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Population changes and economic welfare

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Population changes and economic welfare

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Content POPULATION CHANGES AND ECONOMIC WELFARE by Mohammed Kamel Anous A Dissertation Presented to the FACULTY OF THE GRADUATE SCHOOL UNIVERSITY OF SOUTHERN CALIFORNIA In Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy (Economics) June 1956 UMI Number: DP23262 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. Dissertation Publishing UMI DP23262 Published by ProQuest LLC (2014). Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code ProQuest LLC. 789 East Eisenhower Parkway -P.O. Box 1346 Ann Arbor, Ml 48106 -1 3 4 6 U N IV E K S il Y O F S O U TH E R N C A L IF O R N IA G R A D U A T E S C H O O L U N IV E R S IT Y P A R K L O S A N G E L E S 7 Tk. o Ec. '50, A CIS This dissertation, written by Mohammed Kamel Anous under the direction of.blS.Guidance Committee, and approved by all its members, has been pre sented to and accepted by the Faculty of the Graduate School, in partial fulfillment of the requirements for the degree of D O C T O R O F P H I L O S O P H Y ................. ' D ean D ate ..... Guidance Committee C hairm an TABLE OF CONTENTS CHAPTER PAGE PART I MAJOR CONCEPTS I. INTRODUCTION .................... . . . 2 Scope of the study ..................... 3 Relevant literature and organization of the study 6 II. DEFINITIONS AND RELEVANT CONCEPTS ........ 15 Basic concepts rela:UJigJtQ_™fiQp^ — ■ ■■ changes .'.......... 16 I- Three basic types of changes ......... 16 ( Changes in size of population .... 16 Z.Changes in physical composition . . . IS 3 Changes in acquired qualities . . . 20 2- Major concepts in quantitative changes . 26 ' Uncontrolled quantitative changes . . ^Semi-controlled quantitative changes . 30 j Controlled quantitative changes . . . 34 3, Basic concepts relating to economic ! welfare 35 ^-General welfare as an aspect of 3 human consciousness ................. 36 Economic welfare as an aspect of general welfare ..................... 39 Parenthood as a human instinct . . . 48 Parenthood and the principle of i marginal utility ............. . 50 j ^ Population changes and economic theory . . 52 j Population changes as an exogenous ! factor to economic theory 53 ! Population changes as an endogenous ^ factor in economic theory .......... 55 i STATICS, DYNAMICS, STATES OF EQUILIBRIUM AND ECONOMIC DEVELOPMENT ............... 57 The time element in economic analysis . . 58 A static concept of the economy as of a given time ................... 59 A macro-static concept ............. 60 Economic teachings and the macro- ; static concept 63 j The variables involved in a macro- j static approach ................... 64 The different aspects of dynamic trends 68 Dynamics as an economic approach . . 68 Basic relationships in dynamic analysis .......................... 69 ; CHAPTER | Alternative trends in dynamic ; changes ........................... | Static and dynamic states of equilibrium . Equilibrium as a static concept .... J Equilibrium as a Dynamic concept . . . j ; Economic development and its general aspects .............................. What is economic development? ......... j Productivity and its major constituents i ; Productivity and the nature of the product . . . ............... j j Total versus food production .... I ! National income accounting and its limitations ..................... i i I PART II l ! THE ECONOMIC ASPECTS OF i ' POPULATION CHANGES l | fC IV. HISTORICAL STAGES IN DEMOGRAPHIC DEVELOPMENT i j Measures of control and the history of i ; demographic development ............. | I Types of natality controls ........... i I Natural abstention ....... Mechanical devices ............. iv PAGE 71 73 75 ! 76 ! i 78 | 76 I 79 ! 60 ! 61 j 65 95 : 103 104 104 105 CHAPTER £ Types of mortality controls ........... The" demographic attitude of the primitive era ....................... Basic characteristics of the primitive attitude .... ................... The primitive attitude with regard to natality ..................... The primitive attitude with regard to mortality ..................... Primitive measures of control and the population size desired ............. Early tribes and the different means of maximization ...... . . . ^ Demographic teachings of the Greek philosophers ............... £ The population policy of the Roman Empire ................... Malthus and the medieval era ........... Religious teachings and the medieval pattern of demographic behavior . . . The form and objectives of human behavior in the Christian teachings ......................... PAGE 106 109 110 ; 113 116 117 119 122 127 129 i 130 132 VI CHAPTER PAGE The Christian attitude with regard to natality................. 134 The Christian attitude with regard to mortality ............... 136 Malthusianism and the medieval pattern of demographic behavior ............... 137 Pre-Malthusian literature and attitudes 139 "Political Arithmetic" and the spread of rationality ............. 143 The Malthusian "warning" and its effect on the medieval pattern of demographic behavior ............. 146 The Malthusian thesis, as advanced in his First Essay on Population . . 151 Neo-Malthusianism and the decline of the medieval pattern of demo graphic behavior ................. 156 The demographic attitude of the rational era 159 Post-Malthusian tendencies ............. 160 Natural theories of population growth . . Ny. 160 The optimistic school ............. 164 The socialists 167 CHAPTER PAGE Rationality and the birth experiences......................... 169 Rational demographic behavior and population forecasts ......... . . . 173 Methods of population forecasts . . . 173 The cycle theories ............... 174 Projection as a basis for forecasts ..................... 176 Population forecasts in the light of demographic rational behavior . . . 160 Summary 163 V. ECONOMIC VARIABLES AND SEMI-CONTROLLED CHANGES.................................. 166 Economic variables and "Animalistic" action ................................ 190 Economic variables and human fecundity . 190 Economic variables and the length of life expectancy ..*................. 194 Economic variables and "Ritualistic" action ................................ 196 Economic organization and socio- cultural behavior .... ........... 201 Sociocultural behavior and the rural-urban classification .... 202 VI ll CHAPTER PAGE Sociocultural behavior and the different socio-economic classes...............* .......... 206 Changes in income and sociocultural patterns of behavior ........ 215 Economic variables and ’ ’Rational" action . 217 Summary 221 VI. ECONOMIC VARIABLES AND CONTROLLED CHANGES— THE OPTIMUM THEORY...... 224 Development and criticism of the optimum theory 226 Development of the theory...... 226 From Malthus to the optimum theory . . 227 "Scientific" formulation of the theory 231 Main assumptions of the theory . . . 233 Criticism of the optimum theory . . . 239 The optimum theory is not a general theory ................... 239 As a static approach the theory is not fit for practical application . 240 The form of the relationship between increasing and diminishing returns as presented by the theory is not necessarily true ........... 241 I CHAPTER f The assumptions of the theory are too rigid to be practical . . . Analysis and criticism of the optimum criteria ................. Suggested criteria for the deter mination of the optimum ........... Economic criteria . . ........... The social optimum and its criteria . Criticism of the optimum criteria and their practical application . . An economic optimum is narrow and partial ................... Per capita real income is not a valid criterion of economic welfare ........................ The practical difficulties asso ciated with the use of per capita income as a criterion ........... Recent developments in the optimum theory .............................. The optimum theory as a general demographic approach ............... Attempts at reconstruction ........... The optimum criteria ............. ix PAGE 243 244 244 245 246 250 250 251 251 j 253 254 255 255 X j CHAPTER PAGE The charge of "staticism"........... 256 I | The formal presentation of I the theory ..................... 258 i * ! | Claimed rigidity of the theory*s assumptions 259 The optimum at different levels of capital formation ................ 259 The optimum in a trading non closed economy . . . . . . . . . 267 The optimum concept as a basis for further analysis 269 Validity of the optimum approach . . . 270 The optimum theory as a one-sided approach 271 VII. \EC0N0MIC VARIABLES AND CONTROLLED CHANGES— STATIC ANALYSIS ................. 274 Basic determinants of controlled fertility 275 The value of a child ................... 276 The theory of value in economic literature ........................ '276 The dual nature of the value of a child ........................ 278 CHAPTER ? i XI PAGE The direct value of a child to his parents..................... 279 The "imputed” value of a child .... 282 The cost of having a c h i l d ............. 284 The biological cost of having a child ........................ 284 The social cost of having a child . . 285 The economic cost of having a child . . 286 The money cost of a child ......... 286 The real cost of a child ......... 290 The discount rate of future values . 293 Fertility as a function of a single variable .............................. 295 A retrogression ........................ 295 A fertility preference schedule .... 296 The "fertility preference schedule" and population changes ............... 299 "Semi-controlled” changes and the "fertility preference schedule" . . 300 "Semi-controlled" and "controlled" trends of changes ........... 300 Fertility as a function of multiple variables ............................ 303 CHAPTER A macro-static concept of economic relationships ........................ An initial population ............. Human preferences between "leisure" and "work" ........................ Labor and the level of productivity National product and the three propensities to consume, have children, and save ............... Human preference between capital formation and cash balances . . . . The different forms of capital formation ........................ A static equilibrium of the economic system ............................ Summary ............................ VIII ECONOMIC VARIABLES AND CONTROLLED CHANGES — DYNAMIC ANALYSIS . ......... ........... The different aspects of economic dynamics ............................ The mutual interrelationships between human preferences and the level of productivity/income ............. . XI1 PAGE 304 306 i 306 ! 3 OB i 309 312 313 314 313 319 j i 319 320 xiii CHAPTER The impact of the level of productivity on specific preferences ...................... The impact of specific preferences on the level of productivity . . Leisure, labor and the level of productivity ................. Consumption, fertility, saving and the level of productivity . . . Cash balances, investment, and the level of productivity ......... Material capital, human capital, research capital and the level of productivity ................. The mutual interrelationships among specific preferences ........... Dynamic relationships and controlled fertility .......................... Changes in the level of income . . The dual effect on fertility of a rise in income ................... A rise in income and the value of a child ........................ A rise in income and the cost of a child . . PAGE | 322 324 325 326 329 330 331 ; 332 333 334 335 336 XIV CHAPTER PAGE Income and the socio-biological cost of a c h i l d ...................... 337 Income and the shape of the fertility preference schedule . . . 337 Income and the discount rate of future cost 338 PART III THE IMPACT OF POPULATION CHANGES ON THE ECONOMIC SYSTEM IX. POPULATION CHANGES AND THE LABOR SUPPLY . . 345 Quantitative changes and age distribution ............ 347 United States1 annual rate of growth, 1949 350 Stable white population at different rates of natural growth, United States, 1949 354 Changes in ratio and per capita productivity ........................ 361 The different stages of economic- demographic dependency ............... 363 The stage of heavy youth dependency . . 364 The stage of light dependency ......... 365 XV CHAPTER PAGE The stage of heavy old-age dependency ..... ................. 367 Actual experiences in the light of pure demographic analysis ................... 368 i The over-all effect of socio- | economic factors ................... 369 Socio-economic factors involved .... 372 War and the labor supply ....... 373 Social customs relating to female employment ........................ 373 The ages of entry and departure from the labor force . ........... 375 Other factors ...................... 377 A reflection on the long run trends in the size of the economically active population . ........... 379 Summary . 381 X. POPULATION CHANGES AND CAPITAL FORMATION . . 384 The coefficients of capital formation . . 387 ; Saving in economic literature ......... 387 The "classical” attitude ............. 368 The Keynesian attitude ............. 389 Investment in economic theory ......... 390 The classical attitude ............. 390 CHAPTER I The Keynesian attitude ............. Financial institutions as a factor in capital formation ............. Financial institutions as a stabilizing factor ............. Financial institutions and the expansion of credit ............. Population changes and the saving- consumption functions ............. Saving and consumption as aspects of human behavior ................... The triple nature of human behavior ........................ The Malthusian devil ............. The Keynesian devil ............. Semi-controlled population changes and the saving-consumption functions . . The saving-consumption functions within conditions of Malthusian equilibrium ................... The saving-consumption functions within a framework of Keynesian analysis ........................ xv i i PAGE I 391 j 393 i 394 ! 395 39S 39^ 399 402 403 40a i t 409 413 xvii CHAPTER ^ PAGE Controlled population changes and the saving-consumption functions ......... 414 Population changes and the level of investment 417 The basic relationships involved .... 417 Saving and investment ............... 418 Effective demand and investment . . . 426 The pattern of expenditure and investment................... 428 Semi-controlled population changes and the level of investment .............' 430 Investment within conditions of Malthusian equilibrium ............. 430 Investment within a framework of Keynesian analysis ................. 433 Controlled population changes and the level of investment ................. 436 Summary 438 XI. POPULATION CHANGES AND THE CONDITIONS OF PRODUCTION ............................ 446 Population changes and efficiency of labor 447 Population changes and the physical factors of efficiency ................. 448 Age composition and efficiency .... 448 XV111 CHAPTER PAGE Income changes and physical efficiency...................... 451 Population changes and the cultural factors of efficiency ............... 453 Income changes and education .... 455 Income changes and research .... 458 Population changes and tastes 460 Population changes and human needs . . . 460 Age distribution and human needs . . . 461 Income changes and human needs . . . 462 Population changes and human preferences 465 Population changes and organization . . . 465 The different aspects of economic organization ........................ 467 Population pressure and the organizational structure ...... 469 Controlled changes and organiza tional structure ............ 470 Semi-controlled changes and organizational structure ........... 472 Summary ................................ 473 XII. CONCLUSIONS AND FINAL REMARKS ............. 478 Theoretical findings and conclusions . . . 479 CHAPTER Findings and conclusions in the field of demography ................. Basic demographic findings . . . . . Theoretical findings and prevalent demographic literature ......... Further research in the field of demography ................... Findings and conclusions in the field of economics ........................ Basic economic findings ............. Theoretical findings and prevalent economic literature ............. Further research in the field of economics ...................... Conclusions and recommendations ......... Practical recommendations for the attainment of rationality, in the underdeveloped areas ............... Attainment of rationality in demographic behavior ............. Further recommendations for the attainment of a declining rate of population growth ................. xix PAGE 431 432 439 ! I 492 493 494 | 506 503 510 512 ‘ 515 , 520 XX CHAPTER PAGE Practical recommendations for highly developed economies ...... 524 BIBLIOGRAPHY 527 LIST OF TABLES ! TABLE III. IV. | ! V. i VI. f VII. VIII. I i j ; ix . i i Recent Trends of the Crude Birth Rates in Some Selected Countries, 1930-1951 • • • Estimated Death Rates for Regions of the World, 1947......................... Female Births by Age of Mother, White Population United States, 1949 ........... Computation of "r" {Annual Rate of Growth) United States White Population, 1949 .................................. Stable Population for United States White, 1949 .............................. Age Distribution for Stable Population United States, 1949 ..................... Stable Age Distributions at Different Rates of Growth for United States White Population, 1949 ................... The Economically Active Population at Different Rates of Natural Growth ......... Ratio of the Economically Active to the Total Population for Different Countries Comparisons Between the Classical and Keynesian Views Regarding the Coefficients of Capital Formation ................... PAGE 182 I I i 197 352 353 355 356 357 359 370 439 LIST OF FIGURES FIGURE PAGE 1. Fertility Experiences at Different Levels of Income and Demographic Enlightenment .... 211 2. Per Capita Productivity as a Function of Population Size 241 3. Per Capita Productivity as a Function of Labor and Capital 264 4* The Marginal Utility of Successive Children to Their Parents 260 5. Fertility Preference Schedule ............... 296 6. Semicontrolled and Controlled demographic Trends .................................... 302 PART I MAJOR CONCEPTS CHAPTER I INTRODUCTION i i A realistic interpretation of human behavior, both | individual and social, is a basic objective in the field | of social sciences. The complexity of the subject and j j the multitude of "motives" generally involved in such j behavior make it almost impossible for any one explanation to account for all the factors that might underlie a given situation. Social scientists have long recognized this complexity and,consequently,have abandoned pre-scientific monistic conceptions of social phenomena in favor of limited analyses of more or less definable fields of social action. Therefore, attempts are made to establish the "sciences" of sociology, psychology, economics, ethics, demography, politics, and the like, based on an "arbitrary" assumption of the variables to be included in each case.. While this approach might be justified for the sake of simplicity and adaptability to scientific procedures, the | conclusions of each of these fields individually are, at most, a one-sided view of the more complex real picture. * * - For a survey of such monistic conceptions see Pitrim Sorokin, Contemporary Sociological Theories (New York: Harper and Brothers, 1928), pp. 3-12. 3 A step in the right direction would acknowledge the mutual interdependence existing among these different fields and would attempt the integration or synthesis of their sep arate findings. That such a step must be taken gradually may be appreciated by all those who have had experience with the complexity of social analysis. It is to this wider section of social research that the following study is basically devoted. SCOPE OF THE STUDY In sthe following chapters an attempt is made to examine the different aspects of the interrelationship o between economic and demographic variables. The study of such a relationship is pertinent to both fields. Economic theory is incomplete unless it can explain the effects on the economy of alternative trends in "popula tion changes." The study of population, in turn, would be most unrealistic unless it accounted for the effects of the shortage or abundance of the physical materials 2 The term demography or "description of the people" was first used near the middle of the nineteenth century, 1&55, when it was coined by the Frenchman, Achille Guillard. James Bonard, Theories of Population from Raleigh to ArthUr Young (New. York: Greenberg, 1931), p. 15. necessary for human sustenance.^ One would expect the two explanations to be consistent with each other and capable of being incorporated in one framework of theoretical analysis. The development of an inclusive theoretical frame work covering all variables of the two fields, if these could be determined, would be extremely complicated as j i well as time-and-space consuming. Such an ambitious ob- ; jective is not attempted here. In limiting the field, it is planned to proceed on two bases: first, to limit the variables included to the practical objective in view; and j second, to attempt, from the point of view of the investi- ! gator, to proceed in the analysis from the more general to the more specific issues. Many of the latter issues are important to the analysis, but their importance consists not so much in formulating the original framework as in altering its conclusions so as to allow for the new variables introduced. i i j What then is the practical objective of the study? . To understand this objective and its relation to the title ; of this study it is necessary to make one assumption. In ^ Unlike economics, the field of demography lacks a generally recognized body of demographic theory. For the necessity of developing such a body see; Rupert B. Vance, "Is Theory for Demographers?” Social Forces. 31:9-14, October, 1952. the following analysis economic development is assumed to be desirable per se and always to be preferable to econ omic stagnation. In other words, economic development is assumed to be synonymous with an increase in the economic ; welfare of society and, consequently, notwithstanding all other non-economic factors involved to be desired as an ; objective in itself. In the long run, the prospects of j economic development are closely related to the quantita- j i tive and qualitative changes in population.^" Both as j consumer and producer population has the capacity of initiating,, intensifying, retarding or obstructing any process of economic development. Whether a specific popu lation trend be advantageous or harmful from this point of i By carrying the analysis to the realm of policies and planning, this study mav be described as an attempt at answering two questions: (1) How could the population factor be manipulated so as to initiate a process of econ omic development? (2) How could the population factor be best adapted to a going process of economic development so as not to retard or obstruct its progress? However, it is not the plan of the investigator to carry this study into the field of actual planning and policy making. While helpful in many aspects, it runs ; short of being a basis for policy making for two main * reasons. First, it deals only with one aspect-of social I studies— that of the economic factors. Second, as will be explained later, the importance of the economic factors in the shift from the semi-controlled to the controlled status of population changes is yet to be determined. Most likely, their influence, if they have any at all, is exerted in an indirect way through their effect on the social habits and modes of living of society--aspects avoided in this study. 6 view depends on an understanding of the true relationship between population changes and such a dynamic process. It is the practical objective of this study to investigate that realm of relationships. I RELEVANT LITERATURE AND ORGANIZATION OF THE STUDY ! With this objective in mind,> an inspection is now ■ made of the major theoretical problems facing its achieve- ! | ment. Throughout the analysis, three main questions are raised: 1. How do population changes affect the economic system? 2. How do economic factors affect population trends? 3. Within an intended theoretical framework of analysis, how would this mutual interrelationship between economic and demographic factors be considered? The first of these questions is dealt with in Part III of the study. In that section, the economic ef fects of different aspects of population changes are con- j sidered. Generally speaking, this is the aspect of the problem to which economists have devoted most of their attention. A survey of economic literature revealed two approaches in dealing with the problem. On one hand, there is the ’ ’secular1 * group of writers who merely assume , different trends of population changes and concentrate on the probable economic effects resulting from each trend.^ ' To this group, the problem of which trend would be most i likely to appear at different levels of economic develop- ; ment does not pose any difficulty. They simply ignore it. On the other hand, there are the writers who go beyond the ; ; probable consequences into the realm of expectations. On j i | the basis of available statistical data, they would first , 1 determine the most probable population trend and then 1 proceed to investigate the economic implications of that particular trend. Most important among this group are the S ] classical economists, who based their whole dynamic theory on the perfect positive elasticity concept of the popula tion supply (that is, a rise in the level of productivity i 5 with special emphasis on the economic consequences ' of a declining population, the following works may be classified in this category: W.B. Reddaway, The Economics ' i* Declining Population (London:George Allen and Unwin , Ltd.,1939J; J.J. Spengler,"Population Growth, Consumer De- , mand, and Business Profits," Harvard Business Review, pp. j 204-221, January, 1934; and-"Population Movements,Employ- ' ment, and Income," The Southern Economic Journal. 5;129-57,! October, 1933; and "Population Movements and Economic Equilibrium in the United States," The Journal of Political Economy. 43:153-132, April, 1940. 6 ■ The classical economists include Adam Smith, ■ Ricardo, Malthus, J.S. Mill, and their immediate follow ers. For an exposition of the classical dynamic theory, 1 see: William J. Baumol, Economic - Dynamics: An Introduction (New York: The Macmillan Company, 1951), Chapter 2. 'would always be reflected in an increase of population) and the "mature economy" adherents who, contrary to the classicists, believed in the persisting tendency of the birth rate to drop at higher and higher levels of economic ; 7 1 development. In neither of these two approaches is there any i systematic investigation of the factors underlying and in- : f fluencing population trends. Quite correctly, economists ; seem unanimous in regarding these factors as the proper S subject matter for the field of demography. While much justification may be found in such a point of view, the danger is eminent for these same economists unconsciously to acquire the habit of thinking of these trends as an exogenous., factor to the economic system and, consequently, as independent of the changes in the economic variables. The fallacy of such a concept need not be emphasized. 7 The "mature economy" adherents refer to the group of economists who believe in the existence of a stage in economic development beyond which investment op portunities run short of the level necessary to keep the economy functioning at a level of full employment. Among other things, this is mainly attributed to a drop in the birth rate and the anticipation, on the part of the entrepreneurs, of a declining population. On this point see: J.M. Keynes, "Economic Consequences of a Declining Population," - The Eugenic Review, 29:10-25, April, 1937;and Alvin Hansen, "Progress and a Declining Population," Presidential address delivered.on the fifty-first annual meeting of the American Economic Association, American Economic Review, 24;l-l6, March, 1939. 9 ! In Part II an answer to the second question is sought by investigating the influence that economic fac- , tors exert on population trends. Throughout that part, emphasis is mainly placed on the distinction made between ' "semi-controlled" population changes, where the objective I I of these controls is other than economic, and the "con- i i trolled" type of population changes, which is mainly directed toward the maximization of economic welfare, i The basis for such a distinction, as well as for the whole j organization of Part II, may be found in understanding the j positions whibh the fields of demography and economics ; occupy among the social sciences and, consequently, their : relationship in an intended theoretical framework. At ; this time a summary of the relationship might be helpful : to the reader in following the stream of thought under lying the entire study. i I In their present form the fields of demography and economics may be said to represent the two extremes in the j "procedures" or "methodology" of investigating social : phenomena. On the one hand, demographers, like many other ; sociologists, are firm believers in the realistic g Three categories would be distinguished in the discussions of the types of "quantitative changes." For ■ practical reasons referred to in Chapter II, only the first of these three categories would be awarded a passing interest. l t ; 10 (practical, inductive, or statistical approach). In this ' approach the main emphasis is placed on collecting social data and in remaining as close as possible to practical experiences. Elaborate statistical devices are generally employed in the collection of such data, as well as in i their classification, to allow for meaningful comparisons. The fact that these data are not necessarily self-explan atory, together with the inadequacy of such an approach to answer the hows and whys of practical experience, renders I this method a characteristic of "incompleteness," as well | as a state of "statistical confusion." Demographers are becoming increasingly aware of this state and more and more conscious of the necessity for further theoretical speculations. j Economic literature, on the other hand, represents i the highest form of such theoretical speculations. More than any other branch of the social sciences, it is in j economics that the theoretical or deductive approach i j I reaches its peak. This advance is made possible by the t ! restriction of the field to one aspect of human behavior. i Economic theory does not deal with relationships under lying human behavior but is solely restricted (by assump tion) to that aspect of behavior based on the concept of an "economic man" concerned with the maximization of material profits. That such a "man" could hardly exist in a pure 101 form does not disturb economic theorists as long as their assumption is made clear. Based on that assumption, economic principles and relationships are logically con sistent. With the exception of an overwhelmingly theoretical approach, a comparison of the merits and shortcomings of ; I the realistic versus the theoretical approach does not | fall within the sphere of this study. The point to be > emphasized is that the field of demography, being concerned; with de facto conditions which are the outcome of different motives, is a wider field of study than that of economics, which is concerned only with human action inspired by economic motivation. Thus, while economic theory may be considered ss a mono-science approach, any attempts at the elaboration of a demographic theory must be based, as 9 Spengler correctly put it, on a multi-science approach. Within such an approach, the influence of social, physio logical, political, ethical, psychological, and religious, j as well as economic factors have to be accounted for. Spengler gave three criteria for the development of a population theory: (1) It must be dynamic rather than static. (2) It must take account of demographic inter relations as.between countries and groups within nations. (3) It requires a multi-science approach. These criteria ] were, quoted approvingly by R.B. Vance, op. pit.., p. 13. ; 12 The emphasis placed on each of these factors in the total picture has to be determined in the light of the specific conditions surrounding each society under consideration. As mentioned previously, the purpose of Part II is to show the economic aspects of population changes. For the sake of simplicity the multitude of motives underlying human action is divided into two groups: (1) economic motives which comprise the action stemming from the con scious desire of human beings to maximize material gains; and (2) non-economic motives which comprise all other factors affecting human action. Considered collectively, the history of social development reveals the existence of different stages in which sometimes one and sometimes the other of these two groups dominates. In Chapter IV, Part II, the history of these stages as related to popula tion changes is considered. Chapter V deals with the in fluence of economic factors on population changes under the conditions where non-economic motives dominate the economic motives in the determination of human action. Within such conditions, the economic factors could not be responsible for the absolute long-run trends of population changes, but rather for some specific fluctuations sur rounding them. The opposite would be true when the economic motives dominate the non-economic motives in the determination of human behavior. In such a set-up the 13 economic factors should be able to account, more or less fully, for both the trends and the magnitude of population changes. The different aspects of this relationship are dealt with in the last three chapters of Part II. Chapter I VI, for example, surveys the theory of the optimum popu- ; lation which,' in the opinion ,of the investigator, repre sents the traditional approach to such a relationship in ! the demographic literature. Chapters VII and VIII deal j with that relationship as viewed, respectively, within static and dynamic frameworks of analysis. This approach to the investigation of the economic aspects of the theory of population is by no means without : foundation in the demographic literature. Demographers § have long been interested in the economic bases of popu lation changes. Ever since the publication of Malthus* Essay on Population, in 179$, and the absolute "geometri- cal" principle which he assumed population trends followed,! numerous sporadic studies dealing with statistical corre- i lations between population trends and different economic : 10 criteria have made their appearance. : Reference to some of these studies will be made in the body of the text, each in its appropriate place. For a list of these economic, as well as other studies see: United Nations, The Determinants and Consequences of Popu lation Trends (New York: United Nations, 1953)• 14 The attempt on the part of demographers to inte grate these sporadic studies into a systematic body of thought is of more recent origin. With the exception of the optimum theorists who follow in the path of Sidgwick, Cannan,Wicksell, and Carr-Saunders, attempts in this l direction have not been made until the last few years. This change agrees with the previous statement that J demographers are becoming more and more theoretically j n 1 inclined. The efforts of Fromont, Sauvy, and Leibenstein j can only be interpreted as a swing in this direction and a beginning of a new approach for which the field of demography has long been lacking. In the remaining chapters of Part I the concepts used in the analysis are clarified. Chapter II deals with | the definitions and concepts relating to the two main variables— population changes and economic welfare. Chap ter III is devoted to the analysis of such relevant econ omic concepts as statics, dynamics, economic development, j and the state of equilibrium. ; The books referred to are respectively: Pierre Fromont, Demographie Economique (Paris: Payot,•1947); ' Alfred Sauvy, Theorie General de la Population. Vol. I, "Economie- et Population,” (Paris: Presses Universitaries de France, 1952); and Harvey Leibenstein, A Theory of Economic-Demographic Development (Princeton: Princeton University Press, 19547""* CHAPTER II DEFINITIONS AND RELEVANT CONCEPTS The theoretical nature of the present study makes it inevitable to begin with the task of defining terms. While this holds.true for all theoretical studies, it is of particular importance to the objective for two main reasons. First, the novelty of the theoretical approach in demographic analysis has not yet allowed that field to develop an extensive glossary of accepted terms. Some of the concepts to be introduced in Part II may even be con sidered new and, consequently, in need of specific agree ment as to their meaning. Second, economic terms do not always have the same meaning for every writer. Thus, it becomes the responsibility of each writer to point out which particular meaning is to be understood in his use of the term. This one and the following chapters, then, deal with the definitions of the terms and concepts deemed to be of importance in further analysis. Emphasis in these two chapters will be placed on the clarification of the meanings intended rather than on the survey of the differ ent interpretations given to any of these terms. While reference may be made to some of these interpretations, - it serves no purpose and it may even be confusing to attempt such extensive surveys. Chapter III is devoted to an analysis of the wider economic concepts of statics, dynamics, equilibrium, and economic development. The present chapter is concerned with the more pertinent con cepts relating to population changes, economic welfare, and the different alternatives possible for regarding the Three Basic Types of Changes. The concept of "population changes" in many minds may mean nothing more than the changes in numbers. While this, as maintained later, may be considered the most im portant of all changes, nevertheless, different types of changes should be distinguished. In the following dis cussion these types are divided into three basic categor ies: (a) changes in size; (b) changes in physical compo sition— age and/or sex; and (c) changes in qualities. Changes in size of population. Changes in the size of population may result either from natural causes or from migration. By natural causes is meant changes in the two natural phenomena— birth, or natality, and death, or mortality. A common fallacy may sometimes correlate a relationship existing between them BASIC CONCEPTS RELATING TO POPULATION CHANGES 17 numerical change in population with either one of these phenomena. According to this fallacy, an increase in the birth rate, for example, is the same thing as an increase in population. This statement is not necessarily true. Quantitative population changes are actually net aggre gates and the result of changes in births, deaths, immi gration, and emigration. The basic equation of population changes may thus be expressed as: P2 “ P1 “ 2B1 ” 2°1 * 2IM1 “ 2EM1 That is, population changes between periods one and two (P2 - P-^) is equivalent to the total births between the two periods (3^) minus the total deaths of the same period ^2B1^ plus the immigration experienced throughout the per iod (2IM^) minus the emigration of that period (^EM^). The final outcome of all these factors would show the net changes, whether plus or minus, in the total population for the specific period under consideration. For the purpose of this study, the role of migra tion in quantitative population changes will be ignored. In other words, a case of a closed population^ is assumed. ^ Not to be confused with the concept of a closed economy, the assumption of a closed population merely excludes external migration. Id : Although extremely important in actual experience, migra- i tion and its effect on the economic system must be con sidered secondary to, as well as dependent upon, the ; trends of the natural increase or decrease of the popula tion. Besides, the economic aspects of migration could easily be considered as an independent subject to be 2 dealt with separately. j Changes in physical composition. The physical | characteristics of the human organism, unlike all other [ ! "acquired1 * qualities, are overwhelmingly determined once i and for all in the act of birth (conception) and the time 1 i of its occurrence. Most important among these character- ! o , istics are those of sex and age.^ 'whether male or female, the human organism is known to pass through stages of de velopment ranging from infancy to old age. These char acteristics cannot be changed within the life of a single ; individual and can only be terminated by an opposite act of death. 2 For an example of such studies see cf., Julius Isaac, The Effect of European Migration on the Economy of Sending and Receiving Countries (The Hague: Research Group for European Migration Problems, 1953)• 3 All hereditary qualities could justly be included within this group. Nevertheless, due to the general ina bility of distinguishing between which is hereditary and which an environmental (or acquired) trait, they were placed with the third category. While unchangeable as far as individuals are con cerned, the physical composition of each society, as made up of the physical qualities of its individual members, is undergoing a continuous process of transformation. In the! absence of external migration, this physical composition will be the natural result of each population’s long-run ; ' i experiences with birth rates, death rates, sex ratio at I i j birth, and sex-specific mortality rates. In such countries: | as India and China where both the birth and death rates are high, the size of the annual crop of babies and the inability of most of them to reach maturity would give these societies the physical characteristics of a young population. The contrary is true of France where the birth rates and the death rates began to decline more than two centuries ago. Under such conditions, a large propor tion, of the total population would be found in the higher age groups, with the lower ones, due to the decline in the birth rate, dropping year after year. In the following analysis changes in the age compo- j sition would be more emphasized than those of the sex composition of the different populations. The reason is simple. While changes in the age composition may be found to vary as between countries, times, and at different economic stages, the sex ratio, defined as the number of males per one hundred females, has demonstrated a high 20 degree of stability. With the exception of war conditions and other catastrophies which might favor one sex over the I ; other in mortality experiences, the sex ratio has proved, 1 with minor qualifications,^ to be amenable to changes in time and space. I 1 ! Changes in acquired qualities. In the process of | adapting themselves to their physical environment human ; i - | : societies are something more than mere numbers of physicalj organisms. Through the influence of different factors each society has come to acquire special qualities or characteristics that would sometimes favor and sometimes hinder this process of adaptation. Unlike the physical characteristics discussed above, there is no rigidity with regard to these qualities. They are mainly independent of the act of birth and could always be developed or changed, : at least theoretically, within the life time of a single individual. i From the point of view of human behavior generally i 1 and the aspects of that behavior pertaining to demographic i I I In the relationship between economic development and the sex ratio, Winston suggests the possibility that, ; since prenatal mortality and still births seem to claim ; more males than females, a drop in these rates might result i in altering the sex ratio in favor of males. Sanford ! Winston, "The Influence of Social Factors Upon the Sex ! Ratio at Birth," The American Journal of Sociology. 37: 1-21, July, 1931. 21 and economic activities specifically, changes in these qualities are as much "population changes” as those in numbers and physical composition. Students of human be- j havior divide these qualities into two groups. On one hand, there are the hereditary qualities that are mainly predetermined for each individual by the accumulative qualities o£ his family tree. Although heredity is prin cipally physiological in nature, the fact that its mani festation is never quite complete (in the sense that it is continuously subjected to the influence of environmental forces resulting in differences among individuals and the formulation of new species) make it necessary to include this group among the flexible rather than the fixed qual- ' ities. However, without any implication as to the impor- 1 tance of the hereditary factor in the determination of human aptitudes, and due to inability to deal with the subject intelligently, hereditary qualities in this study ; are assumed to. be constant as to time and space. That is, | all people, regardless of race or nationality are assumed to be basically endowed with the same physical capacities and the apparent differences existing among them are I assumed to be caused by environmental rather than by ; hereditary forces. Environmental qualities, on the other hand, are the ! result of the circumstances and experiences encountered by 22 each individual since his birth (conception). These life long experiences make their impression on the human organ ism through two basic channels, one physical and the other cultural. On the physical side may be pointed out the effect of different diets on the development of the human 5 constitution. The diminutive constitution of Far Eastern populations is generally attributed to their subsistence on an unbalanced diet of carbohydrates. However, it is on the cultural side that the environment exercises most of its prestige in the moulding of rising generations. The aspects of such an influence are numerous and diver sified in nature. For the purpose of this study these aspects may be divided into two groups. First, there is the passive influence which each society exerts through its setting of the standard of values required to be followed by all members.^1 Among this group, the 5 Diets may also affect the prenatal stage of the human life through their effect on the health of the mother. Frederick F. Tisdall, "The Role of Nutrition in Preventive Medicine," Milbank Memorial Fund Quarterly. 23:39-53, January, 1945. 6 The standard of value here is to be interpreted in its broadest sense as including all customs, mores, traditions, habits, religious beliefs, etc., which affect human behavior. 23 institutional-religious factors are by far the most in fluential. Of particular importance also are the differ ences existing among the various standards of values associated with different patterns of economic activities. An agricultural society, for example, may be practicing some rules of value that are not only different but diametrically opposed to those prevailing in highly in dustrialized societies. Changes in these sets of values are gradual and generally follow rather than lead changes in economic activities and the level of education.' The second major environmental factor affecting the cultural qualities of each society is that of the avail ability or lack of educational opportunities. Taken as a unit, each society has the responsibility of both feeding and educating its younger generations in preparation for the productive roles they are apt to play in the future. From the point of view of shaping human character and be havior, the educational role of the society assumes par ticular importance for many reasons: 1. It is the most flexible of all the factors affecting human qualities and the most vulnerable to 7 The argument in support of this point of view is rather lengthy and elaborate. It should be considered as a point of personal opinion belonging to the line of thought generally referred to as the "materialistic interpretation of history." 24 practical planning on the part of central authorities. 2. Compared to the passive influence of the society referred to above and due to the scientific and "enlightened" nature of the educational process, this j * \ latter is the most adaptable to changes in the physical j environment. I j i 3. In such specialized economies as those which j *• ' i | characterize the twentieth century, education is a must ; i for providing the general efficiency and know-how necessary! for the productive mechanism. At the same time educational opportunities are by no means cheap or inexpensive. For a society to be able to dedicate its lower-age groups to the pursuit of knowl edge, it has to afford three things: (1) It has to afford the drop in the total productivity resulting from the shift of these age groups from the "materially" productive occupations to that of education. (2) It has to afford maintenance and support of these age groups while going to j school. (3) It also has to afford payments for teachers j and the supplementary costs associated with school work. j ! While these expenses may be more than offset by the rise in the productivity of future generations, nevertheless, they presuppose the necessity of saving (to be defined as an excess of income over consumption) on behalf of the society. If it is assumed that the societyfs preference 25 A as between investing in "human capital" and all other alternatives for the use of savings should remain con stant, then it may be concluded that changes in the level of education and, consequently, of the cultural qualities of the population would be directly related to the amount of savings afforded by the society. If enough time were allowed for the manifestation of all repercussions, it might be safely stated that none of these categories could occur separately or independ ently of the other two. Actually, they are all bound up together because each is both a cause and an effect of the others. Some aspects of these relationships are mechan ical and most obvious. Quantitative changes, for example, would never fail to affect the age composition of the population since, in the absence of migration, they can only occur through changes in either natality, mortality, or both. Changes in the age composition, in turn, what ever their source might be, would have a similar causal effect on quantitative changes. In cases where the g The use of the concept "human capital" should be distinguished from Paretofs concept of "personal capital." According to Pareto, all people are personal capital. As used in this study, reference is made only to the savings invested in the educational process. J.J. Spengler, "Pareto on Population," The Quarterly Journal of Economics. 1:571-601, August, 1944.. 26 majority of the population is concentrated, for example, within the age group .15 to 45, there would be a tendency to exercise a favorable effect on quantitative changes for two reasons: (a) physiologically speaking, these are the age groups most fitted for mating and reproduction; and (b) the incidence of death among these age groups is, ; i on the average, much lower than those below 15 or above 45-1 j Other aspects of these relationships are neither j ! as obvious nor as clear. How do quantitative changes (and, automatically, changes in the age composition) affect; the acquired qualities both physically and culturally? How, in turn, do changes in these acquired qualities affect the quantitative changes in the population? These, in general, may be considered the essence* of the "population 9 question” the economic aspects of which will be consid ered in this study. Ma.ior Concepts in Quantitative Changes. In the light of these effects and counter-effects j i referred to above, it becomes the responsibility of the 9 The term "population question” is intentionally used here to distinguish the aforementioned relationship from the "population problem” which is generally asso ciated with the Malthusian thesis of an increase in popu lation at a much higher rate than the increase in the means of subsistence. 27 theoretical analyst to approach the subject as an entity by defining either of the two variables, e.g., quantita- tive changes or acquired patterns of behavior, in terms of the other. The two alternatives opened to such an ap proach would be to define (a) quantitative changes in ; f terms of the patterns of behavior (and, consequently, of . the motives underlying these patterns) inducing them, or < i i (b) patterns of behavior in terms of the trends of popu- ! lation changes underlying them. As a starting point of the present study, a preference is expressed for the first ; of these two alternatives. Reasons justifying this preference are: 1. The relationship existing in the first alterna- I tive is a much simpler and more direct one than that of the second. While quantitative changes may be wholly de termined by the pattern of behavior prevailing in any specific society, the patterns of behavior are not solely the result of the quantitative changes in the population. | <2. Existing patterns of human behavior generally i stem from a compound of different motives in which -some may dominate the others. In choosing the first alterna tive, quantitative changes can be correlated directly with the different constituent motives rather than indirectly with an over-all pattern. In this way quantitative changes resulting from economic motivation can be separated 28 from other changes that might be induced by a multitude of possible motives. After the starting point was determined, the next step was to distinguish by definition among three types | i of quantitative changes: (a) uncontrolled, (b) semi controlled, and (c) controlled. ; I I Uncontrolled quantitative changes. The case of | ! uncontrolled quantitative changes in population refers to a condition in which neither the individual nor society has any control, conscious or unconscious, over the two demographic variables— natality and mortality.^ Under such conditions, human beings would be reduced to mere animals with the modes of behavior determined solely by physiological motives (fecundity in the case of natality and the availability of the food supply in the case of mortality). From what is known about human fecundity'**'*' Since most of these controls are exerted through the social institution of marriage, the condition of un controlled population changes would exclude marriage as a necessary requirement for mating. 11 Most demographers distinguish between fecundity and fertility. Besides sex desire three basic factors affect human fecundity: (a) the length of time in which both males and females are physiologically reproductive; (b) the maximum number of "carriages'* physiologically possible per each female; and (c) as related to this maximum, the state of sterility, both total and partial, prevailing among the population. there is no doubt that the potentiality of population growth would exceed any of the known experiences in this 12 connection. Thus, given an equal distribution of the food supply, uncontrolled population changes would con- i tinue upward until the maximum population possible for ; each region had been achieved. At that point, the total j J ' i number of the population multiplied by the minimum quantity; i ] of subsistence necessary for per capita survival would j equal the total food supply available to the region. Beyond this maximum, any further increase in the popula tion would result in starvation.13 j I In practical experiences, such a case of uncon trolled quantitative changes has never been equaled. Even j under the most favorable conditions'^ the cultural patterns 12 por a bibliography of the studies supporting this point see: Raymond Pearl, The Natural History of Population {London:Oxford University Press,1939),pp.356-93* 13 Another term for maximum population is "biologi cal equilibrium." In Chapter III an objection is raised to the use of the term equilibrium in this connection. j The highest record of natality experiences are those of 55 per 1000 estimated for the United States in 1800 and 53*4 per 1000 recorded for the Arabs of Pales tine 1943-1945. Warren S. Thompson^ Plenty of People (New York: The Ronald Press Company, 1948), pp. 31-32. 30 of the different societies have been known to exert a restricting influence on the rate of population increase. This has been pointed out by many demographers as an in dication of the continuing existence of the population i "problem" (in the Malthusian sense) among human societies j and the attempt on the part of these societies to avert ! that problem either through a reduction of the birth rate 1 i 15 1 or the conscious elimination of the old and invalid. ^ I However, the concept presented here may be considered an extreme case which is entitled to theoretical rather than practical importance. 17 Semi-controlled quantitative changes. The earliest records on social behavior seem to indicate that 15 For an account of these conditions see T. R. Malthus, An Essay on the Principles of Population.(ninth edition; LondomReeves and Turner, l^S) ; and A. M. Carr- Saunders, The Population Problem (Oxford: The Clarendon Press, 1922). 16 Only as a pure physiological expression that the concept has a theoretical value. This does not deny the j significance of that factor in connection with the non- 1 economic motives group. 17 The term "semi-controlled" has been preferred to this category since most of the motives involved do not necessarily exert their controlling influence through wilful and conscious decision Oh behalf of society as a whole and/or the individual family units. 31 societies have always attempted the control or the curbing of the full expression of human fecundity. Like most other aspects of human behavior, these attempts could be the result of a multitude of different motives. For the j purpose of this study these motives have been divided into, two groups, one economic and the other non-economic. f Either one of these two groups or a combination of them could possibly exert a controlling influence on quantita tive changes. By semi-controlled quantitative changes reference is made to the type of controlled changes in duced through natality or mortality by either one or a combination of the non-economic motives (including physio- ! logical). Economic motives could also be included but their influence, by definition, has to be subordinate to all others. Of all the non-economic motives possible, the following seem to be the most relevant to population changes; j A. Religious. Religious teachings, with few ex- ceptions, always seem to emphasize the responsibility i XS An illustration of such exceptions is the glor ification by early Christianity and ,some primitive relig-' ions of the moral concept of virginity and celibacy. This, on the other hand, might possibly be the result of the condemnation of these same religions of the habits of in fanticide and the killing of the old and sick that were generally prevalent among primitive societies. 32 of each individual, both toward his God and his ancestors, to beget descendants to further the interests of the sect or clan. Such an emphasis can only result in inducing an I upward trend in quantitative changes that is readily ! observable in most religious societies. j B. Political. Political teachers have not always I I been so insistent on an increasing population. The Greek i philosophers, for example, went on record as favoring a ! stationary rather than an increasing population.^ Their | reasons for such a preference are hardly acceptable to modern political scientists who seem to concur with Vauban in the view that: II est constant que la grandeur des rois se mesure au nombres de leurs sujects; c,est en quoi consiste leur bien, leur bonheur* leurs richesses, leurs fortune et toute la consid eration quTils ont dans le monde. Military. Militaristically-minded societies could hardly resist the temptation of increasing the size of their populations and, consequently, the size of their j human supply necessary to support a continuous state of combat. At first glance, there seemed to be much justifi- , cation for this attitude. However, on closer examination On-the demographic writings of early Greek philosophers, see Chapter IV; 20 As quoted in Pierre Fremont, o£. cit.. p. 13* 33 the relative merits of the mere increase in numbers, as compared with militaristic efficiency and the amount of war machinery available, might be disputed. Since these last two are the result of education, training, and j necessarily savings, and since the existence of a mutual i relationship between quantitative changes and these ac quired qualities has been maintained, it should be the re-J sponsibility of each militaristic society to emphasize, I not the mere increase in numbers, but rather the happy medium between quantitative increase and a high level of 21 qualitative aptitudes and readiness. D. Social and Institutional. The institutional j setup of each society may be said to play a dual role in the prevailing pattern of behavior generally and the aspects of that pattern pertaining to quantitative popula tion changes specifically. On one hand, it is the medium through which most motives, including the first three, do exert their influence. Of particular importance in this connection are the religious and legal attitudes toward marriages and social institutions, such as abortion, in- j i | fanticide, and the killing of the old and invalid. But on 21 This by no means commits the writer to the view that the cause-effect relationship runs from militaris- tically mindedness to an increase in population. It is highly probable that the opposite is the more valid relationship. 34 the other hand, as Veblen pointed out, Institutions are not only themselves the result of a selective and adaptive process which shapes the prevailing or dominant types of spiritual attitudes; they are at the same time' special'methods of'life and of human relations, and are, therefore, in their turn efficient factors of selection. The role of women in the daily life of society, for exam ple, may have a great influence, in itself, on both the prevailing demographic and economic conditions. Controlled quantitative changes. The first two concepts were presented as an introduction to the third and most pertinent type of quantitative changes, namely, "controlled quantitative changes." In such a concept, reference is made to the type of quantitative changes in which society as a group and the individuals as constitu ents of the family unit do consciously attempt the control of their population (family) size with the maximization 23 of "ophelemity," (to be tentatively associated with the economic welfare concept) as their major objective. Thorestein Veblen, The Theory of the Leisure Class (New York; B.W. Huebsch, 1919)V p. 183". 23 The term "ophelemity" was coined by Vilfredo Pareto to designate utility in the economic context. For a discussion of this concept see; Talcott Parsons, The Structure of Social Action (New York; McGraw-Hill Book Company, Inc., 1937), pp« 242-250. 35 P1 Major questions presented in this study include: (1) What is "ophelemity’ 1? (2) What are the conditions of its maximization? (3) What are the probable trends of popula tion changes liable to result, from such controls? BASIC CONCEPTS RELATING TO ECONOMIC WELFARE The welfare of human beings is generally claimed to | be the practical objective of all human effort. ’ ’Economic { welfare” (maintained by assumption in the first chapter to j be directly related to the successive stages in economic development) is the objective of this study. A clarifica- j tion of this objective is a must before any analysis of the conditions of its maximization becomes possible. Even though the subject has had a wide treatment in connection 25 with the field of "welfare economics," nevertheless, ^ The concept of controlled quantitative changes is closely related to the demographic concept of an opti mum population. While the latter is concerned with the size per se, the former is mainly interested in the rationality of behavior necessary for reaching that size. As in the other two concepts, this rationality could be ; exercised either through natality or mortality. Thus there is a distinction between the optimum population size that j may be achieved through the control of natality and the optimum population size that may be achieved through the control of mortality. A.M. Carr-Saunders.•The Population Problem (Oxford:The Clarendon Press, 1922),pp. 230-236. I.M.D-. Little, Welfare Economics (Oxford: The Clarendon Press,1950); M.W. Reder, Studies in the Theory of Welfare Economics (New York:Columbia University Press,1947); and A.G. Pigou, The Economics of Welfare (London: Mac millan and Company, Limited, 195077 36 most of the analysis in that field is based on the dis tinction, in one form or another, between general and economic welfare and, as a result, is colored by each writer*s point of view as to what the field of economics should or should not include. Since the chief interest here lies in the region where "economics” and "demography” meet rather than in that of "economics" alone, such an alysis, as referred to above, may be considered as rela tively narrow in scope for the present discussion. It is precisely because of this "narrowness" associated with the concept of "economic welfare" in the general literature that the term "ophelemity" may be considered preferable. However, the following meaning is used in the interpreta tion of the objective of this investigation. The problem may be divided into two partsi first, to find the meaning of welfare; and second, to separate that part of the general subjective welfare pertaining to the different aspects of this study, both economic and demographic, and label its maximization as the objective, whether it is called "economic welfare," "ophelemity," or any other adequate term. General Welfare as an Aspect of Human Consciousness. The concept of welfare is rather difficult to de fine, for economists have failed to supply a-speeific / 37 definition. The nearest Hobson came to the development of one may be found in the following statement: In fact, all cooperative work for social progress implies the existence of some such standard as 'we are seeking. The complex Image of human values which it contains is always slowly changing, and varies somewhat among different sorts and conditions of men. But for the interpretation of economic goods and processes it has, at any time, a real validity. For it is anchored to certain solid foundations of human nature, the needs and functions to which, alike in the individual and in the society, we give the term organic.2° Pigou, in his widely acclaimed treatise on welfare economics, gave the following definition of welfare: Welfare, however, is a thing of a very wide range. . . . It will be sufficient to lay down more or less dogmatically two propositions; first, that the elements of welfare are states of consciousness and, perhaps, their relations; secondly, that welfare can be brought under the category of greater and less. A general inves tigation of all the groups of causes by which welfare thus conceived may be affected would constitute a task so enormous and complicated as to be quite impracticable.27 The round-about approach and definition of Reder may also prove to be of interest, since he labeled it ; ntheM standard definition of welfare: Instead of attempting to give "content" to the idea of welfare directly, we define a. welfare indicator which increases and decreases ! with welfare: welfare is that which varies with 26 J. A. Hobson, Work and Wealth (New York: The < Macmillan Company, 192o), p. vi. 1 ^ Pigou, o£. cit.. pp. 10-11. 33 this indicator. The indicator is defined as follows: welfare increases (decreases) whenever one or more individuals become more (less) satisfied without any other individuals becoming less (more) satisfied.23 Reder further elaborated by defining "satisfaction” in the sense that ”an individual is said to become more (less) satisfied if he is put onto a higher (lower) indifference surfaee."^ These definitions seem to have much in common. 1. Welfare is a state of consciousness indicated by the level of "satisfactions” that the individual or the society seem to be experiencing at any one time. 2. The concept of welfare is basically a function of human "wants" (to be interpreted in its broadest sense as including physical needs, instincts, desires, beliefs, etc.) and valuations, as well as the capacity of external "stimuli" to satisfy these wants and valuations. 3. While inaccessible^for quantitative measure ment, the concept of welfare "could be brought under the category of greater and less." 4. In the final analysis, it is the individual himself or the collectivity of the individuals making up society that determines whether welfare has increased 28 Reder, op. cit.. pp. 14-15. 29 Loc. cit. 39 decreased, or remained constant. 5. Maximum individual welfare is achieved when the individual has reached the "highest indifference surface," that is, when the marginal satisfactions derived from the j j multitude of his different wants are equal at the highest possible level. 6. Maximum social welfare is achieved when no in- i crease of any constituent individual welfare is possible j but at the expense of that of the welfare of others.^ Economic Welfare (Ophelemity) as an Aspect of General i Welfare. An essential condition for the determination of the 30 Indifference curves are the tools adopted by Pareto to elaborate on Marshall’s pure theory of consumer’s demand. According to this theory, utility would be maxi mized when the marginal unit of expenditure out of a fixed income in different directions supplies the spender with an equal increment of utility. The literature on indif ference curves has been ever since an expanding one. For an exposition of the concept see: J.R. Hicks, Value and j Capital (Oxford: At The Clarendon Press, 1939)* ! 31 Discussions of the social maximum welfare and ; the conditions of its achievement are basic in the Paretian welfare economics and have been widespread ever since. It does not serve the present purpose to go deeper into a discussion of these conditions. However, for an analysis of them see: Kenneth E. Boulding, "Welfare Economics," in Bernard. F. Haley, editor, A Survey of Con temporary Economics (Homewood: Richard D. Irwin, Inc., 1952), Vol. II, pp. 1.-38. 40 point of maximum welfare (equals equilibrium) is that wants should be given as constant and independent of the | utility aspects of the processes leading to their satis faction. Where the wants to be satisfied are A, B, C, D, ; ........n, the point of personal maximum satisfaction : under given conditions would be reached when the marginal ; > satisfactions derived from all these wants A A, A B, AC, j 1 AD, ...... An are equal. If by any chance these wants J i are made to vary as a function of the process of their attainment, the point of maximum satisfaction would become 1 indeterminate and the whole analysis would become circular. In the previous discussion dealing with a general welfare concept, the term "wants" has been interpreted in an all-inclusive sense to become basically meaningless. Under such conditions, a point of maximum satisfaction could be theoretically envisioned but, since the different wants included are not pointed out specifically, its j 32 ■ It was this mutual interrelationship between wants and activities that was one of the reasons for j Marshall,s pessimism with regard-to a theory of economics based on human wants. "Although," Marshall stated, "it is : man’s wants in the earliest stages of his development that ; give rise to his activities, yet afterward each new step ! upward is to be regarded as the development of new activ ities giving rise to new wants, rather than of new wants : giving rise to new activities. Alfred Marshall, Principles j of Economics (London: Macmillan and Company, Ltd.,1927), I p. W- 41 determination becomes a practical impossibility. The fact that these wants are themselves indeterminate makes the point of their maximum satisfaction also indeterminate. From this it follows that any analysis which assumes the j i maximization of welfare as its objective, must start with ; the enumeration of the human wants or needs, the maximiza- | tion of the satisfaction derived from which are intended, i 1 I Without this enumeration, the objective is defeated at the : beginning. Conscious of this necessity, the welfare economists have attempted the distinction in one form or another be tween economic and general welfare. The basic definition in the field and the one to which most economists lean is that given by Pigou. In allegiance to his Marshallian heritage, he considered money the basis for distinction. Hence, the range of our inquiry becomes re stricted to that part of social welfare that can be brought directly or indirectly into relation with the measuring rod of money. This part of welfare may be considered as economic welfare.33 In a way, Pigou may have restricted his field of j interest. However, and basically, he did not answer the essential question necessary for the determination of a point of maximum economic welfare. He did not enumerate the wants considered to be economic in nature and subject 33 Pigou, o£. cit.. p. 11. 42 | as such to economic analysis. The question: What are the human ’ 'wants" included in a concept of economic welfare? | becomes within Pigou*s definition: What are the human "wants” that could be "brought directly or indirectly into relation with the measuring rod of money?" As far as; . ^ | , known to the investigator, neither of these questions has ; ' ever been answered. A great doubt may also be cast on I the possibility of their ever being answered. It was j basically because of this doubt that Marshall refused ex plicitly to consider "wants" as a basis for economic theory and preferred to regard the latter as a theory of activities instead.For a person who defined economics as "on the one side a study of wealth; and on the other, and more important side, a part of the study of man," and ; for a person who developed the marginal utility concept as i highly as Marshall did, this explicit refusal of his may I i i seem strange but not illogical. Marshall explained it as ; follows: For the progressive nature of man is one ! whole. It is only temporarily and provisionally that we can with profit isolate for study the • economic side of his life; and we ought to be careful to take together in one view the whole of that side. There is special need to insist 34 njt is not true>n wrote Marshall, "that the •„ theory of consumption is the scientific basis of economics. Marshall, op. cit., p. 90. 43 on this just now, because the reaction against the comparative neglect of the study of wants by Ricardo and his followers shows signs of being carried to the opposite extreme. It is important still to assert the great truth~on which they dwelt somewhat too exclusively; i viz., that while wants are the rulers of life j among the lower animals, it is to change in j the forms of efforts and activities that we j must turn when in search for the keynotes of 1 the history of mankind.35 i "Economic wants" are still an unknown quantity. In a sense, Pigou may have succeeded in throwing a boundary line around that part of general welfare which he con- \ sidered to be economic in nature. However, he failed to point explicitly to the different wants that should be in cluded or excluded from that region or zone. Basically, economists still think of that region in terms of a theory ! of activities and of economics as "an abstraction from the j general melee of social phenomena based primarily on those magnitudes which are descriptive of the production, con sumption, and exchange of commodities."-^ Heedless of Marshall’s warning to be careful to ! j take together in one view the whole of that (economic) j - a : side, welfare economists were thus inclined to emphasize j the point of maximum economic welfare based on the con sumptive (and, consequently, the productive) nature of ^ Ibid., p. B$. 3 6 Boulding, ojd. cit., p. 3» 44 human beings.37 They confined themselves to the investi gation of the conditions of the maximization of welfare derived from the consumption of different commodities out of a fixed income, from the equalization of the maximum satisfactions and dissatisfactions derived from income and effort, and from the distribution of a fixed national "dividend" among the constituent members of the society. But, do these analyses cover all of the human "wants" of an economic nature (using PigouTs definition as the criterion)? Gould it be that this point of maximum economic welfare,arrived at by restricting the discussion to the consumptive nature of human beings, is inaccurate since it ignores other needs and desires that "can be brought directly or indirectly into relation with the measuring rod of money?" The answer, since there is no way of separating the economic aspect of human nature from all other aspects, could at most be relative to the level of investigation intended in each study. For a restricted analysis, the consumptive aspects of human nature may be quite satisfactory. But, for a higher level social 37 For the sake of analysis, the different wants of human beings may be divided into "consumptive" or "non consumptive." In the "consumptive" category are included all wants, the satisfaction of which involves the utiliza tion of one or more "economic" goods or services. In the "non-consumptive" category all other wants are included. 45 analysis, this aspect of human nature is limited and in complete. A short reflection on the subject would imme- : diately reveal the existence of basic non-consumptive I human wants or desires that, although'they {their inten- i sity) cannot be measured in money units, have a direct j ! ! influence on the level of satisfaction (material satis- | faction included) experienced by each society (family). J Exclusions of such non-consumptive "wants" could easily j I upset the point of maximum satisfaction (equilibrium) j assumed to be the objective in economic analysis. The principal one of these non-consumptive human 38 "wants" is the "instinct” of "parenthood" in all human , beings. The different aspects of such a human instinct is : the subject matter of the next section. The point to be j emphasized here is that from now on the expression "indi vidual economic welfare" (ophelemity) will refer to the net result derived from the satisfactions and dissatis- i factions associated with the consumptive (productive) ■ nature of human beings plus that derived from the exper iences of "parenthood" as such. For the sake of simplicity] i ' and to avoid entanglement in the broad field of welfare 3 8 ! Despite academic controversies, the term ■ "instinct" is used here to imply a "motive" of physiologi- 1 cal origin. j i economics, social economic welfare will be defined as a simple aggregate of its individual component welfares. “Parenthood1 1 as an Aspect of Economic Welfare. Due to the limited range of animal life, the multi- ! plication of the species becomes prima facia a necessary^ requirement for the continuity of the different groups of j i the animal kingdom. In the case of human beings, as well ! as in many lower animals, “nature" seems to have insured j this process through three different factors: 1. A capacity for reproduction (fecundity), in both males and females, that is far beyond the necessary requirement for mere replacement of the species. 2. A deep sex desire that insures the highest utilization of the excessive fecundity referred to above. 3. A human instinct, apart from the sex instinct, favorable to parenthood per se. as a major objective to be accomplished throughout onefs life. Of these three factors, the third is the least I often mentioned in demographic literature. Particularly in connection with the Malthusian argument, demographers have been apt to emphasize greatly the tremendous inherent power of population growth resulting from the first two factors. This is understandable as long as the population growth resulting from the free expression of the sex 47 desire is more than enough to satisfy the human instinct of "parenthood." However, it has long been established that human beings are not always apt to exercise their I sexual faculties freely and unrationally. Even if this were the tendency, the use of contraception has long made : it possible to separate the actual gratification of the sex desires and its correlative result of pregnancy and conception. It has also been established that this ten dency toward the use of rationality and contraception has resulted in a drop in the birth experiences of each society at higher and higher levels of socio-economic de velopment. Demographers hastily concluded that by project ing this downward trend of the birth experiences into the future (assuming, of course, a continuous rise in the socio-economic status), the time would come in the demo graphic development of each society when the rate of population growth would become zero or negative. This is equivalent to saying that the time would come when people would lose all interest in the propagation of the species, i or that that interest would not be high enough to counter balance the mortality experiences of each society. Whether this be true or not depends on the intensity of the "parenthood" instinct as such and the relative position attributed to it in relation to the desire for the satis faction of other "wants" that are basically consumptive 4$ in nature. "Parenthood" as a human instinct. Parenthood may be defined as the experience of having one or more chil dren. In most demographic analyses, such experiences have | i been regarded either as a means to an end (fulfillment of f religious obligations, economic assistance contributed by I children, military prestige associated with population ! | growth, etc.) or as an inevitable correlative to the satis-j j faction of the sex desire. It is surprisingly rare in demographic literature to find "parenthood” being treated as an objective in itself based on internal physiological instincts, the satisfaction of which might result in a 39 sense of welfare. The "family," it may be emphasized,is still the basic unit among the anthropoids.^ As a pattern 39 it should be granted that the intensity of this objective could be enhanced or reduced by other social and economic incentives. Of the few references made to this "parenthood" instinct in the literature is Fromont’s dis cussion of the Human Factor: "D’un cote, bien des raisons vont intervenir pour indentifier enfants et interet per sonnel. Ainsi, certains peuvent apprecier prefondement les joies de la famille, du foyer stable qui possedent ce priv-j ilige incomparable d’etre independantes de circonstances. La joie et la fierte de transmettre son nom peuvent jouer ! un grand role dans certains families." Pierre Fromont, op. cit., pp. 15-16. 40 On this point see: Bronislaw Malinowski, Sex and Repression in Savake Society (London: Routledge and Kegan Paul, Ltd., 1949), pp. 150-51. 49 of behavior, such a unit is based on other instincts beside the sexual. According to Malinowski, If we define instinct as a pattern of behavior in direct response to a situation, a response accompanied by pleasurable feelings, then we can say that animal family life is determined by a chain of linked instincts: courtship, mating, common life, tenderness towards infants and mutual help of the parents. Each of these links follows the other, releasing it completely^ for it is characteristic of such concatenations of instinctive responses that each new situation requires a new type of behavior and a new emotional attitude.41 Within this “concatenations" of instinctive respon ses, the sense of parenthood should loom high. After all, this sense is apparent in old as well as new societies. According to old standards, for example, the prestige of a family (like that of a nation) was often regarded as directly related to the number of its descendants. While not exactly true in modern times, this joy of having a family and the feeling of "personal worth" associated with the continuity of the family name are sources of satis faction for which normal men and women do usually strive. Parenthood, as a human instinct, is then regarded as an end or objective, the satisfaction of which should be taken into consideration in the determination of a point of maximum "economic" welfare. 41 Ibid.. p. 161 I 50j "Parenthood” and the principle of substitution. The concept of maximum economic welfare presupposes the principle of substitution or the ability on the part of each individual to distribute his available income in the I quantities and directions resulting in his experiencing of; the highest level of satisfactions. Within the consumptivei sphere, the problem is generally that of choosing between present or future consumption and, in the case of the ; former, among the different commodities and services available. By including "parenthood" within the sphere of 1 "economic wants," each individual may choose one of three alternatives: saving, personal (family) consumption, or satisfying the "parenthood" instinct through begetting an extra child. Since an extra child is obviously a claim against the available income of the family, the satisfac tion of the "parenthood" instinct becomes as much a sub ject for substitution as any other commodity or service. "Parenthood" and the principle of marginal utility, j Any one of the multitude of human wants is a possible basis for the concept of utility.^"2 Provided that the in tensity of the want remains constant, the degree of utility JO ^ Utility may be defined as the capacity of any external "stimulus" to satisfy a human want. 51 has long been known to vary with the quantity of the i "stimulus" and ultimately to decrease as that quantity ! increased. The value of each "stimulus" (commodity) to the individual, explain the economists, should not be con strued in the light of the total utility derived from that ! 1 "stimulus," but rather in the light of the utility derived I from its "marginal" unit. The marginal utility concept is j : so generally discussed as to make it quite unnecessary to j give a complete account here. The point to be emphasized ! is that the marginal utility concept is applicable only when the "stimulus*" be divisible into homogeneous and equal parts or itself be one of a group of similar objects. ; Without this divisibility no marginal unit or marginal utility would be possible. Within the intended plan to consider "parenthood" i | as an economic want to be included in the determination of ' a maximum point of economic welfare (where the marginal utilities derived from the satisfaction of the multitude ; of economic wants are equal at the highest possible level) ; the marginal approach is still to be found highly appli cable. "Parenthood" as a human want can only be satisfied through the experience of having a child. Thus, in the ; analysis the child becomes a "stimulus." With the ex- i i ception of sex differences, it may be granted that | "children" at the time of birth are more homogeneous than 52 many so-called economic commodities. According to the principle of marginal utility, the first child, in terms of welfare, has a higher value to his parents than the fifth or sixth child. Assuming no preference as to the sex of the child, the marginal utility curve derived from ; the satisfaction of the ’ ’parenthood” instinct, if depicted ; on a graph, would slope downward to the right.^ The point of maximum economic satisfaction (equilibrium) ! would be reached when the marginal utility derived from i an extra child would be equal to the marginal utility de rived from the satisfaction of all or any one of the other consumptive needs. POPULATION CHANGES AND ECONOMIC THEORY The nature of economic theory and its limited role in the explanation of realistic relationships was capably expressed by Kuznets: The task of economic theory is to develop a generalized description of the basic pro cesses of current economic life, to establish general relationships among the different ; factors in the present economic system. These j generalizations are to be the tool, which should in combination with some specific data explain the appearance and general characteristics of an economic phenomenon; unless, of course, the I O 'Since no quantitative measurement of utility is possible, such a curve could only be done on the basis of ’ ’greater or less” satisfaction. 53 latter is in the nature of a passing dis turbance or ijs occasioned by factors outside the economic system.44 ; According to this point of view, economic theory j ; should be able to explain population changes only insofar \! as the latter are not "in the nature of a passing disturb-| : ance or occasioned by factors outside the economic system? ; In view of the previous discussion dealing with the three ' categories of quantitative population changes, a distinc tion can be made between two possible relationships which 1 combine population changes and economic theory; one in ■which population changes are "occasioned by factors out- ; side the economic system," and another in which population! 5 ' • j ; changes are mainly influenced by economic motivation. : Population Changes as an Exogenous Factor to Economic ! Theory. j By definition, both "uncontrolled" and "semi-con- ' trolled" quantitative population changes refer to types of these changes in which non-economic motives dominate the economic motives in the determination of human action. Where these types of changes prevail, economic theory can not possibly be charged with the responsibility of explain- I ing the resulting trends. Economic factors, it is true, : 44 Simon Kuznets, Economic Changes (New York: W. W. i Norton and Company, Inc., 1953), p* 3» (Underlinings are lours.) _____________________ _______________ __________ _____ 54 j may exert a limited influence on the fluctuations sur rounding these trends, but for an explanation of the over- I all level, it is necessary to consider other fields than ; that of economics. I At the same time and under all circumstances, econ- i omic theory cannot feasibly ignore the economic consequen-j i ! ces of population changes without the risk of unrealism and false conclusions. Since such a theory is incapable i of explaining the previous two categories of population j : changes, it can only deal with their economic consequences j through a one-way relationship in which population trends, I taken as given, exert their influence on an economic : system assumed to be governed by "preconceived” economic principles. This cause-and-effect relationship may best ‘ be understood by reference to the classical analysis and the Malthusian theory of population. Two steps may j be distinguished in such an analysis. The first is | based on the "static equilibrium” concept of the Ricardian f economics.^ With that approach, the classicists may be said to have developed a closely knit body of economic theory reflecting the prevailing economic principles i i supposed to govern the production, consumption, and dis- ; tribution of economic goods and services. With the t ' ^ Definitions of such economic concepts will be attempted in the following chapters. ! 1 r~~ ' . i 55 | L achievement of this so-called state of "equilibrium1 1 the | whole system was then exposed to the”disturbing" influ- : ence of the Malthusian theory of population (representing i the basic dynamic force in the classical economic theory) : j j with the implications involved in such an exposure worked j out to their logical conclusions. | ! In this approach the validity of the analysis wouldj I i ; . ! j be mainly a function of the validity of the population j i trend assumed to prevail at any one time. Where the trend! assumed differs from the actual trend experienced, the whole analysis becomes practically irrelevant. Population Changes as an Endogenous Factor in Economic Theory. ] When population changes become mainly motivated i by economic factors, namely, "controlled quantitative . changes," the body of economic theory should be able to: ! (1) explain the resulting trends in population changes;and (2) reflect the impact of these trends on the prevailing j economic system. Within such a mutual interrelationship, j the cause-and-effect type of analysis referred to above i becomes too complicated and most inadequate. Since changes in each of the variables included become simultaneously a cause as well as an effect of the changes in all other variables, there would be a better chance to understand 56 the overall relationship through a functional analysis (in which each of the variables becomes a function of all others) with the main emphasis placed on investigating » I the conditions determining the state of "equilibrium.1 1 , Within such a state, there would be no incentive (in terms ; of welfare) inducing a change in any of the variables at j the expense of all others. i ! The validity of such an approach, however, depends j to a great extent on the variables included or excluded. j 46 , If, as the optimum theorists seem to have done, the > analysis should be limited to the satisfaction of the consumption needs of the individual without paying any attention to the satisfaction of any of his other nrele- i vant" desires, the point of "equilibrium” reached would j be, from the practical point of view, most unstable. : Individuals would always be tempted, especially when the marginal utilities of these non-consumptive desires were : higher than the marginal utilities derived from the I i satisfaction of the consumptive needs, to replace the ; ; satisfaction of the former for the latter and so upset j the calculations of the "equilibrium" theorists. For an analysis and criticism of the optimum theory, see Chapter VI. CHAPTER I I I STATICS, DYNAMICS, STATES OF EQUILIBRIUM, AND ECONOMIC DEVELOPMENT ! The basic objective of this study is the integra- j f tion of the population variable with contemporary economic theory. In so doing, it is natural that we should make use of the tools of analysis and methods of approach pre- j vailing in such theory. Statics, dynamics, equilibrium, stationary state, and economic development are all tech-J t nical terms quite familiar to economic students. However, they are not generally interpreted in the same sense by all. Such confusion in conceptualization (particularly as to the distinction between statics and static equil ibrium, statics and the stationary state,^ statics and dynamics) has been, we believe, most unfortunate from the point of view of population theory. It is one of the contentions of this study that while the economic factors affecting population changes could be dealt with on a ^The concepts of statics and the stationary state have, for a long time, been confused. On a general dis cussion, see: L. Robbins, "On a Certain Ambiguity in the Conception-of a Stationary Equilibrium,” Economic Journal, 16:194-214-, June, 1930. 58 static, as well as a dynamic basis, the influence exerted by population changes on the economic system could only be handled from a dynamic point of view. In this chapter, we give our "particular" interpretations of such terms and ! i their derivatives. No full-fledged analysis is intended j 2 since this is more adequately done in other works. Rather, our analysis will be mainly influenced by three i I I considerations: (1) it will be restricted to the macro- j economic approach characterizing the whole study; (2) it will be handled basically from the point of view of the economic status studied, rather than the type of analysis used; and (3) it will be concerned mainly with the rela tionships which these concepts maintain with the processes of population changes. THE TIME ELEMENT IN ECONOMIC ANALYSIS The study of economic variables is, to say the least, a complicated process. At any one time, the level On such basic concepts in economic analysis,see: P.A. Samuelson, Foundations of Economic Analysis (Cam bridge :Harvard University Press, 1947); G.J. Stigler, The Theory of Price (New York: The Macmillan Company, 1946], Chapter 2; J.R.-Hicks. Value and Capital (Oxford: At the Clarendon Press, 1^39); and R.-Frisch, "On the Notion of Equilibrium and Disequilibrium." Review.of Economic Studies. 2:100-105, February, 1936IT of any of these variables is a function of many factors. Classified on the basis of the time element involved, these are: 1. The level of other variables simultaneously in j i existence with the variable under consideration. j 2. Past trends relevant to this specific variable. ! ( 3. Expectations as to the future role of events j | pertaining to and reflecting on the future level of that j variable. It is customary in economic theory to refer to any analysis given in terms of the first of these groups as static analysis.3 All others may be labeled as dynamic in nature. I A. Static Concept of the Economy as of a Given Time. This definition of static analysis could be equally 3 With the time element as the sole criterion, J.R. Hicks, for example, referred to economic statics as"those parts of economic theory where we do not trouble about j dating.” Hicks, o j d . cit., p. 115. Reder also described the static system as ”one in which the values taken by the i variables at any one moment of time, are given the func tional forms and the parameters of the system, dependent solely on the values taken of the other variables at the moment of time and have no relationship with the value taken by any variable at any other time.” M.W. Reder, ' Studies in the Theory of Welfare Economics (New York: Columbia University Press, 1947), p. 104. j 60 applied to a single micro-economic variable or to a macro concept of the economy as a whole. In both cases an "instantaneous" picture is taken of the relevant variables: involved, as well as of the relationships existing among these variables as of a given time. In our use of the | term "static," unless qualified by another term such as j "equilibrium,” nothing more is implied than a description ! » of such "instantaneous" relationships. A macro-static concept. With such an interpreta tion, any confusion as to the meaning of the "static" ap proach could only arise from similar confusions as to the meaning of the term "instantaneous." In some economic traditions (the supply and demand curve approach) such a term would be interpreted on a strictly time basis.^ This is the rigid interpretation of the term "static"— an interpretation which, while beneficial in the explanation of some micro-economic relationships, is hardly applicable ! to a macro-analysis of the economy as a whole. j A more liberal approach, we believe, is more l suitable in this connection. The economic activities of ^ In such static concepts as the curves of supply and demand, the principle of diminishing returns, etc., in which the variable considered as a dependent variable, the "simultaneous" relationships studied are not existing ones but could have existed at different levels of the inde pendent variable. I 63.1 each society (it is axiomatic) form a continuous uninter rupted time process. From the point of view of macro- economic analysis, the central variable of such a process (as well as the basic criterion of its achievements) is 5 that of the level of productivity or national income. At any one instant in the history of each economy, there can only prevail but one value of such a level. If the national income were referred to as Ynand the successive "instants" as 1, 2, 3, ...n, the level of the national income at each particular instant might be expressed as Yi, Y2, Y^, .... Yn. A static analysis of the economy, as a whole, could then be visualized as concerned with the investigation of the "simultaneous" relationships, both leading to and derived from each particular level. Since the activities leading to such a level of productivity and the uses made of it after it had finally been produced could not possibly occur at the same "instant," the term simultaneous here could not feasibly refer to a time factor, but rather to a "connection" with one specific level of national income prevailing at a specific moment 5 Notwithstanding the technical differences between the net national product and the national income, these two macro-concepts could be used interchangeably in our reference to any specific level of productivity. of the time process. Considered in terms of a chain of successive levels of productivity or national income, the time process of economic activities may then be conceived as made of "links" with each link composed of: (a) a spe- > cific set of the factors of production; (b) a specific level of productivity; and (c} a specific use of the produce. A macro-static analysis assumes the possibility i I of separating these successive "links" from each other j and concentrates on the exposition of the relationships existing among the three phases of each particular "link."7 6 i Two alternatives may be suggested in viewing these relationships. On one hand, we may accept the time element involved in the processes of the production and consump tion of a specific level of national income and regard the I whole analysis as one form of the "period" approach well publicized in economic theory by Robertson. On the other hand, we may assume the whole period or "link" to be pressed against a slide with the "simultaneous" relation ships viewed through the microscopic eye of the economic analyst. In this way, each economic system over time would be composed of a succession of these slides that are apparently independent but actually, as is explained in the dynamic approach, closely integrated with each other, j 7 This macro-static approach may be considered as j closely related to Harrodfs point of view in which he claimed static analysis to be adequately fit for the ex planation of the "once-over" (changes from one level to another— in our case applied to national income) types of economic changes. R.F. Harrod, Towards a Dynamic Economy (London: Macmillan and Company, Ltd., 194$), p. 12. Economic teachings and the macro-static concept. If we have clarified this concept of a macro-static ap proach, it may then be remarked that economists, depending on their different orientations, do not generally agree either on the variables to be included or on the relation- j ships to be emphasized in such an approach. Three groups | of economists may be distinguished. The Physiocrats, for example, claimed that the basic relationships centered on the use made of the produce and the ratios of "productive" j and "sterile" (in the physiocratic sense) consumption.^ Adam Smith and the classicists were more interested in the other side of the picture. Based on their "illusion" that ; supply creates its own demand, they discarded the "final" use made of the produce and concentrated on the static interrelationahips between the three factors of produc tion— land, labor, and capital— and the functioning of the principle of diminishing returns.9 Recently, Lord Keynes ft Francois Quesnay, Tableau Qeconomique (London:Re- | produced for the British. Economic Association, 1&94)• ^ The classical theory of distribution falls in the same rigid category as that of the principle of diminishing returns and the supply and demand curves. Considered from a macro point of view, such a theory can only be relevant to the analysis inasmuch as: (1) it determines the quan tities of the factors of production available for economic use at any one moment; or (2) it affects the final use made of the produce by the recipients of the different shares. 64 and the Keynesian School again seem to have shifted the emphasis back to the use made of the produce in their now famous formula which equates the national income with the ; consumption and investment functions of each economy.-*-^ ! I • j In our approach here, we hope to take both sides of the "instantaneous” approach into consideration. j j The variables involved in a macro-static approach. s ! As referred to above, the basic variable in a macro-static ; approach is the level of productivity or national income, Y. At any one instant, Y is both a function of the variables leading to it, as well as a determinant of the variables derived from it. The question posed here is: s s ' What are.the variables involved on each side? Since in a static approach only one value of each of these variables can prevail, our task here is mainly concerned with their j enumeration and definition. | : On the productive side, a specific level of national! ; income, Yn, is a function of: (1) the quantities, both j 1 I absolute and relative, of the factors of production avail- ! ! 1 • ; 1 able; and (2) the efficiency with which the available i quantities of these factors are utilized in the production John M. Keynes, The General Theory of Employment. Interest, and Money (New York: Harcourt, Brace, and I Company, 1936)• 65 of economic goods and services. Within the first group, it is traditional to dis tinguish among three factors of production— land, labor, and capital."*^ On the basis of a functional approach, we S j define these factors as follows: j 1. Land. All natural productive facilities usefuli t at the prevailing level of knowledge. 2. Labor. The number of man-hours of effort con tributed per n (generally taken to be one year) by the members of each society, at the prevailing level of re turns, toward the production of goods and services that 12 are "economic" m nature. 3* Capital. All man-produced economic goods and services devoted to the improvement of productive effi ciency in the application of labor to land. The efficiency with which the available quantities These three categories are becoming more and more outmoded. However, due to the level of generalization j maintained in this study, we may consider them adequate enough for our purpose. "Enterprise** as a fourth factor, is being omitted, since we consider it directly related ; to the level of "human capital." Labor, as so defined, does not have any reflec tion on the efficiency of the work performed. Provided that such efficiency results from education and training, they may be thus included in the concept of human capital. 66 of these three factors are utilized is, in turn, a function of: 1. The state of the arts. 2. The economic organization of society. 3. The prevailing pattern of consumers1 wants. On the nuse, f side of the ledger, national income is ; 1 generally expressed as equal to the total of consumption 1 * * ® and savings, Y = C ♦ S. This classification, however, is j too ambiguous for our purposes. While undeniably a truism ; in the light of the definitions adopted (S taken by defin ition to equal Y-C), the equality indicated does not make clear the true nature of the alternatives opened for the disposition of a specific level of national income. As referred to in Chapter II, these alternatives ate three: 1. National income, either as a whole or in part, may be used for the satisfaction of the consumptive wants of the members of society. Due to the urgency of some of these wants, a minimum proportion of the national income ; will always be devoted to their satisfaction. Above that I minimum, the produce may or may not be devoted .to the j satisfaction of higher-ranked consumptive wants or, in other words, to raising the standard of living. 2. Alternatively, and beyond the minimum referred to above, the national income may be utilized in increas ing the population at a relatively constant standard of 67 living rather than in maintaining the original population at a higher standard. 3. A third alternative would be to utilize the national produce above the minimum, neither in raising ; the standard of living nor in increasing the population, j but for "other” purposes, such as would be served by cash | balances or capital formation. ! 1 The decision as to the distribution of the extra ! I produce of Yn (above that necessary for minimum subsist ence) among these three alternatives depends wholly on the ' three propensities^ experienced at the “instant” n: (1) the propensity to consume; (2) the propensity to have children; and (3) the propensity to save.^ 13 In the Keynesian sense, a propensity may be de fined as the functional relationship between a given level : of income and the expenditure, out of that income, on the j activity under consideration. Keynes, 0£. cit.. p. 90. j Rostow expressed human qualities in the form of i six variable propensities: ! a. The propensity to develop fundamental science (physical and social). b. The propensity to apply science to economic ends. c. The propensity to accept innovations. d. The propensity to seek material advance. e. The propensity to consume. f. The propensity to have children.• £be first four of these propensities we take to be directly related to the propensity to save. W. ¥. Rostow, The ' Process-of Economic Growth (New York: W. W. Norton and ' Company, Inc., 1952), pp. 13-14-. 63 Under rational conditions, all three of these pro pensities would be determined with the maximization of the satisfactions of the spender as the final objective. i , | ■ The Different Aspects of Dynamic Trends. » i | Dynamics as an economic approach. The macro-static : approach to economic studies is based on two propositions.! - ■ i i ; First, it is understood that the "simultaneous" relation- j i ships studied have in common their connection with one : i specific level of national income. Second, it is assumed : that this multitude of relationships pertaining to a ! specific level of national income is independent of the : levels of the national income preceding it, as well as the | expectations concerning the levels of the national income succeeding it. In dynamic analysis, both these proposi- ! ; tions are dropped. For our purposes, we interpret the ! dynamic approach as basically dealing with more than one t i level of national income and, more important, as explain ing each of these levels in terms of the values taken by ! other levels of national income both preceding and sue- j ceeding it in time. In this connection, two dynamic re lationships may be explicitly pointed out: ! 1. How could the use made of In_2. a^Tect the quantities of the factors of production forthcoming as well | as the efficiency with which these factors are utilized j 69 for the production of Xn? 2. How do expectations as to the level of Yn4>i affect the quantities of the factors of production (and, consequently, the level of productivity).available for Yn?| Basic relationships in dynamic analysis. The I f interrelationships prevailing among successive levels of national income underlie the whole dynamic approach. Each I of these levels, as pointed out above, is a function of j six variables: (1) land, (2) labor, (3) capital, (4) state of the arts, (5) economic organization, and (6) prevailing pattern of consumption. The effect of any one level on another can occur only through its effect on either one or j more of these six variables. Through a general survey of the factors affecting each of these variables, it would be possible to determine the relation between the level of ! that variable at any one moment and (a) the uses made of previously produced economic goods and services (in terms of consumption, population growth, and savings), and (b) I I expectations as to the future values of national income. Fortunately, the multitude of these relationships j may be boiled down to three major issues: A. How does the totality of the spenders* de cisions to increase or not increase the quantitative size 70 of their families affect: 1. The labor supply; 2. Capital formation; 3. The state of the arts; 4. Economic organization;and 15 5. Prevailing patterns of consumption? B. How does the totality of the spenders1 prefer ence between consumption and saving affect: 1. The level of capital accumulation which, in turn, may be taken to affect: 2. The labor supply; 3. The state of the arts; 4. Economic organization; and 5. Prevailing pattern of consumption? C. How do expectations as to the future levels of national income affect: 1. The use made of any specific level of national income; and 2. The relation between such use and future pro ductive capacities, e.g., savings or invest ments? In practical experience all these dynamic relation ships are closely related to each other with the net Land assumed fixed by definition. 71 result generally revealed in the long-run trends of the national income. It is only temporarily that any of these dynamic relationships may be separated for the purpose of theoretical investigation. However, with this limitation i clearly in mind, we propose to deal in Part III of this study with the first of these dynamic issues as classified; above. Reference to the other two dynamic relationships will be made only in connection with the direct influence i which these relationships may exert on the processes of -population change.- * - 6 Alternative trends in dynamic changes. As the basic dynamic variable, the course of national income over a period of time may follow any one of three alternatives: it may decline ("economic decline"), remain constant ("the stationary state"), or tend to rise ("economic develop ment”). Which of these alternatives will prevail depends 1 f. At this stage of the analysis, the writer con sidered the inclusion of a general discussion of the j functional relationships existing among consumption, ! savings, and investment (defined as the net-addition to ! the level of capital stock). This, however, proved to be j too involved and out of line with our basic theme. Thus, by assuming a certain acquaintance with economic theory, we interpret our approach in this connection as basically that of Robertson in which an excess of investment over savings means rising aggregate money income, and an excess of savings over investment means declining aggregate money income. 72 upon the outcome of the dynamic relationships pointed out above. The case of economic development will be dealt with separately at the end of this chapter. Here we propose to deal in a general way with the first two. A case of "economic decline” refers to a condition | in which an economy experiences a drop in its productivity| which is in the nature of a persisting tendency, rather than a passing disturbance. By referring to such a course in terms of successive levels of national income, economic ' decline may be symbolized as: *1 > *2 > V > ..... Tn In harmony with the classification of this chapter, such a trend might result from an adverse change in either one or a combination of: (1) labor; (2) capital; (3) state of the arts; (4) economic organization; and/or ($) the prevailing pattern of consumption. Changes in these five factors, in turn, might be traced to: 1. The three propensities determining the pattern of use made of previously produced economic goods and ! services. I 2. The functional relationship between such patterns and the factors available for future production. It is through the study of the different factors affecting these last two causal groups that the source of 73 economic deterioration may be located. The "stationary state,” on the other hand, is said to prevail when Y-^ = Y^ = Y^ = ........ Y . As a dynamic trend, this equality is only possible when the level of i the five factors affecting productivity are either con stant or changing in such a way that the change in one may. offset the change in the other. By following the same I ! line of retrogression adopted in the case of economic de- ! cline, this constancy, in turn, presupposes: 1. A propensity to consume high enough to absorb all produced economic goods and services. 2. A propensity to have children equal to that necessary for the maintenance of a stationary population. 3. A propensity to save (as a potential source of capital formation) equal to zero. STATIC AND DYNAMIC STATES OF EQUILIBRIUM A state of physical equilibrium stands for two j i things. On the one hand, it refers to a specific case of i stability brought about through the equality of two or j more opposing forces. On the other hand, it is a "norm" towards which the opposing forces are supposed to move barring any arbitrary external intervention or changes in the equilibrium position itself. For our purposes here, the concept of equilibrium refers to any economic state 74 for which both these criteria are satisfied at the same time. This concept is different from the general usage of the term inasmuch as it is sometimes used in the latter sense to refer to stable or equal conditions without any normative connotations attached.^ It is a central thesis of this section that equality and equilibrium are not necessarily one and the same thing in the economic sense. While it is true that the conditions of equilibrium are always satisfied by one form or another of equality, it is not true that all equalities are states of equilibrium. As Pigou clearly pointed out, equality may be assumed by definition, e.g., savings equals investment, and as such "it is nonsense to speak of this equality Id being brought about by equilibrating or any other forces." To elaborate, it may also be pointed out that equality could be the result of an "interlocking" situation, for 17 1 This is true when the concept is used as an analytical device. Samuelson referred to the concept in this role when he wrote: "By equilibrium is meant here only the values of variables determined by a set of con ditions, and no normative connotations attaches to the term." P.A. Samuelson, Foundations-of Economic Analysis. (Cambridge:Harvard University Press, 1947), p* S. A. C. Pigou, Employment and Equilibrium (London: Macmillan and Company, Ltd., 1949), Part II, Chapter 1, p. 39. 75 example, population pressure, which is forced, on the economy by external non-economic factors rather than being voluntarily accepted by its members. Equilibrium as a Static Concept. j ■ To be a normative proposition in the economic j sense, the equality of the opposing forces indicated should! I result from the basic economic assumption concerning an | I "economic man" always striving toward the maximization of j his material satisfactions (including parenthood). When applied to a:static approach, as defined above, the economy : is said to be in a static equilibrium when the "simul taneous" relationships connected with one specific level of national income are identical with those conducive to the maximization of the material satisfactions derived from such a level. In this connection, the conditions of maximization may be divided into two groups. On one hand, there are those conditions relevant to the production of the national income itself. On the other, there are those conditions relevant to the use made of it. | On the productive side, the basic criterion is that , the national income should be the highest possible at the lowest total factor cost. From this the following in ternal conditions of equilibrium may be deduced: 1. The marginal productivity of each factor must j be equal in every use. 76 2. The use of each factor should be pushed up to the point where its relative marginal productivity equals ! its relative marginal cost. With the maximization of the produce assured, the ; second set of conditions relates to the maximization of j the utilities derived from the satisfaction of the out- ' i I standing human wants (including the want to have children j J and to save). The first and most important of these con- j ditions is that the product should be distributed among the different alternatives opened for its utilization in such a way as to equilibrate the utilities derived from the marginal unit of income devoted to each. As such, the marginal utilities derived from consuming, having j ■ children, or saving would all be equal with no incentive ; inducing the spender to shift a portion of his income from i [ one alternative to another. The second condition, of f ' course, is that the portion devoted to each alternative i should, in turn, be distributed among its component , groups, so as to equilibrate the marginal utilities de- j i rived from each. ! Equilibrium as a Dynamic Concept. When applied to dynamic trends, the concept of : equilibrium becomes too complicated and carries us into j fields which we hoped to avoid in this study. Fortunately, 77 the concept for our purposes need not be developed in its minutest details. With the idea of static equilibrium just developed as a basis for our approach, we may define j i dynamic equilibrium as a trend of national income over j time for which the conditions of static equilibrium are satisfied at every level of national income prevailing at ! I any one moment of time. Within a long range of economic i development, such a definition does not deny the possi- ! bility of a positive amount of savings and capital forma- ! tion, as long as the marginal utilities derived from both are still positive. With the assumption, which is not necessarily true,^ that the marginal utilities of savings and capital formation are basically determined by the de mand for capital and its expected returns, it may be stated that an economy would be in dynamic equilibrium when the rates of change in the three propensities to consume, to have children, and to save are directly related; j to and identical with the elasticities of demand for con- ' sumption goods, children, and capital at higher and higher levels of national income. When the net return on new in- > I vestments becomes zero or negligible, the conditions of • * • 9 The marginal utility of saving may come from the desire of the income earner to hold cash balances. Changes in the intensity of such desire constitute a disturbing element to the assumption made above. 78 dynamic equilibrium would then be satisfied by the classic concept of a stationary state in which no changes in the economic variables are supposed to take place. i i ECONOMIC DEVELOPMENT AND ITS GENERAL ASPECTS i ' Economic development is one form of economic j I t dynamics. Since this development has been accepted as s our practical objective in this study, we are now in a i f position to analyze the nature of such a basic concept. What is Economic Development? The term "economic development" is generally used to describe an economy in the process of expanding the capacity of its people to produce and, consequently, to consume. It is basically manifested in the form of a • continuous secular rise in the level of productivity and j the real income of the members of the society. As one form of economic dynamics, this rise in productivity could only be achieved through the manipulation of any one or j all of the basic factors implicit in the concept of ' dynamics. To enumerate, these are (land assumed fixed): population, capital, state of the arts, economic organi zation, and/or the prevailing patterns of consumption. t As used in this sense, "economic development" is wider in meaning than the concept of "industrialization." 79 While both of them are serving the same end, "industrial ization" seems to put the greatest emphasis in raising productivity upon the development of industry in the j sense of manufacture. This emphasis does not necessarily ; occur under all circumstances. "The greatest opportuni- i ties for raising productivity and income in many less J developed areas will lie in modernization of their agri- j j culture, their forestry, their fisheries, etc., and not, j OQ 1 at least at first, in the increase in manufacturing." Productivity and its Ma.ior Constituents. Thencentral term in the concept of "economic devel opment," as here defined, is that of "production" and "productivity." We find it essential that the interpre tation and inclusiveness of the term be clear to the reader. Two factors necessitate this importance. On the one hand, there are those who still hold that the problem of food and food production is the only phase of produc tivity pertinent to demographic analysis. Zimmerman, for I 21 example, considered the "man-land ratio" for the main ( economic regions of the world the essential problem for ! 20 Eugene Staley, World Economic Development (Montreal: International Labor Office, 1944), P^ 5T 21 J. B. Condliffe, The Economic Pattern of World Population (Washington, D.C.: The National Planning Association, 1943), p. 4. demographic studies. On the other hand, the prevalence of the macro-economic concept of the national income makes it necessary in the use of such a concept to keep in mind its limitation as a measure for the true productivity of an economy and also as a meansfor the comparison among different economies. Productivity and the nature of the product. A definition of an act of production is necessarily asso ciated with that of the nature of the product. The his tory of economic thought reveals two major approaches to the issue. The restrictive approach limits the term to some specific sections of economic activities and makes the distinction on one basis or another between what is productive and what is unproductive. The Physiocrats, for example, considered all labor to be sterile, unless it resulted in an excess of output over input expressed in tangible physical commodities. Productivity in this sense was reserved for the fields of agriculture, mining, sea fishing, etc. Adam Smith, who also maintained a restric tive approach, was more liberal than the Physiocrats in the sense that he drew the line so as to include manu facturers and merchants, but not mental labor or any of the professions. "Thus, a man grows rich by employing a multitude of manufacturers: he grows poor by maintaining Si 99 a multitude of menial servants.” The restrictive doctrine of productivity found very little acceptance even among the most faithful fol lowers of Smith. Services, according to the more general approach, have as much right as commodities to be con sidered "product." Productivity was associated more and more with the creation of utilities rather than with tangible output. Almost all services and commodities were recognized as possessing utility in the sense that they are meant to satisfy some specific wants. The question is not which utility is productive and which is not. Rather, the question is to what type of utilities the limited factors of production, available to each society, should be most advantageously devoted. Total versus food production. The emphasis placed on food production stems from the fact that it is a physical necessity for human survival. In the long run, if a continuous increase in population and an equal dis tribution of wealth is assumed, "the ultimate limit is reached when we have that state of subdivision which just enables the occupant to support himself and his family by 22 Adam Smith, Inquiry into the Nature and Causes of Wealth'of Nations (Edinburgh: Mundell, Daig, and Stevenson, 1$09)> Vol. I, pp. 313-314* 82 , his efforts. This would leave no surplus of production, ; and no urban population would be possible."23 ! Basic to the arguments of those who stress food ; rather than total productivity in the discussion of demo graphic problems, is the belief that this ultimate limit has already been reached or is not far away.2^ In con- ; temporary writings this belief takes more than one form. | There are some who are constantly worried about the prob- 5 lems of poverty, malnutrition, and starvation.2^ There 1 are others who are constantly condemning the blunder made 26 i by depleting our natural resources. And there are still 23 M. Aurousseau, "The Distribution of Population," The Geographical Review. 2:563^586,592, October, 1921. ^ Reference here is to global rather than to state-by-state limits. From the following and other quo tations, Malthus was obviously under the influence of such a belief: "A question seems naturally to arise here, : whether the exchangeable value of the annual produce of the I land and labor, be the proper definition of the wealth of ( the country; or whether the gross produce of the land, 1 according to the French economists, may not be a more ac- ! curate definition." R. Malthus; First Essay- of Population I (London: Macmillan and Company, Ltd., 192of, p. 327- j 25 ' Josue de Castro; The Geography of Hunger (Boston: Little, Brown and Company, 1952). | William Vogt, Road to Survival (New York: I William Sloane Associates, Inc., 1948). S3 others who think of the problem in connection with the industrialization of such potential centerd for growth as India and China.2? Authorities in the field seem to be equally divided j i as to the potentialities of world resources to feed the ; present world population at an adequate caloric intake.2^ j While extremely important from the standpoint of some j j global schemes, from the demographic standpoint such j global comparisons seem to be neither realistic nor con ducive to clear thinking. The world, as it exists polit ically, is not a single unit but a composite of different states continuously in competition with each other. Whether the world*s total food production is sufficient or not, each country*s share of that total depends upon three Elmer Pendell, Population on the Loose (New York: Wilfred Funk, Inc., 1951), Chapter 11. Paul K. Hatt, editor, World Population and Future Resources (New York: American Book Company, 1952). In this book we find two of the differing views. J. R. Whittaker expressed his opinion as, "This leads us to the ' familiar conclusion that there are scarcely two acres of cultivated land for each person on earth. At the same time it is estimated that at least 2.5 acres per person are required to provide a satisfactory level of nutrition." p. 77* In the same book, D.A. Fitsgerald stated, "As far as global agricultural production is concerned, I have a deep seated conviction that output can be increased more or less indefinitely at a rate much larger than any probable rate of population increase," p. 132. things: (1) the quantity of food it raises on its own land, minus (2) the quantity of food it is ready to part with in exchange for foreign goods and services of a "non-nutritive** nature, plus (3) the quantity of food it I can acquire on the world markets in exchange for its own j manufactured goods and services of a "non-nutritive" j ■ - I nature. In other words, we can then say that a country*s I I ultimate capacity to increase its population (we do not ' ! suggest that a country will always make use of that capacity) depends on its capacity to acquire food, which, in turn, is a function of its total productivity and the j terms of trade which that country enjoys with the rest of the world. Although their method of reasoning differs, many hold the same point of view expressed above. Bennett, for example, wrote: I think it is impossible to consider intelligently or intelligibly the relations over time between peoples and food without reference to changes in general economic status. ... What is so often called "the race between population and food supply" might better be looked upon— if there is a.race at all— as a race between population and economic development. “ 29 Merrill K. Bennett, Population. Food'and Economic Progress (Houston: The Rice Institute, 1952), Vol. 39, p. 27. 65 National income accounting and its limitations. National income accounting deals with the activities con tributed by an economy within a specific period of time (usually one year) toward the satisfaction of achievement } of a preassumed objective. With regard to this objective, "political philosophers differ, but a majority of econo- ! mists agree that ideally the performance of an economy should be judged by its ability to provide goods and ser vices to households, whether through firms or governments j 30 ■ or even home production."-' This definition of income is widely held. If accepted, such a definition might raise two different sets of questions— one dealing with the evaluation placed on the production of different types of consumers1 goods and services, and the other with the measurement of these activities. In the light of national income measurement pro cedures presently in use, three categories of consumers’ preferences have a great bearing upon the accuracy of national income totals as true indicators of an economy’s j I I productivity. In the first place, there is the preference between home-produced and market-produced goods and ser vices. Since national income estimates always confine 30 * Stephen Enke, Intermediate Economic Theory (New York: Prentice-Hall, Inc., 1950), P* 26. , themselves to marketable economic activities, there is, consequently, a general underestimation of the true pro ductivity of an economy in which many productive activi- i : ties are performed outside the market on a family or a ! barter basis. In the second place, there is the prefer- I ence between privately-produced and publicly-produced goods! I ; and services. On one hand, there is no general agreement ; among national income analysts as to the way public ex- i ; ol , penditures should be handled.-' On the other hand, since : consumers, in the case of public expenditures, do abandon : their sovereignty in favor of elected public officials, ; there is always the chance that some public expenditures, I for example, a large standing army, might be out of pro- : portion to the actual demands of the consumers and the ■ society. The consideration of all such expenditure as i I productive is, in this case, an over-estimation of the j productive performance of the economy. i j Finally, there is the preference between locally- : produced and foreign-produced goods and services. In j cases where the foreign-produced goods and services j " 31 For the different procedures see: Carl S. Shoup, j "Development and Use of National Income Data," Howard S. ; Ellis, editor, A Survey of Contemporary Economics (Phila delphia: The Blackiston Company, 1948), pp. 28^-313. constitute a high proportion of the societyTs total con sumption, a true picture of the economy*s productivity should adjust the national income estimates, so as to account for the terms of trade in existence between its exports and imports. Whether the national income esti mates are in this case under-or-over-estimated depends on whether the terms of trade are favorable or unfavorable to the economy under consideration. Such conceptual and statistical difficulties also limit the adaptability of national income statistics for international c o m p a r i s o n s . ^ Even if all the previous dis crepancies had been accounted for, we would still be faced with the problem of constructing adequate international / index, numbers. Three main issues are involved: (1) how to account for differences in the quality of services ren dered in different economies; (2) how to account for the different valuations of the same goods and services in different economies; and (3) how to deal with items in one 32 For a discussion of the international comparisons; of national incomes, see: Ta-Chung Liu and Shan-Kwei Fong, "The Construction of National Income Tables and Inter national Comparisons of National Incomes," Studies in Income and Wealth (New York: National Bureau of Economic Research, 1946), Vol. 6, pp. 73-116. Also, Simon Kuznets, National Income and Industrial Structure (Washington, D.C: j Twenty-fifth Session, International Statistical Conferences, September 6-16, 1947). 88 economy which have no equivalent in the others? These and other limitations should be kept in mind when national income statistics are used as indicative data. Since the concept is by far the most comprehensive i i barometer of economic conditions now in existence, we have 1 i no other choice but to make use of it. For our purposes ■ ! here, since we do not have to deal with absolute quanti- I I i ties, the concept of national income includes all the j previous qualifications and, as such, could be used as an approximation of the total net productivity of the economy. PART II THE ECONOMIC ASPECTS OF POPULATION CHANGES 90 One of the main objectives of this study is inquiring how economic factors affect population changes. In Part II we investigate this aspect of the economic- demographic relationships. The assumption, of course, is i that such an effect does exist. Even within the category ! ; of ’ ’uncontrolled*1 population changes, when the quantitative! changes are solely determined by physiological motives, j i f : the economic factors are one of two obstacles (the other I is space) setting an absolute limit toward which the re sulting population growth can continue unchecked. This, however, is a theoretical case that we propose to regard as practically irrelevant. In the following chapters we shall concentrate on the other two types of quantitative population changes, that is, the semi-controlled and the controlled, for which economic factors are not only a check j I ' but also an inducing motive; that is, by definition, sub- l ordinate in the case of the former and dominant in the j ! case of the latter. i It is difficult to deny that these two categories | of population changes are nothing more than theoretical , concepts meant to facilitate further theoretical specu lation. The concepts, however, may be justified in terms ‘ of actual practical experiences, both past and present. | This justification, as based on historical events and 91 general demographic literature, we attempt to achieve in Chapter IV. With the assumption for the moment that such a task has been accomplished, our inquiry may then be re stated as follows: j 1. How do economic factors affect "semi-controlled" population changes? ! I '' ‘ i 2. How do economic factors affect "controlled" \ population changes? j 3. How do economic factors affect the transitional I process from the "semi-controlled" to the "controlled" categories of population changes? The third of these questions is, by far, the most important from the point of'view of practical population policies. It is also the one we know least about. Econ omic factors may or may not have anything to do with the changes of human preferences among the different patterns of behavior, as the shift from one category to the other * implies. The issue can never be settled unless we know the factors, economic as well as non-economic, affecting such preferences. The subject, as it stands now, is a big j question mark in demographic literature. Attempts have been made, for example in the Indianapolis study, to determine these factors, but the results are still inde cisive. Until such attempts can reach definite con clusions, nothing more would be gained by discussing the issue as an independent subject and we have to confine ourselves to the findings derived from the investigation of the first two relationships. The effect of economic factors on the "semi-controlled” category of population changes is dealt with in Chapter V. The different aspects j of the relationship between economic factors and the "con- ! trolled” category are discussed in Chapters VI, VII, and I VIII. With reference to the latter category, a point of clarification is in order. Within the definition > of "controlled" population changes, as given in Chapter II, the population size becomes an economic phenomenon that should be adequately explained by economic theory. Like most other economic phenomena, such an explanation might be handled at different levels of economic analysis. The static approach, for example, might begin by placing the phenomenon within the general prospectus of the simul taneous economic relationships. The "static equilibrium" approach, on the other hand, would deal with these rela- j tionships under the conditions of economic maximization. : In either of these two approaches, it is both sterile and misleading to refer to any one of the variables, unless it is the national income itself, as a function or determinant of any other. Both approaches are mainly concerned with the description of economic relationships, existing under 93 stipulated conditions whether actual or normative. Given these conditions, all variables become simultaneously determined. I "Controlled** quantitative population changes may also be interpreted from a dynamic point of view. As such,: f it would be mainly explained in terms of the changes in the’ level of national income itself and/or the changes in other economic variables at different levels of national income, j It Is only under such dynamic conditions that we can meaningfully deal with the effect of changes in the econ omic variables on population trends or of population I trends on the economic variables.^" Finally, the analysis in this part is mainly con cerned with trends of changes, rather than with specific magnitudes. Such magnitudes can only be ascertained for each society on an'individual basis. In this sense, we find ourselves in agreement with Schultz when he wrote: It is our belief that the best that economists can do on most dynamic problems is to infer the ! probable direction of the effect of a development Within a macro-static approach, changes in the population phenomenon may have their effect on other economic phenomena only in the limited sense implied in the fact that consumption, population growth, and saving are all competing alternatives for the utilization of any specific level of national income. and as long as, and to the extent that, this is true, it is exceedingly important to ap proach the problem of economic organization with this limitation of economic analysis firmly in mind. The implication of this belief is as follows: If it were possible to anticipate (determine) both the direction and the rate of such effects, the organizational structure could be designed to deal efficiently with the complete information; if, however, the best that we could do were to acquire insights in the direction alone, the appropriate organizational structure needs to have within itself the capacity to use new and more complete information as it becomes available.^ 2 Theodore W. Schultz, The Economic Organization of Agriculture (New York: McGraw-Hill Book Company, Inc. 1953), footnote p. 9* CHAPTER IV HISTORICAL STAGES IN DEMOGRAPHIC DEVELOPMENT s' We need to know about the social conditions which have educated original activities into definite and significant dispositions before we can discuss the psychological element in society. This is the true meanirig of social psychology. ... Native human nature supplies the raw materials but custom furnishes the machinery and the designs. ... Man is a creature of habit, not of reason nor yet of instinct. — John Dewey, in Human Nature and Conduct If all other factors were assumed constant, includ- I ing human fecundity, available means of subsistence, natural length of human life, etc., different types"*" of population changes would presuppose different patterns of demographic behavior (as pertaining to natality and mor tality). The history of population can, thus, deal with either one or both of two variables: (1) quantitative pop ulation changes per se.2 and/or (2) the demographic pat terns of behavior underlying and affecting these changes, j The term ,rtypen here refers not only to trends but also to the means by which these trends were made possible. 2 On the quantitative changes of world population see: A.M. Carr-Saunders, World Population: Past Growth and Present Trends (Oxford: The Clarendon Press, 1936). 96 In this chapter we are mainly concerned with the second of these variables. Like all other aspects of human behavior, an under standing of demographic action cannot afford to ignore its j 3 i two sides, the"animalistic" and the "cultural." Through- ; out the known history of humanity, neither of these two sides has been known to exist independently of the other. Cultural patterns, obviously, cannot exist in a vacuum and, j as far as is known, there is no proof for the existence of a pre-human or pre-cultural man, the "naturmensch."4 3 "Anthropology is unique in that it is both a i natural science and a social science. Man is part of what we call nature (the forces that create the phenomena of • the material world). He is therefore a natural phenomenon. He is part of the organic material universe— a biological specimen, a member of the animal kingdom .... But an thropology is more than mere human biology. It is the study of man and all of his works. In its fullest sense it is the study of the races and customs of mankind. In these customs we see social behavior, and because anthro pology is also the science of custom, it is a social science as well as a natural science." E.A. Hoebel, Man in the Primitive World (New York: McGraw-Hill Book Company, Inc., 1949), p. 1. i : ! i 4 ; On the development and different aspects of "cul- ■ ture" see: Bronislav/ Malinowski, "Culture," The Encyclo pedia of the Social Sciences (New York: The Macmillan Company, 1931), Vol. IV, pp. 621-45. Also, his Sex and Repression in Savage Society (London: Routledge and Kegan Paul, Ltd., third edition, 1949), Parts III and IV. 97 The "animalistic" side of demographic action is predetermined for each individual by his physical heredi tary organism. As is well known, the range of human life starts with an act of birth (or conception) and ends with an act of death. Within the interlude, the human organism; is endowed with basic needs that must be satisfied to in- ; j sure survival (of the body in some cases and of the race j in others). It is also endowed with innate drives and ; responses governing outward- action in the satisfaction of \ these needs. In an animal society, these drives and re- c spouses constitute the only force motivating such action. The satisfaction of physical needs as they arise becomes, \ ! as such, the only and ultimate goal of "animalistic behavior." Since man is the most versatile and adaptable of all living creatures, it is highly doubtful, even among the most savage societies, to imagine him acting in such a pure "animalistic" fashion. Particularly, in connection i with the demographic aspects of his behavior, "we cannot j assume the existence in the state of nature of an anthro- ; poid species in which the most important business of prop agation is regulated by a system of instincts hostile to 5 every interest of the species."^ 5 Malinowski used this argument against the possible existence of a pre-cultural man. See his Sex and Repres sion in Savage Society, op. cit., pp. 164-65* 9S Since his needs still had to be satisfied, man found out early that this could be done through different alternatives. Man*s unique quality is his ability to I invent new forms of behavior that are not | biologically predetermined by any hereditary I set of the organisms. Though the biological imperatives of hunger, sex, and barebones survival are minimal requirements, which man j may never totally ignore, he is free to ex- i periment with many different ways of meeting j these needs.® | The choice among these alternatives is a matter of individual rationality,social preference, and relative standards of value. Whichever is adopted, however, the ; important thing is that man, while still basically animal-j i I | istic in nature, has elevated himself beyond the rank of i animals into modes of behavior subjected to new patterns of "harmony.1 * We refer to these modes as "culture." | To the behavior underlying each, we reserve the name, "cultural behavior. "Cultural behavior" may, thus, be defined as a mode of outward action deliberately devised by man,individually | ! ' or collectively, for the satisfaction of his innate needs j | Hoebel, o£. cit., p. 3» ! 7 i The distinction between "animalistic" and "cul tural" behavior is related to the anthropological distinc- ; tion between physical and social culture. While the first ; relates to different aspects of human behavior, the second J relates to different aspects of anthropological studies. 99 and desires. In this type of behavior, two basic cate gories may be distinguished: (1) the rational, as based on means believed by the actor to be best adapted for the attainment of specific ends in view; and (2) the ritual- j istic, as based on the adherence by the actor to rules of t behavior prescribed by "higher" authorities in the form of j taboos, mores, social customs, religious teachings, and legal regulations. In all modes of cultural behavior, j these two categories do exist and are closely integrated with each other. Essentially and basically, all cultural behavior may be classified as rational in the sense that it is originally devised to serve ends, for example, welfare, through means believed by the individual and/or society to be best adapted for the attainment of the end in view. Such beliefs and the patterns derived from them may, at the beginning, have been based on personal experiences or the accumulation of such experiences over many genera t e tions. At that stage of development, cultural behavior j was totally rational. With the passage of time, however, On the origin of culture and the theory of the parricide incident see: Malinowski, "Culture," Encyclo- paedia of the Social Sciences, op. cit..pp. 622-62^. Also, his Sex and Repression in Savage Society, op. cit., Part III, Chapters III and IV. 1 0 0 and the persistence of the patterns of behavior from one generation to the next, it was found advisable, whether i consciously or unconsciously, to "incorporate* 1 some of i ! the existing rules of action into fixed standards of j I j ' value. Instead of being a function of personal experi- ; ences that should change with the changes of these exper iences, cultural patterns, thus, became independent mo- J ; tivating factors forcing and shaping such experiences. j i i ! Human behavior in this sense became mainly ritualistic i rather than rational. Not only did ’ ’ritualistic” behavior replace "rational" behavior in many fields of human action; it, moreover, has limited the range of rational action possible ! in the fields where this latter is still feasible. To use Parson’s definition; Action is rational in so far as it pursues ends possible within the conditions of the situation, and by means which, among those available to the actor, are intrinsically best adapted to the end for reasons understandableQ ; and verifiable by positive empirical science.^ In this definition, the term'"rational” is pre- 1 ■ sented not as an absolute concept, but as relative to the "conditions of the situation” and to the means "available to the actor.” Where these means are limited by the ■ 9 : Talcott Parsons, The Structure of Social Action I (New York; McGraw-Hill Book Company, Inc., 1937), p. 58. 1 0 1 ■ ’ incorporated” patterns of behavior, the ’ ’scope” and ’ ’ends” ! to which rational action could justly be applied would j also be limited by the same conditions. This relationship may be best understood by refer- I * i ence to the sphere of demographic behavior. When applied ■ I . I | to that sphere, the concept of "rationality” assumes pari , ; passu the existence of a certain degree of conscious con- j trol of the population size. The existence of such con- ! i trol by itself, however, is not a sufficient criterion for i ! rational demographic action. In accordance with the definition just quoted, such action becomes a function of ! the ends pursued and the population size "intrinsically } 1 best adapted to the end for reasons understandable and i j verifiable by positive empirical science." Both the end ! | and the population size have to be "possible within the j conditions of the situation" and attainable through means | "among those available to the actor." As indicated shortly; l < i there are many alternatives, with different degrees of ef- . fectiveness, through which the population size could be j controlled. The feasibility of any of these alternatives j i depends to a great extent on the cultural orientation of , each society and the "incorporated" body of its standard ; of values. Where the ends pursued require a population i size smaller than that possible through the channels of control available at any one time, these ends become of Southern C»l|tan»l« 1 0 2 inconsistent with any rational action possible at that specific time. In other words, the ends consistent with rational demographic behavior, and for that matter I rational demographic behavior itself, can only be relative; to the means and extent of the quantitative population controls allowed for at any one time. I This relationship is particularly interesting for j our study, in view of the classification adopted in ! Chapter II. Quantitative population changes in that chapter were classified into uncontrolled, semi-controlled 1 and controlled categories,depending upon the objective pursued. The impression given at the time was that man is rationally (consciously) choosing among the different ob jectives favoring one at one time and another the next. In practical experience this is not exactly true. A pure pattern of rational action is just as improbable a case as that of a pure animalistic or ritualistic pattern. Human behavior is generally a blend of all three, rather j than an expression of one at a time (this immediately dis- i qualifies the practical possibility of the uncontrolled j ' type of population changes). In his choice of objectives, it is a fair assumption to say that man, in controlling his population size, is always striving toward a point of maximum satisfaction--material satisfactions included. The difference is that in some cultures such an objective 103 becomes consistent with rational action, while in others it becomes inconsistent with rational action and other "substitute" objectives have to be settled for. In the first case controlled population changes become possible, while in the second we have only to settle for a semi controlled type of these changes. Whichever is the case depends, basically, on the relationship between the popu lation size "intrinsically best adapted" to the point of maximization, and the "means" and "extent" of the quanti tative population controls allowed for in any one culture. Because of the importance of this last relationship to demographic behavior, we propose to use it as a criter ion of classification. Thus, in the remainder of this chapter, we deal with the history of demographic develop ment as interpreted and classified according to this criterion. MEASURES OF CONTROL AND THE HISTORY OF DEMOGRAPHIC DEVELOPMENT In the absence of ext^x.r l^^igration> the alterna tive means opened to the control of the population size are limited to those applicable to either natality or mortality or to both. 104 Types of Natality Controls. The control of natality may, in a sense, be pre- ! sented as a one-way excursion. In the state of nature, I : human fecundity represents such a high natality level that) not even the richest of societies can endure for a long ! ] time without affecting its mortality experiences. Attempts; ' ! at control in this case can only be directed at the re- j ; striction of such a naturally high natality potential. The j 1 i extent to which this potential must be restricted to be i consistent with rational action depends basically on (1) : the population size believed to be adapted to the end in | view and (2) on the level of mortality experienced at the time. Natural abstention. The measure used in restrict ing this high natality potential may be divided into two groups. On one hand, there are those pertaining to the category of natural abstention. Man in this case chooses ’ ’naturally" to limit his role in the propagation of the species. He may do that outside the marriage bond through j delaying his marriage for a time or, in the extreme case, foregoing it completely. Or, he may maintain natural ab- , stention within the marriage bond through limiting the I frequency of intercourse by restricting it to specific I 10 periods of time. In either case, the only force at work ; 10 Reference here is to the rhythm method in con- ! trolling natality. 105 is that of man curbing or moderating the full expression of his "animalistic” drives in favor of "culturally" higher standards and objectives. Because of the intensity of the innate desires of the human body, particularly the sex desire, the effec tiveness of this type of natality controls can only be limited. In a society which depends on such types of control the rate of effectiveness experienced may easily run short of that required for rational action unless, which is rarely the case, the population size desired is high enough to justify the resulting quantitative 11 increase. Mechanical devices. The second category of means applicable to the control of natality are those mechanical in nature. In this category there is no attempt on the part of human beings to curb or restrict the sexual aspect of their innate desires. Instead of allowing the process of intercourse, fertilization, and conception to take its natural course, they interrupt it with the help of any one of many known types of mechanical devices. The main The social conditions of the United States in the 13th and 19th centuries might easily qualify as an il lustration for such a rare case of maximization through' peaceful means. An intentionally large population size, however, is also desirable when the mean decided upon to achieve maximization is that of war. 1 0 6 purpose is to prevent unwanted cases of conception without having to endure the hardships of sexual abstention. In this category may be grouped all types of contraceptives, devious sexual practices, as well as the different means of sterilization. Although there are drawbacks, particularly in con nection with cultural feasibility, mechanical devices are much superior to natural abstention in two basic aspects. As pointed out above, they spare man the necessity of undergoing the hardships of sexual abstention. But more important from the viewpoint of this study, they make possible the extension of the effectiveness of the control of natality up to any level desired in the light of the size of the population considered consistent with the point of maximization. If, as an extreme case, a decreas ing or a constant population size is desired, mechanical devices can, with no unsurmountable hardships, lower the natality experiences to zero or until they equal the mortality experiences. Whether the members of a society would or would not push their control to such an extreme point depends mainly on the believed advantages or dis advantages associated with further population increase. Types of Mortality Controls. Unlike natality control, their mortality counter parts can be utilized to increase or decrease the 107 I mortality experiences of a society. In the state of 1 nature mortality constitutes the safety valve taking care t | of any excess of numbers beyond the maximum population ; consistent with the available means of subsistence. Given< I I an equal distribution of these means, the concept of a maximum population size presupposes a minimum possible ; standard of living. Long before reaching that level, how- j ever, the members of a society may choose to protect them- ; selves against any further increase in numbers. If they ; are not ready, or "culturally” speaking are not in a i position to reduce their natality experiences, they may i then decide to control the level of their mortality ex- i periences, in the sense of increasing it, by eliminating i all unwanted children and/or undesirable adults. Through ; such measures as abortion, infanticide, and the killing ; of the old and invalid, a society may then be able to y | limit its population to any desirable size. The effective- | ness of such measures in controlling the population size j I is, obviously, unlimited. j ! Alternatively, the members of a society may decide { l to control their level of mortality experiences without any consideration of the resulting trends in quantitative population changes. Because of humanitarian reasons closely associated with the respect due to human life per se and the "kinship" feeling uniting each group or log society, control of the mortality level for its own sake is always directed toward driving it to the minimum con sistent with the natural length of human life. When natality experiences are assumed to remain constant, this can only be done through an increase in the level of pro- ■ ductivity which, in turn, may be utilized in: (1) support-j ing the resulting increase in the population size; (2) educating physicians and nurses; (3) educating the popula tion as to the best hygienic means; (4) building hospitals ; and health centers; and (5) investing in needed medical research. Throughout the history of humanity, the feasibility of some of these measures as control devices was denied. Based on the prevailing pattern of social institutions and standards of value, the alternatives opened for in dividual utilization were thus limited. To the extent that he follows them "ritualistically,” man's effective ness in controlling his quantitative changes becomes, as such, a function of his social customs and institu tions. By surveying the history of these institutions j and the measures of control which they do or do not allow, and by relating the effectiveness of these measures to the population size believed to be best adapted to the attainment of the end in view (that is, the maximization 109 12 of economic welfare in its widest sense), we may, thus, be able to determine the stages in demographic develop ment for which the maximization of economic welfare was consistent with rational action, as well as the stages of demographic development for which the maximization of < economic welfare was inconsistent with rational action. Chronologically, and on the basis of the experiences en countered in the Western Hemisphere (Western Europe, United States, Canada, Australia, and New Zealand), there are three stages: (1) the primitive, (2) the medieval, and (3) the rational. Other demographically less advanced areas may still be in the second or, in a few cases, the first of these stages. \7 THE DEMOGRAPHIC ATTITUDE OF THE PRIMITIVE ERA A ' Evidence regarding the demographic behavior of early societies is far from perfect. The limited data at our disposal, however, suggest a pattern of behavior some what different from those known to prevail in the medieval and/or the modern societies. For that "distinct” pattern - * - 2 The association of economic objectives with the general concept of rational action is not new. This asso ciation was particularly emphasized by Vilfredo Pareto in his socio-economic writings. See Talcott Parsons, op.cit., pp. 135-196. 1 1 0 we suggest the term "primitive." Societies in which subh ; a pattern prevails, we shall refer to as demographically J "primitive." Historically, the primitive era extended from the j ; early stages of human existence until approximately the end of the Roman Empire. This more or less arbitrary classification neither denies the possible existence of higher stages of demographic development throughout that period,^ nor does it refute the fact that some isolated % ! "societies" may even now be practicing such a primitive pattern of behavior.1^ All it stresses is that, within that period, the primitive pattern was the dominating one. Basic Characteristics of the Primitive Attitude. The demographic attitude of the primitive era may ! be best understood by reference to the relationship The case of such ancient societies as the Egyptians, the Assyrians, and the Babylonians, about whom we have no adequate information, may be expected to reveal a higher pattern of demographic behavior than that char acteristic of primitive societies. At the same time, how- I ever, there seems to be some evidence that such primitive I practices as infanticide and abortion were not uncommon, i See A.M. Carr-Saunders, The Population Problem (Oxford: The Clarendon Press, 1922), p. 272. 14 To a certain extent, the primitive native tribes reflect these characteristics at present in Central Africa, : Australia, and New Guinea. Ill between man and. society existing at that time. In its pure form this relationship had no plafi^-jfail^QzJcind of cultural individualism. The status as it existed was one of full cooperation among the members of the society for . the general benefit of all. The individual per se had, in no way, any value of his own independent or isolated from that of the society.^ Most of his behavior was predetermined, not by any set of animalistic drives, but 1 by a rigid system of social customs and regulations. In such a setup "ritualism" might be expected to form the dominating part of human behavior. Without deny- ; ing the possibility of the ritualistic practices origin- • ating with animalistic or rational incentives, the fact' i remains that a knowledge of these practices would go a I ; long way toward explaining the primitive pattern of 1 behavior based on them. 15 ; Even among such relatively advanced societies as those of Greece, this same relationship held true. "In Greek life," wrote Stangeland, "the individual found • his ’raison d’etre’ and the satisfaction of his truest ; nature only in the most intimate connection with the i social organization and in obedient subordination to it. ■ Man was regarded as essentially a ’political animal,’ and not in any sense as an,isolated, independent unit." ; G. E. Stangeland, Pre-Malthusian Doctrines of Population j (New York: The Columbia University Press, 1904), p« lS. 1 1 2 With regard to the ritualistic practices of demo graphic character, each society of the primitive era had its own distinct pattern. In the demographic literature j much has been written describing these patterns. This j j . ; literature consists of two groups. On the one hand,there is the description of local practices and customs, as i observed by aliens to the soqiety under consideration. , ’ ■ 1 Frequently, these writings did not go any further than rnierb description. On the other hand, there is the group of i writings originally done by local members of the society . 17 itself. These mainly reflect, not on the description of prevalent practices and customs, but on the values and principles underlying them. In either case, the available literature seems to reveal similarities among the multitude of the practices and principles adhered to by the different "primitive” societies. When analyzed in terms of beliefs and value concepts, these similarities may be condensed into two l For accumulated information on many of these de- ; scriptions, see: B. Malinowski, The Family Among the Australian Aborigines (London:University of London Press, 1913); and A.M. Garr-Saunders, op. pit.; and Margaret Mead, Sex and Temperament (New York: William Morrow and Company, Inc., 1950). 17 Reference here is mainly tothe writings of Plato and Aristotle. 113 basic attitudes: one with regard to natality and the other with regard to mortality. The primitive attitude with regard to natality. The primitive attitude with regard to natality was one of j glorification and veneration which subsided at higher and ! higher stages of demographic development. To the true 5 primitive man who had no idea of the mechanics of concep tion, the whole faculty of propagation represented the power of the unknown which, in his mind, was closely re.-. lated to the power of God. /This association took more ! ! than one form in his outward social action. I i On one hand and primarily, this association was . quite obvious in the primitive ^custom of correlating sex- j ual activities with religious festivals, ceremonial rites, ! and the power of destiny. This correlation was not always j a direct one. On the positive side, the history of__primi~ i tive societies was saturated with accounts of license and debauchery that seemed to be emphasized in tribal gather- ings and religious festivals. It also made frequent 1 $ - LO,,Amongst the Arunta nation, there are different occasions on which men besides the husband have sexual . access to the woman. There are the customs at the initia- ! tion of the girls. And there are many cases in which the ! husband is compelled by custom to waive his rights on be- j half of some one else;such instances generally happen in ; connection with ceremonial gatherings.” As quoted from j Spencer and Gillen by Malinowski, o j d . cit.. pp. 97,105-123* 114 references to ceremonial defloration of ycmng girls asso- , ciated with their initiation on reaching puberty and womanhood."^ On the negative side, we have the numerous occasions on which sexual intercourse was taboo. To men tion but a few of the common practices, intercourse was ' taboo during the preparation for hunting and military ex peditions, during pregnancy, after birth, and throughout the process of lactation.^0 Whether it was positive or : negative, however, the impression given is that sexual : activities had something to do with the reaction of the powers of the unknown (gods) to their intended actiyitifes and, consequently, with the success or failure of these : activities. i On the whole, there seems no reason to believe i ! that these practices had any rational connotation in terms ' of restricting or encouraging the population size. In the I ; primitive societies, these practices were mainly devised : to pacify the gods through means believed to be closely ■ associated with their "supernatural” powers. The form ! which these practices might take was mainly determined by 19 Stangeland, op. cit.. pp. 94, 97, 104-105* Also, Carr-Saunders, pp. cit.. pp. 13&-39* , Mead, op. cit.. — . 33, 36; also, Carr-Saunders, op. cit., p. 141. 115 each society’s concept of the gods and what pleased them. On the other hand, this attitude of veneration was most exemplified in the primitive insistence on the right of each individual, whether male or female, to the grati- j fication of his or her sexual desires. With the exception! I of the occasions on which sexual intercourse was taboo, { | this rule seemed to hold at all other times. In the words ! i of Malinowski: j If we now look behind the facts of all these customs, rules and practices to the underlying social psychology, we see that the idea of the individual rights of a man to a woman must have been deeply impressed upon the aboriginal mind. . . . That such a state of things is indicative of a deeply-rooted idea of personal, individual rights over a woman seems clear. If the value of such rights were not known, nobody would care to secure them so eagerly and so early, especially as the acquire ment of these rights was apparently never gratuitous.^1 The understanding of this assumed right is essential for the explanation of many of the so-called primitive practices dealing with sex and family relations. It goes i a long way, for example, toward explaining why the marriage! I of women in primitive societies "takes place if not before j Op - ' then at or very soon after puberty." ^ It, moreover, Malinowski, o£. cit., p. 60. 22 Carr-Saunders, o£. cit.. p. 139* 116 explains such practices as sexual intercourse before puberty, sexual freedom of unmarried men and women, the handing over of widows to their late husband’s brother or to the nearest relative, the lending of wives to relatives i i and friends, as well as many other social customs and ; institutions.^ In all these practices, however, the demographic effect was obviously one of utilizing the ! natality potential up to the maximum consistent with j I physical fecundity and the religious rituals observed.The interference with that potential, other than on religious grounds, was for the primitive mind socially taboo. The primitive attitude with regard to mortality. Through his daily experience, the primitive man came to regard mortality lightly and without concern. The act of death to him was an every-day occurrence which, through repetition, had lost much of its mystery. This disregard of death was justifiable in the light of the continuous struggle which he had to endure against nature and savage animals, as well as other tribes. In some tribes death I i became such a common occurrence that it lost completely | all of its mystery. 23 Regarding these different customs, see: Malinowski, op. cit.. Chapter IV. 117 No such thing as natural death is recognized by the (Australian) natives; a man who dies has of necessity been killed by another man or per haps even by a woman. If an Abipon die from being pierced by many wounds, or from having his bones broken, or his strength exhausted from extreme old age, his countrymen all deny j that wounds or weakness occasioned his death, I and anxiously try to discover by which of the j jugglers and for what reason he was killed. ^ j With such an attitude, it is natural to find the practice of infanticide, abortion, and the killing of the ! i old and invalid prevailing among primitive societies. i Whether it is by decision of the family concerned or the society (tribe) as ,a whole, it was a socially accepted custom to dispose of any undesirable member of the group through one of these practices. This custom was so preva lent that, speaking about infanticide alone, Thompson related that ”not infrequently the proportion of infants 25 thus made away with reaches one half or even more.” Primitive Measures of Control and the Population Size Desired. In the light of these two value concepts, it be comes simple to understand the primitive profile of ^ Carr-Saunders, op. cit.. pp. 152-53* 25 Warren S. Thompson, Population Problems'(fourth edition; New York: McGraw-Hill iBook Company, Inc., 1953), p. 11. 1 1 8 demographic action. As based on a sense of "adoration” of the procreative powers per se. such a profile is favor able, within the limits of the religious practices ob served, to the full expression of human fecundity. To insure that that expression would not result in a popula tion problem (in the Malthusian sense), something which 26 the primitive mind was always aware of, the different societies of the primitive era either used or advocated the use of such measures as abortion, infanticide, and the killing of the old and the invalid. Since these measures were (1) socially acceptable and (2) of unlimited effectiveness, the primitive demographic profile may,thus, be described as consistent' with the objectives of rational behavior, namely, the maximization of economic welfare.. The main question under these conditions becomes: What is the population size best adapted to the attainment of the 26 The fear of a food shortage is given in many statements as a justification for such practices as abortion and infanticide. Referring to infanticide in an early Australian tribe, Carr-Saunders, for example, wrote: "The reason they give for this practice is that if their numbers increase too rapidly there would not be enough food for everybody.” Carr-Saunders, op. cit., p. 14$* 119 27 point of maximization? ' The answer to this question can only be given on an i | | individual basis for each of thp primitive societies. j Not only did these societies differ as to their socio- .. ! economic conditions, but, which was more important, they 1 ■ differed as to the utilized means leading to the point of I ; maximization. • I t ! Early tribes and the different means of maxirniza- ' tion. In making use of the available measures for popu lation control, each society was guided primarily by the population size considered best adapted to the maximiza- : tion of economic welfare. It is pointed out in a later 2 q------------------ 1 ---------------- ) chapter that this size was not an absolute quantity. Essentially, it was a function of the processes utilized by each society in the production of its means of subsist- | ence. Whether it was by war or by peaceful means, the j desired size would have to change accordingly.2^ i 2? The same conclusion was arrived at by Carr- ! Saunders in his concept of the optimum'among savage so- i I cieties. "The evidence so far adduced," he wrote, "shows j i that the mechanism whereby numbers may be kept near to the ; desirable level is everywhere present. When inquiring into : the nature of the mechanism, we found certain indications ' that it was effective." Carr-Saunders, op. cit.. p. 230. i o f ? " — On the optimum population, see Chapter VI. ' Whichever was the measure chosen by the society, ' it may still be granted that the objective was the same, | namely, the maximization of economic welfare. 1 2 0 ! Among the early tribes of human history, three main alternatives were utilized in the production of the necessary means of subsistence. The demographic practices of each tribe might be expected to depend upon whichever <of these three alternatives was followed. fruits of nature in the land1 of the tribeTs settlement. As hunters or fishermen, they subsisted on whatever catch they could achieve. This method, as is well known to the students of the primitive history, was far from being highly productive. The population policy under such cir cumstances was wholly negative and mainly directed toward the restriction of the number of the members of the tribe, through raising the mortality experiences in proportion to the means of subsistence available at the time. t.hors'was the raising of the means of sub sistence through the continuous migration from one place vidual basis but on a tribal one. When the resources of one region were depleted, the tribe,as a whole,moved to another region where the fruits of nature were more plentiful. This might be a more aggressive way than the first. Nevertheless, the population policy of such a tribe necessarily took into consideration the hardships asso ciated with continuous migration. First, there was the passive acceptance of the to another. In this sense, migration was not on’an indi 12 1 According to Carr-Saunders, . . . infanticide in Australia resulted principally from the difficulty, if not the impossibility, of transporting several children of tender age from place to place on their frequent marches. Later he observed . . . that infanticide was common among the Bangerang . . . they themselves gave as their reason for it the impossibility of the women carrying more than one infant in their constant wanderings.30 Third, there was the resort to war as a means of obtaining necessary subsistence. This was a much more ag gressive method than the second and, obviously, more so than the first. It was the method by which a tribe, by means of physical strength both quantitatively and quali tatively, obtained for itself the means of subsistence belonging to other tribes. It was also used in an attempt to secure for the tribe a fruitful region already occupied by another tribe. In either case, this process was con ducive to an expansive population policy for three main reasons: (1) it was very destructive of human life and necessitated an expansive policy to offset that destruc tion; (2) the amounts of the means of subsistence expected to be available through such a process were almost 30 Carr-Saunders, op>. cit.. p. 216. unlimited; and (3) an expansive policy increased the power of the tribe quantitatively and, as such, increased their capacity to wage war. Under such conditions, the resort to such eliminating practices as abortion and in fanticide would be reduced to a minimum if not ignored completely. Demographic teachings of the Greek philosophers. \ In Greek literature, we have the earliest views on popu lation available. Basically, these views reflect the, general pattern of primitive demographic action,as de scribed above. First, they are based on a relationship between man and society in which there is no place for individual freedom of action. Second, their attitude with regard to natality, while much less venerable than that of earlier tribes, was mainly in terms of control for qualitative rather than quantitative purposes. Third, they advocated the use of abortion, infanticide, and the kill ing of the old and invalid as a means to avoid any unde sirable increase in numbers. Emphasis on each of these points differed with the various writers. The high note in PlatoTs writing, whether in The Republic or The Laws. was that "the number of weddings is a matter which must be left to the discretion of the 123 31 rulers.” The rulers, after due consideration for the effect of wars, diseases, and any similar agencies, must act ”in order as far as this is possible to prevent the state from becoming either too large or too small.”32 In one place in The Laws Plato considered that the number of 5040 families was the optimum size for the 33 population of the state. This number was based on the consideration that: The number of citizens can only be estimated satisfactorily in relation to the territory and the neighbouring states. The territory must be sufficient to maintain a certain number of in habitants in a moderate way of life— more than that is not required; and the number of citizens should be sufficient to defend themselves against the injustice of their neighbors, and also to give them the power of rendering efficient aid to their neighbors, when they are wronged. Both in The Republic and in The Laws Plato seemed to have had the idea of regulating unions as a means for 31 Plato, The Republic, as translated into English by B. Jowett, The Dialogues of Plato. Vol. Ill (Oxford: The Clarendon Press, 1875), v. 460, p. 153. 32 Loc. cit. 33 Plato, The Laws, as translated into English by B. Jowett, The Dialogues of Plato. Vol. V. (Oxford: The Clarendon Press, 1875), v. 740, p. 123. 34 Ibid.. v. 737, p. 119. 124 the preservation of numbers. In The Laws, however, he foresaw the possibility of failure: And if after all there be very great difficulty about the equal preservation of the 5040 houses, and there be an excess of | citizens, owing to the too great love of j those who live together, and we are in our, ; witsT end, there is still the old device 1 often mentioned by us of sending out a colony.35 i Plato, furthermore, elaborated thoroughly on the idea of improving the quality of the population. In his j eugenic discussion, his teachings seemed to be based on two fundamental principles} first, the idea that "the ' best of either, sex should be united with the best as often, 36 and the inferior with the inferior, as seldom as possible;" Second, the principle that "the offspring of the inferior,, or of the better when they chanced to be deformed, will be put away in some mysterious, unknown place, as they should' 37 ' • be." In doing that, "these goings on must be a secret which the rulers only know, or there will be a further danger of our herd, as the guardians may be termed, break- j 3 $ i ing out into rebellion."-^ ! 1 i 35 Ibid., v. 741, p* 123* 36 Plato, The Republic, op. cit.. v. 459, p. 153. 37 Ibid., v. 460, p. 154. 33 Ibid.. v. 460, p. 153* Both Xenophon and Aristotle seemed to have been in accord regarding the eugenic ideas of Plato. Stangeland told us: He C Xenophon] mentions with approval the fact i that Lycurgus permitted and approved the exposing i of infants who were unfortunate in their birth and were deformed, in order, to make the popula- j tion stronger physically and mentally and to ! avoid overburdening and impoverishing parents, j and consequently the state, with useless or : superfluous offspring.39 ; Aristotle also was aware of the importance of popu- ' lation control for his politics. First among the materials required by the statesman is population: he will consider what should be the number and character of the ! citizen, and then what should be the size and character of the country.40 Notwithstanding the fact that Plato recognized the necessity of population control by the state, Aristotle, as Marshall pointed out,* "objects to Platofs scheme for equalizing property and abolishing poverty on the ground that it would be unworkable unless the state exercised a \ L\ j firm control over the growth of numbers."^ In this sense,: ! Aristotle may be considered as more emphatic in his insist- N • i ence on the regulation of numbers than Plato. He 39 Stangeland, 0£. cit.. pp. 20-21. ^ B. Jowett, The Politics of Aristotle (Oxford: At the Clarendon Press, 1885), Vol. I, pp. 213-14* ^ Alfred Marshall, Principles of Economics (New York: The Macmillan Company, 1949), footnote, p. 174. ( 126 recommended to the care of the governments the preserva tion of a due proportion between the extent of the civic territory and its population, and relied on pre-nuptial continence, late marriages, and the prevention or de- j i 1 struction of births for the due limitation of the number of; ; citizens.^ While still primitive in nature, the Greek litera- y i ture on population just reviewed revealed some differences ; from the earlier concepts. These differences could be \ j traced directly to the change in emphasis on the two demo- ; graphic attitudes characteristic of primitive action. 0h"“ one hand, we notice the permissibility of natality con trols on other grounds than religious. On the other hand, we find a decline in the social acceptability of such eliminating measures as abortion, infanticide, and the ; killing of the old and invalid. In both cases, Greek i | literature revealed symptoms of the transitionary period J from the primitive to the medieval era. j ' Another major aspect differentiating the Greek so- i . ciety from earlier ones was the change from wandering , i tribes to the more advanced status of city states. From ;the point of view of the different means for the maximiza- 1tion of economic welfare, this shift eliminated the i * j I - - - - - - - - - - - - - - - - - - - - - - - - - - - - Jowett, o£. cit.. p. 240. 127 possibility of migration on a national scale. Only two alternatives for such maximization remained: one through restricting the number of people to the available re sources of the state and the otKer through war on other - 'v — — — — st-a'tes._ The population policy', as is obvious, would differ in each case. The population policy of the Roman Empire. It is in these two alternatives that we find the main distinction between the Greek and the Roman views on population. While the Greeks, with exceptions, based their policies on the former, the Romans preferred the latter. The Greek idea of perfection might be realized through artistic and intellectual development within the confines of a small and self-limited state; the Roman ideal in cluded universal domain.43 With an empire as their goal and conquest as its means, "the Romans went little beyond the formulation of means designed to stimulate population growth among the citizens.”^' "Marriage was declared to exist fundamentally and primarily for the sake of rearing offspring— Liberum 45 quaesundum gratia.1 1 Different laws were passed with 43 Stangeland, ojd. cit.. p. 29. ^ Ed Whittaker, A History of Economic Ideas (New York: Longmans, Green and Company, 1940), p. 322. I R Stangeland, 0£. cit., p. 29. 128 that objective in mind. Rewards were granted to married people and penalties levied on unmarried ones. "Romans with three children were exempted from certain troublesome offices, and inheritance by unmarried or childless persons 46 1 was restricted." This movement reached its peak at the i time of Augustus Caesar when the Lex Julia et Papia-pappea! 47 ! were enacted. According to these laws, the Roman society! j was divided into the unmarried, the parents, and the childless with each accorded a specific treatment by law. Despite all these incentives, there is ample proof suggesting that the Roman population did not respond 48 favorably. If no changes in all other variables are assumed,this lack of response to state incentives suggests the following: (1) that individual action in Rome became less ritualistic and more influenced by personal ends and objectives; and (2) that beca&se of the socio-economic conditions existing in Rome at the time, these ends and objectives were in favor of a decreasing rather than an ! increasing population. In the Roman demographic trends, ; 46 Whittaker, o£. cit.. p. 322. 47 Stangeland, o j d . cit., p. 30. 48 "The conditions," wrote Stangeland, "were not bettered by the Julian laws; Rome and Italy in the time of the Empire sank to the lowest moral depredation." Ibid.. p. 35. we thus meet a case of conflict between national and per sonal objectives,with the latter triumphing because of the Romans* decision to act rationally on a personal basis, rather than ritualistically according to the laws of the society. MALTHUS AND THE MEDIEVAL ERA Sometimes it is impossible to pin down the end of one era and the beginning of another to a specific date. Particularly in such cases as involve changes in social and religious institutions, the transitional period may easily run into hundreds of years. With this qualifica tion in mind, we classify the medieval era from the fourth to the nineteenth century: the fourth as the century in s ™ ” 49 which Christianity was recognized in an official capacity, and the nineteenth as the century in which the natality experiences were npticed to decline over most of the 50 countries of the Western Hemisphere. ^ By the Edict of Milan, Emperor Constantine raised Christianity to the status of legalized religion in 313 A.Hj As a turning point in demographic development, this date can only apply to the Western Hemisphere. The year 1&70 is generally considered the start ing point for the drop in the birth experiences of Western Europe. France and Ireland experienced an earlier decline. See: United Nations, The Determinants and Consequences of Population Trends (New York: The United Nations, 1953), p. 72. 130 : Religious Teachings and the Medieval Pattern of Demographic Behavior* In patterns of human behavior dominated by j i "ritualism" religious beliefs might be expected to play a J decisive role. Not only do these beliefs incorporate the j | i ; general rituals and customs of each society, but they j ! also, until recently, constituted the basic philosophy j i ' - ! [ j ; underlying each society’s legal legislation. j When applied to demographic behavior, this rela- ; tionship between behavior and religious beliefs becomes j more conspicuous. In the primitive era, we have seen how ! this relationship dominated the primitiveattitude with ! regard to natality. We have also noticed that therewas i nothing in the religious beliefs of that era to prevent i the use of such practices as infanticide, abortion, and ) the killing of the old and invalid. In both of these attitudes religion constituted the basic philosophy under- I I lying the primitive demographic pattern of behavior. ! Changes in such a pattern, it may thus be expected, can I i ; ; only result from changes in the religious beliefs 1 underlying it. Symptoms of these changes were noticeable in social j and institutional developments even before they were in- ; corporated into religious teachings and doctrines. As i | reviewed above, the later stages of the primitive era 131 revealed the existence of such symptoms. In Greek society, for example, we noticed how the religious correlation be tween the faculty of propagation and the power of the unknown had deteriorated to such an extent that the use of I controls of a non-religious nature was permitted. PlatoTs | = writings also indicated that the practices of infanticide j s and abortion became so hateful to the "herd” (the people) 1 ! that their use by the state could have induced a rebellion.; Add to this the individualistic character of Roman demo graphic behavior and we have the essence of the moral changes that finally resulted in a shift from the primi- j s tive pattern of demographic behavior to the medieval one. ; This shift, nevertheless, could.not be dated from s the first observance of the symptoms referred to above. ; Social and institutional changes, it is true, owe their ' origin overwhelmingly to the development of rationality.in > - ■ human action. After its ends have been achieved, however, ! i this rationality, in most cases, gives way to the forces t ; of creeping ritualism. Only when it (rationality) had ; achieved these ends— in the sense of affecting sanctioned ■ i changes in the moral and religious standards of value— 1 can we say that an original shift had taken place. The i | question of importance in this case becomes not what i the symptoms observed during the transitional period are, i but what are the moral and religious changes that finally 13 2 materialized as a result of this temporary spread of rationality? i For the Western Hemisphere, the demographic aspects I ! of the Christian teachings represent the materialized I i i ^ pattern that finally resulted from the social and institu-j ! tional changes observed throughout the later stages of the 1 primitive era. This pattern constitutes, to the present, > i a basic philosophy underlying the ritualistic aspects of | human demographic behavior. It differs from the primitive j pattern in three main respects: (1) with regard to the ; form and objectives of human behavior; (2) with regard to i the natality attitude; and (3) with'regard to the mortality : attitude. ! Tbe form and objectives of human behavior in the Christian teachings. The development of human behavior, : in general, and demographic behavior, in particular, from : a primitive to a medieval pattern was basically a change ■ of form and objectives. In the primitive era, the indi- j vidual was nothing more than a member of the group. Particularly with regard to political and religious status, "individualism” was non-existent and individual action was i j overwhelmingly a function of the existing customs and i ! regulations. Such "ritualism” was stable as long as i | these customs and regulations were equipped to deal with [ basic worldly problems, particularly the material or 133 economic, through means consistent with the "animalistic" tendencies of human nature. I In the Christian teachings both the form and ob jectives of human bfehavior were modified. I We do not find that "man is a political , animal," but that his real home is in another j world and his mission celestial; all earthly countries and institutions are of secondary j importance.51 I Generally, this attitude has more than one impli- | cation. From the "form" point of view, it implies to a great extent emancipation of individualism from political • subordination. Political dominance, however, was imme- i diately replaced by a religious one. Thus, while behavior ; remained "religiously" ritualistic, the seeds were laid f [ down for political individualism which,%as pointed out below, were mainly responsible for the shift from the | medieval to the rational era. | More important, however, is the fact that such an i I attitude was extremely unfavorable to the consideration of the economic aspects of human behavior. To the Christian j I i , teachers, economic maximization as an objective for human j I . ; behavior was of secondary importance, as compared to i Christian ethics per se. No more do "worldly" ends ( J » I. |.| ~ . 1 I • > Stangeland, o£. cit., p. 56. 134 justify the means, since the means themselves have to be ethical, no matter what the end should be. The Christian attitude with regard to natality. In i harmony with this philosophy in which material objectives were of secondary importance, the Christian attitude with , regard to natality represented the rare case of a culturalj , j attempt to subdue completely the animalistic side of human j / I I nature. Mainly as a reaction against the license and de- ! bauchery characteristic of primitive religious beliefs, j the Christian preference for chastity and virginity was most outspoken. All the primitive Christian sects, those which carried their idealism furthest, abhorred matrimony; the Manicheans utterly condemned it; the Eucratists, the Docetists, the Marcionites, all recommended chastity . . . It is true that Christianity has honored and sanctified matrimony, but it has preferred chastity. The apostles, the saints, the men whom the churches venerate have nearly all been chaste, and, in every case, have only reached perfection when they attained chastity. In all lives of the saints,the most meritorious action | and those most generally praised refer to chastity and the resistance to the temptation of the flesh.i Again, the insistence on the so-called ethical character of human behavior is the foundation of this whole idealistic attitude. In the Christian sense, the term "ethical1 1 was synonymous with the denial of the 52 Ibid.. p. 56. 135 demands of the flesh. Obviously, this denial has to be | performed on a basis of "natural abstention," rather than through the interference of any mechanical devices. From the point of view of natality, ’ ’natural abstention" was thus advocated for its own sake,rather than as a means for ■ the control of the population size or the attainment of l any material objectives. The more absolute this abstentionj became, the more ethical the society was supposed to be | from the Christian point of view. "Among all the relig ions of civilized people," Nitti truthfully remarked, 53 "Catholicism is the least favourable to fecundity." As might be expected, however, this idealism was short lived. In its extreme form, it was nothing more : than a reaction against the moral conditions of the prim- ; itive societies— a reaction that withered in the face of . practical necessities. The animalistic nature of human ' beings proved, in the long run, to be victorious against I i , any cultural concept of perfection based on the denial of j the demands of the flesh. The Christian attitude with regard to natality was thus changed and adapted to the , requirements of human survival. By the time of Thomas 1 Aquinas, thanks mainly to the Aristotelian influence, we 53 Francisco S. Nitti, Population and the Social System (New York:. Scribner»s and Sons, 1902), p. 123. find him teaching: Certain men must be celibates, for the sake of the general welfare, as well as for religious purposes. The multiplication of the species is a duty of the multitude and not of the individual.54 The Christian attitude xvith regard to mortality. Christian ethics, again, is the dominant tone of the medieval attitude with regard to mortality. Notwith standing the economic and demographic justifications of such practices as infanticide, abortion, and the killing of the old and invalid, these practices were considered unethical per se and^i therefore, prohibited in the medieval patterns of demographic behavior. In doing so, Christian ethics wiped away some of the most effective practices for checking the over-growth of population. In a sense, we can trace the origin of the population problem to this prohibition. As long as the practices limiting the popu lation size to the means of subsistence available were socially acceptable, there was no problem In the physio logical tendency of the population to outgrow its means of subsistence. But, as soon as these practices became anti social, as well as anti-religious, a population problem would arise unless a socially acceptable means could be 5^ Stangeland, op. cit., p. 76. 137 found to replace abortion and infanticide. Natural ab stention, if carried to extremes, might prove to be such an adequate replacement. As argued previously, however, the effectiveness of such a measure as a device to controlj population size is quite limited. i Maithusianism and the Medieval Pattern of Demographic j Behavior. ' J i Based on the tendencies just described, the medievalj pattern of demographic behavior may be said to possess the i symptoms of a real social problem. With no interest what soever in the “material" consequences of their demographic teachings, the Christian fathers made it ethically unac ceptable to use any other measure for population control except that of "natural abstention." While it is true that they advocated the use of such abstention to the maximum possible, it is also quite true that that maximum could not be far off. Because of the tremendous growth potential of human fecundity and the intensity of the physical drives favoring the propagation of the species, it is obvious that the extent to which "natural absten tion" could be utilized effectively in the control of the population size was very limited. When the effectiveness of such a measure fell short of the requirement for the attainment of that population size considered consistent with the point of economic maximization, the society under i3 d consideration would in this case: (a) experience a "semi- controlled” type of population change, for which the , maximization of economic welfare as a demographic objec tive would become inconsistent with any rational action possible under the circumstances; and (b) be faced with a | socio-economic problem in the form of a continuous popu lation pressure on the produce of the economy. Unless ; that produce could be indefinitely increased at a rate ! higher or equal to that demographically experienced, such ; a society would, sooner or later, reach a maximum popula- 55 tion size, ^ beyond which all increase in numbers would be i involuntarily liquidated through malnutrition and/or i starvation. These ”gloomy" social and economic consequences i followed so directly from the medieval Christian pattern of demographic behavior that it is amazing they did not : arouse public concern before the time of Malthus in the i eighteenth century. While it is true that many philoso- ; phers before Malthus did point to the "dilemma" involved, it is also true that their warnings did not stimulate ! ^ The maximum population concept is obviously a i function of the socio-economic conditions of each society, i Particularly, it is a function of the distribution of wealth and the minimum level of survival beyond which the : members of the society cannot live. enough public concern to induce positive action. The Malthusian thesis was an immediate success, not because : | — _ | | - T - I n — M i » m i l*W » n » i—Hni W i m i i i — , M ■ « « « . . .|[[lr | J f | - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -_ _ _ _ _ _ _ _ _ _ it introduced anything new,, but because it came at a time when the socio-economic conditions were ripe enough for the public to listen to the warning involved. ■ 'num 'll i trTitrniiniiiim m « MfW if J ~nnrr‘jrir~rn—•'ilTwin'WifU'M 'Mm * Pre-Malthusian literature and attitudes. This non-concern of the pre-Malthusian period about the popula- tiontfproblem” involved in the medieval pattern of demo graphic behavior may be basically attributed to (a) con temporary prevailing religious and political attitudes with regard to population growth, and (b) the ability of “national” and "universal” produce to keep up, for the time being at least, with the resulting growth in population. The religious and political attitudes with regard to population growth are best exemplified in the writings of the "Scholastics,” the "Humanitarians,” and the "Mercantilists. T h e "Scholastics" refer to that group of church writers spread from the twelfth to approximately the fifteenth century, of which Sir Thomas Aquinas was a member. Essentially, scholasticism was an amalgamation of social, economic, religious, and moral principles. 56 On the demographic writings of this era, see; Stangeland, o_p. cit., pp. 16-17* 14 0 In general, they looked upon-population growth as a sign of God’s favor, and sub scribed to doctrines and practices definitely conducive to such'growth; for they held human life to be sacred, and marriage to be a sacrament, and they inferred from Holy Scrip- j ture that large families are good for the ; individual and the community, and in accord with the divine p l a n . 57 Politically, the same attitude may be found to pre- ; vail among the humanitarians and the mercantilists who I | agreed mainly in their social objectives but differed as j to the role attributed to the individual in these objec tives. The humanistic attitude appeared in the writings of such men as Machiavelli, Montaigne, Sully (Minister of 58 Finance under Henry IV), La Mothe, Le Vayer, and Paul Hay. Niccolo Machiavelli (1469-1527), considered by some as the first modern writer on population,59 stressed greatly the importance of a large population. In The Prince he wrote; I think those princes capable of ruling who are capable, either by the numbers of their men or by the greatness of their wealth, to raise a complete army and bid battle to any enemy that shall invade them.60 57 Joseph J. Spengler, French Predecessors of Mal thus (Durham: Duke University Press, 1942), pp. 4-5- 58 Ibid.. p. 12. 59 Stangeland, op. cit., p. 92. 60 T . . Loc. cit. 141 This emphasis on the state’s prestige, unlike that of true mercantilists, was not at the expense of individual welfare. Machiavelli saw in trade a means to achieve peace \ between nations. He recognized that agriculture, industry ; and trade contribute to a nation’s wealth and welfare. All , in all, he would generally fall in line with Paul Hay who 61 stressed that man’s happiness is the end of ’ ’La Politique.” i These humanitarian elements, however, were unable j i to check the development of economic nationalism. The Renaissance and the Industrial Revolution combined to give rise to a group of individual writers, generally known as the mercantilists, who advocated severe economic controls in the interest of national power and prestige. Unlike primitive societies where land was the main factor of pro duction, the mercantilists considered labor to be as such: Labor was considered to be by far the most important of the factors of production, and that, consequently, given an augmentation of the supply of labor, the supply of foodstuffs , usually could be made to expand in proportion. The growth of population becomes, in this sense, a basic objective in the mercantilistic policies. Advocation for such a point of view— that the power of a nation con sists in the multitude of its subjects— does not belong to 61 Spengler,. ojp. cit., p- 12. 62 Ibid., p. 19. 142 any one period or any one country. As early as the fifteenth century, it was subscribed to, without any scientific explanation, by Louis XI and Henry IV. ^ Mer- cantilistic writings also came out of most of the European j countries. The attitude of Machiavelli in Italy has al- ; I t ready been referred to. In Germany we find Jacob Bornitius and Christopher Besold (1577-1633) advocating the Roman practice of rewarding marriage and fecundity and placing penalties on celibates.^ In France, Jean Bodin (1530- ■ 1596), Barthlemey de Laffemas (1546-1611) and Antoine de Montchertien (1575-1611) "played an important part in the intellectual formulation of mercantilistic social phil osophy."^ The writings of such English mercantilists as ✓ Mun, Childe, and Locke are already well known. Most of these mercantilists developed a theory of wages based on the postulate that population possessed an unlimited capacity to increase at a fixed subsistence minimum. To say that these views "initiated" population growth is not stating the case in the right prospectus. The inevitability of population growth was already an accomplished fact as a result of human physical fecundity 63 n Ibid., p. 9* „ ^ Stangeland, o£. cit., pp. 93-100. 65 Spengler, ojd. cit., p. 13 • 143 and the cultural pattern of the medieval era. The politi- i cal views of the time, nevertheless, did delay the full I comprehension of the grave social and economic consequences i of that potentiality particularly to individual welfare. i They thus fostered the unprecedented increase of world • 66 ' population experienced in the medieval era. This in- • crease was only made possible through the raising, thanks ■ mainly to the agricultural and industrial revolutions, of the national and universal produce. "Political Arithmetic” and the spread of rationality. i The beginning of the end came for the medieval pattern of I demographic behavior when the public became aware of the \ existence of a basic conflict between such a pattern and ] its (the public’s) immediate social and economic inter- ; ests. Credit for this awareness should be mainly attrib- I | uted to the development of the scientific attitude and its . application to the analysis of social problems. In the ; demographic field, such an attitude was exemplified in the use of the statistical method in population studies. • "Political Arithmetic” is generally_the_ name given to the ; use of this approach about the fifteenth century. I i The honor of pioneering this scientific approach • i . 66 On the best estimates for the-medieval increase in world population see: United Nations, o£. cit.. pp.9-10. 144 is usually given to the Italian Giovanni Botero (1540- 1617) in his book Treatise on the Greatness and Magnifi- 1 cence of Cities. 1592. In that book Botero seems to have i i I formulated the essential points of the Malthusian thesis. i The growth of cities proceeds partly from 1 i the generative powers of men, partly from the ' ! nutritive powers of the cities. The powers of ; generation are'the same now as one thousand j years ago, and, if they had not impediment, [ the propagation of men would grow without | limit and the growth of cities would'never j ; stop. If this growth does not go on, it must j be from yant of nourishment and the means of support.°7 In his arguments that the "virtus generativa,” the generative force, is stronger than the "virtus nutritive," , Botero did not; make use of the statistical method. Neither j i for that matter did Sir Walter Raleigh or Sir Francis , Bacon, who seemed to regard population growth as one of 1 6S \ the reasons for war. It was not until the publication | of Graunt*s book on the London Bills of Mortality. 1662, J that the statistical approach became the basic approach in the study of demography. The main conclusions of Graunt*s book are now a matter of general knowledge. He based his calculations on . the death returns, bills of mortality, of the city of London I ^ Ibid.. as quoted in J. Bonar, Theories of Popu- 1 lation from Raleigh to Arthur Young (New York: Greenberg, ; Publisher, 1931), P* 16. | Ibid.. Chapter I; also Whittaker, op>. cit., pp. I 323-24* 145 and its adjoining areas and concluded: (1) that death rates tend to be higher in urban than in rural localities; (2) that, they are greater throughout the early and late years of life than in the middle period; and (3) that the > number of males born exceeds the number of females. Graunt { further remarked that the population of London, "by the ■ ; ordinary proportion of breeding and dying, doubles in j 1 sixty-four years, this, however, with the aid of immigra- ! tionf"^9 He used the figure sixty-four in calculating I what the world population would have been if Adam and Eve ' had multiplied at that rate. Since the population of the world would fall much lower than the anticipated figure, his conclusion was that the great possible increase had been held in check by the means of subsistence. While Graunt is generally referred to as the father of "political arithmetic," he was not in his general views representative of his period. Graunt regarded London as a head too big for the body: When I consider that in the country seventy are Born for fifty eight Buried, and that before the year 1600 the like happened in London, I consider, whether a city, as it becomes more populous, doth not, for that very cause, become more unhealthful: and inclined to believe, that London now is more unhealthful than before.?0 69 Stangeland, 0£. cit *, p. 142* ^ Whittaker, op. cit., pp. 324-325- 146 This is quite different from the mercantilistic views, in general, and Pettyfs views, in particular. Through use of the same statistical approach, Sir William Petty reached different conclusions from those of Graunt. To him the greater the population, the better it is, not only from the point of view of production but also from * the political, "for the same governors, which are the j 1 great charge, may serve near as well for the greater as j 71 1 the lesser number."' In all justice to Petty, we may remark that his position was not based on an ignorance of the disadvan- * I i tages associated with the relative overgrowth of the population, but on his belief in the possibility of in creasing returns with the increase of population. His known dictum, "Labour is the father of wealth as land is the mother," may clarify his views. All lands are much 72 alike, and there are enough to support the population.' The difference, then, is in the number of people. "An i increase in population," Petty argued, "x^ould develop mar-j kets, raise demand for goods, and, through association j increase the efficiency of production."?3 in plain words, he considered England of his time to be relatively "under populated." 7-*- Bonar, ojo. cit.. p. 66. Ibid., p. B7* ^ Loc. cit. 147 To Graunt and Petty may be added the names of Gregory King, Charles Davenant, and Edmund Hailey as pioneers in the development of "political arithmetic" and the use of vital statistics. The approach from then on j was used by demographers all over the world. In France, Messance (17£>6) "became the first French writer to demon- > strate A length the practical usefulness of birth and j n i j death returns.” In Germany, Graunt found a faithful t student in the person of Johan Peter Sussmilch around 1741.; Sussmilchfs works were quoted by Malthus at length in re ferring to the vital statistics of Germany. All in all, "political arithmetic” may be described ! as an attempt at the use of rationality in the analysis of population data. This rationality seems to point’ in one direction verified statistically. To follow the medieval pattern of demographic behavior ritualistically, it seems to indicate, is a sure way leading to a continuous trend of population growth. With the exception of those who were biased in favor of such growth for economic or other j reasons, it was not hard for the others to anticipate the ( development, sooner or later, of a social problem when the produce of the society would fail to keep pace with such a continuous population trend. Botero and others seem to 74 J. J. Spengler, "Messance: Founder of French Demography,” Human Biology 32:7$, February, 1940. 11+8 have had this concept well developed. That this danger was not immediately recognized by the public may be at tributed to the fact that the pressure of population on the means of subsistence at the time was not yet severe j } enough to force such a recognition. In their own right ! Botero and company may thus be referred to as the pre- ) mature prophets of the population problem. When the socio-; 1 economic conditions were ripe enough for the public to j j comprehend the basic conflict involved, "Malthusianism" was awarded wide recognition, followed by an immediate shift in the pattern of demographic behavior symbolized in j a persistent drop in the birth experiences commencing with ' the nineteenth century. The Malthusian "warning" and its effect on the medieval pattern of demographic behavior. By the end of the eighteenth century conditions were fit for a "show- . I i < i n -1 i, , I U I I I ■ I Hilling, I m ._ J J . . . . I U - . A I 'i I -"— ‘ ‘^ 4 l < K '**g 3 " r^ ^ .. . . . . . . . ^ n.i m p u - ■ im » , M | , , I , i n - tl1 , 1 , | down" concerning many of the social problems, in general, j and the population problems, in particular. There were ! i 4 i two causes mainly responsible_for thisfitness: (1) there j was the "rationalism" and "individualism" characteristic of the "Renaissance" and the "Industrial Revolution"; and (2) there was the growing pressure of an ever-increasing population size on the available means of subsistence. Throughout that period the basic socio-economic 149 problem was one of excessive poverty within an environment of growing industry and wealth. As generally the case : with most socio-economic problems, interpretations of such j poverty differed. Oneone hand, there was the optimistic group, namely Godwin and Condorcet, who believed in the ; i perfectibility and rationality of human beings. On the j other, there was Malthus with his group who considered ! ! misery and vice as chronic symptoms of human society con comitant with the inherent qualities of the physical : organism. To the first of these groups, the opportunities of physical and social progress through the rationality of j \ ! | action were endless. As Spengler put it: | It had been noted that man was making progress, technological and social; and that, since progress is cultural in character and culture is cumulative, progress must, ceteris paribus. be cumulating and unending.75 There is no end, argue the optimists, to the welfare i t j of a society through the means of reason and benevolence, j f i From one point of view and on the basis of the conditions | experienced at the time, Godwin considered these means quite within the reach of human society and social progress. 75 J. J. Spengler, "MalthusTs Total Population Theory: A Restatement and Reappraisal," Part III, The Canadian-Journal of Economics and Political Science, 2: 245, May, 1945. J 15 0 Combining the doctrines of "utility,” "necessity,” and the rights of man, Godwin finds promise of rational and moral be- 1 havior and, therefore,7of complete political | and economic equality.' i ! Up to this point it is hardly possible to disagree ' i with Godwin et al in their enthusiasm for human ration- j ality and the prospects of its utilization. To argue from: < • i this that the maximization of welfare could only be I | achieved through the abolishment of all social patterns and institutions would be, however, carrying the analysis to extremes. In the first place, human behavior can never’ be totally rational. As pointed out previously, ration- ; ality is limited by the "animalistic" and "ritualistic” aspects of human behavior. Even if all "ritualism" could be abolished, as Godwin seemed to believe, the rationality j of human action would still be limited by the "animalism" of the physical organism-r-a fact which Malthus lost no [ time in pointing out. In the second place, social in- i stitutions are not all adverse to the utilization of i rationality in human action. To abolish.all institutions j ; would be in this sense arbitrary, unjustified, and biased, i Instead of condemning all social institutions per se, , Godwin should have inquired as to where, how, and why the i ^ William P. Albrecht, William Hazlitt and the i Malthusian Controversy (Albuquerque: The University of New j Mexico Press, 1950), p. S. 151 , social institutions of the eighteenth century fell short of the standards of rationality. His condemnation of i J private property and marriage,77 in particular, showed ! that he completely missed the point and left himself open i to such valid criticisms as those advanced by Malthus and others. The Malthusian.thesis. as advanced in his First 1 , ! 7 8 \ ' i Essay on Population. 179&, is simple and logical if we | grant the postulates it started from. As indicative of actual (or expected) trends of human behavior, however, it : ) is just as one-sided and erroneous as that of Godwin. : While the latter based his optimism solely on the rational : aspects of human behavior, Malthus based his pessimism on i j the animalistic aspects of that behavior; both of them i j ignored the central role of ritualism in human action. J 77 with regard to private property, Godwin remarked, "Every man has a right to that, the exclusive possession of which being awarded to him, a greater sum of benefit or pleasure will result, than could have arisen from its beirg otherwise appropriated." As for marriage— "a system of : fraud and the worst of monopolies— "Godwin advocated its j substitution with a system of free and flexible unions, it being "a question of no importance in a state of equality. . . . to know who is the parent of each individual child." William Godwin, An Inquiry Concerning Political Justice ! (New York; A. A. Knopf, 1926), p. 317 I 78 1 T. R. Malthus, First Essay on Population, re- : print from the Royal Ecomamic Society-TLondon; Macmillan ; and Company, 1926). 152 Maithus looked for the future Utopia envisioned by Godwin, but found none. On the contrary, he saw strong reasons for believing in its impossibility. "Grant me two postu lates and I disprove your millennium. The first is, that food is necessary; the second, that the instinct for f ' ' ~ I 7 Q ~ ~ ~ "" ~ marriage is permanent,.n On the basis of these two postulates, Malthus based his central thesis that life 1 everywhere tends to exceed the warrant for it. "Popula- f tion, when unchecked, increases in a geometrical ratio. Subsistence increases only in an arithmetical ratio." If this condition be true, it then "implies a strong and conslfantly”6perafirTg—eh-eck on population from the diffi- culty of subsistence." In the case of human beings, these checks were found by Malthus to be "misery" and d2 "vice" with "moral restraint" added in later versions. That the Malthusian thesis reflected the prevailing economic-demographic trends of the medieval era is beyond ^ Ibid., p. S. ! ^0 Ibid. P. 14. > ^ Lo g♦ cit. i S2 Six editions appeared in the lifetime of Malthus. In the second edition, much was revised and added which shifted the central emphasis of the Essay from the refu tation of Godwin*s ideas to that of the consideration of the poor laws and the conditions of the poor class, in general. 153 doubt. Since he was a combination of an "economist” and a "Parson," Malthus was in a most favorable position to figure the basic conflict between the medieval pattern of demographic behavior, as based on Christian morality and the immediate material interests of human society. As ■ pointed out by Malthus himself, this conflict had been "distinctly" seen by many of his predecessors.^^ To men- j | tion but a few: Hobbes, Franklin, Hume, Wallace, and Adam Smith all reflected on the problem. From the demographic i viewpoint, however, the writings of these philosophers attracted no wide attention. The Malthusian thes„!s._,d.oe,s j not owe its fame to the exposition of the existing con- j flict as such, but to the exposition of the conflict at a time when its adverse social and economic consequences had reached such a magnitude as to force the attention of the public to the warning involved. In relation to the S3 ' "In the course of this inquiry," wrote Malthus, j "I found that much more had been done than I had been aware of when I first published the Essay. The poverty | and misery arising from a too rapid increase in population ; had been distinctly seen and the most violent remedies j proposed so long ago as the times of Plato and Aristotle. And of late years the subject has been treated in such a manner by some of the French economists, occasionally by Montesquieu, and among our own writers, by Dr. Franklin, Sir James Steuart, Mr. Arthur Young, and Mr. Townsend, as to create a natural surprise that it had not excited more public attention." Thomas R. Malthus, An Essay on the Principle of Population (ninth edition; London: Reeves and Turner, ISeTS;) , p. vi. 154 ■ socio-economic conditions of the eighteenth century, Malthus was more to the point than Godwin, in the sense that he was dealing with immediate pressing social prob- : lems rather than with mere future speculations. To say that the Malthusian "problem" as it came to | be known is an absolute problem applicable to all times, | j is inaccurate inasmuch as it is based on an erroneous ! i I concept of human behavior. "Physiologically" and "animal-i istically" speaking, the economic-demographic relationships: as indicated by Malthus are true. Human behavior, however, is never purely animalistic in nature. The medieval social , problem existing at the time of Malthus' was not only the : result of basic physiological tendencies but also, and ; more importantly so, the result of the cultural pattern of ! behavior prevailing at the time, including both its ritualistic and rational aspects. That this pattern did : not allow for the use of any other measure of population ! j control but that of "natural abstention," has already been 1 referred to. That "natural abstention" alone was rela- i j tively ineffective for the maintenance of the population at the size considered consistent with the point of econ- : omic maximization, should have been pointed out as the j ! main cause for the whole socio-economic problem of the ! eighteenth century. This ineffectiveness was reflected in MalthusTs presentation of the problem inasmuch as he did 155 not consider "moral restraint," at least at the beginning, as an existing check to population growth. Nowhere in the First Essay did Malthus consider "moral restraint" as an independent check. ^ Even when he considered it as a check in later editions, he was never so optimistic as to its effectiveness in completely eliminating vice and misery. In its final presentation, the Malthusian thesis was true to the form of the medieval pattern of demo graphic behavior. After he had stated the socio-economic conflict clearly, Malthusfs only salvation to such a con flict was that of "moral restraint." It was not, in effect, that Malthus re garded the "principle of population" as an evil in itself, but as a law of nature, the working of which might have evil-consequences. Such consequences would, however, be mitigated if "moral restraint" were practiced, and it was ' therefore the duty of individuals to adopt the rules of conduct prescribed, and for social policy to be so ordered as to give the greatest incentive for those rules to be f o l l o w e d . 5 ^ In subsequent editions Malthus apologized for thel neglect of human rationale and moral restraint as a check J for the problem. "It is probable," he wrote, "that having! found the bow bent too much one way I was induced to bend it too jriuch the other in order to make it straight." Ibid., Appendix., p. 526. d c D. V. Glass, "Malthus and the Limitation of Population Growth," in Introduction to Malthus (London: Watts and Company, 1953T] P* 29* 156 In advocating moral restraint, Malthus was very careful to define it, so as not to include other measures of population control. In a society following his recom mendations, a person would not marry until he had the means to support a family. In his period of ’ ’restraint,” ■ : the individual’s conduct must be strictly moral, no ille- ! j gitimacy. But, as soon as the person married, there must So I be no artificial checks on the family size. This last I requirement makes clear MalthusTs position, in harmony I with his religious orientation, with regard to the i ’ ’ mechanical’ ’ devices of controlling natality. Indeed I should always particularly probate any artificial and unnatural modes of checking population, both on account of their immorality i and their tendency to remove a necessary stimulus to industry.8' Despite its many deficiencies, the Malthusian thesis * justly occupies a vital position in the history of demo- | graphic development. This position may be attributed to ; many factors, based on the theoretical rather than the 66 ' ^practical implications involved. ; s 66 Malthus, op♦ cit.,ninth edition, chapters I and j II of Book IV. Ibid.. p. 393- 66 ! The practical implication of the Essay was mainly responsibleNfor William Pitt, the Prime Minister, dropping ; his Bill to amend the Poor Laws. 157 Primarily, the Malthusian thesis, as such, repre sents a wide step in the application of rationality to human social problems. In a field where human behavior, until then, was mainly dominated by ’ ’ritualism,n this application might be considered as a real break away from I the medieval pattern of demographic behavior. It, thus, j i ' ! ! became no coincidence that the drop in natality experiences 1• i • I ; of the Western European countries came immediately,or almost immediately, after the spread of ’ ’ Malthusianism.” J Second, the Malthusian thesis owes much of its fame I to the simple and convincing manner in which the medieval conflict was presented. Without such a manner, it is j highly doubtful whether the thesis could have survived the j ' strong criticism and abuse directed against it and its i : author. i | Third, and most important, the thesis was a loud I warning against the socio-economic consequences of the conflict. While Malthus, in view of his professional re ligious orientation, was highly ’ ’fatalistic’ ’ in his atti- 1 tude toward the conflict, such warning, nevertheless, in- j spired many ’ ’less dogmatic” thinkers to attempt its solution. To these thinkers, the problem, obviously, was ! not a chronic one. As Senior put it: I admit the abstract power of population to increase so as to press upon the means 153 of subsistence. I deny the habitual tendency. I believe the tendency to be just the reverse. y Neo-Malthusianism and the decline of the medieval pattern of demographic behavior. Among the different trends of thought that followed in the steps of "Malthusianism" is the one generally referred to as "neo- Malthusianism." In its advocation of birth control ! ’ | through mechanical devices, this trend, more than anything : else, signified the breakdown of the medieval demographic era, as based*on the superiority of "natural abstention." Moreover, it signified the triumph of rationality over religious ritualism. Generally, the neo-Malthusianists derived their support, not from Malthus, but from the writings of Francis Place (1771-1354). A father of fifteen children himself, Place was a firm believer in the Malthusian warning. In collaboration with Richard Carlyle and others, Place started to propagandize for the use of contraception as . 90 early as 1823* A quotation of his views might be i helpful: 1 ! ! 89 i As quoted in H. L. Beales, "The Historical Con- | text of the Essay on-Population," in Introduction to j Malthus (D. V. Glass, editor), o£. cit.. p. 7. ! Warren S. Thompson, op». cit., p. 22. 159 If above all, it were once clearly- understood, that it was not disreputable for married persons to avail themselves of such precautionary means'as would, without being- injurious to health, or destructive of female delicacy, prevent conception, a sufficient check might at once be given to the increase of population beyond the means of subsistence; vice and misery, to a prodigious extent, might be removed from society, and the object of Mr. Malthus, Mr. Godwin and of every philanthropic person, be promoted. Whether Malthus was aware of PlaceTs propaganda in ; favor of contraception or not, is not clear. "It seems : highly unlikely, therefore, that Malthus did not know that : contraception was being urged as a preventive check. It must be either that he did not believe in its efficacy or that he so strongly disapproved of any preventive check 92 which dad not involve continence." THE DEMOGRAPHIC ATTITUDE OF THE RATIONAL ERA No sooner had Malthus published his views on popu lation th an they became the subject of extensive...debates. While originally meant to be an argument against Godwin1s optimistic tendencies, as based on the belief in human rationality, the Malthusian thesis and the debates stemming from it turned out to be the greatest argument for these tendencies. As Godwin had originally predicted, the 91 Whittaker, o_p. cit*, p* 343* 92 Thompson, op. cit., p. 22. 160 position of rationality as a determinant of human behavior gained greatly in ground as a result of the post-Malthusian debates. Human minds turned, more and more, to the anal ysis of social data in an attempt (1) to determine the ! true nature of the basic socio-economic problems and (2) 1 to find the most adequate possible solutions for them. j Post-Malthusian Tendencies. i " ' - ' ' 1 In the process of arguing the Malthusian thesis pro | and con, many trends of thought were expressed. Besides the outright Malthusianists, the neo-Malthusianists have already been referred to as believers of the habitual ten- dency of population to outgrow its means of subsistence. On the' opposite side, the Malthusian thesis came under the severe criticism of such schools of thought as the natur alists, the optimists, and the socialists. Even if, in the final analysis, these criticisms were unable to dis prove the Malthusian thesis, their effect, nevertheless, was instrumental in the development of demographic thought. Natural theories of population growth. Dissatisfied with MalthusTs assertion that population has the capacity to double every twenty-five years, a group of demographers attempted the construction of natural laws which popula tion growth was supposed to follow. The first of these attempts came in the lifetime of Malthus. Michael Thomas 161 Sadler published his book, Ireland: Its Evils and Their Remedies,in 1$29» In that book he laid down his natural law of population growth: The law of population, by which the j increase in mankind has been and still is, I in all cases, regulated, is simply this: i The^,fecundity of_ human beings under similar I circumstances, varTes1 . ________^ niiinTr-i-rriirnrriTTr<t*irriTii'»r»inrji~iiriii~TfW TiiTr'->r*iT-]iirm'-n»— j numbers on a given space.^ | I Sadler's “law” in this case, it may be noted, is based on the same confusion as to the determinants of human; behavior characteristic;:; ©1 the Malthusian thesis. By interpreting actual trends of human behavior solely in terms of inherent physical qualities, Sadler was guilty of the same one-sidedness as Godwin and Malthus. Many others have committed the same fault in relation to so-called "natural laws” of population. Both Doubleday and Herbert Spencer expressed SadlerTs same tendencies in terms of pure physical characteristics. Spencer, for example, ex plained that there exists in nature an antagonism between "individualism” and "genesis,” and that infertility is | generally produced by mental labor carried to excess.^. Doubleday, however, was more to the point. In his book on The True Law of Population Shown to be Connected with the Food of the People. 1&41, he stated this relationship: 93 Ihid.. p. 3 1 . 94 Ibid.. p. 3 3 . 162 The ’ ’great general law” then, which, as it seems, really regulates the increase'or decrease both of vegetable and of animal life, is this, that whenever a ’ ’species” or ’ ’genus” is ’ ’en dangered,” a corresponding effort is invariably made by nature for its preservation and con tinuance, by an increase of fecundity or fer tility; and that this especially takes place i whenever such danger arises from a diminution j of proper nourishment or food, so that conse- ! quently the state of depletion, or the d©pleth- j oric state, is favourable to fertility, and that I on the other-hand, the plethoric state, or*state of repletion, is unfavourable, to fertility, in j the ratio of the intensity of each state, and ! this probably throughout nature universally, in ; the vegetable as well as the animal world; further, that as applied to mankind this law produces the following consequences, and acts thus:- There is in all societies a constant increase j going on amongst that portion of it which is the ! worst supplied with food; in short amongst the poorest. j Amongst those in the state of affluence, and well supplied with food and luxuries, a constant decrease goes on. Amongst those who form the mean oh medium*between these two opposite states-- that is to say, amongst those who are tolerably well supplied with good food, and not overworked, nor yet idle— population is stationary. Hence it follows that it is upon the "numerical proportion” which these three states bear to each other in any society that an increase or decrease upon the whole depends. Others of the same group, however, expressed the i opinion that fecundity may have nothing to do with observed! fertility differentials. Both William Thompson and Sir Archibald Allison, 1B40, conceded the possibility of population outgrowing its means of subsistence. ”In the 95 Ibid.. pp. 31-32 163 physical constitution of man, there is the possibility of increasing the numbers of his kind at a quicker rate than the quantity of food.”^ But this physical capacity of ! man will never materialize, due to the function of human j prudence and the rise in the standard of living. Accord- j ing to Allison, "This great and important change which i ensues, in the progress of society, in the habits and de- ! i i sires of all its members, is the principle counterpoise j which nature has provided to the principle of popula tion."^ Thompson’s remarks on the subject were even more[ emphatic. There is no disposition or physical interest amongst mankind, elevated but one step over the merest savage existence, if even in that state, to breed beyond their absolute comforts, what ever they mgy be: and as these comforts increase, accompanied as they are with an increase of knowledge, the tendency to improvident breeding, uniformily decreases with their increase.9° The French demographer Arsene Dumont was also among those who believed in the supremacy of social factors in molding human behavior. According to his theory of social | capillarity, the individual, in the process of climbing to higher social status "becomes interested chiefly in climbing or moving in such a way as will benefit him per sonally, regardless of whether such movement will be of 96 As quoted from Thompson in Whittaker, o j d . cit. . P. 352.Qr, 97 Ibid-, P* 353. 98 ibid.. p. 351. 1 164 | 99 benefit to the community or the race." Furthermore, | "Dumont believes that in a society where movement from 1 ! class to blass is easily accomplished, social capillarity j % I \ is as inevitable as gravity; for he says: What gravity is I s , to the physical world, capillarity is to the social | i order.”100 ; i The optimistic school. The second group critical I 1 ; of Malthus was the optimists, who thought subsistence could ■ be made to increase at a rate that would keep pace with ■ population. As might be expected, the majority of the ; members of this group came from outside England, mainly ; from the United States, where future economic and social i prospects at the time were brighter than anywhere else. ; In his theory of harmonies, Bastiat, of France, j discarded the notion of diminishing returns which is im- | plicitly assumed in'the Malthusian theory. Like Petty and i most of the French mercantilists, Bastiat looked at the I I I problem, not from the view that subsistence limits popula- i ’ tion growth, but from the view that population growth acts ! I as an incentive as well as a factor in increasing produc- 1 tivity. ”A tendency towards increasing returns was sub- ■ stituted for that in the direction of diminishing returns, 99 ; 77 Thompson, o£. cit., p. 37• | 100 L6c .--cit. I — _ L _ _ 165 1 01 so the checks became unnecessary." Both Carey and ! Henry George agreed with Bastiat rather than Malthus. In ! his famous answer to Ricardo*s law of rent, Carey charged i that the richer soils are the ones that remain unoccupied or the last to be occupied. Consequently, an increase in population "makes the food come from the richer soils, with constant increase in the return to labor; whereas depopulation drives men back to the poorer ones, with con stant decline in the ability to obtain the necessary 102 supplies of food and clothing." Henry George1s theory was midway between the opti- ■ mists and the socialists. In harmony with the optimists, he regarded an increase in population as identical with ; an increase in wealth and prosperity; and like Marx and i the socialists, "he was interested in population theory i I only because he had a particular theory of social reform [ to set forth and needed to refute Malthusfs theory of > population growth to make his single tax theory appear 103 : plausible." George argued that if his single tax pro posal were accepted and the economic rent was abolished [ ‘ "there would be no danger of over-population and poverty ; for an indefinite period."10^ 101 1.02 Whittaker, o£. cit.. p. 344. Ibid.. p. 34o. Thompson, o_p. cit.. p. 36. Loc. cit. 167 The same optimistic beliefs were developed and adhered to by most of the American School of Economists, as well as by economists all over the world who were so disturbed with the hopeless future predicted by the Mai- ; thusian thesis. As Bowen put it, the fin de siecle. or i | turn-of-the-century view, was that expressed by Wright of ; 1 i j 1 Cambridge: j ! The standard of living rose; the cost of J | living continued to fall, and man's conquest ; over nature seemed well-nigh complete. Then it was that, in spite of the warning voices of Mill and Jevons, the progress of the human race towards material and spiritual perfection , was generally believed, in Western Europe, to be continuous and inevitable-. Malthus, with I his Principles of Population, and Ricardo with _ | his Law of Diminishing Returns were discredited. j The socialists. In describing the Essay. Marx re marked, MIn this work, Malthus finally discovers, with the I help of Sismondi, the beautiful Trinity of capitalistic ! j production— over-production, over-population, and over- J consumption— three very delicate monsters indeed."'*'^ ; That it would be disastrous for the socialistic i i arguments to accept the principle of population as a 105 Ezra Bowen, An Hypothesis of Population Growth , (New York: Columbia University Press, 1931;, p. 50. Karl Marx, Das Capital (Vol. II, as translated . from the third German edition by Samuel Moore and Edward- i Aveling; New York: The Humbolt Publishing Company, 1S90), footnote, p. 399. 16$ natural law, did not escape the intelligence of the socialists. They wasted no-time in attacking it. Accord ing to Proudhon, "La theorie de Malthus, cTest la theorie de lfassassinat politique, de ltassassinat par philanthro pic, pour 1*amour de Dieu."10^ Marxfs criticism, which was labelled by Bonar as neither decent nor true, was much stronger in language. In essence, it was based on his theory of capital accumulation. With such accumula tion, there is a tendency "for a qualitative change in the proportion between fixed capital,such as machinery, and the circulating which is paid in wages." In the words of Marx, "the progress of accumulation brings with it a rela- tive decrease of the variable component of capitaf'*” ahd a relative increase in its constant component .”-*-09 jn other words, it is the process of capital accumulation which has within it the seeds of over-production, since such accumu- lation can only result in "the progressive production of a population which, in relation to capital, is a surplus or superfluity."110 10? Carr-Saunders, ojc. cit., p. 192. Bonar, o£. cit., footnote p. 391. 109 110 Ibid., p. 3$$. Loc. cit. 169 : Rationality and the Birth Experiences. ! Whethervconsciously or unconsciously, the post al althusian debateg„,g,.ar-y.eil„the pur pose of^emphasizing the ■ socio-economic conflict that existed throughout the medie-j I val era, as well as the necessity of finding an adequate i ; solution for it. Population increase was progressing at a| | much higher rate than that consistent with the point of ; maximum economic satisfactions, and__ "natural jibstention, ” j as the only allowed means of checking it, was incapable | of doing so effectively. ! Almost immediately, and without any preconceived idea as to why, the birth experiences of most Western and Northern European countries started to decline. The de cline did not commence at the same time in the different countries. France, about the time of the French Revolu tion, and the United States, as early as 1800, seem to have pioneered this downward trend and, in the case of France, to have spread it over the remainder of Europe. Slowly but surely, the trend in the other countries began to follow suit. In England, the birth rate dropped from J 35 per 1000 in 1876-1880 to a low of 14*4 per 1000 in 1933. 111 A similar drop from 39*2 to 14*7 per 1000 was also 111 R. R. Kuczynski, The Balance of Births and Deaths (New York: The Macmillan Company, 1928}, pp. 6-7• 170 experienced by Germany. All in all, Kuczynski stated that "the average birth rate for Western and Northern Europe dropped from about 33 per 1000 in 1B76-1GGO to about 17 per 1000 in the 1930*s."112 j This drop in the birth experiences obviously gave ; a sense of- reality to the "natural theories" of population ; that^ believed in the tendency of tha.._hi ra.t^-.fc,Qw^j-noup..at . higher and higher le.v&ls^f...^J Qucjjo^^'C^n-Qgtlc--development~;''- I To argue this point solely on the basis of inherent physi- i cal qualities as Sadler, Spencer, Doubleday, and others did,^^ was to commit the same old confusion as to the distinction between the animalistic and the cultural as pects of human behavior. If human behavior were solely determined by physical inclinations, the "natural the orists" would be hard pressed to explain why the natality experiences -did not start to fall before the spread of Malthusianism* when the socio-economic progress had been going on for at least three centuries. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ i 112 i R. R. Kuczynski, The Measurement of Population Growth (New York: Oxford University Press, 1936), p. 215. The countries included are: Belgium, Denmark, British Isles, Erie, France, Germany, Holland, Norway, Sweden and Switzer land. 113 More recently the same argument was presented by Josue de Castro, The Geography of Hunger (Boston: Little Brown and Company, 1952)• 171 A more7logical explanation, however, might be found in the effect of the Malthusian "warning™ on the cul tural pattern of human behavior. The inherent conflict between the socio-economic interests of society and the i ritualistic attitude of the medieval era was clearly but | fatalistically exposed by Malthus. To less fatalistic thinkers, the way out of the dilemma should have been more clear. If there had been no inclination to make use of j i the primitive practices of abortion, infanticide, or the killing of the old and invalid, an undesirable growth of population could still have been checked through (1) a more thorough use of the Malthusian-Christian policy of "natural abstention," and/or (2) the use of the neo- Malthusian policy advocating ’ 'mechanical devices" and "contraceptions."^^ Since this last category was inac- ceptable to medieval Christian dogma, its utilization could have been possible only through the change of that Available studies seem to indicate that the possibility of using contraception as a measure of popu lation control was known among early societies. The fact that it was not used to any large extent until the 19th century indicates that their use was inacceptable to primitive and medieval patterns of demographic behavior. On this see: Herbert Aptekar, An.jea: Infanticide. Abortion, and Contraception in Savage Society (New York: ¥. Godwin, Inc.'i 1931) • Also, Norman E. Himes, Medieval History of Contraception (Baltimore: The Williams and Wilkins Company, 1936). 172 rigid dogma and/or the shift of human behavior itself from religious ritualism to individual rationality. ! On both counts, human demographic behavior may be ! ! ' said to have shifted from a medieval ritualistic pattern to a rational individualistic one. The essence of this ' ■ j shift was basically applicable to the attitude toward ; ; natality, with mortality held to the lowest possible level. : Instead of the supremacy of Christian ethics per se . the rational attitude came to consider the control of natality I as a means to an end which, in this case, was the maximi zation of socio-economic welfare. To achieve this end, ' such measures of population control as contraception were ■ considered "legitimate,” even if not exactly in harmony I with rigid Catholic dogma. This "legitimacy" was justified j on more than one basis. First, there was the shift of re- 1 ligious emphasis from the rigid interpretations of Catholic ; dogma to the more lenient attitude of the Protestant phil osophy. Second, there was the political individualism j ; permitted in the Christian teachings and intensified by j the competitive spirit characteristic of the Industrial j | Revolution and the development of the capitalistic system. i j Third, there was the expediency involved,^which was greatly 1 / ' enhanced by the post-Malthusian debates and the growing I ; awareness of the socio-economic conflict characteristic of j the medieval era. 173 To this shift in the demographic pattern of be havior, we thus owe the observed drop in the birth exper iences referred to above. As might be expected, this drop indicated that, allowing for a minimum possible mortality ; rate, the population size considered consistent with economic maximization necessitated a birth rate lower than ! i that experienced at the time. j J Rational Demographic Behavior and Population Forecasts. ! I Because of the practical value involved in the pre- ) diction of future trends in population changes, contempor- I ary demographic literature greatly emphasizes the necessity) for such accurate predictions as the goal of technical I demography. ^/ Methods of population forecasts. Modern literature dealing with future population forecasts may be divided into two main groups. The first includes the demographers who base their forecasts on the prediction that population growth follows a "natural” cycle. Most important of them j are Pearl and Gini. The other includes those who base ! | their predictions on the projection of past trends into the future, with adequate consideration for any foreseen changes in the main variables, namely, the birth rate, the death rate, and the rate of net migration. 174 A. The Cycle Theories "Growth occurs- in cycles. Within one and the same cycle, and in a spacially limited area or universe, growth in the first half of the cycle starts slowly but the abso- i lute increment per unit of time increases steadily until ( I the midpoint of the cycle is reached. After that point | the increment per unit of time becomes smaller until the 115 ! end of the cycle." ^ This, in the words of Pearl, is the ; essence of his cycle theory for growth, in general, and population growth, in particular. Adherents to cycle theories come mainly from the j mathematicians and biologists who found it difficult to i ■ j agree with the Malthusian concept of geometrical growth. • "The chief cycle theories have been based exclusively upon i * ! modern human populations or laboratory experiments with i 116 sub-human species." The best known of these theories j are those of Pearl and Gini, especially the first whose I theory came to be called the "Logistic Curve" of popula- : tion growth. 115 Raymond Pearl, The Biology of Population Growth (New York: Alfred A. Knopf, 1930}, pT 22. 116 Donald 0. Cowgill, "The Theory of Population Growth Cycles," The American Journal of Sociology. 55:163, September, 1949. 175 PearlTs views on population were most ably sum marized by Bowen in six main conclusions. ' He used PearlTs words for the most part as follows: First, that population grows in size according to the same mathematical law that individual animals and plants follow in the growth of their bodies in size. Second, that human population grows in size according to the same law as do the experi mental populations of lower organisms and in turn as do individual plants and animals in body size. Third, in the experiments and observations leading to these conclusions Pearl finds that individual plants and animals, including men, and colonies of living forms of whatever kind, follow a slanting !,S-shaped" curve of growth. Fourth, the rate of production or fertility is negatively correlated with density of population. Fifth, that (the) birthrate is negatively correlated with wealth (or positively correlated with poverty), and that the differential birth rate on this economic base constitutes one of the menacing features of human population growth, which, however, can possibly be met in some part by an entirely free dissemination of knowledge about birth control. Sixth, that the indirect psychological and social effects of relative poverty as contrasted with relative wealth express themselves definitely and clearly in the sexual activities of human beings, and through sexual activity to birth rates. * Bowen, op. pit., Chapter IV, pp. 64-70. The third conclusion is in Bowenfs words. The last three of these conclusions make it obvious] that Pearl might be classified in the same group as j Sadler, Doubleday, and (mainly) Spencer. But it was the j third of these conclusions that received by far the most j i attention. , ^ a+bt -1 1 Pearl’s mathematical curve of growth, P=K(l*e ) , \ now generally known as the logistic, was first stated in a! H g ■ paper published in 1920. "This was an independent dis-j covery of a function which much earlier (in 1 S 3 S ) had been j suggested by the Belgian mathematician, Verhulst, but which had remained, undoubtedly due to the absence of suf-j ficient reliable demographic data by which its validity 119 could be tested." 7 By using that curve in the interpre- ; tation of previous trends of population growth, Pearl and ] Reed found a fairly accurate correlation. "The marvel is not that the fit is bad, but that it is as good as it is, considering how world population estimates have been 1 !20 ! made." Encouraged by these correlations, Pearl went on ! 1 ' i 11^ R. Pearl and L. Reed, "On the Rate of Growth of ; the Population of the United States since 1790 and its I Mathematical Representation," Proceedings of the National Academy of Science. 1920. 119 Harold F. Dorn, "Pitfalls in Population Fore casts and Projections," Journal of the American Statistical Association. 3^:317, September, 1950. 120 Raymond Pearl, The Natural History of Popula tion (London: Oxford University Press, 1939), p* 257* 177 to fit his logistic curve to specific population data in an attempt to predict future trends. The results of these attempts at prediction seem to agree^with Cogwill’s conclusion regarding PearlTs cycle theory: So far, perhaps, Pearl is on safe ground. It is when he sets forth identical explana tions for these cycles, human and subhuman, that he errs.121 Another type of cyclical theory is that of Corrado Gini, who divided population theories into "theories of the geometric increase of population" and "theories of the cyclical rise and fall of population." He declared: I have been, and I am, a convinced supporter of the theory of cyclical rise and fall of population, and for the past twenty years and more I have tried to collect facts and argu ments in its s u p p o r t .I22 According to Gini, each society has a demographic metabolism which is similar to the organic metabolism of the individual. This demographic metabolism "differs in intensity and in kind at the various stages of growth of the population."123 The reasons for this difference are 1 biological as well as social and economic. It results 121 Cowgill, ojD. cit.. p. 164♦ 122 ' ' Corrado Gini, Population (Chicago: The Univer sity of Chicago Press, 1930), p. 4- 123 Ibid.. p. 20. . 124 The emphasis is mainly on biological, Ibid., p. 21. 178 in the expansion of the lower and younger strata of human beings, and in the slow growth and decline of the higher and older ones. It is the main cause for a population life-cycle characterized by an early period of rapid growth, a period of maturity and stability, and>finally a period of decline and cessation. B. Projection as a Basis for Forecasts In the short run, the most logical basis for fore casting future populations is that of present conditions and past known trends. In the words of Notenstein: j I The general principle on which population projections are constructed is simple enough. j It is only necessary to advance the population reported at the last census appropriately in age, substracting estimated deaths and adding estimated births . . . When, as here, migration is ruled out by assumption, the validity of the results turns on the accuracy of the basic census data and on the validity of the estimates of fertility and mortality.125 The simplicity of tiiis method hides behind it grave j statistical difficulties and complications. The first, • and most serious, of these complications arises from the attempt to distinguish between the trends that ought to be projected and those that ought not. It has been recognized 1 2^ J Frank W. Notestein and others, The Future Population of the Soviet Union (Geneva: League of Nations, 1944), p. 21. 179 for a long time that crude birth and death rates were such poor indicators of trends as to invalidate any fore casts based on them. Rates were, therefore, standardized for both age and sex. This was not enough, and new measures were called for. In the development of these new measures two main purposes were kept in mind: "(a) to | rule out adventitious conditions which are temporarily | affecting natality, mortality, and natural increase; (b) to distinguish long-run changes in natality, mortality, [ and natural increase from changes that are short-run or 126 temporary." The most advanced of these measures are those attached to the net reproduction rate and the stable 127 population concept. Another grave difficulty in forecasting by pro jections is that connected with judgments and evaluations. As expressed in a recent report, "The projections for a certain year cannot be based on a mechanical exterpolatio n of past trends. The determination of each value requires some degree of judgment." It is in the formulation 126 J.-J. Spengler, "Population Theory," in Bernard Haley, editor, A Survey of Contemporary Economics. Vol. II (Homewood: Richard D. Irwin, Inc., 1953), p. $5• 127 Thompson, Population Problems (New York: McGraw-Hill Book Company, Inc.,19537, pp. 149-156. Julius Isaac, The Effect of European Migration on the Economy of Sending and Receiving Countries (The Hague: Research Group for European Migration Problems, 1953), p. 26. ISO , of these judgments that the a priori biases of the pro jector, as well as the conditions of his social environ ment, are apt to be revealed. Whether they be optimistic s or pessimistic, he is liable to follow suit. j ! ■ i 1 Population forecasts in the light of demographic j rational behavior. In both cases, population forecasts according to the previous methods assume a certain j * ! rigidity on the part' of human demographic action. Whether! this rigidity is the result of preconceived S-shaped cycle ! or an assumed continuity of past trends, it is, neverthe less, greatly misleading when applied to patterns of ! 129 1 behavior dominated by rational action. Such rational- ; ity is not based on a blind continuity of any aspect of I human action but, basically, on the attempt of human 1 beings to achieve specific ends through available means. ! On the assumption which we consider to be very near the | ! truth, that the end pursued is that of the maximization of ; * ^ ' economic welfare in its widest sense, the main question in | ! this case becomes: How could this end be achieved and what 1 is the population size consistent with the point of i ^ 9 To summarize the opinions of many recent demog- : raphers Spengler, who had many forecasts himself,admitted j "that the'Til'story of population forecasts has been, on the .whole a history of failure." Spengler. op. cit.; p. $5. ! For cr,iticism of population forecasts see: Dorn, op. cit.; i I and Joseph~S. DavisT^Our^AmazingPopulation Upsurge," 1 Journal of Farm Economics (Proceedings number),November, L 194.9 •_______r _ . . ............................ ...... ............ 131 maximization? If demographers, considering all socio economic variables involved, could ascertain scientifically this population size or could anticipate what the public’s answer to this main question would be, they would then be in a fairly good position to forecast, everything else j ■ remaining constant, the future size of a specific popula- ; I tion, as well as the trends of different demographic j j variables to be expected for the achievement of that size, j I ! This statement, to a great extent, may^explain the ; dismal experiences of population forecasts in recent years. Against all expectations as to the continuity of the drop in the birth experiences, the most spectacular j i ; event that occurred to fertility in the last two decades | ■ was to find the trend reversing itself and increasing sub- | ^ stantiaily in most of the countries which originally ! initiated the drop. Table I presents the yearly rates ‘ for some of the countries in which this upward trend has 1 been observed. The reversal of the trend is most profound in the cases of the United States, Australia, and New j : Zealand. Without anticipating our argument, we may remark j ! that these same countries have experienced a relatively i j continuous trend of economic prosperity both during and j after the second world war. As for the remaining countries I ' in which economic conditions have been particularly below par, because of war destruction and the total readjustment TABLE I RECENT TRENDS OF THE CRUDE BIRTH RATES IN SOME SELECTED COUNTRIES 1930-1951 Year United England Sweden Japan Australia New Zealand France States and Wales 1930 13.9 16.3 15.4 32.4 19.9 13.3 13.2 1931 13.0 15.3 14.3 32.2 13.2 13.5 17.7 1932 17.4 15.3 14.5 32.9 16.9 17.1 17.5 1933 16.6 14.4 ' 13.7 31.5 16.3 16.6 16.4 1934 17.2 14.3 13.7 30.0 16.4 16.5 16.4 1935 16.9 14.7 13.3 31.7 16.5 16.2 15.5 1936 16.7 14.3 14.2. 30.0 17.1 16.6 15.3 1937 17.1 14.9 14.4 30.3 17.4 17.3 15.0 1933 r 17.6 15.1 14«9 27.1 17.4 17.9 14.9 1939 ' 17.3 14.3 15.4 26.6 17.6 13.7 14.3 1940 17.9 14.1 15.1 29.4 17.9 21.2 14.0 1941 '13.3 13.9 15.6 31.1 13.9 22.3 13.4 1942 20.3 13.6 17.7 30.3 19.0 21.7 14-3 1943 21.5 16.2 19.3 30.3 20.6 19.7 15.9 1944 20.2 17.7 20.6 29.2 21.0 21.6 16.4 1945 19.5 15.9 20.4 23.2 21.7 23.2 16.5 1946' 23.3 19.2 19.7 25.3 23.6 25.2 20.3 1947 '25.7 20.5 13.9 34.3 24.1 26.4 21.3 194& 24.1 17.3 13.4 33.7 23.1 25.5 21.0 1949 23.9 16.7 17.4 32.3 22.9 24.9 20.9 1950 23.5 15.9 16.4 >23.2 125.6 r23 - 3 ( 24.6 * 24.4 20.5 1951 f 24.5 15.5 15.6 »22.9 19.4 Source: United Nations, Demographic Yearbook, 1951-1952. Z$T 183 of the international economic picture, the level of the birth rate, after a slight rise at the end of the 1930*s, experienced an expected drop due to war conditions,fol lowed by a considerable rise immediately after the war and finally a slow downward trend that continued until 1951. i j SUMMARY I I I i Actual patterns of demographic behavior are the net | result of three basic types of action: (1) the "animal istic” type, based on the physiological drives and re sponses of the human organism; (2) the "ritualistic" type, ; based on the blind adherence to social customs and regu lations; and (3) the "rational" type, based on human at tempts to achieve specific ends through means among those available to the actor. In the realm of rational action, it is a fair as sumption to say that man is always striving toward the i maximization of economic welfare (in its wider sense). Demographically, this maximization necessitates a certain i degree of control of the population size. Since, in the state of nature, human fecundity represents such a high level of growth potential, this control can only take the form of attempting to restrict the full expression of human fecundity. In practical experiences, these attempts 134 face two basic difficulties. On one hand, there is the I intensity of the physiological drives and responses under- | lying all animalistic action. On the other, there is the i ! body of social customs and regulations prevailing in the , different societies to which ritualistic action is supposed; • to adhere. With due consideration of these difficulties, ! | i the alternative measures utilized in the control of the j . - ! • . j ' population size.— natural abstention, mechanical devices j for the control of natality, and such practices as abor tion, infanticide, and the killing of the old and invalid— represent different degrees of effectiveness. Unfortu nately from the animalistic viewpoint, the most effective of these-measures in the control of the population size j i are usually the same ones either completely forbidden or disapproved of .by social customs and regulations. Not- ,1« . , withstanding this conflict, however, the measures of con- t . ■ | trol utilized by any one society at any one time represent ( i ' | a specific degree of effectiveness. Where this degree i falls short of that amount necessary for the maximization j j of economic welfare, the objective of economic maximiza- ! tion per se becomes inconsistent with any rational action i possible at the time and the type of population changes t | prevailing becomes mainly that of the "semi-controlled1 1 j rather than the "controlled" category. Where the degree : of effectiveness is relatively high enough for the purpose I 135 of economic maximization, such maximization becomes the objective pursued in rational action and the population changes become mainly one of the "controlled" rather than the "semi-controlled" category. havior may be divided into three distinct the primitive, the medieval, and the rational. In the primitive ritualism was supposed to adhere, however, did , allow for the utilization of measures of population con- ; trol, such as abortion, infanticide, and the killing of : the old and invalid, which were of unlimited effectiveness. The concept of "controlled" population changes was thus ( consistent with the primitive pattern of demographic j behavior,since the effectiveness of the utilized measures j of population control was high enough to achieve the popu lation size considered consistent with the point of econ- ■ omic maximization,once it has been decided upon. In the medieval pattern of demographic behavior, religious ritualism was the dominant type of action. According to this pattern, the only measure of population control permitted was that of natural abstention. Since j it was based on the subjugation of animalistic action j this relationship just referred to, human From the historical standpoint, and primitive era human demographic behavior was overwhelm- , ingly ritualistic. The customs and regulations to which 186 with its underlying physiological drives and responses, this measure of natural abstention could only be limited i in effectiveness. Unless the population size considered | consistent with the point of maximization was large enough! i 1 for natural abstention to achieve without much hardship, ! : rational action under the medieval pattern of demographic behavior could not possibly pursue economic maximization ; | j as its objective and settle for a "semi-controlled” type i ■ ! ! of population changes. I I Finally, the rational pattern of demographic be- | havior is based on the acceptance, along with natural j abstention, of such mechanical devices for the control of j j natality as sterilization and contraception. Thanks ■ mainly to the .Malthus ian. .wr it ings_.. and the post-Malthusian debates, this pattern represents a reaction against the socio-economic consequences of medieval religious ritual- | ism. Since the dogma underlying such ritualism could not i i 1 be changed to any considerable extent, the interpretations j ’ of such dogma were the ones that underwent the change, so as to be consistent with the objectives of rational action.] ; Thus, for the first time in demographic behavior, we find j rationality dominating ritualism in the determination of i | outward action. Economic maximization as an objective of I t. 187 demographic action was thus made possible and the popu lation changes resulting from the rational pattern became mainly of the "controlled’ 1 category. CHAPTER V ECONOMIC VARIABLES AND SEMI-CONTROLLED CHANGES I Within the "semi-controlled" category of population! changes, human demographic action is predominantly "animal istic” and "ritualistic” in nature. While always in ex- | i ■ v ! istence, rational action may even dominate among some j 1 ' ; socio-economic classes. The over-all pattern, however, is subordinate due to the relative ineffectiveness of the socially-allowed measures of population control to restrict human fecundity to the level necessary for the achievement of economic maximization. If we take as our standard the population size considered consistent with economic maxim ization, the ”semi-controlled” category of population changes may thus be described as continuously suffering from an overgrowth of population. Under these circumstances, the relationship of economic variables to the "semi-controlled" category of Throughout most of this study, our unit of analysis is the "society." Differences among societies in demographic behavior, however, may be found to be greatly similar to those existing within each society among its socio-economic classes. While the pattern of behavior of any society as a whole may be classified as predominantly ritualistic, the behavior of some of its socio-economic classes can still be rational. 169 population changes may be considered from two points of view. On one hand, there is the negative effect of these ' variables in checking the persistent overgrowth of popu lation referred to above. On the other, there is the * ; positive effect resulting from the economic variables t j acting as an incentive or deterrent for the members of a ? | society to reproduce themselves. j Nothing much can be added to what Malthus and otheis j I have already made clear regarding the first of these rela-? i I : tionships. With everything else constant, an economy would achieve maximum efficiency at a specific size of the i population. Beyond that size, persistent population pres- | sure would initiate rising trends of inefficiency and i : misery which could be expected to continue until the max- | imum population size had been achieved. After the maximum : all further pressure would be reflected in rising trends of mortality.^ The distinction between natural deaths and those resulting from the shortage of economic necessities is re flected in most studies on the causes of death. ”Faulty as* may be the statistics on the causes of death, they never- * theless suffice to demonstrate the different patterns of ' »how people die* in areas having high mortality as compared f with areas having low mortality. Infectious and parasitic diseases, . . . diarrhea and enteritis, and puerperal in fections are the leading causes of death in areas where general mortality is high. In contrast,in areas where gen eral mortality is low, degenerative diseases,. . . cancer and accident take the lead among the causes of death.” Quoted from United Nations, ”Recent Mortality Trends," Demographic Yearbook. 1951> Chapter I, pp. 15-16. 19 0 It is upon the second of these relationships that we plan to concentrate in this chapter. In considering the three types of action involved in human demographic behavior, the subject matter may be classified in answer , to three main questions: (1) How do economic variables affect “animalistic*1 action? (2).How do economic variables! i affect “ritualistic** action? (3) How do economic variables ECONOMIC VARIABLES AND “ANIMALISTIC” ACTION Reduced to their animalistic aspects of behavior, quantitative changes in population become a function of pure physiological qualities of the human organism, such as fecundity and the natural length of life-expectancy. Within a pure “animalistic” type of behavior, economic variables can affect population changes only through their effect on these qualities. Economic Variables and Human Fecundity. Human fecundity refers to the physiological “potential” of human beings to reproduce themselves. Dif ferences in such potential may be referred to either as differences in fecundity or as differences in the rate of sterility prevailing— the second being the more common of the two usages. In this sense, we make the distinction affect “rational" action? 191 , between total sterility, where the capacity to reproduce is nil, and partial sterility, where that capacity is 1 lower than any other taken to be a norm. I The greatest obstacle in determining the effect of economic variables on human fecundity or sterility is the fact that changes in the latter are extremely difficult, ; if,not impossible to determine. Basically, there is no ! standard available by which the pure expression of these physiological qualities could be measured or compared. ; Actual human experiences are inadequate as a standard, since they include other types of action beside the "animalistic.1 1 The existence of these other types makes j it impossible to correlate changes in fertility, particu- ! larly downward:,., with changes in fecundity. Theories based ' on any such correlation, as those of Spencer and others, | may be true but the evidence is far from being conclusive, i In the face of such an obstacle, two other ap proaches have been utilized in determining the effect of i socio-economic factors on human fecundity. On one hand, j experiments on lower animals and flies have been re- ! 3 sorted to. On the basis of such experiments, Pearl sug- i gested that approximately 10 per cent of the total couples i i ' i-• ..I. -..I i — .... 3 | Raymond Pearl, The Natural History of Population I (London: Oxford University Press, 1939), P» 29U. 19 2 actively engaged in the process of reproduction are com pletely sterile. Experiments of the same sort also serve as the backbone of De Castrofs most recent attempt at re viving the theories of Sadler, Doubleday, and Spencer. In referring to the work of Slonaker, de Castro stated the relationship between fecundity and a protein diet was as follows: Slonaker observed that when male rats received a diet with only 10 per cent of its total calories in proteins, 5 per cent of them were sterile; when the protein con tent of the ration was increased to IS per cent and 22 per cent, the sterility increased to 22 per cent and 40 per cent respectively. With females, the same increase of protein in the diet lifted the sterility rate from 6 per , cent to 23 per cent and 3& per cent respectively. It should be emphasized that, these and other exper iments can only be relevant to human fecundity under two assumptions. First, it must be assumed that the fecundity and fertility of these animals are either equal or con stitute a fixed ratio to each other. Second, it must be assumed that fecundity and its factors are similar for all | animals including human beings. The second approach consists of the medical re searches meant to establish the basic causes of human sterility and, consequently, if possible, the social factors 4 Josue de Castro, The Geography of Hunger (Boston: Little, Brown and Company,, 1952), p. 70. 193 affecting these causes. One list of these causes included: i : 1. Blockage of the female Fallopian tubes; j 2. Deficiencies in the male spermatoza; I I 3« Infection of the cervix; i j 4. The failure of the ovary to produce and | discharge a normal egg; and i 5 | 5. Deficient thyroid functions. f Those who argue that civilization and economic de- : velopment are detrimental to fecundity base their argument on two grounds: (a) that most of these deficiencies, es- i pecially the first and the third, are the result of dis- ' eases and diseases are mainly characteristic of our modern j societies; and (b) that the cultural and social life asso- I : ciated with industrial societies, such as mental strain, l f indoor life, the use of soap, etc., are conducive, through their effect on factors 2, 4, and 5 above, to a decline in the reproductive capacities of human beings.^ Against these arguments, Carr-Saunders pointed out that the "'remarkable improvement in health and vigour, which has a}.*so been shared by all classes, might be thought 5 Grace Naismith, ’ "What We Know About Sterility," reprint from Cosmopolitan Magazine. October, 1945. ! 6 On some of these hypotheses, see the United | Nations, 0£. cit., p. 75- 194 to tell the other way."^ Also, it might be observed that diseases, at least at the present time, are not restricted to industrial societies. Even if this were true, the ad-^ vances made in curing these diseases might more than counterbalance their initial effects. "The complexity of the problem,” stated Lorimer and ! Osborn, "and the paucity of controlled data, however, seem ! j to make it impossible to come to an exact conclusion on ■ B j this subject at present." Economic Variables and the Length of Life Expectancy. The direct correlation between economic variables ; and the length of the life expectancy (inverse correlation with mortality experiences) has already been referred to i above. Unlike the case with fecundity, this correlation , is quite certain and up to a point a truism. J Wherever data are available for showing I the relationship between mortality rates and certain indices of economic and social con ditions, they indicate that high mortality is associated with low per eapita income, high rates of illiteracy, a large proportion of males engaged in agriculture, and a large number of persons per physician.“ 7 A. M. Carr-Saunders, World Population (Oxford: The Clarendon Press, 1936), p. 101. $ J. Lorimer and F. Osborn, Dynamics of Population (New York: The Macmillan Company, 1934), p. 2^4. 9 United Nations, 0£. cit.. p. 49. 195 This is most evident in the case of infant mor- , tality. In this connection an impressive correlation was t J found between infant mortality in Stockholm (1918-1922) and the level of the father*s income. 10 Father * s Income I -4,000 Kr. 19,000 Krt i * • Infant mortality rate ; per 1000 48.9 14-3 Neo-Natal rate 24.0 11.4 Rate during second through twelfth month 24.9 2.9 Still births per 1000 live births 17.5 8.0 It may also be found in the mortality experiences i i and the average expectations of life prevailing among the ! different regions of the world. If we may consider, what i , is only partly true, that the trends for the United States : represent the most favorable conditions for the expecta- i | tion of life, it is not unreasonable, then, to assume that j j an average expectation of life of seventy years would I j represent the natural conditions of a society in which ■ every one is well equipped with economic necessities. The ! crude birth rate for a society with an expectation of life at birth equal to seventy years is 14.3 per 1000.^ 10 For this and other studies of the same correla tion, see Ibid., pp. 61-66. 1 1 The crude death rate for a stationary population is the reciprocal of the average expectation of life. 196 Table II indicates the crude death rates for the major areas of the world in 1947* Those areas with a death 1 rate of lesssthan 15 per 1000 indicate a favorable age , distribution. The majority of the regions, however, in cluding about 75 per cent,of the world population are much; i . ! above 15, which brings the world average death rate for 1947 to between 22 and 25 per 1000. The difference be- i ! ! tween the actual death rates and the minimum possible may j then be regarded as resulting from economic deficiencies. ECONOMIC VARIABLES AND "RITUALISTIC” ACTION "Ritualism” is the most influential of the three types of action involved in the semi-controlled category t of population changes. Such a category of changes is , characteristic of societies in which the measures of popu- ; i j lation control are relatively ineffective in the restric- - tion of human fecundity to the level consistent with ! economic maximization. This ineffectiveness, in turn, is j ! only possible under two conditions. First, prevailing j social customs and institutions must be of the type that i . either forbids completely or merely discourages the use of I more effective measures of population control. Second, I ■ and basically, human behavior must be predominantly of the ! type that tends to act ritualistically according to pre- I • i | vailing social customs and institutions, rather than TABLE II ESTIMATED DEATH RATES FOR REGIONS OF THE WORLD, 1947. (Rate per 1000) Region Rate Region Rate World Total Africa America 22-25 25-30 Europe (including Asiatic U.S.S.R.) U.S. & Canada 10 North-West-Central Latin America 17 Europe 12 Asia (excluding Asiatic U.S.S.R.) Southern Europe Eastern Europe and 12 Near East 30-35 Asiatic U.S.S.R. IS South Central Asia 25-30 Oceania 12 Japan Remaining Far East 15 30-35 ■ - Source: United. Nations. Demographic Yearbook. 1949-1950. Table C, p. 14* 196 rationally in pursuance of specific goals and objectives. It Is to the variables underlying and affecting these two basic "conditions” that social scientists have mainly to I turn for an interpretation of much of human behavior in t general and demographic behavior in particular. ; i i It is extremely difficult to determine the role | played by economic variables in (1) the development of j social customs and institutions, and (2) human preference either to act rationally or ritualistically. This dif ficulty is not only restricted to the economic variables involved, but applies just as well to any of the other non-economic variables underlying and affecting cultural patterns. Basically, it may be explained in terms of the extreme complexity of such patterns and the inability to separate the effect of any one variable from that of the others. The difficulty, moreover, has been greatly in tensified by the supernatural character attributed to some of the social institutions and, consequently, by the i rigidity generally associated with such religious sanc tioning. In the face of such difficulties, the first reaction of the social scientists was to deal with the changes in institutional and behavioral patterns as a unit governed and controlled by natural "laws." 199 The dominant current of the scientific, philosophical, social and humanistic thought of the eighteenth and nineteenth centuries was a firm belief in the existence of perpetual linear trends in the change of sociocultural phenomena. The central content of the historical process of mankind was conceived as an unfolding and ever fuller realization of this "trend" of progress and evolution,” of steady "historical tendencies" and of "the .law of sociocultural I development." Some~delineated these trends as unilinear, others as "spiral,” still others as "oscilating and branching," with minor deviations and temporary regressions;.nevertheless in all these varieties the conception of a linear direc tion of the central sociocultural process remained intact. Consequently the main ambition and central preoccupation of scientific, philosophical, social and humanistic thinkers in these centuries consisted in the discovery and formulation of these "eternal laws of progress and evolution," and in an elaboration of the main stages or phases through which the trend passes as it comes to fuller realization in the course of time. ^ In due time, however, these linear trends lost much > of their prestige. On logical as well as factual grounds, ! they were found most inadequate in the interpretation and I forecasting of sociocultural changes.^ Particularly, | these changes were not found to follow such "stages" of i ; development as devised, for example, by Kant, Hegel, and i Comte in social philosophy; Turgot, Condorcet, and Saint « i : Simon in sociology; List, Hildebrand, Buecher, Schmoller, | pitrim A. Sorokin, "Sociocultural Dynamics and Evolution," in George Gurvitch andvWilbert E. Moore, j editors, Twentieth Century Sociology (New York: The ! Philosophical Library, 1945), p. 97. j ^ On these criticisms see Ibid., pp. 104-106. I L 200 and Marx in economics. The social investigators, "having found the linear sort of social dynamics little produc tive,1 * were thus obliged to shift their attention from dealing with changes in sociocultural patterns as a whole to the more specialized study of the different aspects of these changes as related to specific "factor variables.” All such studies try to elucidate the constant role of each of these "factor- variables” in the behavior of men, in social structure.and cultural life; the constant functions of each of these factors; and finally how and why these constant factors themselves fluctuate and change. The implications of this new approach have not yet been investigated to the limit. It is still early to judge whether this ”piece-meal" method is more or less productive than the linear o n e . -*-5 Without being biased either way, we may nevertheless remark that such an ap proach has made it possible for the different social scientists to study sociocultural dynamics, each from his own point of view. 14 Ibid.. p. 108. 15 "These studies,” wrote Sorokin, "have yielded a large number of formulas of causal-functional or meaning ful-causal uniformities repeated in the dynamics of various societies and in the same society at different periods. They have also tested many generalizations of this kind formulated before and have either found them spurious altogether or in need of serious correction." Ibid.. p. 109. 201 Thus, to go back to the effect of economic "factor- ! variables” on sociocultural dynamics, we may repeat that this effect is still far from being fully understood.0 The question of what determines the development of social j j institutions and/or human preferences to act rationally or j | ritualistically is still a mystery from the economic view- j | point. An answer to the question may, nevertheless, be s approximated through a sort of institutional/theoretical f investigation. This answer we divide into two sections dealing with the effect of (1) differences in economic organization on sociocultural behavior, and {2) changes in the national income on sociocultural behavior.-*-7 J Economic Organization and Sociocultural Behavior. ! The organization of a society, economic or other- | "I d j wise, may be expected to exert a marked influence on the pattern of human behavior adopted on an individual as well if xu In this connection, the publication of the j Chicago University Research Center, Economic Development I £fld Cultural Change. should be highly recommended. | i i 17 Because of the "rigidity” associated with the i religious attitude underlying demographic action, the an alysis of sociocultural behavior would be mainly influenced by human preferences to act ritualistically or rationally. In a "police" state, for example, individual action would be expected, and if possible forced, to follow ritualistic trends as based on governmental laws and regulations. 202 as an overall social level. ) 1 In its widest sense, "economic organization" as ! ! such allows for a multitude of different classifications. s : i ; The sociocultural aspects of all these classifications j i * ! ! are yet to be fully investigated. Available institutional/j statistical studies, however, have indicated the existence ' of a fairly stable correlation between sociocultural be havior and some of these economic classifications. Most conspicuous of these correlations are those indicated to j exist between sociocultural behavior and the rural-urban classification on one hand, and sociocultural behavior I and the different socio-economic classes on the other. Sociocultural behavior and the rural-urban classification. "The rural-urban differential," wrote Lorimer and Osburn, "may truly be characterized as the most conspicuous phenomenon in the demographic situation IQ j of the United States at the present time." Unless they j are the result of physiological differences for which there J is, up till now, no proof, this differential indicates j i 1 J differences in cultural behavior among rural as compared | to urban societies. Demographically, they are mainly represented by a higher set of fertility rates among the 19 Lorimer and Osborn, ojd. cit. . p. 30. 203 20 former than the latter. For an explanation of this differential, we have to go back to the three aspects of human behavior. "Animalistically" there seems to be no reason to believe that rural demographic behavior would differ to any great extent from that of the urban. Demographic attitudes as ; based on religious beliefs may thus only arise from j either one of two alternatives: either that the population j size considered consistent with economic maximization is persistently higher in the rural than in the urban societies, or that the pattern of behavior of the rural society is relatively more ritualistic than that of the urban. Prevailing theories on the rural-urban differential I seem to emphasize the first of these alternatives. Chil dren, the demographers point out, are more of an economic asset in the country as compared to the city. The cost of rearing children in the country is also recognized to be ; cheaper than that in the city. The country people are thus pictured as rationally in favor of larger family j sizes and presumably of a higher fertility rate. 20Differences in mortality are not as conspicuous as those in fertility. Rural-urban differential in fertility also holds true at all levels of socio-economic classes. Lorimer and Osborn, op. cit., pp. 23-27; 160-165• Also, United Nations, op_. cit., pp. 62, 65-36. 204 While basically true, comparative differences in rational action cannot, by themselves, explain rural-urban differential since they lack the ’ ’persistence" character istic of the observed differences in the fertility exper- 21 iences. This differential, it is our hypothesis here, can mainly and more logically be explained through the second of the previous alternatives: that the pattern of ! i demographic behavior of rural societies is relatively ; more ritualistic than that of the urban. Since ritualism,; as still based on the religious attitudes and beliefs dominating the medieval pattern of behavior, is relatively less effective in its attempt at population control, dif ferences in its dominance between rural and urban societies can easily account for the persistently higher level of the fertility experiences of the former as compared with the latter. The question now is, what are the factors characteristic of rural societies which tend to emphasize 21 Most of the statistical studies available on rural-urban differential as well as on class differential are based either on one form or another of the birth rate or directly on the size of the families involved. This way, we may be justified in using both of these variables interchangeably in dealing with these differentials. How ever, a rationally desirable larger population is not enough by itself to explain a persistent trend of fertility experiences, unless this size of population in rural societies is itself increasing at a higher rate than that of the urban. 205 the animalistic and ritualistic aspects of the rural demographic behavior as compared with their counterpart in urban behavior? Contemporary findings of the social sciences are still far from explaining why any one pattern of behavior l is exactly what it is. In our case, however, two factors j 1 may be suggested hypothetically as possible causes for the relative overemphasis on the animalistic-ritualistic i aspects of rural demographic behavior. On one hand, there | is the closeness (proximity) of the rural population to the purely physiological aspects of the material universe. In their everyday life, they are closely in contact with such physiological functions as cultivation, breeding, milking, etc. By repetition, this physiological-animalism came to lose much of the impurity associated with it in urban societies. In rural societies, animalism as a basis for human behavior is more favorably looked upon. The rural people, on the other hand, are constantly I running practical risks against which the only insurance j is faith and religious conviction. Because their main concern is with natural forces which they can use but never control, farmers are always obsessed with fear of the unknown, for example, bad weather, harvest infection, shortage of water, etc. This fear, we suggest, tends to emphasize religious ritualism in the sociocultural 20 6 patterns of behavior of the rural societies. Reinforced by the favorable outlook granted the animalistic aspects of behavior, this ritualism may thus contribute, demo- graphically, toaa higher level of fertility experiences ! than that prevailing in the urban societies. | ! Sociocultural behavior and the different socio economic classes. Another aspect of "economic organiza tion” which has a bearing on the sociocultural demographic behavior is that of the different socio-economic classes both rural and urban. In terras of practical criteria, it is difficult to i define the concept of a socio-economic class inasmuch as "social classes do not exist in the sense of clear-cut, 22 accurately defined entities.” Available studies on the subject have made use of more than one criterion. One of the earliest of these studies made use of the number of persons per room, the cleanliness of the house, excreta disposal, and the supply of fresh milk.^ Hardly any of | 22 Frank ¥. Notestein, "The Differential Rate of Increase Among the Social Classes of the American Popula- | tion," Social Forces. 12:17, October, 1933. 23 Edgar Sydenstricker, "Economic Status and the Incidence of Illness," Hagerstown Morbidity Studies:A Study of Illness in a Typical Population Group. United States Treasury Department, Public Health Service., No. 10 (Wash ington, D.C.: Government Printing Office, 1930), pp.2-3. 207 these criteria are used now as a basis for social classi fication. Faced with the problem, Sydenstricker and Notestein made the following remark about differential fertility: i In view of the absence of information which would make possible an accurate differ- i entiation of certain income groups, the method 1 adopted was to differentiate only those broad and conventionally accepted social classes within which one expects to find a certain homogeneity in standards of education and achievement and the general social environment, but within which there undoubtedly exists.a substantial range of economic wellbeing. ^ These ”homogeneous groups” were still viewed differ ently by the different writers. The previous two authors, for example, based them on the occupation of the head of the family with the urban population divided into pro fessional men, businessmen, skilled workers, and unskilled workers; and the rural population into farm owners, farm 25 renters, and farm laborers. This classification was found most unsatisfactory by Kiser. ”It may be objected,” he warned, ”that occupation is only one of several cri- I teria of social class, that individuals of widely different' character may be found among the representatives of ^ Edgar Sydenstricker and Frank ¥, Notestein, differential Fertility According to Social Class,” Journal of the.American Statistical Association. 25:13, March, 1930. Loc. cit. 208 particular occupational groups, that the social class of the husband is not necessarily that of the wife, and that except in a rigidly stratified society, there is a con tinuous movement of individuals from one social class to another." He next discussed the use of a triple class- „ i ification as based on the occupation of the husband, the j educational level of the wife, and the cash income for the whole household. I j Whatever the criteria used, however, socio-economic classes have long been observed to differ in their fertil- 27 ity experiences and family sizes. With the exclusion of any physiological differences in fecundity, this differ ential can only result from differences in the socio cultural behavior. In the following analysis we suggest first to determine the exact nature of these sociocultural differences and second to analyze, if possible, the role 2^ Clyde V. Kiser, "Fertility of Social Classes in Various Types of Communities of the East North Central States in 1900," Journal of the American Statistical Association. 27:372, December, 1932. ! 2? For an accumulated bibliography of the studies 1 dealing with socio-economic group differential,see:Clyde V. Kiser, Group Differences in Urban Fertility (Baltimore: The Williams and Wilkins Company, 1942), pp. 274-77; Also, United Nations, The Determinants and Consequences of Popu lation Trends. 1953), PP* 85-91. 209 played by the different socio-economic criteria in af fecting and influencing these differences. As in the case of rural-urban differential, socio cultural class differential can be the result of either one or both of two alternatives: first, the result of differences as to the population size considered consistent! with economic maximization; and second, the result of I | differences in the cultural patterns of behavior of the different classes and the ratio of ritualism to rationality! prevailing in each. As a factor underlying class differential, the first of these alternatives can only apply to the limited role played by rationality in the semi-controlled category of population changes. The population size considered consistent with economic maximization is, in this case, a function of: (1) the level of income, (2) the relative value attributed to "parenthood” in relation to other human wants and desires at different levels of income, and (3) the advantages and disadvantages associated with having a , child at different levels of income.2^ All three of j these factors will be elaborated on in connection with 2$ It ..is quite difficult to separate the level of income from other socio-economic criteria associated with it. Factors 2 and 3 above can just as well be a function of occupation as of income. 210 the controlled category of population changes when rationality is assumed to be dominant. At this stage of | the analysis, nevertheless, it is only necessary to point i I out that assuming (a) the pattern of sociocultural demo- j ! graphic behavior to be constant, and (b) factors two and I 1 | three above to be constant,the population size considered I 1 consistent with economic maximization will be directly I related, at least in trend, to the level of income , forthcoming. The sociocultural pattern of behavior, however, is rarely the same among the different members of each society. In their demographic attitude, people differ in the evaluation of the different aspects and problems involved. As such, they reveal varying degrees of "demographic enlightenment" as based on: 1. An appreciation of the demographic conflict ' between the medieval pattern of religious ritualism and the immediate socio-economic interests of the family and i ; ! society. 1 I i 2. A tendency on the part of the individual to s i . | solve this conflict through the substitution of rational ! for ritualistic action. | As a first approximation, we can view these degrees ! of "enlightenment" as a continuous process (fa, f^, fc, i f^j, fe in Figure 1) ranging from a point of minimum FERTILITY EXPERIENCES MINIMUM ENLI GHTENMENT INTERMEDIATE 8TA8E8 O P ENLI8HTENMENT ____I MAXIMUM ENLIGHTENMENT { ____ h — STAGES OF DEMOGRAPHIC ENLIGHTENMENT / PERSONAL OR NATIONAL INCOME FIGURE I : f e r t il it y e x p e r ie n c e s at d if f e r e n t l e v e l s of INCOME AND DEMOGRAPHIC ENLIGHTENMENT 211 212 enlightenment (ritualism as high and rationality as low as possible) to a point of maximum enlightenment (rationality as high and ritualism as low as possible). At the point of minimum enlightenment, the fertility ex- j periences will be the highest possible in the light of human fecundity and the ritualistic attitude involved. - ‘ ! At and beyond the point of maximum enlightenment, the fer-j tility experiences will be mainly determined by the same | ! factors underlying and influencing rational action, that is,basically the level of income and individual preference between children and other economic goods and services. Between the two points, the fertility experiences will be, J I on the average, a function of the degree of enlightenment - I i I prevailing.£9 | Further, each degree of enlightenment referred to ! above actually includes a group or a class "within which there undoubtedly exists a substantial range of economic wellbeing." Within each of these groups, the degree of j 29 The nearest that demographic studies came to the classification of demographic behavior on the basis of the degree of enlightenment involved is the classification made in the Indianapolis Study of the sample surveyed into , the excess fertility group, the quasi-planned group, the number-planning group, and the number-and-spacing-planning ! group. For the definition of these groups, see: P. K. ; Whelpton and Clyde V. Kiser, "Social and Psychological | Factors Affecting Fertility." The Milbank Memorial Fund i Quarterly.9:211. April, 1949* i 213 . demographic enlightenment being the same, the fertility experiences will be basically a function of the level of income and directly related to it. On the average, and up to the point of maximum enlightenment, the fertility experiences of each group would still be lower than the i one preceding it and higher than the one succeeding it. i > Beyond the point of maximum enlightenment, the level of I j j fertility experiences will be solely a function of income j 1 and its associated factors to be dealt with later. f ! In Figure 1 we present this compound relationship. A, B, C, D, E, represent stages of demographic enlighten ment ranging from the lowest A to the highest E. fa, fj-,, fc, fjj, fe refer to the average fertility experiences at J the different stages of enlightenment. Within each stage J the fertility experiences of the members of the group aa, btf, cc, dd, and ee become mainly a function of the income of each. Beyond the point of maximum enlightenment,; J when no further change in the demographic pattern is j i I possible, the fertility experiences become solely a func- i 30 ' ! tion of the income forthcoming. i 30 For the concept of stages of demographic enlight- ienment, see: F.W. Notestein, "Class Differences in Fertil- ! ity,” Annals of the American Academy of Political and ' Social Sciences. "3-83:26-36." November, 1936; and J. W. Innes, I Class Differential Trends in England and Wales (Princeton: Princeton University Press, 1938). 214 For this diagram, it was necessary to assume that the stages of "demographic enlightenment" and the level; , of income (individual, group, or national) stand in a i fixed relationship to each other. Justification of this , assumption is given in the next section. However, it , ! ; ! should be made clear that while income is a basic factor i i | underlying "demographic enlightenment," it is not by all j ; means the only one. At the same level of income, other j socio-economic criteria, such as occupation of the head of the family, education of both husband and wife, employ- s ; ment of the wife, etc., have been observed to exert a controlling influence. Based on the occupation of the head of the family, for example, the ease of rural-urban differential has already been referred to. Clerical employees have also been observed to maintain a lower , i J level of fertility experiences than laborers. Explanations | of these and other differentials may differ. However, one i explanation may point to the fact that these "other" j : . - I 1 criteria of socio-economic classification are themselves, ! . at least on the average, directly related to income as a variable. While obviously a simplification on the compli- ; cated picture of practical experiences, this explanation, nevertheless, gives meaning and importance to the following , analysis concerning the relationship between income and sociocultural demographic behavior. 215 Changes in Income and Sociocultural Patterns of Behavior. The level of economic activities (income) affects the sociocultural patterns of human behavior in more than j one way. Indirectly, this effect is exerted through the 1 ■ different socio-economic institutions and organizations j I ; characteristic of different levels of national income. j j The known aspects of this relationship were dealt with in the previous section. More directly, however, it may be exerted through the application of a portion of the national income to the education of the members of the society in the best means of achieving their objectives. , For the accumulated value of this portion, we reserve the I name of “human capital.” ! As pointed out in Chapter II, “human capital” ; necessitates and constitutes an alternative for the utili zation of the savings of the individuals and/or the ! society. Assuming constant: (1) the propensity to save at i different levels of income; and (2) individual and social ! ! preference among the different alternatives for the util- j | ization of current savings^ the yearly accretion to "human J capital” would then be directly related to the prevailing level of personal national income. Assuming, furthermore, 31 For further analysis of these two assumptions, ; see Chapter VII. that all investment in "human capital" is of the same degree of efficiency in the enlightenment of the popula tion as to their immediate socio-economic interests and the best means of achieving them, it may then be stated I I that the level of "enlightenment" of human behavior gen- ■ I erally and demographic behavior particularly would be ; I directly related to the accumulated level of human capital j i I which, in turn, is directly related to the current levels ■ of personal and national income. In this connection two points should be made clear. On one hand, this last assumption is not exactly a simple one. The educational process and curricula adopted by any one society generally reflect the original cultural pattern of that society. If it was predominantly relig ious, for example, the emphasis in the educational curric ula would generally fall on the religious aspects and their dogmatic interpretation. Demographically, this may defeat the basic objectives of the educational process rather than enlighten the population as to the socio-economic problems involved in religious ritualism. On the other hand, the relation between income and cultural enlightenment does not easily lend itself to statistical verification. This effect we just referred to is generally of a long run nature (covering more than one generation). Those who make the money are not necessarily 217 , the same ones who benefit from it educationally. It is generally the younger generation of school age who should i ' be depended upon gradually to change the sociocultural | patterns of human society. ECONOMIC VARIABLES AND "RATIONAL” ACTION32 "The central fact— a fact beyond all question— is j i that in certain aspects and to certain degrees, under cer- i ; tain conditions, human action is rational."^ This is par-; ticularly true of the demographic patterns of behavior underlying the semi-controlled categories of population changes. Even though that rational action should be sub ordinate to the overall pattern, it would exert a notice able effect ’ ’under certain aspects and to certain degrees." This effect was revealed in the form of a correlation3^ 3 The basic relationship between economic variables? ' and rational demographic action may be found in the next i three chapters. This section is devoted to the exposition ! of relationships already observed statistically. , 3^ Talcott Parsons, The Structure of Social Action (New York: McGraw-Hill Book Company, Inc., 1937), p. 19« 34 On the statistical studies of this correlation, see: Dudl^- Kirk, "The Relation of Employment Levels to Births in Germany," Milbank Memorial Fund Quarterly. 20: 126-133, April, 1942; Virginia L. Galbraith and Dorothy S. Thomas, "Birth Rates and the Interwar Business Cycles," Journal of the American Statistical Association.36:465-76. December, 1941; and Dorothy S. Thomas, Social and Economic j Aspects of Swedish Population Movements. 1750-1933,(New ; York: The Macmillan Company, 1941)• 213 between the short run fluctuations of the demographic variables on one hand and a variety of economic criteria on the other. Since the customs and regulations of most modern societies forbid by law the wilful manipulation of the mortality experiences, this correlation would be main- ! ; I j ly applicable to fertility and its associate variables. j I • ! ! Demographically, and from a natality viewpoint, s ' this correlation indicates a rate of effectiveness in the control of population changes (fertility) that is directly related to the fluctuations in the economic activities of the society. As basically rational in nature, this cor relation may be expected to intensify with the relative ; i spread of rationality in the overall pattern of demographic 1 behavior. Thus, Dorothy Thomas found out in her study of I j the subject in 1925 that: ! ■ One point in evidence for a direct influ- j ence of the business cycle upon the birth rate | is the fact that, whereas the correlation between the marriage rate and the business i cycle has become weaker in the last two decades of this study, the correlation between the birth rate and the business cycle has tended to become steadily stronger, and attains its j maximum during the period 1895-1913* 1 The same trend was also indicated by Dudley Kirk in I his study of the correlation between employment levels 35 Dorothy Thomas, Social Aspects of the Business I Cycle (New York: Alfred A. Knopf, 1927), p* 9&* 219 and births in Germany. This chart also affords something of a test of the second hypothesis, namely, that the relationship between employment and births should have increased as fertility declined in time. The relationship in the early part of the period was somewhat tenuous, later increasing and rising to a rather im pressive association in the latter part.36 The spread of rationality seems also to have in fluenced the correlation between the economic and demo- ' graphic variables in another way. In such patterns of demographic behavior as those dominated by religious ritualism, emphasis in the deliberate manipulation of the birth experiences may be expected to fall on natural ab stention as a device for population control. Because of the social and moral necessity of "marriage” before any ’ children could be begotten, and because of the disfavor i with which religious teachings regard the use of any of the "mechanical" measures of control after marriage, this ; emphasis would be revealed in: j 1. A high correlation between economic variables I I and the marriage rate. r ' 2. A high correlation between the marriage rate ; and first births with nine months to a yearfs lag. 36 Kirk, op. cit.. p. 134. 220 That is, the correlation between economic variables and the birth experiences within a high level of religious ritualism is expected to be mainly indirect and the result of the high correlation between the economic variables and I i 37 the marriage rate. With the decline in religious ritual-^ ism and the spread of rationality, the emphasis in popula- | tion control shifted more and more to the use of meehanicai j devices. The correlation between economic variables and j birth experiences became, not only stronger, but also more • direct through the control of fertility per se rather than j indirectly through the control of the marriage rate (as pointed out in Thomas* quotation above). This stress of reasoning seems to corroborate Thomas’s hypothesis, as based on her statistical study of the subject. She found that her conclusions, suggested wthe interesting hypothesis that, whereas a business depression formerly led to 37 On the basis of statistics supplied by the Metro politan Life Insurance Company, as well as those accumu lated by the authors, Galbraith and Thomas gave the fol lowing statistical correlation for the United States in the interwar period: j Between business cycles and total births '*.79 to *.50. ' ” " ” t t marriages ,.545. “ ? » « first births .793 * ? marriage and first births .775 Galbraith and Thomas, op. cit.. pp. 470-72. I 221 j prudential restraint through abstention from marriage, it 1 now leads to a more widespread and deliberate use of birth ! control. Summary * i | In the semi-controlled category of population j changes, the role of economic variables is still far from ] ; being determinable. "Animalistically,” the difficulty is* one of measuring the physiological capacities of the human organism and their changes in time and space. Resort was made to experiments on flies and lower animals, as well as to medical research concerning the basic factors underlying human fecundity and sterility. In both cases, however, the results are yet inconclusive. "Ritualistically," the effect of economic variables on (1) social customs and institutions; and (2) human preferences to act rationally or ritualistically, also is | not very clear. From a natality viewpoint, however, and I on the basis of an institutional-theoretical approach, | two aspects of that effect were pointed out. On one hand, j | there is the observed fertility differential resulting | from the effect of economic organization on the socio- | i cultural patterns of demographic behavior. Rural-urban i Thomas, Social Aspects of the Business Cycle. op. cit.. pp. 99-100. 222 fertility differential was mainly attributed to the I emphasis on religious ritualism in the rural as compared i ■ I to the urban patterns of behavior. Socio-economic class ' . i , differential was also basically attributed to the different! i I ' degrees of "demographic enlightenment." When based on the ■ ! prevailing ratio of rational to ritualistic behavior, these degrees were considered as ranging from a point of j ; minimum "enlightenment" to a point of maximum "enlighten- j ‘ ment." At the point of minimum enlightenment, human fer tility would be the highest possible under the circum- , stances. Within the two points, human fertility would be, on the average, a function of the degree of enlightenment prevailing. At and beyond the point of maximum enlighten ment, human fertility would be basically a function of I ;the conditions governing rationality of action. i ; On the other hand, the degree of demographic en- I |lightenment may be expected to be directly related to the I level of income. This relationship is exerted through the i application of a portion of that income— referred to as ihuman capital— to the education of the members of the ;society as to the best means for attaining their objec- itives. All other things assumed constant, the level of 1 human capital and, consequently, the level of education or !enlightenment would be directly related to the level of iincome. 223 Finally, the effect of economic variables on rational action within the semi-controlled category of population changes is revealed in the form of a short rim correlation between demographic variables on one hand and j i a variety of economic criteria on the other. With the spread of rationality associated with a gradual shift from J the semi-controlled to the controlled categories, this I i i correlation may be expected (1) to intensify, and (2) to shift from an indirect status, resulting basically from changes in the marriage rate and first births, to a direct ' status, resulting from an effective control of the size of the family. CHAPTER VI ECONOMIC VARIABLES AND CONTROLLED CHANGES~ THE OPTIMUM THEORY The eoneept of "controlled** population changes per- ; tains to a group of people (family, class, or society) who ! ! are willing and capable of acting rationally toward the . maximization of their economic welfare (in its wider ; sense). Because they are technically and scientifically I non-specialized, these people look to the social scien- ! tists, in general, and demographers, in particular, for ! help and guidance. The students of population are thus ! charged with the responsibility of determining, for and on behalf of these people, the prerequisites of economic- I demographic maximization which satisfy the conditions of I I rational action. To the analysis of these prerequisites, we devote the remainder of this study.^ Prerequisites of rationality in controlled popu lation changes should be based on a full understanding of : the mutual interrelationships between economic and demo graphic variables. In Chapter VII we deal with the I static picture of this interrelationship. Chapter VIII | deals with the dynamic effects of economic changes on-the | population variable. And the whole of Part III deals with | the dynamic effect of population changes on economic variables. 225 This responsibility is by no means new to demog raphers. In demographic literature this aspect of the economic-demographic relationship is dealt with in con nection with what is generally referred to as the Optimum Theory of population. Regardless of differences in emphasis, a survey of this theory represents an excellent starting point for a general consideration of the issue at hand. Not only does it keep us in close contact with contemporary demographic literature, but also its discus sion pro and con should prove helpful in further research and analysis. In this chapter an attempt is thus made to acquaint ourselves with the main aspects and criticisms of the "optimum" approach. Primarily, on the basis of the theo retical controversies involved, the subject matter is divided into two main sections; one dealing with the de- velopment and criticism of the theory as such, and the other with the different criteria suggested for the deter- mination of the optimum. To these are added a third section on the recent developments in the field, as well as a fourth section devoted to a general consideration of the theory as a basis for further development in popula tion analysis. 226 DEVELOPMENT AND CRITICISM OF THE OPTIMUM THEORY The optimum theory has been developed mainly in economic circles. By the conditions of its birth, it is of a pure economic character both in regard to its termin- j ology and concepts. It is only recently that other aspects; i beside economics seem to have had any influence on the - | I discussion. 1 l ! | Development of the Theory. ; It was„.indicated in .Chapter IV that the critics of the Malthusian theory came to emphasize two main points: (1) that population growth does not behave as Malthus maintained; and (2) that subsistence could be made to in crease at a rate parallel to that of population. In an effort to prove their point, the advocates of the first argument, mainly mathematicians, biologists, and sociolo gists, almost completely shifted the emphasis in population studies from the field of economics to that of other social; and biological sciences. The fact that shift was not j complete may be attributed to the attempt of fellow econo- j mists to deny the pessimism of the Malthusian thesis. j There are, they pointed out, many cases, especially in industry, where an increase in population is conducive to \ increasing productivity. Division of labor, inventions, substitution of capital for the limited factor of land, 227 etc., are all factors that Malthus did not consider in his argument. ! For the sake of .twinning their point, the pioneers ; i of the argument, Bastiat and Carey, were inclined, like i i Petty and the mercantilists before them to over-emphasize ■ j the potentialities of increasing returns. This was not I the case with the later optimists, however. They fully ; appreciated the argument about increasing returns, but they f . I did not lose sight of the decreasing returns necessitated by the limitation of land as a factor of production. The consideration of both trends led to the belief in the ex- , istence of a point of maximum returns: . . . attained when the population is so ■ exactly fitted to the circumstances that ' returns (or productiveness of labour) would be less (diminished) if it were either less ' or more than it is. This population has been I christened the "optimum1 * population.2 i i i ’ From Malthus to the optimum theory. The correlation between population size and the level of productivity ! j i seems to have had little attention in the Malthusian argu- | ment. The "geometrical" and "arithmetical" increases of population and the means of subsistence in the Malthusian j thesis were completely independent of each other, with the i j first based on the "passion between the sexes" and the | 2 Edwin Cannan, A Review of Economic Theory (London: P. S. King and Son, Ltd., 1929), p. $1. 228 second on ' ‘all our knowledge of the properties of land."3 «To imagine that the Essay on the Principles of Population was ever based on the law of diminishing re turns is to confuse Malthusianism as expounded by J. S. Mill with Malthusuanism as expounded by Malthus.”^' Despite the fact that the principle of diminishing returns was stated by Turgot in France thirty years before the publication of the Essay.^ its importance to the Mal thusian argument was not appreciated until much later. The delay was attributed by Bobbins to the confusion sur rounding the principle when it first emerged in England in connection with the Corn Law controversy of 1814• In his own words the confusion was two-fold: In the first place, the fact that it was in connection with the growing of corn that the idea of the t t Lawt t first took shape tended to distract attention from the uni versality of the phenomena which it ultimately describes, and to give it a peculiarly ^ T. R. Malthus, An Essay on the Principle of Popu lation (ninth edition; London: Reeves and Turner,ll¥8), p. 5 • ^ Edwin Cannan, Theories of Production and Distri bution. as quoted in L. Robbins, ”The Optimum Theory of Population,London Assays in Economics. T.E. Gregory, editor (London: George Routledge and Sons,1927), p. 105. Cannan, A Review of Economic Theory, op. cit.. p. 75. 229 agricultural flavour, which is not con ducive to clear thinking. . . . But this was not the worst source of confusion. The great error of the Ricardians consisted in regarding the so-called "Law” as stating something which actually took place in time, rather than as statement of what would take place at any time supposing the population instantaneously varied.5 i \ It was not long, anyhow, before the "rediscovery” of, ; the law of diminishing returns. Reasons for this "redis- j : covery” by population theorists may be found in the severe attacks directed against the Malthusian ratios of ! growth. In that law, the post-Malthusians found an ex- ; cellent substitute for these ratios, notwithstanding : Carey*s arguments. J.S. Mill, named by Wolfe as father 1 ' 7 of the optimum concept, was of the opinion that despite increasing returns at the beginning "the point at which they begin to diminish is not very far on." After a degree of density has been ! attained sufficient to allow the principal i benefits of combination of labour, all further I increase tends in itself to mischief so far as | regards the average condition of the people; i but the progress of improvement has a counter- I acting operation and allows of increased numbers i without any deterioration.^ ■ ^ Robbins, op. cit.. pp. 106-107- ; 7 A.B. Wolfe, "The Optimum Size of Population,” j Population Problems. Louis I. Dublin, editor (Mew York: | Houghton Mifflin Company, 1926), footnote, p. 66. j ^Robbins, op. cit.. p. 110. I ^ LOC# cit. 230 In this pioneer sense, the optimum population was not a static concept but an absolute quantity fixed once and for all for each society under the assumption of i everything else remaining constant. The increasing re- j turns of industry, from Mill’s point of view, is not suf- ; < I 1 f&cient to counterbalance the continuous pressure of the I ! population; and in the long run the Malthusian argument j would emerge victorious. At that time, Mill had no idea j of the drop in the birth rate which commenced in Europe shortly thereafter.10 Even if he had, his notion of the optimum as a fixed concept that is found early in the history of each economy would still have led him to the j same conclusion. j This, however, is not the main point in Mill’s i i j demographic writings. The main point is that the two i | basic forces on which the concept of an optimum was built were laid down. These are, of course,the forces of dimin ishing and increasing returns. On the basis of these : forces, the science of economics since J.S. Mill made its j main, if not only, contribution to the field of population j in the form of an optimum theory. | The date usually given for the decline in the I birth rate in Europe is 1670-1880. See: Warren S. Thomp- ; son, Plenty of People (New York: The Ronald Press Company, 1946), p. 33. 231 ^Scientific” formulation of the theory. Reference to some most desirable size of population, or an optimum, ! can be found in the writings of Sismondi, Cantillon, and 11 ' , as far back as Plato. Reference to it, we are told, was ) • 12 , also common in the German literature on population theory. . ' ! * But it was not until the end of the nineteenth century ; j that the optimum theory emerged in its modern formulation j j on the hands of Henry Sidgwick, Edwin Cannan, Knut Wick- | 13 : sell and Carr-Saunders. To these writers, the optimum concept was not the i absolute size of population envisioned by Mill. The fal- ; lacy of the ceteris paribus assumption associated with this absolute size was too obvious to permit such a theory ; to hold. The double characteristics of the nineteenth century from the demographic point of view were those of a i tremendous increase in population accompanied by rising levels of productivity. Under such conditions, the roles I played by efficient technology and capital accumulation 1 - - - - - u — i | A. B. Wolfe, ”The Theory of Optimum Population,” ! The Annals of the American Academy of Political and Social : Sciences. lH: 243-249, November, 193&. ; ^ Manuel Gottlieb, ”The Theory of Optimum Popula- ! tion for a Closed Economy,” The Journal of Political Economy. 53i2&9-316, December, 1945* 13 For reference to the roles of these writers in the development of the optimum theory,see: Gottlieb, op. cit.. footnote, p. 291- 232 were too important Tor a theory of optimum population to ignore. The optimum point was then realized by the popu lation theorists, not as fixed once and for all, but as • . . . varying with the development of the industrial arts and the accumulation of capital; and . . . tends to be continually advanced by the progress of invention, provided that through the accumulation of capital the improvement of process which invention renders possible is actually realized.^4 The optimum in this version of the theory is variable from 15 one time to another, but,as Leibenstein clearly pointed out,there is nothing in the theory that would relate the change from one optimum to another. Aside from the theoretical aspects, however, the ; adherents of the optimum theory appear to have differed as ' to its role in the field of demography. Wicksell, for i j example, seems to have placed the emphasis on mere theo- j retical investigation concerning "what density of popula- | tion under given circumstances is most advantageous."^ l i ___________________ I 14 Henry Sidgwick, Principles of Economics, as ; quoted in Ed Whittaker, A History of Economic Ideas (New j York: Longmans, Green and Company, 1940), p . 34$• . ! Harvey Leibenstein, Studies in the Theory of 1 Economic-Demographic Development (Princeton; Princeton i University Press, 1954), p. 173- 16 I Gottlieb, op. cit., p . 2 9 0 . 1 __ 233 . The optimum concept to Cannan had a more rigid foundation: j The only real l f Law of Fopulatlon"is I simply this: At any given time the amount ! of labour which can be exerted on a given extent of land, consistently with the at tainment of the greatest productiveness of industry at that time, is definite.-*-' Carr-Saunders was even more emphatic concerning the : i role played by the optimum concept in inducing actual population changes: As regards quantitative problems we saw that from the first period of history onwards— from the time, that is to say, that it began to be possible for man to reap the benefits of cooperation— it was of the utmost importance for every group to approximate to the optimum number. This is the number which— taking into consideration the nature of the environment, the degree of skill employed, the habits and customs of the people concerned, and all other relevant facts— gives the highest average return per head. This number is not fixed once and for all. On the contrary it is constantly varying as the conditions re ferred to vary, and, as skill has tended to increase throughout history, so has the number economically desirable tended to i increase.18 ‘ i I j Main assumptions of the theory. Despite the static I I ' character of the optimum theory, its basic underlying l i assumptions should be made clear. In essence, the theory 17 ; Cannan, Elementary Political Economy, as quoted j in Robbins, op. cit.. p. 115... ^ A. M. Carr-Saunders, The Population Problem (Oxford: The Clarendon Press, 1922), p. 476. 234 ; ceteris paribus deals with the effect upon per capita productivity (or any other similar criteria) resulting 3 ; from the application of a variable factor, labor, to a fixed factor, land. The assumptions of the theory could I , then be divided into four categories: (1) with regard to I ‘ i i • : I land; (2) with regard to labor; (3) with regard to the way ; both labor and land are combined; and (4) with regard to all other conditions, i The main assumption with regard to land is that it j remains fixed. Three things are required for this assump- | tion to hold. First, we must have a well-defined, fixed ; area of space. This usually is a national boundary. | Second, we must have complete isolation between this fixed ! area and all external natural resources. In other words, 1 it is a closed economy. Third, within this closed economy j we must exclude all inventions or discoveries that would I j make previously unknown natural resources available for human use. To this category belong all new discoveries of natural resources, inventions that have to do with i ; finding new uses for materials that were formerly con- j I sidered useless, as well as inventions that would make profitable the utilization of resources formerly con sidered economically unprofitable. 235 The theory as applied to labor is even more rigid. As is clear by now, the optimum theory deals with quan- ( tities of labor applied to a fixed area of land. To be a population theory, the basic assumption dealing with the fixity of the ratio between population and the labor sup ply must be made. Cannan put it this way: Assuming (what within short periods is almost exactly true) that the total amount of labour exerted on a given terri tory increases and diminishes as the population of that territory increases or diminishes, we may word the law thus— at any given time the population which can exist on a given extent of land, consistently with the attainment of the greatest productiveness of industry possible at the time, is definite.19 Both the ratio of labor to population and also the » j quality of labor have to be constant. In this connection it is interesting to note the association which the | pioneers of the optimum theory maintained between ttje quality of labor and the level of productivity or the ac cumulation of capital. 1 That the productiveness of the labour of a people is limited by their knowledge of the arts of life is self-evident and that any progress in those arts, any im- • proved application of the objects or powers of nature to industrial uses, enables the ! same quantity and intensity of labour to raise a greater produce. 19 Robbins, op. cit.. p. 115* 20 J.S. Mill, Principles of Political Economy (New York: Longmans, Green and Company, 1909), P* 10?. 236 The same point is also emphasized in Cannan's dis cussion of the influence of accumulation, especially the accumulation of knowledge or non-material equipment on 21 produce. The third category of assumption deals with the act of combining the two factors involved, namely labor and land. This, in turn, could be divided into two sections: assumptions with regard to the output resulting from the further combination of the two factors; and assumptions with regard to the ratios in which the two factors are combined. In the economic analysis of the optimum theory, the output resulting from the combination of labor and land in a specific ratio is always constant. That is, if the combination ratio is three labor to one land, any three units of labor combined with any one unit of land will always produce an x unit of output. For this result to hold, three assumptions are implicit: (1) that the units of labor are homogeneous; (2) that the units of land are also homogeneous; and (3) that the efficiency of the pro cess used in combining the two factors is constant. The increasing returns resulting from the early additions of Ql Cannan, A Review of Economic Theory, op. cit.. pp. 122-123* 237 labor units to a constant quantity of land units is gen erally attributed to the increased efficiency in the pro cess of combination due to "increasing division of labor, improved organization, fuller exploitation of tlumpyt 22 factors, and increasing returns to scale." After the j point of maximum returns has been passed, the reversal of ! the trend is explained as the result of population growing while land is constant, or of population growing faster than natural resources. The optimum theory holds constant the ratio com bining the two factors. The constancy of this ratio could | be disturbed by either of two substitutions: technical substitution and/or commodity substitution. Spengler de fined technical substitution as that resulting "if producers! in a given industry, since they now can obtain labor at a lower relative price, combine a larger quantity of it with; 23 the cooperating resources employed in that industry." To prevent such a technical substitution on behalf of the | 1 entrepreneurs, the optimum theory must assume no changes [ I in the relative costs of the factors of production. j 22 j. j. Spengler, "Aspects of the Economics of Population Growth,” Part I, The Southern Economic Journal. 24;123-147, footnote p. 135, October, 1947. 23 Ibid.. p. 136. 233 , Without these changes, the producers would have no incen tive in the substitution of one factor for another in the 1 production of the same commodity. As for commodity sub stitution, it may result "if the addition of an increment i of labor to the quantity of labor already in use in the j economy operates primarily to reduce the relative price j costs and selling prices of goods and services in the i fabrication of which the labor factor is comparatively im- | portant,” and as a result, "there will be an increase in the relative amount produced and consumed of such goods and services; or, because of the change in the cost and price structure, there may now be produced for the first 1 time goods and services in which the labor factor bulks relatively large, and the production of which has not heretofore been undertaken because of the relatively high cost of labor. Under such a condition, the assumption is necessary that no changes should occur to the consumer^ s ? preference scale in the purchasing of commodities. ! The fourth and final category of assumptions deals , with all other things, mainly the accumulation, organi- i zation, and distribution of capital. Reference has | already been made to the shift from the original assump- I j tion of ceteris paribus in this connection to a static 24 T Loc. cit. 239 ‘ position which allows for changes in the optimum popula- i ] tion with changes in capital accumulation. Nothing more i i j could be added here for the time being, but the point will ! be further elaborated in the last section of this chapter s when the optimum theory will be considered as a basis for further development in population studies. 2$ j Criticisms of the Optimum Theory.25 i t t The optimum theory,” stated Myrdal, ”is one of ; the most sterile ideas that ever grew out of our science• ] As presented by Cannan, Wicksell, and Carr-Saunders, it was challenged on more than one point. It was challenged ; as a necessary basic theory for the study of population I I problems. It was also challenged in its approach and in J its presentation of the theory, as well as in the validity | of its assumptions. I > J The optimum theory is not a general theory. The | theory, it is charged, is not fit for the discussion of | all types of population problems. . In this sense, the 25 The criticisms enumerated in this section do not necessarily reflect the opinion of the writer. The prin ciple used here was that of inclusion rather than selection. 26 Gunnar Myrdal, Population: A Problem for Democracy (Cambridge: Harvard University Press, 1940),p. 26. 240 optimum theory is considered an outgrowth of the conditions ; in Western Europe, fit only as an approach for the demo- j I graphic problems of that part of the world. Gunnar Myrdal' i ; I with whom the criticism originated asserted: | j i In order to deal with the pressure of ? : population in China and India— and for 1 ! that matter, in certain backward and culturally isolated regions in the United j States or Poland— or with the indigence of i l life on a desert land, one does not really j need such a factitiously constructed general j ! theory. What the optimum population theorists | actually had in mind was, instead, the ordinary j Western countries in process of rapid indus trialization. 27 ! As & static approach, the theory is not fit for ■ practical application. The charge of Mstaticism, t against i | the optimum theory is a triple charge which is closely : connected with that against the validity of the theory’s i assumptions. In searching for a maximum output by hypo- l ; thetically varying the population size for any specific j period, the optimum theory is said to have neglected the i following points: 1. The factors with which the theory deals, in- : eluding population itself, are dynamic and are always in ■ the process of change. I 2. The process of population growth or decline ; affects such factors as the age distribution and the ^ Loc. cit. 241 i comparative level of factor costs which, in turn, are basic elements in the calculations of an optimum. 3. Even if an optimum could be determined, this optimum is liable to change within the time lag necessary | | ' I to bring the population from what it is to what it ought | to be. i l I j The form of the relationship between increasing andj diminishing returns as presented by the theory is not j ! necessarily true. In Figure 2 a simple statement of the i j optimum theory is graphically presented. With population Per capita productivity "-Po pul clV IOYS T? FIGURE 2 PER CAPITA PRODUCTIVITY AS A FUNCTION OF POPULATION SIZE i 1 I i size on the horizontal axis and per capita productivity (or any similar criterion) on the perpendicular, we find per capita productivity, ceteris paribus. rising with the increase in population until it reaches a maximum point after which diminishing returns would tend to outweigh 242 increasing returns. The curve in this case is "an 2B i inverted bell-shaped, curve with a single optimum point." Against such a type of curve, the following criti- | cisms were directed: (1) Assuming the point could be 1 located on one section only of the curve, it does not have j i to be a point. "There is nothing in the construction of i < the curve which indicates that it could not for larger ' spaces have a very level course."^ (2) There could be, i for any one period, more than one optimum population de- i pending on the criterion used and the scale of values of the society concerned. "It is thus extremely probable that a range of possible sizes of population could exist, each of which would have a good claim to be regarded as OQ the optimum population."-^ Also, "it is, likewise, per fectly possible that this curve might have several maximum positions at very different sizes of population and that | the differences in height of the average level of living j between the maximum positions might be unimportant, I [ ------------------- i 28 [ Manuel Gottlieb, op. cit.. p. 293. 29 Myrdal, op. cit., p* 142. 30 J. R. Hicks, The Social Framework of the American Economy (New York: Oxford University Press, 1945), Appendix, note B, p. 241• 243 particularly in view of the great indeterminateness in theoretical content which the quantity level of living 31 shares with all averages and indices." (3) The regular- ity of smoothness of the curve is not characteristic of ! i practical conditions. "While this is a justifiable first approximation, irregularities in inflection and even oc- casional reverses may be expected, because of discontinu ities inherent in the economic development which has a 1 jerky* or Tlumpy» character and which (not only histori cally but functionally) come in stages."^2 The assumptions of the theory are too rigid to be practical. "In assuming everything else to be constant, the optimum theory," contend its critics, "has invalidated itself." The shift from Millfs version of the theory to the static approach was not enough to alleviate the dif ficulty. This latter stems from different sources: (1) The theory holds constant such factors as capital accumu lation, which are extremely important in the determination ! of per capita productivity. (2) As pointed out previously, changes in population size implicit in the theory would bring about changes in other factors assumed to be constant. — - — Myrdal, op. cit., p. 142. 32 Gottlieb, o£. cit.. p. 297. 244 As Fairchild stated, "rather than a postulated constancy of ’other factors’ and a one-way dependence between popu lation and output, there exists between these factors a complexity of relationships so intricate and so thoroughly reciprocal that, in a very real sense, any of them may be ; : considered as the result of the other three."33 1 I i ANALYSIS AND CRITICISM OF THE OPTIMUM CRITERIA ! The criterion of the optimum theory is the objective; or condition which the theory attempts to maximize. It is : the condition in relation to which a specific area of land, ceteris paribus. could be justly labelled over-populated, ; under-populated, or just having the optimum population. . It can consist either of a single criterion, like per i I capita income, for example, or . multiple criteria the i ; combination of which is supposed to indicate the level of j i welfare on the part of society. i . Suggested Criteria for the Determination of the Optimum. ' The choice of an adequate criterion or criteria : ■ j ■ for the optimum theory has been subject to wide discus- : sions and controversies. The issues involved were j ! stated by Penrose as: i 33 Ibid.. p. 300. 245 There are, however, two aspects of this , problem. First, what is the most desirable criterion for our purpose apart from all ; questions of practicability of application? j Secondly, what is the nearest approximation \ to this criterion which the ascertainable I i quantitative knowledge of the economic i | order is likely to enable us to reach?34 i j The answer to the first of these questions has been j ! ; found, more or less unanimously, in one form or another of I i ; the welfare concept whether economic, social, or both. i i In his criticism of Maithus, Robbins stated: i The conception of returns per head, including all the prerequisites of economic welfare, as something worthy of theoretical discussion, seems to have been remote from his way of thinking.^ To approximate this concept of welfare, the sup porters of the theory made use of different criteria. • Two types of these criteria may be distinguished: some j 1 were purely economic in nature and others were social in i | nature. | Economic criteria. In his early writings Cannan i j expressed the idea of an optimum in terms of "productive- | ness of industry." "The truth is that the productiveness I ; of industry is sometimes prompted by an increase in popu- ! lation and sometimes by a decrease in population. I 34 > E. F. Penrose, Population Theories and Their j Application (Stanford:Food Research Institute,1934)> p«5^» Robbins, o£. cit..p. 114. ^6 Ibid., p. 115* 240 37 "Maximum productiveness," as Robbins pointed out approv ingly, was later changed by Cannan in The Wealth (1914) to "maximum returns." However,ambiguous these terms may look to us now, they must have been more ambiguous when used by Cannan and Robbins almost half a century ago. It is justifiable, then, to find this statement made by Penrose: It is perhaps the weakest point in the discussion of the population theory by Robbins and Cannan that they have not sufficiently analyzed the basic concept in their theories.3° Dr. Hugh Dalton-^ Was more specific in his discus sion of the criterion used. He stated his objective in population discussions as economic welfare and then made the transition from economic welfare to maximum production of wealth per head under only two assumptions: First, that changes in numbers influence economic welfare only through changes in production per head, and second, that maximum economic welfare means maximum economic welfare per head, and not in the aggregate.4-° 37 Ibid.. p. 117. ^ Penrose, op. cit., p. 58. Hugh Dalton, "The Optimum Theory of Population," Economica. 8:28-50, March, 1928. k° Ibid.. p. 31 247 The first of these assumptions is quite interesting ; and we shall return to it before the end of this chapter. J Dalton, however, pointed out that economic welfare is not ' only a function of the production of wealth, but also of its "distribution between persons, the subjective cost of ' I production and the distribution of these costs between j persons, and the degree of steadiness, through time, of i : economic life and, in particular, of personal income and employment.”^* Notwithstanding these variables, Dalton ; seemed to accept maximum production, ceteris paribus. as ! a basis for economic welfare. His final criterion for that welfare, namely real income per head, was achieved by ; ”a further transition from maximum production per head to ! maximum real income per head, as an index of maximum j j economic welfare,” a transition which "raises no serious | difficulties of principle.n^2 i i Real income per head has ever since been the ac- ! ceptable criterion for economic welfare and, consequently, i for the discussions concerning the economic optimum. Some i i have preferred Cannan»s earlier criterion of maximum j 1 l 3 ! productiveness. Others were not satisfied and tried to I 41 T .. 42 _ Loc» cit. Loc. cit. ! ^ j, j, Spengler, "Population Movements,- Employ- | ment, and Income," The Southern Economic Journal. 5:129-57, | October, 193&- Spengler preferred explicitly the use of ! output, rather than income, in the welfare sense. 24S introduce new economic criteria of their own. To name just a few, some of the criteria suggested were: the level of employment, the level of real wages, and the real rates of exchange between commodities. These criteria have been; rejected, not only by the critics of the optimum theory, ; but by its most influential exponents as well.^ i The social optimum and its criteria. The social i optimum, as distinguished from the economic optimum, is a ! concept developed by sociologists in harmony with the general trend in the field of population. "An economic definition of the optimum is, however, as unacceptable as 45 a purely economic interpretation of social progress." In contrast with the economic optimum which deals only with the effect of numbers on material wealth, the social optimum is conceived as "that density which is most favor- j able to the happiness of the individuals comprising the population when all the effects of number upon individual j welfare are taken into consideration."4-6 As might be i 4 - 4 - Dalton, Oja. cit.. pp. 34-35, and Robbins, oj>. j cit.. pp. 124-128. . ^ Radhakamal Mukerjee, "The Criterion of Optimum Population," American Journal of Sociology.38:688-698. March, 1933* 46 Lindley M. Fraser, "On the Concept of an Optimum in Population Theory," Population. 1:37-42, February,1934* 249 • expected, the main difference between the economic and j the social optimum is found in the objectives or criteria ! used in indicating the position or size of the optimum j population. ; j \ > As is the case with the economic criteria, more ! ' ’ t I ! than one criterion was made use of in the social optimum, j i • ! ; To Sir Charles Close, the social optimum was, under given j l • I ; "geographical conditions,1 1 that "density of humanity which j I 1 will produce or maintain a race in a state of greater moral, mental, and physical fitness than will other den sities, either above or below the optimum."^ Radhakamal ; Mukerjee of India made use of another type of criterion, ; the average expectation of life. "A high average expecta- ; tion of life and a moderate and selective reproduction are the criteria of a progressive type of human popula- : tion."^ Penrose went further than either of these writers i and offered a compound type of criterion based on the | "consensus of specialized groups as to what constitutes ; and determines the highest desirable level of social and ! i economic welfare."^ j 47 sir Charles Close, "A Brief Review of the Present ; Population Situation in South and East Asia," Population, j 1:42-64, June, 1933- i 4$ Mukerjee, op. cit.. p. 698. 49 Penrose, op. cit.. p. 75* 250 Criticism of the Optimum Criteria and Their Practical Application. ! Critics of the criteria side of the optimum theory, ; named by Gottlieb nthe welfare critics,"^0 were quick to i | point out a multitude of issues which they consider grave ' i < i weaknesses of the theory. First, they considered an econ- ' s * j omic optimum to be narrow, partial, and one that "fails | to appreciate the nature and complexity of human person- j ality and culture."^l Second, even if they granted an I economic welfare concept, per capita real income, as sug- ; gested by the founders of the theory, was not a valid criterion to them. Third, in the practical application of : such a criterion, they contended, there are unsurmountable j i difficulties which make the future of such a theory hopeless. I An economic optimum is narrow and partial. The concept of a most desirable population size is apt to i • i change from one time to another. At the time of the Roman : j Empire the most desirable size was that which offered the highest number of physically qualified soldiers. The optimum in this case was political or militaristic. At Qther times population policies were governed by the i Gottlieb, o£. cit.. p. 296. ibid..p. 297• 251 belief that the purpose of man on earth was to glorify God. Under such an ecclesiastical conception, as Thompson pointed out, "the optimum population would be the one which had the highest birth rate and the greatest numbers that could be maintained under the existing circum stances. **52 for the Optimum theory to consider only an economic optimum at the neglect of all other factors, it runs the risk of being narrow in its scope and, conse quently, unfit as a basis for a valid population policy. economic welfare. This point has been elaborated before and so only a brief reference to it is necessary here. Economic welfare is generally considered to be a function of the balance between the advantages and disadvantages of the economic system, as well as of the distribution of these advantages and disadvantages among the members of the population. Per capita real income represents only one side of the whole picture and as such is unfit as a valid criterion for economic welfare. The practical difficulties associated with the use of per capita income (or productivity) as a criterion. In Per capita real income is not a valid criterion of G. Thompson, Population Problems (second edition; New York: McGraw-Hill Book Company, 1942), p. 422. 252 the practical application of the eoncept of an optimum thus expounded, maximum per capita real income (or produc tivity), as indicating the highest desirable level of , welfare, raises two types of problems. On one hand, we , have the problem of measurement. "In the first place,” ; i ' - ; j inquired Hicks, "what do we mean by saying that net output , per head is a m a x i m u m ? ”53 This, in turn, raises two other ' i ■ ! i issues. First, ”in order to say that net output per head j ! j ; is greater in one set of circumstances than in another, j : we have to find a means of reducing the variety of goods (and services) to a common measure.”^ Second, we have to I isolate the rise or fall in per capita productivity attributable to population changes from those attributable ; to other variables. On the other hand, the problem of desirability and its constituents becomes extremely important. Should what is desirable be determined by the people themselves or by an authority from outside? ”It is fundamental to my position,” wrote Penrose, "that an aggregate of realized actual individual desires for goods and services is not i necessarily nor even probably identical with an aggregate of desirable goods and s e r v i c e s . ” 55 55 Hicks, o£. cit., p. 241. ^ Loc. cit. 55 Penrose, ojd. cit.. p. 74. 253 RECENT DEVELOPMENTS IN THE OPTIMUM THEORY Recent efforts for the reconstruction of an opti mum theory were induced by two different motives. On the one hand, there are those who believe in the basic impor- | tance of the theory as a valid approach to the study of [ 56 population problems. On the other, there are writers j ! like Alfred Sauvy and others who found it important to I t elaborate on the theory simply because "it corresponds— 1 57 I for better or for worse— to ideas which are widespread.” In this section, no distinction is made on the basis of these intentions. We shall merely attempt a review of how these writers defended and re-presented the optimum theory in the face of such criticism and repudiation. As classified in this section, the different elaborations on the optimum theory are divided into three groups: (1) those relating to the theory as a valid ap proach in the field of population; (2) those relating to i s — 1 56 Reference here is to the two outstanding arti- ' cles of Manuel Gottlieb on the subject, “The Theory of Optimum Population for a Closed Economy," op. cit.. and "Optimum Population, Foreign Trade, and World Economy," Population Studies. 3:151-169, September, 1949« 57 Alfred Sauvy, Wealth and Population in France (translated into English by Robert Strausz-Hupe, Paris, 1943), p. 67. 254 the reconstruction of the theoretical aspects of the optimum including the criteria used; and (3) those relating to the assumptions of the theory. The Optimum Theory as a General Demographic Approach. In criticizing the optimum theory, Gunnar Myrdal j was not satisfied with merely pointing out its deficien- j cies. "The theory stands mainly as an excuse for, and i also as an actual inhibition of, the proper posing of the ! problem of the economic effects of population changes."^ That is, Myrdal is mainly interested, not in how big the population ought to be, but in what will happen if and ; when population increases, decreases, or remains constant. 1 • "The dynamic effects of population changes,” claimed Myrdal I ... . . and most of the non-believers in the optimum theory, "are : more important than the static relation of population to 1 resources. l i ! Against this alternative approach, Gottlieb pointed 5 out that the dynamic effects of population changes are j ! important, but their importance, due to their short run j i 1 implications, must be considered as secondary to the i Myrdal, 0£. cit., p. 27. j 59 To the group of Myrdal may be added all the ad- | herents to the "mature economy" concept who seem to favor j population increase for the sole purpose of raising the I consumption function. 255 question regarding the population size. "To increase population for the mere sake of population growth or to ' reduce numbers because of the benefits of a decline would seem to require a singular and aggressive shortsighted- ! f - i f . Q , ness." Blinded by his own defense of the optimum I ! 1 theory, Gottlieb was inclined to disqualify completely j I the importance of considering these dynamic short-run aspects. "The economie of the transition— and that is how i a process of population increases or decreases should be envisaged— covers just what the designation implies: the limited operation of comparatively unimportant variables : for a transitory period. And it was for this that Myrdal 61 wanted to sacrifice the theory of the optimum." • Attempts at Reconstruction. The general attitude of the optimum theorists to j all the criticism directed against the theory is that it j j tends "less to invalidate the idea of optimum than to ob- i - ! ' scure and complicate the attempt to determine the optimum ! I i * position for a given population."°2 I I I I The optimum criteria. With the exception of few ! 60 Gottlieb, "The Theory of Optimum Population for i a Closed Economy," op. cit., p. 302. i 61 62 Ibid., p. 307. Sauvy, o£. cit.. p. 53. 256 . elaborations on the s u b j e c t ^ the theoretical analysis of the optimum criteria seems to be the least attended to in contemporary literature. It is generally conceded that every person is entitled to the use of his own criterion as long as he defines it and sticks to it throughout the 64 discussion. As Leibenstein pointed out, this makes pos sible the development of as many optimum theories as there ; } are criteria and their combinations. With this exception, • 1 however, the consensus of the optimum theorists seems to concur with Gottlieb "that the ethical-welfare, and to only less extent the economic-welfare, theorists have failed to grasp the fundamental essentials of a workable i : concept of the optimum, and have, consequently, needlessly i ! complicated the problem and obfuscated the real desiderata I 65 I of analysis and research. 1 ! The charge of "staticism". The optimum theory is a 1 static approach, an approach which was found necessary | against the historically inaccurate version of J.S. Mill, j as well as a basis for allowing the possibility of varying optimum sizes. "This staticism,” maintained its advocates, i , 6a ’ ” Reference here is to Leibenstein1s analysis of i the subject; ojd. cit., pp. 171-191* 64 65 Ibid., p. 172 Wolfe, ojd. cit.. p. 244* 257 "need not necessarily be at the expense of the dynamic elements." The theoretical recognition of the long duration of the transition period, during which the population size is adjusted to the optimum, provided room for a certain element of "dynamics" by basing the optimum on a "trend of change" for a "calculable future" rather than on a fixed inventory existing at a prevailing moment. "This,” contended the critics again, "might be true." However, by the time the so-called optimum size was achieved, it was not any more the most desirable size required, due to the changes in the multitude of varia bles involved. Against this charge of "volatility," Gott lieb offered three propositions which tend to prove the relative stability of the optimum: This first proposition is that the funda mental factor (resources) by which the optimum size is conditioned has been relatively stable in Western countries for some decades and promises to remain so for the proximate future. . . . The second of our propositions is that, while early industrial inventions and dis coveries required (and obtained) a large market in order to develop their full effects, the market, once achieved, does not need to be enlarged because of subsequent discoveries and inventions, so that the optimum density pre serves certain stability. . . . Our third proposition is that the single most revolu tionary innovation of modern industrialism— 66 Gottlieb, op. cit.. p. 299. i 258 that of cheap railway and ocean-going transport— had (and has) the effect of raising the effective economic density of an area.°7 The formal presentation of the theory. The modern i presentation of the optimum concept has been modified to allow for the constructive criticism directed against its simpler version previously stated. The optimum was acknowledged to be a zone rather than one single point. j i The possibility of more than one optimum size, depending upon the criterion used, was fully appreciated. The irregularities characteristic of industrial development as j a function of population increase was granted by Gottlieb and the others. Another aspect which was mainly characteristic of Sauvy*s presentation of the optimum theory was his use of 6$ the marginal, average, and total production curves. On a graph similar to the one used in Figure 2, Sauvy, assum ing everything constant including the "technical level,” plotted a marginal productivity curve, that is a curve indicating "the production of an additional worker of the i 69 population n," as well as an average and a total pro duction curve. The optimum population on such a graph 67 Ibid.. pp. 309-310. ^ Sauvy, op. cit., graphs 1-4, pp. 230-31. 9 Ibid.. p. 7. 259 was then defined as the size of the population for which marginal productivity and average productivity are equal. The use of a marginal type of analysis in the optimum ; theory makes clear the distinction necessary between the ! 1 rise in productivity resulting from population growth and , that resulting from changes in the other factors. "In case of changes in the technical level," Sauvy pointed out, j i I ' "the curves as a unit would shift to a higher level on the j , - i graph than the one used in the first case." Claimed Rigidity of the Theory*s Assumptions. "Any efforts," said Gottlieb, "to salvage from this ! assumed wreckage of the optimum theory must commence with | the proposition that the theory does not logically require, J ! although it freely assumes, constancy in the variables 70 ! frozen in the ceteris paribus assumption." At the ex- t pense of simplicity, the optimum theorists thus commenced with the incorporation of some assumed "constants" in the ' process of analysis. In the following paragraphs, we i ' i > shall briefly review spme of the attempts made in this 1 f ■ connection. The optimum at different levels of capital f ; formation. The conventional classification of the factors j .............— . - i | ^ Gottlieb, o£. cit., p. 300. j 260 ■ of production groups them into three categories: land, : labor, and capital. The optimum theory by visualizing per capita output as a function only of land and labor, with capital held constant, runs a definite risk of being ! labelled incomplete, inaccurate, and rebellious against the basic traditions of economic theory. Recent literature on the determinants of produc tivity and the factors of economic growth does not seem' j to agree with the optimum theory inasmuch as the emphasis I ! was not placed on labor and land, but on labor and capital I , with the natural resources usually included in the latter. | Rostow, for example, stated that "the level.of the output j of an economy, at any period of time, is a function of the I size of its working force and its stock of capital (in- l eluding its stock of applied knowledge)."^ Spengler also seemed to accept that approach. His first determinant of the per capita real income is the "ratio of population to the productive factors (i.e. equipment, land, and natural resources) used jointly with labor in the creation of 72 goods and services."' Other statements to that effect 71 W. W. Rostow, The Process of Economic Growth (New York: W. W. Norton and Company, Inc., 1953), p. 17. 72 J. J. Spengler, "Population and Per Capita Income," The Annals of the American Academy of Political and Social Sciences 237:1^2-192, January, 1945. 261 may be found in the writings of Harrod and S c h u l t z . 7 3 ; Some may be puzzled as to the difference between : including capital with natural resources and calling the total land, and including natural resources with capital and calling the total capital. In the first case, since \ ! natural resources are usually considered fixed for the { I society, the totality of land and capital would also be | considered fixed; and per capita productivity would then be a function of a fixed factor, land, and a variable factor, labor. In the second case, capital being variable i by nature, the totality of land and capital would also be j considered as variable and per capita productivity would i then be a function of two variables, capital and labor. 1 [ . The inclusion of capital as a variable in the pre- j sentation of the optimum theory allows, not only for the 73 Harrod went to the extreme in discarding the | diminishing returns principle as based on the limitation | of land. ”1 propose to discard the law of diminishing re- | turns from the land as primary determinant in a progres- j sive economy.” R.F. Harrod, Towards a Dynamic Economics j {London: Macmillan and Company, Ltd., 1948), p. 20. j Schultz, referring to Harrod, also remarked that "clearly | in particular countries, land is no longer the limitational | factor it once was; for instance, in such technically ad- l vanced communities as the United Kingdom and the United ; States the economy has freed itself from the severe re- j strictions formerly imposed by land.” T.W. Schultz, The Economic Organization of Agriculture (New York: McGraw- j Hill Book Company, Inc., 1953), P* 125. 262 consideration of material capital accumulation, but also for the consideration of such social aspects, the change in which seems to be closely related to the changes in capital accumulation. Most important among these social i aspects are the organization of capital, the technique of production, the quality of workers, and the potentialities ’ of technical innovation. These aspects are mainly depend- i | ent upon the education and research facilities of each j economy which, in turn, are a function of the level of capital accumulation. How would the optimum concept be expressed as a function of two variables, capital and labor (or capital and population assuming the ratio of labor to population to remain constant)? Two methods of presentation may be suggested in this connection. The first is that used by Sauvy. On a graph similar to that used in Figure 2, the per capita productivity curve, as a whole, was raised or lowered depending on the ’ 'technical level,” as Sauvy pre ferred to use the term, or on the level of capital accumu- j lation as used in the previous discussion. Simultaneous / with the rise in the curve resulting from a higher tech nical level, the position of the optimum would be con tinuously shifting to the right up to the point where capital becomes more of the labor-saving than the labor- employing type. After that, the optimum shifts to the 263 left again and continues shifting until "at the extreme limit of an infinitely technological level, where one single person could exploit all the forces of nature, the optimum population would again be very low and reduced i 74 theoretically to one single p e r s o n . j The second method is the one used here. In Figure 3’ i S i per capita productivity is placed as usual on the perpen- j | dicular axis with capital, not population, on the hori- ! I r zontal. P-» , P0, P~, P , P_ indicate varying sizes of ^ j 4 ■ > I population ranging from P]_, the smallest, to P^, the j largest.^ Capital accumulation is arbitrarily divided 7 fci : into three regions. From zero capital accumulation to i fifty millions will be designated the small industry j region. From fifty to one hundred is the medium industry j region. From one hundred and over is the heavy industry j region. ■ i With capital accumulation equal to zero, per capita 74 Sauvy, 0£. cit.. p. 11. i 75 ■ There can be as many population sizes as possi ble. The five sizes were chosen to indicate a case of ! persistent over-population, a case of persistent under population, and an optimum size for each of the three regions indicated on the graph. V 6 This is an extremely arbitrary division and the development could be abstractly visualized as continuous from small size industry to heavy industry. P E R CAPITA PRODUCTIVITY HIAVY INDUSTRY SMALL INDUSTRY MKDIUM INDUSTRY 10 SO 80 4 0 SO SO TO SO SO 100 110 ISO ISO 140 ISO CAPITAL ACCUMULATED (0 0 0 ,0 0 0 ) FIGURE 3 PER CAPITA PRODUCTIVITY A8 A FUNCTION OF LABOR AND CAPITAL. ro ON - P - 265 I productivity of is indicated by the height from 0 to Pq_. Per capita productivity of P2 is higher than that of P-L due to the tendency toward increasing returns. Per capita productivity of P3 is lower than that of P2, but i still slightly higher than that of El, indicating the re- | versal of the tendency from increasing to diminishing ! returns. After that, the larger the population size, the lower per capita productivity becomes. I I At higher levels of capital accumulation, per ! capita productivity for all sizes of population starts rising. At the ten million level of capital accumulation P^ runs into difficulty. There are not enough people to keep the economy running at higher and higher levels of productivity. The substitution of capital (and land) for the fixed factor, labor, will be resorted to; but as Spengler pointed out, "since the substitutability of one factor for another is limited, the elasticity of substitu tion S must inevitably decline and eventually become zero if x (the amount of P combined with k of R) continues to j 77 increase."'' i Per capita productivity for the other four sizes of population continue to rise. P2 meets the same fate as Pi 77 J. J. Spengler, "Aspects of the Economics of Population Growth," op. cit., p. 133* The limited factor in his analysis is land (and capital) with labor the abundant factor. In our discussion it is vice versa. 266 when it reaches a level of around thirty-five million capital accumulation, still within the small industry i region. At that level, per capita productivity for P2 be- j comes horizontal,indicating no further rise in productiv- ; ity with the continuous accumulation of capital. The rise j ! of per capita productivity forP3, P^, and P5 is intensifiedi I ! when they shift from the small industry region to the i j medium industry region, indicating that increasing returns I ; are higher in the latter than the former of these regions. ; The rise does not continue long for P3 and it levels at : about the eighty-five million level of capital accumula- | tion. The rise in productivity is further intensified for j I P^ and P<j when they shift from the medium industry region ; to the heavy industry region. But by that time the j economy begins to feel the pressure of natural resources i ; on the size of population. Diminishing returns from agriculture, as well as the exploitation of more and more i - : < inferior units of natural resources,will bring the rise in j ! per capita productivity for P4 and P^ to an end. The per j . capita productivity curve for P5 will flatten at a level lower than that for due to the larger size of the i former. Any more increases in the size of population ; after that would have the effect of reducing the per capita productivity and impoverishing the lower classes of the society, even with the continuous increase in capital 267 accumulation. At that stage, the economy could be justi- | fiably described as a "mature" economy. I ! ! A quick glance at the graph will show that at no level of capital accumulation is per capita productivity for Pi or P ^ the highest possible. Pj_ might then be de scribed as an absolute case of under-population and P^ as I an absolute case of over-population. P2 is the optimum I j population for the small industry region, P3 for the j | medium industry region, and P^ for the heavy industry region. Thus, if we assume infinite sizes of population : ranging from P2 to P^, we can then represent the shift of • the optimum population, resulting from higher and higher j levels of capital accumulation, by a smooth S shaped curve ; connecting the highest points of P2, P3, and in Figure 3 i above. The optimum in a trading non-closed economy. The assumptions with regard to land are those of a fixed area ’ and a closed economy. Attempts at the relaxation of the ’ theory’s assumptions are based on discarding these two. I In a discussion of the effects on the optimum population I | resulting from the unification of several territories, I 7$ I Sauvy,' for example, pointed out that, while the maximum He defined the maximum level of population as "the level beyond which mortality exceeds natality due to lack of subsistence." Sauvy, 0£. cit.. p. 1. 26E population would be expected to rise for each territory and, consequently, for the sum total of all territories, 1 the optimum population may not rise. In such cases as the unification of a very rich and a very poor country, "the optimum population of the two countries as a whole may not i 79 1 be larger than that of the rich country." A relaxation of the closed economy assumption was ! : also made by Gottlieb in his article, "Optimum Population, An ; Foreign Trade, and World Economy.”ow The discussion of the article is mainly in terms of the effects of inter national trade upon the two basic elements of the optimum i concept, namely increasing and diminishing returns. "In creasing returns may be gained not only through an increase in population but chiefly through penetration into a larger economic nexus. Tendencies for diminishing returns appear to be blunted through the process of shifting the El satisfaction of needs to that larger nexus.” The article also introduces different sizes of optima depending on the criterion used. The "foreign-trade optimum," for example, is defined as "that size of population which achieves, 79 Ibid., P- 23. Gottlieb, Population Studies, op. cit.,pp.151-69• El Ibid., p. 155. 269 within a framework of a given institutional structure of trade and of want satisfaction, the most favourable real terms of trade, allowance being made for a given stress on minimization of risks and maximization of security j g2 ; interests.1 1 The "synthetic optimum" is the "size popu- j lation which achieves the highest man-hour productivity ' S3 from both indigenous resources and foreign trade." ^ THE OPTIMUM CONCEPT AS A BASIS FOR FURTHER ANALYSIS In this chapter and until now we have basically maintained an objective attitude with regard to the expo sition and criticism of the optimum theory. The time has come, however, for us to try and reach a conclusion con cerning the validity of the theory as a general approach to demographic studies. If the theory has no validity at all, the sooner we forget about it, the better for all concerned. However, if the answer should be in the af firmative, it is then the responsibility of the theoretical: analyst to inquire why optimum discussions have reached a stage of confusion and decay, as observed in contemporary demographic literature, as well as how such a theory could be reconstructed to serve as a meaningful basis for Ibid., p. 159* ^ Loc. cit. 270 . further theoretical investigation. It is the purpose of this section to attempt to deal with these questions and ! . . . inquiries. Validity of the Optimum Approach. f I As a concept, the "optimum” has theoretical as well ; i t as practical limitations. The latter, in particular, have been the source of most of the criticism of the theory and of its difficulties. Without denying the validity or the j I I I importance of these criticisms, it is, nevertheless, maintained here that these practical limitations do not i have to deter the elaboration on the theoretical aspects of the theory. Three arguments may be advanced in defense j j . ; ! of this position: 1. The economic concept of "optimum returns," with ! ; all its practical limitations, has been and still is one of the essential bases on which the theory of the firm is I so elaborately built. It is generally conceded that the number of variables, as well as the interactions among ; these variables,are much less in the case of the firm than ; ; those of the whole economy, but this only leads us to the ; second argument. i 2. As Wolfe pointed out, "to assume that provisions I of the essential statistical data on production, resources, and population will continue indefinitely to lie beyond 271 the will of the people and the capacity of administration, ; or that scientific technique will necessarily prove un equal to the complicated task of analysis, is evidence of unwarranted pessimism with regard to the intelligence of coming generations.**^ 1 I 3. Even if the optimum were incapable of quantita tive measurement, the concept as such does not have to | lose validity as an instrument of theoretical analysis. j If this position be granted, we may then proceed to i the inquiry into what seem to be, from our point of view, j the basic deficiencies of the theory as a general theory of population. The Optimum Theory as a One-sided Approach. In its present form, the optimum theory by itself cannot be, a general theory of population as its advocates ,! at least the modern ones, seem to regard it. Going all the way back to the writings of Dalton and Robbins, we i find the former stated: From the point of view of the economist, ; the theory of population has two chief j branches. The first is the theory of the causes which determine the growth or decline of numbers in the world as a whole, and in such smaller areas as may seem to be of special interest or Wolfe, o£. cit., p. 247. 272 significance, such as areas bound by j national frontiers. The second is the theory of the relations between economic welfare and changes in number. ! Robbins was not less clear on this point. The first sentence of his article on the subject ran as ; follows; ( i Economic theory on the problem of popu lation, or at least on the quantitative aspects of these problems, falls into two j clearly separated divisions. It discusses ' I the causes which determine the size of j populations, and it discusses what influence J the size of population everts upon the productivity of effort. As both of these -writers have pointed out, the opti mum theory deals only with the second of these branches or f divisions. It deals only with the number of people ”de- ! manded*’ by the economy of a specific area in order that j that economy could achieve maximum productiveness In rela tion to a specific set of natural resources and a fixed “technical level.n There is nothing in the theory to indi cate that the optimum size will also be, ceteris paribus, the same size of population that the members of that economy will choose to “supply” assuming rationality of action. The optimum position, as based on a strict economic interpretation, need not be (and most of the time is not) one and the same thing as that of economic- demographic equilibrium. Welfare critiques of the ^Dalton, o£. cit..p.29. ^^Robbins.op. cit..p.103. 273 optimum criteria seem to have had this distinction clearly in mind. A strict economic version of the optimum theory 37 is only valid as a "demand function” by the economy for j one of its factors of production, namely labor. This, ! however, leaves unexplored a whole aspect of the popula- j tion question concerning the determination of the "supply ; function" assuming rationality of action. The optimum ! theory is incomplete until it includes all factors in- ! j volved in the determination of that "supply function" in its frame of reference. Dalton’s previously quoted assumption "that changes in numbers influence economic welfare only through changes in production per head," j ! cannot be accepted as valid or realistic. Changes in num- l ber, as resulting from changes in the natality and mortal ity experiences of the society, affect economic-demographic | welfare, not only through their effect on per capita pro ductivity, but also through their effect on the feelings I and emotions associated with these experiences. ^ a "demand function” of population may be defined as a series of population sizes necessary, ceteris paribus. I for the maintenance of different levels of per capita productivity. : 33 . A "supply function" of population may be defined i as the sizes of population forthcoming, everything else assumed constant, at different levels of per capita pro ductivity assuming rationality of action. CHAPTER V I I ECONOMIC VARIABLES AND CONTROLLED CHANGES— STATIC ANALYSIS j f | j Notwithstanding the assumed dominance of ration- j 1 ! I ality in the controlled population changes, the form and j ; character of that rationality would still be adapted to ! t i the ritualistic practices observed. In most modern societies, this is true of the means utilized for the achievement of the population size considered consistent 1 with economic maximization. Legally as well as religious ly, manipulation of mortality is forbidden as a means to the attainment of that maximization. With minor qualifi cations, such practices as abortion, infanticide, and the killing of the old and invalid are prohibited in favor of a maximum duration of life-expectancy. In controlling their number, human beings thus came to rely solely on "natural abstention" and/or "mechanical devices" that per- I tain to the natality side of demographic behavior. j [ Rational manipulation of the population size is thus mainly affected through the rational manipulation of the fertility experiences. In this chapter, then, we deal with the static re lationships involved in human preference to have or not to 275 have a child under conditions of rational action. Through out the analysis, two basic assumptions are maintained. First, we assume fecund family units. Second, we assume rationality of action, that is, we assume these units to i be willing and capable of controlling their family size , ' as a means toward the maximization of economic welfare. ( BASIC DETERMINANTS OF CONTROLLED FERTILITY At any one time, parental decision to have or not to have a child is basically a function of the "satisfac tions” and "dissatisfactions" associated with that child. ; Since we assume rationality of action and perfect control I : on the part of the parents, it then follows that: With allowance for all the physiological aspects involved, a child is born if, at the time of conception, the believed "satisfactions" derived from having a child are equal to or more than the believed "dissatisfactions" associated with his conception, birth, and rearing. i ; I That is, if the child’s "net-believed satisfactions"! I 7 j I to his parents at the time of conception were negative, I » * . the child, under controlled conditions, would not have ; t ■ j been conceived. By referring to the "satisfactions" ! __________________ ^ This, of course, should allow for unavoidable "accidents" such as occur when a couple plan on having a child and end up with twins or triplets. 276 derived by the parents from having a child as his "value” to them and the "dissatisfactions" as his "cost" to them, we then attempt in the following analysis to determine the variables and relationships involved on each side. The Value of a Child. The theory of value in economic literature. In contemporary economic writings, the genesis of value is 2 conceded to be subjective in nature. "The economist who undertakes to explain value," wrote Von WdSser, "has 3 to explain the procedure of those who value." In this sense, the causes of value are found to be an attribute, not of the object valued, but rather of the relationship between that object and the wants and desires of the sub ject making the valuation. A full explanation of this "value-generating" relationship is hardly possible in our short resume here. Studies on the subject, however, make distinctions among different aspects of this relationship and,consequently, 2 Hardly any economic book on theory or principles can achieve its objective without dealing in one form or another with the theory of value. In our classifications and terminology, however, we closely follow the discussion of: Lewis H. Haney, Value and Distribution (New York: D. Appleton-Century Company, Inc., 1939), Chapters 3-6. 3 Frederick Von Wieser, Natural Value (New York: G. E. Stechert and Company, 1930), p. 3. 277 . of value.^ The "direct" value, for example, is distin guished from the "imputed" or "indirect" value.^ Within j the process of direct valuation, we also have: (1) primary j ! value, based on the ability (natural or assumed) of an j ‘ j object to satisfy any one or more of the wants and desires j ; j i of the subject— utility; (2) secondary value, as attributed| j • I i by the subject to an extra ■unit of the object in the pro- I ! | cess of maximizing his satisfactions— marginal utility; ! j and (3) tertiary or economic value, as based on an ob- | jectfs exchange potential for other goods and services— | price. By restricting themselves to the.last of these ! types of value, economists hoped to achieve objectivity I j and definiteness for economic analysis. While justifiable ! from many points of view, this restriction, nevertheless, left unconsidered a wide group of "stimuli" or "objects" which possess "primary" as well as "secondary" value for ! human beings but to Which, for one reason or another, no j j market value is attached. Such neglect, while not neces- i | sarily serious in pure economic discussions, can be : : extremely misleading in any consideration of a socio- t economic concept of rational action. In such analysis I I J ^ For a bibliography on the Theory of Value, see: j Haney, 0£. cit., footnote p. 161. 1 S ' Definition of this value in the next section. 27S as in this study, relevant subjective values with no ob jective (money) connotations have to be considered, inasmuch as they constitute alternatives for individual and social behavior. The value we are mainly interested in, of course, is that of a child to his parents. The dual nature of the value of a child. As re ferred to above, the value, attributed by a subject to an object can be either "direct" or "imputed." On one hand, the value is direct when the object is desired, because of its necessity per se, as a stimulus for the satisfac tion of any of the human wants and desires. On the other hand, value is "imputed" when the desire for the object stems, not from any direct primary value involved, but from associated circumstances which, themselves, satisfy human wants and desires. In economics, this aspect of valuation is most frequently illustrated by the case of the importance that men attach to things which are not desired for themselves, but only as a means or instrumentality for attaining indirectly other things which are so desired.6 When applied to parental desire for children, both of these types of valuation are found to be applicable. 6 Haney, op. cit.. p. 173 A child, up to the point of saturation,? is directly valued by his parents as a stimulus for the satisfaction of the “parenthood instinct.” Simultaneously, a child may also be granted imputed value because of associated j circumstances which, in themselves, are valued by the parents. Both of these types of valuation have to be con sidered before an accurate estimate of the value of any | j one child to his parents can be achieved. i i The direct value of a child to his parents. From the parents1 point of view, their children have direct primary value, utility, even though they may have no ex change or money price. As explained above, this utility is based on the natural desire of the parents for children, the parenthood instinct. Taken in the aggregate, the relative intensity of this desire,as compared to all other wants and desires would, basically, determine the relative primary value of children per se. as compared to those of all other goods and services. A point of saturation is reached when the marginal utility of the child is zero. 8The relative primary value of children as compared to other goods and services may be expected, ceteris paribus. to rise with higher age groups. The fear of a declining fecundity should induce such changes in prefer ence . 280 In shifting from the primary to the secondary value we notice the human desire for offspring, like most other desires, to decrease at higher and higher levels of satis- i i faction. Provided that all other things remain constant, particularly the imputed value including parental prefer- j ences among sexes, the secondary value or marginal utility of each child to his parents would be as presented in Figure 4» The utility of the first child would be higher s Marginal Utility in Degrees of Satisfaction 1st 2nd 3rd 4th 5th 6th 7th 8th FIGURE 4 THE MARGINAL UTILITY OF SUCCESSIVE CHILDREN TO THEIR PARENTS than that of the second, which in turn would be higher than that of the third child, and so on. The gradation in this figure, it should be made clear, is strictly hypothetical. In actual experiences, it would be basically i a characteristic of each individual family unit. In this connection, an aspect of practical impor tance should be pointed out. Most analyses of the marginal| utility deal with it as a static relationship prevailing as of any one time. Even if this were hypothetically possible in the case of parenthood, the fact remains that the desire for children is not a "recurrent" desire, such as that for food, drink, and the like, but a "life-long" j j one. Under such conditions, it is highly doubtful to imagine the marginal utility of a child dropping to zero or becoming negative. In the case of foody for example, its marginal utility becomes negative after the point of saturation has been attained. In the case of children, it is more probable that, with most people, the marginal utility curve, having dropped to a low level, would gradually flatten and continue horizontally at a positive j 232 Q level of value or satisfaction. , The "imputed" value of a child. Besides his direct ' value to his parents, a child is generally attributed with i ’ 1 an "imputed" value of one sort or another. Basically j originating with the parents, the "imputed" value covers i any desire for a child on their part which is based on j ' incentives other than the satisfaction of the "parenthood i t instinct." An all-inclusive list of such incentives is « 10 i practically out of the question. Some of the most com- j j mon ones, however, are: A. A desire for one particular sex over the other, j This,is only a supplementary desire to that for children per se. 9 , The practical significance of this point stems j from its possible use as an argument against the mature . economy concept. This can be explained as follows: Since, I as explained later, the cost of having a child is basie- ! ally that of an "opportunity cost," this cost will drop with the drop in the marginal utility of all other goods and services. At a stage of abundance when most marginal utilities approach zero, the "mature economy" concept | would still not result because people will shift from the production and consumption of economic goods and services to the "production" and rearing of children. Because of differences in the socio-economic statuses of the different societies, the majority of these incentives will have to be determined on an individual basis. !' 283 B. A desire for a child as a playmate or a com panion for a previous one. This is particularly noticed , in families where either the father or the mother was an t - ( j "only” child -and does not want,his or her child to have ! I ; the same experience. C. A desire for a child as a means to social, re- : ligious, or political prestige. In this sense, the social [ or religious prestige becomes a "want” the conscious i . I j satisfaction of which is desired by the parents. D. A desire for children as a means to the attain- ment of, government subsidy or recognition. This is par- : ticularly important when the government is following a policy for the encouragement of population increase. ; E. A desire for a child as an income tax I ! exemption. ! F. A desire for a child as an additional work hand. This is particularly noticed among rural societies. | G. A desire for a child as an insurance against | old age retirement. This type df imputed value is quite prevailing in-societies with no old age social programs and in which family ties are still strong. i H. Another aspect of imputed value, which is less i t I clear than the others, is that derived from the desire j i for children in the belief that an increasing population is ! j conducive to a rise in per capita productivity and 234 presumably of welfare. This is the case where the con ventional optimum theory comes to bear on controlled pop ulation changes. If optimum theorists can, through their i complicated calculations, establish the fact that an in creasing population is needed for the attainment of opti- I 1 mum per capita productivity, and, more important, if they can convince the public of the accuracy of their calcu lations, the parents would, in this case, attribute a positive imputed value to the believed satisfactions de rived from having a child. If the optimum calculations were in favor of a decreasing population, the imputed valuev.attributed to a child would, in this case, be a negative one. j The Cost of Having a Child. The cost of having a child refers to the believed dissatisfactions resulting from his conception, birth, and rearing. From the parents’ point of view this cost may be divided into three categories: the biological, the social, and the economic. » j | The biological cost of having a child. In this category is included all the hardships associated with the conception and birth of the child. Exclusively endured by the wife, the intensity of these hardships would vary with the different attitude of each. Some would consider them 2B5 lightly as a necessary sacrifice for the strengthening of the tie between mother and child. Others would consider them merely as a nuisance that should be avoided at all cost. Developments in the field of medicine have recently | reduced the intensity of these biological hardships. How- j ever, these hardships can still be semi-prohibitive par- j ticularly under the circumstances when a case of pregnancy j i | can endanger the life of the mother. The social cost of having a child. The begetting > - | of a child is also accompanied by some social "inconven iences” that should be included in a general evaluation of j his cost. These "inconveniences" are associated with pregnancy, as well as with the experience of having a child. In the first case, there is always the limitation imposed on the social activities of the mother throughout the period of pregnancy. In the second, there is involved the effect of having a child on the social and physical mobility of the family.^ On both counts, the parents i would not be as "light" as they were before. Where this "lightness" counts high among family units, the social H On a discussion of the social mobility hypothesis see: Charles Westoff, "The Changing Focus of Differential Fertility Research: The Social Mobility Hypothesis," The Milbank Memorial Fund. 31•43, January, 1953* 2S6 "inconveniences” of having a child would also count high. | The economic cost of having a child. All things : considered, the bulk of the cost of a child to his parents :. ' s is economic in nature. In terms of dissatisfactions, such I i economic cost refers to the sacrifices underlying parental ; expenditure on the child from the moment of conception j until he is financially capable of taking care of himself. ! Considered rationally, the magnitude of these sacrifices, j occuring predominantly after the moment of conception, would be a function of: 1. The level of "monetary” expenditure made neces- I ; sary by the conception, birth, and rearing of the child. ! 2. The magnitude of the sacrifices involved in ! such expenditures, that is, opportunity cost. 3. The rate of discount at which future costs are j reduced to present values (values at the time of concep- | tion). i A. The Money Cost of a Child In terms of dollars and cents, the cost of a child may be divided into three groups: the pre-natal, the j natal, and the post-natal. Besides the necessary expenses of the pre-natal medical attention, the pre-natal economic cost of the 287 child is primarily negative in nature. If the wife (mother) were economically employed, this cost would con sist of the income which the family would have to forego ! while she (the wife) was in the last stages of pregnancy. ! j Where the wife (mother) is not economically employed,this j aspect of the economic cost will be reduced to the cost I of market services which the family has to resort to in ^ I substitution of those generally performed by her (the 1 2 mother). The natal expenses are also just as simple in ; nature. Mainly, they consist of the expenses incurred in connection with the birth of the child. The level of these expenses, however, differs with the different fami lies, depending on ; the type of services sought, as well as ; the average price level of these services prevailing in 13 each community. Questions as to whether the wife will I TO ! This may prove to be an influential factor under lying the high fertility of the societies where it is not ! the general custom of women, married women in particular, to be economically employed. By reducing the cost of the child to his parents, the chances are high that the net- j 1 believed satisfactions from having a child will continue j for higher-bracket children. 13 ^ For a discussion of these expenses in the United ; States, see: Louis I. Dublin and Alfred J. Lotka, The Money ; Value of a Man (New York: The Ronald Press Company, 1947), ; Chapter IV, pp. 44-48. 288 go to a hospital or give birth to the child at home,whtether ; to have a physician or a midwife in attendance, and the ! like, are basically decided upon by the parents in the ! light of: (a) their social class; (b) their available means; (c) the relative cost of each service; and (d) the expected assistance from the grandparents. These, as well I t j j as other considerations, determine how high the "birth- j I bill* is going to be. I ! j Of the three groups of expenditure, however, the ; "post-natal” accounts for the largest share of the monetary ! cost of a child. Basically, this group relates to the support and education of the child until he is financially I i capable of taking care of himself. On both counts, the I j level of post-natal expenditure should be recognized as a function of different variables of which the most impor- i tant are: 1. Parental concept as to what an adequate level of "support” and "education” for their child should be: : This is particularly influenced by the prevailing social ! 1 ; conditions of the society, in general, and the family, ; in particular. In some cases the society does, by law, i j force the parents to supply their children with a minimum j level of subsistence and education. This, however, is the exception rather than the rule among the majority of world populations. In most cases, it is the social 289 status of the family itself that determines the level of j support and education of the child. The higher the social status, of course, the higher that level is going to be. 2. The length of the period of "dependency" by : the child on his parents: It is axiomatic that the longer j ! the period of dependency, ceteris paribus. the higher the i cost of the child to his parents is going to be. This i * 1 period is noticed to differ among the different societies, j i ; ! as well as within the different groups of each society. Government regulations have in many cases the primary role ! of determining the minimum age level within which no child can maintain a regular job without the consent of the i proper authorities. In the final analysis, however, it is the socio-economic conditions of each society that de- terminesthe length of the dependency period. Among low , income groups, a child has to quit school early in favor i : of a regular employment because of the need for the extra | income involved. At higher income groups, the need will I 1 be much less and the child thus will be able to prolong j i his period of dependency. 3. The share of society, in general, and the gov- i ernment, in particular, in shielding the total expense of : rearing the child: This is particularly important in the 1 case of education. Where the educational system is totally 290 or partially free, the cost of a child /to his parents is reduced by just as much. On the aggregate, of course, the society, as a whole, will be paying through scholar- | ships, taxes, or direct tuitions for the education of its j younger generations. In rational demographic behavior, ; I however, it is individual family cost rather than the j t total social cost that is taken into consideration. j i . The Real Cost of a Child By itself, the monetary cost of a child is not an accurate indicator of the parental sacrifices involved. Even at the expense of objectivity, it is still necessary to go beyond monetary units into the consideration of the different factors determining the "real" level of "hard ships” associated with any specific level of monetary cost. Such a consideration can only be accomplished through an "opportunity cost” type of analysis. In this sense, we have mainly to deal with the intensity of the j desires the satisfaction of which is forsaken by the 1 parents in favor of having the c h i l d . j 14- Again,' the "opportunity cost" theory can hardly be dealt with here. For an exposition of its major as pects, see: A.E. Monroe. Value and Income (Cambridge: Harvard University Press,"1951), Chapter I, pp. 3-14* 291 Eyen within pure economic analysis, the real cost of satisfying a human want is given in terms of: I . . ./ the satisfactions I must forego in ; order to perform the labor required to | I produce the good in question, and the consumption I must sacrifice if I devote this/amount of labor to this purpose. 1 The latter is not one magnitude but many, ' for many other things might have been produced.-1 -5 , In the case of the satisfaction of "parenthood" as j a human want, this concept is mainly applicable to the ; ! means devoted by the parents for the support and education I i : of the child. Instead of devoting them to the rearing of I a child, three other "opportunities" were opened for the j utilization of these means. First, the parents could have j j reduced their working hours in favor of more leisure and j comfort. Second, the parents could have utilized these i , I means for the satisfaction of other wants and desires. I ; Third, the parents could have utilized these means as I "capital" for the improvement of their productive I 16 ■ ' ! capacity. The question now is: What are the hardships j i resulting from the parents’ decision to devote a portion j of their available means to the rearing of a child rather j Ibid.. pp. 10-11. 1 6 Monroe refers to these three alternatives in terms of "satisfaction cost," "consumptive cost,” and "efficiency cost," respectively. Ibid.. p. 9. 292 than to any or all of the three previous alternatives? ! To answer this question, we have primarily to con- t I sider the degree of satisfactions cf the human wants under- 1 ! j lying the three aforementioned alternatives, namely, the j I | j want for leisure, the want for consumption goods and ser- j 1 vices, and the want for capital. As is well known, the ! ; I j intensity of a subject’s desire for an object is inversely i related to the degree of satisfaction which that desire j has already attained. In other words, the higher the de- : gree of satisfaction, the lower the marginal utility of | the object and, consequently, the lower the sense of ! ’ ’sacrifice” associated with the loss of that object in : favor of a child, for example. Thus, assuming (1) that the | monetary cost of a child is equal at different levels of j income, and (2) that the level of satisfaction from all | sources is directly related to the level of income ex- i j perienced, it then follows that the real cost of having a child is inversely related to the level of satisfactions j (income) experienced by the family concerned.^ 17 I Another factor which may affect the real cost of ! the child is that connected with whether the monetary cost has to be paid as it arises or whether it would spread through any one form or another of insurance over a longer period of time. 293 C. The Discount Rate of Future Values The peculiar aspect about the cost of a child to his parents is that it predominantly occurs after rather than before his conception. This peculiarity introduces a new variable into the picture. Since the ”net-believed- satisfactions” resulting from having a child have to be determined prior to the parental decision concerning con ception, we thus have to allow for the rate at which the parents discount future values and costs. Changes in this rate can easily determine whether the ”net-believed-satis- factions” will be positive or negative. To understand this point, we may assume an extreme case in which the rate of discount of future cost is equal to 100 per cent. In this sense, whatever the cost of a child in the future may be, its present value will be nil. Since at least a portion of the value of a child (direct as well as imputed) to his parents will be accomplished 1$ simultaneously with conception, the ”net-believed- satisfaction” of having a child at the time of conception Partially, at least, the rate of discount of future values will affect parental satisfactions derived from having a child. This, however, is counterbalanced1 by the always existing risk that the child might turn out to be a "disgrace” rather than a ”pride” to his parents and thus for the satisfactions to be turned into dissatis factions. The effect of the rate of discount as applied in this case may just as well be ignored. 294 will always be positive. Within rational conditions, the parental decision in this case will always be in favor of having the child.^ Rarely, however, does the rate of discount of future values reach that of 100 per cent. It, nevertheless shows wide variations among the different societies, as , I well as among the different communities of each society. J l I In such societies as those of Western Europe and the j United States where the rate of discount is low, the ten dency is for the parents to appreciate fully the magnitude of the future costs associated with having a child. Con sequently, they will be discouraged from having the child at least until they are capable of meeting his cost.20 The same is relatively true of urban as compared to rural 19 A highly significant point in this connection is that the high rate of discount of future values which is conducive to a high fertility is, at the same time, a hindrance to savings and capital formation. Where the rate is low, the tendency is for a low fertility and a high level of savings. 20 This suggests an interesting proposal for those countries that are trying to reduce their fertility ex periences. If a plan could be devised by which the econ omic cost of a child to his parents would be immediately experienced at the time of conception (through a require ment that the parents should deposit a cash sum with the government in lieu of the child’s future support and edu cation) the chances are high that the parents would think twice before they decided on having an extra child. 295 communities. The result is generally that of a lower : level of fertility. t FERTILITY AS A FUNCTION OF A SINGLE VARIABLE A Retrogression. J We may now try to sum up the argument by capital- , i ! | izing on the previous discussion. Within a dominantly j j , j | rational pattern of behavior, parents may be expected to i [ ' j J decide in favor of having a child when at the time of con- j ception the believed total satisfactions ■ = » - the believed j ; total dissatisfactions. i i By substituting for the aggregates and using K to 8 i refer to the rate at which future values are discounted, ‘ \ ! this equation of controlled fertility indicates that an extra child will be decided upon when his direct value * • l his imputed value his biological cost his social cost - * ■ K (his economic cost). In looking behind these variables, we find that they} ■ ! ; are basically subjective in nature. In essence, however, i ; they are a function of (1) the prevailing level of satis- ! factions or income of each family (particularly with re- j gard to the economic cost of the child) and (2) the atti- i tudes and value judgments of the parents. Any attempts at i the "discovery” of "trends" in controlled fertility have to take into consideration both of these factors. : A Fertility Preference Schedule* j In view of these considerations, it is hardly pos- I ■ : sible for any one family at any one moment of time to S t i state its desire for children in terms of an absolute i j : number. Rather, this desire must be stated in terms of a ; i preference schedule, from now on referred to as the "fer- j j tility preference schedule," associated with different j levels of income. Figure 5 gives a graphical representa- i | tion of such a schedule. At Yi income the family’s prefer ence will be for one child. That is, at one child, the satisfactions derived from having the child are equal to | or just a little more above the dissatisfactions involved, j | A second child at the same level of income, will have a negative "net-believed-satisfactiqn" for ifche parents and : as such will be rationally inadvisable. | At higher levels of income, however, things start ' to change for the family under consideration. Primarily, j the dissatisfactions associated with having a child, par- j j i ticularly those related to the economic cost of the child, ! i will decline. Provided that the rate of decline of the ! ! dissatisfactions is not less than that for the marginal i . ' 1 utility of children per se. a point will, sooner or later, 1 j be reached when the satisfactions derived from having a second child will equal or surpass his dissatisfactions. UNITsO F •ATKMOTKM A N D OISAT|S»CTION 297 V A L U E OF I A T C H IL D VALUE OF 2 1 0 C H IL D . VALO E OF « M > CHILD |ALUO- OF A H CHILD rtAI-UE OF k TH CHILD FAMI LY I NCOME FAMIY INCOME FIG 5 ■ ■ PARENTAL FERTILITY PREFERENCE SCHEDULE UNDER CONDITION OF RATIONAL BEHAVIOR 296 At Y2 °f income, the parents will thus be in favor of having a second child. If the level of income continues rising high enough, this same process will repeat itself for a third, fourth, fifth, and higher bracket children. The family size will continue to grow until the marginal utility of an extra child drops to zero (considered improbable) or until it drops to a level equal to that of the fixed cost of the 21 child (biological and social). Beyond this point, no rise in income will lower the cost of the child or will induce the parents to have an extra one. This maximum point, as well as the ^hole shape of the fertility preference schedule, may be said to depend on the attitudes and value judgments of each individual family. As should be clear by now, there are two main trends that are in "competition" with each other. First, there is the decline in the marginal utility of children per se as stimuli for the satisfaction of the parenthood instinct. Second, there is the decline in the"opportunity 21 The biological and social costs of the child are predominantly independent of the level of income of the family. Being basically determined by the attitude of the family concerned, they may thus be referred to as the "fixed cost" of the child. 299 ■ cost” of the child, as based on the decline in the , marginal utility of all other economic goods and services. 1 The rate of decline of each of these trends depends pri marily on the family’s preference between children, on j , one hand, and all other economic goods and services, on I f ■ the other, at different levels of income. This preference i I will determine the level of income at which the total j , satisfactions derived from each ’ ’bracket-specific” child ; i will equal the total dissatisfactions. Along with the ! family’s attitude toward the ^biological and social cost ! of the child, it will also determine the level beyond , which the family will decide on paving no more children. ) i The ’ ’Fertility Preference Schedule” and Population Changes.! Within contemporary prevailing patterns of ritual- i ! istic behavior, rational manipulation of the population j j size can only be accomplished through the rational manipu- ! lation of the fertility experiences. When we assume mor- ; ^ i j tality constant at the lowest possible level under the ; i ' circumstances, the type of population changes experienced , i i is thus solely the result of the type of fertility pre vailing. Changes in the population size are of the ! ’ ’controlled” category where fertility is rationally j ! controlled. They are of the ”semi-controlled” category 3 0 0 where fertility is ritualistically semi-controlled. In both cases, the trends in population changes will be identical with those in fertility. I i "Semi-controlled" changes and the "fertility preference schedule." Even though the fertility preference! schedule applies only to the controlled category of fer- j i I tility (and, consequently, of population changes), it, I nevertheless, offers an adequate means for the definition of the semi-controlled category. If we assume the neces- 22 sary data is available, we can thus draw a fertility preference schedule for any specific family unit. Both the fertility and the size of the family are of the con trolled category, as long as its actual experiences follow those of the schedule. In a truistic sense, they are semi-controlled when the fertility actually experienced at any specific level of income is higher than that preferred by the parents. "Semi-controlled" and "controlled" trends of changes. By combining our information about both types of changes, j 22 The problem of measurement represents a great ob stacle for all subjective studies in general and this study in particular. Nevertheless, short of specific tabulations of the fertility preferences, the trends of change could be theoretically constructed on the basis of mere or less. S ' . we then reach a fertility and population trend of change 23 i similar to that presented in Figure 6. The basic ! assumptions of this figure are: i ! i 1. A trend of change in the social pattern of be havior ranging from the predominantly ritualistic (minimum , ( i i | enlightenment) to the predominantly rational (maximum ( : | ! enlightenment). | ! 2. Stages in demographic enlightenment directly ! 1 i ! related to income. I ! / / / | 3. A fertility preference schedule S S for the family (or group of families) under consideration. In this diagram fertility (and consequently the , family or population size) is semi-controlled as long as ff // 1 it lies above the fertility preference schedule S S . As | j indicated in Chapter V, the trend in this category is I [ directly related to the income and inversely related to ! i ; the demographic stage of enlightenment. However, the moment the fertility experiences at any one level of in- j ; come coincide with that indicated on the fertility prefer- i i v \ • ence schedule S S^, the type of change would then shift j \ • from the semi-controlled to the controlled category. From ! | then on, the trend of fertility would follow that preferred I j ‘ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ • Figure 6 is in essence an amalgamation of both Figures 1 and 4. FERTILITY EXPERIENCES GTAGE8 IN DEMOGRAPHIC ENLIGHTENMENT STAGES OF DEMOGRAPHIC ENLIGHTENMENT / NATIONAL INCOME FIGURE 6 : "s e m ic o n tro lle d " and " c o n tr o lle d " demographic tre n d s 302 303 , by the family in the process of maximizing its satisfac tions. ■ A basic distinction to be kept in mind is that of a movement of fertility along the fertility preference ' K U schedule S S and the movement of the schedule itself i // . // I from the S S to the S S , for example. In the first case , the change in fertility is a consequence of the change of the family income and consistent with a single pattern of : fertility preference. In the second case, the movement | represents a total shift of the fertility preference : itself and, consequently, of the parents’ attitudes and : value judgments. By barring any horizontal or perpendic- ! 1 , ular trends in the preference schedule, a shift from one I ! curve to another may be represented by a change in fer- | tility preference with income constant or a change of income with fertility preference constant. FERTILITY'AS A FUNCTION OF MULTIPLE VARIABLES ! Controlled human fertility whrs shown in the previous i | section to be a function of individual family income. By | assuming the totals to be simple aggregates of their con- t ; stituent parts, the controlled fertility of each society i j would then also be a function of the prevailing national i income. i For the economy as a whole, this dependence of : fertility on income is only one of many relationships ! based on the latter as the basic variable of the economic system. The totality of these relationships is actually I } the determinant of the level of economic activities, ; I i income being only their manifestation. To understand the j I ; role of any one variable in the economic system, it is j ! ' i thus not enough to understand its relation to the national ' income. Basically, we also have to place it within the i : general prospectus of all the economic relationships, so as to be able to study its mutual interrelationships with | the other variables. We attempt to deal with the static j i | , aspect of this endeavor in the remainder of this chapter. j i ; A Macro-static Concept of Economic Relationships. i For the clarification of the analysis, an outline sketch of the following dealt-with relationships is given in Chart I on the following page. This outline, we : believe, gives an all inclusive realistic picture of (1)the : I basic variables of the economic system, and (2) the pre- i i . ( vailing static relationships existing among them at any ; one level of income prevailing at any one moment of time. j ■ , j With the emphasis mainly on population, it is thus appro priate to make it our starting point. 305 LEISURE AN INITIAL POPULATION LABOR ALL OTHER FACTORS OF PRODUCTION 1. Land 2. Gapital 3. State of the Arts 4- Economic Organization 5. Pattern of Consumers* Wants * m NATIONAL PRODUCT INCOME CONSUMPTION FERTILITY SAVINGS MATERIAL CAPITAL CAPITAL FORMATION HUMAN CAPITAL (Education) CASH BALANCES RESEARCH CHART I BASIC VARIABLES OF THE ECONOMIC SYSTEM 306 An initial population. At any one moment of time, | the population of any society, region, or community | consists of: ! j 1. A number of people. j i j 2. A specific age distribution. ; ! I 3. A specific sex ratio. j 4. A predetermined set of hereditary qualities I j I (assumed to be constant for all populations). | j 5. A specific level of acquired qualities taken to be directly related to the level of previously accumu lated human capital. Human preferences between “leisure” and ”work.” The history of any specific population, irrespective of age, sex, or qualities, is a history of continuous activ- i | ity. Hardly any act of “living” is performed without the expenditure of some energy. These ”energy-consuming" activities are of many types. Economists have long found i ; it convenient to distinguish between economic activities, : ' ! i or labor, and non-economic activities, or leisure. With- ; I ’ | | out adopting any of the known definitions or giving any of I our own, it suffices to say that the more of the former and the less of the latter, all other things assumed con- ( stant, the higher the level of total productivity is 307 o I ; going to be. In this sense, it makes no difference where we draw the line, as long as we stick to it through out the analysis. Because of physicdl and social, as well as economic j reasons, it is both impossible and inadvisable for man to j j i ! devote all his time and energy to one of these types of j j ' | ' activities at the exclusion of the other. On one hand, he ! i i cannot concentrate on leisure instead of work because of j j the necessity of labor in the production of scarce commod- | : ities. On the other, he cannot devote all his time to ; work because of these reasons, among others: 1. The physical inability of man to work before a minimum age level, as well as beyond a maximum age group. 2. The necessity of rest, particularly after a , long period of exertion, for the preservation of the human ; organism. i I 3• The social advisability of devoting some time I j to non-economic activities. j I [ 4- The attitude in many societies which is unfavor-. | able to the participation of women in "economic” activi- i I 4-- i ties. ^ The chances of the marginal productivity of labor equaling zero is almost impossible. 308 , 5* The advisability of delaying economic work for , the younger age groups in favor of education and higher ! levels of future productivity. These and other factors make it imperative for man i ! to divide his time and energy between leisure and work. j j The important question from the economic point of view is, j i : at what ratio does he do that? This ratio, as based on * I ! ' 1 I man-hours of leisure and work, can only be determined for ! i | j each "initial” population on an individual basis. Basic- i ally, it is a function of the age distribution, the sex j ratio, the physical and social qualities of the population, j as well as the relative intensity of the desire for rest, ! as compared with all other wants and desires. 1 j Labor and the level of productivity. If we were l j able to determine the man-hours of labor that the initial i I population would be capable of and willing to contribute, j ! the level of productivity (gross as well as net) actually i j materializing would depend on the level of the other j \ ' \ factors— land, capital, state of the arts, economic organ- , ization, and tastes— associated with labor in the process j of production. As in the case of population, there can j prevail only one level, both quantitatively and quali- i tatively, of each of these factors at any one moment of ! time. The dependency of this -level on other factors, both 309 | ; past and future, is a subject for dynamic analysis. i National product and the three propensities to consume. have children, and save. After the level of pro- j i ductivity has finally been accomplished, man is in a j position to enjoy the fruits of his own labor. This en- ; joyment is participated in, not only by those who contrib- j ! * ‘ ! j uted the labor involved, but also by their families and j j - i ! dependents. On a functional basis, contemporary economic I theory pictures them as either consuming the income or as , saving it. X in this sense is equal to C * S. j Like many other distinctions in the field of econ- i i j omics, this one concerning the different alternatives I open for the utilization of any specific level of national j income is basically arbitrary in nature. As based on a i functional approach, it pays no attention to the different j motives underlying either consumption or saving. Obviously neither one of these two groups is of one type or based on a single motive. Human consumption may be of the physio- j : logically-necessary type, the luxury type, the showing j type, or the mere-blunder type. The same is also true of I savings. It may be motivated by material returns on in- ! vestment, by major-cost items desired, by future support ! i of the children, or merely in anticipation of a rainy day. The truth of the matter is that human uses of the national 310 , income are almost infinite in number and range all the way : from the absolutely necessary to the mere superficial types. The classification of such a wide range of uses ! should be made, not arbitrarily as in the approach of consumption versus savings, but in the light of the study I to which it is applicable. This way, attention may be i 1 , i focused on the items of human expenditure deemed important ' ! I ; for each study. > i For the sake of the present study, and still approx-; ! imating the conventional classification of economic theory, the multitude of the possible uses of national income may I thus be divided into three groups in connection with the j consumption, fertility, and savings of the initial pop- i ; ulation. | In the first of these groups, we include that por- i tion of the national income devoted directly to the i satisfaction of the "consumptive” wants of the initial ! • population. The ratio which this consumption holds to the | prevailing level of the national income is generally re- j ferred to as the propensity to consume. Among other factors, this propensity is basically a function of: ! 1. The age composition of the initial population. | 2. The ratio of leisure to work. 3. The level of minimum subsistence below which the demand for consumption goods is perfectly inelastic. I f i 4. The level of consumption beyond which the I , marginal satisfactions derived from consumption per se are equal to or less than those derived from the other . alternatives open for the utilization of the national j income.^ i j In the second of these groups is included that portion of the national income— actually spent or merely saved— earmarked for the support of actual or planned additions to the population. Functionally, this group in- ; eludes both acts of consumption, where the child is I i actually born and the income is spent on his support, and j acts of saving, where it is laid aside out of income in ! anticipation of having a child. Basically, that portion of consumption devoted to fertility is a function of: (1) j the number of children born, and (2) the average cost of J a child throughout the first year of his life. ° The i This is more of a compound factor which, in ! turn, is determined by the level of income and the prefer- | ences of the population involved. 1 26 It is only the cost of a child in the first year that pertains to our analysis here. In the second and later years, his cost becomes automatically a part of the I consumption of the initial population. 312 level of savings motivated by the prospect of having a child is, however, quite indeterminate. Basically, ; j nevertheless, it may be considered as a function of: (1) ! j the absolute number of children desired; (2) the parents’ j concept concerning an adequate level of support for their ■ j children; and (3) the prevailing rate of discount. All j in all, however, the propensity to have children at any one moment of time refers to the ratio which the sum total : of these ’ ’fertility-related” acts of consumption and savings maintains to the level of the national income. Finally, the third and last alternative for the ; utilization of the national income is that of saving. In a negative sense, we may define it as what is left over i and above the portions used for consumption and fertility. That is, S would equal I * (C f F). As in the two pre vious cases, the propensity to save at any one time refers ! to the ratio which S maintains to Y. i Human preference between capital formation and I irr— i- - "" I cash balances. With savings being the only ’ ’uncommitted” I ; portion of the national income, we find that it can be i ; either utilized in the formation of capital or merely left ; alone in the form of cash balances. The basic factors ; underlying human preference among these two alternatives j is a subject of wide discussion in economic theory and 313 27 need not be dealt with here. The important thing is to ■ allow for the existence of these two alternatives in the i over-all analysis of static equilibrium. i j The different forms of capital formation. In 1 i Chapter III capital was defined as "all man-produced ; ; economic goods and services devoted to the improvement of I i ! ; productive efficiency resulting from the application of I | labor to land." This definition allows for more than one ! form of capital formation. Basically, it allows for the existence of: 1. Material capital: This exists in the form of ] produced machinery and equipment utilized by man in ; improving his productive efficiency. 2. Human capital: To be defined as that portion of savings devoted to the education of the population and, \ through raising their know-how of doing things, to the i improvement of the productive efficiency. I j 3- "Research" capital: Referring to that portion I ! of a society*s savings employed in the stretching of human i j know-how in realms that were not investigated before. i I -------------------- i 27 j See: John M. Keynes, The General Theory of ; Employment. Interest, and Money (New York: Harcourt, Brace . and Company, 1936). i 314 As such, these three forms of capital represent I ■ three alternatives for that part of savings devoted by the J economy to the accretion of its level of capital. i A Static Equilibrium of the Economic System. | I j When all these static relationships are considered, j it appears that the members of a society are continuously in the process of choosing among different alternatives. i 1 I Within a state of rational action, each society would j | condition its choices in such a way as to equalize the ! marginal satisfactions derived from all the possible | alternatives.2^ According to our previous outline sketch, the ultimate alternatives to be considered are: (1) leisure (2) consumption, (3) fertility, (4) cash balances, (5) material capital, (6) human capital, and (7) research capital. ! ' » 1 At one stage of the analysis, the writer con- ! sidered the inclusion of mortality among the different ; alternatives open for the utilization of a specific level ' of national income. In this sense, we would have to separate the expenditure related to the health of the I population from the total consumption so as to include it ; in a separate group by itself. However, so as to con- ! centrate attention on fertility (considered to be the vital factor in controlled population changes) and because of the "ritualistic* obligation concerning the maintenance of mortality at the lowest level possible, we thus preferred i to shape the analysis as presented above. f ] 315 Only when the marginal satisfactions derived from all of these alternatives are equal,can a state of macro- i static equilibrium be said to exist. Where that equil- j ibrium prevails, the level of fertility associated with i [ ! ; the existing level of mortality at the time, would de- ; [ 1 I termine whether the population size would increase, s • ! decrease, or remain constant. ' j i SUMMARY j Within the prevailing pattern of modern ritualism, rational manipulation of the population size is mainly * : j affected through the rational manipulation of the fertil- i j ity experiences. When fecund family units that are willing arid capable of controlling their family size rationally i ' are assumed, the fertility experiences, in turn, will be basically a function of the believed satisfactions and dissatisfactions derived from having a child at the time of conception. In this sense, a child will be conceived when parental satisfactions derived from having a child ! , (his value) are equal to or greater than the dissatisfac- j ! tions (his cost). The value of a child to his parents may be either j "direct” or "imputed." Direct value is based on parental ! desire for children, as stimulus for the satisfaction of j 316 the parenthood instinct. Like most other human wants and desires, this desire for children may be noticed to de- ! cline at higher and higher levels of satisfaction. The I j marginal "direct” value of a child would then diminish, j ■ with the rate of decline being a function of human | j f ! preferences and value judgments. j In a negative sense, the "imputed” value of a j I j child may be defined in terms of any parental desire for ! children based on incentives other than the satisfaction of the parenthood instinct. The different incentives on ! which imputed value may be based, such as for government i subsidy, as an income tax exemption, as an additional \ ! ; working hand, etc., would differ with the various societies and the prevailing socio-economic conditions of each. At any one time, however, the "imputed” value de rived from all the existing incentives would amount to a specific magnitude in terms of satisfactions which shoMd be considered in human preference to have or not to have a child. I I ' ! The cost of a child, on the other hand, has been ; i ! divided into "biological," "social," and "economic" cost; i /; j the latter,in turn, has been divided into "pre-natal," "natal," and "post-natal” cost. The first two of these i i | costs have been referred to as the "fixed” cost of a child j in the sense that it is based on biological and social ,lhardshipsM that are independent of the prevailing income | of the family. The economic cost of a child may also be | considered as relatively "fixed” in terms of monetary : units. In terms of real sacrifices, however, this cost is found to be inversely related to the prevailing level of income: the higher the income, the lower the economic real cost of the child. Since the economic cost of the | child usually occurs after the moment of conception, it is 1 also found to be inversely related to the rate of discount at which future costs are reduced to present values: the ; higher the rate of discount, the lower the cost of a child at the moment of conception will be. | After we considered both the value and the cost of , a child to his parents, we were then able to develop a | "fertility preference schedule" for each family, or group i ! of families, based on the family’s income and its attitudes I | and value judgments. This schedule, up to a theoretical : point of saturation beyond which the parents will desire ! ! no more children, is found to be directly related to the level of income forthcoming. Provided that the attitude j and the value judgments of the family do not change, the I trend of actual fertility would follow that of the I “fertility preference schedule” under the conditions of \ rational action. 316 Finally, and for the sake of clearer understanding of the static economic relationships involved, this re lationship between fertility and income was placed within the multitude of other relationships based on income as such. In this sense, human beings were pictured as con- j tinuously choosing among different alternatives. A state j of static equilibrium would prevail whenever the marginal j | satisfactions derived from any one alternative should I I become equal to those derived from any other. Where such equilibrium prevails, the population size would be a function of the level of "rational" fertility prevailing, taken in relation to the minimum level of mortality possi ble at the moment. CHAPTER VIII ECONOMIC VARIABLES AND CONTROLLED CHANGES— j DYNAMIC ANALYSIS j i i Fundamental to economic analysis is the concept of , man in the process of choosing among different alterna- t tives. His choices are physically predetermined, socially j prescribed, and/or rationally preferred. Taken as a whole, however, the totality of these choices at any one moment of time constitutes a pattern of behavior. From the economic point of view, the study of such patterns is not only important in terms of the moment of occurrence but also, and more significantly so, in terms of future changes and trends of development. It is in connection with this last relationship that we prefer to deal with economic dynamics. THE DIFFERENT ASPECTS OF ECONOMIC DYNAMICS The high level of generalization maintained in this I approach to the study of dynamics is made necessary by the j multitude of variables and the complexity of relationships [ ] involved. It is doubtful whether any one definition at a lower level of generalization could possibly cover all the aspects of such a complicated field. Considered 320 systematically, however, these aspects may be found to lend themselves to logical classification. Based on the ! level of generalization involved, we attempt such a ! ! j classification in the form of four groups: i I I 1. The mutual interrelationship between human l i i i preferences and the level of productivity income. , i i 2. The impact of the level of productivity on specific preferences. i : 3* The impact of specific preferences on the level ; of productivity. 4. The mutual interrelationship among specific preferences. j The Mutual Interrelationship Between Human Preferences | and the Level of Productivity/Income. As a continuous process, each economic system has within it the seeds of dynamism. These seeds are scat tered over the whole economy and are found in almost every j transaction performed. Basically, they are found in I i ^ individual and social preferences concerning daily econ- ' omic phenomena. Whether it is in connection with working, ; consuming, reproducing, saving, or investing, these preferences determine the dynamic trends of development of | economic activities,as reflected in.the trends of develop ment of the national product income. In this sense, 321 : dynamic analysis may be considered as related to two basic J variables: ! 1. Human economic preferences: taken in the pre- i * vious chapter to be basic among: I i | a. leisure and labor; j b. consumption, fertility, and saving; , j j c. cash balances and investment; and ; I d. investment in material capital, human capital, ! | ! or research capital. 2. National income: subject to all the qualifica tions referred to in Chapter III. Since they are the two basic variables of the economic system, the analysis of each can only be handled in terms of the other. On one hand, the preferences of each society are found to vary at different levels of national income. Each level of the national income, on the other hand, is a function of the prevailing factors and conditions of production which, with the exception of i land,-1 - are a function of the preferences of the society, " * ■ The tendency in contemporary economic theory is to regard land as a form of capital. Since it does not originate with any form of saving, we prefer to deal with it as an independent factor assumed constant, at least over a long period of economic development, throughout the analysis. 322 as determining the accumulative use made of all previous national incomes. An analysis of these two mutual re lationships may, generally speaking, be considered the subject matter of economic dynamics. ! The Impact of the Level of Productivity on Specific Preferences. i i 2 I Given a specific physical base, changes in the j t economic preferences of a society may result from: ! 1. Changes in the ratio of rationality to ritualism; in human behavior. 2. Changes in attitudes and value concepts within | rational behavior. The impact of national income on the first of these types of changes has already been dealt with in Chapter V. It is the second of them in which we are mainly interested in this section. In contemporary economic literature, the subject has been dealt with mainly in the form of "propensities.” Thanks chiefly to the late Lord Keynes and his so-called j O Changes in the physical base can only occur through changes in fertility, mortality assumed constant. Since fertility is one of the alternatives in the analysis, the inclusion of the change in the' physical base as a source of changing preference would amount to circular reasoning. 323 3 "fundamental psychological law," the propensities that received the most attention are those of consumption as opposed to saving.^ Without going much into the content of the discussions^ it may be remarked that: 1. Besides consumption and saving, there are other ; propensities that are just as important in the determin ation of economic trends. These are: ! a. The propensity for leisure as opposed to 5 that for work. b. The propensity to have children, as opposed to both those of consumption and saving. "The fundamental psychological law," wrote Keynes, "upon which we are entitled to depend with great confidence both a priori from our knowledge of human nature and from the detailed facts of experience, is that men are disposed, as a rule and on the average, to increase their consump tion as their income increases, but not by as much as the increase in income." John M. Keynes, The General Theory of Employment. Interest, and Money (New York: Harcourt, Brace and Company, 1936), p. 96. 4 For a discussion of these propensities, see:Ibid. Book III, pp. $9-131. Also, Mordecai Ezekiel, "Statisti- | cal Investigations of Savings, Consumption, and Invest- ; ment," American Economic Review. 32:22-49, 272-307, March- ; June, 1942; H. J. Moulton, Controlling Factors of Economic i Development (Washington, D.C.: The Brookings Institution, i 1949). 5 Reference to such propensities may be found in [ John Durant, The Labor Force in the United States 1$9Q- 1960 (New York: Social Science Research Council, 1948J; Clarence Long,.Labor Force. Income and Employment (New York: National Bureau of Economic Research, Inc., no date), Chapter IV. 324 c. The propensity to invest,as opposed to the ; propensity of maintaining cash balances. d. The propensity to invest in material capital, i as opposed to the propensities to invest in human or ! , research capital. ! 2. With few exceptions,^ most analyses have assumed the existence of specific and more or less rigid trends concerning human preference for these referred to economic phenomena at different levels of income. Neither of these points is meant to be a criticism : of the literature. Rather, they are more in the nature ' ! of an attempt to widen the analysis and to direct it ; toward aspects that have not yet been awarded the neces- | sary attention. Whether or not any specific trends exist, i I the investigation of the reaction of people toward the different alternatives at different levels of income re mains of the highest importance. The Impact of Specific Preferences on the Level of j ! Productivity. I The other dynamic group of relationships is that J 6 Refer to James Dusenberry, Income. Saving, and ; the Theory of Consumer Behavior (Cambridge: Harvard University Press, 1949)• 325 : dealing with the impact of specific preferences on the level of productivity. These relationships, obviously, s can only be handled through the effect of such preferences > on the factors and conditions of production. If we regard i ! these latter to be labor, capital, efficiency, economic i | organization, and tastes (land constant by definition) we may then inquire into the relationships among these fac tors and the different specific economic preferences. Only a short resume is possible in each case. Leisure, labor and the level of productivity. i Considered in man-hours, the more a specific population I contributes to labor, the less the amount of leisure it ! will enjoy. With this as the tendency, what would be the ; resulting effect on the level of the national income? j An adequate answer to this question necessitates a i variety of assumptions concerning the conditions of pro- i duction, the resulting changes in the price level, and 7 I the physical endurance of labor. For our purposes, how- i : ever, such an elaborate consideration need not be attemp- | | ted. As a general proposition, it may be safely stated j l ? On a fuller analysis of these aspects see: I L. Robbins, "The Economic Effects of Variations of Hours | of Labour,” The Economic Journal, 9525-40, March* 1929. j I 326 ; that the higher the ratio of labor to leisure in any economy, the higher the level of productivity will be, J provided that the marginal disutility associated with the \ reduction in leisure is not, in terms of material product, | high enough to counterbalance the marginal productivity | of the additional labor. ■ j Consumption, fertility, saving and the level of I ! productivity. These three variables represent the basic ; alternatives for the utilization of current income. Human] i preferences among these alternatives constitute, basically,! the underlying factors that can lead to economic develop- j ment, decline, or stagnation. An understanding of the impact of any one pattern of preferences on the trends of development is mainly a function of the understanding of J the relationship which each of these variables maintains I j to the factors and conditions of production and, conse- t i quently, to the level of productivity. s ; ' ' i The effect on economic development of a larger or I smaller portion of the national income devoted to con- j ! I ; sumption is basically a function of two divergent rela- i i tionships. On one hand, there is the adverse effect re sulting from the fact that the more that is devoted to consumption, the less there is available for saving and, consequently, the less there is available as. a base for capital formation. On the other hand, the higher the level of consumption, the higher the incentive for invest ment on the part of the entrepreneurs and the lower the chances of the existence of a "gap" between savings and investment. Whichever of these two relationships will, in the final analysis, dominate depends on the relative necessity of marginal "voluntary" savings in the process of capital formation, as related to the relative neces sity of marginal consumption as a factor underlying and inducing any specific level of investment.^ In the case of fertility, the relationships are more complicated. A higher preference for fertility per se, mortality assumed constant, results not only in a larger size of population, but also a younger age ^ Where the financial organizations in a society are well established they, through the extension of credit, can meet the demand of investors without the necessity of "voluntary" savings. The credit, which these organiza tions will create is, for safety reasons, a constant ratio of the "voluntary" savings of the society. 9 In most underdeveloped countries, the low level of consumer demand is one of the factors adverse to in vestment and, consequently, to economic development. Nevertheless, it is not the basic factor involved. The lack of an adequate level of savings sufficient to finance a growing level of investment should, by far, occupy that role. United Nations, Measures for the Economic Develop ment of the Under-Developed Countries (New York: United Nations, Department of Economic Affairs, May, 1951)• composition. These, in turn, affect the factors and con ditions of production through: 1. The changes in the ratio of labor to leisure made necessary by the younger age composition. 2. The resulting effect on the tastes of the society. 3. The dissaving necessitated for the support of increasing numbers.^ In this last case, the resulting consequences will be determined by the same two relationships pointed out in connection with a higher level of consumption. Finally, the relationship between savings and the level of income is more compound. Basically, however, it is mainly exercised through the relationship of savings to investment and, through the latter, to capital accumula tion, efficiency, tastes, and economic organization. As in the case of consumption, but diametrically opposed to it, two divergent relationships may be distinguished. Granted a higher preference for savings on the part of the economy, it may be expected to lead to: This dissaving will result from two sources: a) from previous savings that origiaally materialized in an ticipation of having a child, and b) from funds that would have been saved had the increase in population not mater ialized. 329 1. A lower level of consumption and, consequently, through the drop in consumers1 demand, an adverse effect on the prospects for investment. 2. A higher level of savings and, consequently, : a larger base for capital accumulation. i Where an economy is more in need of "saving" than t of "consumer demand," a higher preference for saving would be conducive, as an impetus to capital accumulation, ; to a rising trend of economic development. Where the needs of the economy are vice versa, as in the case of highly industrialized societies, a higher preference for saving would be conducive to a declining trend of economic activities. Gash balances. investment. and the level of pro ductivity. Given a specific level of saving, the higher the portion devoted to investment rather than to cash balances, the more favorable the effect on productivity. The reason for that should be obvious. Beyond a minimum necessary for the adequate functioning of the economy, ; cash balances represent portions of the national income of which no use has been made. Unless counterbalanced by other factors, this futile isolation of a portion of the national income would reduce total national demand for 330 consumer, as well as for capital goods, and, consequently, it would have a depressing effect on the economy. The : smaller the cash balances are, the smaller that adverse effect is going to be. i Material capital, human capital, research capital. ; and the level of productivity. A dynamic progressive j economy necessitates a variety of material equipment, ex-' I ! | perienced labor to work the equipment, as well as a grow- , ing knowledge of the true nature of the physical universe. I For all three of these endeavors, the economy requires an i ever-increasing stock of capital. As a first approxima- . i tion, we may then say that the higher the level of i j | capital accumulation, all other things assumed constant, I the higher the level of production will be. i The economy, however, is still faced with the i i problem of distributing its available capital among the 1 I three alternatives: material capital, human capital (edu- i ! cation), and research capital. Human preference in this I ; ; connection will determine the rate at which additional : 1 I units of capital improve productivity. The rate will be ■ at a minimum when the available capital is devoted to one ! ' ! alternative to the exclusion of the others. It will be ! ; at a maximum when current investment is distributed in i i i such a way as to equalize the marginal productivities of : the three types of capital. 1 The Mutual Interrelationships Among Specific Preferences. I i Since we have pointed out the two basic dynamic I I . j i relationships in economic activities, we may now deal with j j 1 the most pertinent aspects of economic dynamics, namely, ; * 1 ! the mutual interrelationships among the different variables; of the economic system. j For an adequate understanding of these interrela- ■ : tionships, two points should be made clear: i 1. They can only be handled on a dynamic basis inasmuch as they include changes in the level of the ; national income. 2. The relationship between one variable and an- ; other is not actually a single relationship but mainly i j dual in nature. Basically, an analysis of such a rela tionship should explain: a. The effect of an initial change in any one of the variables on the level of the national income. j i | b. The defect of the change in the national income ; i i * X j ; on human preferences determining the levels of all other ; variables. | This approach to the analysis of dynamic inter- ; relationships is applicable to any of the economic varia- \ bles, as related to all others. In this chapter, however, 332 we are mainly interested in the dynamic interrelationships between controlled fertility, taken as an economic vari able, and all other variables of the economic system. DYNAMIC RELATIONSHIPS AND CONTROLLED FERTILITY Since controlled fertility is a basic variable of the economic system, dynamic economic analysis should be able to explain: 1. How changes in fertility affect all other variables of the system. 2. How changes in any or all other variables of the system affect fertility. As mentioned in Chapter I, the first of these questions is the one to which economists devoted most of their attention. Basically, it would deal with: a. How, given the rate of mortality, a specific change in fertility would affect the size and age distri bution of the population. b. How this change in the size and age distribu tion of the population would affect the level of the national income. c. How the change in the level of the national income would affect human preferences concerning all other economic variables. 333 Taken together, these questions represent a broad field in the study of economic-demographic relationships to which should be devoted an independent section. In harmony with the material in this part, it is the second of these questions in which we are mainly in terested. After assuming a rising trend of national income,we will thus inquire into the possible sources that might have led to such a trend, as well as into the influence which such a trend might have on fertility. Changes in the Level of Income. A change in the level of income, whether of the continuous or the once-over type, may result from either one or more different sources. As based on human preferences, these may be; 1. A favorable change in the ratio of leisure to labor. 2. Favorable changes in the preferences among consumption, fertility, and savings. 3. A higher propensity to invest. 11 In the opinion of the writer, the effect of a rise in income on human preferences is a one-way effect. It is highly doubtful that nn individual or a family, having acquired a specific pattern of economic preference at a high level of income, would, at least in the short run, relinquish that pattern when their income is reduced. 334 4. A favorable change in the allocation of current ! investment to material, human, and/or research capital. 5. A new discovery made possible through research capital. > It is of little importance to our analysis in this section which of these sources contributes to the rise j in the national income. This statement, however, may be I qualified in one sense. Where the rise in income is the result of a higher propensity to invest and, consequently, i a higher level of capital accumulation, it is then of significance to inquire whether the additional capital be 1 ? neutral, labor-elastic, or labor-inelastic. The impor tance of this point, as related to fertility, will be i considered later. I The Dual Effect on Fertility of a Rise in Income. A rise in the level of the national income would affect the fertility of a society through two different ways. Primarily, it would result in a higher level of fertility consistent with a single aggregate fertility preference schedule. However, it may also affect fertility The concepts of labor-elastic and labor-inelastic capital are used by Harvey Liebenstein, A Theory of Econ omic-Demographic Development (Princeton: Princeton Uni versity Press, 1954), p. 46, footnote 2. 335 through its effect on the fertility preference schedule itself, raising it or lowering it as the case may be. The first of these effects has been dealt with in I Chapter VII. Assumed the income distribution to remain 1 ■ | constant at the higher level, this effect is basically a ' function of the drop of the real economic cost of an : extra child to his parents, as related to the drop in the j marginal utility experienced from the begetting of each : additional child. The second of these effects is the one that we hope j to deal with here. Since the position and the shape of ! the fertility preference schedule is a function of paren- i tal attitude toward the value and the cost of each i additional child, the effect of a rise in income on that schedule may thus be expected to result from its effect on i both of these attitudes. i A Rise in Income and the Value of a Child. All other things assumed constant,would a rise in ; the level of income affect the intensity of human desire i for children? This question is merely theoretical in I I j nature. Practically, the fact is that there is no way of ! knowing. To start with, human desire for children,whether direct or imputed, is a subjective quality for which in tensity is hardly measurable. Changes in that intensity 336 ; would be just as difficult to depict if not more so. The : chances are that changes in income would have no effect ; on the desire for children and that their effect on the i j j fertility preference schedule would be mainly exercised I . ; : through the cost rather than the value of the child. j ; Again this may be qualified in one sense. Where the rise in income is the result of a "labor-inelastic" type of capital formation, this rise would have a de- | pressing effect on human fertility. Parents would tend to regard an increasing population as harmful to their mater ial interest. The imputed value attributed by them to an extra child would thus decline. The opposite, of course, | i ; j would be true in the case of a "labor-elastic” type of | capital formation. i | j A Rise in Income and the Cost of a Child. I j Given a specific pattern of parental attitudes, a ! change in income would "statistically” affect human fer tility through its effect on the real economic cost of I ! t ; children. Dynamically, we have also to consider the ef- | i ' feet of the change in income on the pattern of attitudes I itself. This is particularly relevant to: 1. The biological and social cost of the child. 2. Parental relative preference between children and other economic goods and services at different levels 337 of income. 3. Parental rate of discount of future costs at different levels of income. child differ with the various family units. As related ; income that leads to the attitude. Lower income groups, accustomed to hard work and not much social life, come to : regard the socio-biological cost of a child quite lightly. i : With the rise in income and the associated rise in social i | obligations, these costs may be expected to gain more and j more importance, with the degree of correlation mainly determined by social customs and institutions, for example j urban-rural. j schedule. Parental relative preferences between children ; ; and other economic goods and services at different levels ; | of income determine the shape of the static fertility i j preference schedule. With actual changes in income, how- schedule. This change would basically result Income and the socio-biological cost of a child. ! I Parental attitudes toward the socio-biological cost of a I to levels of income, however, it is hard to determine whether it is the attitude that leads to the income or the Income and the shape of the fertility preference ever, the family may, and in most cases does, change its ferences and, consequently, the shape of its 333 from the change in the family’s evaluation of "all other economic goods and services" and, consequently, its eval- I I uation of the opportunity cost of having a child. At I higher and higher levels of income, the value of the ; alternatives other than having a child, particularly that 13 . of savings, would greatly enhance in value, J indicating i s ! a rise in the opportunity cost of a child. It is this : enhancement that seems to underlie Marshall*s explanation I of socio-economic differential fertility in terms of dif- j ferences in the age at marriage and the earning prospects I of each class.^ i Income and the discount rate of future cost. ; Reference has already been made to the fact that at, higher ! and higher levels of income and social development the i tendency is for parents to appreciate more fully the re- j sponsibility associated with the future rearing and edu- ! ! cation of their children. This tends to reduce the rate j at which they discount the future cost of such items add | TO , -'Bowen expressed this relationship in terms of the ■standard of living when he stated that "the desire for a i higher standard of living is in direct proportion to the ! height of living standards." Ezra Bowen, An Hypothesis of Population Growth (New York: Columbia University Press, 1931), p . 15. ! ^ Alfred Marshall, Principles of Economics (New York: The Macmillan Company, 1949), p. 131. 339 consequently, the probability of their having more chil dren than they can support. i Considered collectively, two trends of changes may I be said to exist in controlled fertility resulting from an increase in income. On one hand, there is the rising I trend consistent with a single fertility preference ( schedule. On the other hand, there is a declining trend i j resulting from the shift of the schedule itself to the i right. The final trend in population change will depend on the outcome of these two opposing trends, as related , to the prevailing level of mortality experiences. PART I I I THE IMPACT OF POPULATION CHANGES ON THE ECONOMIC SYSTEM 341 An understanding of the impact of population changes on economic activities, in general, and economic development, in particular, is of vital importance no I matter what type of population change is involved. On | the one hand, the degree of demographic enlightenment in { the case of the semi-controlled changes may be considered directly related to the prevalence of such an understand ing, particularly to the disadvantages associated with a ! I continuous overgrowth of population. On the other hand, the level of controlled fertility and, consequently, the ; trend of controlled changes is, everything else assumed j constant, a function of the expected impact which such | fertility (trend) will have on economic activities and economic welfare. Systematically, such an understanding entails more than one step. Assumed a given rate of natural change, we have: First: to determine the effect which such a rate of quantitative change will have on the age-sex composi- i I tion of the specific population under consideration. i ! Second: to investigate the impact which both of these changes in size and age-sex composition will have on i the conditions of economic development. 342 The effect of any specific rate of natural change j on the age-sex composition of a specific population i I cannot be determined unless we know the age-sex specific fertility and mortality experiences associated with such • a rate of natural change. Given these experiences, the j I problem becomes one of pure statistical character, for i : the solution of which demographers have generally utilized i j two alternatives. The simplest of these alternatives j * I | ; consists of the advancement of the given population appro-j priate to age, both subtracting and adding the age-sex ; specific mortality and fertility experiences, respectively. ; Another more advanced method, however, is based on the i ; Mstable” population concept as originally developed by the i late A. J. Lotka.^ This concept refers to the age-sex ' structure which a closed population will eventually de velop, assuming its fertility and mortality experiences j remain constant. ' The second step, more relevant to our study, how ever, is that of the impact which changes in size and age- i t ! | sex composition will have on the conditions of economic I ! 1 On the stable population concept and its deter- ; mination see: David Glass, Population Policies and Move- i ments (Oxford: Oxford University Press, 1940), Appendix, pp, 374-415. 343 development. Most of these conditions -are already familiar : * j to economists and many lists of them can be found in econ- i omic literature. Rather than deal with each of these i conditions separately, however, we will for our purposes in this part classify them on the basis of the factor or I ! condition of production involved. According to this class- | ■ ! ification, we shall inquire into the impact of population changes on the conditions of economic development related j to: 1. Land ( 2. Labor ! 3. Capital 4* State of the arts 5. Economic organization 6. Tastes : With land constant by definition, it consequently becomes unsusceptible to any changes in population.3 In the following chapters we shall concentrate on the impact ' 2 Joseph J. Spengler gave a list of twenty such factors in "Economic Factors in the Development of Densely j ; Populated Areas," Proceedings of the American Philosophical j Society. 95:21-24, February 13, 1951* j O | J On the relationships between world population and | land, see: United Nations, The Determinants and Conse- I quences of Population Trends JNew York: United Nations, | 1953), pp. 181-193. 344 of population changes on the other five variables. Chapter IX deals with the impact of population changes on labor as a factor of production. Chapter X deals with such impact on the level of capital accumulation. The impact of these changes on the last three conditions of production, namely, the state of the arts, economic organ izations, and tastes,is considered in Chapter XI. CHAPTER IX POPULATION CHANGES AND THE LABOR SUPPLY The most conspicuous of the relationships between , population changes and economic development is that I channelled through the labor supply. As population is the j I ultimate source of all labor, changes in the former will ; ‘ invariably affect changes in the latter. Unless these ‘ i changes are counterbalanced by opposing trends, they, in I turn, will exert their influence on (a) the size of the ! 9 v total national income through their effect on the size and ; composition of the labor force, and (b) the size of the ' per capita national income through their effect on the ! ! ratio of the economically active to the total population. 1 j In both cases, demographic factors are not the only ! i j factors involved. The level of the labor supply at any In most cases neither demographic nor economic literature makes any distinction between the labor supply and the economically active population. In this chapter I they are used interchangeably. f ”The term feconomically active population’ refers to the working population and in general includes all per sons working for pay or profit as well as workers paid in ! kind, unpaid family workers assisting in a family enter- t prise and unemployed persons seeking work. Women occupied solely in domestic duties, students, retired persons, pensioners, etc. are generally excluded.” United Nations, Demographic Yearbook 1949-1950 (New York: Department of Social Affairs, 1950), p. 20. 346 given time is not only a function of the total number of ' people physically capable of participating in economic i I activities, but also of: 1. The length of the working span of life as de termined by the "accepted” average of entry and exit from ! the labor force. ! ! 2. The number of hours workers are willing to con- ! 2 j tribute to economic activities. Both of these factors, in turn, are basically a : function of social patterns and economic motivations which have to be taken into consideration.v i Changes in the size of population may thus be said j to affect the labor supply (and, consequently, the ratio j of the economically active to the total population) in | two ways. On the one hand, they affect the labor supply I 1 directly through their effect on the age-sex composition ^ The efficiency of labor is generally included as one dimension of the labor supply. In this chapter, how- j ever, we do not deal with efficiency, since it is: j included in Chapter XI. i ! 3 "In the studies and theories of economic develop- < ment," wrote Wilbert Moore, "the subtler aspects of the labor supply have been largely neglected. This neglect has arisen in part from an exclusively quantitative demo graphic approach to man power or *labor force* in part from a naive view of economic motivation, as will appear in subsequent chapters." Wilbert E. Moore, Industrializa tion and Labor (Ithaca: Cornell University Press, 1951), p. 5. 347 of the population. On the other hand, they affect the labor supply indirectly through their effect on the social and economic circumstances prevailing. In this chapter we deal only with the first of these effects. Indirect effects, as referred to above, are dealt with casually as (a) we have not yet dealt with ' the effect of quantitative changes on socio-economic con ditions, and (b) changes in the labor supply of socio economic nature are not exactly in line with this study.^ QUANTITATIVE CHANGES AND AGE DISTRIBUTION The relationship between population and the labor supply is so obvious that most economists have tended to take it for granted and to regard the correlation as stable. From a demographic point of view, the ratio of the economically active (L) to the total population (P) i was thus taken to be constant stant function L s k(P) where k is a con- with changes in the former viewed as ! directly related to changes in the latter. In this ! section, this assumed demographic constancy is investi- ; gated. For this purpose we, in turn, assume: ^ On an analysis of such changes see Ibid. Also, The United Nations, The Determinants and Consequences of ! Population Trends (New York: United Nations, 1953), pp. ! 194-209. 348 1. All relevant socio-economic variables to I remain constant.'* ! 2. The sex ratio to remain constant.^ 3. Age groups 15 to 64 to represent the economi- ; 7 ■ cally active population. ; | The first two of these assumptions restrict the | I j | analysis to age distribution, with the third enabling us I I ! to detect changes in the ratio of the economically active I j to the total population. With the analysis so restricted, i our objectives may then be stated as: 5 On the basis of such an assumption, it was possi- i ble for John Durand and S.L. Wolfbein to calculate "work- ; ing-life tables” similar to the ordinary life-tables well I known in demographic literature. In these tables, both | authors attempted the calculation of the total working- ; person-years-of-life expected to be spent in the labor : force by each age-specific, sex-specific population group. : John Durand, The Labor Force in the United States 1690- 1960 (New York: Social Science Research Council, 1948); i and S.L. Wolfbein, ”The Length of Working Life,” Population | Studies. 3:286-294, December, 1949 • i 6 I j This is in harmony with our previously stated j ! intentions (Chapter II) since the sex ratio is in most | j cases constant. ' i * 7 : Since we assume all socio-economic variables to remain constant, the ratio of the age groups 15 to 64 to | the total population may be considered as a justified ap- i proximation to the ratio of the economically active to the 1 total population even though all people within these age groups are not economically independent and not all people out of these age groups are economically dependent. 349 1. To determine whether this assumed constancy does or does not hold true at different rates of quanti tative changes. 2. To determine, when changes in ratio occur: ! I a. Whether the change is of such magnitude as j to warrant practical attention. b. The conditions under which they are favor able or unfavorable to economic development | i using per capita productivity as our i criterion. To achieve these objectives, a case study approach was adopted. According to such an approach, a specific population (United States white population, 1949) was ex posed to different rates of natural changes with the re sulting age distributions compared to the ratio of the economically active to the total population. These com parisons may be done among the age distributions at the end of a specific period of time, or among the age dis- j & j tributions of the stable populations shown to develop0 if j the age specific fertility and mortality experiences asso- ( ciated with each of the natural rates of growth were ^ F. R. Sharp and A. J. Lotka, ”A Problem in Age Distribution,” Philosophical Magazine. April, 1911. 350 ; assumed constant. In the following analysis we adopt the 1 stable population approach. Our calculations are based on the procedure described by Glass^ in an appendix to j Population Policies and Movements in Europe. For the j technical aspects of the procedure, we refer the reader j to that specific appendix. In the following discussion, ' we shall be mainly concerned with the application of the I j procedure rather than with its justification. ! I United StatesT Annual Rate of Growth. 1949. The first step in the calculation of a stable popu- ' lation concerns the determination of the annual rate of ' growth (r) experienced by the population under considera tion. As shown by Lotka and adopted by -Glass: where ! r s the annual rate of growth. 9 David Glass, Population Policies and Movements in i Europe (Oxford: The Clarendon Press, 1940), Appendix, pp. 405-415. Rq = the net reproduction rate (taking both fertility and mortality into consideration, it is the rate at which the potentially fertile women of one generation are replacing themselves). R^ * "first moment of the fertility-mortality distribution from which the net reproduction rate is derived,” (approximated to by multiplying R q by the mean age 1 ! of the mother). j R2 ■ "second moment of the fertility-mortality distribution from which the net reproduction rate is derived," (equals R^ multiplied by the mean age of the mother), j As based on this formula, the following two tables calculate the variables necessary for the determination of the United States white population rate of growth in 1949* Table III specifically deals with the distribution of female births by the age of the mother and Table IV with the determination of R0, R_, and R . 0 * 1 2 According to these tables concerning the United States white population for 1949, it was determined that i 1.379 36.3975 2 R2 = 1040.11875 754.2558 26.7567 / 352 TABLE III FEMALE BIRTHS BY AGE OF MOTHER, WHITE POPULATION UNITED STATES, 1949 (1) (2) (3) (4) (5) White Ratio Distri Age Female to F.W. bution of Total Group Birth Total the Not- W.F.B. Births **Stated (2)*(4) 10-14 868 0.06 2* 870 15-19 160,671 10.74 238 160,909 20-24 484,453 32.39 718 485,171 25-29 438,055 29.29 649 438,704 30-34 253,433 16.94 376 253,809 35-39 124,506 8.32 184 124,690 40-44 31,525 2.11 47 31,572 45-49 2,095 0.14 3 2,098 50* 44 0.00 0 44 Total 1,495,650 99.99 2217 1,497,867 (From United States Vital Statistics. Part II, 1949, Table V, p. 124* * One added to make total equal to 2217 as reported for that year. ** These are white births not stated by the age of mother and consequently distributed according to the ratios indicated in column (3). TABLE IV COMPUTATION OF "r» (Annual Rate of Growth) UNITED STATES WHITE POPULATION, 1949 (1) (2) (3)* (4) (5) (6)*** (7) (6) (9) Age Group Central Age W.F.B. by Age of Mother White Female Population 1949 Female Life Birth Table per 1000 Female Females Population Rq (5) (6) R1 (2) (7) r2 (2) (6) 10-14) 15-19) 17.5 161,779 4636. 34.6^ 462,029 166 2940.0 51,450.00 20-24 22.5 465,171 5244 92.52 460,224 444 9990.0 224,775.00 25-29 27.5 436,704 5504 79.71 476,014 361 10477.5 266,131.25 30-34 32.5 253,609 5205 46.76 475,165 233 7572.5 246,106.25 35-39 37.5 124,690 4947 25.21 471,206 119 4462.5 167,343.75 40-44 42.5 31,572 4525 6.96 465,506 32 1360.0 57,600.00 45-49 47.5 2,096 4122 0.51 457,061 2 95.0 4,512.50 50* 44 Total per 1000 1.379 36.6975 1040.11675 (From Vital Statistics. Part I, 1949). * Column (5) Table III. **Vital Statistics. Table XVII, p. 37. *** Vital Statistics..Life Table, p. liv. 1 Ul Vo 354 Substituting for the original equation, the annual ; rate of growth (r) for the United States white population | would then be equal to: j r= 26.7567- s/( 715.9210 -2 [(754.2558-715.9210)] 1.379^ | i i j 754.2558 - 715.9210 : ! i I j " 26.7567 - / 715.9210 - (76.6696) (.3214) I 36.3348 ! ; = 26.7567 - s / 715.9210 - 24.6416 = 691.2794 I 38.3348 i j I * 26.7567 - 26.2922 « .4645 ! 38.3348 38.3348 j = .0121 or an annual rate of growth of 1.2. per cent. j : Stable White Population at Different Rates of Natural 1 “ Growth. United States. 1949. After the annual rate of natural growth was deter mined, our next step was the calculation of the stable f population resulting if we assume this rate to remain j constant. Tables V and VI conduct these calculations for ; the actual rate of growth of 1.2:3, per cent and give us the j ratio maintained by each age group to the total population j when that population finally reaches stability. By using > the same procedure but different rates of natural growth, Table VII gives the age distributions of the stable A TABLE V STABLE POPULATION FOR UNITED STATES WHITE, 1949 11) _ (2) (3) (4) (5) (6) (7) . (8) Age Central Age e-r(x*2i) - t ' Females L n x Female Stable Population (3) (4) Males O. • , ! / Oy L n x (5) *** Sex Ratio Male Stable Population (7) (3) 0-4 2.5 .97020 4.36359 4.71366 4.82421 5.08375 4.93225 5-9 7.5 .91325 4.34356 4.42333 4.79859 5.05675 4.61808 10-14 12.5 .35964 4.33326 4.15436 4.78325 5.03964 4.33228 15-19 17.5 .30917 4.32029 3.90043 4.75848 5.01449 4.05757 20-24 22.5 .76166 4.30224 3.65767 4.72182 4.97585 3.78991 25-29 27.5 .71695 4.73014 3.42712 4.68144 4.93330 3.53693 30-34 32.5 .67436 4.75165 3.20670 4.63772 4.88723 3.29820 35-39 37.5 .63524 4.71203 2.99330 4.57838 4.82470 3.06484 40—44 42.5 .59795 4.65506 2.73349 4.48837 4.72984 2.82821 45-49 47.5 .56235 4.57031 2.57263 4.34973 4.58375 2.57996 50-54 52.5 .52931 4.44603 2.35555 4.13789 4.36051 2.31024 55-59 57.5 .49371 4.26435 2.12692 3.83167 4.03781 2.01370 60-64 62.5 .46943 3.99993 1.87769 3.41297 3.59659 1.68835 65-69 67.5 .44187 3.59774 1.58973 2.86431 3.01841 1.33374 70-74 72.5 .41593 3.02005 1.25613 2.20813 2.32693 .96784 75-79 77.5 .39151 2.23365 .89603 1.50832 1.58947 .62229 80-84 32.5 .36352 1.46254 .53898 .86067 .90697 .33424 85+ 33.7 .34139 .79269 .27101 .43383 .45717 .15630 46.75033 46.46493 * r - 1.21 per cent. ** Vital Statistics. Part I, 1949, Life Tables, p. liv. **# Sex ratio M/F = 1.0536: Vital Statistics. Part II, 1949, p. 124* 356 TABLE VI AGE DISTRIBUTION FOR STABLE POPULATION UNITED STATES, 1949 (1) (2) (3) (4) (5) (6) 4 Females It Males Stable Column (2) :Stable Column (4)x Age Population Reciprocalpopulation Reciprocal Total X .02203* of Total** :x .02203* of Total** - . 0-4 -10395 50.62 .10866 52.91 103.53 5-9 -09745 47-45 .10174 49.54 96.99 10-14 .09153 44-57 .09544 46.48 91.05 15-19 .08593 41.84 .08939 43.53 85.37 20-24 .08058 ,39.24 .08349 40.66 79.90 25-29 .07550 36.77 .07792 37.94 74.71 30-34 .07064 34-40 .07266 35.38 69.78 35-39 .06594 32.11 .06752 32.88 64-99 40—44 .06132 29.86 .06231 30.34 60.20 45-49 .05668 27.60 .05684 27.68 55.28 50-54 .05189 25.27 .05089 24.7S 50.05 55-59 .04686 22.82 .04436 21.60 44.42 60-64 .04137 20.14 .03719 18.11 38.25 65-69 .03502 17.05 .02938 14.31 31.36 70-74 .02767 13.48 .02132 10.38 23.86 75-79 .01974 9.61 .01371 6.68 16.29 80-84 .01187 5.78 .00736 3.59 9.37 35* .00597 2.91 .00344 1.68 4.59 1 .02991 501.52 1.02362 498.47 999.99 NOTE: r - 1.21 per cent. * The stable birth rate equals: 1 * 1.053^ 93-21526 (total of columns (5) and (8) Table V) = .02203 ** Reciprocal of the total refers to the total of columns (2) and (4) above or 1.02991 * 1.02362 . 2.05353- Ratios expressed in terms of 1000 population. 357 TABLE VII STABLE AGE DISTRIBUTIONS AT DIFFERENT RATES OF GROWTH FOR UNITED STATES WHITE POPULATION, 1949 Age Value of r in per cent -31 -3 -2 1.21* 3 4 5 0-4 15.26 19.72 31.85 103.53 161.50 196.41 231.79 5-9 18.09 22.81 35.01 96.99 138.34 160.05 179.67 10-14 21.50 26.42 38.59 91.05 118.74 130.67 139.54 i '15-19 25.51 30.58 42.48 85.37 101.81 106.57 108.25 120-24 30.22 35.33 46.69 79.90 87.13 86.75 83.82 :25-29 35.76 40.77 48.99 74.71 74.49 70.56 64 • 84 30-34 42.27 47.01 56.21 69.78 63.62 57.32 50.11 35-39 49.82 54.04 61.46 64.99 54.18 46.44 38.62 ,40—44 58.40 61.78 66.84 60.20 45.89 37.41 29.59 *45-49 67-86 70.02 72.06 55.28 38.53 29.88 22.49 50-54 77.77 78.26 76.61 50.05 31.91 23.53 16.84 55-59 87.35 85.72 79.82 44* 42 25.89 18.16 12.37 60-64 95.20 91.12 80.71 38.25 20.38 13.61 8.81 65-69 98.77 92.20 77.69 31.36 15.28 9.70 5.98 70-74 95.09 86.58 69.39 23.86 10.63 6.42 3.76 75-79 82.15 72.96 55.62 16.29 6.64 3.81 2.12 60-84 59.80 51.79 37-56 9.37 3.50 1.91 1.01 85* 39.18 32.90 22.42 4.59 1.54 .80 .39 1000.00 1000.00 1000.00 999.99 1000.00 1000.00 1000.00 * Repeated here for the sake of comparison. 353 populations resulting, if we assume the rate of growth to be constant at the following per cents: -3.5, -3, -2, 3, 4, and 5,successively. On the basis of that table, it will be then possible to compare the different stable pop ulations as to the ratio of the economically active to the total population. As based on these data,comparisons become possible among the different ratios of the economically active (age group 15-64 by assumption) to the total population. It also becomes possible to make comparisons among the ratios of the age groups 0-14, 15-64, and 65* at the indi cated rates of natural growth. Table VIII makes these comparisons. According to this table the evidence indicates the following conclusions. First, the ratio of the economically active to the total population shows, as might have been expected, definite changes at different rates of natural growth. At this point, it may be emphasized that the trend of the change is not only a function of the rate of growth, but also of the initial age distribution of the population, as well as the age-specific fertility and mortality 359 TABLE VIII THE ECONOMICALLY ACTIVE POPULATION AT DIFFERENT . RATES OF NATURAL GROWTH | Rate of Total Ratio to Total Population per 1000 j Growth in Population Economically Economically i Per Cent Inactive Active 0-14 65* Total" 15-64 O A “->2 1000.00 54.S3 374.99 429.34 570.16 -3 1000.00 63.95 336.43 405-33 594.63 -2 1000.00 105.45 262.63 363.13 631.37 1.21 999.99 291.57 35.47 377-04 622.95 3 1000.00 413.53 37.59 456.17 543.33 4 1000.00 437.13 22.64 509.77 490.23 5 1000.00 551.00 13.26 564.26 435.74 360 experiences associated with each specific rate of natural growth.^ Second, from a purely demographic point of view and within average rates of natural growth (from -2 per cent | 1 1 to r 2 per cent may be considered as average), changes in the ratio of the economically active to the total pop- l | ulation are not of such magnitude as to warrant practical ! | attention. This comes about because of the balancing ef- | I feet resulting from the counter-changes in age groups 0 -1 4 and 65* associated with any specific rate of natural growth. Table VIII, for example, shows that the smallest of the 0 -1 4 age group is associated with the highest of the 65* age group and that the highest of the former is associated with the lowest of the latter. When one is increasing, the other is automatically decreasing (and vice versa) leaving the ratio of the age group 15 -6 4 relatively stable. This does not deny the seriousness of The first of these points could be proved by j taking equal populations with different age distributions, ! submitting them to the same rate of natural growth, and comparing the results. The second may be proved by sub mitting a specific population to a single rate of natural growth resulting from different fertility and mortality experiences. The results may be expected to be different. 11 The term average refers to contemporary known world experiences. 361 I the situation when either of* the first two age groups be comes so^liquidated" as not to be able to counterbalance ; 12 1 the increase or decrease of the other. This situation, i however, is the exception rather than the rule, particu larly in terms of short run fluctuations in the rate of j growth. i Changes in Ratio and Per Capita Productivity. The third of the objectives in this section con- i cerns the conditions under which changes in the ratio of the economically active to the total population become | advantageous to economic welfare using per capita produc- • tivity as a criterion. If it were possible to assume j \ ; i productivity per laborer (T) to remain constant, per capita j productivity (Y) would then be directly related to the i ratio (R) of the economically active to the total popula- j tion (Y being equal to TR). However, the relationship is not that simple. Invariably, changes in R are associated | \ i with changes in the absolute size of the economically j j active population. Since T itself is a function of that | l ! !________________ j ; j~2 This case is approached in under-developed areas i where the fertility experiences have been persistently I high for such a long time. The fact, however, that the I mortality experiences in these countries are also exper- ; ienced in the young age groups moderates to a great extent j the effect of such a high fertility rate on the age dis tribution. 362 ; size, its assumed constancy becomes inadmissable and its 1 changes have to be considered simultaneously with the ! I changes of R in their effect on per capita productivity. 1 ! Because of the multitude of variables involved, no j ! i generalization seems to be possible in this connection. i Even though we may have an idea about the long run func- \ j i tional relationship between per capita productivity and j the size of the labor force (based on the concepts of i ' j increasing and decreasing returns), the magnitude and J 1 direction of R resulting from a specific quantitative ! change will still be a function of (1) the age distribu- ■ tion of the initial population, and (2) the fertility and mortality experiences associated with that specific rate of quantitative change. These are variables that can only be determined for each case under consideration on an individual basis. Notwithstanding this inability for generalization, j the following broad trends may be indicated: I 1. Per capita productivity will be increasing wherej ! both the ratio of the economically active to the total } | population (R) and the productivity per laborer (T) re sulting from a specific rate of quantitative growth are increasing. 2. Per capita productivity will be decreasing where both R and T resulting from a specific rate of 363 , quantitative growth are decreasing. I 3* Where changes in R and T resulting from a I j specific rate of quantitative growth are in opposite di- , rections, the per capita productivity will remain constant,! | I increase, or decrease depending.on the magnitude of change | 1 in each direction. If the changes in terms of the original^ ! 1 " 3 ^ 1 variables are very small, - ' per capita productivity will ! remain constant when the marginal change in either variable i dR/R is equal to the marginal change of the other variable ' dT/T in the opposite direction. It will increase when the I change in the variable favoring the increase is higher j than the marginal change in the variable favoring the de- j crease. It will decrease when the marginal change in the j variable favoring the decrease is higher than the marginal I change in the variable favoring the increase. j THE DIFFERENT STAGES OF ECONOMIC- I DEMOGRAPHIC DEPENDENCY i I i i | I As based on differences in the accumulative demo- j I | j graphic experiences of each society, different populations ] i i __ - * - 3 in terms of practical experiences, this assump tion should be considered as very justifiable. 364 may be expected to differ in their distribution among age groups 0-14, 15-65, and 65+. On the basis of such differ- 1 ences, demographers distinguish among three economic- demographic stages: the stage of heavy youth dependency, , the stage of light dependency, and the stage of heavy j old-age dependency. j | The Stage of Heavy Youth Dependency. The stage of heavy youth dependency refers to a i I demographic distribution in which: 1. The ratio of the economically "inactive" or ! "dependent" to the total population is relatively high j ; (or in which the ratio of the economically "active" to the ! total population is relatively low). I 2. The majority of this economically dependent i J segment is concentrated in the age group 0-14* This stage is characteristic of growth-potential societies with persistently high fertility and mortality i j experiences. In this group may be classified most of ' Western Europe around the end of the nineteenth century, ! I i ! the U.S.S.R. in 1940, as well as all of contemporary world ■ j regions generally referred to as the economically under developed areas. In the U.'S.S.R., 36 per cent of the popula tion was under 15 years of age, and only 4 per cent over 65; that is, nine-tenths of the 365 dependents were children. The situation was much the same in England and Wales in 1861. At that time in Western Europe generally, about 40 per cent of the popula tion was in the dependent groups, or, in other words, there were 2 dependents for every three persons in the productive years. ^ United Nations* statistics also show the same situ ation to hold true for most under-developed areas: According to estimates made by the United Nations as of 1947, Latin America had a ratio of over seven persons under 15 years of age j for every ten persons in the age group 15 to 59 years and a combined ratio of over eight persons under 15 years and 60 years and over per ten 15 to 59 years of age. Siiailar .ratios prevailed generally in Africa and Asia. ^ The Stage of Light Dependency. The effect of declining rates of fertility and mortality, particularly the latter, on age distribution and the ratio of the economically active to the total population has, since the beginning of the decline in the Western Hemisphere, attracted the attention of demographers as well as economists. On the basis of statistical studies in this connection, this effect is divided into two stages: the stage of light dependency and the stage of 14 Frank W. Notenstein et al., The Future Popula tion of Europe and the Soviet Union. Population Projec tions 1940-1970 (Geneva: League of Nations,1944), p. 155. -*-5 United Nations, The Determinants and Conse quences of Population Trends (New York: United Nations, 1953), p. 197. 366 , heavy old-age dependency , The stage of light dependency refers to a popula- I I tion experiencing the initial effect of a decline in fer tility and mortality. In this stage: I I s 1. Population group 0-14 is declining due to a ; j I declining fertility. j : „ ! I 2. Population group 15-64 is increasing because | I j of a declining mortality. With the decline in mortality | I ( i generally surpassing the decline in fertility in the first ! I ' ; 1 stages of the demographic cycle,^ the rate of increase j of this age group may be expected to surpass the rate of | decrease of the age 0-14-group. 3- Population group 65* is increasing but at a much lower rate than the decrease In 0-14- 16 of particular importance in this connection are MortaraTs studies based on the absolute size and the total number of years expected to be spent in the different j demographic-economic age groups. For a list of his con- i elusions, see Giorgio Mortara, Puree de la Vie Econo- ! miquement Active Suivant la Mortalite~TRio de Janiro: j Servico Grafico de Institute Brasileiro de Geografia I Estatistica, 1951)• i 17 ! Reference here is to cycle theories supposedly describing the transition from a high fertility and mor- ■ tality experience to a low fertility and mortality exper- | ience. On such a theory, see Frank W. Notestein, KThe , Population of the World in the Year 2000,” Journal of the I American Statistical Association. 45:336-345, September, ■ 1950; G.P. Blacker, ^Stages in Population Growth,n Eugenics i Review. 39:&&-101, October, 1947; W.S. Thompson.Population j and Peace in the Pacific (Chicago: University of Chicago Press, 19467* 367 In this stage may be classified most of the contem porary western populations. According to Notestein*s projections, most of the northwestern and central European 18 j countries will pass through this stage from 1940 to 1 9 7 0. t More specific studies also indicate the existence of that 19 stage in England, Belgium, the Netherlands, and Sweden. The length of time spent in that stage would, however, | differ with the different countries. i i j The Stage of Heavy Old-Age Dependency. | Provided that the drop in the fertility and mortal- : ity experiences persist;?,the stage of light dependency j will then prove to be a transitory stage. After a while i the bulk of the population will concentrate in the old-age groups, with the ratio of the age group 6$ and over in- | creasing at the expense of the 0 -1 4 and the 1 5 -6 4 age s i . j groups. Where this conditions prevails, demographers i refer to it as the stage of heavy old-age dependency. None of the known national units seems to fall into i this group at present. France, which is the nearest to j | it, may be expected to experience a drop in the ratio of the economically active to the total population by the 18 Notestein, ojp. cit.. p. 156. United Nations, op. cit.. pp. 196-97* 368 20 year I960 according to Sauvy. The attainment of this stage, however, is subject to two conditions. First, it is subject to the assumed continuity in the drop of the i fertility and mortality experiences. This, in the light of more recent trends, does not seem to be the case. Second, it is subject to the condition that no balancing migratory movements will take place. i ACTUAL EXPERIENCES IN THE LIGHT OF PURE ! DEMOGRAPHIC ANALYSIS j Up to this point we have been dealing with changes in the ratio of the economically active to the total popu lation from a purely demographic point of view. As men tioned at the beginning of this chapter, however, demo graphic factors are not the only factors underlying the level of the labor supply or the size of the economically active population. Actual experiences with the labor force reflect the influence of social and economic together with demographic factors. By reviewing these experiences, j we then can: j 20 Ibid.. p. 197- 369 1. Examine the validity of the purely demographic conclusions of this chapter when applied to actual experiences. 2. Note the major socio-economic factors that sup- ; plement the demographic factors in the determination of j the relative size of the labor force. j As reported to the United Nations by the Inter national Labor Office, Table IX indicates the ratio of the economically active to the total population for different countries. The quotation of these statistics here is done only under the conditions and qualifications indicated in the original source. The Over-All Effect of Socio-Economic Factors. In comparing Tables VIII and IX, our first reaction concerns the average level of the ratios of the two tables, In Table VIII where the analysis is purely demographic, the ratios of the economically active (age group 15-64 by assumption) to the total population at different rates of i growth are mainly concentrated between 50 and 60 per cent, j In the actual experiences of Table IX most of the ratios are found to congregate at levels of 30, 40, and 50 per cent with few below 30 and above 50. This difference in levels can be attributed only to the functioning of the socio-economic factors which discourage the full 370 TABLE IX RATIO OF THE ECONOMICALLY ACTIVE TO THE TOTAL ..POPULATION FOR DIFFERENT COUNTRIES Country Year Ratio Per cent Africa Egypt 1937 33.3 Union of South Africa 1936 35.2 North America Canada 1941 40.6 New Foundland 1935 30.6 Cuba 1943 31.3 Guatemala 1940 33.1 Honduras 1940 34.3 Mexico 1940 29.3 Nicaragua 1940 35.9 Panama 1940 36.7 United States 1940 40.1 South America Argentina 193& 42.9 Brazil 1940 34.0 Chili 1940 34.7 Colombia 1933 52.5 Peru 1940 39.9 Uruguay 1940 40.7 Venezuela 1941 32.2 Asia Ceylon 1946 39.3 India 1931 42.2 Indonesia 1930 34.4 Japan 1930 46.0 Philippines 1943 33.2 Thailand 1937 47.2 Palestine 1931 36.0 Europe Austria 1939 52.3 Belgium 1930 46.3 Bulgaria 1934 56.5 Czechoslovakia 1947 43.1 371 TABLE IX (concluded) Country Year Ratio Per cent Europe (continued) Denmark 1940 51.3 Finland 1940 51.9 France 1936 49.2 Germany 1939 49. a Greece 192S 44 * 2 Italy 1936 44.2 Luxembourg 1947 46.1 Netherlands 1947 40.2 Norway 1930 42.0 Portugal 1940 39.5 Rumania 1930 57.9 Spain 1940 35.8 Sweden 1940 47.1 Switzerland 1941 46.7 Turkey 1935 49.0 U. K. 1931 47.0 Yugoslavia 1931 46.5 Oceania Australia 1933 42.6 New Zealand 1936 43.2 Other Areas Hawaii (U.S.) 1940 44.5 U.S.S.R. 1926 57.5 SOURCE: United Nations, Demographic Yearbook-1949-1950 j New York: Department of Social Affairs, 1950), Table 11, ! pp. 250-251. . ! 372 , participation of the "physically active" into the "economically active" population. ' Socio-Economic Factors Involved.. The basic onesof these socio-economic factors af- j fecting the labor supply may be detected by comparisons among the actual experiences of the different societies and by analyzing the causes, other than demographic, underlying any existing differences. Why, for example, does a country like Mexico indicate a minimum ratio of : 29.$ per cent (1940), while other countries like Rumania i and the U.S.S.R. indicate maximum ratios of 57*9 (1930) and 57.5 (1926) per cent, respectively? It is highly ! improbable that demographic factors can account for such > 21 wide differences. Faulty statistics may explain a part j of it. For an explanation of the major part of that dif- i ference, however, reference should be made to the socio- E : economic factors involved. Prior to and including the years indicated above, , the vital statistics of the three countries show a close resemblance. United Nations* statistics show that for the j major part of the decade 1930-1940 the crude birth and : death rates for Mexico were not less than 40 and 20 per thousand, respectively. The rates for Rumania were 35.9 and 21.7 per 1000, respectively in 1932. Judging by the known social conditions of Romania as well as of Russia, however, the vital rates prior to that must have been * comparable to those of Mexico in 1940. United Nations, Demographic Yearbook. 1950. 373 War and the labor supply. Before discussing these i : factors, one attribute common to most of these ratios should be brought to light. Since the ratios indicated refer to a period from 1926 to 1948, each of them must, to t j ' a greater or lesser degree, have been affected by either j i one or both of World Wars I and II. In this sense the j - - . I effect may have been direct, through the effect of war on j the fertility and mortality experiences of the society; or j indirect, through necessity, patriotism, inflationary ; wages, et cetera. t The direct effect of war on age distribution through its effect on the fertility and mortality experiences is ; f , too familiar to warrant further discussion. It is the ; indirect effect, however, which in the short run may prove to be quite influential. Ratios like those for Canada, 1941; United States, 1940; Austria, 1939; Finland, 1940; and Germany, 1939, must obviously have been affected by j the going war at the time or the expectation of that war j I in the near future. The part of each of these ratios j | attributable to war conditions can, however, be determined I 1 for each country on an individual basis. Social customs relating to female employment. Much j of the difference among the over-all ratios is accounted I for by differences in the age-specific female employment. 374 As might be expected, the lowest of the first are asso ciated with the lowest of the second. Mexico, for example, with an over-all ratio of 29*3 per cent, has a female employment ratio of 4*3 per cent for the same year. The same thing applies to Newfoundland with 30.6 and 7-3 per cent; Cuba with 3 1 and 6.9 per cent; Guatemala with 33*1 and 10.5 per cent; and Honduras with 34*3 and 7*5 per 99 cent. On the opposite side, the highest of the over-all ratios are also associated with the highest ratios of female employment. This is illustrated by Rumania’s ratios 57*9 and 52.0 per cent, respectively. The same is true of the U.S.S.R.,57*5 and 51*6 per cent; of Bulgaria, 56.2 and 50.7 per cent; of Colombia, 52.5 and 47*6 per cent, 23 as well as Austria, Finland, France and Denmark. For the majority of the other countries, both ratios are medium between the two extremes. What does affect the ratio of female employment? The answer, while of great social and economic importance, can hardly be dealt with here. Mainly determined by.a combination of religious and social, as well as personal 22 United Nations, Demographic Yearbook. 1950, Table 11, pp. 250-251* 23 Loc. cit. 375 t , concepts and beliefs, the attitude of a society toward | female employment can only be pointed out here as an im- l . 1 portant factor affecting the over-all labor supply. The ages of entry and departure from the labor force. Other important factors in the determination of the size of the. labor force are the socially-accepted ages at which an individual may enter or retire from the labor i force. It has long been a recognized phenomenon that I differences in these ages do exist among the different economies. These can be shown by a comparison of the ! percentage employed among the younger groups before. 20, and among the older groups after 65- Beyond establishing the relative constancy of the ratio employed in the male age group 20-64 of the differ ent populations,^ such a comparison does not lend itself j to any generalization in relation to the over-all employ- I ! ment ratio. The countries with'the highest ratios of . over-all employment are not necessarily the same ones with : the highest employment ratios in the below 20 or the above ! I i ! 65 age groups. According to United Nations1 statistics, j i Egypt, with a relatively average over-all employment ratio i I i of 38-3 per cent, reflects the highest employment ratios i i Ibid., Table 12, pp. 252-253. 376 among these age groups (91*1 for age group 15-19 and S9-7 for those 65 and over). France has one of the highest j over-all ratios, 51*5 per cent in 1946, and she reported j employment ratios of 75-6 per cent for age group 15-19, j * ; ; with 54«4 per cent for those 65 and over. The United \ f States, for the sake of comparison, reported 40.1 per cent | ! for the younger group and 41•5 per cent for the older j group. ' Despite these seeming inconsistencies which may be | attributed to the disturbing influence of other variables, J such as female employment, there is no logical doubt that | | the ages of entry and departure exert a determining in fluence on the size of the labor force. This has led many economists to the study of the trends of change in these ! ages, particularly as related to socio-economic develop ment. In his study of the United States labor force, 1S90-1960, Durand found a definite decline in the ratio of j ' the economically employed among the 14-19 age group,with I 26 I that for the 10-13 age group reduced almost to zero. j l j - - - ;- - - - - - - - - - - - - - - - - - - - - - - 1 ^ Loc. cit. 26 j John Durand, The Labour Force in the United i States 1B90-196Q (New York: Social Science Research Coun- I cil, 194$), PP» 2S-29. On the same point, see: Clarence Long, Labor Force. Income, and Employment (New York: Economic Research, Inc., no date). 377 This would be equivalent to a rise in the age socially acceptable for entering the laboh force. At the same time and in the same study, statistics related to the ratio I employed among the higher age groups indicated a declining} 27 1 trend in the retiring age. ' More and more people, it j i ■ seems, now prefer to retire about the age of 50 rather j than 60 or 65- j Without any attempts at generalization, similar I trends have been indicated in other countries of the 1 world.^ The proof, however, is far from being universal, even for countries with high levels of socio-economic de- | ! velopment. ”In Germany and Great Britain boys have con- I tributed fairly constant proportions to the labour force, I : and increases have been recorded in the percentages of ' economically active girls of teen age.,,29 I i Other factors. Beside these three previous factors, there are many others which determine not only the number I of those in the labor force, but also the number of hours I I 1 they will work per week, as well as the quality of that : | ____________________ ^ Durand, o£. cit.. Table A-6. 2g On studies indicating these trends, see: United Nations, The Determinants and Consequences of Population Trends, op. cit., pp. 2 0 1 -2 0 2 . 29 Ibid.. p. 2 0 1 . 37B ; work. Some aspects of these other factors will be dis- ; cussed later in connection with efficiency, tastes, and I ! organization. The remainder, however, should at least be j given passing attention. Of particular importance, of course, are the 1 | i ! physical qualities of the population. This is not only , * ' 1 relevant to the general aspects of these qualities, such ■ j ' I I as stamina, but also to such specific conditions as the j | j j ratio of the physically handicapped at different age I groups. While recently, thanks mainly to war aftermath, i they have been able to find employment, under normal con ditions they would be considered inept for the labor force.! j Migration is another factor which we intentionally | ignore here but which, in some cases, exerts a determining ■ | influence on the labor force. Since migrators are mainly i \ mature, able-bodied individuals of both sexes, immigration may then be expected to swell the labor force and, conse quently, to raise the ratio of the economically active to ' the total population. Emigration, however, will work in t | the opposite direction. ; Finally, the effect of the level of income on the number of hours of readiness to work should be given at tention. In his study of the relationship, Long quoted Douglas who expressed it as follows: one per cent increase 379 I in income evokes a reduction in hours of 1/6 to 1/5 of one j I per cent. Long's own studies suggest a reduction in hours ' relative to income nearly double that of Douglas. He also 30 j noticed considerable variety from one decade to another. J | [ j A Reflection on the Long Run Trends in the Size of the : Economically Active Population. j Although the extreme cases on both sides are ig- i ! I nored, it is quite impressive to observe in Table IX the : i resemblance in the ratios of the majority of the countries, j With such differences as exist among the demographic and ! socio-economic experiences of the different countries, j | j most ratios register variation within five to ten per cent.; 1 Countries like Egypt, Union of South Africa, United States,; i India, Indonesia, Portugal, Philippines, Spain, and Palestine are all within a range of seven or eight per cent. Such a range is quite narrow, considering their I social differences. If each of these countries should represent a i i specific phase of socio-economic development, this simi larity in the ratio of the economically employed to the total population would indicate two things. Primarily, it Long, ojd. cit., Chapter IV. 3 SO would tend to indicate that our previous purely demo graphic conclusion concerning the constancy of the ratio is, to a great extent, true. More important, however, j is the fact that it also would indicate that the socio- i i economic factors affecting the ratio would tend to counter-; balance each other at different stages of development, , l specifically, the counterbalancing effects of the changes j in female employment and the changes in the age of entry and retirement from the labor force. At higher and higher; levels of socio-economic development, there is every in dication of changes in the first of these variables 31 favoring a growing size of labor force. Changes in the other variable, however, have exactly the opposite effect. With the raising of the age of entry and the lowering of the age of retirement, these changes favor a decreasing size of the labor force. In the final analysis and for long run fluctuations, both these trends will tend to offset each other. The same conclusion was reached by Long^2 on the basis of his statistical studies. ________________ I 31 On changes in the ratio of female employment, see: United Nations, The Determinants and Consequences of Population Trends, op. cit.. p. 200. 32 Clarence Long, "Impact of Effective Demand on the Labour Supply," The American Economic Review,43:458- 467, May, 1953. 331 SUMMARY j Quantitative changes in population affect the labor ; supply in two ways: directly, through their effect on the sex and age composition of the population; and, indirectly,; ; ' t ' through their effect on the socio-economic conditions of i the society which, in turn, affect the labor supply. Mainly concerned with the former of these effects, and by restricting the analysis to changes in the age dis-• tribution, a case study approach was adopted to determine the effect of quantitative changes on that distribution. | ! In that approach: ; 1. The United States white population for 1949 was subjected to different rates of natural quantitative changes. 2. The age-specific stable population associated with each of these rates was calculated. 3. The ratio of the economically active (age group 15-64 by assumption) to the total population for each of i these stable populations was determined. | } | 4- The different ratios were compared. | The results of these comparisons were found to point to: 332 t a. The existence of definite changes in the ratio ; of the eeonomically-active to the total population at i I different rates of quantitative changes; b. The relative constancy of that ratio, due to i | the counterbalancing effects of changes in age groups 0-14 ; and 65*; and c. Whether a specific rate of quantitative change ! is advantageous or harmful to economic welfare, using per j i i ; capita productivity as a criterion, is basically a func- j tion of the direction and magnitude of the effect of the ! quantitative change on the ratio of the economically active I i ! to the total population on one hand and on the productivity) ) | ; per laborer on the other. After these conclusions were reached on a purely demographic basis, the analysis then shifted to the actual ; experiences of the different countries, as reported by the | United Nations. By reviewing these experiences and by | comparing them with the previous conclusions, we were able j I to determine the existence of an over-all discrepancy i i j attributable to such socio-economic factors as war con- j j ! ditions, social customs relating to female employment, i differences in age of entry and retirement from the labor force, physical qualities,-and migration, as well as the I level of income. It was also observed that the majority 3 S3 of the experiences actually reported showed a narrow range of variation. This variation tended to emphasize our previous conclusion concerning the relative constancy of the ratio of the economically active to the total ! i population, as well as led us to believe that, in the j course of economic development, the different socio economic factors affecting the size of the labor force tend to counterbalance each other. CHAPTER X POPULATION CHANGES AND CAPITAL FORMATION Besides their effect on the labor supply, popula tion changes also affect economic welfare through their j effect on the yearly level of investment. Along with the i annual depreciation experienced, this level determines j whether the accumulated stock of capital will increase, | decrease, or remain constant. If the national income were | directly related to the level of capital accumulation,^ the nep yearly increment of capital formation (new invest ments minus depreciation) would also determine whether national income would increase (economic development), decrease (economic decline), or remain constant (a station ary economy). To start with, what is capital formation? Nurkse described it as follows: The meaning of Tcapital formation* is that society does not apply the whole of its current productive activity to the needs and desires of immediate consumption, but directs a part of it to the making of capital goods: i 1 This is true of most of the stages of economic de velopment. An exception, however, is the rare case where, the rise in productivity resulting from further application of capital is more than counterbalanced -by the diminishing returns resulting from the further utilization of land. 385 tools and instruments, machines and transport facilities, plant and equip ment— all the various forms of real capital that can so greatly increase the efficacy of productive effort.2 While he limited his analysis to the material aspects of capital formation, Nurkse, nevertheless, con ceded that "the term is sometimes used to cover human as well as material capital: it can be made to include in vestment in skills, education and health— a very important investment.”3 It is this wider sense in which the term capital is used in this chapter. It is insisted upon here because of the closeness of "human capital” to population changes and the relative sensitivity of the former to changes in the latter. As defined in this wider sense, capital is affected by. population changes in more than one way. These ways are classified into two groups logically, as well as ,for the purpose of analysis in this study. On one hand, there is the initial effect of population changes on capital formation per se. In this sense, the emphasis is placed on the relationship between population changes and the 2 Ragnar Nurkse, Problems of Capital Formation in Underdeveloped Countries (Oxford: Basil Blackwell, 1953), p. 2. 3 Loc. cit. 366 immediate coefficients of capital formation, namely, saving and investment. On the other hand, however, there are the deeper effects of population changes on the levels i of capital and income and through them on tastes, organi zation, and efficiency which, in turn, will affect the j levels of capital and income.^ These are the accumulative | socio-economic effects recognized by many economists to exist in the processes of economic development and econ- 5 ' omic decline. In this chapter we deal only with the first of these groups of effects and postpone the second until the next chapter. The relationships, however, are so close that some overlapping is inevitable. The reader merely will have to bear with us, particularly when reference is made to a specific relationship that is dealt with some what later. This, however, does not deny the fact that popu lation changes can affect these factors {tastes, organi zation, and efficiency) directly without any previous changes in the level of income. Reference to such direct effects may be found in this chapter. 5 Nurkse, for example, spoke about the "vicious circle of poverty,” and how "it implies a circular con stellation of forces tending to act and react upon one another in such a way as to keep a poor country in a state of poverty," o jd . cit.. p. 1+ . 387 THE COEFFICIENTS OF CAPITAL FORMATION By definition, capital formation implies the per formance of two economic activities, namely, saving and investment. It also implies the existence of financial institutions, particularly in cases where the savers and the investors are not identical. These three factors are referred to from now on as the "coefficients of capital formation."^ The first two are essential to such forma tion, and the third helps to bring the savers and the in vestors together and, consequently, it affects the trans formation of the bulk of the economy’s savings into pro ductive equipment. Saving in Economic Literature. Whether it is on an individual or a national basis, saving is generally recognized as an excess of income over consumption. This excess can be achieved in more than one way. It may be achieved voluntarily through the absten tion of some or all of the members of the economy from consuming all of their current income. In this sense, 6 In this classification we follow such works as M. Abramovitz, "Economics of Growth," Bernard Haley, ed., A Survey of Contemporary Economics (Illinois: Richard D. Irwin, Inc., 1952), Vol. II, pp. 132-182. Also, H. J. Moulton, Controlling Factors of Economic Development - (Washington, D.C.: The Brookings Institute, 1949)• 388 saving and abstinence are one and the same thing. In another way, however, saving may be "forced” on the fixed income groups through inflationary tendencies which will raise the price level and, consequently, lower the pur- ! j chasing value of the fixed incomes. This comes about i 1 mainly through the expansion of credit by financial in- , stitutions and the resulting increase in the monetary media j in circulation. \ The "classical” attitude. When the necessity of abstinence to the formation of capital is considered, the i classical view (Adam Smith and his followers) is basically i favorable to saving and thrift. They seem to indicate | that saving per se is all that is needed for capital for mation. Their argument runs as follows: both saving and t ; investment are a function of the interest rate which tends I I to keep them in equilibrium. Consequently, the more that is saved, the lower the interest rate will be and the ; higher the level of investment forthcoming. Sayfs Law ; I 1 ! i i that supply creates its own demand is tihus vindicated. ■ 7 ' Among the classicists, Malthus especially did not I adhere to this particular point of view. He seemed to be i I ____________________ 7 j T. R. Malthus, Principles of Political Economy (London; William Pickering" 1836) , Book II, pp. 308-437* 339 ; overwhelmingly of the opposite opinion. Accumulation, I both of saving and capital, was basically associated in 1 his writings with the threat of under-consumption in the I case of the first and over-production in the case of the second. i i j . . . it appears to be quite as certain that an inordinate passion for accumulation must inevitably lead to a supply of com modities beyond what the structure and habits of such a society will permit to be profitably consumed.® I This is not to say that Malthus considered all i I saving to be bad. On the contrary, j A state may certainly be ruined by extrava- ; gance; and a diminution of the actual expendi ture may not only be necessary on this account, but when the capital of a county is deficient, compared with the demand for its products, a temporary economy of consumption is required, in order to provide that supply of capital which can alone furnish the means of an in creased consumption in the future.^ The Keynesian attitude. From the Keynesian point of view,"^ the equality of saving and investment is an accounting truism, rather than a result of automatic adaptation of one to changes in the other. Saving and S Ibid., p. 32$. 9 Ibid.. p. 326. Reference to the Keynesian views as expressed in The General Theory of Employment. Interest, and Money ("New York: Harcourt, Brace and Company, 1936. 390 investment, argue the Keynesians, are not a function of the same variable (the rate of interest) as the classi cists seem to believe. On the contrary, the factors af fecting saving are different from those determining in- i vestment. Basically, saving is a function of the pro pensity to save (the propensity to consume) out of a fixed i income. Both the propensities to save and to consume follow, in turn, what is generally referred to as Keynesf psychological law. The fundamental psychological law, upon which we are entitled to depend with great confidence both a priori from our knowledge of human nature and from the detailed facts of experience, is that men are disposed, as a rule and on the average, to increase their consumption as their income increases, but not by as much as the increase in income. Investment in Economic Theory. Attitudes with regard to the determinants of the level of investment are closely related to the previous two attitudes with regard to saving. The classical attitude. By adhering to their pre ferred tendency to deal in real terms, both the classicists and the neo-classicists think of the level of investment as a function of: ^ Ibid.. p. 96. 391 1. The supply of savings forthcoming. 2. The returns resulting from the application of | | capital to the other two factors of production, namely, !'land and labor, at the prevailing level of technical j . efficiency. 1 f As long as the second of these factors remains i ! I positive, the supply of savings will be the only factor J j limiting the accumulation of capital. However, as soon as! I ! ! the return on new investments reaches zero, or a minimum equal to the minimum interest rate possible, the supply of , ' savings will stop, the formation of new capital will ter minate, and the stationary state will then have been | ; I achieved.^ The Keynesian attitude. With the emphasis on mone tary rather than real phenomena, the Keynesian attitude Among the major classicists, there is a slight ; disagreement as to when the stationary state is reached. While Smith believed it to exist when the profit is zero and the wage rate is equal to the minimum physical sub sistence, Ricardo and Mill, by introducing psychological | elements in the determination of the rate of savings and f the minimum standard of living, recognized the possibility ! of a stationary state at a positive minimum rate of profit i and a wage rate higher than physical subsistence. For the | distinction, compare Adam Smith, Inquiry into the Nature j and Causes of the Wealth of Nations (Edinburgh: Mundell, j Daig, and Stevenson, 180977 Vol. I, Book I, Chapter VIII, with John S. Mill, Principles of Political Economy (London: John W. Parker and Son, no date), Vol. I, Book II, Chapter IX. 392 ! toward investment is geared to the distinction between the i factors affecting saving (referred to above) and those J determining investment. While saving, on the one hand, is ! determined by the so-called psychological law, investment I ! ! j on the other hand, is a function of two factors: the mar- j t ginal efficiency of capital and the prevailing rate of j I i interest. The marginal efficiency of capital, as explained by * i X3 i ! Keynes, refers to the relationship, positive or negative,! 1 . \ ■ between the expected returns on an extra unit of capital I discounted at the prevailing rate of interest and the j supply price or replacement cost of that unit. In other ! words, it is "equal to that rate of discount which would I make the present value of the series of annuities given by the returns! expected from the capital-asset during its life just equal to its supply price."-1 -^' ; The second factor determining the level of invest- i ment is the interest rate. A thorough explanation of the Keynesian theory of interest is unnecessary here since I ! 15 • : it may be found in more than one other treatise. ^ Of j • particular importance, however, is the fact that the I | .... — ■ S ^ Keynes, op. cit., Chapter li. ^ Ibid.. p. 135• j 1 c J See, A. Hansen, A Guide to Keynes (New York: McGraw-Hill Book Company, 1953), Chapters VII and VIII, pp. 126-153* 393 Keynesian rate of interest is not a function of the supply ; of savings, as the classicists seem to believe. If it were, the whole Keynesian analysis would have been cir- ; cular. u0n the contrary," explained Lord Keynes, "the ) i : rate of interest is a function of the quantity of cash in ! - | I circulation and the Tliquidity preference* of the | economy."It is the ♦price* which equilibrates the de sire to hold wealth in the form of cash with the available quantity of cash."1? I In consideration of the two factors simultaneously, I \ it would be profitable for the entrepreneurs to keep on investing as long as the marginal efficiency of capital j was higher than the prevailing interest rate. When both | of them become equal at the lowest possible level: We should attain the conditions of a quasi-stationary community where change and progress would result only from changes in ^ technique, taste, population, and institutions.15 Financial Institutions as a . Factor in Capital Formation. The role of financial institutions in the formation j of capital is dual in nature. On one hand, they are media 16 Keynes, o£. cit.. pp. 165-174* 17 1$ Ibid., p. 167. Ibid.. pp. 220-221. 394 between the savers and the investors that tend to stabil- > ize the market and to exert a favorable influence in both I directions. On the other hand, they possess the power to j expand credit which, if not accompanied by an increase in ; production would influence the price level and induce j "forced” savings among the fixed income groups. i ! j Financial institutions as a stabilizing factor. j ' - j ; Where the savers and investors are not identical, the ! | | | money saved will have to be transferred through loans to : the investors before any investment becomes possible. : This procedure entails two basic issues: (1) concerning the division of the returns between the savers and the in vestors; and (2) concerning the security of the loans. By j affecting both these issues, financial institutions gen erally tend to exert a favorable influence on the process of capital formation. Whether they are banks, insurance companies, mutual * funds, et cetera, financial institutions are known basic ally to reduce the "financial spread"^etween the marginal i j returns on new investments— what the borrowers can afford | to pay— and the net yield on loans— the reward to savers 19 On the concept and discussion of the "financial spread," see Abramovitz, o£. cit., pp. 164-65* 395 j for lending their money. In doing so these institutions , would invariably raise the reward to savers for lending | their money. This in turn would: j 1. Encourage saving. 2. Induce investors to be on the lookout at all j i times for investment opportunities with maximum returns. j Both of these factors, obviously, would tend to encourage the accumulation of capital and its distribu tion in the most efficient manner possible. Of equal importance, however, is the role of financial institutions in stabilizing the money market. This happens in more than one way. Primarily, through ! diversification and professional supervision, they greatly j j j reduce the risk of capital loss/on the part of the savers. ! j Second, they insure liquidity to bond and security holders i whenever needed. Third, they insure the investor against the premature calling of loans which might jeopardize his investment. All these functions, however, are closely re lated to the degree of enlightenment and efficiency re- j i vealed by the management of such institutions. Financial institutions and the expans ion of credit. The ability to expand credit within limits is another feature characteristic of financial institutions in the process of capital formation. The mechanism of such 396 i expansion is a common subject familiar to most money and | banking students. The influence of such expansion on 3 I capital formation and economic development has, however, j I been a topic of some disagreement. , I i I j The expansion of credit is equivalent to an increa® in the quantity of money in circulation. With the ex- j ' < ception of its effect on the price level, the classical I long-run view considered such expansion as irrelevant to i j the basic coefficients of capital formation, namely, savirg : and investment. These are taken to be determined by real returns forthcoming on new investments. The influence of monetary changes not based on real factor changes can only i be temporary. On this point, nevertheless, economic literature has come a long way from the classical viewpoint. Rather j than being considered irrelevant, monetary phenomena, in j general, and credit expansion, in particular, came to be reconciled more and more with the body of economic theory. 20 Schumpeter, for example, considered credit expansion j | inevitable for the reallocation of resources and based on j ’ 20 Reference here is mainly to Joseph A. Schumpeter, The Theory of Economic Development {Cambridge: Harvard University Press, 1934)> Chapter II, "Credit and Capital," pp. 95-127. 397 ! 21 it his theory of business cycles. Keynes went even further and based his general theory of employment, inter- | est and money on monetary phenomena. All together the two j writers conceded the importance of credit expansion and credit management to a healthy development of economic ; j . ' i I activities. I i f Despite this importance of financial institutions to capital formation, they are assumed for our purposes here to be directly related to the levels of saving and 22 investment. The relationship actually is circular in I nature. Financial institutions will probably not develop i until there is enough saving and investment to justify I j their existence. Having developed, however, they will I j tend to exert a favorable influence on saving and invest ment. In this sense, the levels of saving and investment are as much a function of financial institutions as the . latter are a function of saving and investment. Our i ; assumption above is merely for the sake of simplicity and j permits us to concentrate on the effect of population I changes on (1) the saving-consumption functions, and (2) | ____________________ 21 Keynes, ojd. cit., Chapter i3. 22 The position of financial institutions should have been postponed until the next chapter, but because many consider them one of the coefficients of capital formation, we discussed them here and give only a passing reference in the following chapter. 398 the level of investment. POPULATION CHANGES AND THE SAVING- CONSUMPTION FUNCTIONS Saving is the negation of consuming. A decision to save is a decision not to consume, and a decision to consume is a decision not to save. The factors determin ing these variables should be considered simultaneously rather than independently of each other. Saving and Consumption as Aspects of Human Behavior. On a functional basis, the society as a whole is considered to be either consuming or saving its national income. In Chapter VII this classification was modified to add a third variable, namely, fertility. Individual family units were then represented as choosing among con sumption, saving, and/or increasing their family size by having an extra child. Economists have long been inter ested in these choices, inasmuch as they determine to a great extent the fluctuations in the two basic factors of production, labor, and capital. The choices in this con nection, however, are no different from any other type of choices in everyday human behavior. A consumption-saving- fertility theory is, in essence, one integral part of a general theory of human behavior. 3 9 9 The triple nature of human behavior. Human be- j havior, in general, and demographic behavior, in particu- j lar,were classified in Chapter IV into three groups: 1. The animalistic: as based on the inherent I drives of the human organism. 2. The ritualistic: as based on the adherence by I the actor (or actors) to rules of behavior prescribed by ! [ higher authorities. J 3* The rational: as based on means believed by the ; actor to be best adapted for the attainment of specific i i ends in view. ; Actual human experiences are basically a combina- j tion of all three of these types of behavior. At any one {time, merely one of these types may, and usually does, i ' dominate the other two. In the final analysis, however, i | an understanding of the forces underlying all three is~- essential for the interpretation of actual experiences. Since they are basic types of human behavior, these three groups are as applicable to saving and consumption as they are to fertility. When considered animalistically, : human behavior is primarily geared to the satisfaction -of the essential needs of survival. This type of behavior, however, is only dominant within minimum levels of national and individual incomes when an overwhelming 400 j portion, if not all, of the income is consumed. Economic ; literature is not particularly interested in minimum j levels. Mainly, it is interested in human choices con- t ^ cerning the disposal of income over and above that minimum I i ! level. Would they consume it, devote it to having more ; children, or save it? Human choices in this connection i are dominantly ritualistic or rational in nature. Economic theorists would spare themselves much ar- ; gument and controversy if they were to agree on which j aspect of human behavior they mean when they deal with the underlying factors controlling economic variables. Econ- | omic literature reveals basic inconsistencies not only 1 i with regard to interpretations of a single variable by j different persons, but also with regard to interpretation of different variables by a single person. On one hand, the classicists and neo-classicists deal with rational j . aspects when they deal with consumption, saving, and in vestment; but they shift to ritualistic aspects when they accept the Malthusian theory of population. The Keynes- ; ians, on the other hand, deal with rational aspects only when they deal with investment and capital formation. I Saving, consumption, and population trends^ are attributed 23 The population trend maintained by the Keynesians should be distinguished from that maintained by the class icists. The former regarded it as continually declining, the latter maintained it was continually growing. ; by the Keynesians to so-called psychological and physio logical "laws" or, in our terminology, to ritualistic and animalistic tendencies. Since both with the classicists ; and with the Keynesians these tendencies are supposed to i ! constitute basic forces underlying economic secular j trends, further studies of what Spengler2^ referred to as j the "Sociological Presuppositions in Economic Theory" should prove greatly valuable at this stage of economic controversies. This leads us directly to the pessimistic views ex- ' pressed on both sides of the fence. Among the classicists, | on one hand, vice, misery, minimum levels of subsistence, i iron laws of wages, et cetera, are characteristic features of economic equilibrium. The Keynesians, on the other j hand, preach seemingly inevitable states of ecnnomic f maturity and equilibrium at less than full employment. Both these sets of conclusions, it should be clear, are based on completely different concepts and reasoning. | Could there then be any truth in these gloomy expecta- j tions? Are the Malthusian and Keynesian " d e v i l s " 2 ^ really i Qh J. J. Spengler, "Sociological Presuppositions of Economic Theory," The Southern Economic Journal.7:131-157. October, 1940. Harvey Leibenstein, A Theory of Economic-Demo graphic Development (Princeton: Princeton University Press, 1 9 5 4 ) , p . 9. 402 inevitable? The previous analysis seems to shed some light on this question. The Malthusian devil. When analyzed rationally,we find both these sets of pessimistic conclusions based on j i pre-assumed concepts of human behavior toward one or all j three of the alternatives open for the utilization of the ( i national income. Specifically, these are consumption, j saving, and/or fertility. ! With the classical school, such pre-assumed con cepts were limited to human behavior with regard to fer tility. The Malthusian theory, which is the core of these concepts, has already been discussed in a previous chapter. Rightly observing that human fecundity was prolific, Mal thus maintained population growth was perfectly elastic at all levels of national income. From this assertion it is not difficult to understand how Malthus and the classi cists reached their previously-mentioned pessimistic views. The technicalities of the relationships involved are post poned to later sections in connection with the effects of ! semi-controlled population changes on economic activities. In assuming perfect elasticity, Malthus attributed a certain rigidity to human behavior concerning fertility. This regidity is justified on the basis of a naturally f prolific fecundity and a pattern of dominantly 403 ritualistic behavior prevailing in the medieval era. Malthus may be said to have denied the chances or the possibility of rational action with regard to fertility. Theoretically, this is where MalthusT inconsistency lay. Why should human behavior with regard to fertility be I accepted as predominantly ritualistic while that with re- j gard to consumption, saving, and investment be assumed to be rational? To say that Malthus approximated reality and actual experiences in connection with fertility does j not justify or explain his inconsistency. Actual exper iences with regard to consumption, saving, and investment ! 26 ! are also partially, and sometimes dominantly, ritualistic. j Economists, nevertheless, abstract from actual experiences and assume an economic man "rationally. " concerned with the maximization of economic welfare. If such an assumpr- tion be appropriate in the case of consumption, saving, and investment, it should also be appropriate, at least for theoretical consistency, in the case of fertility. The Keynesian devil. If the previous argument be j accepted and Malthus be considered, so to speak, at fault, 26 On a basically ritualistic interpretation of such activities, see: James S. Duesenberry. Income. Saving, and the Theory of Consumer Behavior (Cambridge: Harvard University Press, 1949)• 404 ’Keynes should be considered doubly so. The Keynesian preconceived concepts cover, not only human behavior with regard to fertility, but also such behavior with regard to consumption and saving. The Keynesian preconceived concept with regard to j ! human behavior concerning fertility should be distinguished, i from that of Malthus. While Malthus believed such behav ior was positively elastic at a high rate of growth,Keynes regarded it as negatively elastic with the rate of growth continuously declining at higher and higher levels of I national income. Both writers, it should be clear, re- » I fleet actual experiences existing at their times and,con sequently, indicate a basic change in the predominantly ritualistic human behavior with regard to fertility. This i i change, by itself, should have proved the invalidity of any assumed rigidity in human behavior and should have warned Keynes against basing absolute generalizations on i observed predominantly ritualistic trends. After all, it is always possible both for the pattern and/or for the degree of ritualism to change from one period to another. ; Despite this warning, we find that the bulk of the Keynesian theory is based on what is generally referred to as the psychological law of consumption and saving. , ! The fundamental law,” we are told, ”is that men are disposed, as a rule and on the average, to increase their consumption 405 1 as their income increases, but not by as much as the in- crease in income.” This divergence between the increase in income and the increase in consumption is then taken ! i to be a "law” of absolute applicability on which are basedj ! all versions of the secular stagnation theory, whether i I they are of the "over-saving” branch, including Keynes, ! I Joan Robinson, Harrod, Jay Moulton, et al., and/or of the ”decline-in-investment-outlets” branch, including Alvin I Hansen and many other American e c o n o m i s t s . ^ ' ! As in the case of the Malthusian theory, this abso lute applicability of the Keynesian psychological law can hardly be accepted. Many statistical studies have already established that human behavior did not follow this 23 Keynesian presupposition with regard to consumption and ^For a discussion of Shcular stagnation, see: D. G. Franzsen, "The Secular Stagnation Thesis and the Problem of Economic Stability,” The South African Journal of Economics. 10:232-294, December, 1942. 2S Reference here is to Kuznets studies of the sub ject. Simon Kuznets, National Product Since 1369 (New York: National Bureau of Economic Research, 1946); also, Mordecai Ezekiel, "Statistical Investigations of Saving, Consumption, and Investment,” American Economic Review.32: 22-49, 272-307, March and June, 1942; George Kotana,"Effect of Income Changes on the Rate of Saving,” The- Review of Economics and Statistics. 31:95-103, May, 1949; W. S. Woytinsky, "Relationship Between Consumers’ Expenditures, Savings, and Disposable Income,” The Review of Economics and Statistics. 23:1-12, February, 1946; and Ruth Mack, ”The Direction of Change in Income and the Consumption Function.” : The Review of Economics and Statistics. 30:239- 253, November, 1943. saving in many cases and over lengthy periods of time. From our previous discussions, the reason should be clear by now. Actual observed experiences at any one time are the result of three types of behavior. To accept such I experiences as indicating an absolute law of consumption j ! and saving is to assume: 1. That the human instinctive reflexes underlying animalistic behavior will remain the same both quanti tatively and qualitatively. 2. That the sobial institutions on which ritual istic behavior is based will also remain constant. 3. That the trend indicated in these experiences will always be consistent with the conditions of rational behavior. 4. Finally, and most important, that the ratio of the three types of behavior found in actual experiences will always remain fixed. A short reflection on these four assumptions, par ticularly the fourth, will immediately reveal that the ! Keynesian psychological law can only be true of theoreti cally static analysis. Within dynamic interpretations, all four of these assumptions are liable to change. 407 i The previous discussion is not supposed to mean i j that either Malthus or Keynes was wrong in his repre- i sentation of existing trends.«However, it is meant to warn ! : against the acceptance of such trends as absolute in j ! nature. It also endeavors to emphasize to economists the ; ! importance of distinguishing among the different types of ! • human behavior and the necessity of agreeing as to which | type economic theory is supposed to deal with. The writer is of the opinion that economic theory, by assump tion, should be restricted to the study of human rational : action, as applied "and related to "economic” phenomena. i i Exogenous, dominantly ritualistic trends can be included, j but they will have to be treated merely as given, without i any long-run conclusions attached to them. Whether such trends are absolute or temporary in nature is a problem , for which economists are neither equipped nor justified to i i deal with. Along with the underlying conditions of change i I I in such psycho-sociological trends, these are problems for ; i ; i i other social scientists to determine. | j On this basis the remainder of this chapter, deal- . ' ing with the relationship between population changes and the coefficients of capital formation, will be consist ently divided into two sections. Whether the coefficient involved be saving or investment, the analysis will dis tinguish between population changes of the”semi-controlled” 40S • category, when they are dominantly ritualistic in nature, i | and population changes of the "controlled" category, when I they are dominantly rational in nature. In the first ■ section, the analysis will also distinguish between the ! semi-controlled changes of the Malthusian pattern and the semi-controlled changes of the Keynesian type. With a more or less arbitrary assumption both as to the type and J the trend of the change involved, the analysis will pro- ! ceed to investigate "rationally"‘the impact of such changes i on the coefficient of capital involved,irrespective of any j preconceived Keynesian concepts concerning the saving- ' consumption functions. Semi-controlled Population Changes and the Saving- Consumption Functions. A significant outcome of the classical-Keynesian j controversy was the recent emphasis placed on the dis tinction among different types of economies. In contem porary economic literature, particularly that dealing with the prospects of economic development, the distinction is | mainly between a stagnant, under-developed economy on one hand, and a highly-developed, semi-mature economy on the other. Both the social and economic problems involved in I either type are distinctly different. From a demographic viewpoint, for example, the former would be experiencing 409 • rates of fertility, mortality, and population growth i ! reminiscent of those described by Malthus, while the lat ter’ s demographic experiences would be more in line with those represented by Keynes and the natural theories of i i population growth before him. Such differences in demo- j ' ' ' i j graphic experiences are, to a great extent, responsible j for basic differences in economic phenomena. j The saving-consumption functions within conditions ■ Malthusian equilibrium. As is true of the whole classical framework of analysis, the conditions of Mai- I thusian equilibrium are geared to the Malthusian theory of population. Quantitatively, they reflect persistently high levels of fertility and mortality experiences with j the latter fully counterbalancing the former in the absence of sufficient means of subsistence. Qualitatively, the demographic pattern resulting from such trends is generally one of: 1. A high growth potential which can only material ize through an increase in the means of subsistence (income). j 2. A very young population on the average. I 3. A stage of "heavy-youth-dependency" with the majority of the dependents within age groups 0-14* 410 Within these conditions, it is only natural to ex- : pect the saving-consumption functions to be adapted to the I ever-pressing magnitude of population growth. With both j individuals and societies committed to sparing human life i I whenever possible, the chances are that the overwhelming ; I I portion of the current income would be devoted to the sup port (consumption) of the ever-increasing numbers.^ If we assume that such benevolence would be carried to ex- j tremes, two trends may then be expected to develop: j ; 1. Per capita consumption (the standard of living) ; : will be reduced to the minimum possible level, so as to allow for the support of as many people as possible. 1 j 2. The consumption function will constitute 100 I per cent of the current income with savings reduced to i zero. Because of many other considerations, however, such an extreme case does not usually materialize. Even within the most "relatively" underdeveloped societies, current j income is rarely fully consumed, permitting savings to be I positive but at a low level. Among the factors involved, [ I there are those, both economic as well as psycho-socio- I logical, that are favorable to savings and a higher level 2Q y The situation may be even worse if the society should embark on dissaving to support these numbers. 411 of living per se. Also to be mentioned are the possibility of forced savings through credit expansion on the part of financial institutions, the extreme maldistribution of wealth characteristic of most under-developed countries, the influence of differential fertility that is inversely related to the social status of the family, and last but # not least, the time lag between a change in income and the corresponding change in the size of population. It was in relation to this last factor that the classical theory of dynamics allowed for the possibility of "accumulation1 * within a Malthusian pattern of demo graphic behavior. Versions concerning such possibility differ slightly among the different writers both past and present.3® An adequate synthesis, nevertheless, finds the average per capita income, in general, and the wage level, in particular, rising as a result of an assumed rise in productivity. This,according to some versions, will induce 30 Besides the writings of the classicists them selves, among them Smith, Ricardo, Malthus and John S. Mill, statement and summary of the conditions of classical equilibrium may be found in William J. Baumol, Economic Dynamics (New York: The Macmillan Company, 1951T7 Chapter II, pp. 11-19; Leibenstein, o£. cit.,Chapter II, pp. £-33; and Alan T. Peacock, "The Theory of Population and Modern Economic Analysis,” Population Studies. 6:114, November, 1952. 412 31 ; a rise in fertility through a rise in the marriage rate. ■ According to other versions, the effect is mainly on mor tality with fertility stable at a high level. In both cases, however, the result is that of an increase in the j population size which will absorb the assumed Increase in j I productivity and forfeit any rise in the standard of liv- ; ! i ing and/or saving that might have resulted. In this sense, equilibrium will prevail again with all the increase i I in productivity going to the support of an increasing j | number of people at a low level of per capita consumption. All in all, the saving-consumption functions within i j conditions of Malthusian equilibrium may be expected in i ; the long run to remain stable with the former at a rela- | | tively low level and the latter at a relatively high level. With the exception of cases in which the level of produc tivity' is increasing at a higher rate than the rise in the ! size of population, the magnitude of savings available for investment will, both absolutely and on the average, be generally low but subject to all the moderating consider ations referred to above. 31 i This is chiefly true of Adam Smith’s discussion on the subject. Inquiry into the Nature and Causes of the Wealth of Nations (Edinburgh: Mundell, Daig, and Stevenson, 1909), Vol. I, Book I, Chapter VIII, pp. S6-99* 413 The saving-consumption functions within a framework of Keynesian analysis. The framework of Keynesian analy sis is committed to the concept of a declining rate of : population growth at higher and higher levels of socio economic development.-^2 Since it is highly doubtful that i ! ! the Keynesians meant the decline to result from a rising level of mortality, it may then be assumed that they based I it on the belief in a declining fertility. ! ) The effect of such a trend on the saving-consumption! functions is not clear in the Keynesian analysis. This I may be attributed to the fact, which is also true of the classicists, that the Keynesian framework of analysis does not recognize fertility as a static alternative for : the utilization of income. It is only concerned with ‘ static interrelationships which do not allow for popula tion changes. Human beings are thus assumed to be choosing only between consumption and/or saving. | Despite this obscurity, it is not difficult to j figure out the effects just referred to, if fertility were j . i 32 ' This is generally stated in terms of population I growth. See: J. M. Keynes, "Economic Consequences of a Declining Population," The Eugenic Review. 29:65-60,April, 1937; and Alvin Hansen, "Progress and Declining Popula tion," Presidential Address delivered to the 51st Annual Meeting, of the American Economic Association." American | Economic Review. 29:1-16, March, 1939* 1 + 2 . 1 + I recognized as an alternative in static analysis. At j higher and higher levels of income, the rigidity of the Keynesian demographic concept implies a persistent shift | ! - i \ in preference unfavorable to fertility. In this sense, i the portion of the national Income devoted to the totality I : | of consumption (referring here to the consumption of the I I \ initial population) and saving will be increasing, while ; that devoted to the support of newly-born children will be j decreasing. This former "totality,” however, still has to ! j be divided between consumption and saving. If we accept the Keynesian so-called psychological law, this totality i ' will be divided in such a way as to allow consumption to j increase "but not by as much as the increase in income.” I Coupled with the decline in the fertility preference, both these Keynesian trends seem to indicate an accelerating trend of saving at higher levels of income— an acceleration which even surpasses that depicted by Keynes in the General j Theory. j Controlled Population Changes and the Saving-Consumption Functions. Controlled population changes at any one time are a function of the realized fertility under conditions of economic maximization, as related to the realized mortality prevailing under the circumstances. When, on the average, 415 ; the first is higher than the second,population will in- i crease; when it is lower,population will decrease; and i I when they are equal, population will be numerically stationary. If mortality were assumed, beyond a certain point, j 33 i to remain constant at higher and higher levels of income, the rate of controlled changes in population would then be a function of the rate of controlled changes in fertility. Under rational conditions when such controlled changes in j fertility prevail, what will be the probable effect on the ; I saving-consumption functions? I To answer this question, we must know two things. ) j First, we have to know the accumulative fertility prefer- ! ence schedule of the economy at the time under consider ation. Second, given that schedule and the associated mortality experiences, we still have to know the effect on I i the size of population of the specific fertility related to the prevailing level of income. 33 This assumption should be interpreted very cau tiously, since it is only valid after mortality has been reduced to the approximate minimum possible. However, since, according to the prevailing cycle theories of Note- stein and others, such a status is generally attained be fore that of perfect fertility control, the assumption may be considered as valid for the analysis here. 416 The determination of an accumulative fertility preference schedule involves grave problems of both theory and application. How can we separate the controlled from the semi-controlled fertility? In constructing the schedule, should the preferences of the wife, the husband, or both be counted? These and other issues are problems for the practical demographer which we shall not attempt to deal with here. If the schedule were known, however, and given the mortality experiences at the time, it would then be possi ble to determine whether the population size would in crease, decrease, or remain constant. In case of an in crease, it would also be possible to determine whether the increase in population would be at a higher, an equal, or a lower rate than the increase in income. If the increase in population were found to be at a higher rate than the increase in income, the consumption function, including expenditure on newly-born children, would increase while the saving function would decrease. If the increase were at a lower rate than that of Income, the consumption function would decrease while the saving function would increase. If both rates of increase were similar, then there would evidently be no change in either the consump tion or the saving function. 417 i POPULATION CHANGES AND THE ; ..LEVEL OF INVESTMENT ! An understanding of the impact of population changes on the saving-consumption functions is only a means to an • | end. A specific distribution of the national income be- : tween consumption and saving is mainly significant from i the point of view of its effect on the factors, labor and capital, available for the production of further income. I If we assume that specific distribution, whether rational ; or ritualistic, allows for a rate of population growth of i X magnitude, the direct effect of that rate on the long- ! run labor supply was dealt with in the previous chapter. Its effect on the level of capital formation, however, can only be determined through its effect on the saving-con- i 1 sumption functions. With that effect determined, we now s ! | inquire about how the Whole pattern of expenditure affects I I the level of investment and, ceteris paribus. the level of | income. The Basic Relationships Involved. The most peculiar aspect of this effect is the in tricacy of the relationships involved. The level of investment is a function of both saving and consumption. It is a function of saving inasmuch as the latter, whether : voluntary or forced, is a prerequisite of the process of capital formation. It is also a function of consumption j (effective demand),inasmuch as that demand is a determining i | factor in entrepreneurial decisions to invest or not to invest. In such a three-way tangle, the level of invest ment is always determined by the least favorable factor to capital formation. , Saving and investment. The prevalent concept in I economic theory is that saving and investment are always I 1 equal. The classicists believed that equality resulted from changes in the interest rate and the "automatic" in vestment of all savings according to SayTs law. The j Keynesians believed it was an accounting truism basically affected through changes in the level of income. In this concept of equality, both factions defined saving so as to include "voluntary1 1 as well as "forced" ; savings. For the sake of analysis, however, we suggest | I distinguishing between the two concepts. The distinction | is basically monetary in nature. i I Voluntary savings, for our purposes here, are de- [ fined as the excess of income over consumption, both of them measured in monetary units of equal real value. In this sense, we assume no change either in the quantity and/or the velocity of the money in circulation between 419 the period of income-receipt and consumers’ decisions to consume or save. All voluntary'savings will, in this case, be totally a result either directly from consumers’ decisions to save per se and/or indirectly from consumers’ | decisions not to consume. • ; i Forced savings, on the other hand, take into con sideration -the trend of change, either upward or downward, in the value of money between the period of income-receipt and consumers’ decisions to consume or to save. As such, i the concept refers to the difference in real value between ; the amount of savings experienced under such changes and the amount of savings, everything else constant, that OJ would have resulted if no such change had occurred. This distinction makes possible the reconciliation between the equality concept of savings and investment and the significant implications associated with the possi bility of the contemplated investment level, ex ante, being higher, lower, or equal to the level of voluntary savings. In the first case, savings cover the voluntary and the o i J On forced savings and other related concepts, see: D. H. Robertson, "Saving and Hoarding," The Economic Journal. 43:399-413, September, 1933* Also, J. M. Keynes, R. G. Hawtrey, and D. H. Robertson, "Mr. Robertson on ’Saving and Hoarding,’" The Economic Journal« 43:699-712, December, 1933* 420 i forced types. In the second, they are only restricted to the voluntary type. The distinction then offers a tool for the under- | standing of different dynamic economic situations. Given j a specific set of economic circumstances, we will assume j j the level of contemplated investment, ex ante, to equal I. i We will also assume the level of voluntary savings forth coming within the same set of circumstances to equal S. Now, there is no apparent reason why I, ex ante, should always be equal to S. If they were, I, ex post, would i then be equal to S with no further complications involved. ; More probably, however, the chances are that they will not i 1 1 be equal to the level of contemplated investment either j higher or lower than that of voluntary savings. Faced with these inequalities, the reaction of different econo mies will then differ under different circumstances. Let us begin with contemplated investments being higher than the level of voluntary savings forthcoming. Since every dollar*s worth of investment must be preceded ! by an equivalent dollar*s worth of saving, two alternative J extremes can be foreseen. On one hand, saving may remain unchanged with the contemplated investment cut down to its -(savings*) own level. On the other hand, contemplated investment may remain unchanged with the members of the 421 i economy ’ ’forced” to save the difference. In both cases investment, ex post. will be equal to saving whether voluntary and/or forced. The choice of an economy to follow either extreme j or an in-between combination of them depends basically on j ! the available facilities for forcing saving on the members of the economy. If there were no way whatsoever by which the members could be forced to save the difference, it would then be obligatory for the economy to follow the first extreme. However, if such ways did exist in abun- l dance and if all of the contemplated investments were j financially sound-^ in relation to the risk involved, the chances are that the difference between contemplated in vestment and voluntary savings would be forced on the members 100 per cent.^ How, then, can saving be forced, and what are the ways to do so? The answer to the first part of the i i 35 The soundness of an investment refers to antici pated positive marginal efficiency of capital in the field where investment is contemplated. 36 Whether this be advisable or not from a collec tive point of view is a subject which we leave to welfare economists and government regulations to decide. The above conclusion, nevertheless, is based on the fact that financial institutions, at least in free-enterprise coun tries, are business firms striving toward the maximization of profit. 422 i question is inherent in the definition of forced savings i given above. To start with, we may hypothetically divide the members of an economy into a fixed income group and a I ! non-fixed income group. After doing that we will assume \ i that from one hundred dollars received in income, the fixedj i income group will save ten and spend ninety on consumption • ; ! goods and services (either for the consumption of the j initial spenders or for the support of newly-born childrm.)! i j i Since the gross product equals the gross income, these ten | * | I dollars saved and ninety dollars spent will, in real terms,; i equal ten and ninety units of the total product,respec tively. If, however, before the money is spent, its real ; value drops— through inflationary tendencies resulting from a rise in either the quantity or velocity of money— by 10 per cent, the real value of the ninety dollars would then be only equal to eighty-one units of the total prod uct. The ten dollars saved, If the saver decides to invest ] them, will also be equal only to nine units of the total product. All in all, the one hundred dollars at the time j I of spending will only be equal to ninety units of total product. This "forcefully" liberates ten units of the total product that can be utilized in filling the gap be tween contemplated investment and voluntary saving. As for the second part of the question, the answer may be given in two parts. Fluctuations in the value of 423 | money resulting from changes in either the quantity and/or i j the velocity of money in circulation are common occurrences in dynamic economic systems. They can be initiated by individuals, by firms, or even by the government. In this general sense, inflationary and deflationary trends occur I mainly haphazardly with the resulting changes in forced savings bearing no relation to the needs of the entre preneurs . [ Based on these needs, it is the inflationary and I deflationary trends resulting from the expansion or con traction of credit by financial institutions that are of primary significance to the previous analysis. In their j role as safeguards of the economyfs cash balances, finan- i j cial institutions have the ability, if needed, to expand credit over and above the balances entrusted to their keeping. In this sense, they are capable of "forcing” saving on the members of the economy any time voluntary savings fall short of the level demanded by the entre preneurs for the financing of their contemplated 37 investments. 37 ^' This may even be used as a short cut for the estimation of the forced savings at any one time. Forced savings in this sense will be equal to the net expansion of credit by financial institutions over and above their available cash balances. 424 j Could it then be said that, in the presence of i i financial institutions, the total savings (equals invest ment) of an economy are fully independent of the voluntary saving? The answer, on first consideration, appears to be in the affirmative. In such countries as the United States, and England where financial institutions have at tained such a high level of development and where deficit j financing on the part of the government seems to be the accepted philosophy, the potentiality of capital expansion is so out of proportion to voluntary savings that they may , be considered fully independent of each other. This, it | seems to the writer,was the Keynesian attitude, particu- J larly when he discarded the supply of "voluntary" savings as a determining factor of the interest rate and based the latter on a concept of liquidity preference instead. On further consideration, however, this previous ! answer does not seem to be true of most economies,for the following reasons: 1. As referred to in a previous section of this chapter, the degree of development of the financial in- ! stitutions themselves is, at least over a long period of economic development, a function of the supply of "vol untary" savings prevailing. 2. The capacity of financial institutions to ex pand credit is primarily based on the cash balances I 425 i I entrusted to them which,in turn, are a function of the national income and the saving habits of the economy. 3. Even if the government decided to indulge in deficit financing backed merely by its promises to pay, the extent to which net credit can be expanded over and above the supply of voluntary savings without endangering I the smooth functioning of the economy is, in many low per capita income countries, very limited. All these factors restrict the capacity of an economy to expand credit irrespective of the level of voluntary savings prevailing. In other words, they main- ! tain a definite relationship between the level of invest ment (equals total savings) and the level of voluntary savings. With the relationship differing in rigidity from one economy to another, the supply of voluntary savings will, nevertheless, be a determining factor of the interest; rate. 1 The other case is one in which the level of contem plated investment is lower than that of voluntary savings, j Saving in such a case will be no hindrance at all to the process of capital formation. Most investment will be financed through the accumulated reserves of business firms with no need for bank credit. Forced savings, in the form of a net expansion of bank credit, would then be 426 36 unnecessary. This is basically the case in which savings do not play a dominant role in the determination of the interest j rate. Excess savings, it is true, will force the rate to a minimum which, however, will settle at the point where the consumers will prefer to hold all excess savings in the form of liquid assets rather than exchange them for entrepreneurial promises to pay. Thus, the interest rate under such conditions will be determined by liquidity preference and the size of the excess saving rather than the liquidity preference and the total quantity of cash,as maintained by Keynes. Effective demand and investment. Effective demand is the macro concept of what is generally referred to in microanalysis as the "market.” Generally, it describes the total readiness and ability of an economy to purchase economic goods and services. More specifically, however, it refers to the different levels of expenditure necessary, everything else constant, to keep the economy functioning at different levels of employment and productivity. All 36 ] \ [ 0t only is forced saving unnecessary, but through "forced dissaving”(exactly opposite to saving),the economy and fixed income group will come to consume more than they would have if the value of money had remained constant. 427 i in all, it includes outlays on both consumption and capital goods. Whether in real or monetary terms, this total ex penditure on the part of the economy determines on an , ■ equality basis the income level of the members of that economy. The equality indicated here is merely an account ing truism with both phenomena being two sides of the same transaction. In this sense, a specific trend in the level of income can only result from a similar trend in the level of expenditure. National income will expand, for ! example, only if the related total expenditure shows a | V j similar expansion. The specific source of such expansion t | becomes immaterial here as long as the total expands. The question then arises as to how the total ex- i penditure resulting in Yn income is related to the pattern I of spending based on Xn_]_ income? The relationship is actually dual in nature with both aspects based on the consumption and fertility functions. On one hand, the higher these functions are the higher the total outlay on j consumption goods and services will be. On the other hand, the higher these functions are the higher, everything else assumed favorable, the immediate as well as the absolute, through the acceleration principle, level of entrepren eurial expenditure on capital goods and services. From both;points of view, and assuming no other hindrances to 42a capital formation, the higher the consumption and fertil ity functions, the higher the effective demand and, con sequently, the higher the level of income and the related j level of investment will be. i The pattern of expenditure and investment. Through the consumption and fertility functions on one hand, and the saving function on the other, the pattern of expendi ture may be said to exert a dual influence on the level of current investment. These functions, however, are alter natives of each other for the utilization of any given level of income. The lower the consumption and fertility functions, for example, the higher the level of voluntary savings forthcoming and, consequently, the more developed the organization of financial institutions and the more capable they are to expand credit and force saving without serious damage to the smooth functioning of the economy. The lower the saving function, in turn, the higher the total expenditure on consumption and fertility and the higher the level of effective demand. Under such con ditions, the actual level of investment will be determined by the factor least favorable to capital formation, that is saving in the case of the classicists and effective demand in the case of the Keynesians. The objective of economic development would,' then, be better served if the i 429 members of the economy devoted less of their income to the variable in abundance and more to the variable in shortage. These relationships may be better understood with I i reference to a constant level of income. Referring to I t i the successive levels of income as Yq, Y2 and so on, Yq j will equal Y2 only under these two basic conditions: 1. The expenditure resulting in Y2 income must be j exactly equal in real value to Yq. ! 2. The pattern of expenditure resulting in Y2 income must allow, whether voluntarily or forcefully, for a level of saving-investment equal to the depreciation experienced in the production of Yq. When the ratio of income to investment is assumed constant, the first of these conditions will induce a j level of investment equal to the level of depreciation. This induced investment will, according to the second con dition, be adequately covered by an equal level of savings. Whether either one of these two conditions falls short of the level indicates, a level of investment equal to de preciation will not materialize and Y2 will fall short of Y^. Where one of the conditions is higher than the level . indicated and the other is just equal to it, Y2 will still remain equal to Yq. Where both conditions are higher than the levels indicated, but one of them much higher than the j other, Y2 will then be higher than Yq but the rate of 430 I ! increase will be determined by the condition least favor- 1 able to capital formation. i Semi-controlled Population Changes and the Level of Investment. j i As in the case of the saving-consumption functions, i I the effect of semi-controlled population changes on the level of investment will differ according to the specific trend involved. Investment within conditions of Malthusian equilib- | rium. Given the conditions of Malthusian equilibrium and I the related saving-consumption functions, the level of i i I investment may then be determined in the light of the basic relationships indicated above. Among these condi tions, two basic ones come to bear on the level of invest ment. First, there is the inevitable disproportion between i the consumption and fertility functions on one hand and the saving function on the other hand. Second, there is the pattern of consumption to which the high level of I effective demand is mainly devoted. Basically a result of persistent population pres sure, the national product within Malthusian conditions is overwhelmingly devoted to (1) the sustenance of the initial population and (2) the support of newly-born children. Such a pattern of expenditure, under otherwise 431 , favorable circumstances, should prove to be a great impe- i ' tus to investment and capital formation. Two factors, | however, tend to dissipate this favorable effect in under- i ' * developed areas. Primarily, the main obstacle comes from ! the shortage of voluntary savings and the inability of the government and/or the financial institutions to force | j savings on the individual members. | The shortage of voluntary savings needs no explan- i i ation inasmuch as it is an automatic result of the high j consumption and fertility functions. More significant is the inability on the part of the economy to force saving on its individual members and, consequently, to close the gap between contemplated investment and voluntary saving j without having to curtail the former drastically. The j ! reasons for such inability have been pointed out before. Most important among these reasons, however, is the fact that with per capita income as low as it is.in the under developed areas, any inflationary tendency will result in higher rates of malnutrition and starvation. In both cases, the effect will be unfavorable to the smooth func tioning of the economy and may even lead to unrest and rebellion. The other obstacle to capital formation in the under-developed areas is the pattern of consumption to which the national income is devoted. With per capita 432 j income almost at the subsistence level, the effective de- 1 I mand of the economy will be overwhelmingly directed i toward farm product and what is generally referred to as "primary industries."^9 ^ot only are these industries "unfit” for the absorption of a high absolute amount of capital, but they also more readily reflect the impact of diminishing returns to the further application of capital. So, even though savings are already at a low level, the chances are that they will not be utilized fully for capital formation.because of: 1. The lack of effective demand for commodities other than the necessities of life. 2. The relative scantiness of the returns resulting from the application of capital to "primary industries." Within conditions of Malthusian equilibrium, both of these obstacles (the low level of investment and the pattern of consumption) will invariably reduce the possi bility of investment being at a higher level than volun- | tary savings. With the latter already at a very low level,! the whole situation is then reflected in a high rate of i | interest and a low level of investment and capital 39 On "primary industries" see the next^ chapter. 433 l formation. ^ These will continue as such in under- i ! developed areas unless either one or more of the following i I j occurs: i 1. A cessation in population pressure through a change in human preferences from fertility to consumption j i (higher levels of living) and/or saving. From this, the I following sub-changes may follow: 2. A rise in the voluntary savings of the economy. 3. An improvement in the organization of financial institutions and, consequently, in their efficiency in the utilization of available voluntary savings. | 4» A change in tastes from "primary" to "second ary" and/or "tertiary" industries. While the changes from 2 to 4 are basically a func tion of the first, they, particularly as related to finan cial institutions, can be utilized to induce a change in human preferences. Investment within a framework of Keynesian analysis. * In a previous section the Keynesian framework of analysis j was found to imply a decreasing fertility function, a ^ This high rate of interest is not only the re sult of low voluntary savings, but also a result of the inability of financial institutions to force saving. How high the rate will be, depends basically on this second point. 434 i decreasing consumption function, as well as a "doubly” f I increasing saving function. How do these trends affect > the prospects of investment and capital formation? | At least for a while throughout the process of economic development, such as in the United States and j i I most of Western Europe during the last century and a half, j such trends will be a great relief for countries suffering j ! from conditions of Malthusian equilibrium. The population i • . ■ | pressure will finally be decreasing. The level of volun- | ! tary savings will start to rise. Financial institutions i I ! will be improving in both the capacity and ability to ex- i ' ! pand credit and force saving. Consumption, while de- j creasing all along, will, nevertheless, be shifting to the j satisfaction of higher wants and desires. All these fac tors, in turn, will tend to reduce the rate of interest and to encourage, ceteris paribus, a persistently rising level of investment, as well as a persistently rising level of total and per capita income. Sooner or later, however, the economy will reach a point where the level of voluntary savings will surpass the needs for further investment.^" This may come about 41 This point will differ in different economies de pending mainly on the natural resources available. 435 ■ because of a continuously rising level of savings and/or • because of a persistently declining marginal efficiency of capital. In either case, the rate of interest will decline up to the point where the savers will prefer either i to (1) reallocate the excess savings back to consumption j j and/or having children or (2) to keep on saving with the excess savings maintained in the form of liquid funds rather than capital assets. In case the former of these alternatives is fol lowed, the saving function will be appropriated in direct response to capital needs for further investment. When j the marginal efficiency of capital becomes zero and there is no further need for saving, the economy will then have reached the semi-stationary state with the total income devoted to consumption and/or having children. This, however, is the case for which Keynes did not , allow. The rise in savings, he maintained, would continue irrespective of the need for further investment. The in- ! terest rate would drop down to the point where it would be j determined by the economy*s liquidity preference and the | ! size of excess savings (the quantity of cash in the Keynesian analysis). Excess savings, in this case, would neither be consumed, devoted to having children, nor in vested, but hoarded in the form of cash balances. Unless these hoardings were counterbalanced by government 436 ' spending, they would result in a gap between income and ' expenditure which, in turn, would curtail future invest- J O ment and start the economy on a downward trend. Controlled Population Changes and the Level of Investment. Given the rate of population changes resulting from J controlled fertility and the associated trends in the saving-consumption functions, it would not be difficult to determine the final effect on the level of investment. According to the previous analysis on the subject, this effect would mainly be a function of the level of voluntary savings forthcoming, the existing organization of financial institutions, the level of effective demand, and the level of contemplated investments. ' ' This is only a simplification of a more complicated relationship. Within rational conditions, and with fer tility being one of three alternatives for the utilization of income, it would be just as erroneous to say that the level of fertility would be a function of the levels of consumption and saving as it would be to say that the levels of consumption and savings were a function of the Government spending will make the situation worse by forcing further savings on the part of the fixed income groups. Such a Keynesian proposal might be beneficial in alleviating the situation only if the absolute effect of public expenditure on the consumption function were higher than the forced savings resulting from such public expen diture. 437 i level of fertility. The national (individual) income is j distributed among all three in such a way as to maximize i j satisfactions with the conditions of equilibrium attained when the marginal satisfactions derived from the expendi ture on all three are equal. i Now let us assume that economic maximization is the | objective of rational action in the distribution of income among the three alternatives. Let us further assume that that maximization will be attained through the maximization | of current investment within given circumstances. In this sense all three alternatives would be judged from the * | point of view of their effect on capital formation. Par- j ticularly as related to the shape of the fertility prefer- I ence schedule, such a shape would be affected by parental belief in the advantages or disadvantages of population increase as based on variation in the level of investment ; (reference here is to H factor in the analysis of the imputed value attributed to a child by his parents dis cussed in Chapter VII). In other words, it would be af fected by parental belief in whether saving or effective demand were more needed for the stimulation of capital formation. Under such conditions, the interrelationships between controlled population changes on one hand and the saving-consumption functions on the other will reach 43S , equilibrium at the point where, ceteris paribus and to the ; best belief of the parents, the level of investment is at its maximum. SUMMARY f I The effect of quantitative population changes on the coefficients of capital formation (saving, investment, and financial institutions as a moderating factor) depends primarily on the trend involved, as well as on the under- ! standing as to the determinants and relationships of i I these coefficients. On both counts economic theory re- ; veals basic differences in opinion between the classicists [ on one hand and the Keynesians on the other. The main I aspects of such differences are summarized in Table X. Despite these differences, both factions reached conclusions that are more or less pessimistic in nature. In both cases these conclusions stemmed from an assumed rigidity of human behavior concerning either one or all of | the three alternatives open for the utilization of nationalJ income, namely, consumption, fertility, and saving. The classicists accepted that rigidity with regard to fertil ity, while the Keynesians maintained it applied to fer tility as well as to choices between saving and consump tion. As indicated in Table X, however, the level at which demographic experiences are assumed to be rigid 439 TABLE X COMPARISONS BETWEEN THE CLASSICAL AND KEYNESIAN VIEWS REGARDING THE COEFFICIENTS OF CAPITAL FORMATION The Classical View The Keynesian View Variable Population Saving Investment Interest Rate S = I Financial Institu tions Belief in the Malthusian theory. Basically a func tion of the interest rate. Function of the rate of interest and the average return on current investment. Function of the supply of saving and the demand for investment. Comes about through the equilibrating influence of the interest rate. Having at most a transit&ojiary effect on the economy. Belief in a declining rate of growth at higher socio-economic levels. Follows the so-called Keynesian psychologi cal f,law.n Function of the rate of interest and the marginal efficiency of capital. Function of the liqui dity preference and the total quantity of cash. An accounting truism to which the national income has to adapt. Their functioning is an integral part of Keynes’ General Theory. 440 differs in each case. Based on the multiple concept of human behavior developed in Chapter IV, this rigidity is highly inad missible. We are not denying that the experiences indi cated prevailed at the time the two economic factions made their appearance. It mainly indicates that such exo genous trends should be accepted merely as given without any long-run connotations attached to them. Accordingly our analysis in this chapter is divided so as to allow for trends indicated in the classical and also the Keynesian versions, as well as for trends that may result under conditions of rational behavior when no rigidity can be assumed. As alternatives for the utilization of income, the saving-consumption functions are considered simultaneously in their relation with population changes. Within con ditions of Malthusian equilibrium, both functions tend, in the long run, to remain stable with consumption at a relatively high level and with saving at a relatively low one. Within a Keynesian framework of analysis, the saving function will be rapidly increasing with both the fertility and consumption functions experiencing a decline. Under conditions of rational behavior the trends in the saving- consumption functions will, basically, depend on: 441 j 1. The accumulative fertility preference schedule j of the society. j 2. The rate and direction of population change given that schedule and the associated mortality [ experiences. j Without any change in the preference between saving I and consumption, the consumption function will increase and the saving function will decrease, if the resulting change in population under conditions of rational action is negative. If population is increasing, however, the effect on the saving-consumption functions will depend on the rate of increase in population, as compared to the rate of increase in income. Where the former is higher than the latter, the consumption function will go up while the saving function will go down. Where it is the opposite the consumption function will decrease while the saving function will increase. If both increase at the same rate, no change will result in the saving-consumption functions. The question now is: How do all these different trends < affect the level of investment and, consequently, the level of income? Before we could answer this question, however, a general framework as to the relationship between the pattern of expenditure and the level of investment had to 1+1+ 2 be developed. The pattern of expenditure, it is argued, will affect the level of investment through two channels, namely, saving and effective demand. Our approach to the saving-investment relationship is based on the equality concept of the two variables. The equality, nevertheless, need not be "voluntary1* on the part of either the savers or the investors. On the contrary it is the rule rather than the exception that voluntary savings will differ from contemplated invest ment. When this is the case two situations may be visualized: First: When the voluntary saving is lower than con- > templated investment, one alternative is for the differ ence to be forcefully imposed on the members of the econ omy. This can be done through the net expansion of , credit on the part of financial institutions. Where finan cial institutions do not possess either the capacity or the ability to force that difference, the level of con templated investment will then have to be forcefully cur tailed because of the lack of savings. Under such conditions the rate of interest will be nearer to the classical rather than the Keynesian version. On the one hand, it will be a function of the level of contemplated investment. On the other hand, it will be a 443 i function of (1) the level of voluntary savings and (2) j the absolute capacity and ability of financial institu- j tions to expand credit over and above the cash balances I I I available. j Second: When voluntary saving is higher than con templated investment, the excess savings have to be elim inated from the money market. This may come about either through the reallocation of resources by the consumers and/or through the decline of the interest rate down to the poj.nt when the savers will prefer to hold their savings in the form of liquid funds rather than take the risk of lending them to the entrepreneurs. Under such conditions the rate of interest would be at a low level determined by the economy’s liquidity preference and the size of the ! excess savings. As for the relation between effective demand and i the level of investment, it is found to be dual in nature with both aspects based on the levels of the consumption and fertility functions. Directly, the higher these | functions are the higher the level of expenditure on con sumption goods and services. Indirectly, the higher these functions are the higher, everything else constant, the level of entrepreneurial expenditure on capital goods and services. 4A-A- i The pattern of expenditure may affect the level of | investment through, both of these channels. The effects, however, are competitive in nature since, consumption, i j fertility, and saving are all alternatives for the utili- I zation of income. Under subh conditions the actual level I i of investment is determined by the variable least favor- ! able to capital formation. I Within conditions of Malthusian equilibrium and with an increasing portion of the national income devoted to the support of newly-born children, this least favor able variable is basically the shortage of saving. Another 1 [ obstacle to the capital formation, however, is the pattern j of consumption which mainly consists of farm products and ' primary industries. Not only are these industries unfit , for the absorption of a high absolute amount of capital, but they also more readily reflect the impact of diminish ing returns to the further application of capital. I A change from the Malthusian to the Keynesian demo- | graphic conditions will, to a great extent, alleviate i j these obstacles to capital formation previously mentioned. j ' However, beyond a certain point, the level of voluntary saving will surpass the needs for further investment. Saving will be no more an obstacle but will be substituted by a shortage in effective demand. Unless the consumers 445 i decide to reallocate their expenditure so as to eliminate • the excess savings, both the national income and the level I ; of investment will decline due to the decline in the level i | of expenditure. ; Finally, the level of investment under rational i action will be determined by the saving-consumption i | functions associated with the prevailing levels of mortal- J ity and controlled fertility. If perfect knowledge and | economic development are assumed to be the objective of ! rational action, the national income in this case will be | distributed among the three alternatives, namely consump tion, saving, and fertility, in such a way as to maximize the level of investment and capital formation forthcoming j for the production of future incomes. CHAPTER XI I POPULATION CHANGES AND THE CONDITIONS I OF PRODUCTION 1 I The economic consequences of a changing population j i ‘ are not limited to the initial effect on the level of pro- ; ! " ! ! ductivity. Mainly through that effect, but also inde- | j pendently, these consequences reach deeper into the socio- J I . ; ! economic pattern surrounding and determining the processes j i of production. Population changes in this sense come to ; affect human preferences as related to the efficiency, tastes, and organization of the economic system. From a j long-run point of view, such changes in the conditions of j production are of the highest importance in sustaining a j specific dynamic trend once it made its appearance. | The different aspects of these socio-economic re- lationships constitute the subject matter of the present chapter. Basically, the issues involved are the opposite I of those dealt with in Chapter VIII. At that time the analysis mainly reviewed the effect on the demographic variables of changes in the level of income resulting from pure economic sources. In this chapter the analysis is concerned with the effect on.economic variables of changes i " in the level of income resulting from pure demographic sources. 447 POPULATION CHANGES AND EFFICIENCY OF LABOR ^ Given a specific assortment of the factors of pro duction, efficiency may be described as the ability of the members of a society, measured by the prevailing level of productivity/income, to satisfy their wants and desires.-1 - In its general sense such a definition will undoubtedly include tastes and organization as elements affecting efficiency. In a restricted sense, however, we separate these two and concentrate mainly on labor*s dexterity in the utilization of the available factors of production. This dexterity of the labor force can be physical and/or cultural in nature. In the first group may be in cluded such qualities as vitality, alertness, and^natural intelligence, as well as others that are inherent in the physical organism. The other group covers all the acquired qualities and characteristics that reflect on the level of productivity per laborer. Efficiency may also be defined in4 terms of the lowest real cost of a specific level of productivity. The above definition has been preferred, however, because it allows for underemployment even though real cost may be at the lowest level in relation to the national product forthcoming. Population Changes and the Physical Factors of Efficiency. The physical factors of efficiency are related to the quantitative changes in population through two basic channels. On one hand,these two are related through changes in the age composition invariably associated with the changes in numbers. On the other hand, they are re lated through the "initial” changes in the level of in come resulting from the impact of population changes on the factors of production. Age composition and efficiency. As might readily be admitted, the age composition of the labor force has a vital influence on the physical aspects of efficiency. This is particularly noticeable in a comparison between under-developed economies suffering from high levels of demographic experiences and highly-developed economies with low levels of demographic experiences. In the first case, the labor force is, on the average, very young in age, as well as experiencing a high level of "turnover." In the second case the position is exactly the opposite. From both points of view the differences tend to influence: 1. The vitality and alertness of the labor force. 2. The adaptability of the labor force to regional, occupational, and technical shifts. 449 Whatever may be said about the advantages of an j aging labor force in terms of experience and the like, there is no doubt that the process is accompanied, every- | thing else constant, by a decline in physical stamina and i mental ingenuity. In all aspects of the economic and 8 ! social life when either one or both of these faculties is exercised, this decline will be detrimental to the fullest ! utilization of the available factors of production. According to Spengler, this is particularly relevant to 1 the decision-making group of each society and the result ing changes in "the character of fundamental economic and i 2 politico-economic decisions and decision-making.” . Of more serious nature, however, is the effect of a changing age composition on the adaptability of the labor ’ force to regional, occupational, and technical shifts. The seriousness of the situation stems from two simulta neous but opposing trends associated with the aging process ‘ of population, in general, and the labor force, in partic- j ular. On one hand, there is the growing necessity for j ! I j adaptability resulting from associated changes in tastes ] ! 2 , J. J. Spengler, ”Some Effects of Changes in the j Age Composition of the Labor Force,” The Southern Economic i Journal. 3 :1 5 7 -1 7 5 , October, 1941. 450 and techniques. On the other hand, there is the growing non-flexibility of the labor force generally associated 3 j with older age groups. ! As the rate of population growth falls, ! the relative amount of interoccupational and interregional transference of labor necessary to maintain overall employment at a stipulated level, and to insure an optimal distribution of workers among occupations, tends to increase.^- | This trend is basically a function of the changes 1 ! in the age composition and the associated changes in ; tastes, occupations, and technology. With the aging of I population, demand will change differently from product i to product and from region to region. Of particular im- : portance also are the changes in technology resulting from | changes in the size of the market, the level of capital, j and economic organization. All these changes will neces sitate a regional, as well as an occupational, realloca tion of the labor force. They will also necessitate a j labor force that can keep up with the changing technology indefinitely. 3 on both these trends see: Spengler, ojj. cit. and I Wilbert E. Moore, "The Aged in Industrial Societies," A ! reprint from the Aged and Society (industrial Relations ! Research Association, no date). 4 Spengler, op>. cit., p. 158. Notwithstanding these necessities, an aging popu lation will experience the consequences of: (1) an aging labor force; and (2) a slow-down in the annual turnover of the labor force, as determined by the annual levels of entry and exit. Both of these factors, in turn, hamper the smooth reallocation and the technical flexibility of the labor force necessitated above. It is generally true that the older the worker and the longer his experiences in one place and occupation, the greater, ceteris paribus. his "trained incapacity" for taking other jobs, as well as the lower his mobility from one region to another. It is also just as true that the older the worker is, tfie lower his adaptability to new organizations and techniques. Particularly where the new techniques necessitate training and educational programs, the chances are that a new worler would be more readily adjustable than an older one. In this sense, the slow-down of the turnover in the labor force of any specific economy could be a serious obstacle to its technical adaptability, as well as a cause for the reduction in its efficiency. Income changes and physical efficiency. The level of productivity may be linked to the physical efficiency of labor in more than one way. Basic among these ways is 452 i the ’ ’diet" of the mother before a child is born and of a ! child throughout the process of growth, as well as the diet of an adult in his everyday working life. In case the in- j come is high enough and the diet is both adequate and suf- : ficient, the chances are that the individuals involved i will exercise normal and healthy life conducive to effi cient economic performance. In case the income is low and the diet is either inadequate or insufficient, such dis eases as rickets, scurvy, beriberi, pellagra, et cetera j may develop; human stamina and alertness will be below par; and the economy as a whole will suffer from the in-- efficiency of its human resources. In the words of Dr. j : Tisdall: When one examines the evidence showing the effect of diets that are not perfect, but still good enough to prevent any deficiency j disease, one is led to the conclusion that there is no one single factor today which so affects the health of the individual as the food he eats.2 i In addition to diet the level of income can affect I physical efficiency through several other factors: 5 Frederick F. Tisdall, "The Role of Nutrition in Preventive Medicine," Milbank Memorial Fund Quarterly. 23:39, January, 1945- 453 1. The climatic conditions of doing business: air conditioning can improve the efficiency and respon siveness of an office. 2. Clothing and housing: factors affecting human morale. j 3. Rest: overwork will lower the over-all vitality | of the physical organism. j 4- Motherly attention: children receive this at tention if the mother is not involved in other economic activities. At higher levels of income all these factors will be fa vorable to efficiency in economic performance. Particu larly in the case of motherly attention, these factors will, generally, influence the over-all pattern of think ing and behavior. Population Changes and the Cultural Factors of Efficiency. The cultural or acquired factors of efficiency in clude both ritualistic and rational aspects. The ritual istic aspects refer to the over-all pattern of customs and \ institutions within which the economic activities are con ducted. They are the principles to which the members of the economy have to (or are supposed to) adhere more or less ritualistically in the performance of their daily occupations. Within this body of principles, Malthus, for 454 ; example, emphasized the political and moral aspects.^ I Spengler stressed more the institutional and structural sides.^ All in all, this body may be said to include all the ritualistic aspects of human behavior, whether politi- j cal, social, economic, moral, or of any other nature, j \ 1 pertaining to productivity. The effect of population j j changes and the related changes in income on such aspects will in a limited sense, be referred to in connection j with "organization." j The other aspect of cultural efficiency is the rational one. Generally, this aspect refers to the level of "knowledge" utilized by a society in the process of maximizing its satisfactions. Population changes affect such a level mainly through their effect on the level of investment and capital formation. These, in turn, will i affect cultural efficiency through (1) education and (2) research. Education is used here to describe the process j of bringing some or all of the members of a society up to ( ^ T. R. Malthus, Principles of Political Economy. Book II (London: William. Pickering, 1836),' pp. 309-311. 7 J. J. Spengler, "Economic Factors in the Develop ment of Densely Populated Areas,” Proceedings of the I American Philosophical Society. 95:14, February, 1951. Reference here is particularly to determinants 9, 10 and 16 in his list of the determinants of the progress of industri ali z at i on. 455 g par with an already "existing” body of knowledge, j Research is the process through which the body of knowledge itself is being continuously enlarged. Income changes and education. The educational pro cess is a money-consuming process. As pointed out in an earlier chapter, for a society to be able to educate its younger generations, it must afford: 1. The resulting reduction in productivity based ! on their exit from the labor force. i 2. Their maintenance and support while going to | school. j 3. Payments for teachers and the supplementary ! costs associated with school work. Whether the funds are supplied through private or ! public channels, the over-all operation from the macro- | economic point of view is one of the "saving equals l investment" type. On one hand, the necessary funds have to be supplied through saving whether of the voluntary and/or the forced type. From this point of view, the level of education may be expected to change directly with I _________ g The term "existing" is being employed for the lack of a.better term. As used here, it refers to the ab solute level of knowledge universally familiar to all human beings. 456 the changes in the prevailing levels of income and savings. On the other hand, the funds allotted to educa- : tion are one form of capital defined above as including s | nall man-made economic goods and services devoted to the i improvement of productive efficiency in the application ; j of labor to land.lf9 Considered from a strictly economic j point of view, it will be to the advantage of a society f | to keep on allotting funds to education as long as: (1) j j the marginal productivity resulting from a marginal rise ! in the level of education is higher than the initial cost ; involved, and (2) the net marginal return resulting from a marginal rise in the level of productivity is higher ; than the net marginal return that could have resulted, if ! the funds involved were allotted to other forms of capital, such as physical and/or research. The society will be economically at an educational optimum when the marginal productivity resulting from a marginal rise in the level I of education becomes equal to the marginal cost involved. If that optimum level could be determined, the society then would be considered as over-educated if the first of j these variables, the educational process assumed to be at | maximum efficiency, were lower than the second; it would 9 Refer to Chapter III 457 be considered under-educated if the first of these vari ables were higher than the second. The significance of this analogy between education and capital stems from the "hypothesis1 1 that the level of education seems to be more sensitive to changes in income than any other form of capital. Particularly when the income is dropping, it is a generally-observed phenomenon that the eldest of the children will quit school and join 10 the labor force to search for a job. If it were assumed that that child would have finished his education, had the level of income not dropped, his leaving school would then represent an act of disinvestment on the part of the society. Even though there might be no change in the physical capital of the society, this social or human disinvestment would tend to intensify, in the long run, the downward trend in the level of the national income. In under-developed countries, for example, the majority of the younger generation joins the labor force at very low age-groups with very low levels of "human" investment. IQ This may be supported by the statistical finding of an inverse correlation between the level of income and the size of the labor force. On this correlation, see: Rupert B. Vance and Nadia Danilevski, "Population and the Pattern of Unemployment, 1930-1937," The Milbank Memorial Fund Quarterly. 13:27-43, January, 1940. 45a Income changes and research. Changes in the level of income resulting from changes in population also affect j the capacity and ability of a society to conduct research j regarding the possible ways and means for the improvement ■ > ! of efficiency. This is mainly a result of: | i 1. A changing capacity to save: As in the case j with education, the higher the level of income, the higher . will be the capacity of the society to save and, conse- ! quently, the higher the available means that could be i - i utilized, among other things, for the support of research i ! work. ( 2. A changing educational level: Changes in the j educational level have already been referred to as directly I related to the changes in income. The higher the educa- * ! tional level, however, the higher the capacity and ability to conduct fruitful research in directions which are most ; liable to result in tangible progress. This mainly re sults from the fact that all research and attempts at in vention are primarily based on the full acquaintance of j the existing body of knowledge in the field involved. Without such an acquaintance funds may be wasted either in ( search of something that is already familiar to the exist ing body of knowledge and/or on researches that are basically speculative in nature with a very low probability 459 of its resulting in an improvement in the society’s efficiency. i j POPULATION CHANGES AND TASTES As reflected in the pattern of consumption expen- { diture, the tastes of the members of an economy have a I t i great bearing on the levels of efficiency and production. Where the tastes are directed toward goods and services in the production of which the economy possesses relative I advantages, the efficiency of that economy will be higher 5 than if the case were the opposite. The economy, in turn, ; may be considered as possessing a relative advantage in ! the production of the goods and services for which its ! j resources, both absolute and relative, as well as its "know-how,” are most equipped. Such commodities for coun tries with much land and few people, such as Australia and New Zealand, will be markedly different from those for countries with limited land and many people, such as \ Egypt and India. In the first case, such "land-consuming" I 1 activities ks cattle raising and highly mechanized farming i would be most fitting. In the second case, the relative quantities of the factors of production would be most adapted for such "labor-consuming" activities as weaving and spinning. These commodities, however, are not j 460 necessarily the ones locally in demand by the respective countries. What, then, determines the tastes of an economy? How do population changes affect these tastes? | Since taste is an aspect of human behavior, the j l answer to the first of these questions will have to follow! i our general classification of such behavior. At the risk of being repetitious, human tastes as to what or what not to consume may be considered as a function of animalistic I (physical), ritualistic, and/or rational motives. Where [ , the tastes are based on the first of these groups of \ motives, the analysis will then deal with the "needs" of the human organism. Otherwise, all other tastes are in ! i the nature of human preferences, whether they are of the ritualistic and/or of the rational type. / Population Changes and Human Needs. - The physical needs of individuals differ among the different socio-economic groups. Basic among the reasons i for these differences are: (1) the climate of the region, i (2) the age composition of the population, and (3) the i level and form of the minimum standard of living below which physical suffering will ensue. Only the last two of ; these factors are related to quantitative population i changes and their concomitant changes in income. 461 Age distribution and human needs. The needs of a ' child differ markedly from those of an adult or an old ; man. In a population with a high ratio of children, the need will be mainly for food, In general, and the primary types of food, in particular, for wider housing quarters, ! for more educational facilities, and the like. A pre- i - I dominantly adult or old population, in turn, will be less ! inclined to these types of needs and more in favor of the 1 "relaxing” kinds of goods and services, social insurance. | programs, and medical and hospital services. ! j With quantitative changes in population "automati- I cally” resulting in changes in the age distribution, they | may also be expected to result in a decline (or increase) j in the demand for certain categories of goods and ser- ; vices more than for others. Where the change is in favor of an increase in the ratio of the young to the total population, either because of the trend itself and/or its associated fertility and mortality experiences, the change in the over-all pattern of expenditure will be from the It has been established in many studies that a ; relatively young population spends a larger share-of its ■ income on food. On a discussion of these studies, see: J United Nations, The Determinants and Consequences of I Population Changes (New York: Department of Social Affairs, ; 195JT7PT-2I3T ' 462 "old-age” types of goods and services to the ttyoung-age” types. This has been and still is the case in most of the j \ under-developed countries. Where the change, however, is in favor of the older age-groups, either through a de- dining rate of growth and/or a decline in the relative importance of fertility in the determination of quantita tive growth, the shift in the pattern of consumption will be exactly the opposite from that indicated above. As in the case in the United States and most of Western Europe, ! the relative magnitude of old-age expenditure will be in- j creasing at the expense of the younger age-groups. The j importance of these shifts to efficiency and the level of income can be determined for each economy independently, depending on the available factors of production and the type of goods and services in which the economy enjoys a relative advantage. ! Income changes and human needs. From the individ uals point of view, what is a need and what is a prefer ence is as much a psychological as it is a physical problem. To draw a line between the two implies a univer- • sally accepted standard. Besides climate, two other factors hinder the existence of such a standard. On one hand, there ahe the different forms in which a specific / number of calories can be consumed by the human organism. 4 63 Vegetable calories, for example, can be consumed in their original form and/or converted into animal products to be consumed as such. On the other hand, there is the gener- i ally observed tendency for human beings to cling to a I I customary pattern of consumption. What may be considered J a minimum under one pattern is not necessarily the same ' under another. Thropgh both of these factors the needs of society are affected by changes in income resulting from changes in the population size. Where the changes in population have a favorable effect on the level of income, the chances are that the members of the economy will choose to satisfy their needs through more elaborate caloric intake, even though there may be no change in the number of calories. The consumption of meat under such circumstances becomes more and more a necessity to the members of that economy. However, where the changes in population are unfavorable to the level of income, the members of the economy, sooner or later, will have to abandon their previously assumed j minimum pattern of consumption and shift their demand from meat to other forms of food that supply the same quantity of calories but in different forms and at cheaper cost. ; Population Changes and Human Preferences* i v I Over and above the essential needs of the members : of the economy, the pattern of consumption expenditure becomes basically a function of (1) the level of wants and (2) the preferences of the individuals involved. The level of wants may be considered as directly I \ - ! j i related to the level of income. As Marshall expressed it: I I i I Although it is man’s wants in the earliest I j stages of his development that give rise to j ! his activities, yet afterwards each new step j upwards is to be regarded as the development of new activities giving rise to new wants, rather than of new wants giving rise to new activities.12 Changes in population favorable to changes in income will thus tend to increase the number of human i wants and, consequently, to widen the sphere within which human preferences have to operate. These preferences are either social and/or rational in nature. On one hand, the members of an economy may be consuming or not consuming specific items just because it is the custom of the society to do so. The preference in this sense is ritualistic in nature and is basically de termined by the organization and the social orientation of the economy. I2 Alfred Marshall, Principles of Economics (London: Macmillan and Company, Ltd., 1927), p.~1^9. 1+65 On the other hand, the preferences may be the re sult of deliberate action directed toward the maximization of satisfactions. The predominant element in this case will be the standard of valuation of the members of the economy. This standard, however, is not necessarily rigid and is generally highly amenable to education, ad vertisements, and patriotic campaigns. Where an increase in income resulting from population changes tends to manipulate all three of these factors in favor of commod ities in which the economy possesses relative advantage, the result will generally be one of an increase in effi ciency and a further improvement in the level of income. POPULATION CHANGES AND ORGANIZATION Organization is a loose term which covers all the structural and institutional aspects of human society. Whenever two or more people come in contact with each other, there usually develops a pattern of organization. Whether it be social, political, religious, economic, or otherwise, such organizational patterns are invariably a determinant, as well as a determining factor, of human ideologies and endeavors. They are determinant factors in the sense that they follow closely what are considered to be the objectives of the society and the means believed, 466 ; either rationally or ritualistically, to be best adapted | for the attainment of these objectives. They are deter- | mining factors in the sense that they mold the ideologies and the pattern of behavior of the members of the society, i particularly the younger generations, and consequently : j | determine the political, social, religious, and economic orientation of the society involved. As related to the material.or economic aspects of I human endeavors, all types of social organizations seem to j ! be applicable. Throughout this study, reference has i * already been made to many forms of this applicability. Primarily, we have indicated how religious institutions have a great influence on the degree of rationality exer- ! cised within the realm of demographic behavior. Second, reference has also been made to the manner in which cus toms affect human preferences among alternatives, partic ularly among the alternatives consumption, saving, and/or having children. Third, it was also indicated at the be- j ginning of this chapter that the social, political, and | i economic organizations affect not only the available levels; ' of the factors of production, but also the efficiency with which they are utilized. Through all these relationships organization, whatever its form may be, will have a great 467 . influence on the levels of productivity and income. | Our analysis in this section, however, is mainly * concerned with the economic form of organization. While | basically arbitrary in nature, this limitation of the analysis may be justified if we assume a direct relation ship between economic organization and all other forms of ; / social organization. This assumption seems to have been made long ago by List, Marx, and by all other adherents to the materialistic interpretation of history. The exact j relationship is still, nevertheless, a subject of wide s i controversy. i i The Different Aspects of Economic Organization. J From a macro-economic viewpoint economic organiza- * } : tion covers the different types of activities involved in the production of a specific level of the national income. In other words, it refers to the sources from which the members of an economy draw their income whether as labor- I ers, money lenders, executives, or entrepreneurs. More and more often these activities are classified into three ! basic groups. According to Clark’s1- ^ definitions these groups are: ! - * - 3 Colin Clark, The Conditions of Economic Progress (London: Macmillan and Company, Ltd., 1940), p. 182. 463 Primary Industries: These include agricultural and ! pastoral production, fishing, forestry, and hunting. Secondary Industries: Basically, they refer to mining, manufacture, building construction, and public works, gas and electricity supply. Tertiary Industries: These may be defined as cover ing all other economic activities mainly distribution, transport, public administration, domestic service, and all other activities producing a non-material output. Throughout the socio-economic development of each society the economic organization based on these three groups of activities has undergone a specific change in emphasis. On the basis of available statistical data Clark concluded that "the different levels of economic ad vancements are very closely associated with the propor tions in which the working population is distributed."-^ At the lowest levels of economic advancements, the majority of the working population is engaged in primary industries. At higher and higher levels, however, the emphasis becomes less and less on primary industries and more and more on secondary and tertiary industries, respectively. If this should be accepted as a valid generalization, the question 14 Ibid., p. 177. would then become: How do population changes affect the emphasis on each of these groups of activities? If the emphasis would be in favor of primary industries, popula tion changes would then be, from the organizational point l of view, detrimental to economic development. If the t t ■ i ! opposite were true, population changes would then be con ducive to further increases in income and higher levels of economic development. I Population Pressure and the Organizational Structure. I 1 i The effect of a specific "type” of population 1 changes on the organizational structure of an economy is 1 ? primarily a function of more than one variable. To appre- ! ciate the exact nature of the relationships involved, we i • assume a hypothetical economy in which the size of popu lation is P, the level of income is Y, the level of con- I • '• sumption expenditure is C, and the portions of that C allotted to primary, secondary, and tertiary industries are a, b, and c, respectively. At any one moment C will j i equal a + b r c. j Now, let us assume a case of population increase. In the light of our discussions in this study, two possible utypesr t of increase can be visualized. On one hand, the increase in numbers may be the result of total rational behavior on the part of the members of the economy. On 470 the other hand, the increase may be the result of the ritualistic inability of the members of the economy to control their excessive fecundity. The effect on the or ganizational structure of the economy differs in each case. Controlled changes and organizational structure. Mortality assumed constant, quantitative changes in popu lation under rational conditions may result from either one of two causes: (1) from a change in income with fer tility preference constant, and/or (2) from a change in fertility preference with the level of income constant. In the first case population increase will only occur if preceded by an increase in income. Without any change in the average diet of the members of the economy, an increase in population would also be associated with an increase in the demand for agricultural or primary pro ducts. This last increase, however, need not be at the expense of the demand for secondary or tertiary products, since it could be more than satisfied through the total increase in productivity/incomeIt, nevertheless, 1 15 This could be achieved directly if the increase in productivity was already in the field of primary in dustries; or indirectly through the exchange of secondary and tertiary products on the international market for primary products. However, in this case, the terms of trade have to be taken into consideration. 471 might have an effect on the propensities to consume primary, secondary, and tertiary products. The exact nature of that effect depends basically on the rate of in- i | crease in income, as compared to the rate of increase in 1 ! I the demand for primary products. Where the two rates are j j the same, everything else assumed constant, the chances I i I t ' are that the three propensities will also remain constant. i However, if income is increasing at a higher rate than the increase in the demand for primary products, the propen- ! sity to consume primary products will decline, while those ; * for secondary and tertiary products will increase. If the I • ! increase in income is at a lower rate than the increase in the demand for primary products, the propensity to con- J sume primary products will increase while those for secondary and tertiary products will experience a decline. Where the increase in population is the result of a change in fertility preference with the level of income constant, the effect on the organizational structure of i the economy will basically depend on the means through ! f which the increase in the demand for primary products is j j being financed. If it was financed through funds that otherwise would have been "hoarded" by the members of the economy, the result will generally be one of an increase i in the total level of income and, consequently, an increase in the demand for secondary and tertiary products. If, 472 however, the over-all consumption level is assumed con- i stant, the increase in the demand for primary products » | will then be totally at the expense of secondary and ter- I tiary products. The economy, in this case, will reallocate j its factors of production in favor of primary rather than I i ! secondary or tertiary industries. i Semi-controlled changes and organizational struc- J ture. In cases where the increase in population is the i result of the inability of the members of the economy to i control their excessive fecundity, the effect on the , organizational structure of the economy will be basically | of this last category. With no preceding increase in income and a very high propensity to consume out of a j given income, any increase in the demand for primary prod- : ucts associated with an increase in population will have to be at the expense of secondary and tertiary industries. The demand for primary products will increase, while that j for secondary and tertiary products will decrease. Through ! ! changes in the comparative levels of wages and profits, j the economy will thus come to adjust itself to such a i • : shift in the organizational structure. As is the case in I most underdeveloped areas in which the Malthusian con- | ditions prevail, their economies come to be basically i agricultural in nature with barely an^i "effective” demand 473 , for secondary and tertiary goods and services. i i ! SUMMARY i The impact of quantitative population changes ex- ! tends to the socio-economic patterns surrounding and de- ‘ i I termining the processes of production. Through associated changes in age composition and the level of income, quan- | titative changes come to affect: i * 1. The efficiency of the labor force. i ] 2. The tastes of the consumers. 3. The socio-economic organization of economic activities. Basically, quantitative population changes are j i found to affect the factors underlying the efficiency of labor, whether physical or cultural. The effect on the former is exerted through: 1 1. The vitality and alertness of the labor force: The younger, on the average, the population, the younger i will be the labor force and the higher its vitality and ! i alertness. i i ! 2. The adaptability of the labor force to regional, occupational, and technical shifts: While increasing the necessity for adaptability, an aging population is, never theless, adverse to such a process. Two factors account for this adversity. On one hand, the older the laborer 474 j the greater will be his reluctance to change regions and/or occupations. On the other hand, the slow-down in the turnover of the labor force associated with an aging j population hampers the chances of educating the force to i j new techniques and organization. As such, it also hampers j the technical adaptability of the labor force. | 3. The diet and environment of the labor force: These are directly related to the level of income. Quantitative population changes conducive to a higher level; of income will also tend to raise physical efficiency through improving the diet and the surroundings of the labor force. From the point of view of cultural efficiency, the effect is mainly that of associated changes in income. Up to a point, the higher the level of income, the higher will be the levels of education and research. The society may be said to reach an educational optimum when the mar ginal productivity resulting from a marginal rise in the level of education is equal to the marginal cost involved, j Below that optimum, the society is under-educated. Beyond that optimum, the society is over-educated. Population changes will also affect the tastes of the members.-of the economy. As is the case with efficiency, that effect is mainly exerted through changes in the age composition and/or the associated level of income. On one 1 ' 475 ' / : hand, and because of the differences in the needs of the I different age groups, changes in the age composition will I i r determine whether the demand of the economy will be pre- I dominantly for children’s goods and services, adults’ I i ' ! j goods and services, or old-age groups’ goods and services, j I On the other hand, the level of per capita income as a function, of quantitative population changes will determine: 1. The absolute level of wants of the members of the economy. ! 2. The minimum level of physical requirements. ; 3. The form of the minimum level of physical re- I j quirements, for example in the ease of diets, whether the minimum requirements will be in the form of carbohydrates or protein. 3. Through education and advertisement the stand- i ard of valuation of the members of the economy. As for social organization, in general, and econ omic organization, in particular, the effect of population changes will basically depend on the type of these changes j t and whether they are of the controlled or the semi- ! controlled categories. In the case of the former, it will also depend on whether the change in fertility is a result of a change in the level of income or of a change in the fertility preference. 4 76 Controlled population growth, resulting from a rise ; in the level of income, need not be detrimental to econ- i I i omic organization, particularly as to the distribution of i I J economic activities among primary, secondary, and tertiary | I | industries. The chances are that the increase in the de- ! : j j mand for primary products associated with the growth of i ! j population will be more than offset by the increase in ! income. In this case, the effect on the organizational ! structure of the economy will depend on the rate of in- j ; crease in income, as compared to the rate of increase in I the demand for primary products. > Wher^e the increase in population is of the con- j trolled category and the result of a rise in the fertility i preference of the members of the society, the associated j increase in the demand for primary products may or may not J be at the expense of secondary and tertiary products, de- : pending upon how the increase is financed. If it were i I financed by funds that originally would have been hoarded, i ! I the result would be basically an increase in the demand j ! I for primary products associated with an increase in income j 1 which, in turn, would increase the demand for secondary and tertiary products. However, if the increase in the : demand for primary products were financed through funds that originally would have been spent on secondary and tertiary products, the increase in the demand for the former 477 would then be at the expense of the latter two. Where the increase in population is semi-controlled and the result of the inability of the members of the economy to control their excessive fecundity, the asso ciated increase in the demand for primary products would then be totally at the expense of secondary and tertiary products. The members of the society would then be trying to curtail any increase in their standard of living to accomodate as large a size of population as possible. CHAPTER XII CONCLUSIONS AND FINAL REMARKS An overall review of this study should distinguish ; between its theoretical and practical aspects. Theoreti- ■ cally, the study is an apparatus, or framework, for the t i simultaneous interpretation of demographic and economic | variables in relation to each other, as well as In rela- { tion to the "unified” body of human behavior. Practically,; it is an attempt at the utilization of the theoretical findings in: 1. The initiation of economic development in : stagnant economies, when such development is lacking. j 2. The preservation of economic growth after the development has been started. From both points of view, the study is subject to different limitations. On the one hand, the multitude of demographic and economic variables has made it necessary i to concentrate on the variables and relationships most relevant to the theoretical framework intended. Such re- , lationships as pertain to migration and foreign trade,for example, have been, by assumption, excluded from the analysis. Even among the variables and relationships in cluded, time and space limitations necessitated the curtailment of further elaboration at points where such elaboration could easily have been pursued. On the other hand, the fact that demographic and economic variables are not the only variables involved in economic development i makes it necessary to regard the results achieved as j Mdual-sided.n For a more detailed picture, the analysis ! could be expanded to include other fields in the social i I sciences.' I i i Despite these limitations, the preceding analysis j goes a long way toward the attainment of the objectives in | view. The variables and relationships excluded need not, to any great degree, change the basic theoretical frame work developed. The duality of the study, in turn, should not deter the deduction of a practical set of recommenda tions to be pursued toward the achievement and preservation; of economic development. THEORETICAL FINDINGS AND CONCLUSIONS The interpretation of demographic and economic variables, each in terms of the other, has contributed a j fresh outlook to the body of theory in both fields. Basic to that outlook are three concepts to which reference was made throughout the study. First, there is the triple j concept of human behavior, as composed of animalistic, ritualistic, and rational aspects. Second, there is the 480 concept of economic theory as mainly concerned with rational htt^JasSaT&SK,in,tto,jmae^„^«ggA^ir l g ff1 f m ” • satisfactions. . Third, there is the concept of parenthood as a source of parental satisfaction to be considered in the maximization of economic welfare, i The child, in this sense, becomes a value-possessing stimulus constituting one alternative for the utilization j of family and/or national income. j All three of these concepts form our a priori ap proach to the demographic-economic interrelationships.^ Because it is concerned with actual demographic exper iences, the field of demography must take into account all three aspects of human behavior. As such, it is a wider ; field than that of economics, which is only concerned with ! the rational maximization of welfare, including that de rived from the satisfaction of the parenthood instinct. Based on that approach, it was thus possible to examine the different interrelationships between demo graphic and economic variables. In reviewing the Not to seem arbitrary or purely speculative, it may be remarked that such an approach follows closely Pareto’s concept of economics, as "rational mechanics,nas well as his concept of the interrelationship between econ omics and the other-social sciences. On these concepts, see Pitirim Sorokin, Contemporary Sociological Theories (New York: Harper and Brothers, 1928), pp. 37-59- 4S1 theoretical findings and conclusions of such examination, j it is planned to distinguish between the demographic and economic findings and, in each case, to point out: 1. The basic findings already accomplished. j 2. Where such findings differ from the prevalent j j literature, whether demographic and/or economic. j 3. The major directions in which further research I should, from the point of view of the study, prove most j ! fruitful. Findings and Conclusions in the Field of Demography. The basic contribution of this study to the field of demography is in the form of a suggested nucleus for J the development of a demographic theory. To a field in which theory is for all practical purposes lacking, such a nucleus should, irrespective of its still empirically un verified nature, prove highly valuable. Even if all aspects of the suggested theory should prove invalid, the contributions would still possess a certain significance. As Vance put it: But we should remember there are two forms of maximum error: The first is a system that misses contact with the known facts at every point of observation. The second is no system at all. This is maximum error for it equates with total ignorance. As a matter of fact, I am willing to make the claim that he who develops a theory capable of being proved invalid makes a contribution. In statistics the disproof of 462 any hypothesis is accepted as a way station on the road to knowledge. Demographers should be brave enough to so state their hypotheses that they are capable of disproof.* That the aspects and findings of the presented theory are predominantly hypothetical in nature should, by now, be quite clear. As pointed out all throughout the study, however, these aspects follow closely the known demographic experiences as reflected in the multitude of statistical studies available. Basic demographic findings. Itemized in its con stituent parts, the suggested demographic theory is stated here in the form of successive hypotheses arranged in the order of their presentation in the analysis. I. The known demographic experiences, both past and present, suggest three basic patterns of demographic behavior: the primitive, the medieval, and the rational. II. The primitive pattern is characterized by: a. A sense of veneration per se of the pro- creative powers. b. The unacceptability of any interference with such powers except on religious grounds. 2 Rupert B. Vance, "Is Theory for Demographers?" Social Forces. 31:9, October, 1952. 433 c. A sense of indifference toward mortality. d. The approval of infanticide, abortion, and the killing of the old and invalid as measures of population control whenever i needed. ! III. The medieval pattern, as based on Christian morality, is characterized by: 1 ! t a. The abolishment of infanticide, abortion, j and the killing of the old and invalid as measures of population control. b. An emphasis on natural abstention as: 1. Preferable per se on moral grounds. 2. The only morally permissible measure of population control.-^ c. A population problem (in the Malthusian sense) resulting from the relative ineffec tiveness of natural abstention, alone, in maintaining population at the size con sidered consistent with economic maximization. IV. The rational pattern is characterized by: 3 While preferring natural abstention, religious teachings do not seem to have explicitly forbidden contra ception. The general unwillingness, prevailing among many people of the world, to interfere with the process of prop agation may be traced, not to any specific religious, teach-] ings, but to the primitive "supernatural” concept of such a. process. 4£>4 a. The same medieval prohibition of the wilful manipulation of mortality experiences. b. The social approval of "mechanical de vices," along with natural abstention, as measures of population control. V. The different demographic writings reflect whichever of these three basic patterns is dominant at the time. a. Plato and Aristotle, in advocating infan ticide, abortion, and the killing of the old and invalid, reflected the primitive pattern. b. Maithus, in his exposition of the popula tion problem and advocation of natural abstention as the only measure of popula tion control, was a true prognostic of the medieval pattern. c. The optimum theorists, in dealing with the population size consistent with the maxi mization of economic welfare, reflected the basic problem of the rational pattern. VI. The observed trend in demographic development was, and there is every indication to believe that it will continue to be, from the primitive to the medieval to the 435 rational patterns. VII. The transition from the primitive to the medi-i eval patterns of demographic behavior has long been ac complished by the overwhelming majority of world societies; j as indicated by their laws and religious beliefs. VIII. The transition from the medieval to the ration al patterns may be said to: j a. Have begun in the United States and South-I j western Europe about the nineteenth ' 4 century. b. Be in progress at the present time in many! countries of the world (as indicated by j the drop in their birth experiences). c. Have not yet started for most of the so- called underdeveloped areas. IX. The transition from the medieval to the ration al patterns occurs gradually and in successive stages of demographic enlightenment, ranging from a point of minimum enlightenment (ritualism as high and rationality as low as * possible) to a point of maximum enlightenment (ritualism ' as low and rationality as high as possible). ^ The transition is accomplished for a group or a society when the changes in the fertility of that group, the fertility preference assumed constant, become directly related to the changes in income. k S 6 X. Differences in demographic enlightenment may # be found to exist among different societies, among dif ferent regions within each society, among different socio economic classes within each region, as well as among different family units within each class. ; XI. Before the point of maximum enlightenment, changes in the fertility experiences are inversely related, to the changes in enlightenment and directly related to j I the changes in income, ceteris paribus, within each level of enlightenment. XII. At and beyond the point of maximum enlighten ment, when no further change in the latter is possible, the fertility experiences will be a function of the level of income and the fertility preference schedule of the family unit or units under consideration. XIII. Assuming (1) maximum enlightenment (rational behavior), (2) fecund family units, and (3) perfect contra ception, the static shape of the fertility preference schedule of any one family is a function of that family's : i decision to have or not to have a child (an extra child) at different levels of income. ! ^ XIV. Given the level of income, each family1s rational decision for or against having a child is a func tion of .the believed satisfactions and dissatisfactions derived from having that child. 439 preferences that, in turn, are a function of changes in other socio-economic variables, (the level and shape of the fertility preference schedule may then be said to change with actual changes in: I a. The level of income. j b. Associated socio-economic variables. ) Theoretical findings and prevalent demographic literature. Among the many aspects of the presented ! theory, there are some that are new to demographic liter- ; ature, others that show similarity to prevalent concepts, and still others that show differences from such concepts. The new aspects of the theory are basically a function of the application of economic concepts and ap proaches to the field of demography. On the one hand,the exogenous-endogenous approach has long been a basic ap proach in business cycle theories. When applied to the field of demography, it resulted in the two basic concepts of this study, namely, the semi-controlled and the con trolled categories of population changes. On the other i hand, the utility and marginal utility theories have also long been integral parts of economic traditions and an alysis. By expanding them in the above study to cover stimuli that possess utility but, for one reason or an other, do not have a market price, such as a child, such theories, it is believed, resulted in a more realistic 490 interpretation of the factors controlling and determining human demographic behavior under rational conditions. Aside from its new aspects, the above analysis in dicates many similarities to prevalent demographic con cepts. Basic among these similarities is the resemblance 1 between the second transition indicated above and the demographic cycle theory, as developed by Notestein, ! s I Thompson, and others. . Based on the known empirical ex- j I ! periences of the United States and some Western European ! countries, the cycle theory may be considered as an em pirical elaboration on the suggested transition occurring from the medieval to the rational patterns. As such, both theories lend support to, as well as borrow it from each i other. Last but not least, are the differences between this study and prevalent concepts in demographic litera ture. Basic among these differences is the exception which the study takes to all preconceived demographic quantitative trends, as well as to all attempts at fore- j i cast based on automatic projection of quantitative past f trends into the future. In particular, the study takes J exception to: 5 On the literature dealing with the theory of demographic cycles, see Chapter IX. 491 | 1. The Malthusian thesis when it claims high fertility experiences at all levels of socio-economic development. 2. The natural theories, when they assert that it ! is the tendency of fertility experiences to drop at higher1 and higher levels of socio-economic development. ! 3. Modern demographic forecasts, as based on either] preconceived demographic cycles (Pearl and Gini) or the projection of past trends into the future. As representing so-called natural Mlaws,t t the first j two of these assertions seem to have lost contact with 9 the true nature of human behavior. Physical fecundity, claimed by the Malthusians as well as by most of the natural theorists to be the basis of their argument, is not the only factor underlying human demographic behavior.| Of greater importance are the ritualistic and rational aspects of that behavior. Both are aspects which the above demographic factions have basically ignored. j In regard to the quantitative projections, they can J i be applicable only to very short-run approaches and within j situations involving no drastic changes in the underlying ) factors determining population trends. Without a support ing general theory, such a short-run approach would be invalid in the forecasting of population trends associated with the attainment of maximum enlightenment. The factors 492 determining demographic trends below the point of maximum enlightenment are not the same as those determining demo graphic trends beyond the point of maximum enlightenment. | Further research in the field of demography. If the logic of the analysis should be approved, the pre- i vious theoretical findings would indicate different j directions in which further research, both theoretical j and statistical, is greatly needed. Still adhering to the triple classification of human behavior, such issues as those which follow come to the forefront. 1. Do physiological qualities actually differ j under different circumstances? And if they do, what are the factors underlying such differences? An answer to these two questions can immensely improve our understand- I ing of an aspect of demographic behavior which, for the major part, has been ignored in this study. 2. What determines the social institutions of a society on which its ritualistic behavior is based? Why is it, for example, that the social institutions of one j society allow, either explicitly or implicitly, for the j ! use of contraception, while those cf another deny such use? 3. ’ What determines the degree of rationality to ritualism in human behavior? In other words and from a demographic point of view, what determines the degree of demographic enlightenment reflected in the behavior of ; 493 each society, region, class, or family unit? 4. Assuming rational action, what accounts for the differences in the fertility preference schedules of the different family units? 5. Still assuming rational action, how does the | fertility preference schedule of any specific family ; 1 react to changes in that family’s level of income and/or j to changes in other relevant socio-economic variables? j All these questions may be considered as fertile ; areas for further demographic research. Particularly when; the research is statistical in nature, similar studies to j that of Indianapolis should prove to be highly valuable. ! Findings and Conclusions in the Field of Economics. ( The expansion of economic theory to cover children ; as stimuli for the satisfaction of the parenthood in stinct has contributed a modified outlook on the field of economics. Economists have long considered their subject j to deal with variables and relationships capable, through ; the medium of money, of accurate measurement. Thus, for the sake of such accuracy, they have tended to restrict j 1 their field of interest and to exclude different stimuli, j such as children, which possess utility or value to human beings' but, for one reason or another, have no money or market price. The inclusion of such stimuli in economic analysis should: 494 1. Emphasize the human aspect of the field of economics. 2. Give a more realistic picture of rational human behavior in the process of maximizing economic satisfac tions. ) \ Basic economic 'findings. In the process of maxi mizing economic satisfactions (welfare), the individual (family) tends to distribute available income in the quantities and directions conducive to such maximization. Rationally, this implies a certain familiarity with the primary as 'well as marginal value of each alternative. Since propagation is one of these alternatives,the underlying factors of the value of a child to his parents have already been considered. Basic among these factors is parental belief in the advantages or disadvantages of an increasing (decreasing) population. Assuming economic I development to be desirable per se and using per capita productivity as a criterion for economic welfare, the issue, from a purely economic point of view, resolves it- j self to the question: How do population changes affect the; I 1 level of economic welfare (per capita productivity)? Where! parents are of the opinion that an increasing population would be advantageous to economic welfare, the chances are that they would attribute a positive imputed value to I each planned child. Where parents are of the opposite 495 opinion, they would attribute a negative imputed value to each planned child. ‘ Under closer examination, the above question may' be regarded as dual in nature, fPer capita productivity is equal to productivity per laborer multiplied by the ratio i i of the economically active to the total population. Popu-4 lation changes can thus affect the level of per capita j productivity through their effect on the ratio of the I I economically active to the total population and/or through; their effect on the level of productivity per laborer. Concerning the first of these relationships,Chapter I IX showed the following findings were true of the 1949 j United States white population at different stable rates of quantitative growth: 1. Changes in the rate of population growth affect changes in the ratio of the economically active to the total population. The magnitude of the resulting changes, however, differs among the different rates of growth and among the different age distributions. 2. At persistently high or low levels of demo- | j graphic experiences {fertility and mortality), the ratio ; of the economically active {as represented by age groups 15-64) to the total population will be at a minimum, much to the disadvantage of the level of per capita produc tivity. Where the demographic experiences are high, the 496 majority of the dependents will be within the age group 0-14. Where demographic experiences are low, the majority of the dependents will be above the 65 year-old age group. 3- Within these two extremes, changes in age, j groups below 15 and above 65 years, associated with ! changes in the rate of population growth, will tend to counterbalance each other and, consequently, to leave the | ratio of the economically active to the total population almost stable. i These findings, it should be pointed out, are based on a purely demographic approach. When compared to ! the actual experiences of different countries at different! levels of quantitative growth, the demographic factor in j the determination of the ratio of the economically active ! to the total population was found to be less significant than the social, religious, and psychological factors. The demographic factors, it is true, determine the size of the population physically capable of participating in i economic activities. However, it is such social, relig- j ious, and psychological factors as war, the attitude toward women participating in economic activities, the ages of entry and exit from the labor force, individual propensity to work at different levels of income, et cetera, that determine the actual size of the labor force and, consequently, the ratio of the economically active to 497 the total population. It is the second of these relationships, however, which is emphasized by economic-demographers, in general, and the optimum theorists, in particular. Productivity, as such, being a function of the factors and conditions of production, the effect of quantitative changes in pop ulation on the level of productivity per laborer can occur) I only through their effect on such factors and conditions. I As stated throughout the study, these are land, labor, capital, efficiency, tastes, and organization. I. By definition, land is fixed and independent of any changes in the population size. Beyond a specific point, it is true, the ratio of land to labor will act, through the principle of diminishing returns, as a deter rent to further development. In accordance with the con temporary economic trend of thought, however, this un favorable effect may, for all practical purposes, be ignored.^ II. In most cases, changes in the labor supply are, all other social and psychological factors assumed constant, directly related to the changes in population. As just pointed out above, moderate demographic changes ° Reference here is to the writings of Harrod and Schultz on the subject. See Chapter VI, p. 261, foot note 73* 493 tend to maintain the ratio of the economically active to the total population constant, due to the counterbalancing changes in the size of age groups below 15 and above 65 years. It is only when an economy experiences persis- ! tently high or low levels of demographic experiences that ; the ratio will decline to the disadvantage of per capita ; productivity. I III. The effect of population changes on capital formation can only be understood within the prospectus ; of the variables and conditions of such formation. As dealt with in Chapter X, five points may be considered as j basic to such a prospectus: 1. The coefficients of capital formation: j These are saving and effective demand. Saving, whether o voluntary or forced, is a prerequisite to all investment. Effective demand (defined as the portion of national in come devoted to personal consumption and/or to the increase in population through having more children) is the basic factor determining entrepreneurial decision for or against; i a specific level of investment. 2. The ratio that these coefficients must have in relation to each other, so as to produce a spe cific level of investment: It is axiomatic in economic theory that saving ;is always equal to investment. At any one moment of time, however, investment is also a specific i 499 function (n) of the prevailing level of effective 7 demand. By substitution, saving and effective demand, for that specific moment of time, will have to be in (n) relationship to each other so as to produce a level of 1 investment equal to saving. ] 3. Human behavior in the distribution of income between saving, on one hand, and consumption and fertil ity, as the basic determinants of effective demand, on the other: Being basically a function of social and individ- j ual preferences, such behavior is largely independent of any conscious desire for a specific level of investment. The resulting distribution in this case may end with I saving and effective demand being in (m) relationship to j each other which may or may not be equal to the (n) ratio | necessary for the resulting investment to equal forth coming voluntary saving. 4. The relationship between the (n) and (m) ratios: Where the (n) and (m) ratios indicated above are j 7 The factors determining the ratio of investment j to effective demand are numerous and diversified in na- * ture. Basic among these factors, however, are the direc- i tions of the prevailing effective demand and the marginal I efficiency of capital if invested in such directions. j Where the marginal efficiencies are low, the rate of in vestment to effective demand will also be low, indicating a necessity for high levels of consumption and having children so as to induce a specific level of investment. The subject, it is believed, should be awarded great at tention and priority in economic discussions. 500 equal, entrepreneurial investment will be exactly equal to the voluntary saving of the economy. Where the (n) and (m) ratios are not equal, forthcoming investment will not be equal to voluntary saving,resulting in the interference of equating factors that are either obligatory or inherent i in the financial organization of each economy. ; 5. The equating factors and the new level of j eauality: Where the ratio (n) is higher than the ratio I I (m)— vindicating a relative shortage of saving and a rela tive abundance of effective demand— the resulting reper cussions will depend on whether financial institutions are| or are not capable, and willing, to force on the members j of the economy the difference between the level of saving actually forthcoming and the level of saving consistent, at the ratio (n), with the prevailing level of effective demand. If financial institutions were incapable or un willing to force any or all of that difference, the re sulting level of investment would involuntarily.be reduced to the level of voluntary saving prevailing. However, if i financial institutions were capable and willing, through ' the expansion of credit, to force that difference (or any % part of it), voluntary saving would then be supplemented by forced saving and brought up to par with the level of investment consistent with the prevailing level of effective demand. 501 If the opposite were true and the ratio {n) was lower than the prevailing ratio (m)— indicating a relative abundance of saving and a relative shortage of effective demand— the rate of interest would then be reduced to a j 1 minimum determined by the tendency of the members of the f economy to do either one of two things. | a. Reallocate their Income less in favor of saving and more In favor of consumption and fertility. b. Withhold the excess savings from the money j market and in the form of cash balances. In this case, the rate of interest would be determined by the size of the excess saving and the liquidity preference schedule of j the members of the economy. | When all five of these points are taken into con sideration, (the effect of quantitative population changes on the level of capital formation may be said to depend on whether the economy, at the time, was more in need of saving and less of effective demand, or more in need of effective demand and less of saving. If, as is the case j with most underdeveloped areas, the need was more for i saving (due to the scantiness of the level of voluntary j saving and the inability of available financial institu tions to force saving on the economy to any great degree), an increasing level of population would be disadvantageous to the levels of investment and capital formation. If, 502 however, the need were more for effective demand, as is the case in highly developed economies, an increasing * trend of population would tend to raise that demand and, consequently, to be advantageous to the levels of invest ment and capital formation. IV. As to the effect of population changes on the efficiency of labor, that effect was found to be a function of; 1. The effect of associated changes in the age composition on; a. The vitality and alertness of the labor force: Basically characteristic of a relatively young labor force, such vitality and alertness will result from a quantitative change in population conducive, on the average, to a younger age composition of the population and of the labor force. b. The adaptability of the labor force to re gional, occupational, and technical shifts; Again, when quantitative changes are conducive to a younger age com position and a higher rate of turnover in the labor force, such changes will be found more adaptable to regional, occupational, and technical shifts. 2. The effect of associated changes in income on; a. The physical efficiency of labor: The higher the level of income resulting from a specific trend 503 in quantitative changes, the better will be the diet of the laborers, the more comfortable their surroundings, and, consequently, the higher their overall physical efficiency. b. The cultural efficiency of labor; As al ternatives for the utilization of a specific level of in- | come, changes in the levels of education and research tend to be related directly to the changes in the levels of income. Thus, the higher the level of income, the higher I the levels of education and research, and, consequently, the higher the levels of technical know-how and efficiency.: When these aspects are reviewed from the point of view of a specific trend of quantitative changes, that trend may be found to have its advantages as well as its disadvantages. A persistent trend of population increase, for example, may result in a younger age composition and a higher rate of turnover in the labor force. As such, based on points (la) and (lb) above, that trend will be oonducive to labor efficiency. However, if that trend were also detrimental to the level of national income, as is the case in most underdeveloped areas, such disadvan tages to efficiency as those resulting from points (2a) and (2b) above, would prove to be more than enough to counterbalance the indicated advantages. 504 V. As is the case with efficiency, population changes affect human tastes through associated changes in the age composition and/or the level of income. Because of the differences in the needs of the different age groups, the age composition associated with each specific trend of demographic experiences will determine whether the needs of the economy will be dominantly for young-age goods and services, adult goods and services, or old-age goods and services. On the other hand, the level of per capita income, as a function of quantitative population changes, will determine: 1. The absolute level of wants of the members of tne economy. 2. The minimum level of physical requirements. 3. The form of that minimum level of physical re quirements, such as whether a specific number of calories will be in the form of protein or carbohydrates. 4* The standard of valuation of the members of the economy. The level of income affects that standard through: a. Education. b. Advertisement. VI. Finally, population changes are found to affect social organization,in general, and economic organization, 505 in particular. Particularly as to the distribution of ; economic activities among the primary, secondary, and j tertiary industries, the type and trend of quantitative population changes seem to play major roles. Population increase, for example, can either be controlled or semi- j controlled and, in the case of the former, it may be a j result of a change in income with fertility preference ! constant and/or a change of fertility preference with the i level of income constant. 1. Where the increase is controlled and the re sult of a change in income, the increase in the demand : for primary products associated with the increase in popu lation need not be at the expense of secondary or tertiary i products. On the contrary, the chances are that the in- | crease in the demand for primary goods and services will be more than offset by the increase in income. In this | case, the effect on the organizational structure of the i economy will depend on the rate of increase in income, as ; compared to the rate of increase in the demand for pri- 1 mary products. 2. Where the increase is controlled and the result of changes in the fertility preference of the members of the economy, the effect on the organizational structure will depend on the means through which the increase in the demand for primary products is being financed: I 506 j a. If it were financed through funds that originally would have been hoarded, the result would be basically an increase in the demand for primary products ( associated with an increase in income and, consequently, j f | • in the demand for secondary and tertiary products. ! b. Otherwise, the increase in the demand for j i primary products would be totally at the expense of i | i | secondary and tertiary products. j i i j 3 * Where the increase is semi-controlled and a re- j ' suit of the inability of the members of the economy to I control their excessive fecundity, the increase in the : demand for primary products would be totally at the ex pense of secondary and tertiary products. Theoretical findings and prevalent economic liter- j | ature. The theoretical approach and findings of this study shed some light on that side of the field-of economics where economic variables and relationships become directly | dependent on the prevailing patterns of human behavior. | This is particularly relevant to the prospects of economic i I , i development, as based on human patterns of behavior con- ’ cerning the distribution ofthe available income among the | three basic alternatives (1) consumption, (2) having | children, and/or (3) saving. j The different factions of economists reveal definite j and specific biases regarding these patterns. The Classicists, for example, believed in the Malthusian theory of population and, consequently, in the "physio logical” tendency of human beings to utilize any increase in income in increasing their number, rather than their consumption or saving. The Keynesians were of the oppo site opinion. They believed in the "psychological” ten dency of human beings to utilize any increase in income, not in increasing their numbers, but in increasing their consumption and saving, the former at a lower rate and the latter at a higher rate than the increase in income. To both schools, these tendencies were believed to be "fixed” trends of human behavior that, sooner or later, would re sult in "subsistence conditions,” in the case of the Classicists; and, in mature economies, in the case of the Keynesians. That these trends reflected actual tendencies at the time of Malthus and Keynes, respectively, is difficult to say. That they were fixed at all times and within all circumstances, could be disproved both on empirical, as j i well as theoretical, grounds. Empirically, the high birth j rate at the time of Malthus has been known to decrease | j over most of western Europe since the last quartercf the j nineteenth century. Theoretically, and on the basis of the triple classification of human behavior adopted in this study, the claimed rigidity of behavioral trends would 508 : imply the following to remain constant at all times and in ; all circumstances: j 1. Physiological drives and potentials, j 2. Social institutions determining the ritualistic ! aspects of human behavior. s i 3. The variables involved in the determination of j I the rational plans of action. j 4* The ratio of animalism, ritualism, and ration- | ality in human behavior. All four of these factors may be expected to change | . at different times and within different sets of circum- ; stances. In the face of such changes, any claimed rigid- ! ity of behayioral trends would be erroneous. Social | scientists, in general, and economists, in particular, should base their analyses, not on any preconceived con- J cepts of behavioral rigidity, but on a full understanding i of the variables underlying human behavior and on an ac~ j curate interpretation of the trends which these variables ; seem to follow.J ! Further research in the field of economics. Whether : "economics” deals with actual behavior or normative be- I havior under conditions of maximization is an issue on I which economists have long been, and still are, in dis- j agreement. As stated in the light of the current study, I the issue may be found to resolve on whether economic theory should deal with variations in the animalistic and ritualistic aspects of human behavior, or should ac cept such aspects as given and concentrate solely on rational behavior. Bach of these approaches has its ad vantages and its disadvantages. 'While more realistic in ! nature, the first destroys the exactness of economics as a | science, regards it merely as one aspect of the social studies, and expands economic analysis into fields with which economists, by orientation, are not equipped to deal. The second, however, is exactly the opposite. Basically theoretical or deductive in nature, in an attempt to pre serve the identity of economics as an exact science, it restricts the analysis to variables and relationships capable of.being expressed in monetary units. With the exception of the institutional and his torical schools of economists, prevalent trends in econ omic literature seem to follow closely the second approach. While highly justifiable in view of the complexity of the i underlying factors of human behavior, a realistic inter- ; pretation of the conclusions reached has to be made within j the prospectus of the animalistic and ritualistic patterns ; j prevailing. Economists in this sense should: 1. Understand clearly the position which economic analysis occupies within the general framework of actual human behavior. 510 2. Investigate thoroughly the physiological, sociological, and psychological bases of economic analysis. I 3. Keep in close contact with these bases, so as i 1 to be able to change economic conclusions, once the bases j i i 1 underlying them have changed. : ! As much as possible from the point of view of j t i economic analysis, try to determine the effect of economic! I ' | variables on the development of the physiological, socio- i j logical, and psychological bases underlying them. All four of these points have been, to a degree, dealt with in this study. The field, however, is too wide for any one study to cover. Economic theorists, it is be- : ; lieved, would greatly benefit by further investigating the : issues involved, as well as by expanding their subject, so i as to allow for changes in variables and relationships, | demographic and otherwise, which, for the time being at least, are not considered to be within the jurisdiction , of economic analysis. j CONCLUSIONS AND RECOMMENDATIONS ■ From theppoint of view of economic development, the , theoretical findings of this study allow a certain insight j into the demographic-economic problems of the different 1 1 societies. While the exact nature of the problems may j 1 ; differ from one society to another, they are basically j i problems of adapting "what is” to "what should be” for the 511 purpose of initiating or preserving a rising trend in the ; level of per capita income. This is particularly applica- ' ble to human behavior in the distribution of available income among the three alternatives— consumption,fertility and saving. To adapt "what is" to "what should be" with j regard to this distribution, two conditions must be i , satisfied: 1. The behavior of the members of the society must be predominantly rational in the pursuance of maximum i satisfactions, rather than ritualistic based on institu tions that may or may not be favorable to the objective ; in view. ' 2. The ratios which consumption, fertility, and ! j saving maintain to each other under rational conditions ! should be the same as those conducive to economic develop ment and growth. With different emphasis, the problems involved in the attainment of these two conditions are essentially the , same for the different economies, whether of the under- ! ! developed or the highly developed types. With the under developed areas, where human behavior is either of the j dominantly ritualistic or still at an early stage of the i transition from the ritualistic to the rational pattern, ! j the emphasis is mainly on the attainment of rational be- I havior, in general, and rational demographic behavior, in 512 i particular. With the highly developed economies, where i relatively high levels of rationality have already been j attained, the emphasis is on the manipulation of rational human behavior, so as to be at the same time (a) consis- i i tent with the maximization of the satisfactions of the I j members of the economy, and (b) consistent with the pat- I tern of behavior which is conducive to further rises in | the level of per capita income.® | i Practical Recommendations for the Attainment of Ration- 1 ality in the Underdeveloped Areas. The irrationality in the distribution of available income among the three alternatives— consumption, fertil ity, and saving— characteristic of the underdeveloped areas is a function of irrational human behavior, in gen eral, and demographic behavior, in particular. This emphasis on the demographic aspect is consistent with the 1 i & ! V Despite their practical value for the purpose of | analysis and discussion, the classification of the differ ent economies into underdeveloped and highly developed is j both arbitrary and relative. It is arbitrary in the sense i that it allows for no other categories than these two. It I is relative in the sense that if it were possible to cal culate an average universal per capita income, the under- I developed areas would include all countries for which the J per capita income is lower than the average, and the ; highly developed economies would include all countries for | which per capita income is higher than the average, j 513 known facts and the classical concept of economic equil ibrium. (it is highly probable that the members of the underdeveloped areas desire higher levels of consumption and saving. However, because of their dominantly ritual- ! istic pattern of demographic behavior and the resulting I 1 semi-controlled trend of population growth, these members | j have to settle for a subsistence level of per capita con- ! I i | sumption and for a very low, if any, level of saving. j ' These are basically the conditions of classical equilibriim.' That there is no Mabsolutism5 ’ with regard to these conditions has been established by the experiences of western Europe over the last two centuries. If these ex- ! periences were not restricted to western societies and | could be expanded to other parts of the world, the basic problem of the underdeveloped areas would then be one of j increasing the level of income without the total increase . being absorbed in population growth. This, in turn, may be divided into two questions: (a) How to increase the * level of income? and (b) How to control quantitative popu- . lation growth so as to check it from absorbing all in- I ! i ! crease in income? An adequate plan for economic develop ment should attempt to answer both questions simultan- i | eously, if there is to be any hope for increasing the level ( of per capita income.of the members of the underdeveloped | economies. \ 514 Both of these aspects of the problem are quite ; clear in the minds of the economic planners. In most • f 9 i eeonomic-development programs, nevertheless, the emphasis - is mainly on the measures for increasing the level of the ; national income. Such measures, the planners will hasten : j to add, cannot be effective unless the population was j j i j made to increase at a lower rate than the resulting in- ! crease in income. As for a means of achieving this, avail- ; able programs of economic development seem to offer no j solution. ) It is precisely in this connection that the current ' ) study makes its contribution to the field of economic de- j velopment. Based on the presented interpretation of the l i j cultural aspects of demographic behavior, it is now pos- } ‘ .sible to reach specific recommendations concerning: i 1. The speeding of the transition from a domin antly ritualistic to a dominantly rational pattern of j Reference here is primarily to the International ! ’ Bank for Reconstruction and Development Programs for in- i initiating economic development in some of the under- ; developed countries. International Bank for Reconstruction j . and Development, The Economic Development of Iran (Balti- j > more: John Hopkins Press, 1952T7~^ther~programs are also ! available for Columbia, 1950; British Guiana, 1953; and j Ceylon, 1953; as well as for other countries. I 1 I I demographic behavior. 2. The achievement of declining trends in demo graphic experiences consistent with the maximization of satisfactions, as well as with the necessary conditions for economic development in the underdeveloped areas. These recommendations must be implemented simultaneously j with those devised to increase the level of the national income. f Attainment of rationality in demographic behavior. \ I Assuming man to be a rational animal, there are five basic factors preventing the exercise of such rationality in demographic behavior: 1. A physical population growth potential far in excess of the rational demand of each family and/or society. 2. A legal and religious prohibition of the wilful I manipulation of the mortality experiences. 3. A primitive concept of the venerability of the j procreative powers still adhered to. | 4. An implicit assumption that religious teachings,] just because they favor natural abstention on moral This is true of the followers of most of the big religions, particularly Judaism, Christianity, and Islam. 516) grounds, are opposed to all mechanical measures of popu lation control, such as contraception. 5. A tendency on the part of the members of some societies to act ritualistically, according to prevailing I social institutions, rather than rationally in pursuance j i of their maximum satisfactions. ! t Considered against a background of the prevailing conditions in most civilized societies, in general, and in i the underdeveloped areas,in particular, there is nothing j much that could be done about the first two of these factors. The rigidity of the growth potential of the physi cal organisms is attributable to two basic factors. On one hand, it is yet unknown whether human fecundity does or does not vary under the different circumstances. Also, in the case of the first , i it ,is, , unknown what are the fac tors underlying such variations. On the other hand, even if fecundity could be reduced through sterilization and by j similar measures, such methods, short of being forcefully j I imposed on the members of the society, would require a tendency toward rational action on the part of these mem bers. Where such a tendency exists, measures of population control other than sterilization may be more adequate for the maximization of satisfactions. 517 I As for the wilful manipulation of mortality- through the allowance of infanticide, abortion, and the killing of the old and invalid, it is quite obvious that such measures are so inherently against the value judg- j f ments of most civilized societies, as not to permit their serious recommendations as measures for the attainment of j i ' the objectives of rational behavior. Particularly in the i , i ' case of abortion, nevertheless, some societies do relax j their rules and regulations. However, in view of the ! magnitude of the total problem, such relaxation becomes quite insignificant. Recommendations for the attainment of rational demographic behavior may, thus, be more adequately made in , terms of the three last factors obstructing such behavior. I i In this connection, the following recommendations seem to i be most applicable: 1 . The members of each society should, as much as j possible., be familiarized with the mechanics of fertiliz- I I - 1 ■ ation and conception: The higher this familiarity, the j ; less will be the mystery surrounding the whole process and,| i [ ! I ' consequently, the less will be the.sense of veneration at- I I , tributed to it. This could be done either through general I i ! i or specialized instruction. In the case of the latter, | special lectures, movies, programs, et cetera, would be j 1 highly valuable. 518 2. The attitude of the major world religions toward contraception should be more adequately investi gated and clarified; Along with Christianity, the major religions of the world emphasize natural abstention on I moral grounds. Such preference for natural abstention j < need not necessarily imply the prohibition of other ! i measures of birth control. Most studies on the subject I i seem to agree that, at least in the Bible and the Koran, i I there is no such explicit prohibition. Thus, if it were j I j established that such major religions merely prefer natur- { I al abstention, but not to the point of prohibiting all : other birth control devices, an effective measure of pop- [ ; ulation control would then be allowed for and a major j j obstacle to the exercise of rational demographic action ! 1 i j would disappear. ; 3» Along with the previous recommendation, infor mation concerning the different, the most effective, and the cheapest forms of birth control should be made avail- j able to the members of the society, at least to the married! ’ ones. Some of the primitive forms are already familiar to J ! ' i I many. For more effective and advanced forms, relevant in- - formation should be allowed for through private doctors, public hospitals, birth control centers, or any similar institutions. 519 4. Dangers resulting from a dominantly ritualistic ’ $ I pattern of demographic behavior should be publicized and ! emphasized to the members of the society: It is highly s probable that the discussions succeeding the Malthusian ! thesis were more responsible than the thesis itself for ! ; the decline in the birth experiences of western Europe | , about the end of the nineteenth century. When people be- I i come more conscious of the population problem, they will ; probably try to find a rational solution for it. 1 5- As much as possible, the members of the society! should be made less and less dependent on the forces of the unknown and should be encouraged more and more to favor rational planning and organization: Throughout the analy sis, one of the reasons suggested for the dominantly ritu- ! alistic pattern of behavior of the rural areas is the fact i j that farm populations are dependent on forces which they can use but can never control. If it were possible, ! through scientific procedures, capital investment, cooper- ; I atives, et cetera, to alleviate the danger of such forces, ] 1 the chances are that the population would deviate from the | ! I j ritualistic to the rational pattern and would apply the i j latter, not only to their everyday economic activities, i j but also to their behavior with regard to fertility and i | population growth. All five of these recommendations depend on the education of the members of the society as to the dangers of ritualism and the benefits of rationality in human demographic behavior. This type of education could be offered either formally, through classrooms, lectures, i movies, et cetera, or informally, through the association j among classes reflecting different degrees of demographic enlightenment. With formal education a function of the level and distribution of the national income, and infor mal education a function of the closeness of the members of the society to each other, such factors would then represent further sub-recommendations for any society ' seeking higher stages of rationality, as related to human behavior, in general, and to demographic behavior, in particular. Further recommendations for the attainment of a declining rate of population growth. Along with the pre vious recommendations which attempt to encourage rational 1 demographic behavior and, consequently, to bring down j actual levels of demographic experiences to those con sistent with maximum satisfactions, the underdeveloped areas can still intensify the downward trend through the manipulation of the position of maximization. While that position is insignificant within highly ritualistic 521 patterns of behavior, it, nevertheless, gains more and more importance with the shift from ritualism to ration- : ality. At and beyond the point of maximum demographic en- , lightenraent, the underlying variables of the position of | maximization become the most important determinants of , actual demographic experiences. As should be clear by now, the only type of demo- : graphic rationality permissible within contemporary con- i ditions is that concerning fertility. The underlying re- ! lationships and conditions of such rationality were dealt , with in Chapter VII of this study. Either because of rigidity or because of insufficient data, some of the I variables involved are, at least for the present, non- susceptible to intentional manipulation. In this group ; will fall such variables as the direct value of a child to | his parents, as well as the physical and social cost of i that child. Other variables, however, will allow for such manipulation. For a society desiring a decreasing j rate of population growth, the following recommendations , will then be in order: ! I. As much as possible, the society should, on the basis of accurate investigation, counterbalance any factor 5 I I which will tempt parents to attribute an imputed value to I their children. Some of the basic measures in this con- i nection will be: 522 1. The discontinuance, if existent, of any form of monetary or cash subsidy for children. 2. The establishment of a minimum age below which no child should be engaged in economic activities whether in industry or on the farm. 3. The establishment of a social old-age in- 1 i surance system which will guarantee parents against old- ; age retirement and will free them from regarding their 1 ! children as a means for future support. The abolishment, within the conditions of social justice, of any tax advantages accruing to the parents as a result of having a child. II. As much as possible,again within the conditions i ! of social justice and practicability, the society should ) intensify the economic cost of a child to his parents at ! the time of conception. As is true of the cost itself, | recommendations in this connection will fall into three : groups: I 1. Intensification of the monetary cost of a i child to his parents: Particularly in the underdeveloped ! areas where demographic behavior is still dominantly ■ ritualistic, measures in this connection should be scru- I I tinized very carefully, so as not to be detrimental to the qualities of the future members of the society once they \ ; were born. The society, for example, can make education 523 obligatory for all children, at least in the early stages, i as well as make the parents share in the cost of that education. Such a recommendation meets all the require ments. First, it is practical since most parents de’ sire j I ■ their children to have an education. Second, it is ad- I vantageous rather than detrimental to the qualities of the j future population. Third, it increases the cost of a j ! j child to his parents, since it makes the parents share in j ; the cost of education where that sharing was previously ! non-existent. j 2. Intensification of the nrealr t or "oppor tunity” cost of children to their parents: This can be j ’ done through the intensification of human desires for ] i | ] consumption and/or saving. Both these variables are al- j 1 I ternatives to fertility for the utilization of the national] ; income. Specific recommendations in this connection can J only be reached after a detailed analysis of human desires j ; for these alternatives. Such analysis was not attempted here and, consequently, the recommendations have to be i J left to other students in the field of economics. ! I 3. Intensification of human evaluation of 1 ; future cost: This can be achieved either through a de- j crease in the parental discount rate of future costs or ] through advancing the future cost of a child nearer to the time of conception. In both cases, parents will come to evaluate realistically the future cost of having a child 524 j : and, consequently, will refrain from having one until they ; are capable of meeting his cost. These recommendations are based primarily on in fluencing human rational preferences less in favor of « fertility and more in favor of consumption and saving. ! Without such a change in preferences, none of the avail- ; 1 j | able programs of economic development in the underdeveloped: 1 ' ! | areas is practical. This is primarily applicable to pro- | grams based overwhelmingly on the importation of foreign capital. Since foreign capital does not result from in ternal saving and, consequently, is not a result of j changes in human preferences, such programs will tend to i increase, simultaneously, both the level of income and the size of population. With no resulting increase in the level of per capita income, they generally end with a ! larger population and, consequently, a worse economic- t demographic problem than the one they started from. ; Practical Recommendations for Highly Developed Economies. j ' - ■ - ■ — — . j Already at a relatively high level of demographic ! j enlightenment, the basic demographic-economic problem of the highly developed economies is one of adapting the rational pattern of income distribution to the pattern conducive, according to the best estimates of specialized economists, to higher levels of economic growth. This adaptation is made necessary by the fact that the objective 525 [ of the former distribution is the maximization of satis- I factions, as based on human preferences among alternatives, ! while that of the latter is the raising of the levels of capital formation and income. Assuming perfect ration- | ; ality, knowledge, and fertility control, both distribu- ■ tions may be identical. This, however, is the rare ex- j j ception rather than the rule. j For the attainment of such adaptation, it is neces- i sary for economic and social planners to know: I I 1. The pattern of distribution most conducive to ; economic growth and development: This is a matter for ‘ technical economists to determine. Generally, the pattern i ; i is based on the ratio which the coefficients of capital i formation (saving and effective demand) have in relation j to each other so as to result, under the circumstances, in j i ! the highest possible level of capital formation. ! 2. The actual pattern of distribution prevailing I among the members of the economy: Because of the multi- ! tude of variables and relationships involved, it is doubt- j ful, as well as unnecessary, that either of the two pat- J | terns could be so accurately and qualitatively determined. ; This, however, is immaterial from the point of view of I l 1 economic planning and policies. What is important at any ! one point of time is whether the economy is suffering from J an abundance of effective demand (consumption and 526 fertility) as related to the prevailing level of saving, , or from an abundance of saving as related to the prevail- : ing level of effective demand. The practical recommenda- . tions depend on whichever of these two conditions prevails. Where effective demand is relatively abundant, con- i I ditions of economic development will require a decline in ! i total consumption and/or fertility. In this case, the ; problems will be quite similar to those of the underdevel- i i ■ oped areas. As related to a decline in fertility, the j i same recommendations indicated above will thus apply. i In most of the highly developed economies, however, | ! it is the opposite case that generally prevails. In this sense, the members of the economy tend less in favor of I [ consumption and fertility and more in favor of saving in their distribution of the available income. Practical | recommendations in this case will have to be based on the attempt to raise the levels of consumption, fertility, or i j both. As related to fertility, such recommendations will ! be exactly the opposite of those suggested for the under- 1 i j developed economies. Still within the conditions of social : justice and practicability, the government, as much as I possible, should raise the value and decrease the cost of ; a child to his parents. 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S., "Standards-and Content of Living,” The Amer ican Economic Review. 35:1-16, March, 1945. _______ , "Our Amazing Population Upsurge," Journal of Farm Economics. Proceedings Number, November, 1949. 533 Davis, J. S., “Population and Resources," Journal of the American Statistical Association, 45:346-349, September, 1950. _______ , "Our Changed Population Outlook and-its Signif icance," American Economic Review, 43:76,June, 1952. Dorn, H. F.,-"Pitfalls in Population Forecasts and Pro- . jections," Journal of the American Statistical Asso ciation, 45:302-319, September, 1950. , Eisner, Robert, "Underdevelopment Equilibrium Rates of- Growth,” American Economic Review, 43:53-74. March, ; 1952. Ezekiel, Mordecai, "Statistical Investigations of Saving, : Consumption, and Investment," American Economic Review.■ 32: 22-49 and 272-307, March and June, 1942. Franzsen, D. G.,”The Secular Stagnation Thesis and the Problem of Economic Stability,” The South African Journal of Economics. 10:232-295, December, 1942. Fraser, Lindley, "On the Concept of an Optimum in Popula- ; tion Theory," Population, 1:37-42, February, 1934. Frisch, R., "On the Notion of Equilibrium and Disequil ibrium," Review of Economic Studies, 2:100-105, February, 1936. Gal.briehh,V., and D. Thomas, "Birth Rates and the Inter- War business Cycles,” Journal of the American Statis tical Association. 36:465-476, December, 1941. Glass, D. V., "The Population Controversy in Eighteenth Century England,” Population Studies. 6:69-76, July, 1952. Glenday, Ray, "Long Period Economic Trends," Journal of the Royal Statistical Society. 101:511-522, May, 1933. | Gottlieb, M., "The Theory of Optimum Population for a Closed Economy," The-Journal of Political Economy. 53:239-316, December, 1945. _______ , "Optimum Population, Foreign Trade, and World- Economy," Population Studies. 3:151-167, September, 1949. 539 Hajnal, J., "The Analysis of Birth Statistics in the Light of the Recent International Recovery of the Birth Rate," Population Studies. 1:137-165, Septem ber, 1947. Hansen, A., "Progress and Declining Population," American I Economic Review, 29:1-16, March, 1939. ! Hartman, C. G., and others, "World Population Problems and; Birth Control,” Annals of the New York Academy of i Sciences. 54:729-768, May 2, 1952. ; Hicks, J. R., "Mr. Keynes and the Classicists," Econometrica. 5:147-159, April, 1937. Hofstee, E. W., "Population Pressure and the Future of j Western Civilization in Europe." The American Journal i of Sociology, 55:523-532, May, 1950. j Hoselitz, Bert F., "Social Structure and Economic Growth," Economica Internazionale. 6:52-72, August, 1953* Jacobson, P. J., "Marital Dissolution in New York in Relation to Their Trend in the United States," Milbank Memorial Fund Quarterly. 28:25-42, January, 1950. Keynes, J. M., "Economic Consequences of a Declining Pop ulation," The Eugenic Review. 29:335-340, April,1937. , R. G. Hawtrey, and ,D. H. Robertson, "Mr. Robert son On Saving and Hoarding," The Economic Journal, 43:699-712, December, 1933. Kirk, Dudley, "The Relation of Employment Levels to Births in Germany," Milbank Memorial Fund Quarterly. 20:126- 138, April, 1942. j Kiser, Clyde, "Birth Rates Among Rural Migrants in CitiesJ* The Milbank Memorial Fund Quarterly. 16:369-381, October, 193^ I , "Birth Rates and Socio-Economic Attributes," ! The Milbank Memorial Fund Quarterly, 17:128-151, April, 1939. _______ , "Fertility of Social Classes in Various Types of Communities of the East North Central States in 1900," Journal of the American Statistical Association, 27: 371-382, December, 1932. / 540 Kiser, Clyde V., "Intra-Group Differences in Birth Rates of Married Women," The Milbank Memorial Fund Quar- terly, 19:147-170, April, 1941. _______ , "Trends in Annual Birth Rates Among Married Women in Selected Areas According to Nativity, Age, and Social Class," The Milbank Memorial Fund Quar terly, 15:48-74, January, 1937. : _______ , "Variations in Birth Rates According to Occupa- ; tional Status, Family Income, and Occupational ■ ; Attainment," The Milbank Memorial Fund Quarterly,16: 39-57, January, 19W- ; _______ , "Voluntary and Involuntary Aspects of Child- I lessness," The Milbank Memorial Fund Quarterly. 17: ! 50-68, January, 1939* _______ , "Exploration of Possibilities for New Studies of Factors Affecting Size of Family," The Milbank Mem orial Fund Quarterly, 31:436-480, October, 1953* _______ , "Resume of the Indianapolis Study of Social and Psychological Factors Affecting Fertility," Population; Studies, 7:95-110, November, 1953. Kotana, George, "Effect of Income Changes on the Rate of of Saving," The Review of Economics and Statistics. 31:95-103, May, 1949. Long, Clarence D;, "The Impact of Effective Demand on the Labor Supply," The American Economic Review. 43:458- 467, May, 1953. Mack, Ruth P., "The Direction of Change in Income, sand the | Consumption Function," The Review of Economics and Statistics. 30:239-259, November, 1948. Mukerjee, R., "The Criterion of Optimum Population," American Journal of Sociology. 38:688-698, March,1933-j Naismith, Grace, "What We Know About Sterility," Cosmo politan Magazine. October, 1945. Notestein, F.W., "The Population of the World in the Year 2000," Journal'of the American Statistical Asso ciation. 45:313-345, September, 1950. . ! 541 Notestein, F. ¥., "Class Differences in Fertility,” Annals of the American Academy of Political and So cial Sciences, 18&:2o-36, November>1936. j _______ , "Differential Fertility in the East North Central States,” The Milbank Memorial Fund Quarterly, 16r 173-191, April, 1933.. ' _______ , "The Differential Rate of Increase Among the Social Classes of the American Population,” The Mil bank Memorial Fund Quarterly. 12:17-33, October, 1933 Ogburn, W. F., "Population, Private Ownership, Technology,) and the Standard of Living," American Journal of ' Sociology. 56:314-319, January, 1951- ■ Peacock, Alan T., "Theory of Population and Modern Econ- ! omic Analysis," Population Studies, 6:114-122, Novem ber, 1952. Pearl, R., and L. Reed, "On the Rate of Growth of the Population of the United States Since 1790 and its Mathematical Representation," Proceedings of the National Academy of Science. 1920. Robbins, L., "The Economic Effects of Variations of Hours i of Labour," The Economic Journal, 39:25-40, March, 1929. _______ , "On a Certain Ambiguity in the Conception of a Stationary Equilibrium," The Economic Journal. 40: 194-214, June, 1930. Robertson, D. H., "Saving and Hoarding,” The Economic Journal. 43:399-413, September, 1933. ) Rostow, ¥. W., "A HistorianTs Prospective on Modern I Economic Theory," The American Economic Review. 41: 1 750-777, December, 1951. i i Sanford, W., "The Influence of Social Factors Upon the Sex Ratio at Birth." The American Journal of Sociology, 37:1-12, July, 1931. Sauvy, A., "Some Lesser Known French Demographers of the Eighteenth Century,". Population Studies, 5:3-22, July, 1951. 542 j Sharp, F. R., and A. J. Lotka, "A Problem in Age Dis tribution," Philosophical Magazine, 10:15-18, April, 1911. I Singer, H. ¥., "The Mechanics of Economic Development: A j Quantitative Model Approach," Indian Economic Review, ! 1:18-34, August, 1952. Smith, Kenneth, "Some Observations on Modern Malthusian ism," Population Studies, 6:92-98,, July, 1952. Spengler, J. J., "Alexander Hill Everett, Early American Opponent of Malthus," The New England Quarterly, 9: 97-118, July, 1936. _______ , "Aspects of the Economics of Population Growth," The Southern Economic Journal, 14:123-165.January, 1948. _______ , "Economic Factors in the Development of Densely Populated Areas," Proceedings of the American Philo sophical Society, 95:20-53, February, 1951. _______ , "French Population Theor;/ Since 1800," The Jour nal of Political Economy. 44:577-611 and 743-766, October and December, 1936. _______ , "Malthust Total Population Theory," The Canadian I Journal of Economics and Political Science. 11:83-110 j and 234-264, February and May, 1945* I _______ , "Messance: Founder of French Demography," Human Biology. 3:77-94, February, 1940. _______ , "Pareto on Population," The Quarterly Journal of ! Economics. 571571-601 and 107-143, August and November, 1944* . "Population Growth, Consumer Demand, and Business Profits," Harvard Business Review, 30:204-221, Janu ary, 1934* X _______ , "Population Movements and Economic Equilibrium in the United States," The Journal of Political Economy. 48:153-182, April, 1940. _______ , "Population Movements, Employment, and Income," The Southern Economic Journal, 5:129-157. October. I 1938. 1 .J Spengler, J. J., ’ ’Population and Per Capita Income,” The Annals of the American Academy of Political and Social Science, 197: 24-33, January, 1945* _______ , ’ ’Prospective Population, Income Growth, and Fiscal Policy,” National Tax Journal, 3:36-63. March, 1950. _______ , ’ ’Sociological Presuppositions in Economic Theory,” : The Southern Economic Journal,7:131-157. October,1940. _______ , ’ ’Some Effects of Changes in the Age Composition of the Labor Force,” The Southern Economic Journal, 6:157-175, October, 1941* i j Sydenstricker, Ed. and F. 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K., "Cohort Analysis of Fertility,” American Sociological Review. 14:737-748, December, 1949* _______ , "Geographical and Economic Differentials in Fer tility,” Annals of the American Academy of Political and Social Sciences, 188:37-55, November, 1936'*"’ 544 Wolfbein, S. L., nThe Length of Working Life,” Population Studies. 3:236-294, December, 1949* Wolfe, A. B., "The Theory of Optimum Population,” The Annals of the American Academy-of Political and Social Science, 1M7243-249, November, 193^1 Worcester, Dean A., and R. J. Lampman, "Income, Ability, and Size of Family in the United States,” The Journal ! Political Economy. 53:331-352, October, 1950. i Woytinsky, W. S., "Relationship Between Consumers* Expen ditures, Savings, and Disposable Income," The Review of Economics and Statistics. 23:1-12, February*, 1946. E. ESSAYS AND ARTICLES IN COLLECTIONS Notestein, F. W., "Population - The Long View,” Food for the World. Theodore W. Schultz (ed.T. Chicago: The University of Chicago Press, 1945• F. ENCYCLOPEDIA ARTICLES Malinowski, Bronislaw, "Culture,” The Encyclopaedia of the Social Sciences. IV, 621-645* New York: The Macmillan Company, 1931* Unlworsity of Southern C a O t a MMe UBKM I

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Creator Anous, Mohammed Kamel (author)

Core Title Population changes and economic welfare

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Degree Doctor of Philosophy

Degree Program Economics

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag Economics, General,OAI-PMH Harvest

Language English

Advisor Pollard, Spencer D. (committee chair), Anderson, William H. (committee member), Caldwell, Russell L. (committee member), Garis, Roy L. (committee member), Sabagh, George (committee member)

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