It is a common assumption that there are too many people in the world. Possibly because, for most of history, humanity has had to fight for its existence and whatever meager resources came its way. Catastrophe and starvation were only ever one misstep away.
But what if overpopulation was no longer an issue? What if there aren’t enough people on the planet?
Elon Musk, in typical contrarian fashion, tackles this issue head-on. He takes the view that there is a growing shortage of humans. He goes on to say, quote:
“The foundation of the economy is labor, the primary resource constraint is labor. I can’t emphasize this enough – there are not enough people. One of the biggest risks to the population is the low growth rate and the rapidly declining growth rate. And yet so many people, including smart people, think that there are too many people in the world and think that the population is growing out of control. It’s completely the opposite. Please look at the numbers. If people don’t have more children, civilization is going to crumble.“
Elon believes there are too few people on the planet. He believes that humans are, in fact, the bottleneck for getting things done. With more people, there would be more innovation, output, and progress, which would lead to a brighter future and better life for all.
This can be corroborated in part by the observation that people are so extremely expensive to employ. In line with supply and demand – human labor costs so much simply because of the scarcity of productive people in the world. Instead, imagine a scenario where people were super cheap to hire. This would catalyze a boom in productivity and development and significantly drop the prices of the resultant products and services.
In most cases, the major cost component of any product or service is the cost of the human contribution that goes into its production. If humans did not cost so much, then things would be a lot cheaper, and growth would soar.
The argument is that humans would need significantly less money to live a great life. The difficulty with this argument is that it is circular in nature, and so it is hard to disentangle and test. People are the primary contributor to output, and they are also the primary consumer and beneficiaries of that output. So if input costs go up, then also the output costs rise too – and a circular inflationary spiral ensues.
People always fear the replacement of human labor with cheaper forms of labor and machines. Instead of being the existential threat that it’s made out to be, maybe it’s actually the solution. Whatever the case, salaries in the West are enormously expensive. Every business owner would agree that high salary costs and labor shortages are common challenges for companies. Access to affordable Human Resources would be a golden ticket for most – especially for smaller, growing, and resource-constrained businesses.
Elon’s solution is robots. Instead, I suggest offshoring.
Why go to the trouble of building a robot when there are 8 billion highly capable candidates in the world already? For employers in the West, they have an unfair advantage over the rest of the developing world. They can take advantage of global cost structures and access competent offshore staff today – for a fraction of the cost. And the batteries are included.
The question for your business
What could you do if your staffing costs were halved?