Economists like Prof. Sidgwick, Edwin Cannan, Robbins, Dalton and Carr-Saunders have rejected the Malthusian theory of population. They proposed the modern theory called “The optimum theory of population”.
Optimum Population– Car-Saunders defines optimum population as “that population which produces maximum economic welfare”. By optimum population we mean the ideal number of population that a country should have considering its resources. The optimum size of population is which along with the existing natural resources and a given state of technology, yields the highest income per capita in a country. The optimum population means the best and the most desirable size of a country’s population. The optimum theory of population is based on two important assumptions. First, it is assumed that the proportion of working population to total population remains constant as the population of the country increases. Secondly, it is assumed that as the population of a country increases, the natural resources, the capital stock and the state of technology remains unchanged.
As the population of a country increases, the number of worker also increases. At the same time, the average product per man increases, but beyond that point it starts diminishing. Edwin Cannan says,” at any given time, increase of labour up to a certain point is attended by increasing proportionate returns and beyond that point further increase of labour is attended by diminishing proportionate returns. At that very point where the average productivity of labour begins to decline, the income per capita is the highest. This is the point of maximum returns or optimum population.”
The optimum population is liable to change in accordance with the quantitative and qualitative changes taking place in the means of production. The optimum point, therefore, keep shifting upwards or downwards. We cannot fix the optimum population of a country on a permanent basis, because its productive factors, techniques keep changing from time to time.
Under population- If the population of a country is below the optimum, i.e. below what it ought to be, then the country is said to be under-populated. The number of the people is not sufficient to utilize the resources of the country. The resources are vast, much can be produced, but men are not sufficient. The community will not be able to reap the economies of large-scale production. Under such conditions, an increase in population will be followed by an increase in the per capita income. When the shortage has been made up, the per capita income will reach the maximum and the optimum is reached.
Over-population- If the population still goes on increasing and the optimum is exceeded then there will be over-population stage. There will be too many people in the country. The country’s resources will not be sufficient to provide gainful employment to all. The average productivity will diminish, per capita income will diminish; standard of living will fall. These are the symptoms of over-population. Food shortage, diseases and death, overstraining resources, increase in dependents, open and disguised unemployment are the economic effects of over population.
Both under –population and over-population have disadvantages. It is the optimum population, with the highest per capita output, that is the best for a country to aim at. The concept of optimum population, under-population and over-population comprises the modern theory of population.
