An Example of Declining Per Capita Consumption in America

http://www.reuters.com/article/economicNews/idUSN1644139520080516

The attached article is about yesterday’s release of April housing starts. To make a long story short, housing starts jumped dramatically, rising 8%. However, before drawing the conclusion that this is a sign of the housing market bottoming out and beginning to rebound, you must look a little more deeply into the data. All of the improvement is due to a huge 36% jump in the construction of multi-family dwellings – apartments, townhouses and condominiums. Construction of single family homes actually fell once again, by 1.7%.

 

What’s at work here is the very per capita consumption-destroying effect of space conservation that I warn of in Five Short Blasts. As our population density continues to rise beyond its optimum level, and as our “effective” population density is driven much higher still by engaging in free trade with grossly overpopulated nations, more and more Americans are finding single family homes to be out of their reach. Over the decades, their incomes have been eroded by the loss of jobs overseas and the cost of single family homes has been driven higher by an ever-rising premium on undeveloped land, almost always farm land, now more than ever needed to meet an ever-growing demand for food and other renewable resources like corn for ethanol production. Now more Americans find it necessary to resort to the kind of housing that people settle for in other overpopulated nations in Europe and Asia.

 

Consider the impact on per capita consumption. Let’s say a family finds it necessary to move into a 1,200 square foot apartment instead of purchasing a 2,000 square foot home, and that it’s a three-story apartment building. Assume that, of the four walls that form the perimeter of the apartment, two are exterior walls with windows. The other two are shared with other apartments. Here’s how much per capita consumption for the following products has decreased:

 

  • steel and concrete for foundations – 80%

  • roofing materials – 80%

  • flooring materials – 40%

  • drywall for walls & ceilings – 57%

 

Not only is the labor required to build such structures dramatically reduced but so too is the labor involved in making the building products. While it may seem to a good thing that the per capita consumption of resources is reduced, the reduction in the per capita consumption of labor is not. Falling per capita consumption in the face of rising productivity is a recipe for economic disaster in the form of unemployment and poverty. This is the road that America is traveling – a long, slow journey leading away from the American Dream and toward a future of crowding, poverty and scarcity.

 

But it doesn’t have to be this way. The antidote is right in our grasp if only we have the courage to take it – stabilizing our population and imposing tariffs on the products of overpopulated nations. Anything short of these steps will doom us to trudging ever further down that dark path.

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