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One of the major problems with natural scientists when they “project” into the future they often do not take into account the power of innovation to change the fundamental parameters of the game. I believe this was part of the issue at the heart of the famous Simon-Ehrlich wager. Though Julian Simon was untutored in many aspects of natural science, he did comprehend the recent economic history of the world, which has seen a break with the shackles of the iron laws of Malthus. Those laws have been operative for all of human history until the mid-19th century, when Britain started to become the first nation which was a clear exception to the pattern (some may argue that the Dutch pre-figured the English case, but this seems to be debatable).

There are two major changes which Thomas Malthus and his contemporaries (including economists such as David Ricardo) could not anticipate. First, that the rate of innovation in the 19th and 20th centuries would simply surpass anything that the world had seen before. In The Fall of Rome: And the End of Civilization Bryan Ward-Perkins reports that the pollutants which are the byproducts of industrial activity did not reach Roman levels in Britain until the 18th century! I am not naive enough to be such a partisan of the “ancients” as to suggest that Europe did not reach Roman levels of civilization in the generality until the 1700s. But, up until the Industrial Revolution occurred in Britain there were aspects of European civilization which had not yet climbed back up to the Roman scale of grandeur or virtuosity. For example, it seems that it was only in 1800 that London attained the size of the city of ancient Classical Rome (which had fallen in its nadir in the 7th century to a population of 50,000).

The second major parameter is more subtle, and perhaps even more surprising, than innovation. It’s the demographic transition. Even with higher growth rates, if population rises to “catch” up with the bigger economic “pie,” then per capita wealth remains the same. What began in the advanced nations of Western Europe in the 19th century was that the urban middle classes began to reduce their fertility, while at the same time economic productivity continued to increase. The growing pie would was not matched by concomitant population increase. Ergo, greater per capita wealth.

Believe it or not, the world is going through a demographic transition, life expectancy is increasing, as has per capita income (PPP). This is due to continued economic growth, and, a decrease in the rate of population growth. At least in the aggregate.

But different conditions hold in different locales. Below is a comparison of per capita income (PPP) for a few selected nations, as well as their population growth rates:

Saudi Arabia is a famously reactionary society. Slavery was officially banned in 1962, in part due to international pressure (this was not an issue when Saudi Arabia was an obscure backwater, but its rise to a commodity powerhouse entailed an integration into the world system, and so abolition). We don’t even need to go into its religious authoritarianism and sexual apartheid. The critical point though is that in many ways the influx of petro-dollars also means that Saudi Arabia is a very modern and affluent society which has also subsidized extremely retrograde practices. And yet look at the pattern of petroleum driven affluence: it exhibits not only the cyclical swings subject to commodity prices, but, the massive gains in wealth in the 1970s led to a huge baby explosion. Fertility crashed only after the nosedive of oil prices in the 1980s. This is was a classic pre-modern pattern, where greater wealth was swallowed up by greater population growth. In contrast to Saudi “windfall” wealth, South Korea, and to a lesser extent Turkey, have followed a more conventional path of investing of in human capital. All saw a gradual consistent decrease in fertility concomitant with gradually increasing per capita wealth.

Today at a total fertility rate of ~3.0, Saudi Arabia is converging to the world average. But the legacy of the 1970s oil-fueled population explosion remains, a huge demographic bulge which grew up hearing about the stories of the glorious affluent 1970s through their childhood in the 1980s and 1990s. Because of Chinese demand I suspect that we won’t see the shift in favor of consumers that we saw in the 1980s and 1990s. But, neither will we ever see a domination of the oil markets by a single cartel like OPEC, there are too many suppliers now. Aside from the partial-exception of Sub-Saharan Africa Paul Ehrlich’s geopolitical prognostications in The Population Bomb have turned out to be false. But in the case of petro-states like Saudi Arabia his simplistic model may actually hold over the medium-term (i.e., within the next generation). Unlike genuinely advanced nations the Saudis are not doing anything innovative to produce wealth. In other words, changing the equation which constrains their ultimate potential. Rather, they’re simply tapping into their natural resource bank more efficiently. At some point in the future this capital will be expended. The consequences for the House of Saud may then be catastrophic, though I suspect they have “back up” homes across Europe and Swiss bank accounts to tide them over in case they need to flee.

Razib Khan
About Razib Khan

"I have degrees in biology and biochemistry, a passion for genetics, history, and philosophy, and shrimp is my favorite food. If you want to know more, see the links at"