San Juan Mountains

San Juan Mountains
San Juan Mountains: Grenadier Range

Friday, February 27, 2015

Population Growth Stimulates Economic Growth

People believe lots of stupid things about economic growth.  Government bureaucrats and career politicians believe that introducing legally counterfeited money into the economy will make it grow. They are wrong.  The only impact that counterfeit money has upon an economy is to drive up prices through what most people know as inflation.  Fools who want to become career politicians make endless speeches about how they will create laws that will create economic growth, if you only vote for them.  They believe that economic growth can be created by legislative fiat.  Idiots, all of them.  It is impossible to create economic growth by passing a law telling the economy to grow.  The fact that people continue to believe these ridiculous ideas about the source of economic growth tells me a lot about the economic understanding of most people.
Yesterday I posted an article to this blog in which I discussed the difference between the public's opinion on a handful of different contemporary issues compared to the opinion of scientists about those same issues.  I left out one important issue that I would like to come back to today.  The issue was, "Growing world population will be a major problem."  82% of the scientists agreed with that statement.  A solid majority of 59% of the general population also agreed with the statement.  I conclude that most people believe that population growth is a bad thing.  In this case everyone is wrong but me.  Allow me to explain.
I was watching Fox News again last night.  The different talking heads on the various programs all reported that King Obama is an evil man because he issued an Executive Order that effectively increased the population of the Socialist Democracy of Amerika by ten million souls.  You all remember that EO.  Our King decided that since Congress would not give him the law he wanted, he would create one by himself via Executive Order.  It is all unconstitutional of course, but we abandoned the Constitution ages ago.  One day he took a pen and declared that people who had been living in this county as illegal aliens were now permitted to remain in the country without fear of deportation.  The King's action outraged the fair and balanced people at Fox News so they embarked upon a fair and balanced campaign of propaganda against the King's order.  Integral in that propaganda campaign is the idea that growth to the population of the SDA caused by the King's order, an estimated ten million new residents, will inevitably result in lower economic growth for the country.
You all know the argument.  Illegal aliens are in our country "stealing our jobs."  Because these desperate illegals are willing to work for less than what SDA citizens demand to perform the exact same job, evil, profit-seeking corporations will hire them and effectively displace millions of Amerikan workers.  Since these illegals are working for less money and since many of them have the audacity to send most of their earnings back home to Mexico rather than spending them at the local Wal-Mart, the net impact to the economy of the SDA is disastrous.  It will not be long until we are locked into a deflationary spiral that will make the Great Depression look like a minor recession.  Or so we are told.
Lost in all of the ridiculous rhetoric is the calm assessment of valid economic principles.  Think back to what you learned by reading Robinson Crusoe.  Was our stranded citizen of one harmed when Friday showed up?  Did Mr. Crusoe run about screaming that he was going to be worse off because there were now two mouths to feed instead of one?  Of course not.  And why didn't he behave that way?  Because Mr. Crusoe recognized that additional people means additional skills, additional labor, additional capital and greater wealth for all.  Indeed, both Crusoe and Friday recognized that, when it comes to economic calculations, one plus one equals three.
Basic economic principles tell us that more people equals more wealth.  The reason is simple.  As people are free to pursue those things they do best, which they become as more people enter the economy, it is only a matter of time before each person is performing the activity that he is most suited to perform.  In other words, each person is performing at peak efficiency.  Economists call this the division of labor.  As the division of labor chugs along economic output increases as a direct result of the new efficiencies created by having more people working.  As people become more efficient at production it becomes possible to move beyond a subsistence barter economy to an economy in which savings accumulates and financial capital becomes available to entrepreneurs.  Entrepreneurs take that capital and wed it to their ideas, creating new and better goods and services.  More people are needed to create these new goods and services and the factor of human capital becomes very important.  Population growth, either through greater births than deaths or through immigration, provides the human capital necessary for economic growth to continue.  Far from hindering economic growth, population growth becomes one of the necessary and vital ingredients to economic growth. 
Why do so many people miss the obvious truth that a growing population translates to a growing economy?  There are many reasons.  What I have written above assumes that the country in question has a free market and is not socialized.  In a free market country with no socialization people come to that country to work.  Additional people are seen as both additional workers and additional consumers.  From both perspectives they are welcome additions.  When the country is socialized however, additional people are seen as an additional drain upon government reserves and new people are most certainly not welcome. The problem with additional people is not the simple fact that there are more people.  The problem is with the socialism in the country to which the people come.  If allowing ten million more people to reside in the SDA is a problem it is only a problem because the SDA is a socialist country.  Fix the socialism and the alleged problem of too many people disappears.  In fact, just the opposite is the case.  Fix the socialism and everyone becomes much more well off.
Another reason that most people believe that more people harms the economy is due to the great success the socialistic labor unions in this immoral country have had with their propaganda campaigns.  They are the ones responsible for the mantra that new residents are stealing the jobs of the existing residents, thus causing everyone to be worse off financially.  They know that what they are saying is untrue but they do not care because the reason for their existence is to obtain a wage that is higher than what the free market will bear.  The fact of the matter is that the jobs the new residents are allegedly stealing are the exact same jobs that are presently going unfilled because the lazy bums who live here already are unwilling to work for a rate the free market is willing to pay.  So the labor unions enlist the services of government, in exchange for votes, to prevent additional workers from coming here and, thus, prop up unfairly high wage levels.  The bill is paid for by the unwitting consumers who have no idea why the things they are purchasing are priced much higher than they would be in a true free market.
Others, like the fair and balanced people at Fox News, do not want new people to come to this country because they are afraid that new residents will register as Democrats.  They see immigrants and illegal aliens as a homogenous group of malcontents who want nothing more than to get a driver's license and a voter registration card so they can vote for a Democratic candidate who will increase their welfare payments.  Whether that is an accurate assessment of the situation or not I do not know.  What I do know is that the problem, once again, is not with an increase in population.  The problem is with socialism. 
As you listen to all of the debates and arguments that will be presented about the relative merits of allowing more people into the SDA remember this....none of the arguments have anything to do with economic reality.   Population growth stimulates economic growth in a free market.  Everything negative associated with an increase of population is directly related to the socialistic practices of the country, not to the sheer number of new residents.  And this is where it gets really ironic.  The fair and balanced folks over at Fox News are committed to socialism.  Every career politician and every life-long bureaucrat is committed to socialism. We are the Socialist Democracy of Amerika.  Practically every person I meet on the street in this ignorant country is committed to socialism.  But rather than eliminate the socialism and begin to experience true economic prosperity, the ignorant fools who populate this land choose instead to demonize those who would like to live and work among us, while clinging tenaciously to their beloved socialistic practices.  And why is socialism so popular?  Because it appeals to the totally depraved sinful nature of the citizens of this land by promising something for nothing.  All you have to commit to is the principle of theft by majority vote and everything will be fine.

Note To Regular Readers:
I am taking two weeks off to flee from the snow.  I will be in the dry desert climbing peaks until Monday, March 16th.  Check back then for another interesting and informative blog post.  

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