The effect of population growth on the economy

Here's something to consider: Why does it seem immigration results in overcrowding into the cities and housing prices in these places shooting up to affordable levels, rather than new desirable big destination cities being built out in some region that's not yet developed?

It almost seems like there's something "inanimate" in these cities, where the wealth comes from, rather than wealth automatically being the natural byproduct of the presence of working people.

Which explains why people are forced by economic necessity to move to certain places, and crowd around those places, rather than just move anywhere.

If we did an experiment and said that all new immigrants would only be allowed to move to (and live in) economically impoverished small rural towns out in remote places, what would happen?

Do you truly believe these places would suddenly be as wealthy as New York City or Los Angeles, if only we crowded enough people into them?

 

Do you think wealth of a country will just automatically increase in proportion to population size?

How about if there are two countries, one a rich country and one a poor country, bordering each other, and we just suddenly transferred a little piece of territory (with all the people still living in it) from the poor country to the rich country, what would happen?

You don't believe that would suddenly result in more wealth being created, simply by virtue of population being transferred into the jurisdiction of another country, do you?

 

Then I refer you back to my earlier point.

Why are we considering sub Saharan Africa. The conversation was about the USA surely?
Further as I have already said population of Africa is not growing out of control. Its infant mortality rate sees to that.

 

An interesting discussion Kazen. I don't have time to address both properly, so I'll bookmark this post and return to it.

TBD

 

Unless something else stops it, yes.

I believe The poor people invited into the rich country would soon integrate, they would take jobs at the going rate for the country they joined. They would then start to build lives and homes and the economy of the host country would grow by that amount.

I don't know why you keep thinking it must be instantaneous.

 

Let me ask you a question, then. Why do you believe that the going rate for jobs is so different in different countries?

You stated that you believe a country's wealth will be in proportion to its number of people. Well, why then do different countries have such different wages?

Are you able to realize how there's something in your logic that's not really adding up?

 

That is down to the standard of living in the country concerned. Some countries have done better than others and achieved a higher standard of living. Same as some families do better than others.
The result of this higher earning per person is a form of generosity we call welfare. This enables people not to work for a pittance or die.
The other defining factor in this is government. If you have a democratically elected government, there is less corruption, favouritism, cronyism and poverty. For the obvious reason that the poorest voter still gets a say.

 

And you don't think standard of living would be altered by population number changes, or movement of substantial numbers of population from one country into another?

 

You might think it would, but the UK has increased its population dramatically over the last 3 decades with no appreciable difference to our standard of living.
The only real difference is the cost of housing because we are running out of land to build on. Not something you guys suffer from.
So it seems that whatever you have extrapolated real life disagrees with you.

 

Do you think it's possible the standard of living might have increased, if it was not for the population increase?

But it is just that, as the general standard of living begins to inch up, it just creates more of a draw for immigration, thus establishing a sort of equilibrium.

Anyway, there have been plenty of signs that the standard of living in the UK (and several other parts of Europe, like Germany) have been going down.

 

That's a possibility, have you any supporting evidence?

 

America had the strongest wage growth in the late 50s and early 60s, and this was after the country had put the breaks on immigration, and recovered from the Great Depression.

 

Thanks, but that's a bit circumstantial standing alone. You would need to look at other circumstance around the times. Like the ending of the second world war for instance.
So did the standard of living in other countries that continued immigration not match that of the USA over this period?

 

The population of many of these European countries that were involved in the war (WW2) were drastically reduced. So that would be a little hard to say.

One might speculate the sudden population reduction could have triggered an economic growth spurt, even though the population numbers soon exceeded the pre-war high.

I am trying to compare the numbers and it's very difficult. The population of France barely increased between 1940 and 1960, while in Germany it's very complicated, because Germany lost many territories after the war.

 

The problem is its not just population growth (or lack of) alone that impacts economic growth. Population growth spurs demand, particularly demand for housing which feeds out into the general economy via demand for building materials & consumer goods etc.

But the far bigger contributor to economic expansion post WW2 in the western world was rapidly rising productivity via advances in technology. This allowed every unit of labor employed to produce more outputs at lower cost.

On top of that was a notable increase in the international trade in goods and capital which meant investment and technology was more readily available where needed. This nosedived at the start of WW1 having grown steadily since the 1880s. In fact it didn't really even start to recover until after the end of WW2 whereupon it did start to grow steadily. Interestingly as a % of the international economy the export of goods and capital as did not return to its pre-WW1 levels until 1993, 80 years later! Proving yet again that WW1 was and is the gift that keeps on giving.

 

I agree Kazenatsu. To many other factors blur the figures, if we took a literal interpretation then Russia which lost 17 million people in the war should have seen huge economic growth, but we know what happened there.
The best evaluation I could come up with is to look at the Western countries from then until now and see if those with higher percentages of population growth have fallen behind, but I see no significant differences.