By Aaron M. Renn, senior fellow at American Reformer

The population of the United States is 340 million. That of China is 1.4 billion. This leads some to suggest the United States needs more people in order to be competitive on technology, innovation, and beyond, whether through continued mass immigration or some type of deeper integration with allies. A recent essay in Foreign Affairs magazine made this point explicitly, saying, “This is an era in which strategic advantage will once again accrue to those who can operate at scale. China possesses scale, and the United States does not—at least not by itself.”

It’s obvious that there’s a certain logic in the scale argument. The tiny nation of Estonia could never defend itself against Russia, for example. It’s just too small. Yet we also see that there’s no necessary link between size and prosperity. The smaller Nordic countries are among the world’s most prosperous—certainly far ahead of population leaders like Pakistan and Nigeria.

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Scale does offer several benefits. First, it enables lower cost production by substituting fixed for variable costs and amortizing fixed costs across large numbers of units. The logic is simple: making something at a greater scale reduces per-item costs. High-volume production allows manufacturers to build large factories, invest in automation, etc. In many sectors, this provides cost advantages small scale producers can’t match.

Second, it can create benefits thanks to market power. A large company can obtain favorable terms from suppliers. A country like the United States accrues market power from having a large and wealthy consumer market that firms in other countries want access to.

Third, scale enables other benefits from agglomerations. Large cities allow for greater specialization and division of labor. This allows a city like New York City to have amenities other places can’t match. Agglomerations of talent produce knowledge spillover and similar effects that can create powerful industry clusters, such as in Silicon Valley.

Fourth, scale allows for greater self-sufficiency. A large, continental scale nation like the United States can be a major player in many key sectors at once: natural resources, agriculture, manufacturing, higher education, defense. Autarky—producing all of what you consume—is neither necessary nor desirable. But in times of geopolitical conflict or national emergency, countries that are not self-sufficient in critical sectors like food production can find themselves facing an existential crisis as enemies can cut off needed imports.

Those facts make scale beneficial and even necessary to some extent. But it’s not something where more is always necessary, or even a good thing.

In business, there is a concept called “minimum efficient scale,” the level of production needed to produce a good or service at a cost-competitive level in a given market. Automobile production has a high minimum efficient scale. While a very small-volume boutique producer like Ferrari can thrive as a luxury niche brand, in general, a car company needs to sell a lot of cars to produce them at profitable unit cost. Research and development, building factories, regulatory compliance, and more are very expensive and require large sales volumes to recover. That’s why electric car startups lose so much money. If they can’t significantly grow volumes, or get acquired by a major global automotive group, they are likely to go bust.

Once a firm has a minimum efficient scale, further growth in volumes may not be necessary. In fact, they may be counterproductive because of diseconomies of scale. That is, at a certain level of volume, production actually starts becoming less efficient. Why is this? There are various factors, but one is the growing complexity of management. At some point, managing a large company becomes much harder than a smaller, nimbler office. In the technology world, one embodiment of this is what’s known as Brooks’ Law: “Adding manpower to a late software project makes it later.”

Applying these principles of scale to the United States, there are few obvious areas where we have too little scale of population to be competitive with China. Yes, in a direct military conflict, China could field more manpower than America. But even were such an event to occur, modern conflicts are not necessarily won based on who has the most manpower. Technology, strategy, training, and logistics matter as much or more.

There’s no reason to believe America’s inability to supply Ukraine with artillery shells, or its lack of computer chip factories, or its lack of shipbuilding are a result of too little population scale. It’s because we allowed those industries to languish or degrade. It may well be that we did so because we could not produce certain goods cost-competitively. But this was not because we lacked enough people or a large enough market. Offshore labor costs, regulatory arbitrage, and other factors loomed larger and weren’t simply tied to the number of workers abroad. Doubling our population wouldn’t solve these problems. They require different solutions.

Rather than too few people and too little scale, arguably too much scale has become the problem for America. Mass immigration has blown up our political culture. The bipartisan toleration of illegal immigration is arguably the origin point of the decline of the rule of law. If these illegal immigrants don’t have to follow the law, then why should anybody else? Donald Trump could not have been elected President but for the immigration issue. It’s a great irony that those who profess to be most horrified by Trump are the greatest promoters of mass immigration and even open borders. These are the very things that made his presidency possible. In any event, it has undoubtedly fueled polarization, making it difficult to address some of our substantive China competition issues.

We also see that our federal government, and too many state and local governments, have become highly inefficient and ineffective. Recent infamous examples like the federal electric vehicle charging station and rural broadband initiatives, which have delivered next to nothing for several years despite tens of billions of dollars allocated to them, make this clear.

Too much scale may not be the sole underlying cause of these problems, but the inability to solve them is arguably related to size. Bureaucratic rules naturally proliferate in large-scale environments, and institutional effectiveness presents a managerial challenge at that scale. How exactly would adding a lot more people do anything to fix this?

Theoretically, we could be better off with a lot more people—even, as Matt Yglesias put it in his book of the same title, with One Billion Americans. Better collaboration with allies, as the Foreign Affairs authors call for, would be a good thing. But until we prove that we are able to function well as a society at our current scale, adding more people is only likely to make things worse rather than better.

Nothing makes that clearer than mass immigration, particularly in the presence of a deeply institutionalized racial preferences regime. Such an approach directed at increasing our national size will only create further cultural, political, and arguably economic problems. Even a naïve pro-natalism is problematic. In a country with a 40% out of wedlock birth rate and the highest percentage of children living in single parent households of any country in the world, simply pumping out more kids without regard to the environment in which they are coming into the world also might create more problems than it solves.

Before we start aiming for the true benefits of larger scale, the United States has to fix its very real social, cultural, political, economic, and institutional problems first.

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Why We Don’t Need One Billion Americans