There Really are Limits to Growth: Canadians’ Orthodox Assumptions are Flat-Out Wrong

Two centuries ago, clergyman Thomas Malthus expounded the proposition that population always outruns food supply. He said population increases geometrically while food supply increases, at best, only arithmetically. Half a century ago the Green Revolution, enabling massive increases in agricultural production, allayed such fears. Arguably, however, it will be impossible to repeat that Revolution. 

Even if the world’s population levelled off, there are reasons to question the reliability of the food supply. The first is that rising living standards connote more consumption of fish and meat. The limit to the productive capacity of the oceans is at hand and, by a conservative estimate, some five pounds of feed produce one pound of meat. Another problem is that current farming practices are degrading arable land. Therefore, production requires unsustainably more chemical fertilizers. For example, Jared Diamond says the sustainable population of Australia is just five million compared with the current twenty-six million.

In 1972 the Club of Rome’s The Limits to Growth argued that exponential depletion of resources must end eventually. Critics thought alarmism exaggerated because we’ve always figured out how to meet new demands. But beyond the impact of carbon dioxide on climate change, other limits loom. There’s only so much Amazonian rain forest to clear for growing soybeans, and the oceans can’t absorb an infinite amount of garbage and man-made pollutants. There are limits to the arable land to build on and to the sand for making concrete.

This leads me now to what I see as the worldwide failure to address the foundational challenge. Who’s making all that carbon dioxide and consuming all those resources? Answer: People! With fewer people, there would, axiomatically, be less pressure on the environment. It follows that birth control everywhere must accompany improving health care and increasing longevity. A classic example of over-population is what caused the genocide in Rwanda. There had long been friction between Hutus and Tutsis. But tensions escalated because the increasing population of Hutus, mostly farmers, was running out of arable land.

So what does growth mean? As I see it, there are two partly overlapping kinds of growth, wealth generation and consumption. Wealth generation comes primarily from natural resources like agriculture, mining, forestry and energy production as well as most manufacturing. The problem is that we reckon Gross National Product (GNP) by including everything from fixing broken windows to retailing goods made in China. But consumption needs wealth generation.

As a corollary, governments of all persuasions everywhere have failed to grasp why the gap between rich and poor is widening. I submit that foundational causation is that the law of supply and demand impacts labour markets as it does every other marketable commodity. When labour is plentiful, wages are low and investors benefit disproportionately. In China, as an extreme example, a seemingly inexhaustible supply of cheap labour has enabled the enrichment of billionaires. 

Historically, the biggest surges in wage rates occurred after plagues decimated populations. The biggest surge occurred after the Black Death in Europe, between 1348 and 1352, halved the population. Scarcity of labour ended feudalism and raised wages. It induced immense improvements in productivity, through technological innovation as well as by abandoning less profitable farmland and mines.

Exceptionally in world history, the Industrial Revolution increased overall prosperity in parallel with huge population increases. However, there are limits to net societal benefits from economic growth or from technological innovation. Real wages for the Canadian and American middle class have stagnated for decades. Worse, poverty statistics don’t show the distress arising from homelessness and insufficient housing. They don’t put a human face on the burgeoning underclass of unemployed and all-but-unemployable multigenerational welfare recipients. Largely, but by no means exclusively, in Canada, they include Indians and Inuit in remote settlements and urban slums. Distress shows up in the numbers for suicide, substance abuse, violent crime, teenage pregnancy, health care costs, and law enforcement and incarceration.

Erroneously asserting that all growth is good, business owners, real estate developers and lawyers pay politicians to promote immigration. The supply of ever more willing labour has then kept wages low and enhanced returns on capital. But tax revenues spent to sustain the underclass constrain benefits for the middle class.

Canada has always relied on immigrants for jobs requiring advanced skills. Therefore, it wasn’t necessary to deliver sufficient education and skills training to the wider population of native-born citizens. It seemed easier and more economical to drain doctors, engineers and health-care workers even from Third World countries that needed them. For farming, meat-packing plants, and much of the hospitality and home care industries, Canada’s and America’s ultimate in exploitation of cheap labour, and the corresponding marginalization of native-born citizens, has been employment of temporary foreign workers. I believe, however, that there would soon be a net national gain if the money paying marginalized citizens not to work went instead to enabling them for employment. Elsewhere, effective mentoring and temporary subsidies get the able-bodied unemployed out of the poverty trap and into the job market. In any case, job losses from technological innovation will offset the decline in the labour force as the population ages, thereby proving mistaken the claimed need for immigration.

An unrecognized challenge arising from immigration is that a one-percent population increase requires significantly more than a one-percent increase in GDP to maintain the same level of prosperity for citizens already here—and even one-percent growth has been barely happening. That’s because the cost of providing housing and infrastructure, and other support systems, is front-end loaded. Canada’s Fraser Institute has long been estimating that recent immigrants receive tens of billions of dollars more in benefits annually than they pay in taxes. Therefore, this burden also constrains national prosperity. With other misdirection of tax revenues, it prevents necessary expenditures like the $40 billion needed for Toronto’s transit system. 

Another problem is that population increase has been surpassing residential construction. The result has been exponentially rising house prices and rents—to the considerable advantage of existing home-owners or those involved in real estate. The unbalanced market induces homelessness and the insufficiency of decent and affordable housing. The remedies include constraining immigration and enabling the able-bodied marginalized with marketable skills for the high-tech economy. Educated and skilled people in rewarding jobs could then pay for their own homes.

As an example of the population-induced imbalance, I was looking recently for an apartment in Ottawa for an Indigenous woman with a good income. The best we could find was a two-bedroom basement apartment for $1,450 per month. I know people living in identical accommodation on the same street whose monthly rent, subject to regulated increase, is only $850. I was also looking recently for a lower-priced hotel room in Ottawa. Despite the restrictions on travel imposed by Covid-19, rooms were available only at the high end. Lower-priced hotels were overflowing with illegal border-crossers. 

There are several templates for better governance. Outstanding is what Premier Lee did for the then Third World Singapore after independence. (There are three official languages with English, in addition, the lingua franca and universally the language of education.) In 1965, Canada had three times’ Singapore’s per capita GDP. Upon inheriting a terrible Asian slum with 60,000 Indigenous Malays, Premier Lee began a ten-year housing program along with delivering intensive education. He understood that supporting a marginalized underclass was unconscionable and unsustainable for taxpayers. Today, Malays participate in the economy as equal citizens, and Singapore has per capita GDP 50 percent higher than Canada’s. Immigration is limited to those with high-end skills in finance or technology. 

Looking at these challenges the other way around, the wealth that Canada and the United States could generate with better stewardship would enable foreign investment—not charity!—where it’s needed by more people. That could help to stem migration out of poor and troubled countries.

So where does Canada stand now?

Growth for its own sake and misdirected spending are delusional. Like most western democracies, has Canada been importing the Third World for the benefit of the rich and to the detriment of everyone else? Should Canada bring millions of immigrants to live in a country with the world’s highest per capita consumption of energy? Does environmentalist David Suzuki have it right when he says, “Canada is full!”

Colin Alexander was formerly publisher of the Yellowknife News of the North. His current book project has the working title Justice on Trial: Tales from shark-infested waters—Time to rein in the predators. 

Photo by Nicholas Cappello on Unsplash.