What they missed in Cairo: defusing the population bomb.

• Author: Lambert, Thomas

FOR centuries, numerous doomsday prophets have predicted that an increasing world population will cause serious crises. Such thinking certainly permeated the International Conference on Population and Development, held in Cairo, Sept. 5-13, 1994, which sought "to forge a new consensus that population concerns should be at the centre of all economic, social, political, and environmental activities."

Naysayers typically insist that a burgeoning population soon will squander the Earth's finite natural resources, that there is an insufficient supply of living space and agricultural land to support continued population expansion, and that population growth necessarily will imply intolerable levels of pollution. To avert these dire consequences, they call upon governments to undertake aggressive family planning programs, increase regulations on the use of nonrenewable resources, and undertake centralized planning in order to limit economic expansion to "sustainable" levels.

Before enacting such measures, policymakers ought to take a critical look at an assumption that went unchallenged in Cairo. What is the actual evidence that "overpopulation" is a problem? Are there built-in mechanisms in a market system that will avert tragedies from population growth? In short, they should ask, "Is there a population bomb?" before they become consumed with how it best can be defused.

Because supplies of natural resources and energy are limited, more resource users inevitably will lead to the eventual depletion of supplies, the theory goes. Underlying this reasoning is the dramatic notion of the planet as "Spaceship Earth," launched with a countable amount of each resource and, hence, having less resources per passenger as the number of passengers increases. The dire predictions in the classic doomsday manifestos of the 1960s and 1970s--most notably The Limits to Growth and Stanford University ecologist Paul Ehrlich's The Population Bomb--were premised upon the Spaceship Earth model. Although virtually none of these dire predictions came true, the model persists.

It is not at all clear, however, that humans are running out of resources. In fact, the history of natural resource use provides overwhelming evidence that natural resources, including energy, progressively are becoming less scarce.

If a good is becoming less available, suppliers, confident in the knowledge that consumers have fewer outlets from which to obtain the good, will raise their prices. Thus, in a relatively free market, persistently rising prices accompany increasing scarcity. Conversely, a steady decrease in the price of any good indicates that the substance is being supplied at a faster rate than it is being demanded, or, in other words, is becoming far more available. So, if the prices of resources exhibit a downward trend, the resources must be becoming less scarce.

Indeed, prices for most basic resources exhibit long-term declines, and many are at an all-time low. Relative to wages, the 1990 prices for all commonly used natural resources in the U.S. were one-half what they were in 1950 and one-fifth the 1900 price.

Some doomsayers ask, "What if the supply of a natural resource suddenly just runs out?" They fear current prices of resources will not provide sufficient warning of future scarcities. This is unfounded.

Throughout history, resource suppliers have been quite conscious of future supplies of the materials they provide. When it looks as though something is becoming more scarce, suppliers know that they can hoard it now and charge higher prices in the future, when consumers will have fewer outlets for obtaining the material and will be willing to pay more. If they hoard it now in anticipation of future scarcity, however, the present price of the resource will rise. Thus, because it is in the self-interest of suppliers to know how abundant resources will be in the future and to set prices in accordance with this knowledge, today's price is a trustworthy measure of both current and future scarcity.

The fundamental assumption underlying pessimistic accounts of future resource depletion--and the concomitant obsession with limiting population growth and resource use--is that the supply of natural...