Ingenious Economics

Introduction

Lecturer: Marian Tupy, founder of HumanProgress.org and senior fellow at the Cato Institute.

Course Overview:

New economics of knowledge, learning, and time.
Core ideas from Superabundance:
Population growth vs. resource abundance.
Time prices as a measure of resource abundance.
Importance and mechanics of innovation.
Rational optimism and threats to human flourishing.

The Thanos Fallacy

Key Idea: Fictional character Thanos from Avengers: Infinity War represents the Malthusian fear that resources are finite and overpopulation leads to disaster.

Real-world parallels:

Paul Ehrlich (2017): Claimed perpetual growth is unsustainable.
Alexandria Ocasio-Cortez (2019): Questioned whether it’s ethical to have children.

Survey Results (2021):

83% of young people believe humans have failed the planet.
75% find the future frightening.
56% believe humanity is doomed.
39% are hesitant to have children.

Population Trends

Replacement fertility rate: 2.1 children per woman.
Current trends: 89 countries have fertility rates below replacement levels.
Projected population peak: 9.7 billion by 2064, falling to 8.8 billion by 2100.

Addressing Population Fears

Key Questions:

Does a growing population deplete resources?
Is humanity a net positive or negative for planetary resources?

Counterargument:

Humans are not just consumers but creators of resources.
Improved standards of living over the last 200 years.

The Role of Knowledge

Human mind: Source of ideas and inventions.
Innovation cycle: Ideas → Inventions → Market testing → Innovations → Economic growth.
Larger populations: More potential for groundbreaking ideas.

Expanding Resource Definitions

Traditional definition: “Factors of production provided by nature.”
Expanded view: Human ingenuity can enhance and create new resources.

Examples:

Hydrocarbons: Once a nuisance, now essential.
Sand to microchips: Value creation through knowledge.
Desalination: Expanding water supply.

Mechanisms of Resource Expansion

Increased understanding of materials.
Value addition (e.g., sand to microchips).
Exploration and extraction improvements.
Efficiency gains (e.g., aluminum reduction in soda cans).
Substitution (e.g., oil replaced whale oil).
Dematerialization (e.g., Wi-Fi replacing copper cables).
Recycling (e.g., reclaiming metals from old buildings).
Transmutation (e.g., element conversion through fusion).

Historical Perspectives on Population Growth

Ancient Views:

Confucius: Population should be controlled for balance.
Plato: Ideal population for governance.
Aristotle: Feared overpopulation would strain resources.

Modern Views:

Mercantilists (16th century): Valued large populations for economic power.
Physiocrats (18th century): Supported population growth alongside agricultural improvements.

Malthusian Theory

Key Argument:

Population grows geometrically (1, 2, 4, 8…), while food production grows arithmetically (1, 2, 3…).
Predicted famine and suffering without population control.

Critique:

Historical evidence disproves Malthus.
Economic growth and innovation outpace resource limitations.

Modern Malthusianism

Concerns: Finite resources, diminishing returns, unsustainable consumption.
Criticism: Fails to consider technological advances and human ingenuity.

Anti-Malthusian Arguments

Population growth expands resources and labor specialization.
Innovation flourishes with more minds at work.
Technology transcends local resource limitations.
Past successes suggest cautious optimism for the future.

Case Study: China’s One-Child Policy

Implemented based on Malthusian fears.
Enforced through coercion, forced sterilizations, and social restrictions.
Led to demographic imbalances and long-term social consequences.

Conclusion

Malthusian fears are based on misconceptions.
Human ingenuity and innovation drive progress.
Key takeaway: “There are no resources besides knowledge, and no ultimate limits on the creation of knowledge.”