Monday, April 25, 2011
Not what the Philippines needs
This article is a few months old. As the saying goes: "better late than never!" - CAP
by "Filipino Freedom Fighter"
Population has become a subject of heated debate during the past few years. Proponents of the Reproductive Health (RH) bill argue that the Philippines is becoming overpopulated and that it is undermining the public welfare. Everybody will partake less of the economic pie because resources, especially land is fixed. Neighboring Asian countries have enacted population control measures and are doing better than the Philippines, so therefore, higher per capita GDP must be because of population control measures! And in the name of sustainable development, the Philippine government must enact population control measures here. The idea is that lower population equals more wealth, and more happiness!
There are many problems with this sort of thinking, but to start off, we must remember that per capita GDP describes an aggregate, and does not describe the distribution of income throughout society. A hypothetical country wherein 90% are poor but 10% are extremely rich would still yield high per capita figures. More importantly, a lower population does not imply that everybody gets a little bit more. Economic demand is not constituted solely by desire, but by desire plus purchasing power. An infinite desire to have a BMW does not mean infinite demand. Demand only exists where there is purchasing power accompanying desire. If the population of the Philippines were reduced by 1/3, the poor would not be any better financially. If we assume that the 1/3 that disappeared were part of the labor force, then society would be worse off because there would be less productivity. Division of labor is compromised making goods and services less available and more expensive.
The concept to grasp here is Say's Law, named after classical liberal economist Jean Baptiste Say. A farmers supply of wheat excess of what he consumes constitutes his demand for all other goods. You first need to produce in order to consume. A lower population means less productive labor, and hence less ability to consume.
On the individual level, the population of your country says nothing about the quality of life you can achieve. If you want to better your lot in life then you work, you take part in the division of labor. The more people take part in the division of labor, the more the specialization, and the more efficient wealth creation becomes for everybody.
The market system is not a zero-sum game. If you want to consume then you have to produce, you have to add to the economic pie. Prices determine what you must produce and what to consume. Prices of labor or wages guide people in getting jobs, as with prices for other items. The only thing government can do is impede this process and create more consumers than producers, as most Western welfare schemes, by subsidizing the unemployed. They have changed the rules of the game. For now you can earn an income and consume goods without working, ignoring the Biblical tenet "For even when we were with you, we gave you this rule: If a man will not work, he shall not eat."(2 Thessalonians 3:10)
It is vain to take the collectivistic approach and deal with charts and figures rather than real, living, changing economic agents at the ground level who are unique and make different choices. The government simply cannot look at population growth charts, compare them with population charts with other countries, and ex post facto come to a conclusion that will lead to the creation of another corrupt bureaucracy.
Empirical evidence does not warrant the claims of the population controllers. Hong Kong, Monaco, and Singapore are ranked in the top five in population density yet those three countries are also among the top ten in terms of per capita GDP. At the other end of the list, it is the poorest countries that have the lowest population density. Countries like Congo, Mozambique, Mali, and Zambia. It is important to note that just because less population does not equal more wealth for everybody, does not mean more population necessarily means more wealth for everybody. It is only when the productive worker or entrepreneur produces more than he consumes, or in the act of saving, that he can benefit society the most. The point is that in order to have high population numbers, there must be, or must have been a good workforce and capital goods enough to support it.
Poor Southeast Asian and Latin American countries have a large portion of their labor force in the agricultural sector where many working hands are needed. Large family sizes make good financial sense in the context of rural life. Children in rural areas are viewed as assets in the financial sense because they contribute to the family income at a young age. Urban families have less children because children are viewed as 'liabilities', their education and various other consumption items unavailable to rural children are expenses of the family. So contrary to the claims of the population controllers, having many children are actually good for rural families. And how could they not be? Rural folks do not mindlessly produce more children without weighing the costs and benefits. Families in the rural area are just as responsible as those in the cities. Or maybe the political establishment thinks differently?
The truth is that the poverty of the Filipino people have nothing to do with population. The Philippines is suffering because of the government interventionism hampering the market process and a majority that refuses to recognize and accept the inherent evil of state coercion.
If the goal is to reduce population numbers as such, then capital accumulation, particularly, machination and modernization of the agricultural sector is key. In the agricultural areas, the benefits of having children surpass the benefits of not having children. The solution is to reverse this. By making it unnecessary for agriculture to be labor intensive, labor will move to higher paying industrial and service-oriented sectors where children will not be needed on the fields and can be sent to school. And the only way this can happen is to get the government out of agriculture, out of fertilizer subsidies, import quotas and customs fees for agricultural commodities, out of the provision of irrigation, out of crop insurance, but that is another topic for another day.
I will be forever dumbfounded by the silly attitude of the political establishment in accusing lack of education for the alleged overpopulation of the country. This is typical leftist blame the victim mentality. For who, in fact is educating the masses of the people, the freakin' government is!
If you sincerely believe in reducing population growth for whatever reason, you can do it the moral way by spending your OWN money to buy condoms and distribute to people. Voting on other peoples' property just to serve an unfounded belief (look at sources) is wrong and is why the government can get away with a lot of horrible acts. Statism is just so easy to subscribe to. No down-payment required.