Summary: For 36 years, China enforced a strict one-child policy that shaped the lives and futures of millions of people. How did this policy affect China’s economy and society, and what would have happened if it never existed? This article explores the alternative scenarios of a world without the one-child policy, using historical data and projections to measure its impact on population growth, labor supply, human capital, consumption, savings, and social security in China and beyond.
“It’s a simple calculus. This universe is finite, its resources, finite. If life is left unchecked, life will cease to exist. It needs correcting.” So argued Thanos in the 2018 movie: Avengers: Infinity War.
But where did Thanos’s ideas come from?
In 1968, the Stanford University biologist Paul Ehrlich published an immensely popular and influential book, The Population Bomb. In it, Ehrlich claimed that population growth would result in mass starvation. More recently, he argued that “You can’t go on growing forever on a finite planet. The biggest problem we face is the continued expansion of the human enterprise.”
Ehrlich’s early work launched a frenzy of studies, books, and articles concerning the supposedly negative relationship between population growth and resource scarcity. Two of them, The Club of Rome’s The Limits to Growth (1972) and The Ecologist’s A Blueprint for Survival (1972), were taken seriously by the Chinese Communist Party.
Thanos, incidentally, first appeared in a comic book in 1973.
The Chinese One-Child Policy
In 1980, the Chinese communists implemented the so-called One-Child Policy. American journalist Charles C. Mann reports that the birth limit “led to huge numbers—possibly 100 million—of coerced abortions, often in poor conditions contributing to infection, sterility and even death. Millions of forced sterilizations occurred [as well].”
The National Population and Family Planning Commission, which was tasked with implementing the One-Child policy, grew into a gigantic bureaucracy with half a million full-time employees and 85 million part-time employees. According to the Chinese government itself, the policy prevented 400 million births.
So, Ehrlich, who is still alive, is the real Thanos, and China was his universe. The primary victims of Ehrlich’s policy recommendations were females. Mothers suffered, and the Chinese cultural preference for sons meant that girls were aborted more often than boys. It is estimated that there were 34 million more men than women in China in 2018. Under normal circumstances, there should be a rough parity between sexes.
China relaxed its One-Child Policy in 2015, and Ehrlich was incensed. He tweeted (in all caps): “GIBBERING INSANITY – THE GROWTH-FOREVER GANG.”
Contrary to Ehrlich, we believe that China’s One-Child Policy was a mistake. The policy caused mass suffering and death. Moreover, analysis suggests that without China’s birth limit, global resources would be almost twice as abundant today. If you are interested in how we reached that number, read on.
How to measure global resource abundance?
Our method for estimating the abundance of global resources is simple. It is based on economics, not physics, and prices, not quantities. We start by calculating the changes in personal resource abundance (i.e., can the average inhabitant of the world afford to buy more or less). We then multiply that value by the size of the population. Finally, we compare the size of the global resource pie at two different points in time to see if resource abundance rose or fell.
Personal resource abundance is measured with time prices. We buy things with money, but we pay for them with time. A time price is the hours and minutes of work it takes to earn the money to buy an item. It is the ratio of the (nominal) money price divided by the (nominal) hourly income.
To determine if resource abundance is rising or falling, we analyzed the time prices of 50 basic commodities, including energy, food, materials, minerals, and metals, between 1980 and 2020. Our data came from three reputable organizations: the World Bank, the International Monetary Fund, and the Conference Board.
What did we find?
We found that the average time price of the 50 basic commodities fell by 75.2 percent. That means that the time required to earn the money to buy one unit in our basket of 50 basic commodities in 1980 would get you 4.03 units in 2020. So, the average inhabitant of the planet saw a 303 percent increase in personal resource abundance.
Between 1980 and 2020, the world’s population rose from 4.434 billion to 7.795 billion, or 75.8 percent. Put differently, every one percent increase in the world’s population corresponded to a one percent decrease in time prices (-75.2 percent ÷ 75.8 percent = -0.992).
Given that personal resource abundance increased by 303 percent and the world’s population increased by 75.8 percent, we can say that global resource abundance (i.e., the increase in personal resource abundance x the increase in the world’s population) rose by 609 percent.[i]
What if we added the 400 million people who are missing due to the One-Child Policy?
What would have happened to our findings if the world’s population rose by an additional 400 million people? Instead of a global population of 7.8 billion, the planet would now be inhabited by 8.2 billion people (i.e., it would have increased by 84.8 percent instead of 75.8 percent between 1980 and 2020). What would that increase in the world’s population do to resource abundance?
Recall that our findings suggest that for every one percent increase in the world’s population, time prices decrease by one percent. If that relationship held in a world populated by 400 million more people, time prices would have fallen by 84.8 percent instead of 75.8 percent.
For the same length of time required to earn enough money to buy one unit in our basket of 50 basic commodities in 1980, you would get 6.59 units (rather than 4.03 units) in 2020. That represents a 559 percent increase in personal resource abundance (rather than 303 percent). That also means global resource abundance would have increased by 1,118 percent (rather than 609 percent).[ii]
Such is the miracle of compounding! Thomas Malthus, the English pastor who was Ehrlich’s intellectual precursor, recognized exponential growth but mistakenly thought that the population would grow faster than resources. Two hundred years of empirical evidence suggests that the opposite is true.
Summary
China has experienced a great economic boom since the start of its economic reforms in the late 1970s. At the same time, the Chinese people suffered from the One-Child Policy that reduced the potential Chinese population by 400 million people. Just imagine how much more prosperous China could be today if its economy employed 400 million more young (and somewhat freer) people!
In the late 1970s, the Chinese Communist Party assumed that unless they implemented strict population controls, China would never escape poverty. Of course, today, we know that economic policy – namely, greater economic freedom – not population control, was responsible for Chinese success.
But, as we showed, the rest of the world also suffered. If the global population were 9 percent higher, the average time price of the 50 basic commodities would be 9 percent lower. Instead of a 303 percent increase in personal resource abundance, the average inhabitant of the world would be 559 percent better off. Instead of a 609 percent increase in global resource abundance, the world’s resources would be 1,118 percent more abundant.
In our forthcoming book, The Age of Superabundance, we will present evidence that strongly suggests that human beings are the ultimate resource, for it is people who create more on average than they consume – just as the late economist Julian Simon predicted.
[i] [[(1 + 3.03) x (1 + 0.758)] – 1]
[ii] [(6.59 x 1.848) – 1]