OPTIMUM POPULATION THEORY
For some the theory of optimum population initially developed by Marshall, Sidgwick, Cannan and Gini provides a more realistic alternative to Malthusian and Marxist theories. According to this theory, due to the law of diminishing returns and limited substitutability of factors of production, as population grows the long run tendency of per capita income is to decline. For the reason of economy of scale, initially for some time the per capita income may also rise as population grows, but beyond reaching a certain size, further growth of population would lead to reduction in per capita income (Figure 8.1). This size is the optimum size of population. Beyond this, there is a surplus population. Below this there is a shortage of population (UN, 1973). Some scholars use welfare measures other than per capita income but the logic of optimum population is the same.
Box 8.1 presents the economic logic behind optimum population theory.
Optimum population theory is part of an economic theory of production. It assumes: (a) there are five factors of production, namely, land, labour, capital, organization and enterprise; (b) one single factor produces nothing; (c) cost of production falls with increasing use of one factor and increases thereafter; (d) perfect substitution is impossible; (e) optimum point arises when the ratio of marginal productivity of factor A to that of B is the same as the ratio of the price of factor A to that of B; and (f) population is a non-specific factor which can be put to alternative uses. The optimum population theory draws attention to situational factors and gives an objective ideal according to which changes in population should be controlled. |
