The population growth Ponzi scheme

Joseph Chamie, Globalist, 2010 - Bernie Madoff's recent Ponzi scheme has drifted out of the world’s headlines. However, there is another even more costly and widespread scheme — "Ponzi Demography" — that warrants everybody’s attention.

While it may come in many guises, Ponzi demography is essentially a pyramid scheme that attempts to make more money for some by adding on more and more people through population growth.

While more visible in industrialized economies, particularly in Australia, Canada and the United States, Ponzi demography also operates in developing countries. The underlying strategy of Ponzi demography is to privatize the profits and socialize the costs incurred from increased population growth.

The basic pitch of those promoting Ponzi demography is straightforward and intoxicating in its pro-population growth appeal: “more is better.” However, as somebody who has spent a lifelong career as a demographer, including 12 years of service as the director of the United Nations Population Division, I find that more is not necessarily better.

As has been noted by Nobel laureate economists Joseph Stiglitz and Amartya Sen as well as many others, current economic yardsticks such as gross domestic product focus on material consumption and do not include quality-of-life factors.

Standard measures of GDP do not reflect, for example, the degradation of the environment, the depreciation of natural resources or declines in individuals’ quality of life.

According to Ponzi demography, population growth — through natural increase and immigration — means more people leading to increased demands for goods and services, more material consumption, more borrowing, more on credit and of course more profits. Everything seems fantastic for a while — but like all Ponzi schemes, Ponzi demography is unsustainable.

When the bubble eventually bursts and the economy sours, the scheme spirals downward with higher unemployment, depressed wages, falling incomes, more people sinking into debt, more homeless families — and more men, women and children on public assistance.

That is the stage when the advocates of Ponzi demography — notably enterprises in construction, manufacturing, finance, agriculture and food processing — consolidate their excess profits and gains. That leaves the general public to pick up the tab for the mounting costs from increased population growth (e.g., education, health, housing and basic public services).

Among its primary tactics, Ponzi demography exploits the fear of population decline and aging. Without a young and growing population, we are forewarned of becoming a nation facing financial ruin and a loss of national power.

Due to population aging, government-run pensions and healthcare systems will become increasingly insolvent, according to advocates of Ponzi demography, thereby crippling the economy, undermining societal well-being and threatening national security.

Low birth rates, especially those below replacement levels, are considered a matter of national concern. Without higher fertility rates and the resulting population growth, the nation, it is claimed, faces a bleak and dreary future.

So Ponzi demography calls for pro-natalist policies and programs to encourage couples to marry and to have more children, which will lead to the promised sustained economic growth...

Many environmental groups are also reluctant to take up or even touch the volatile subject of population growth, especially those that have been burned on this issue in the past. Such groups fear possibly offending some members and donors, which might undercut their organizations and efforts.

Despite its snake-oil allure of “more is better,” Ponzi demography’s advocacy for ever-increasing population growth is ultimately unsustainable. Such persistent growth hampers efforts to improve the quality of life for today’s world population of nearly seven billion people as well as for future generations.

Moving gradually towards population stabilization, while not a panacea for the world’s problems, will make it far easier to address problems such as climate change, environmental degradation, poverty and development, human rights abuses and shortages of water, food and critical natural resources.

Fortunately, most couples around the world have chosen — or are in the process of choosing — to have a few children rather than many and to invest more in each child’s upbringing, education and future well-being. Nations need to make the same vital transition with respect to their populations.

The sooner nations reject Ponzi demography and make the needed gradual transition from ever-increasing population growth to population stabilization, the better the prospects for all of humanity and other life on this planet.