The optimum theory of population was propounded by Edwin Cannan and Carr-Saunders. This is also a modern theory of population and Edwin described the population growth in relation to country’s total volume of output. Whereas, the earlier study “Malthusian Theory of Population” by Malthus was a little bit narrow. Malthusian theory’s main focus was on the relationship between population growth and food supply. However, the theory by Cannan and Saunders is an ideal population theory.
Cannan says “that at any given time, we always have a point where we earn the maximum return and at the point, both the increase and decrease in the labor force would diminish the return. So, keeping the capital stock, natural resources, and technology constant, there is an optimum level of population which uses the resources fully and we get the highest level of output.
Contrary to that, there are two other situations stated as underpopulation and overpopulation. When the resources are not utilized fully, it means that a country if facing underpopulation. However, if the country utilized its recourses fully, there is a situation of overpopulation. This is the point where we are facing fall in per capita income. So, optimum population is the ideal size of the population where the output is maximum (per head output). Thus, the wealth and welfare of society also increase. Thus, an optimum theory of population is considered to be the more realistic theory in comparison to the Malthusian theory of population.
Characteristics of Optimum Population:
The optimum theory of population has some main characteristics which we summarize here briefly;
The base of the study:
The theory was based on finding the relationship between the population in a country and its resources at a point in time. However, it has not described the population growth like Malthus which he described in the essay on the principle of population.
It is the ideal no of people where a country uses the resources properly and the output is at its maximum. The population is at its desirable size and the real per capita income of the country is at its maximum. Moreover, the capital stock and technology etc. are constant.
The deviation from optimum population results in over and under population. A country is overpopulated when due to increase in population the real per capita income tends to fall. Thus, when the real per capita income of a country decreases and its population is increasing. The country in that situation will face the problem of overpopulation.
The per capita income increases due to increase in the population. The country will face the problem of underpopulation. Here, as the population increases, the manpower increase and the country uses its resources fully. That is why the real per capita income increases.
Graphical Representation of Optimum Theory of Population:
The optimum theory of population tells us about the ideal size of the population where per capita income is highest. The underpopulation has some disadvantages as one does not utilize the resources fully. The large-scale economies would not be achieved. Moreover, specialization of workers will not be achieved. In case of overpopulation, the resources of the country won’t be enough to meet the requirements of its population. So, optimum level is the ideal level of population.
In the graph above, you can see that op is the optimum population. Thus, at this point, the per capita income is the highest. All the points to the left of the optimum population show the area of underpopulation. You can see that initially, the per capita income is low. Gradually, you can observe the increase in per capita income until it reaches the optimum level. Whereas, opposite to that area to the right side of the optimum population shows the condition of overpopulation. As the law of diminishing returns applies here, you can see that after optimum level the per capita income starts falling. So, OP is the ideal population where the per capita income is the highest.
Assumptions of Optimum Theory of Population:
The optimum theory of population is based on certain assumptions. These assumptions are as follows;
- Based on the assumption, we say that is the direct relationship between the average production and per capita income of the country. This means that if there is any change in productivity, there will be the same amount of change in per capita income.
- The theory works on the law of diminishing returns. Because after some point in time, the law starts its operation. That is, the natural resources, capital, and techniques of production remain constant. The only thing changing is population.
Criticisms of Optimum Theory of Population:
The optimum theory of population was quite popular at times but this theory is also not without criticism. Some of the criticisms of the theory are as follow;
A static Concept:
The concept of optimum population is not relevant or applicable in the real world. The size of the optimum population is dependent on capital recourses and techniques of production etc. however, these factors are constantly changing in the real world. So, the optimum population is not a constant figure. It is something fluctuating. Just because these factors are not constant, so there production would directly make a country over or underpopulated. I.e. if a new economic resource is discovered, then a country will soon face the problem of overpopulation.
One can not measure the size of the optimum population. The optimum population is dependent on resources and techniques of production. So, the level of optimum population would be different for each country. As you know, that each country has different methods of production and different amounts of resources.
The theory focuses on the material things which increase human welfare and real per capita income. However, there are some other factors as well which increases the real per capita income but may not be increasing the human welfare