COMMENTSON

POPULATIONPRESSURE,SAVINGS,INVESTMENTAND
GROWTHINTHEISLAMICWORLD:SOMEEMPIRICAL
EVIDENCE
DISCUSSANT:ASADZAMAN
Letmebeginbycongratulatingtheauthorsforprovidinganexcellentliterature
reviewonaveryimportanttopic,namelytherelationbetweenpopulationgrowthand
economic growth. In particular, the authors show how the theoretical arguments
showing that population growth is harmful are inconclusive, and the empirical
evidence is weakorcontradicts thebasic premises onwhich thewholedebate is
founded.Ihaveprovideddetailedparagraphbyparagraphcommentstotheauthors
onthematerialofthearticle.HereIwouldliketoaddressmoregenerallythecontext
withinwhichthisarticlearises.Beforestartingonspecifics,Iwouldliketomentiona
generalprinciple.Ihavefounditusefultoviewresearchasaconversation.Inthis
conversation,weneedtoknowwhatthetopicsofinterestare,andalsothepeople
whomtheyinterest.Itisalsocrucialtoknowwhytheyareofinterest.Insomesense,
thisisclosetothemethodsoftheMuhaddatheen,whoanalyzedtheintegrityofthe
transmittersofknowledgefirst,andthecontentslater.IntheWesterntradition,only
thecontents orthe text is opentoanalysis andthe transmitters are notgenerally
examined. However, I have found that a great deal of additional insight can be
obtainedonthetopicunderdiscussionbylookingatthepersonwhoisresponsiblefor
formulatingagiventheory.Withthisinmind,letmebeginwithMalthus,whois
clearlythefirstandthefounderoftheideathatpopulationgrowthmayhaveharmful
effects.
Malthus:
Thomas Robert Malthus (17661834) was an English political economist and
historian who in 1798 published a book called "An Essay on the Principle of
Population".ThisdocumentstartedareactionagainsttheearlierwritingsofGodwin,
Condorcet and others, who reinforced the principles of emancipation and
enlightenment which ensued after the French Revolution. Malthus proposed that
poverty,andtherebyalsoviceandmisery,areunavoidablebecausepopulationgrowth
willalwaysexceedfoodproduction.Thechecksonpopulationgrowthwerewars,
famine,anddiseases.Malthusproposed"sexualabstinence"fortheworkingclassasa
meansbywhichthepopulationexcesscouldbediminishedandabalanceachieved.In
thisway,the"lower"socialclassesweremadetotallyresponsibleforsocialmisery.

Malthus'presentationshadtheimpactofabomb;hismathematicalandgeometrical
explanations anddiagrams hadapowerfulpersuasiveeffect.Manyofourpresent
Director General, International Islamic University, Islamabad, Pakistan.

117

authoritiescontinueuseitasabasisofoperation.YetneitherMalthusnorhislater
disciplesevermanagedtoputforwardanyscientificproofforhistheory,andinfact
excellent scientists have at various times disproven Malthus' theory. All of the
specificpredictionsofMalthushaveturnedouttobewrong.Forexample,Malthus
arguedthattheislandofBritaincouldnotsustainapopulationof20million,but150
yearslaterthepopulationwasmorethantripleMalthus'ceiling.Alsothefoodto
populationratioappearstohavebeenstableoverthepastseveralcenturies,contrary
toMalthus.
However,withthebook,Malthuscreatedanatmospherewhichnotonlyprevented
arealsolutiontothesocialproblems,butalsopromotedtherepressivelegislation
whichworsenedtheconditionsofthepoorinEngland.Itwasreasonedthatbetter
conditionsforthepoorwouldonlyencouragethemtofurtherpropagate,puttingthose
whowerecapableofworkatadisadvantage.Malthusianismthenmovedforwardto
achieveitsgreatesttriumphin1834withanewlawprovidingfortheinstitutionof
workhouses for the poor, in which the sexes were strictly separated to curb the
otherwiseinevitableoverbreeding.Thistypeofthinkinghasaninherentdevaluation
ofhumanlifethroughfearthattheeverincreasingpopulationoflowerclasseswill
devourthemorecivilizedor"better"people.
TextandContextforMalthus:
WhatdowelearnbystudyingthewritingsofMalthus?Thetext(whichisunder
discussion by Pirasteh and Karimi) is that population growth will outstrip food
growth,therebycausingvarioussocialproblems.However,thecontextmakesclear
that Malthus is not concerned with population growth per se,but rather with the
growthoflowersocialclassesandtheeclipseofthearistocracy.Furthermore,his
theories were not based on any evidence at all Malthus had NO data about
populationgrowthratesorfoodgrowthrates.Itwasmerelywildhypothesiswhich
waslaterdisconfirmedbyempiricalinvestigations.Nonetheless,histheoriesbecame
acceptedandbecamethebasisofcruelandoppressivepolicyinEngland.Fromthe
Islamicpointofview,Allahhaspromisedthatalongwitheverybaby,Hesendsthe
rizqorfoodthiswouldappeartobeprimafaciecontrarytotheMalthusianview.
Inthisconnection,itisimportanttonotetheNobelprizewinningworkbyAmartya
Senonfamines.Asimplistictheorysuggeststhatfaminesarecausedbyscarcityof
foodthatis,whenfoodpercapitabecomeslowduetofailureofcropsforexample.
However,Sensdetailedworkshowsthatthefaminesarecausebythefailureofthe
richtorecognizetherightsofthepoortotheirwealth.
AGENERALWEAKNESSOFNEOCLASSICALMETHODOLOGY
It is especially important for workers in Islamic Economics to be aware of a
generalweaknessinneoclassicalmethodology.Ingeneral,amodelisassessedFIRST
for its conformity to certain a priori assumptions, and then SECOND for its
conformitytoempiricaldata.Furthermore,inconsistencywithempiricaldatacanbe

118

tolerated, but inconsistency with the a priori assumptions is not tolerated. For
example,SubjectiveExpectedUtilitytheoryconformswithaprioriassumptionsof
neoclassical, but fails to make correct predictions about decision making under
uncertainty.However,ithasbeenanuphillstrugglefortheempiricallymoreadequate
ProspectTheoryofTverskeyandKahnemenntobecomeaccepted.Evennow,SEUis
taught in textbooks, and Prospect Theory sometimes gets a footnote or two. The
situationissimilarwithmanyothertheories.Thecentralpillarsofmicroeconomics,
namelyutilitytheoryasadescriptionofconsumerbehavior,andprofitmaximization
asadescriptionoffirmbehavior,havebeenempiricallyrefutedmanytimes.Right
next to the Economics Departments, Business Schools teach radically different
theoriesofconsumerandfirmbehavior.Nonetheless,attemptstomodifytheoriesof
consumerbehaviortomakeitmoreempiricallyvalidmeetwithstrongresistancein
economics. Such alternatives are termed unscientific, because they do not have
maximizationbuiltintothem.
Sincewedonotsharetheideologicalcommitmentsofneoclassicaleconomists,we
neednotusetheirmethodsofevaluationfortheories.Inparticular,weshouldpay
considerablegreaterattentiontoempiricalvalidityorlackthereofintheoriesthatwe
choosetoconsiderfromtheneoclassicaldomain.Especiallyinfieldsliketheeffects
ofpopulationgrowth,wherethereisoftenanefforttoestablishanideawhosevalidity
is taken from granted at the outset, it is essential to be critical. As an important
illustration, wehavehundreds ofarticles purporting toshowthatfreetrade helps
growthanddevelopment.However,asRodriguezandRodrikshowin TradePolicy
andEconomicGrowth:ASkepticsGuidetotheCrossNationalEvidence(2000),the
econometricstudiesareseriouslyflawed.Whatisevenmoreinterestingisthatwhile
theoriginalstudiesarepublishedinrespectablejournals,RodriguezandRodrikhas
notyetbeenpublished.Thisisjustoneofmanyexamplesofthegeneralphenomenon
thatempiricalevidenceforfavoritetheories doesnotreceive criticalexamination,
whileevidenceagainstsuchfavoritesispublishedonlywithgreatdifficulty.
SuccessorstoMalthus
ModerntheoriesupdateMalthusianargumentswithmorecomplexmechanismsto
show why population growth can pose problems for economic development. The
authorsPirastehandKarimidoagoodjobofsummarizingtheseargumentsandalso
showingtheirweaknesses.Inthisconnection,itisnotcleartomewhetherPirasteh
andKarimihavereviewed all relevantliteraturefromeconomicsonly,orwhether
theyhavealsosummarizedtherelevantcontributionsfromthefieldofdemography.
Inanycase,theyhaveshownclearlyhowthetheoreticalargumentspresentedareall
seriouslyflawed.Inaddition,empiricalworkalsofailstoprovideanybasisforbeing
alarmedaboutpopulationgrowth.Thus,theauthorsareledtoconsiderissuesrelated
todemographictransitionasthemodernversionofthepopulationexplosioncrisis.

CorrelationandCausation

119

Workwithinthisdemographictransitionframeworkfacesaserioussimultaneity
problem which has not been addressed by the researchers. It is clear that the
demographic transition itself is caused bydevelopment andgrowth. Theresulting
populationchangescanthencauseeconomicchanges.Inanycorrelationbasedstudy
thereisaseriousdangerofmixinguptheeffectsofthesetwounderlyingcauses:
economicsdevelopmentandtheconsequentdemographicchanges.Inthisconnection
itwouldbeofgreatinteresttostudytheeconomiceffectsofChinasonechildpolicy.
Thereitisclearthattheonechildpolicyisanexogenouspolicyanditseffectscould
perhapsbeisolatedtosomeextentfromtheothereconomicchangessimultaneously
occurring in China. Before coming to any serious conclusions about effects of
population growth,Ithinkitwouldbeessential tostudyindepththeexperiment
carriedoutinChina.Thishasnotbeendonesofartomyknowledge.Tosomeextent,
suchastudywouldbehamperedbythefactthatthedemographicchangesarelong
runeffects andindeed,themaineffectsofthepolicymaybeyettocome.Some
analystsforeseecrisisinthefutureforChinaastheproportionoftheirlaborforce
shrinksdrasticallyinthenextdecadeorso.
EconometricWork
Thefundamentalequationestimatedbytheauthorsisseriouslymisspecified.Itis
thereforeimpossibletoderiveanyconclusionsfromit.Theconsumptionfunctionhas
beenintensivelystudiedforseveraldecades,andmanyelementaryspecificationsofit
havebeenproventobeinadequate.Sincethemainequationforthesavingsrateisin
factjustthecomplementofaconsumptionfunction,allofthisresearchisdirectly
relevant.Oneofthemainmisspecificationsisthelackofawealthvariable,whichhas
beenshowntobesignificantinnearlyallformulations.Itisintuitivelyobviouswhy
wealthwouldbecriticalindeterminingsavingsrates.Amoretechnicalissueisthat
thesavingsrateisexpectedtobestationarywhileGNPpercapitaislikelytobean
integratedvariable.Therecanbenoequilibriumlinearrelationbetweenastationary
andanintegratedvariablesothatthemainequationoftheauthorsismisspecified.
Thefactthatmanyotherauthorshaveuseditisnotsufficienttoallowustouseit.In
fact, as Islamic Economists, it is essential for us to learn to be critical of the
neoclassicaltraditions.Inparticular,thisobservationthatthesavingsrateequationis
misspecifiedisnotsomuchanegativesuggestionrather,itshowsthewayforward.
Sincetheconsumptionfunctionhasbeenextensivelystudied,formsofitwhichare
now consideredwidelyacceptable andhavebeensubjected tonumerous tests are
available.Usingsuchformswouldenablenotonlyavalidcritiqueofexistingstudies,
butalsoenablefurtherworkextendingsuchstudiesonthebasisofempiricallywell
foundedeconometricrelationships.
SOMEFINALWORDS
ThefoundersofAmericanEugenicsSociety,aprogramtobreedabetterhuman
race,wereallopenlyandexplicitlyracist.Onofthemwasthefamouseconomistand
YaleProfessorIrvingFisher,whosaidthatthepurposeofthesocietywasto"stemthe
120

tide of threatened race degeneracy" and to protect the United States against
"indiscriminate immigration, criminal degenerates, and race suicide. It was their
followerswhoinventedthetermPopulationExplosion,eventhoughthegraphof
the population as well as that offood per capita has been smooth and stable for
centuries.Thisracismisbynomeansathingofthepast.CurrentstatementsofUS
militaryleadersshowthattheyvalueonedropofAmericanbloodfarabovethatofthe
lives ofhundred ofthousands ofnonEuropeans.Ontheacademic front, Harvard
Professor Richard J. Herrnstein and Charles Murray authored The Bell Curve:
IntelligenceandClassStructureinAmericanLife(1994).Thisbookmakesanopenly
racistargumentthatNegroesaresubstantially lessintelligent thanwhites.Onthis
basis,ProfessorRichardLynnoftheUniversityofUlsterinNorthernIrelandtoldthe
1998 annual conference of The British Psychological Society that a decline in
populationgrowthinthedevelopedworldcouldleadtoadropinintelligence.The
problemthen,isnotpopulationgrowthperse,butthat "thewrongpeople"are
increasinginnumbers.(whichisafrankheadlinefrom WashingtonTimes of12
January 1998.) This point is vividly illustrated by officially sponsored US
Governmentprograms,brieflydiscussedbelow.
WhiletheUSgovernmentspendsbillionsonpromotingbirthcontrolinLDCs,it's
outreach to Europe and Northern Asia has avery different feel to it. Radio Free
Europe/RadioLiberty,bemoananinsufficiencyofbirths.Twoexamplesarearticles
entitledEstonia:SmallCountryFacesBigProblemInPopulationDecline(Part1)By
BreffniO'RourkeandCzechRepublic:DropInBirthRatesSpellsTrouble(Part2)By
Jeremy Bransten . The titles are selfexplanatory, while the full texts are readily
available on the Internet. To solve the problem of low birthrate in Europe, birth
incentives have been tried in Western Europe and Scandinavia for decades
(simultaneouslywithpromotionofbirthcontrolinLDCs).
IthinkthatpolicyplannersinIslamiccountriesshouldbefullyawarenotonlyof
thetheoriesandtheempiricalevidence,whichhasbeencompetentlysummarizedby
PirastehandKarimi,butalsoofthebackgroundinwhichthesetheoriesanddebates
aretakingplace.

121