# Adam Smith, Julian Simon, Pro-Natalism **URL:** **By** Nicholas R. Swanson **Published:** May 22, 2024 --- Nicholas Swanson explains Adam Smith’s views on population growth, detailing how increases in population can provide a population with many benefits that can be stifled by government regulations. Julian Simon is renowned for his arguments in favor of population growth. In the acknowledgments to _The Ultimate Resource_, he credited Adam Smith as a principal inspiration. So, what did Smith think about population? Although Smith scholarship has blossomed over the last many decades, assessments of his big ideas tend not to mention his views on population. The editors of the Glasgow edition of _The Wealth of Nations_ (_WN_) write: “Increasing population, whether a cause of economic growth, or as something to fear, was not highlighted” (Campbell and Skinner 1981, 48). Useful articles on Smith and population were, however, written by Joseph Spengler (1970; 1976). Smith does not dedicate a chapter in either of his major works specifically to population. Nevertheless, he discusses population throughout _WN_. As for _The Theory of Moral Sentiments_ (_TMS_), his discussion is more sparing but no less important, for Smith brings up population at key moments in _TMS_. I contend here that Smith was resolutely pro-natalist and that his sentiments closely resemble those of Julian Simon. ## Smith’s General Approach to Population The first reference to population in _TMS_ comes in a footnote in which Smith declares that “self-preservation, and the propagation of the species, are the great ends which Nature seems to have proposed in the formation of all animals” (_TMS_ 77.10n). Later, in the “invisible hand” paragraph of _TMS_, Smith refers favorably to population growth no less than three times. Smith writes that those pursuing honest income “are led by an invisible hand to… afford means to_ the multiplication of the species_” (_TMS_ 184-185.10, italics added). _TMS_’s invisible hand paragraph shows how focal population was to Smith. If the invisible hand is Smith’s “central idea” and Smith “thought so” too (Klein and Lucas 2011, 44), the inclusion of population not once but three times in that paragraph should not be overlooked. Smith was highlighting the centrality of population as both a cause and consequence of his liberal plan. Maria Pia Paganelli (2021) has argued that Smith uses population in _WN_ as a “proxy” for material betterment, analogous to how we now use Gross Domestic Product. In _WN_, in the chapter on wages (82.1-104.57), Smith posits that population growth is regulated primarily by the growth rate in the demand for labor as reflected in wage rates. When demand for labor is growing, wage rates will rise to “encourage… the marriage and multiplication of labourers, as may enable them to supply that continually increasing demand by a continually increasing population” (_WN_ 98.40). When the demand for labor falls, the reverse ensues. If there is a Smithian population principle, it appears to be the following: population growth moves with wage rates, which increase when there is growing demand for labor and decrease when there is falling demand for labor. High “liberal” wages would “encourage propagation… \[and\] increase the industry of the common people” (_WN_ 99.44). Thomas Malthus was concerned about the “constant tendency in all animated life to increase beyond the nourishment prepared for it” (1992 \[1803\], 14). Smith, however, diverged from such Malthusian pessimism. Smith conjectured that “Every species of animals naturally multiplies in proportion to the means of their subsistence, and no species can ever multiply beyond it” (_WN_ 97.39). The demand for labor as reflected in wage rates provided a natural check to population growth. Smith, nonetheless, was more confident that sustenance and other “necessaries of life” could outpace population. His confidence arguably stemmed from his bullishness about the prospects of technological change and innovation (see discussion in Waterman 2012). > If there is a Smithian population principle, it appears to be the following: population growth moves with wage rates, which increase when there is growing demand for labor and decrease when there is falling demand for labor. ## More People Mean More Discovery Julian Simon (1996), Paul Romer (1990; 1994), Michael Kremer (1993), and Bryan Caplan (2011) have all been associated with the notion that population growth enables economic growth by adding to the stock of individuals hitting upon new ideas. Is that thesis present in Smith? Smith declares in the title of the third chapter of WN “\[t\]hat the Division of Labour is limited by the Extent of the Market” (31). That claim implies one about population: “The extent of their market… must for a long time be in proportion to the… populousness of that country” (_WN_ 34.4). To increase the division of labor you need a larger population to fill jobs (_WN_ 253.15) and to demand the added goods and services (_WN_ 31.1). Population growth creates new demand and new production to pay for that increased demand—thereby making it worthwhile for firms to scale up their operations and extend the division of labor. The consequence thus of a larger population is a wider market and a greater division of labor. Increased specialization yields for Smith three particular benefits: (1) workers become better skilled, (2) task switching, which prompts some to “saunter” and takes time even for those who don’t, is reduced, and (3) new machines and methods augmenting productivity are invented (_WN_ 17.5-22.9). The third effect of the division of labor—better production methods—approximates closest to later economists’ language about more people yielding more ideas. Smith seems to largely agree with that point: “The greater their number, the more they naturally divide themselves into different classes and subdivisions of employment. More heads are occupied in inventing the most proper machinery for executing the work of each, and it is, therefore, more likely to be invented” (_WN_ 104.57). Smith understood that more people would mean the invention of new machines both by “common workmen” (_WN_ 20.8) and by a newly established and growing class of researchers and inventors (_WN_ 21.9). ## Increasing Returns, Productivity Boosts, and Wholly New Horizontal Axes Malthus’ chief fear was that population size would outstrip food supply because land is limited and there are decreasing returns to scale when attempting to expand the food supply (1992, 17). Smith seems to have been of the contrary view, that sustenance did not face a strict upper bound but rather could (perhaps continuously) be expanded upwards through innovation and economic growth. The conviction that increasing returns are perennially possible is at the heart of Smith’s pro-population growth rhetoric. As Smith writes, “The liberal reward of labour, by enabling \[parents\] to provide better for their children, and consequently to bring up a greater number, naturally tends to widen and extend those limits \[of subsistence\]” (_WN_ 98.40). Smith focuses in a particular way on agricultural innovation. He reflects on the auspicious arrival of the potato to Europe via the Columbian Exchange: “\[T\]he same quantity of cultivated land would maintain a much greater number of people” if potatoes are used compared to wheat (_WN_ 176-177.39). Smith predicted “Population would increase” if potato cultivation became at least as common as wheat cultivation (_WN_ 176-177.39). Nathan Nunn and Nancy Qian (2011) have estimated that “the introduction of the potato explains 25–26 percent of the increase in Old World population between 1700 and 1900” (643). The potato represents a new good, a new horizontal axis, and fresh blocks of consumer and producer surplus. As Smith says elsewhere, “It is the great multiplication of the productions of all the different arts… which occasions… that universal opulence which extends itself to the lowest ranks of people” (_WN_ 22.10). > The long-run consequence of population growth is new methods, new products, lower prices, and improved living standards for all. Portrait of Julian Simon *Julian Simon is renowned for his arguments in favor of population growth.* Julian Simon’s general approach to population was that when a soul is added to humankind, that soul, besides her own actualization of the blessing of life, is, in the long run, a net positive to the material well-being of others. In the short run, more people mean greater demand for goods and services which impels greater scarcity and price rises. But, assuming freedom and the profit motive, the short-run problem becomes an invitation for a solution. Rising prices evoke conjoining innovation; thus, the long-run consequence of population growth is new methods, new products, lower prices, and improved living standards for all. The creativity of the added soul may itself be a prodigious source of the improvements. Smith’s ideas are compatible with Simon’s broad story. G.B. Richardson (1975) points out that “Smith presumed… that a sustained increase in the demand for a good would generally permit a realization of hitherto unexploited scale economies and thereby lower its price” (353). Smith appears to have thought that the long-run supply curve slopes downwards: in the long run, lower prices come at higher quantities supplied. One passage in _WN_ demonstrates the point aptly: > The increase of demand, besides, though in the beginning it may sometimes raise the price of goods, never fails to lower it in the long run. It encourages production, and thereby increases the competition of the producers, who, in order to undersell one another, have recourse to new divisions of labour and new improvements of art, which might never otherwise have been thought of. (748.26; see also 260-61.4, 277.4) Thus, since population growth yields increased demand, the long-run effect of population growth is a net positive for Smith, as it is for Simon, in that it creates the incentive for innovations that “might never otherwise have been thought of.” Notice that Smith speaks of improvements being “thought of.” Across _WN_ and the _Lectures on Jurisprudence_, he uses the “thought of” formulation several times (DelliSanti 2021). If the uniquely human act of thinking is the fundamental ingredient for improvements in material prosperity, Smith is putting his finger on Simon’s most famous idea: the human being, specifically the human mind, as “the ultimate resource.” The three benefits bred by the division of labor are themselves linked to human thinking. Smith’s reverence for human thinking likewise shows in his remarks about “\[t\]he first invention of such beautiful machines” as clocks and watches: “the work of deep thought and long time, and may justly be considered as among the happiest efforts of human ingenuity” (_WN_ 139–40.16). Smith similarly underscores how the source of the division of labor—the propensity to “truck, barter, and exchange”—is distinctly human. Smith’s claim that “a philosopher is not in genius and disposition half so different from a street porter” (_WN_ 30.5), beyond what it says about the division of labor, can be read as an attempt to sacralize the human being and isolate the human category from other categories of being, for “\[n\]obody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog” (_WN_ 26.2). ## Freedom and Population Growth Simon argued that “\[t\]he world’s problem is not too many people, but lack of political and economic freedom” (1996, 11). Restrictions constrain people’s natural abilities, deactivate their incentives, and misdirect their effort to innovate when population size increases. There are several passages in _WN_ that signal Smith would have likely been in Simon’s camp. The clearest thread relates to free trade. Smith forewarns on import quotas: “To prohibit by a perpetual law the importation of foreign corn and cattle, is in reality to enact, that the population and industry of the country shall at no time exceed what the rude produce of its own soil can maintain” (_WN_ 463.22). James Buchanan and Yong Yoon (2000) argue that Smith’s view was that restrictions on free trade necessarily “reduce the potential for the exploitation of the inexhaustible advantages of specialization” (47). Restrictions obstruct the division of labor as do “natural boundaries,” such as “an arm of the sea or a ridge of high mountains” (_WN_ 157.58). For Smith, unimpeded free trade enables “generalized increasing returns” to take hold because specialization is greater in such an environment (Buchanan and Yoon 2000, 47). Thus, Smith saw free trade as enabling a larger population and protectionism as dampening specialization that makes possible population growth. Smith likewise condemned subsidies given to domestic wheat producers exporting to the foreign market. The goal of such subsidies was to enable domestic wheat producers to lower their prices in the foreign market and thus gain a competitive advantage. Smith explains that the subsidies were financed by imposing a considerable tax on wheat purchases within Great Britain. Smith speculates that such policy could have either of two effects—both bad for population: “So very heavy a tax upon the first necessary of life, must either reduce the subsistence of the labouring poor, or it must occasion some augmentation in their pecuniary wages, proportionable to that in the pecuniary price of their subsistence” (_WN_ 508.8). In other words, the tax will (1) impoverish the laboring poor by increasing their costs, or it will (2) lead to higher wages (the increase corresponding to the tax) for the laboring poor. If (1) holds, the tax will “reduce the ability-of the labouring poor to educate and bring up their children, and must, so far, tend to restrain the population of the country” (_WN_ 508.8). If (2) holds, the tax will “reduce the ability of the employers of the poor, to employ so great a number as they otherwise might do, and must, so far, tend to restrain the industry of the country” (_WN_ 508.8). For Smith, protectionist policies are generally harmful for population. Wheat subsidies had to be paid for somehow, and the effect of imposing an excise tax on wheat for British citizens was to hurt the poor above all. The effect of either bad outcome once again would be to depress population. ## Love of Life Besides the economic reasons Smith favored population growth, he seems to have been a pro-natalist for at least one other reason: he thought human life was good and worthwhile in itself. An additional mouth means an additional person, and that means an additional soul, and an additional conscience, which Smith said was a “representative” of the impartial spectator (_TMS_ 215.11). “The all-wise Author of Nature… has made man… the immediate judge of mankind; and has… created him after his own image” (_TMS_ 130.31). In Smith, the good corresponds to what is pleasing to the universal beholder, who is benevolent toward his creatures. God’s attitude would seem to be: The more, the merrier. One senses a satisfaction when Smith writes of the British colonies in North America: “Those who live to old age… frequently see from fifty to a hundred, and sometimes many more, descendants from their own body” (_WN_ 88.23). And Smith was optimistic about the life experience of humans: > Take the whole earth at an average, for one man who suffers pain or misery, you will find twenty in prosperity and joy, or at least in tolerable circumstances. No reason, surely, can be assigned why we should rather weep with the one than rejoice with the twenty. (_TMS_ 140.9) ## Endnotes Buchanan, James M., and Yong J. Yoon. 2000. A Smithean Perspective on Increasing Returns. _Journal of the History of Economic Thought_ 22(1): 43–48. Campbell, R. H., and A. S. Skinner. 1981. Introduction. In _An Inquiry into the Nature and Causes of the Wealth of Nations_, edited by R. H. Campbell and A. S. Skinner, 1-60. Indianapolis: Liberty Fund. Caplan, Bryan. 2011. _Selfish Reasons to Have More Kids_. New York: Basic Books. DelliSanti, Dylan. 2021. The Dynamism of Liberalism: An Esoteric Interpretation of Adam Smith. _Journal of Economic Behavior and Organization_ 184: 717–726. Klein, Daniel B., and Brandon Lucas. 2011. In a Word or Two, Placed in the Middle: The Invisible Hand in Smith’s Tomes. _Economic Affairs_ 31(1): 43-52. Kremer, Michael. 1993. Population Growth and Technological Change: One Million B.C. to 1990. _Quarterly Journal of Economics_ 108(3): 681-716. Malthus, Thomas Robert. 1992 \[1803\]. _An Essay on the Principle of Population_, edited by Donald Winch. Cambridge Texts in the History of Political Thought. Cambridge, UK: Cambridge University Press. Nunn, Nathan, and Nancy Qian. 2011. The Potato’s Contribution to Population and Urbanization: Evidence from A Historical Experiment. _The Quarterly Journal of Economics_ 126(2): 593-650. Paganelli, Maria Pia. 2021. Population as a GDP Proxy in Adam Smith. _Journal of Scottish Philosophy_ 19(2): 115-123. Richardson, G.B. 1975. Adam Smith on Competition and Increasing Returns. In _Essays on Adam Smith_, edited by A.S. Skinner and T. Wilson, 350-360. Oxford: Clarendon Press. Romer, Paul M. 1990. Endogenous Technological Change. _Journal of Political Economy_ 98(5): 71–102. Romer, Paul M. 1994. 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