The Colorado Springs Gazette: Nobel committee honors pro-growth economists, including Colorado’s Paul Romer
Author: The Colorado Springs Gazette Editorial Board - October 9, 2018 - Updated: October 9, 2018
Colorado native Paul Romer won the Nobel Prize on Monday for good reason: He understands and advocates humanity’s limitless potential to create and improve nearly everything.
His philosophy defies soothsayers of darkness, including 19th-century English cleric Thomas Robert Malthus and population alarmists who view economic theory in a context of static scarcity.
Fifty years ago, in 1968, the world’s population hit 5.3 billion. More than 40 percent of those humans lived in “extreme poverty,” based on data compiled by The World Bank. Fast-forward to 2018, and the planet hosts 7.6 billion people — a whopping 43.3 percent increase.
Throughout the past 50 years, and long before that, advocates of zero population growth insisted Earth could not sustain us all. Despite evidence to the contrary, they continue warning of mass starvation. Growing populations stretch a static supply of resources too thin, they insist. If one man has a loaf of bread, two men have only half a loaf.
In his bestselling book “The Population Bomb,” Stanford biology professor Paul Ehrlich warned humanity would suffer mass starvation in the 1970s, including 65 million Americans who would die of starvation. The book declared “England will not exist in the year 2000.” Ehrlich warned in 1970 “the end will come” before 1985.
Since the release of Ehrlich’s culture-changing book, world hunger has steadily declined. In 2018, about 10 percent of the world’s population lives in “extreme poverty.” That means the 43.3 percent increase in population since “The Population Bomb” corresponds with a 75 percent decrease in “extreme poverty.”
We hear the small-minded thinking of population phobia in countless aspects of contemporary life. Anti-growth activists on every segment of the political spectrum say we can’t afford growth in cities and towns, statewide, nationally or worldwide.
A new subdivision will unfairly strain established neighborhoods, they insist. A foreign immigrant’s gain comes at an American citizen’s expense. A rich person’s gain causes a poor person’s plight.
To doom-and-gloom ideologues, the Earth’s resources are a pie. There is only one pie. There has always been one pie. If the pie adequately serves 10 humans, we cannot add another 10 without reducing servings sizes by half. Each time we add more mouths, we get less pie.
This gaunt worldview overlooks the fact humans produce more pie than each can consume. If average humans consume more than they produce, Ehrlich would be right. We would starve. Humanity would have died off long before 1968.
Romer, the son of former Colorado Democratic Gov. Roy Romer, explains how humans have unlimited capacity to create ideas and carry them out. The Earth’s physical resources are finite, but humans constantly manipulate them to serve more people.
“We have taken the fixed quantity of matter available to us and rearranged it,” he said 22 years ago in an interview with Strategy+Business magazine. “We have changed things from a form that is less valuable into a form that is more valuable. Value creation and wealth creation in their most basic senses have to do with taking physical objects and rearranging them.”
On his website, Romer talks about Alice and Bob on a desolate island. Separated by a wall, Alice and Bob each have the same quantity of copper ore, tin ore and iron ore.
In separation, Alice discovers she can mix copper with tin and create a more valuable bronze. Bob discovers he can mix iron with carbon and create steel.
“After the wall is removed, if Alice and Bob can communicate what they know to each other, then they have the same quantity of natural resources per capita and same amount of muscle power per capita, but they have twice as many useful recipes per capita. They can both have both of the recipes,” Romer explains.
“… in the activity that Malthus (and Paul Ehrlich) worried about, the evidence shows that with a falling quantity of surface area on the earth per capita, better recipes have nevertheless allowed an increase in the annual production of food per capita.”
The Nobel committee awarded Romer and economist William Nordhaus, explaining the two “have designed methods for addressing some of our time’s most basic and pressing questions about how we create long-term sustained and sustainable economic growth.”
Both men advocate climate change solutions fueled by innovation and growth.
The Nobel committee made a great choice, honoring men who understand the benevolence of innovation funded by capital investment and profit. Economic and population growth work together. They improve life by solving problems and overcoming scarcity.