OVERCROWDING

My commentary entitled "Defying the Conventional Wisdom” which was published more than a month ago generated variety of remarks from the readers. They were informative and thoughtful regardless of their nature. Thus far, I have not been able to explain some of the alleged unconventional views I presented in that article. The following is kind of sequel to the original article designed to shed some additional light on some of the key points I thought in need of clarification:

1. When I said that people should not complain about overcrowding, that was not to claim unconditionally that overcrowding is not a problem. Overcrowding is a problem, but not for those who make a conscious decision to live in overcrowded city versus small towns. Many people cannot flourish unless they live in big cities. Modern products and innovative services cannot be developed in rural areas. Similarly, overcrowding is not a problem for those of us whose welfare is not adversely affected as a result of it. There are, however, people who always complain because they either cannot afford the expenses or unwilling to tolerate other people. Overcrowding is a challenge for the government who has the means and the power to provide adequate infrastructure to accommodate population growth. However, it may every so often fail to do so.

Almost the entire world’s economic growth happened during the last two hundred years especially after the industrial revolution in the early 19th century. One of the consequences of the industrial revolution was the mobilization of the labor force and massive movement of workers into industrial jobs, thus augmenting the productivity of labor. We learned how to improve our life as soon as we learned to live together. Economic progress requires wealth, and wealth is the fruit of knowledge and technology created by human beings. Furthermore, entrepreneurs are driven by profits that are boosted by mass production. Big companies could not have survived if it was not for the millions and millions of people buying their products.

2. Population may or may not be the only source of wealth. Yes, without people there will not be a great deal of economic activity. Population is in fact the source of wealth, given that property rights are protected. Population is the source of capital, information and technology, the necessary ingredients of wealth and income. I understand there are many populated countries in which living conditions are gloomy; factual testaments that population per se is not a sufficient condition for economic growth. Institutional settings should also be favorable. Respect for and protection of property rights, enforcement of contracts, safe and efficient execution of business transactions, and above all the rule of law are the building blocks of economic prosperity. Without such institutional factors a country cannot move forward no matter how intellectual its population. In other words, the advantages of a large population will not materialize automatically if institutional settings are not constructive. Population without institutional factors is like having millions of modern automobiles but no modern highway system to accommodate them. Calamity will ensue as a result of such mishmash.  

3. I mentioned that society might benefit from a family’s decision to have more children because of spillover benefits to the society while the costs of raising children stay with the family. For many of us, like myself, who come from a big family, I thought that was an altruistic way to justify big families. As long as the children grow up to be productive members of society, they would not make the society any less fortunate. However, if they do not contribute to society as adults, it forces government to support these people using resources that may otherwise be used more deservingly in alternative uses.

When I argued about the benefits of having more children, I made it clear that having more children does not automatically benefit the society. It does so as long as the children do not grow up to become criminals and/or free riders. Generally speaking, I may add, more children may make society worse off because parents need to spend more time taking care of their kids and less time on other matters that can help elevate their standard of living. Society does benefit, though, with one caveat: the family must be able to provide for all children adequately. If not, all the costs of raising kids may not stay with the family as in United States where the burden of welfare payments falls on the shoulders of taxpayers. Having more children without being able to support them is obviously not going to benefit the society.

In spite of all this, the larger the number of children in a family, the bigger is the probability that one of them grow up to be a difference-making individual. When I was in Iran last December, I was given an opportunity to talk to high school students in my hometown. I found most of them very bright, articulate, and enthusiastic to learn. They answered my questions with a high level of sophistication that revealed their maturity. I have no doubt that many of them will grow up to be the future leaders who can wield their power to improve the life of others. Raising children is like archaeology. Archeologists spend months or even years digging the ground expecting to find something of historical value. There may not find something every time they excavate the ground. However, when they find even one significant item, that one item reveals lots of valuable information about our history.  

4. I don’t believe our country is overpopulated. To prove this in a fun way, I did a simple rudimentary calculation. Suppose that there are a total of 13 million households in Iran given that the total population is 65 million and the average size of a family is 5, that is five members in each household. If we give every family a piece of land equivalent to 1000 square meters, each family can build a large house at the middle of it with more than enough space remaining for privacy. Incredibly, a total of 13,000 square kilometers is needed to house the entire population. That is equivalent to about only 0.8% of Iran’s total land area implying that 99.20% of the country’s area still remains free. This is of course an accurate abstract calculation. Whether it is practicable remains to be seen.