Compound Interest and the Population Problem

If in 1492 Christopher Columbus had placed a single penny in a 6 percent interest-bearing account and instructed someone to remove the interest every year for safekeeping, when he retired 515 years later in 2007, his retirement fund would be worth 32 cents.

But if he had placed the same penny in the same interest-bearing account but left the earned interest to compound — earning interest upon the interest — his retirement fund in 2007 would be worth $107,775,640,215.56 (almost $108 billion). That is from a single penny deposited!

The Columbus example is just to show the power of compounding. Which now brings me to my main topic. I was reading a transcript of a lecture by CU’s Professor Emeritus Al Bartlett called Arithmetic, Population, and Energy. In it he uses the fact of compound growth to show that eventually we will all have exactly one square meter of space, and references this 1971 New Yorker cartoon.

Here is a section of the lecture that asks what can we do to prevent this impossible situation. It’s definitely food for thought, although no one seems to want to think about it. Bartlett has been like a prophet in the wilderness, mainly ignored, not because his arguments are invalid but because people don’t want to face them.

As Bartlett says, “growth control is very controversial, and I treasure the letter from which these quotations are taken. Now, this letter was written to me by a leading citizen of our community. He’s a leading proponent of “controlled growth.” “Controlled growth” just means “growth.” This man writes, “I take no exception to your arguments regarding exponential growth.” “I don’t believe the exponential argument is valid at the local level.” So you see, arithmetic doesn’t hold in Boulder.”

So here is the section of the lecture that I wanted to share:

There’s a very profound lesson in that cartoon. The lesson is that zero population growth is going to happen. Now, we can debate whether we like zero population growth or don’t like it, it’s going to happen. Whether we debate it or not, whether we like it or not, it’s absolutely certain. People could never live at that density on the dry land surface of the earth. Therefore, today’s high birth rates will drop; today’s low death rates will rise till they have exactly the same numerical value. That will certainly be in a time short compared to 780 years. So maybe you’re wondering then, what options are available if we wanted to address the problem.

In the left hand column, I’ve listed some of those things that we should encourage if we want to raise the rate of growth of population and in so doing, make the problem worse. Just look at the list. Everything in the list is as sacred as motherhood. There’s immigration, medicine, public health, sanitation. These are all devoted to the humane goals of lowering the death rate and that’s very important to me, if it’s my death they’re lowering. But then I’ve got to realise that anything that just lowers the death rate makes the population problem worse.

There’s peace, law and order; scientific agriculture has lowered the death rate due to famine—that just makes the population problem worse. It’s widely reported that the 55 mph speed limit saved thousands of lives—that just makes the population problem worse. Clean air makes it worse.

Now, in this column are some of the things we should encourage if we want to lower the rate of growth of population and in so doing, help solve the population problem. Well, there’s abstention, contraception, abortion, small families, stop immigration, disease, war, murder, famine, accidents. Now, smoking clearly raises the death rate; well, that helps solve the problem.

Remember our conclusion from the cartoon of one person per square meter; we concluded that zero population growth is going to happen. Let’s state that conclusion in other terms and say it’s obvious nature is going to choose from the right hand list and we don’t have to do anything—except be prepared to live with whatever nature chooses from that right hand list. Or we can exercise the one option that’s open to us, and that option is to choose first from the right hand list. We gotta find something here we can go out and campaign for. Anyone here for promoting disease? (audience laughter)

We now have the capability of incredible war; would you like more murder, more famine, more accidents? Well, here we can see the human dilemma—everything we regard as good makes the population problem worse, everything we regard as bad helps solve the problem. There is a dilemma if ever there was one.

The one remaining question is education: does it go in the left hand column or the right hand column? I’d have to say thus far in this country it’s been in the left hand column—it’s done very little to reduce ignorance of the problem.

Full transcript of Arithmetic, Population, and Energy.