The Indian Economy Blog

October 21, 2006

Demographic Cognitive Dissonance

Filed under: Basic Questions,Media & Economics — Atanu Dey @ 6:11 pm

People who don’t practice what they preach are not necessarily hypocritical. Perhaps they are merely not sufficiently intelligent to realize that what they do is inconsistent with the logical implications of what they preach. This gap between what they insist to be true while doing something which reveals their words to be false can be attributed to what is politely called cognitive dissonance but more accurately should be termed as stupidity.

Examples of cognitive dissonance abound, in people great and small. My favorite example of a deluded person is our omnipotent ruler of the world, POTUS G W Bush. His ranting and raving about weapons of mass destruction possessed by others is a study in cognitive dissonance (or stupidity, if you prefer.) But we mere mortals are also subject to varying degrees of this mental illness. We are spared the ignominy of our affliction behind the veil of our anonymous lives. But newspaper columnists lose that protection when they hold forth on subjects that they haven’t thought through entirely. They willingly reveal their cog dis to the world at large. Why they don’t follow that cautious rule of “keep your mouth shut and be suspected a fool, rather than open it and remove all doubts” is a mystery to me.

At this point you may ask what the devil am I going on about. I was coming to that. You see, one astute reader of this blog (and you are all astute, dear readers, I hasten to add) wrote to me pointing out a column by one Mr Swaminathan Aiyar in The Times of India of 23rd September, 2006. Rohit, the said astute reader, wrote to say that he finds something not quite right with that column. My abiding interest in population matters is well known to readers of my blog (the population category has about 36 articles, some of which are worth reading even) and Rohit asked me to comment.

Without someone’s prompting, I am unlikely to read a rag such as The Slimes Times of India. I scanned the article, shook my head in disbelief, and promptly decided to blog it one of these days. As is my wont, I equally promptly moved on to other distractions and forgot about the unbearable silliness of Mr Aiyar’s musings. I would have been writing about the cog dis of the POTUS right now (which I will have to get to later, for sure) but for the fact that Rohit revealed himself to be not just astute but persistent as well. Thank goodness not all the readers of this blog (astute as a bunch) are as persistent as he is. Else I would be busy writing all my promised pieces all day long and have no time to surf the web. Anyway, time to get on to the point that I want to make.

Mr Aiyar’s column is cleverly called “Swaminomics” and I suppose he is an economist of some sort or the other. One cannot be sure, of course, since there was “Reaganomics” and Mr Reagan, a minor actor and later a major POTUS, did not even act as an economist in movies, leave aside be one. Just adding “-nomics” to your name therefore does not reveal what your day job is. For all I know, you may be a computer programmer with a diploma from NIIT on J2EE or something mysterious as that. Still, to have a regular column dealing with matters economic in a national newspaper could mean that one was an economist. But then one has to remember that it is The Times of India we are talking about after all and perhaps we are justified in having our doubts.

The column titled “Lalu Yadav’s Demographic Dividend” says that Lalu, the ex-chief minister of Bihar, fathered nine children and thus bequeathed an example for all Indians to procreate with abandon which will undoubtedly lead to India’s GDP growth while China’s GDP growth sputters out due to its misplaced emphasis on population control through its draconian one child per couple policy. Lalu, claims the column, moves as mysteriously as God himself.

Perhaps Mr Aiyar was just being facetious. Perhaps he is not serious and the aim of the column was to poke fun at Lalu Yadav who, as Mr Aiyar admits, presided over the “economic and social stagnation” of the state of Bihar. Not mentioned is the broad-daylight shameless looting by Lalu of public funds by the thousands of millions. Perhaps Aiyar does not seriously admire neither the man’s mendacity nor his fecundity. But I doubt it. I think that the columnist is indeed seriously peddling nonsense, and it is errant nonsense at that.

Briefly, the column talks about three demographic phases: first, there is a baby-boom with its high dependency ratio; in the second stage, there is a baby bust, accompanied with improving dependency ratio and a “demographic dividend” from more savings; the third stage – the write forgets the third stage. Perhaps each “demographic dividend” is a distinct phase. I am confused about the phases bit. But let me get down to a few details.

He writes,

“[T]he middle-class remains shocked that Lalu has fathered nine children, worsening the population explosion (viewed by this class as one of India’s top problems).

Yet, economists are now unanimous that rising population is giving India a ‘demographic dividend’ that will soon help it grow faster than China. Seen in this light, Lalu Yadav’s contribution to the demographic dividend may outstrip his contribution to the railways.”

Never mind who is responsible for the recent so-called success of the Indian Railways. It is a dismally mismanaged public sector monopoly and a few public-spirited bureaucrats may have been responsible for promoting some good policies which, given the massive inefficiencies already present, resulted in the easy picking of some low-hanging fruits. Crediting Lalu with improving the railways is silly at best; perhaps it would be more appropriate to praise Lalu for not yet stealing (as far as one can tell) the 50 million tons of steel rails scattered along the railway lines. But enough about Lalu.

Let’s examine “growing faster than China.” GDP growth rates don’t mean a whole lot. Like many extremely poor countries, India’s GDP growth rate is much faster than, say, a developed country like the US. What matters is the absolute per capita GDP and to some extent the growth in the per capita GDP. The operative phrase is “per capita.” Let me put it in more personal terms.

It could be that the peon in our office is getting a 20 percent raise every year while I am stuck with only 5 percent raises annually. Yet, if I earn 40 times what the peon earns, the peon would be happy to be stuck with a low annual rise as long as he gets my salary. Rates of growth have to be read in the context of what the base is.

So even if China’s GDP were to grow at 5 percent, and India’s were to grow at twice that rate, if China’s GDP is three times that of India’s, then in absolute terms China adds more production than India every year. Sure, if the differential growth were to persist for 25 years, India will catch up eventually. But 25 years is the long run (and as Keynes noted, in the long run we are all dead) and what happens 25 years hence is not going to bother us.

The story gets even worse when you move to per capita GDP growth rate. If the population is growing at rate x and GDP is growing at rate y, then the per capita GDP growth rate is (y – x). Since compared to China, India has a lower GDP growth rate and a higher population growth rate, India’s per capita GDP growth rate is lower than China’s. What matters is the per capita GDP (which is another way of stating the income of the average person) and to some extent the per capita GDP growth rate, not the GDP nor the GDP growth rate. I would rather be stuck with an average American income growing at 2 percent a year than have an average Indian income growing at 8 percent a year.

Reading that column once again underlined my conviction that those who refuse to do arithmetic are doomed to speak nonsense. All you have to do is pull out an Excel sheet and do a bit of figuring. I just did that. If today India’s per capita GDP is $700 and China’s is $2,000, and if India’s per capita GDP grows at 10 percent a year while China’s grows at only 5 percent per year, India’s per capita GDP in the year 2031 – 25 years hence — will be $6,143, still lower than China’s $6,268. The average Chinese will still earn more than the average Indian despite (an unlikely) twice the per capita GDP growth rate compared to China. And even if India were to have the same GDP growth rate as China, if India’s population growth is higher than China’s, then India’s per capita growth rate would be lower than China’s.

This is all very tedious. I should not have to poke around in an Excel sheet to make my point. I blame the pathetic Indian education system that even some columnists for newspapers (rags or not) are innumerate. I am forced to go on about GDP, per capita GDP, GDP growth rates, and per capita GDP growth rates because of a silly column when it should be absolutely clear to the average 7th grade student what it all means. My patience, and I am sure yours as well, is wearing thin at this point. But we have a few more points to address. So stick with me.

The story Mr Aiyar is telling appears to be this: “Indians have been having more children than the Chinese and that is good because India’s GDP growth rate will be higher than China’s sometime in the future. And therefore India is better off. So having a higher population growth rate is good. Therefore Lalu Yadav is god. And all you who were promoting lower fertility were ignorant neo-Malthusians. And the Supreme Court of India is ignorant of “demographic dividend.” So Lalu’s nine children is a miracle of nature, not ignorance of contraceptive methods.”

Seriously, why do we “neo-Malthusians” fret about India’s population. The answer is simple: because we care about the quality of life, not just about quantities. Here are some numbers. India has about 17 percent of the world’s population and 2 percent of the world’s land area, and about 1.7 percent of the world’s fresh water. Those who are reading this blog have access to adequate quantities of fresh water, but the majority of Indians don’t have clean water to drink, leave alone for personal hygiene. More than half of children below the age of five are malnourished in India. These and many more facts like them paint a simple picture: that we have more people than we have resources.

That is the basic incontrovertible fact: there is an imbalance between the number of people and the amount of resources available for them. When you do the arithmetic, the average figures are deplorable. But then, averages don’t matter to those who write newspaper columns because they are sitting pretty with umpteen times the average amount of resources at their disposal. So they can comfortably write about neo-Malthusians scaring the middle-class people. That there are those who are above average merely implies that there are many who are below even the deplorable average. The suffering of those hundreds of millions don’t matter to those who are comfortably sprouting nonsense about the demographic dividends.

The age structure of an economy matters, of course. Demographic transition is a well-understood phenomenon. You cannot study the development of economies without realizing that at some point in the path to development, an economy will reduce its fertility rate and move towards a lower population growth rate. The critical question is not whether but when. And it my contention that that point should have been decades ago instead of being some decades hence. It should have been earlier because it has to be at a point where the balance has not gone so askew that too many people are living with too few resources.

There will be a demographic transition in India’s future. It will have to go through the population bottleneck. But instead of going through the population bottleneck at an earlier stage (with less pain), now we will go through it with a great deal more pain at a later stage.

Why do so many otherwise seemingly educated people who should know better not pay attention to the damaging fecundity of the poor? I think I have an answer. It is because the damage that the poor do by multiplying beyond reason is primarily to themselves; the rich actually enjoy what I would call a “population dividend.” The higher the numbers of the poor, the lower their wages, and consequently the higher the standard living for the non-poor.

You may notice that there is a construction boom in most urban areas in India. You need people to do the slave labor. The US had imported slaves from Africa. Urban India gets its slave labor from the rural areas. These laborers live in horribly deplorable conditions. And they procreate. Women laborers at construction site often have three or four children hanging around. Children as little as toddlers play barefoot among the rusting steel, cement and other construction material. It is heart-breaking to see how the children have little future other than being labor for future constructions – and a significant percentage will never see adulthood, I am sure.

These are disposable children and are sacrificed to those who write glowingly about the demographic dividend.

Remember I started this piece with the matter of cognitive dissonance and hypocrisy? This is why I did that. If a person really believes that the more people there are, it is better, then they should behave consistently with that belief. That is, he or she should immediately go out and bring 20 or maybe 40 people home and thus increase the household income growth rate. They don’t because they realize that merely adding people who are below the average household income will not increase the average household incomes. Only by adding people whose incomes are greater than the current household incomes will the average household income go up.

That is what Mr Aiyar needs to ponder. He has to understand that it is not the number of people that matters, but rather what resources these people have at their disposal matter. Nine children born to a couple who can barely feed, clothe, and educate even one means that there will be nine under-nourished, illiterate, unproductive people who will actually slow down, not speed up, economic development.

Hypocrisy or cognitive dissonance? You decide.

17 Comments »

  1. Great post. One of the big problems with being a cheerleader for the Indian economy is that people will constantly misinterpret prognostications to suit themselves: so the *potential* of higher growth because of the demographic dividend becomes a celebration of fecundity. And thank you for highlighting what everyone should know already: that productivity (pc GDP) growth is where the focus should be.

    One small point of contention though: Lalu/RabriDevi have a lot of (ill-begotten) wealth; so presumably, their offspring would have a higher than average incomes – meaning we should welcome them??

    I think Bihar is forever destined to be our Missisippi.

    Comment by N Desai — October 21, 2006 @ 10:42 pm

  2. This is a brilliant post.

    Comment by Sunil — October 22, 2006 @ 9:22 am

  3. What is said is extremely true, Indian Government need to make a rule of havin at the most two children per family and awareness among the poor people of using contraceptives is a requirement that the poltical leaders should spend time into. But I would alsolike to highlight that it’s not only ignorance among the poor but also immigration from neighbouring countries that is contributing to the population explosion. They are mostly poor refugees and few political leaders do not restrict them for getting support in elections but they are becoming burden to already burgeoning population and thus worsening the situation.

    Comment by Sarika Das — October 22, 2006 @ 6:30 pm

  4. Why, oh why do Indian columnists love to play devils advocate ? It doesnt take a PhD to figure out the advantages of population control.

    If you take his line of reasoning a step further, what he is really saying is ? We will reproduce like rabbits and flood the world baby. No one can stop us now, mawahahaha. This is silly and stupid, and irresponsible coming from a guy like him.

    I kind of disagree on just one point you made :
    >> The higher the numbers of the poor, the lower their wages, and consequently the higher the standard living for the non-poor >>

    Cheaper labour does not necessarily mean higher standards of living. If that were true, the rich / upper middle class would be having a high standard of living in India today. Yes, they can afford a lot of servants, that is important but not equal to high standards of living. Clean environment, a happening city, a framework to work hard and play hard, parks, riverfont dining, lakes, and national parks, miles of bike trails, are all missing from the picture.

    An american expat once told me what sucked in India, “even the PhD types cant have a good lifestyle in India”.

    Comment by realitycheck — October 22, 2006 @ 7:34 pm

  5. [...] Atanu explains the role of population in economic growth. An essential read. [...]

    Pingback by DesiPundit » Archives » Population Matters — October 22, 2006 @ 8:11 pm

  6. Hi Atanu,

    On the one hand I agree with you: Northern India is having far too many children, and the writer you focus on obviously fails to understand this. But Kerala is not having too many children, Kerala is already having too few, and just here comes the problem. This is the part where I disagree with you: there are two population problems not one, and age structure is important.

    For in just the same way as people are dying and living in extreme poverty in many parts of India, children and adults in many parts of the old soviet union are also suffering the same ills, and the problem here precisely is not too many children, but too few. Some of these countries (Belorussia for eg) are quite literally dying, but most writers and commentators have yet to wake up to the presence and tragedy of this most unfortunate of all occurences.

    “Demographic transition is a well-understood phenomenon.”

    Would Atanu that this were true. I certainly don’t understand it, and I have been thinking about the issues here for many years now. I have not yet found anyone else who understands it, and even Wolfgang Lutz, who must surely be one of the contemporary world’s foremost demographers is quiet frank with me that he doesn’t understand it. The question is where is the transition going, and where does it have its end point. Now one really knows, since we haven’t got there yet.

    Only a week or so ago Federal Reserve chairman Ben Bernanke was making a similar point in the US context, the transition is still continuing in the US, but transition to what? In this case what seem to be in question is what might be called a ‘demographic penalty’ which arises as populations age past a certain point, a penalty which is in many ways symetrical with the dividend which occurs earlier on.

    What we do know is that many developed countries now have fertility in the 1.2/1.3 tfr range, and this has one very simple interpretation, cohort-size halves with each generation, so melt down is not too long in coming. This is not sustainable.

    Now it seems many developing countries are headed into the same trap, and very fast indeed. There is some debate about actual tfrs in China, but on some accounts they are already well caught in the trap. That is why this:

    “Seriously, why do we “neo-Malthusians” fret about India’s population.”

    is rather problematic. Getting the fertility rate down below a tfr of 3 in the north of India is important but the how of doing this is also important. To put things in perspective, the US has presently a stabilised Tfr of just below replacement largely thanks to the fact that the Latino population have a tfr of 2.8. This gives you some idea of the bandwidth you need to maintain.

    Kerala, as I say, may already be in the league of states who grow old before they grow rich. China has made a gigantic (and I would say near criminal) error, they have structurally broken the population pyramid (some demographers cite fears that Brazil may have done something similar).

    So this eventuality has to be avoided for India if at all possible.

    India needs quite simply 2 population policies. One to get fertility below the 3 tfr where it is still above, and another pro-natalist policy where fertility is already below say tfr 2.5.

    Don’t follow European countries like Germany, Italy, Hungary, Poland, Lavia, estonia etc etc, along the road of tragedy, where they have left it far to late to act on this. Meaningful pro-natalist policies are quite simply unaffordable in such countries, since the burden of supporting a large and growing elderly population, and an inability to obtain serious economic growth due to the aged population means that the fiscal constraints are too tight. From Germany to Italy to Japan to Hungary the order of the day is fiscal rigour, and not increased spending to help women who want to be mothers to have children. So there is a critical moment somewhere here, and some parts of India are already in that moment.

    Fertility comes down in association with the growing education and emancipation of women, and their consequent massive arrival in the workforce. The processes of birth postponement and quality versus quantity (unlike the transition itself) are relatively well understood. You need equality programmes, nurseries, maternity leave, good free education etc etc. You can’t have one half of this process without the other.

    Obviously:

    “Those who are reading this blog have access to adequate quantities of fresh water, but the majority of Indians don’t have clean water to drink, leave alone for personal hygiene.”

    But really is that all we aspire to, that the majority of Indians have clean water and personal hygiene? Or are we after something bigger, coz if we are, the best way to do it isn’t to crash India the way China has been crashed.

    “And it my contention that that point should have been decades ago instead of being some decades hence.”

    The point is, you may be right, but unfortunately that is now water under the bridge, the only thing we can really focus on is what happens next, and this is just where my concerns lie.

    Comment by Edward — October 23, 2006 @ 8:04 pm

  7. Edward,

    You might look at the example of France. I read an article last week which pointed out that they have followed progressive policies, encouraging women to have more kids, after WW 1.

    Btw, Belarus is the right name, Belorussia is derogatory.

    Atanu,
    Edward is right.. This demographic transition appears straightforward but its not. Population controllers are fighting against thousands of years of culture and millions more in procreating more babies. Just as the Hurricanes in the Gulf of Mexico start forming in August due to the lag in getting the oceans to heat up; similarly the effects of this population reduction will be delayed and unknown, they will also not necessarily be pleasant.

    Population can be reduced by many diverse factors in industrial societies. Pollution, societal norms, lifestyle preferences, willingness, monetary capacity etc.

    Last but not the least, being, the reduction in male fertility due to wearing tight underwear :)

    The current trend is toward controlling population, because you really can do without slave labor with the help of technology. We can feed and clothe all the current inhabitants of the earth, and a half. I think that as yet no one has figured out how to think positively and use population effectively for constructive purposes, and not just as another dumping ground for consumption based society.

    I think that agriculture just can’t be done with tractors, combines, harvestors and fertilizers. It needs manual labor. We have gone from one extreme to another in 100 years, and the result on the land being farmed is horrible, I don’t need to talk about it. Need to strike a balance.

    So, can you think instead: how can we use India’s huge population constructively? Not in manufacturing, because of technology. Not in consumption based Ponzi scheme like America seems to labor under. How else?

    Comment by Amit Kulkarni — October 23, 2006 @ 11:22 pm

  8. “He has to understand that it is not the number of people that matters, but rather what resources these people have at their disposal matter.”

    I am not sure I agree with that assessment. You are implying that only the rich (or rich countries/societies) can have more children. It is not about what resources (disposable or not) are available to the children but how productive these children (as Amit says). It is classic Indian problem. Sure resources help – but India’s problems are less about resources and more about constrains, legal or otherwise (and mostly non-financial), keeping people from being productive. Till now people usually ignore these constrains and blame population growth; now it seems the trend has turned 180 – ignore these constrains and celebrate population growth (as so called demographic divide). If all it took was population growth for a booming economy, India would have been rich long time ago. But population growth isn’t the sole cause for keeping India at the bottom of global HDI decade after decade.

    Comment by Chandra — October 24, 2006 @ 7:24 am

  9. I felt real sick with the logic given by Swaminathan Aiyar. I should thank you for this blog entry.

    Very frequently I keep listening from “so-called” economists that India is infact “blessed” with a huge population. Even politicians and administrators are now slowly talking about “advantages” of our huge population. This is completely wrong. The quality of life available to each individual due to this huge population is pathetic.

    Its time we again seriously focus on population control for the betterment of mankind.

    Comment by Dilip Sankarreddy — October 24, 2006 @ 7:23 pm

  10. @realitycheck

    “Cheaper labour does not necessarily mean higher standards of living. If that were true, the rich / upper middle class would be having a high standard of living in India today. Yes, they can afford a lot of servants, that is important but not equal to high standards of living. Clean environment, a happening city, a framework to work hard and play hard, parks, riverfont dining, lakes, and national parks, miles of bike trails, are all missing from the picture.”

    You have really driven the nail on the head with this comment. Economics tends to simplify things and that can be dangerous when analyzing poverty. The poor cannot be seen as just a source of cheap labour, because they wield huge political power in a democratic society such as ours. However, what Amit is saying is not entirely false either, because the poor are also disadvantaged when it comes to organized political power. They lack the resources: time, negotiation skills, communication, nutrition that it takes to build a support group around an issue. It’s not impossible, but very very difficult. In a nutshell, economics cannot be divorced of sociology, but at the same time, the lack of strong sociologic institutions does not discredit the deductions of a purely economic viewpoint.

    Pre-independence, Malthusian economists warned that India is headed for a demographic disaster in the 20th century, as its population seemed to outstrip its resources. It goes to say that while not a disaster, India’s case is not one of envy. Because, it seems that while its middle class and old-world rich has grown in prosperity, the poor have not received much of the economic dividends. Poverty is probably the least well understood problem of our country. After all, we have failed miserably on many fronts to tackle it. What I do know is that poverty is not just the lack of access to nutrition, shelter or clothes.

    It also includes the lack of access to jobs, legal recourse, land and education. Take Kerala for example, which has attained literacy standards akin to developed economies. Yet, people lack access to jobs because of an inhospitable business environment. They lack legal recourse because the judicial system moves at a snail’s pace. Had these elements been unshackled as illiteracy had been tackled, Kerala still would not lag behind other states.

    Poverty has to be tackled on many fronts. It’s an uphill battle, probably the biggest humanity has ever fought. Forget wars over land, water, WMDs etc – those are irritations compared to the effort in providing people with the ability to lead healthy lives. So it shouldn’t come as a surprise that we haven’t achieved much. But, it shouldn’t be acceptable either.

    Comment by Abhishek Nair — October 25, 2006 @ 2:12 am

  11. N. Desai wrote:

    One small point of contention though: Lalu/RabriDevi have a lot of (ill-begotten) wealth; so presumably, their offspring would have a higher than average incomes – meaning we should welcome them??

    My point is that having more children than one has resources to make productive citizens out of is where the main problem lies. I am not refering to individuals or societies which have sufficient resources at their disposal to invest in the upbringing of their next generation.

    On the comment made by Sarika Das, I agree that better border control is necessary so that India is not swamped by illegal immigration from Bangladesh and Pakistan. They are generally economic refugees but their impact on India goes beyond the economic impact alone: they change the demographics of India and ultimately harm the dominant ethic of India.

    Whether the government should impose a 2-child limit or not is a different matter which should be dealt in a separate discussion.

    realitycheck disagreed with me on my statement that “the higher the numbers of the poor, the lower their wages, and consequently the higher the standard living for the non-poor” and wrote that “If that were true, the rich / upper middle class would be having a high standard of living in India today. Yes, they can afford a lot of servants, that is important but not equal to high standards of living.”

    My point is that the non-poor have a higher standard of living compared to what they would have had had there not been such a glut in the numbers of the poor. If the laboring classes were smaller, their wages would have been higher and therefore those who enjoy the benefits of low wages would have been able to afford much lower quantities of labor and thus their standards of living would have been lower. The comparison is not between the living standards of the rich countries versus the poor countries, but rather the living standards of the non-poor in India today as compared to what they would have had if they had to pay higher wages for labor.

    In response to Edwards comment where he write:

    On the one hand I agree with you: Northern India is having far too many children, and the writer you focus on obviously fails to understand this. But Kerala is not having too many children, Kerala is already having too few, and just here comes the problem. This is the part where I disagree with you: there are two population problems not one, and age structure is important.

    My point that it is bad to have more children than can be supported does not contradict your position that some societies have the converse problem of having fewer children than they should have (given that they have the resources and need to have more children so as to avoid a demographic and economic decline.) There may indeed be several, not just two, different population problems. The fact that I discuss one problem does not imply that I deny the existence of others.

    Moving on, Edward admits that he does not fully understand the phenomenon of demograhic transition. That one has not dotted all the i’s and crossed all the t’s in the academic theses of demographic transition does not imply that broadly the idea is not well-understood. Aerodynamics, to take an example, is well-understood but that does not mean that there is no disagreement on the finer details or that there is no possibility of further advances in aeronautical engineering.

    Edward quotes me, “Those who are reading this blog have access to adequate quantities of fresh water, but the majority of Indians don’t have clean water to drink, leave alone for personal hygiene” and the most puzzlingly goes on to say:

    But really is that all we aspire to, that the majority of Indians have clean water and personal hygiene? Or are we after something bigger, coz if we are, the best way to do it isn’t to crash India the way China has been crashed.

    No, a glass of clean drinking water is not all that we aspire for. The point is that if we do not have the resources to provide the majority of Indians with even clean drinking water, we do have a problem providing them with all sorts of other resources which are required to give people a decent chance at living a human existence. If you cannot provide even drinking water, can you reach beyond and provide them with food, health care, education, recreation, a means of livelihood, and so on? What sort of logic is it that says “OK, we really cannot provide the basic necessity but let’s just go ahead and reproduce even faster so that one of these days there will be a demographic dividend”?

    Amit Kulkarni strikes an optimistic note and writes:

    The current trend is toward controlling population, because you really can do without slave labor with the help of technology. We can feed and clothe all the current inhabitants of the earth, and a half. I think that as yet no one has figured out how to think positively and use population effectively for constructive purposes, and not just as another dumping ground for consumption based society.

    There is a gap between the realm of what is theoretically possible and what is actually likely to happen. Yes, the earth would be able to support 10 billion sometime in the future, or even a few trillion if you belong to the Julian Simon camp. What matters to me is not some future utopian state but the state today and how we transit from the present misery to the future utopia without needless suffering.

    To a starving child, what matters is whether it gets food now, and it could not care less if your theories show that billions more can be supported by the earth.

    In the end, saying that the earth can support (either now or at some distant time) x number of people is meaningless. You have to condition that number on what level of consumption: with my income I can support anywhere between a family of one (myself alone) or a family of 1000. At the high extreme, the only thing the family will be able to afford will be some basic calories and nothing else — no clothes, no shelter, no education. Not just numbers alone but at what standard of living is important.

    Amit claims that “I think that agriculture just can’t be done with tractors, combines, harvestors and fertilizers. It needs manual labor.” This is too far out of the reality I know for me to be able to address this astounding claim. So I will pass over it in silence.

    He asks though “how can we use India’s huge population constructively?” There is not enough space in this comment box for the long answer which I have worked out :). The short answer is: imaginatively.

    Moving on to Chandra’s comment, he disagrees with my statement that “it is not the number of people that matters, but rather what resources these people have at their disposal matter.” He writes:

    You are implying that only the rich (or rich countries/societies) can have more children. It is not about what resources (disposable or not) are available to the children but how productive these children (as Amit says). It is classic Indian problem. Sure resources help – but India’s problems are less about resources and more about constrains, legal or otherwise (and mostly non-financial), keeping people from being productive.

    I do not imply that only rich can have more children. People can have as many as they want. But the consequences of that decision is visited upon the people to some extent but more importantly it is visited upon the children (who, we should note, have no say in the matter of their birth.)

    My position is a normative one: I think that people (and thus by extension, socities) should not have more children than they have the ability to support them. By resources I mean all of it: material, institutional, political, what have you. Merely saying something like, “There is enough food; we just need a better distribution system” is pointless. If we are not smart enough to distribute what food we have efficiently, then it is no different from not having sufficient food in the first place — the result of starvation is the same irrespective of whether the food was not grown or that the food was grown but rotted in the fields.

    Thanks all for adding to the discussion. This response to the comments has grown really long. I will have to address the misunderstanding of Malthus at a later date. Stay tuned.

    Comment by Atanu Dey — October 25, 2006 @ 11:32 am

  12. Atanu,

    Technological innovation kills the need for people to be employed in their old occupations. My point is that in agriculture it is not a good application as it stands today.

    The problem is not over-population, but what to do with it? That is the dilemma facing the rulers of the world. If you don’t occupy the majority of the populace in some productive thing, and you don’t give them an opportunity to earn, the rulers are in trouble.

    But ‘organic’ agriculture is one way of employing a huge number of people.

    The reality is that the world will come to understand that the tractors, combines, and harvesters are no good. Do you know which country is amongst the highest exporters of such stuff right now? Brazil, how come? They are planting staple food in areas cleared of the Amazonian rainforest. What happens after 10-30 years? Desertification. You suck nutrients out in 3-5 years, then you pump artificial nutrients through fertilizers, but a point of no return comes in. The land has to heal before it is ready for producing food. Land is not a dead machine but a living thriving piece of earth which technology just brushes over.

    Regarding food distribution: As long as there is a jungle, there will be wolves and deer, enough said.

    Anyway, what is your solution to using our population?

    Comment by Amit Kulkarni — October 25, 2006 @ 2:37 pm

  13. comments about the same topic from Sumit K. Majumdar,a Professor of Technology Strategy, University of Texas at Dallas, at the link below
    http://www.thehindubusinessline.com/2006/10/27/stories/2006102700040900.htm

    Comment by Suda — October 27, 2006 @ 12:31 am

  14. [...] http://indianeconomy.org/2006/10/21/demographic-cognitive-dissonance/ [...]

    Pingback by Harsha Kollaramajalu » Demographic Dividend? — October 27, 2006 @ 11:21 pm

  15. [...] It is tiresome to have to point out idiocy and I don’t want this blog to be “Responding to Idiotonomics All the Time.” The last time I pointed out at great length the idiocy of claiming that the demographic dividend justifies uncontrolled breeding (see Demographic Cognitive Dissonance). I thought it was a one-time deal and it was fun poking fun at the guy who wrote it. But I should not make it a habit of skewering the guy regularly on this blog – unless of course there are other reasons for demonstrating what exactly is wrong with his argument. Of course there has to be something wrong first. [...]

    Pingback by The Indian Economy Blog » Advantages of Being a Village Idiot — November 6, 2006 @ 3:06 pm

  16. [...] Of late there have been a couple of scathing posts on Swaminomics articles, one related to demographic dividend in India and the other on advantages of poverty. To indicate my disagreement with the stand taken I would like to provide four points. [...]

    Pingback by The Indian Economy Blog » Sense and Swami — November 15, 2006 @ 12:34 pm

  17. Atanu, I generally agree more with you than with most people. But sometimes there is an unacceptable level of anti-liberty rhetoric in your posts – especially in the population and religion categories in my opinion.

    Here is a post which might be worth reading
    http://bponews.blogspot.com/2006/10/in-defense-of-swaminomics.html

    Now, my humble six cents:
    1. Poor people have a sad living, but not a sad life in general – humans adjust to conditions and dont commit suicide en masse. Extremely important distinction. So let us not jump in and curtail the civil rights of procreation of parents saying that bequeathing poverty is morally unjustifiable.

    2. Now the possible negative economic externalities for society. Hmmmmmm…. since the children of the Indian agricultural poor GET little de facto state services (and since a lot of us would stand for limited de jure help except for disability benefits, primary education vouchers, health insurance financing and the like) then where is the negative externality? If there is some externality, which I am missing use moderate taxation (positive and negative) strategies for incentives.

    3. Water and other resources you point out is what is the main problem (Higher population density is by itself not a problem, right). While an increased demand of stuff is not technically an externality, but pollution might be one. Aesthetics seems to be one with you. Well, we can and are buying resources in the world market and news – even India’s population is stabilizing ! If Simon is “right” and Malthus was “left”, I am right-of-center.

    4. The transition then is the ugly problem, you say. Sure – just like ugly poverty has been in the world for millenia. The government should further invest in small family awareness campaigns, and maybe subsidize condoms, pills and the like. That is all, besides some tax incentives as I have mentioned earlier.

    5. Now to your discounting of long-term economic and strategic benefits. Firstly, to hell with Keynes. I am certainly hoping to live for more than 25 years. Even the US-Canada and intra-EU trade is not the same as say intra-Japan trade, so for many decades the nation will remain the biggest free trade unit. Here is where India and China will get efficiencies of scale which will reflect in per-capita figures. Sure we have to further deregulate our internal economies but let us not fudge two issues here.

    6. The second long term benefit which you dismiss is the geopolitical angle. Larger absolute GDPs and larger efficiencies for “crowded” countries. But still one army. Still one negotiating team. Think about it.

    In short, population has to be controlled. Just like poverty. But just like communism isnt the second problem’s answer, arresting, disqualifying or heavily charging farmers, politicians or journalists with more than say 2 children isnt the answer either. It just brings in more bureaucracy and is downright immoral in my opinion.

    Try to explain small family benefits. Distribute condoms. Privatize education. Some labor will immigrate resulting perhaps in remittances and peace lobbies. Discuss and debate. But viciuosly attack an established columnist for obviously trying to make a point (correct or incorrect) with some entertainment-added-value for the lay man?

    Not expected from one of my favorite bloggers.

    Comment by Harsh Gupta — June 4, 2007 @ 10:16 pm

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