Friday, March 17, 2017

One Child

China's "One Child" policy has to be the most successful economic experiment at least since the Marshall plan, and maybe since the invention of stock markets. Fifty years ago, China was one of the poorest countries in the world, with a per capita GDP one fifth that of Nigeria, and a comparable fertility rate. Under "One Child" the fertility rate plummeted from 7.5 (children per woman) to 2.3 and then to about 1.5. Meanwhile, the per capita GDP went from $732 to $13,330 (in 2015). Nigeria, like many other African countries, has maintained a birth rate of 6.0 or so and barely nudged forward in per capita GDP.

Dr. Malthus may have died centuries ago, but his insights live on. If you have as many children as the land can sustain, subsistence is about the best you can do.

China's leaders had the immense foresight to see this, and totalitarian political control to implement it. Other nations have achieved similar results with less draconian methods. Of course there is ultimately a penalty of sort to be paid. Many countries have seen their populations age, and a few are already shrinking in population. This slows economic growth and the burden of carrying for the old falls on a shrinking population. Of course if you've seen a ten or twentyfold increase in your per capita income in the meantime, the burden is enormously lightened.

China has relaxed the one child policy, but the Chinese, like their counterparts where low fertility evolved more naturally, are showing little sign of going on a baby making frenzy. Most of South Asia seems close to dropping to the replacement rate or lower. The Middle East lags a bit, but is also getting close.

A few war torn and desperately poor countries (Aghanistan, Syria, Yemen) lag well behind, as does most of Africa. Africa, in particular, needs to learn that it will always be poor unless it can slow or stop its population explosion.