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We cannot let humanity happen

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Thursday, 25 October 2018 14:21

Population and effectiveness in sharing wealth

Peter Blok

Many people consider sharing wealth a moral obligation.
When sharing wealth results from moral obligations, it is justified to ask who will benefit from it. In different terms: how do you share your wealth most effectively? To get rid of it indiscriminately is, to our opinion, an answer that runs contrary to moral considerations.

These considerations oblige those who want to share their wealth to target the poor, if not the poorest.

History has shown that moral people hardly ever ask for effectiveness in the distribution of their wealth. It took almost fifty years until those in favour of development aid were willing to admit that this approach to wealth sharing was not very effective. The admission that development aid sometimes even hindered development was even more reluctantly expressed. New ways of transferring wealth from the rich to the poor were looked for.

Nowadays migration – i.e. migration of people from poor areas to rich areas - is seen as the new and benign way of sharing wealth, better than development aid. Unfortunately, once again the question whether migration is an effective way of transferring wealth from rich to poor is hardly ever asked. When the question is asked, mostly sotto voce, answers are discouraging. Immigration on a large scale has proven to be horrendously expensive. The assimilation of poor immigrants into rich societies takes time, most probably several generations. Technological developments will almost certainly shift employment, away from the uneducated to the educated. This will raise the cost of immigration even further, most probably to an unsustainable level. The shared wealth is spent mostly on integrating migrants. Worse, the problems resulting from the need to integrate immigrants erode the strength of the moral considerations that make people want to share their wealth. As a result there is less wealth shared with those who succeed in passing all hurdles to migration.

There is a third and entirely different approach to sharing wealth resulting from economic considerations. This approach can be summarised as: trade, not aid. China is the example most frequently quoted when advocating this approach. That more than five hundred million people could be lifted out of poverty within a thirty year time span would in the nineteen seventies have been considered as naive and illusory, even by the most ardent advocates of development aid. Once more, the negative aspects of this approach took time to become apparent. Spreading “our” standards of consumption (already far too high) will put an even further surpass of the carrying capacity of the earth itself. Only a decline in the number of global consumers will enable us to sustain current consumption levels and the introduction of the poor to “our” levels of consumption. To become effective, this approach has to be one of the essential parts of a population policy. There is serious doubt whether economic growth will automatically result in declines in fertility. In Africa and to only a limited extent in India economic growth has not led to a decline in fertility. Therefore, also the efficiency of sharing wealth through the trade, not aid approach is limited.

There is one other hardly tested way of sharing wealth: direct money transfers. Modern technology, mostly mobile phones used for depositing money, will allow such direct transfers. The very limited trails of this method have shown encouraging results. Basically, because direct money transfers can reach women. Allowing women to participate in the economy alleviates poverty most effectively. In addition, it is one of the most effective ways of encouraging women to have fewer children. Lower fertility rates mean less compensation costs for the ill effects of overconsumption, less costs of migration and integration, and no erosion of the strength of the moral considerations underpinning sharing wealth.

To conclude: only when a method of sharing wealth results in a decline in fertility can the goals of sharing wealth be reached. The so far practically untested approach of direct money transfers seems to have some promise. The most relevant approach, however, is also the most neglected one: spending money on birth control. Only a global decline in fertility will ultimately solve the problems of both poverty and depletion of the earth.

World population