"The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks." ~ Lord Acton
Libertarians and the Environment, Part 2 of 3: Mises Loves Malthus
Column by Lawrence M. Ludlow.
Exclusive to STR
Mises on Malthus
In his chapter entitled “Harmony and the Conflict of Interests,” Mises included a lengthy section (six pages) entitled “The Limitation of Offspring.” In it he raises several key issues. First he identifies the circumstances in which an increase in population can be accommodated.
Within the system of society there is no conflict of interests as long as the optimum size of population has not been reached. As long as the employment of additional hands results in a more than proportionate increase in the returns, harmony of interests is substituted for conflict. People are no longer rivals in the struggle for the allocation of portions out of a strictly limited supply. They become cooperators in striving after ends common to all of them. An increase in population figures does not curtail, but rather augments, the average shares of the individuals. [Emphasis added]
Then Mises pays much more than lip-service to the concept of overpopulation as outlined by Malthus:
The Malthusian law of population is one of the great achievements of thought. Together with the principle of the division of labor it provided the foundations for modern biology and for the theory of evolution; the importance of these two fundamental theorems for the sciences of human action is second only to the discovery of the regularity in the intertwinement and sequence of market phenomena and their inevitable determination by the market data. The objections raised against the Malthusian law as well as against the law of returns are vain and trivial. Both laws are indisputable. But the role to be assigned to them within the body of the sciences of human action is different from that which Malthus attributed to them.
Nonhuman beings are entirely subject to the operation of the biological law described by Malthus. For them the statement that their numbers tend to encroach upon the means of subsistence and that the supernumerary specimens are weeded out by want of sustenance is valid without any exception. With reference to the nonhuman animals the notion of minimum sustenance has an unequivocal, uniquely determined sense. But the case is different with man. Man integrates the satisfaction of the purely zoological impulses, common to all animals, into a scale of values, in which a place is also assigned to specifically human ends. Acting man also rationalizes the satisfaction of his sexual appetites. Their satisfaction is the outcome of a weighing of pros and cons. Man does not blindly submit to a sexual stimulation like a bull; he refrains from copulation if he deems the costs – the anticipated disadvantages – too high. In this sense we may, without any valuation or ethical connotation, apply the term moral restraint [i.e., abstinence] employed by Malthus.
In his comparison of humans to other animals, when Mises claims that “the case is different with man,” he does not imply that there are no exceptions to forward-looking, planning behavior. We can easily insert the word potentially into the sentence to read “the case is potentially different with man,” as the remaining sections will demonstrate. Furthermore, please note that Mises understood perfectly the objections that had been raised to the thesis presented by Thomas Malthus in An Essay on the Principle of Population.
The wealth that modern capitalism bestows upon the broad masses of the capitalist countries and the improvement in hygienic conditions and therapeutical and prophylactic methods brought about by capitalism have considerably reduced mortality, especially infant mortality, and prolonged the average duration of life. Today in these countries the restriction in generating offspring can succeed only if it is more drastic than in earlier ages. The transition to capitalism – i.e., the removal of the obstacles which in former days had fettered the functioning of private initiative and enterprise – has consequently deeply influenced sexual customs. It is not the practice of birth control that is new, but merely the fact that it is more frequently resorted to. Especially new is the fact that the practice is no longer limited to the upper strata of the population, but is common to the whole population. For it is one of the most important social effects of capitalism that it deproletarianizes all strata of society. It raises the standard of living of the masses of the manual workers to such a height that they too turn into “bourgeois” and think and act like well-to-do burghers. Eager to preserve their standard of living for themselves and for their children, they embark upon birth control. With the spread and progress of capitalism, birth control becomes a universal practice. The transition to capitalism is thus accompanied by two phenomena: a decline both in fertility rates and in mortality rates. The average duration of life is prolonged.
The Need for a Free-Market Ethos to Avoid Overpopulation
By the time Mises wrote Human Action, he was well aware of (1) the positive impact of technology on agricultural production, (2) the downward-sloping population curve of industrial societies (the tendency for people in industrial societies to have smaller families and to seek a higher standard of living), and (3) their impact on the Malthus thesis. And what is the Malthus thesis? In brief, Malthus believed that an increase in the human population is necessarily limited by the means of subsistence – i.e., agricultural technology. This is not controversial. But Malthus also claimed that all animal populations invariably increase when the means of subsistence increase, and that the power of population is greater than the power of the earth to yield subsistence (Book 1, Chapter 1). In other words, population will always outstrip the means of subsistence. This is clearly false. As we know, the ethos of Western industrial society has mitigated population growth as people seek greater comfort and a higher standard of living – along with smaller families. Nonetheless, given the right incentives, this tendency can be reversed. While humans are not destined to obey sexual impulses in the face of subsequent starvation, Mises also recognized that human foresight (voluntary population planning) can be undermined by cultural factors, and we should include the impact of government incentives and disincentives. Observe what Mises had to say about the presence of life-promoting technologies among human populations whose cultural traditions have not assimilated the capitalistic Western habit of smaller, more affluent populations. Furthermore, remember that these paragraphs were written between 1934 and 1940; consequently, their perspective is dated.
Historical experience shows that all Caucasian peoples reacted to the drop in mortality figures brought about by capitalism with a drop in the birth rate. Of course, from such historical experience no general law may be deduced. But praxeological reflection demonstrates that there exists between these two phenomena a necessary concatenation. An improvement in the external conditions of well-being makes possible a corresponding increase in population figures. However, if the additional quantity of the means of sustenance is completely absorbed by rearing an additional number of people, nothing is left for a further improvement in the standard of living. The march of civilization is arrested; mankind reaches a state of stagnation.
The case becomes still more obvious if we assume that a prophylactic invention is made by a lucky chance and that its practical application requires neither a considerable investment of capital nor considerable current expenditure. Of course, modern medical research and still more its utilization absorb huge amounts of capital and labor. They are products of capitalism. They would never have come into existence in a noncapitalist environment. But there were, in earlier days, instances of a different character. The practice of smallpox inoculation did not originate from expensive laboratory research and, in its original crude form, could be applied at trifling costs. Now, what would the results of smallpox inoculation have been if its practice had become general in a precapitalist country not committed to birth control? It would have increased population figures without increasing sustenance. It would have impaired the average standard of living. It would not have been a blessing, but a curse.
….These backward peoples receive the devices for fighting and preventing disease ready-made from the West. Often they are not even charged for the drugs, the hospital equipment, and the services of the doctors.…It is true that in some of these countries imported foreign capital and the adoption of foreign technological methods by the comparatively small domestic capital synchronously tend to increase the per capita output of labor and thus to bring about a tendency toward an improvement in the average standard of living. However, this does not sufficiently counterbalance the opposite tendency resulting from the drop in mortality rates not accompanied by an adequate fall in fertility rates. The contact with the West has not yet benefited these peoples because it has not yet affected their minds; it has not freed them from age-old superstitions, prejudices, and misapprehensions; it has merely altered their technological and therapeutical knowledge.
Please note that Mises assigns great importance to the existence of a flourishing free-market ethos and private-property as the only way to successfully incorporate advanced technologies without triggering an unsustainable population increase.
The reformers of the oriental peoples want to secure for their fellow citizens the material well-being that the Western nations enjoy. Deluded by Marxian, nationalist, and militarist ideas they think that all that is needed for the attainment of this end is the introduction of European and American technology. Neither the Slavonic Bolsheviks and nationalists nor their sympathizers in the Indies, in China, and in Japan realize that what their peoples need most is not Western technology, but the social order which in addition to other achievements has generated this technological knowledge. They lack first of all economic freedom and private initiative, entrepreneurs and capitalism. But they look only for engineers and machines. What separates East and West is the social and economic system. The East is foreign to the Western spirit that has created capitalism. It is of no use to import the paraphernalia of capitalism without admitting capitalism as such. No achievement of capitalist civilization would have been accomplished in a noncapitalistic environment or can be preserved in a world without a market economy.
Mises on Birth Control
Mises clearly understood the value of a culture of free-market capitalism. Consequently, he understood that anti-market cultures and ideologies – especially Marxism – have a tendency to destroy or otherwise vitiate the benefits produced by free markets. In particular, a non-capitalist or Marxian culture will undermine the benefits of capitalism and breathe new life into the Malthusian thesis. More to the point, the existence of the modern proto-Marxian welfare state leads to many of the population and environmental overuse phenomenon that a capitalist ethos of private property would prevent. As Mises points out, it is not surprising that coercive population-control methods have been imposed in socialist countries (such as in the People’s Republic of China) to respond to the overpopulation problems caused by the introduction of capitalistic production methods among populations that are culturally out of step with its benefits (as Marxian economies and traditional societies are):
A socialist commonwealth would be under the necessity of regulating the fertility rate by authoritarian control. It would have to regiment the sexual life of its wards no less than all other spheres of their conduct. In the market economy every individual is spontaneously intent upon not begetting children whom he could not rear without considerably lowering his family's standard of life. Thus the growth of population beyond the optimum size as determined by the supply of capital available and the state of technological knowledge is checked. The interests of each individual coincide with those of all other individuals.
Those fighting birth control want to eliminate a device indispensable for the preservation of peaceful human cooperation and the social division of labor. Where the average standard of living is impaired by the excessive increase in population figures, irreconcilable conflicts of interests arise. Each individual is again a rival of all other individuals in the struggle for survival. The annihilation of rivals is the only mans of increasing one's own well-being. The philosophers and theologians who assert that birth control is contrary to the laws of God and Nature refuse to see things as they really are. Nature straitens the material means required for the improvement of human wellbeing and survival. As natural conditions are, man has only the choice between the pitiless war of each against each or social cooperation. But social cooperation is impossible if people give rein to the natural impulse of proliferation. In restricting procreation man adjusts himself to the natural conditions of his existence. The rationalization of the sexual passions is an indispensable condition of civilization and societal bonds. Its abandonment would in the long run not increase but decrease the numbers of those surviving, and would render life for everyone as poor and miserable as it was many thousands of years ago for our ancestors.
The Message of Mises
Those who dismiss the problems associated with pollution, overpopulation, and over-stimulated growth (as opposed to prosperity) ignore the pervasive influence of statism and its crippling effects on self-regulating market forces. These crippling effects include a “muting” of the otherwise automatic population-pressure adjustments that Mises described earlier. The result is a falling standard of living and the same types of deprivation that Malthus described. Moreover, the tendency to adopt an in-your-face preference for maximum consumption and population growth and to minimize ecological concerns flies in the face of praxeology. Why don’t libertarian writers of this persuasion follow the examples that they have established with respect to Federal Reserve practices? For example, many fine libertarian writers issued prescient financial warnings during the 1990s and early years of the new Millennium. They wrote lucidly about the skewed market signals that were the result of inflationary Federal Reserve practices and loan-regulation policies. They warned us about the dot-com bubble and the subsequent credit and housing bubbles. Unfortunately, many of these otherwise-insightful writers failed to apply those same insights and tools to the false signals sent out by the government when it comes to resource consumption, population, pollution, and the use of toxic substances. After all, if the cost of warring U.S. and British troops stationed in petroleum-producing areas of the world were fully reflected in energy prices instead of hidden and redistributed in taxes, what would be the result? How much oil does $1 trillion per year in “defense” spending buy? What if the zooming costs of empire and the destruction of the World Trade Center (I do not consider the Pentagon to be a thing of value) were factored into the price of gasoline?
If fuel prices were significantly higher – two, three, four times as much – and if the government did not subsidize child-rearing through tax incentives and various subsidies, how would this be reflected in our dependence on the automobile and in our housing practices? What would be the size, shape, and configuration of our cities and entire civilization without these factors? Please understand that this is not a diatribe against four-wheel travel or modern civilization. I am simply pointing out that a change in only one or two factors can have a remarkable effect on how we live and make personal choices. Mises reflects on this aspect of the free market throughout his writings.
I am not unaware of the objection that petroleum prices could actually be lower than they are now if a free market reigned throughout the world. Once again, however, we cannot be certain. That is why I again remind libertarians that an agnostic position is well supported by libertarian theory. We simply cannot know, and it does not help to pretend that we do. To begin, the normal, downward-sloping population curve of industrial societies might be even more pronounced than it is now if all government meddling was removed. How many children would people birth under circumstances where there are no subsidies? Furthermore, without the tax subsidies funneled into road building and urban sprawl, what would be the configuration of our cities? Would they be more like the dense, closely hemmed-in urban environments of the Middle Ages through the 19th century, or would other technologies completely eliminate the urban environment? We don’t know. Similarly, nobody can say what the carrying capacity of earth is – given the state of any technology or the accompanying social ethos. But does it make sense to claim that more is always better when it comes to population growth? Isn’t this the same kind of central-planning type of statement that big-government environmentalists use? At a level of personal choice and personal responsibility, a “more is better” population preference can be harmless. But if we elevate that preference to a policy recommendation for mankind, it is no longer sound or harmless. It is an invitation to ignore the feedback that the marketplace provides. It is the realm of the central planner. There can be no libertarian “policy” in this matter other than market-based agnosticism.
I will not address the topics of water-table and surface salts and underground plumes of toxic substances resulting from desert irrigation and runoff from petroleum processing and military facilities. You can probably guess the direction of the argument yourselves. Try to remember some of the wisdom imparted by Terry Anderson and Donald Leal in the book, Free Market Environmentalism. For example, they showed that federal agricultural policies encourage farmers to cultivate far more marginal acreage than would be economically feasible in a free market. Is it not possible that the entire, centralized, government-subsidized agri-business would collapse in a free market? Think of the many congress-critters paid off by the powerful agricultural lobby. Is it not possible that a much larger percentage of agricultural production would be conducted locally if the subsidized agri-business, tax-subsidized desert irrigation mania, and road-building fetish did not hold sway? The point is that we do not know, and we should not pretend that we do. Similarly, as libertarians, we know that big-government measures cannot successfully address the issue of global warming – whether it is caused by man, is the result of solar variances, or does not exist at all. Let the market decide, but let’s not fool ourselves into thinking that the status quo resembles a free market even faintly. It is, instead, a twisted hybrid Rosemary’s Baby spawned by big-government bureaucrats and crony capitalists – not a pretty sight. Let’s not pretend that it is, and let’s not ask for more of it and more of its byproducts. After all, aren’t libertarians the ones who should step into the role of the little boy who pointed out that the Emperor’s New Clothes were nothing but a product of churlish sycophancy?