Following up on Ryan’s post about population fears, I find it interesting that almost nobody ever mentions the substantial benefits of greater population. I’ll admit that I struggled with the economic arguments at first. It just seems so obvious that a population of billions is too much for the planet. My problem was that I was thinking of it as a physical problem rather than an economic one.

The economic argument for greater population is so simple that I’m surprised it didn’t occur to me right away. It rests on Adam Smith’s insight: “The division of labour is limited by the extent of the market.” Simply put, in a world of just one person, there would be no division of labor, and that person would (maybe) barely survive. With more people in the world, trade makes specialization and division of labor possible, greatly increasing each person’s productivity through economies of scale. Moreover, the range of consumer goods expands, as low-cost mass production of a good is economical only with a sufficiently large consumer market for that good. More people makes us all better off. Likewise, more trade makes us all better off.

As Matt Ridley argues in The Rational Optimist, as population has increased, our ecological footprint has shrunk. Greater division of labor has decreased each person’s ecological footprint so much that it more than offset the addition of more people. For example, greater efficiency in agriculture allows more people to move to cities and reduces the amount of land needed to produce food, both of which lessen our ecological impact. So more trade and more population is better for the planet too!

So rather than celebrate falling rates of population growth, we should really consider it as a bad thing, and encourage more child-having.