This article was originally published by Peter Jacobson at The Foundation for Economic Education. 

Elon Musk says the number one threat to humanity is a population collapse. Is he right?

The irrational pandemonium of the 20th century was the fear of a population explosion. Estimates from scientists such as Paul Ehrlich projected population growth would lead to mass starvation, death, and environmental degradation.

None of that happened.

Instead, food became more plentiful, life expectancy increased, and the environment got cleaner. This is because, as economist Julian Simon pointed out, human beings are the ultimate resource for improving the world. Population growth is good.

Now it appears, though, that the opposite problem is rising to the surface. Fertility rates are down below the level needed to sustain the size of the population in many countries.

Since population growth is a good thing, this seems like bad news. As the population plummets, so does the number of creative minds ready to tackle humanity’s challenges. This issue has caught the attention of many, notably Elon Musk, who believes population collapse is humanity’s biggest threat.

Yes https://t.co/hmmRqxqKus

— Elon Musk (@elonmusk) August 21, 2023

To be clear, if the population is going to collapse, I agree with Musk’s concern. Growing population is the engine of human creativity, and human creativity is why we live in the wealthiest time in human history.

However, where I don’t agree is that I’m not convinced the population numbers will collapse in the long run. To understand why, we need to look at the questionable history of long-term demographic predictions and consider the importance of unplanned order.

Malthus’s Mistake

In the 18th century, economist and demographer Thomas Malthus made a familiar gloomy prediction. He claimed that a growing population would trap humanity in poverty. Why? It was based on a simple logic.

As people grow wealthier, they will be able to afford to have more kids. When they produce more kids, they then have to feed those kids and their increased wealth goes away.

Is this how things go? Not really. Individuals don’t simply have more kids as long as they can afford it. This tendency holds true for insects and animals but not human beings. Malthus wasn’t alone in this fear either. Scientists have long attempted to fit humans into animal demographic models, and the results simply don’t bear out.

Malthus, for his part, saw this possibility coming in later editions of his “Essay on the Principle of Population.” He realized this logic was avoidable if individuals could muster the ability to abstain from having more children.

This is precisely what happened. As countries grew richer from the time of Malthus to today, a pattern emerged. Increased wealth led to greater rates of children surviving infancy and childhood. As a result, families could count on their children living and they no longer had to “overshoot” the number of kids they wanted. At the same time, increased wealth made it possible to save resources for retirement rather than depend on children as a form of social security.

Similarly, cultural changes toward women being involved in the workforce both increased the opportunity cost of women having children as job opportunities became more attractive and eliminated the infant “male preference” which often drove families to have more children until they had boys.

As a result of these and other factors, the average size of families decreased. Demographers call this change the demographic transition. There were also some extremely negative factors that led to a lower population, such as a wave of antinatalist propaganda in the 20th century. But, for the most part, the factors that led to a lower population growth rate were the result of human action but not human design.

Economists call orders that result without central designing spontaneous order.

Demographic trends are largely the result of spontaneous order. The initial inability of Malthus (and others) to anticipate long-run demographic trends properly was an inability to comprehend the complex nature of this spontaneous order.

Spontaneous Order Marches On

So, if the population growth decline was a result of spontaneous order, why am I unconcerned about this trend continuing to the point of population collapse?

For that answer, we need to turn to Nobel Prize-winning economist F. A. Hayek. In one of his last works, The Fatal Conceit (1988), Hayek writes a chapter on population (inspired in part by Julian Simon).

In the chapter, Hayek makes a clear point: human institutions that lead to the growth of the population will survive because the growing population will carry those institutions on. On the other hand, institutions that do not prioritize a growing population will, by their very nature, die out. In Hayek’s words, “as with every other organism, the main ‘purpose’ to which man’s physical make-up as well as his traditions are adapted is to produce other human beings” (emphasis added).

Traditions unattached to a growing population are not able to be passed down as well as others. Hayek points out that this isn’t a unique observation:

“The close connection between population size and the presence of, and benefits of, certain evolved practices, institutions, and forms of human interaction is hardly a new discovery.”

So what’s the point? There is a natural tendency for institutions and cultures which promote population growth to be passed on. Cultural spontaneous orders select for societies that grow populations despite the modern situation. That means, in the long run, the groups that grow the population the most will begin to displace groups that do not.

Within societies, there are often subcultures with higher fertility norms. Similar to George Mason economist Robin Hanson, I expect these subcultures to rise in prominence. Or, to borrow a phrase from writer Zachary Yost:

The Amish will inherit the Earth.

— Zachary Yost (@ZacharyYost) November 27, 2023

However, it’s not obvious what these subcultures will be. While it’s true that groups like Mormons and Catholics have historically had higher fertility rates, the demographic transition seems to have impacted both groups the same way as the rest of society (the latter more quickly than the former).

So even though population growth in these circles is higher than in the rest of society right now, being higher isn’t the most important feature in predicting which subcultures will rise. The groups most likely to grow will be those who are either unaffected or even inversely affected by the demographic transition.

Consider an example from financial markets. Writer Nassim Taleb is famous for writing about the importance of assets which grow in value as everything else gets worse economically. He calls these assets antifragile.

In figuring out which groups will reverse fertility trends for humanity, you simply need to figure out which groups have norms that are antifragile with respect to the “population collapse.”

That’s not all, though. As certain subcultures that promote population growth rise in prominence, I expect other subcultures will follow their lead, even without realizing it.

Economists Kimenyi, Shughart, and Tollison published a paper in the Journal of Population Economics in 1988 with an interesting title: “An interest-group theory of population growth.”

The paper found that countries which were ethnically heterogeneous tended to have higher fertility rates. The reason? A higher population is important for different ethnicities in these countries competing for government resources.

The straightforward result of the paper is somewhat distasteful. We probably don’t like the idea that different ethnicities or cultures would compete demographically for government resources at the expense of one another, but it isn’t surprising that they do.

Note, the authors do not claim this is an intentional strategy. Instead, it’s likely, again, to be the result of spontaneous order.

This logic leads me to believe that as some groups rise in numbers and influence, other groups will “compete” by adopting norms that raise their numbers as well.

As a result, I think spontaneous order surrounding demographics will prevent a population collapse. In the long run, populations will not collapse, because groups that promote population growth will pass those norms on to future generations.

Short-Run Pains

At this point I need to highlight that just because population likely won’t implode in the long run doesn’t mean there won’t be problems caused by changing demographics in the short run.

When you say the phrase, “Groups with cultures that encourage population growth will be spontaneously selected,” you’re necessarily implying some other groups will not be selected. This could even mean certain countries fall significantly in terms of population and, as a result, prosperity.

Just a few weeks ago, I wrote about how I think the Chinese government, because of their coercive population policies in the 20th century, have created a severe problem for the country.

China is reversing course on population, but I believe it’s too little, too late.

Many countries are turning to the use of pro-natal policies to try to curb population woes, but I don’t see this working in the short run.

While it’s true that pro-natal policies increase birth rates, the question is, “At what cost?” Lyman Stone, a Research Fellow at the Institute for Family Studies, argues that attempting to restore birth rates via cash incentives alone is “prohibitively costly.”

That doesn’t mean policies can’t help, though. One of the largest expenses to Americans on their tax bill is Social Security. Individuals who have large families essentially subsidize other citizens’ Social Security both by providing income and also paying to raise a person who will provide his or her income later as well. Such a system could easily be reworked to be fairer and penalize large families less.

Regardless, it may be impossible for some countries to reverse their population collapse, and, as a result, I can’t say the fears of people like Musk are totally unfounded. I don’t think the population collapse will derail humanity as a whole in the long run, but it will hurt many in the short run.