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After reading this article you will learn about the view of Enke on population.
The name of Stephen Enke is associated with the Tempo model. Tempo is a General Electric Company which is based in Washington D.C., U.S.A. Enke was an economist working in the study centre of this Tempo Company.
Enke considered population control as an essential factor for development in the context of relation between population and development. He believed that population control through development will be more expensive. So he thought that population control should be given the first priority and then only development can be achieved.
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Enke started to work on the Tempo model in 1967. Initially Richard Gind was associated with him in this task. In the beginning, there were two sub-models of the first Tempo model, out of which one sub-model was about economic variable while the second involved demographic variables. In the demographic sub-model, projections about labour-power in future and the age-sex composition of population in each year were made.
Further, they considered two types of output – first, consumption output and second, investment output. According to them, when there is population growth, consumption will rise and so there will be less savings. As a result, a lesser proportion of the national income will be available for investment.
Thus, there will be an inverse relationship between population and investment. They indicated positive relationship between production and population. According to them, the extent of employment is determined by investment, population and capital.
In their model, they determined all the economic variables and reached the conclusion that consumption will increase due to population growth. As a result, investment and employment will decline and so there will be decrease in GNP. With population growth, this type of a vicious circle will start. Thus Tempo-I was a very simple model which did not have several sectors and was based on simple assumptions.
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Enke’s Tempo-I Model:
Enke had considered 17 countries in his Tempo-I Model till 1974,. In this study, private research institutions, government departments of the nations and Tempo Company were associated. These 17 nations included India, Nepal, Indonesia, Costa Rica, Venezuela, Turkey, Columbia, Taiwan, Nigeria, Chile, Bolivia, Tanganika, Peru and Jamaica.
Objectives of Tempo-I Model:
The objectives of Tempo-I Model were as follows:
1. The main objective of the model was to reduce the birth rate so that production and per capita production increase.
2. As the fertility rate reduces,
(i) There will be change in the age structure and composition of the population;
(ii) The proportion of dependents in the population will decline.
(iii) The proportion of economically working population will increase, and
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(iv) Savings will increase.
3. Due to population control, consumption will go down in the short-run. But against this, production will not decrease immediately, because children below 15 or 18 years are not included in the labour force.
4. Due to decline in birth rate, labour power will also decrease but its extent will be very small compared to the increase in capital. So the per capita savings will rise.
In Tempo-I model of Enke, developed or undeveloped sectors, rural or urban sectors, private or government sectors and external or internal sectors were not considered separately.
There are two main sectors in Tempo-II model of Enke:
(1) The Modern Sector, and
(2) the Backward Subsistence Sector.
Both the sectors can be described as follows:
1. The Modern Sector:
In the modern sector, there is population growth due to natural reasons and migration. The labour force is mixed, some labourers are skilled and trained while others are unskilled and untrained. Both the labour power and capital go on expanding. Enke considers ‘technology’ as an additional component. In the modern sector, capital, employment growth and population affect the savings.
2. The Backward Subsistence Sector:
In Enke’s backward subsistence sector, there is more migration, population growth is high. Technology, income, capital, savings and employment are at low levels.
Keeping in view all these factors, Enke quantified the effectiveness of investment in the following sectors:
(1) family planning,
(2) welfare,
(3) education,
(4) health,
(5) public planning,
(6) general administration,
(7) social and economic amenities, and
(8) defence.
According to Enke, the consequences of population control will be found to be beneficial in the sectors in which the extent of empty land is more. In other words, in the regions with low population density, more benefits can be derived through population control.
According to him, compared to the case of birth rate 45 and death rate 35 i.e., the annual rate of population growth of 1 percent, the condition in which birth rate 35 and death rate 25 is better and the condition in which the birth rate 25 and death rate 15 is still better, because in all the three situations the annual rate of population growth is the same.
But in the second and third situations, the proportion of working population will be higher and that of the dependents will be lower.
Enke believed that we can increase the pace of development by reducing the birth rate rather than reducing the death rate. Thus, in order to achieve good results, a nation must increase GNP and reduce population growth.
“Thus higher ratio of GNP to population can usually serve as a surrogate for economic improvement. Governments have customarily concentrated on accelerating the GNP growth numerator; but more and more poor countries should also be concerned with slowing the population growth denominator.”
Regarding the international sector, Enke’s opinion was that many benefits can be obtained in the international sector through population control. For instance, the underdeveloped countries export primary goods due to insufficient capital with them.
But if the population of such countries is low, per capita capital is high and as a result output of capital goods will be high. So the countries will be able to export more of such goods and the rate of investment will be higher and there will be increase in the international aid. Enke went on to propagate his above mentioned ideas which he propounded through Tempo-I and Tempo- II models, till his death.
Tempo-II model contained four sectors—rural sector and urban sector as well as the government sector and private sector. Tempo-Ill model was presented by Enke, Richard Brown and James Benet in 1971. Like Model-I, the Cobb-Douglas model was used in this model. It also contained the feedback influence of the government programmes and it also studied their effects on demographic and socio-economic changes.
According to Tempo-II model, they reached the conclusion that, (i) due to population increase, consumption rises and hence capital, investment, employment and GNP decline, and (ii) the gains from investment in population control will be much more than the same obtained from the same amount of investment made for development.
Stephen Enke also developed the cost-benefit model along with the Tempo model through which he studied the demographic variables. According to him, capital-labour ratio cannot be kept constant due to population growth, and decrease in per capita investment. He also favoured land reforms, industrialization and urbanization and opined that industrialization and urbanization will be possible only when the birth rate declines.
Enke had propounded his models for the underdeveloped nations. According to him, the underdeveloped countries are countries of real conditions, but are not typical mythical countries. Enke had full confidence that his recommendation will be found useful in the Indian conditions and all his beliefs will be implemented there.
So he considered India as a model nation. He also believed that the value of preventing births in undeveloped countries is high. Enke considered the expenses saved when a birth is prevented as ‘gain’ and the direct and indirect expenditure incurred by the Family Welfare Department of the state as ‘cost’.
Enke believed that the marginal utility or marginal productivity of children in India is negative. In 1960, he had estimated that the reason for this was that the total consumption of a child in India throughout his life would be Rs. 6,000 more than the total value of production by him during his lifetime. Therefore, if India was able to prevent one birth, then it would be able to save Rs. 6,000 throughout his lifetime.
Thus, according to Enke, expenditure incurred on birth control is five hundred times more important than that on development. For this, Enke had assumed that ‘expenditure’ includes the use of real resources only. Enke also clarified that the cash payment made to the person undergoing operation for family planning as ‘incentive’ is only a ‘transfer payment’ because the amount changes hand from one person/agency to another, while real resources are not spent.
Moreover, Enke also included some new elements in his cost-benefit model for investment. He started measuring production after a person attained 15 years of age. Then he estimated the discounted value of future production. According to him, production of goods in future is possible only when sacrifice in consumption is made at present.
Based on this logic, if the present rate of interest is 10 percent then the value of production worth Rs. 100 now, will be Rs. 110 after a year. If the rate of interest continues to be 10 percent in the 2nd, 3rd or 4th year, than the value of production would be Rs. 110, Rs. 120, Rs.133… and so on respectively. According to Enke, this is the discounting of future production.
Enke also mentioned ‘Superior Effectiveness’ in his model. According to him, due to implementation of the family planning programme, consumption declines and savings increase and investment also increases. Due to this increase, benefit worth many times this amount can be obtained. He calls it The Superior Effectiveness Ratio,
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This Superior Effectiveness Ratio will vary directly with the fertility of women practising birth control and inversely with the rate of return on investment.