The "per capita" fallacy
Most policy-making models are based on estimating demand and production in terms of "per capita" units, where an individual is the unit of resource consumption or production. This foundation is used to make major strategic decisions, like say how much water will a town or city use, how much garbage will it generate, and so on. However, it is easy to see that in reality, the unit of consumption is rarely the individual. Consumption and production are primarily driven by systems of individuals like households, companies and other forms of organizations. Let me use the generic term "organization" to refer to all of these. In a small place that is (say) primarily driven by agriculture managed by families, the relationship between the number of individuals and the number of families (which are the elements that drive major consumption) remain fairly static. However, as the population grows, the relationship between individuals and organizations is not static. In...