People always say more populations means they have to consume more things and make economy more energetic, but I have a question, suppose my income is 4000 dollars per month, I won't spend them all, I have to save a little amount of them, so if I spend 3500 dollars, then the sum of contributions to salaries of jobs created due to my consumption is at most 3500 dollars, and each node of such chain will be some loss, if how we harness energy and food didn't leap, then more populations should lead to lower quality of life
"More populations means more energetic economy", is this true?
byu/H3_H2 inAskEconomics
Posted by H3_H2
1 Comment
A larger population directly leads to a larger “economy” but only in the most boring way possible. That alone doesn’t actually make anyone better off it is just arithmetic addition. If we had 100 subsistence farmers over there and 100 subsistence farmers over here and then all of a sudden decide they are one “economy” that now has 200 farmers, okay, great I guess.
A larger population in a given area can lead to actual increases in welfare but through a different mechanism. As a local population grows there are increasing opportunities for specialization (increasing productivity) and trade. Starting with 100 poor farmers who will be primarily practicing a relatively unproductive form of agriculture. As the population grows there is eventually enough demand for other industries for some farmer to start making, say, clothes. When that farmer switches he will be much more productive and thus be able to produce more clothes than the previous combination of all hours spent on making homemade clothes. Real prices (in time spent) for clothes fall and more time can be spent increasing agricultural production/productivity, increasing the ability for someone else to switch to producing something else.
We see this most clearly in cities where larger and larger cities will have people in them offering increasingly specialized services as the city grows.