The Benefits of Population Reduction to a Developed Country

By Social Contract Editors
Volume 28, Number 4 (Summer 2018)
Issue theme: "Are there no limits? The crisis of overpopulation, mass immigration, and overconsumption"

Some proponents of continuing mass immigration, such as The Wall Street Journal’s William McGurn, argue that developed countries’ populations will shrink without more fertile newcomers. Echoing the late University of Maryland business professor Julian Simon, they claim that a declining population must necessarily hurt a country’s future well-being. This proposition was challenged by Ezra. J. Mishan (1917-2014), Professor of Economics at the London School of Economics. Writing in The Social Contract (Fall 2001, p. 3), he outlined some of the benefits of a reduction in population to a developed country:

“...that Japan and those Western European countries with declining populations face a dilemma: In order to maintain cultural integrity, they must limit immigration yet they can’t because of ‘economic necessity.’

In a country with a diminishing population, aggregate consumer demand declines along with the workforce, the reverse being true of a country with an expanding population.

But bearing in mind that in ordinary economic circumstances markets are continually having to adjust to quite rapid changes in the pattern of consumer demand, in resource availabilities, and in technologies, gradual changes in population size are unlikely to cause any serious dislocation.

More important, a reduction in the population of a developed country is hardly to be deplored on economic grounds. Certainly countries with populations as small as those in Switzerland, Norway, or Singapore are among those with the highest living standards in the world. Specific advantages of a reduction in population size include an increase in land and resources per capita, and a decrease in the amount of pollution, garbage, and traffic congestion. Moreover, with the associated decline in the volume of imports relative to exports, an improvement in the terms of trade which entails a reduction in the prices of imported goods and material is experienced.

In sum, a developed country that is enjoying a declining population is twice blessed if it is able to prevent immigration. For along with an improvement in living standards and amenity it also avoids racial tensions and cultural conflict.” ■

Works of Interest by E. J. Mishan

The Costs of Economic Growth (1967)

Cost-Benefit Analysis (1971)

Economic Myths and the Mythology of Economics (1986)

Thirteen Persistent Economic Fallacies (2009)