Demography is Destiny (or why two heads are better than one)

Bradford DeLong has a fantastic blog post on the relationship between population size and economic growth and development. He writes:

In Kremer’s model, population will grow and eventually population will be high enough that research and development will proceed fast enough to push income per capita high enough to trigger the demographic transition and thus break the Malthusian proportional link between resources and technology on the one hand and population on the other. After that link is broken, economic growth will predominantly take the form not of Malthusian increases in population but rather Industrial Revolution and Modern Economic Growth increases in living standards and labor productivity.

The breakthrough to an Industrial Revolution, Modern Economic Growth, and our present prosperous global post-industrial economy is therefore baked into the cake. It is an all-but-inevitable event in human history produced by the simple fact that when it comes to generating useful ideas two heads are better than one: “the fundamental nonrivalry of technology as described by Paul Romer (1986)…”

DeLong then tests an alternative theory in which the economic takeoff of WENA countries after 1750 could have been a fluke, and concludes that the British industrial revolution at most saved the world 150 years — that is, “if you take the association between global populations and global economic growth back before the British Industrial Revolution seriously, as a causal relationship.

The whole post is worth reading. The empirical bits are clear and easy to follow. See also here.

In my Political Economy of Development class I make sure that my students understand the relationship between demography and human development — (i) the impact of demography on state development; and (ii) the impact of state development on markets and economic growth and development. To that end I often use these three illustrations.

Up until the mid 1990s tiny Europe had more people than all of Africa. In the next 30 years Africa’s population will grow by about 800 million people. By 2050 the Continent is projected to have 2 billion people; and half of the children being born in the world will be African. There is no reason to believe that the African experience after these demographic changes will not follow established correlations between population size, state development, and technological change.

Human Capital and Economic Development in Britain, 1750-1930

B. Zorina Khan writes:

Many argue that the nature of early British industrialization supports the thesis that economic advances depend on specialized scientific training, the acquisition of costly human capital, and the role of elites. This paper examines the contributions of different types of knowledge to British industrialization, by assessing the backgrounds, education and inventive activity of the major contributors to technological advances in Britain during the crucial period between 1750 and 1930. The results indicate that scientists, engineers or technicians were not well-represented among the British great inventors, and their contributions remained unspecialized until very late in the nineteenth century. For developing countries today, the implications are that costly investments in specialized human capital resources might be less important than incentives for creativity, flexibility, and the ability to make incremental adjustments that can transform existing technologies into inventions that are appropriate for prevailing domestic conditions.

…….. The patent records also enable us to examine whether a science background increased productivity at invention. Again, the patterns are consistent with the notion that at least until 1870 a background in science did not add a great deal to inventive productivity. If scientific knowledge gave inventors a marked advantage, it might be expected that they would demonstrate greater creativity at an earlier age than those without such human capital. Inventor scientists were marginally younger than nonscientists, but both classes of inventors were primarily close to middle age by the time they obtained their first invention (and note that this variable tracks inventions rather than patents). Productivity in terms of average patents filed and career length are also similar among all great inventors irrespective of their scientific orientation. Thus, the kind of knowledge and ideas that produced significant technological contributions during British industrialization seem to have been rather general and available to all creative individuals, regardless of their scientific training.

The whole paper is definitely worth reading and is available here.