Shrinking Population is Smarter than Cutting Per Capita Consumption

I’ve recently had a couple of exchanges with other bloggers on this topic and, although I posted something on the same topic recently, I think it’s worth revisiting it again. This seems to be a hard concept for folks to grasp, that falling per capita consumption can be a bad thing while sustaining high per capita consumption is the more desirable alternative. People associate high per capita consumption with waste, excess, the plundering of natural resources and environmental degradation. At the same time, they are unable to grasp that low per capita consumption is indicative of a low standard of living rather than some sort of “enlightened” way of maintaining a high standard of living in an environmentally sustainable way.

Not helping matters, recent stories in the news reported on a study that showed that per capita carbon emissions are lower in big cities than in more rural areas. Many people have been left with the impression that this is the way to address global warming, by crowding people together into cities to improve efficiency. They fail to recognize that, while per capita emissions may be lower, the total emissions from large cities dwarf the emissions from less densely populated areas due to the sheer number of people.

There is nothing wrong with sustaining high per capita consumption in a less densely populated society. It is the only way to sustain a high standard of living and high quality of life. But the key is to keep the population density low, not letting it drift ever higher. A rising population density, beyond some critical, optimum level, will drive down per capita consumption, reducing the standard of living and quality of life, while driving total consumption higher.

Consider the example of housing in Japan. The size of Japanese dwellings is, on average, only 30% that of Americans. So their per capita consumption of housing materials is only 30% of our ours. Many people see this as being more efficient and environmentally sustainable. But it’s not. Because Japan is ten times more densely populated than the U.S., their total consumption of materials for housing is higher than it would be if their population density was the same as the U.S.

How can this be? Do the math. In the U.S., per capita dwelling space is about 500 square feet. Japan’s per capita dwelling space is about 150 square feet. (Their country is just far too crowded for them to have any more than this.) Their total population is 127 million people, so their total dwelling space is 19.05 billion square feet. Now, if their population density was no higher than the U.S., they would have a population of 12.7 million people and each could occupy 500 square feet like in the U.S. In that case, their total dwelling space would be 6.35 billion square feet.

Therefore, in spite of the fact that they live more “efficiently” than in the U.S., consuming only 30% as much housing materials as an average American, their total consumption of housing materials is exactly three times what it would be if they lived like us while reducing their population density to match ours.

Now, some may counter that, taking the two countries together, the most effective way to reduce total consumption is for the U.S. to reduce its per capita dwelling space to match Japan’s, rather than Japan reducing its population by 90%. If Japan did reduce their population by 90% and increased their per capita dwelling space to 500 square feet, while the U.S. did nothing, the total consumption of dwelling space would be 156 billion square feet. Conversely, if Japan did nothing while the U.S. cut its per capita dwelling space to 150 square feet (to match Japan’s), then the total consumption of dwelling space would fall to 64 billion square feet – less than half. So that’s better, right?

Aha! Herein lies the rub! The problem is that, if we take that latter approach, we have also cut employment in the housing industry by more than half. What will those people do for a living? Work in some other sector of the economy? Not if we’re cutting per capita consumption of everything! This is where unemployment and poverty take hold, just as I’ve warned in Five Short Blasts.

A third alternative, the one I’ve proposed in the book, is to reduce the population of both the U.S. and Japan to an “optimum” level. Let’s say that, for the U.S., that’s 200 million people and for Japan it’s 8.5 million people. We now have 208.5 million people occupying 500 square feet each, for a total dwelling space of 104 billion square feet. That’s 65 billion square feet less than today’s situation and, while we have also cut total employment in the housing industry, the percentage of people working in the housing industry has actually risen because now people in both countries live in larger dwellings. It’s a win-win situation – a huge cut in the total consumption of materials used for housing construction and an increase in the demand for labor to manufacture that housing. It’s good for the environment and good for the people.

I hope this helps everyone understand why it’s much smarter to reduce population density than to reduce per capita consumption.

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4 Responses to Shrinking Population is Smarter than Cutting Per Capita Consumption

  1. Henry Dubb says:

    I am reminded of the “third world” is greener than the “first world” ads I have heard recently. Recently there was a study that showed Milwaukee more greener than Madison. This related to how both cities responded to population density. As you rightly pointed out it sees increasing population density as a given and decides growing up is better than growing out. The real issue is without increasing population density neither of these options would be inevitable.

    Well, since we are onto population density, what do you think of Obama’s tax credits. In particular funding the EIC at 45% or more for families with 3+ children. I am strongly in favor of EIC, and have found it a necessity being a single parent, but something rubs me wrong about a policy encouraging large families. Unless you are the Heritage Foundation you do not think we need to radically increase population in this country.

    So, my question is do you favor this policy, and if not, what form should the policy take. What would a pro family, pro worker EIC policy look like while also encouraging smaller, sustainable family units.

  2. Clyde Bollinger says:

    It is obvious that website design has not read the book, since the answer is spelled out in detail. it is also obvious that some measures that some will consider ‘harsh’ will be required. The legal immigration reduction would probably be the step that will produce the greatest complaining.

  3. Pete Murphy says:

    The “website design” comment has been deleted due to violation of site rules. But, for those who are interested, he/she said “And how do you propose shrinking the population? … death lottery… voluntary suicide?”

    As Clyde pointed out, if “website design” had taken the time to read the book before spouting off, he’d have learned that shrinking the population would take place gradually by balancing immigration with emigration and through non-coercive, income-neutral economic incentives (like tax incentives) for people to choose smaller families.

  4. Pete Murphy says:

    Henry, I’m afraid I’m not that knowledgeable about how EIC works but, in general terms, I’d agree that it shouldn’t encourage larger families (like the welfare system does and like our system of providing tax deductions for every dependent does). Maybe someday EIC won’t be necessary when we bring all of our manufacturing jobs back home, driving the demand for labor and everyone’s income higher.

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