| Advancing the principles of
in the 21st century
|I. The Importance of People|
The rapid rise of human population has often been cited as a reason for poverty, environmental damage, and resource depletion. Terrifying stories of the world's population reaching 20, 30, or even 50 billion people were forecast in the latter half of the twentieth century. In alarming language, for instance, President Carter's 1981 Global 2000 report warned that "the staggering growth of human population, and ever-increasing human demands, the possibilities of further stress and permanent damage to the planet's resource base are very real."1 The fact that "population explosion" caused destitution has not born out for the 200 years since Thomas Malthus made his first pessimistic forecast, has not discouraged modern-day pessimism.
World population reached 6.2 billion in 2004. When compared to a population level of 2.5 billion in 1950, this indeed looks sinister. A little linear math shows that at this rate of growth, world population would be 15 billion by 2050 and nearly 40 billion by 2100. Yet the United Nations projects a global population of only 8.91 billion in 2050, peaking at around 9 billion in 2075 and then declining.2
Why is the expected future population so low? It stems from declining global fertility rates. The world's fertility rate - which is the number of children per fertile woman - has dropped from 5.01 in 1950, to 2.83 children per woman in 2000. The U.N. projects it to drop to 2.02 by 2050, the accepted replacement level in which there is neither growth nor loss.3 However, these numbers by themselves are deceiving. In the more developed nations the fertility rate plunged to 1.50 and is only projected to struggle back to 1.92 by 2050, which is still below replacement levels. On the other hand, the fertility rate of the least developed nations will drop from 6.64 to an expected 2.47, which is only slightly above the replacement rate. By 2050 the U.N.'s "2002 Revision projects that 3 out of every 4 countries in the less developed regions will be experiencing below-replacement fertility."4
Thus, not only have population growth rates been falling in virtually all middle-income and advanced countries, but, paradoxically, in many poor countries as well - especially those that have higher economic growth.
The apparent anomaly is easily explained: in very poor countries, with little or no economic growth, there is low population growth because of high mortality, especially infant mortality. In the early stages of economic development population growth rates rise, not because there is more procreation (fertility), but because of less death, especially amongst infants. Population growth (in poor countries) is not a problem, as suggested, but a solution - a solution to the problem of death.
As populations get richer less people die thanks to health care, food and water, and fertility start falling for social reasons to the point where population growth rates fall even though people are living longer. Ultimately, in the world's richest countries, there is zero population growth. The solution for those concerned about "overpopulation" is therefore simple: high rates of economic growth.
|Table 1. Fertility rates, the number of children born per woman, for the world and three development classes. Population is in balance with 2.1 children per woman.|
|Year||World||More Developed||Less Developed||Least Developed|
|Source: Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat, World Population Prospects: The 2002 Revision and World Urbanization Prospects, March 3, 2004.|
In the United States, fertility rates dropped from 3.45 to 2.05 during the period 1950 to 2000, and are projected to continue to drop to 1.85 by 2050.5 In Europe, the fertility rate has plunged from 2.66 to 1.37 today and, according to some observers, represents the number one problem in nations like Spain (1.19), Czech Republic (1.18), Italy (1.21), Hong Kong (1.1), Russia (1.25) and many others as they attempt to staff their existing production infrastructure.6 One thing stands out in this maze of numbers; wealthier countries have fewer children per family than poor ones. This will become important later.
Although population growth rates are falling, there are still concerns about whether the world's "carrying capacity" can sustain existing and anticipated "population pressure" in the environment. Claims by certain NGO's and authors that the world is running out of natural resources due to population and economic growth also turn out to be false and exaggerated. Global statistician Dr. Bjorn Lomborg provides analysis after analysis contradicting the evidence of alleged resource depletion and environmental degradation purported by groups like the Worldwatch Institute.7 Lomborg is a self-described, former "left-wing Greenpeace member" who initially set out to disprove economist Julian Simon's (University of Maryland), assertions that the litany of environmental rhetoric is "based on preconceptions and poor statistics."8 As an Associate Professor of statistics at the University of Aarhus, Denmark, Lomborg spent years investigating Simon's claims only to discover that Simon was right and his own popular beliefs were wrong.
In his best-selling book. The Skeptical Environmentalist, Lomborg offers this astonishing conclusion:
"Our consumption of the essential resources such as food, forests, water, raw materials and energy seem to have such characteristics that it will leave the coming generations not with fewer options, but rather with ever more options. Our future society will probably be able to produce much more food per capita, while not threatening the forests.... Our energy consumption is not limited, in either the short run or the long run."9
Simply stated, the planet is not experiencing an overpopulation problem or resource scarcity. The World Bank defines sustainable development as "development that lasts."10 In this respect, global society certainly seems to be sustainable.
That population density doesn't cause poverty or environmental degradation can be demonstrated in various ways. The most obvious is that people create wealth. Give the rights polices and institutions, more people create more wealth, especially in advanced societies having extreme degrees of specialization. Additionally, anti-population activists are entitled to their own theories, but not their own facts, and the facts are against them. One fact is that there is no statistically significant correlation between population density on one hand, and poverty on the other. There are many ways to illustrate this fact. Europe's population density (56 people per sq km) is well above the world's continental average (46), whereas Africa is well below it (28). Asia (170) is the world's most densely populated continent. It is famous for having world's biggest collection of high growth economies, the "Asian Tigers," and some of its most backward countries.
Individual countries are more instructive. The world's most "overpopulated" countries are Monaco (16,549) and Singapore (6,800), yet they are two of the worlds wealthiest. Bangladesh (1,055) and India (358) are celebrated examples of impoverished densely populated countries. The success of some mini-states is often attributed to their small size. However, Japan (340) and the Netherlands (482) are rich densely populated big countries. Conversely, the world's most impoverished countries are often amongst its most sparsely populated - nations like Chad (7.58), Gabon (5.26) and the Central African Republic (6.01) are examples of these.
Standing in sharp contrast to these developing countries are the prosperous, yet sparsely populated Australia (2.61), Iceland (2,93) and Canada (3.57). With population densities of 482, 342, 340, 250 and 236 people per sq. km., the Netherlands, Belgium, Japan, United Kingdom and Germany have population densities similar to India, Rwanda, Haiti, Burundi and Pakistan with 358, 319, 278, 243 and 204 people per sq. km - yet they have five of the highest living standards in the world compared to five of the lowest.11
These anecdotal examples reflect statistical reality accurately. The 20 most and least "overpopulated" countries had similar growth rates, despite being at opposite ends of the population spectrum (3% and 3.6% respectively in 2004), but divergent per capita incomes (US $18,860 and US $10,300), which means that more densely populated countries were 80 percent richer and grew 20 percent slower, which is typical of the difference between growth rates in rich and poor countries with similar economic policies.
The argument that poor countries are overpopulated in that they have lower "carrying capacities" is a form of circular logic because it amounts to saying poor countries are poor because they are poor. It's a vacuous tautology. In reality, data reveals that such factors as the number of people, population density, country size or resource endowment are close to irrelevant. What ultimately matters is a county's domestic policies and institutions. People flourish (or languish) anywhere, from the world's most densely populated square mile (Monaco), to a island without resources off the African coast (Mauritius); from one of the biggest countries (USA) to an arctic tundra (Iceland).
The fallacy of overpopulation being linked to poverty is made even more obvious when looking at lower levels such as high and low density regions or cities within countries, or suburbs within cities. In almost every country, incomes in densely populated urban areas are higher than in rural areas and big cities have higher living standards (by standard definition) than small ones. This not surprising; its explains why people flock to cities. Some densely populated suburbs, like some countries, are rich and some are poor. Densely populated big cities tend generate more wealth and jobs, and use less resources, per capita than anywhere else in a country.12
No matter how one analyses the numbers, the notion that "overpopulation" causes poverty or resource depletion and environmental degradation is simply without merit.
There is the common assumption that overpopulation causes poverty and poverty breeds discontent and insurrection. We repeat the point, since it bears repeating, that the term "overpopulation" is seldom defined coherently, that its context usually implies it as a synonym. When used as a real reference to people, it tends to be used in two senses: the first implying excessive population densities; the second implying aggregates; that there are simply too many people on earth for the earth's ability to provide everyone with high living standards, thus locking the third world in the "poverty trap."
A casual glance at countries ranked by population, population density, population growth rates, surface area and natural resources makes it immediately obvious that such factors are not determinants of each other, prosperity or virtually anything else of relevance. The top twenty population density countries, to which we have referred, are a motley bunch of disparate countries such as Hong Kong, Bangladesh, Bahrain, Taiwan, Barbados, South Korea, the Netherlands and San Marino. The bottom twenty are equally disparate including Russia, Bolivia, Guyana, Mauritania, Namibia, Australia and Libya.
Half way down the population list one finds Ghana, Spain, Egypt, Cambodia, Qatar, Malaysia and Bulgaria. The first conception of overpopulation is clearly meaningless. What about the second? Quite apart from the fact that population growth rates are declining rapidly and the world's population is set to peak and decline during the lives of today's teenagers, there are other senses in which the second conception is also of no significance, though not as obviously so.
An enormous shift in demographics is also expected. In 1950, 70 percent of the world's population lived in rural areas. This has fallen to 51 percent in 2005, and is expected to drop to only 39.7 percent by 2030.13 It is as low zero in rich mini-states like Monaco and Singapore, and below five percent in large, high-income countries. Since almost all of the population growth expected in the next thirty years will be in urban areas, rural areas will remain free to grow food and there should be plenty of space and wealth to protect the environment. At the same time the percentage of the total land area in rural verses urban areas will shift only slightly.14
People also create productive rural land by ocean and delta reclamation (up to one third of Holland), drainage of swamps (western France), and forest clearance (much of Europe and New England). It is seldom appreciated that multistory buildings amount to man-made urban land. There are so few people that the entire world's population could be housed in the state of Texas, with enough space for infrastructure and parks, living on regular urban plots. So, objectively, there is enough land to accommodate many times the anticipated population comfortably. But are there enough resources? Again, there is no need for panic.
Bjorn Lomborg also notes that by the end of the 20th Century some 3-4 billion of the world's people had experienced substantial improvements in their standard of living, and about 4-5 billion now have access to basic education and health care.15 Even the United Nations has acknowledged, "In the past 50 years poverty has fallen more than in the previous 500."16 Much of that improvement was because of international trade with developed nations - and population growth has not hindered it.
Still, poverty remains extreme around the world. While 15 nations whose combined populations exceed 1.6 billion halved the proportion of their citizens living in extreme poverty in just two decades, many others remain desperately poor. U.N. Secretary Kofi Annan noted in the U.N. Millennium Report, which was accepted by consensus by over 150 heads of state at the U.N. Millennium Summit on September 8, 2000, "Nearly half the world's population still has to make do on less than $2 per day. Approximately 1.2 billion people - 500 million in South Asia and 300 million in Africa - struggle on less than $1."17 Secretary General Annan continued, "Of a total world labor force of some 3 billion, 140 million workers are out of work altogether, and a quarter to a third are underemployed." What Annan said must be done is to give these countries the "resources and support to help them," including "wiping off their books all official debts...."18
Unfortunately, debt forgiveness, like aid, is no answer. Annan's approach, and that of the G8 under pressure from well-meaning, but mistaken people, is more likely to exacerbate poverty than alleviate it. Aid and debt relief directly reward for the world's worst governments for being oppressors at home and beggars abroad. Totalitarian, corrupt and centrally controlled governments curtail, or do not allow freedom and property rights, which are among the major causes of poverty.
Many developing nations have such corrupt governments, dictatorships or moribund bureaucracies that they will remain poor unless they have significant reform. Some nations have aggressively taken action to reduce graft and corruption and compete on the global market for the sale of their goods. They reduced poverty substantially during the past 50 years. Some of the world's poorest countries became its highest growth countries by adopting sound policies. Although the United Nations gives lip service to the reduction of corruption and liberalizing markets within nations, there is no plan to force nations to do so - nor can there be unless the United Nations were given authority to impinge on national sovereignty. Such heavy-handed authority, however, is something that would create its own set of problems and thus should not be pursued.
Contrary to good policy, the entire premise on which the U.N. operates, and which forms the basis of Agenda 21 and "sustainable development," is the erosion of individual property rights, ostensibly for the collective benefit of all. In his deeply compelling book, The Mystery of Capital, Hernando de Soto identifies property rights (broadly defined as everything people own, the single most important asset being land) as the key to reducing poverty. Capitalism has not worked in the former Soviet Union, the East Block nations and the developing nations, he notes, because they have tried everything but property rights:
The poor inhabitants of these nations - the overwhelming majority - do have things, but they lack the process to represent their property and create capital. They have houses but not titles; crops but not deeds; businesses but not statutes of incorporation. It is the unavailability of these essential representations that explains why people who have adapted every other Western invention, from the paper clip to the nuclear reactor, have not been able to produce sufficient capital to make their domestic capitalism work.19
With formalized strong property rights, legal title to use property represents equity. In turn, this equity can become collateral to create the capital needed to start, expand or buy into a business which then yields income and wealth. The amount of equity can be stunning, even in the United States. The average net worth of home-owning Americans is $132,100 verses $4,200 for American renters - 30 times less! True, other factors also play into these numbers, but property remains the key factor in creating wealth.20 When legally protected property rights do not exist, as is the case in all the Third World and formerly communist nations, property has equity but no collateral value. Hernando de Soto calls this dead capital. This dead capital could be available for investing in manufacturing the products as well as reducing the dependence on multinational corporations.
De Soto has shown that the total value of this kind of extralegal property within developing nations and former communist countries is at least $9.3 trillion! This is ninety-three times as much as all development assistance to the developing nations from all advanced countries during the past thirty years.21 There would be no need development assistance if these poverty-stricken people could have access to the asset value of their property that is presently dead capital. Yet, the United Nations and the international community are presently putting together a series of international treaties in the name of "sustainable development" that systematically prevents citizens in the third world nations from ever attaining the formal property rights that will give them wealth and liberty.
Unnecessary regulation kills the asset value of property as effectively as a lack of title, deed or contract. The U.N.'s vision of sustainable development centers on state control of private property rights, effectively killing the very mechanism that will actually get the impoverished people of the world out of poverty! As the balance of Freedom 21's alternative to Agenda 21 demonstrates, property rights and free enterprise not only will help nations to get out of poverty, but are the key to protecting the environment as well. There is just no demonstrable reason for the government-centered, bureaucratized structure demanded by the U.N. and Agenda 21. The world simply must not proceed down that very damaging road.
In Globalization and Its Discontents economics Nobel Laureate and former Senior Vice President of the World Bank, Joseph Stiglitz, blames the IMF's (International Monetary Fund) policies for creating the Asian economic meltdown in 1997 as well as other global economic crises. While at the World Bank, he concluded that "many of the policies the IMF pushed, in particular, premature capital market liberalization, contributed to global instability."22 Because of the unfavorable conditions imposed on a nation receiving IMF funds, the funds not only failed to stabilize the situation, but in many cases made matters worse, especially for the poor.23 As part of its policy, the IMF requires impoverished countries to open their markets to First World investment and products without instituting banking and property rights laws to allow local businesses and citizens to participate in economic growth and protect from exploitation. At the same time IMF policy does not pressurize developed countries to open their own markets to the products of the borrowing Third World countries.24
At the same time, it is not all the IMF's fault, however, poor countries typically have higher trade barriers than rich countries. International comparisons show that freer trade, especially for developing countries, coincides with higher economic growth.25 All these factors work together to perpetuate and even worsen poverty.
Poor countries don't have to borrow from rich ones through agencies like the IMF. The Third world countries are to blame for third world debt and poverty. The problem with the IMF is that it finances their bad habits, like lending money to alcohol and drug addicts to finance their addiction while instituting policies that can exploit them. Worse, such international agencies encourage third world aid addicts to follow policies that are likely to aggravate withdrawal systems if they try to cure themselves.
Stiglitz understands that a free market system "requires clearly established property rights and the courts to enforce them."26 However, the IMF merely creates the perception of property rights, without requiring the legal structure that protects them in an equitable manner. According to Stiglitz, the IMF expects the legal structure needed to protect private property rights to appear magically.27 Of course, that never happens.
If the IMF, and the protagonists of third world aid and debt relief are serious about making poverty history they should encourage poor countries to do what rich countries did when they were poor in order to become rich, and what NICs did and are doing to escape the poverty trap. Global comparisons show that poor countries with high growth are those that, first and foremost, improved the integrity of their legal systems (property rights, the rule of law, independent courts, due process etc), and, secondly, liberalized and privatized their economies. There is no evidence that doing so slowly is better than quickly, but it is important that all core ingredients of economic liberalism must be implemented simultaneously.
It should never be forgotten that the world's rich countries did not have other rich countries giving them "aid" and bad advice. Mindful of the facile response to this point that Europe, especially Germany, recovered under the Marshall Plan, it should be noted that (a) if it were true it would be the exception proving the general rule, (b) Germany's "economic miracle" (wirtschaftswunder) occurred after the Marshall Plan under the radical "social market" liberalization policy of Ludwig Erhard, and (c) Germany got less than Britain and France, both of which performed poorly under post-war dirigisme.28
There are two further crucial points about the Asian crisis. Firstly, it affected some countries but not others, and, secondly, most of the world's countries, which are poor, should look upon the crisis with envy, for it was a small price to pay for the staggering growth and prosperity in the countries concerned prior to and after the crisis. Prosperity with a crisis is better than poverty without one.
In accordance with the Stiglitz analysis, many in the developing world view IMF policies as a new form of hidden colonialism under the guise of free market capitalism. No wonder property rights, capitalism and free market policies in general, and the United States in particular, have such a bad name in the developing world. However, these tragedies are not the result of property rights, free markets, or even the United States, but the global international community perpetuating an economic advantage over poor countries - ironically in the name of helping them.
In such a system, it should surprise no one that under the IMF's policies the very wealthy do "far better for themselves behind closed doors, bargaining special favors and privileges."29 Benefits to the developing nation primarily "accrue to the well-off, and especially the very well-off - the top 10 percent - while poverty remains high or increases."30 This is exactly what happened in Russia following the collapse of the Soviet Union and the rise of the Russian Oligarchs.
Under the current system, transnational corporations make investments, hire local workers with cheaper labor costs, and then skim the profits off and take them out of the country. While it is true that the citizens of these poor nations are often glad to have the work and are far better off than without it, Hernando de Soto found in a massive global study that together these impoverished citizens have $9.3 trillion dollars in dead capital!31 Dead capital is property that has potential value for equity purposes, but is worthless for collateral purposes or second mortgages because there is no legal structure to secure it for lending institutions.
If people in such impoverished nations had access to this dead capital, not only would local citizens directly benefit by investing in their own resource development, but also much of the profits would stay in their own nation for reinvestment! As the nation's wealth increases, wages increase thereby creating more demand for international (including U.S.) products and goods. U.S. businesses would benefit. More important, the hemorrhage of American jobs offshore would gradually diminish as the advantage of cheap labor evaporates. In the long term, everyone benefits. Yet, IMF policies often frustrate such measures.
While establishing formalized property rights in the developing world will not happen overnight, the fact that the IMF and its supporters do not even make it a condition of getting loans is very revealing. Without the wealth-creation ability of formalized private property, coupled with the effects of IMF policies and U.N. style sustainable development, there is little hope that these nations will ever get out of poverty. It must be further noted that the welfare concepts advanced by the U.N. also do not work. At best they will merely put a band-aid on the corruption and property rights failures of many nations.
In the United States, for instance, it is commonly assumed that welfare programs have taken millions of people off the poverty rolls. Again, this is incorrect. In 1966, the first full year following the passage of President Johnson's Great Society legislation, the percentage of all Americans below the poverty level was 15 percent. While it dropped to 11.1 in 1973 - alleged proof that government welfare worked - it increased back to 15 percent in 1982-83 and again in 1992-93.32 In 2000 it was again 11.3 percent.33 Since Johnson instituted his Great Society, the percentage of Americans below the poverty level has varied from 11.1 percent to 15 percent several times. What brought the poverty level down in each case waswere not government welfare programs, but an improving economy.
Distressingly, the campaign to "make poverty history" is informed by policies that have been tried and failed. Debt relief and aid will perpetuate the history of poverty by rewarding bankrupt dictators who cause the world's worst poverty, and demand of them that they adopt environmental policies of the kind that would have kept rich countries poor had they not been applied there. How to alleviate poverty is no mystery. It has been done in many countries, and there are increasing numbers of poor countries with high economic growth rates. What the characteristics of winners and losers respectively are is a simple statistical question. Various studies have found that freer markets out-perform less free markets. More significantly, it is not clear what the decisive variables are - which policies make the biggest differences.
Research during recent years the Free Market Foundation established the determinants of prosperity and poverty alleviation to the point where there is no longer room for informed debate.34 As explained by Hernando de Soto, one of the cornerstones of prosperity is property rights, which exist where there is freedom to own and exchange all forms of property. Other crucial policies needed for robust economies on which economists are in general agreement: low levels of government ownership, fiscal and monetary rectitude, freedom from exchange control, and flexible labor markets (actually forms of property right), to which we return below.
The single most important policy variable is the integrity of the legal system. Countries with least poverty, corruption, and unemployment, are those where property rights, free markets and rule of law coincide. The rule of law has become a popular development cliché. Everyone says its necessary, but few know what it means in practice - including national leaders. The term is used as if it is merely a synonym for whatever the user espouses. Sadam Hussein and Robert Mugabe claim to have operated in accordance with the rule of law. Few critics could say how, precisely, they violated it.
The "rule of law" is the absence of the "rule of man." It defines rights and obligations by objective laws of general application, made, implemented and adjudicated in accordance with the separation of powers. Where rights and obligations are not known with certainty in advance, where they are determined by arbitrary discretion or retroactively, there is no rule of law, and poor economic performance with high levels of corruption are inevitable.
Natural Resources - Key to Wealth if utilized efficiently
Lomborg notes that "rural regions by far dominate the problem of global poverty. Towns and cities on the other hand, are power centers which provide greater economic growth. Urban areas in developing countries produce 60 percent of GDP (Gross Domestic Product) with just one third of the population."36 The ratio is even more dramatic in the United States. Out of a GDP of $9.22 trillion in 2000, only 2.8 percent was in agriculture, forestry, fishing and mining.37
Figure 2 Less than 5 percent of the U.S. is classified as urban (depicted in red) by the U.S. Bureau of Census.35 Yet, 77 percent of all U.S. citizens live in urban areas and politically control their rural cousins by unknowingly heaping stifling and unneeded regulations on how they make a living. In the end, everyone loses. (The US Bureau of Census defines an urban area as being over 1,000 people per square mile).
Nevertheless, it is important to note that while the rural economy is seemingly unimportant to overall economic health, this perception is misleading and can have dire consequences to any nation that ignores its rural citizens. The raw material for every product used by urban citizens throughout the world originally comes from agriculture, forestry or mining in rural areas. Natural resource development and rural communities are like the hidden foundation of a skyscraper. Without its unseen foundation the strongest skyscraper will collapse. Likewise, without of the contribution of rural GDP, the strength of the national GDP is weakened. Rural economic health is critically important to the health of the overall national and global economy. Yet, rural citizens typically have the lowest incomes and often suffer the greatest abuse or neglect by their central governments, which is known as the "urban bias."
In most cases, urbanites do not even know their home computers originated in the ground, or that some of the clothes they wear come from trees. Even if they did, the vast majority do not fully appreciate what it takes for rural citizens to produce the raw materials used in products which are taken for granted every day. Therefore, many citizens can be misled into believing they are protecting the environment by voting to impose huge marketing, price and other regulatory structures on those living in rural areas, and disproportionately heavy taxes, especially on mining. In fact, they are unnecessarily denying their rural cousins the means to sustain their livelihoods. This forms the heart of a type of eco-imperialism applied to rural America that is similar to that experienced by poverty-stricken Third-World nations. The Wall Street Journal labeled this "rural cleansing"38 because rural citizens are being put out of work by big government interference and urban ignorance.
One of the most pernicious impacts on rural communities is labor regulation, whereby the cost and risk of employing urban workers is are kept well above market-clearing levels, which means populations, especially in the third world, are driven disproportionately into rural areas, where they compete for scarce lobs and other resources. Despite such costly policies that discourage urbanization, and diversion of wealth-generating resources to wealth-consuming "rural development," there is continual migration to cities, where people in shanty towns improve their quality of life by escaping the worst impacts of over-regulation in the underground economy.
Resolute resistance to natural and, ultimately desirable urbanization means that rural development resources are not invested where they should be, in urban areas to create favorable infrastructure and institutional environments. In the end everybody loses.
The most devastating modern intervention against rural peasants and commercial farmers is regulation informed by Agenda 21 and related documents. Rural citizens in developing nations, where such measures are often very damaging, accept eco-imperialism as a way of life because they have never experienced anything different from strident government interference or neglect. Rural Americans, on the other hand are experiencing eco-imperialism for the first time. They are angry and are fighting back. Most urbanites don't know or understand why.
The 2000 U.S. presidential election was one of the most, if not the most, contentious and divisive in American history. The election revealed the stark ugliness of the cultural war between urban and rural America in ways that can no longer be ignored. Although candidate Albert Gore got a slight majority of the total US vote, George W. Bush won an overwhelming 2,436 mostly rural counties, compared to 676 for Gore. In pure land area, Bush won in 2.4 million square miles of land area, while Gore won in only 0.6 million.39 This was because of the respective rural and urban biases that distinguished their policies.
The U.S. Constitution gives regional and local governments (states and municipalities) power over the federal government. According to Article 1, Section 3, "The Senate shall be composed of two Senators from each State, chosen by the Legislature thereof, for six years; and each Senator shall have one vote." Since the individual state legislatures elected their U.S. Senators the state's interests were represented in the U.S. Congress. This made it less likely that Congress would pass laws that would serve the interests of individual populous states.
This concept of state's rights was enshrined in the 10th Amendment of the US Constitution, "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." The founders designed the Tenth Amendment, among other things, to prevent an urban majority from being manipulated into unknowingly passing laws that discriminate against rural states. This was lost with the passage of the 16th and 17th Amendments that gave unlimited power of the federal government to tax and spend, and denied state legislatures the right to select Senators to represent the state and defend state's rights. Consequently, the ability of states and local governments to protect themselves from the whims of the more populous states and urban areas has greatly diminished.
How then do nations and rural areas get out of poverty? Dozens of studies and our analysis above show that increasing population does not cause poverty. If anything, there is a slight positive correlation. There is, however, strong evidence that the higher the personal income of a family the fewer the children they will have. This is strikingly apparent in the plunging fertility rates of developed nations. The reason centers on human nature. In a wealthy economy children are no longer an asset to their parents in old age, but a liability. Economist Dr. Jacqueline Kasun notes that in developed countries, "Children do not work; they require long, expensive education, bearing and raising them means large losses of earnings by their mothers; and social security retirement income depends on the parent's earnings, not on their children."40 Hence, while children can still be a blessing and deeply loved, there is no longer any economic incentive to have a large family.
Wealth creation is the answer to the population question - as well as to almost every issue discussed in the remainder of this document. Rarely is more government control the answer. The proliferation of socialist programs in Argentina brought that once proud, stable nation to near bankruptcy in the early 2000's. Burgeoning government merely slows or strangles economic growth. Dr. Kasun states, "it is not population growth, nor the behavior of private business that pose the big threat to environmental quality. It is the government, with its bottomless tax funds and its incentives to enlarge its activities no matter what the benefit-cost relationships."41 Simply stated, the surest way to reduce population growth and protect the environment of a country is to increase the prosperity of its citizens.
What is necessary to improve the economic condition of a society is large-scale investment in people and physical capital. Machinery is critical because it increases per capita productivity, while education is key to knowing how to run the machinery and conduct business. In addition to this, it is necessary to have a corruption free, open economy in order to facilitate international trade, investment and economic freedom. Stability, both economic and political, is required for the "security of property rights."42 To this must be added the freedom to be creative and to freely conduct business and trade. "Economic freedom - the right to property and choice - is observed to have a strong positive correlation with growth."43
We mentioned above that Hernando de Soto identifies the true pillars of capitalism as being essential for any nation seeking to improve the health, welfare, prosperity and environmental quality of its citizens. These are essential for any nation seeking to improve the health, welfare, prosperity and environmental quality of its citizens. They build primarily on property rights, fully transferable and secured by legal system that is free of corruption and over-regulation - enabling hard working citizens to preserve, build upon and bequeath the fruits of their labors; utilize their wealth and property and intellectual creativity as collateral for loans; and give them other incentives to build, create and innovate. In reviewing de Soto's work, the World Bank notes that:
While the concept seems simple, very few property owners actually hold official government-licensed titles outside the United States, Canada, Australia, Western Europe, and Japan. De Soto estimates that nearly five billion people are legally and economically disenfranchised by their own governments. Since these people do not have access to a comprehensive legal property system, they cannot leverage their assets to produce additional wealth. They are left with what de Soto calls "dead capital."44
Hernando de Soto asserts that much of the wealth needed in the third world already exists in the form of $9.3 trillion worth of dead capital. This is nearly as much as the total value of all the companies listed on the main stock exchanges of the world's twenty most developed countries. It is more than twenty times the total direct foreign investment into all Third World and former communist nations in the ten years after 1989, and forty-six times as much as all the World Bank loans of the past three decades. Finally, it is ninety-three times as much as all development assistance to the developing nations from all advanced countries during the past thirty years.45 There would be no need for development assistance and U.N. socialist income redistribution schemes if these poverty-stricken people could have access to the asset value of their dead capital.
Therefore capital, education, economic/political stability, property rights, economic freedom and the rule of law are all keys to economic growth, population stabilization and environmental protection. Free markets, not government dominated markets, are the only approach that lifts impoverished nations from their poverty in the real world, and give them the incentive to have smaller families. There has been enough food to feed the world for the past fifty or more years. The problem has not been the failure of the market to produce enough for all, but of governments preventing markets distributing food to those who need it, and curtailing the natural aptitude of the poor to enrich themselves through production creation and trade.
Starvation and poverty are not caused by the unbalanced exploitation of resources by the developed nations as frequently charged, but by corrupt governments, lack of infrastructure, government interference, socialist redistribution of all forms of property, insurrection and war. All of these discourage capital investment, innovation, creativity, pride of ownership and an incentive to properly take care of private property so the owner can continue to generate income year after year - perhaps for generations to come. This is true sustainable development that leads to sustainable communities.
"No famine has ever taken place in the history of the world in a functioning democracy" wrote Nobel Laureate, Amartya Sen, in his most memorable quotation.46 His native country, India, has been suggested as the exception which proves the general rule.47 But even there, where there was real hunger during extreme drought conditions, actual starvation was averted. It is not voting per se that prevents famine, nor is it adverse weather alone that causes it. Sen's thesis is that, with sound policies implemented by democratic governments dependent on the popular vote in countries with a free press, famines are avoided regardless of weather conditions. Ultimately, given enough wealth produced in efficient economies, food and other needs can be imported.
Population growth does not necessitate depleted resources, and there are currently no shortages of food, raw materials or energy. Nor is there anything to prevent increased production. People are human capital.
Overpopulation in the world is not a problem. The United Nations itself shows that population will peak at about 9 billion people around the year 2050. More people means more minds to produce innovations; not simply more mouths to feed.
High population densities don't cause poverty. There is no correlation between population density and poverty. There are, however, high correlations between denser populations and prosperous human specializations.
A vibrant free market economy, not more numerous government programs, reduces poverty. Hernando de Soto identifies the true pillars of wealth which center on property rights that are fully transferable and secured by a legal system that is free of corruption and over-regulation. The World Bank estimates nearly five billion people are legally and economically disenfranchised by their own governments.
Government corruption and/or government over regulation create poverty. There is a high correlation between poverty and nations having corrupt governments or governments that over regulate the marketplace and citizen initiative. Where economic improvement has occurred, it was always proceeded by a lessening of corruption in their respective governments and increased political and economic freedom and stability within their borders.
Population growth is either not related to, or has a slight positive correlation with, economic growth. Greater population growth rates often translate into the economic growth.
Per capita income is positively correlated with environmental protection. The better the economy, the greater the ability of a society to afford environmental protection and sustainability.
Money alone does not reduce poverty. While there is still extreme poverty in the world, enormous progress has been made in its reduction. Although trillions of dollars have been spent in the United States on poverty reduction, dollars have not measurably lowered the poverty level. Large government programs have in fact harmed millions of Americans by making their survival dependent upon the largess of federal government.
The greatest poverty will be in rural areas. While rural prosperity seems to play only an insignificant role in the overall GDP of a nation, without rural prosperity urban prosperity cannot be maintained in perpetuity. It is not sustainable. Nor is the poverty in the developing nations caused by the wealthy developed nations.
Planned societies and centralized government discourages initiative, free markets and creativity. Government planning stifles economic growth. Overly bureaucratized societies dampen creativity and causes factions and instability. It therefore does not help people; it discourages them.
Economic growth is not destroying the earth as proclaimed in the headlines, rather the contrary.48 We will look more specifically at environmental concerns below.
Notes and Citations
1 The global 2000 Report to the President: Global future: Time to Act, prepared by the Council on Environmental quality and the U.S. Department of State (Washington: U.S. Government Printing Office, January 1981), p. ix.
2 "World Population 2002."
Data Tables. United Nations Population Division, Department of
Economic and Social Affairs. Last posted February 14, 2004.
Also see: "World Population Prospects - The 2002 Revision,
Highlights" United Nations Population Division, ESA/P/WP. 180,
February 26, 2003.
3 Population Division of the
Department of Economic and Social Affairs of the United Nations
Secretariat, World Population Prospects: The 2002 Revision and World
Urbanization Prospects, March 3, 2004. Go to:
4 "World Population
Prospects: The 2002 Revision," Press Release, population division
department of economic and social affairs united
5 Population Division of the
Department of Economic and Social Affairs of the United Nations
Secretariat, World Population Prospects: The 2002 Revision and World
Urbanization Prospects, March 3, 2004. Go to:
6 Table 3. Total Fertility, By
Country, For Selected Periods. In: Annex Tables, World Population
Prospects, The 2002 Revision, United Nations Population
Division. March 3, 2004.
7 Bjorn Lomborg. The Skeptical Environmentalist, (Cambridge, New York: Cambridge University Press, 2001). p. 91-160.
8 Ibid, p. xix
9 Ibid, p. 159
10 World Bank, World Development Report, (Oxford: Oxford University Press, 1992), p. 34.
11 "World Population
Prospects; The 2000 Revision." The
12 http://www.usmayors.org/ uscm/news/press_releases/documents/metroeconomies110399.htm.
13 Population Division of
the Department of Economic and Social Affairs of the United Nations
Secretariat, World Population Prospects: The 2002 Revision and World
Urbanization Prospects, March 3, 2004. Go to:
14 Bjorn Lomborg, The Skeptical Environmentalist, p. 49.
15 Ibid, p. 72.
16 Human Development Report
1997. United Nations Development
17 Kofi Annan. "Freedom From
Want." We The Peoples, The Role of the United Nations in the 21st
Century. Section III, 2000.
19 Hernando de Soto. The
Mystery of Capital. Chapter 1.
20 Ronald Utt and Wyndell
Cox. City Limits: Puting the Brakes on Sprawl: A Contrary View,
WebMemo#20, Heritage Foundation. June 29, 2001.
21 Hernando de Soto. The Mystery of Capital (New York: Basic Books, 2000), pp. 6-7, 20-21, 35.
22 Joseph E. Stiglitz. Globalization and Its Discontents (New York: WW. Norton & Company, 2003), p. 15.
24 Ibid, p. 19.
26 Ibid, p. 74.
27 Ibid, p. 73.
29 Joseph Stiglitz. Globalization and Its Discontents, p. 164.
30 Ibid, p. 18.
31 Hernando de Soto. The Mystery of Capital, p. 35.
32 Joseph Dalaker, Poverty
in the United States: 2000, Number of Poor and Poverty Rate,
1959-2000, September 2001. p 3. U.S. Bureau of Census, Current
Population Trends, Series P60-214.
33 Poverty: 2000 Highlights,
U.S. Department of Census.
35 U.S. Census Bureau determines an area is urban if it has over 1,000 people per square mile surrounded by census blocks having at least 500 people per square mile
36 Lomborg, p. 49.
37 "Real Gross Domestic
Product by Industry in Chained" (1996) Dollars, 1994-2000. Bureau of
Economic Analysis of the Department of
38 Kimberley Strassel. "Rural Cleansing" The Wall Street Journal, Thursday, July 26, 2001.
39 USA Today. "Latest Vote,
County by County."
40 Jacqueline Kasun. The War Against Population, The Economics and Ideology of World Population Control (San Francisco: Ignatius Press), p. 64.
41 Ibid, p. 45.
42 Jeffrey Frankel. "Why
economies grow the way they do." Canadian Business Economics,
44 Hernando de Soto Asks Why
Capitalism Triumphs in the West But Fails Everywhere Else. DevNews
Media Center, World Bank Group. July 23, 2002.
45 Hernando de Soto. The Mystery of Capital (New York: Basic Books, 2000), p. 35.
46 Amartya Sen. Democracy as Freedom (Anchor, 1999)
48 Lomborg, p. 211. [an error occurred while processing this directive]