Thursday, 19 July 2012

Man I love Crowds!!!

We learnt this week that the last 10 years have seen the biggest increase Britain’s population since the Industrial revolution. There are now, according to the 2011 national census, 56.1 million living in England and Wales, and an estimated 63.1 million in the whole of the UK. New births and immigration have added a city the size of Manchester to the population every year since 2001 – a 4 million people over the decade. Between 1991 and 2001 total population growth was a meagre 1.6 million. Without doubt, there are more human beings living and working on this blessed plot of ours than ever before.
                Cue: much weeping, wailing and gnashing of teeth about Britain being overcrowded, about the heavy strain on our infrastructure, about foreign students at our places of learning, about the strain on the environment, and about the vast swarms of migrants eating out our substance etc, etc.
                Now, I am not adverse to a spot of teeth gnashing, particularly when trying to get to the office by the Victoria line, and find myself wedged between a tourist with a rucksack and a sullen business man, while gazing at some youngster’s ear, which, of course, always has a wire coming out of it. The morning crush was the bane of my existence, and so I have recently taken to walking to work instead.
                With my experience of commuting in mind, I find it perfectly understandable that people are concerned that there are too many people around. Parents will find it harder to get their children a place in school, patients are finding it harder to get beds, and housing is getting ever less affordable, as the population has grown, but the supply of accommodation has not. These are serious problems related to the increase in population, which cannot be solved as easily or as cheaply as an unpleasant journey on the tube – but Malthusians are wrong; the problems are not insurmountable. We mustn’t be too pessimistic about the population growth. Growth is far more desirable than shrinkage. With the right institutional framework, an increased population can be accommodated. We need more houses, more schools and more hospitals.  We need effective border controls so that people are not here illegally. But one thing we do not need is strict long-term caps on migration.
Human beings are the ultimate economic resource. More people, with more and different skills and ideas, and more energy, should mean more hours worked, and an increase in aggregate demand.  Where there are crowds, there is business. It would be preferable of course, if the average age of the country was a youthful 25 rather than a middle-aged 39.  But an increased population is a supply side reform to boost economic growth, and we know how desperate the country is for economic growth! Many have long lauded the benefits of open and free trade of goods, conducted in accordance with clear standards and practices. So why, should we get overly protectionist about the movement of people?