The concept of countries having a point of optimum population is summarised in Cannon’s theory of optimum population which explores the relationship between a country’s population and the resulting per capita income. According to Cannon’s theory, the optimum population is the population size that produces maximum returns in the form of income. It is “the best and the most desirable size of a country’s population consistent with its resources”. This optimum population size makes the most efficient use of available resources in the country and yields maximum per capita income. Any deviation above or below the optimum size will cause there to be a decrease in income per person. Thus, population sizes above or below the optimum level are either over-populated or under-populated.
The graph shows that the highest point of the curve (M) is the point of optimum population where per capita income is at its peak. To the left of this maximum point, the per capita income is reduced, implying that the country is under-populated as it is able to increase population until it reaches the optimum level where resources are fully utilised. Therefore, a country is considered to be under-populated if an increase in the number of people in a country is met with an increase in per capita income. When the population is not large enough, there are not enough people to exploit all the available resources in the country with maximum efficiency, causing there to be reduced output produced and lower per capita income. Under-population causes there to be a shortage in the supply of labour and hence specialization of labour is not possible, so production methods are not operating at their maximum efficiency. To the right of the optimal point, there is also a reduction in per capita income, demonstrating that an increase in population above the maximum point leads to a decline in returns. This is due to the labour force being too large to work efficiently and produce maximum output and per capita income. Therefore, points above the highest point is the stage of over-population where there is lower per capita income as a result.
The theory of optimum population can be explained by the law of diminishing returns which states that in the short run when variable factors of production, such as labour, are added to a stock of fixed factors of production, land and capital, total and marginal output will initially rise and then fall. Diminishing returns of labour occurs when marginal product of labour starts to decline. An increase in the size of the population will cause an increase in the size of the labour force so there will be a larger number of workers. This will increase the output in a country’s economy and will increase per capita income but only up to a certain point. After this maximum point is reached, things such as increasing difficulties in monitoring the large work force, more frequent breakdowns due to over-utilisation of capital, or inefficient workers as a result of overcrowding of work spaces will inevitably occur. The marginal returns to each extra unit of labour input gets increasingly smaller and eventually turns negative, resulting in lower per capita income in the economy. Therefore, at the stage of over-population, the output from each additional unit of labour will diminish and the output per unit of labour (average product of labour) will also diminish.
There are two important assumptions for the theory to hold. The first is that as the size of the population increases, the percentage of the working population to total population remains the same. The theory also assumes that there is no change in natural resources, capital and technology. In other words, an increase in the population does not alter the available natural resources, capital and technology. However, this assumption is a criticism to Cannon’s theory since it reduces the practicality of the theory because in a realistic economy, factors such as the stock of capital and technology are constantly changing. So, it is not possible to exactly determine and fix the optimum size of population because it is not always a constant point. For example, if due to inventions in a country there are developments in the methods and techniques of production used, the average product of labour might increase and increase the level of per capita income so that the optimum point becomes higher. In addition, if the amount of capital or natural resources in an economy increases, this will also lead to the optimum point being higher than before. As a result, what may be the optimum at one point in time might become less or more than the optimum over a period of time.
The figure shows an upward shift in the average product curve due to these changes. The curve shifts up from AP to AP1 and the optimum level rises from point L to point L1 which shows the maximum per capita income at the new optimum level of population at P1. Hence, the optimum point is not a fixed but movable point as all these factors are constantly changing, so the optimum must be fluctuating. Therefore, it is difficult to determine to the optimum population of a country at any time.
Another theory exploring the population of a country is the Malthusian theory which considers the relationship between the growth in food supply and in population. In Malthusian theory, the question of over¬population is discussed with reference to a country’s food supply. According to the theory, a country is said to be overpopulated if it doesn’t produce sufficient food to feed the population. Malthus stated that populations increase in geometric proportions while the food resources available for them would increase only in arithmetic proportions. In simple words, if human population was allowed to increase in an uncontrolled way, then the number of people would increase at a faster rate than the food supply. A point would come when human populations of the world reach the limit up to which food sources could support it. Any further increase would lead to population crash caused by natural phenomena like famine or disease.
The figure demonstrates population growing exponentially whereas the food supply is growing linearly. At the point of intersection of the two lines, this is where the Malthusian catastrophe occurs as the population begins to outrun the food supply causing famine in the country. Hence, at this stage of population, population is too high, and the country is overpopulated.
However, the Malthusian theory of population lacks validity as he failed to predict that there would be an increase in food production in the future due to it being a dynamic economy where factors are changing. Technological improvements in agriculture and advancements in farming techniques has rapidly increased the efficiency of food production and has enabled living standards to rise alongside population growth. Thus, the Malthusian catastrophe is prevented, and the supply of food today is capable of meeting the population’s needs in a modern economy due to the improvements arising from the Industrial revolution.
The figure shows the development of per capita income from the beginning of recorded human history to the present. Till the 1800s, the income per person almost remained constant and follows a Malthusian Trap. Thus, for most of recorded human history, real income per capita did not rise and average living standards in 18th century England were not significantly higher than those in ancient times. But after the Industrial Revolution, new improved technology caused food production to hugely increase which subsequently resulted in a continuous upward trend in the population and per capita income. Therefore, the Malthusian Trap breaks after the 1800s.
The Industrial revolution was the transition to new manufacturing processes in the 18th century. In the 18th century, Britain became a dynamic economy and innovations in agriculture resulted in increases in crop yields, thus an increase in the supply of food. Mechanisms such as selective breeding and crop rotation were used to achieve this. So, the existing trends before the 1800s, which Malthus observed, failed to continue in the future and a rise in the population was followed by a rise in crop yields. Therefore, there may be no such thing as overpopulation if population growth can be supported by improvements in technology.
While both theories address the existence of a point of over-population, the optimum theory of population is considered as an improvement over the Malthusian theory. One reason for this is because Malthus’s theory is viewed as mainly theoretical and lacks practicality. This is because he considered any increase in the size of the population to be detrimental to the country as he thought it would cause starvation as a result of a lack of resources being able to support the population. Malthus wrote, “The table of nature is laid for a limited number of guests and those who come uninvited must starve.” Conversely, the optimum theory is seen as more practical because it regards an increase in population as not only desirable but also necessary for the maximum utilisation of the country’s natural resources to be met.