Matthew Yglesias vs. Alex Tabarrok
Doug Holtz-Eakin Turns to the Dark Side

Demography: Twentieth Century Economic History Weblogging

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Tyrannies throughout the world—dictators, sane or insane—for whom prosperity was not a concern or was even seen as a threat, were the principal cause of rising relative inequality around the globe. But the second cause were the demographic burdens placed on poor countries by the population explosion. These burdens are now, fortunately, ebbing as the demographic transition to low fertility and extended lifespan finish their spread across the globe.

A human population with adequate food, and with reasonable pre-modern public health will do what the English settler population did in North America in the two centuries after 1600: it will double from natural increase each generation. Only Malthus’s “positive check”—plague, famine, children malnourished so that their immune systems are compromised and cannot fight off bacterial or viral infections, women so malnourished that they cease ovulating—can keep population stable. Even Malthus’s “preventative check”—priests threatening those who engage in illicit sexual intercourse with damnationd, fathers refusing to let their daughters marry until the suitor is established with a farm of his own, brothers refusing to let younger lineage males marry until lineage resources increase, kings to enforce Poor Laws and confine vagrants and those without visible means of support—cannot do much. Only with the coming of female literacy and artificial means of birth control can a society maintain both a slowly-growing or stable population and a substantial edge in median standard of living over subsistence.

China’s population has grown by a factor of 7 since 1800. Egypt’s has grown by a factor of 30. Each has moved between 1⁄4 and 1⁄2 their population off of dependence on the land—out of farming—and have irrigated new lands. Nevertheless, the raw arithmetic means that average farm sizes in China and Egypt today are about 1⁄4 the sizes of their ancestors’ farms in 1800.

You need huge increases in fertilizer and other inputs to get the same crops out of 1⁄4 of the acreage, even with the extra sweat the farmer’s family can put in. That shrinking of average farm sizes is an enormous headwind hindering economic growth. It does not end until societies go through the demographic transition: until women learn to read and use birth control and so control their own fertility and the spacing of their children.

And even rapid structural adjustment out of agriculture does not ease the situation. Consider the infrastructural task. Suppose you manage to move the bulk of your population out of subsistence agriculture and into manufacturing and service occupations. Those occupations will be predominantly urban. Many of them will require a cheap and effective network for long-distance trade. You will have to build cities, railroads, highways, and ports to house and serve your rapidly-growing (remember: no demographic transition yet!) population. You will have to do this while you are still desperately poor. And the enormous magnitude of the infrastructural task associated with these sectoral shifts diverts a huge amount of resources from their alternative use of raising labor productivity.

Thus to those economies who had in 1800—had high levels of female literacy to begin the fertility decline of the demographic transition and relatively high levels of productivity to ease the burden of infrastructure creation—more was given. The working-out of this process was, along with the greater burden of Leninist communism and the lesser burdens of other forms of corrupt authoritarianism, at the origin of our present international global economic inequality.

Within-country inequality is, however, another set of stories: stories of national politics.