Friday, April 13, 2012

The Depopulation Bomb

Last week I downloaded a Long Now Foundation talk by Phillip Longman. It was fascinating listening. Longman is the author of several books, but is best known as a demographer and author of a book with the provocative title of The Empty Cradle. Longman's talk was about what effects depopulation would have on the economic and social fabric of the world. That's right, depopulation. Even though world population is increasing precipitously, birth rates are actually falling all over the world, even in places you least expect it like the Middle East, much of East Asia, and even Latin America.While we worry a lot about overpopulation, Longman talks about the effects that shrinking birthrates and lengthened life spans will have on world economies. Essentially, it leads to a graying population - the population continues to increase, but it's the elderly who are driving the increase. There are less children than old people. Just as the rise in population is a feedback loop because you have more breeding pairs, the decline also feeds upon itself, since you have less breeding pairs with every iteration if you have a lower than replacement birth rate. Longman goes through a laundry list of concerns about this, some expected, some not (such as fundamentalists outbreeding the 'normal' population).

David Brooks covered much of the same ground in a recent column - The Fertility Implosion:
Usually, high religious observance and low income go along with high birthrates. But, according to the United States Census Bureau, Iran now has a similar birth rate to New England — which is the least fertile region in the U.S.

The speed of the change is breathtaking. A woman in Oman today has 5.6 fewer babies than a woman in Oman 30 years ago. Morocco, Syria and Saudi Arabia have seen fertility-rate declines of nearly 60 percent, and in Iran it’s more than 70 percent. These are among the fastest declines in recorded history.

The Iranian regime is aware of how the rapidly aging population and the lack of young people entering the work force could lead to long-term decline. But there’s not much they have been able to do about it. Maybe Iranians are pessimistic about the future. Maybe Iranian parents just want smaller families.

As Eberstadt is careful to note, demographics is not necessarily destiny. You can have fast economic development with low fertility or high fertility (South Korea and Taiwan did it a few decades ago). But, over the long term, it’s better to have a growing work force, not one that’s shrinking compared with the number of retirees.

If you look around the world, you see many other nations facing demographic headwinds. If the 20th century was the century of the population explosion, the 21st century, as Eberstadt notes, is looking like the century of the fertility implosion.

Already, nearly half the world’s population lives in countries with birthrates below the replacement level. According to the Census Bureau, the total increase in global manpower between 2010 and 2030 will be just half the increase we experienced in the two decades that just ended. At the same time, according to work by the International Institute of Applied Systems Analysis, the growth in educational attainment around the world is slowing.

This leads to what the writer Philip Longman has called the gray tsunami — a situation in which huge shares of the population are over 60 and small shares are under 30.

Some countries have it worse than others. Since the end of the Soviet Union, Russia has managed the trick of having low birthrates and high death rates. Russian life expectancy is basically the same as it was 50 years ago, and the nation’s population has declined by roughly six million since 1992.

Rapidly aging Japan has one of the worst demographic profiles, and most European profiles are famously grim. In China, long-term economic growth could face serious demographic restraints. The number of Chinese senior citizens is soaring by 3.7 percent year after year. By 2030, as Eberstadt notes, there will be many more older workers (ages 50-64) than younger workers (15-29). In 2010, there were almost twice as many younger ones. In a culture where there is low social trust outside the family, a generation of only children is giving birth to another generation of only children, which is bound to lead to deep social change.
Here's a Canadian columnist saying pretty much the same thing:
The world is on the threshold of what might be called “peak people.” The world’s supply of working-age people will soon be shrinking, causing a shift from surplus to scarcity. As with “peak oil” theories – which hold that declining petroleum supplies will trigger global economic instability – the claims of the doomsayers are too hyperbolic and hysterical. These are not existential threats but rather policy challenges. That said, they’re very big policy challenges.

About 11 per cent of the world’s people are over 60 at the moment. In the next 25 years that will double, to almost a fifth, and one in six of those people will be over 80, according to a forthcoming book, Global Aging in the 21st Century, by sociologists Susan McDaniel of the University of Lethbridge and Zachary Zimmer of the University of California.

While this is affecting every country and region – even sub-Saharan Africa is now seeing a very fast rise in its proportion of seniors – some countries are being hit very hard. While 12 per cent of Chinese are now over 60, in two decades, there will be more than 28 per cent. Brazil faces a similar blow. It will be very difficult for countries that are only just emerging from poverty to suddenly face huge elder-care costs.

Peak people will be an age when jobs compete for workers rather than vice versa. The cheapest labour will vanish. We’re already seeing this: Because China is aging very fast, its dwindling working-age population is turning down the lowest-paid jobs and pushing up the minimum wage sharply, as well as the once-minimal costs of social services: Stuff from China will stop being cheap, because the Chinese aren’t young.
Here is another pro-growth take on this trend:
Like other prejudices, the belief that more humanity means more misery resists compelling evidence to the contrary. In the past two centuries, the number of people living on earth has nearly septupled, climbing from 980 million to 6.5 billion. And yet human beings today are on the whole healthier, wealthier, longer-lived, better-fed, and better-educated than ever before.

The catastrophes foretold by Malthus and his epigones - some of them in bestsellers like "The Population Bomb," which predicted that "hundreds of millions of people are going to starve to death in spite of any crash programs embarked upon now" - have never come to pass. That is because people are not our greatest liability. They are our greatest asset - the wellspring of every quality on which human advancement depends: ambition, intuition, perseverance, ingenuity, imagination, leadership, love.

True, fewer human beings would mean fewer mouths to feed. It would also mean fewer entrepreneurs, fewer pioneers, fewer problem-solvers. Which is why it is not an increase but the coming decrease in human population that should engender foreboding. For as Phillip Longman, a scholar of demographics and economics at the New America Foundation, observes: "Never in history have we had economic prosperity accompanied by depopulation."

And depopulation, like it or not, is just around the corner. That is the central message of a compelling new documentary, "Demographic Winter: The Decline of the Human Family." Longman is one of numerous experts interviewed in the film, which explores the causes and effects of what may be the most ominous reality of 21st-century life: the fall in human birth rates almost everywhere in the world.

In 1965, the population of Italy was 52 million, of which 4.6 million, or just under 9 percent, were children younger than 5. A decade later, that age group had shrunk to 4.3 million - about 7.8 percent of Italians. By 1985, it was down to 3 million and 5.3 percent. Today, the figures are 2.5 million and 4.2 percent.

Young children are disappearing from Italian society, and the end isn't in sight. According to one estimate by the UN's Population Division, their numbers will drop to fewer than 1.6 million in 2020, and to 1.3 million by 2050. At that point, they will account for a mere 2.8 percent of the Italian nation.

Italy isn't alone. There are 1.7 million fewer young children in Poland today than there were in 1960, a 50 percent drop. In Spain 30 years ago, there were nearly 3.3 million young children; there are just 2.2 million today. Across Europe, there were more than 57 million children under 5 in 1960; today, that age group has plummeted to 35 million, a decline of 38 percent.

The world's population is still growing, thanks to rising longevity. But fertility rates - the average number of children born per woman - are falling nearly everywhere. More and more adults are deciding to have fewer and fewer children. Worldwide, reports the UN, there are 6 million fewer babies and young children today than there were in 1990. By 2015, according to one calculation, there will be 83 million fewer. By 2025, 127 million fewer. By 2050, the world's supply of the youngest children may have plunged by a quarter of a billion, and will amount to less than 5 percent of the human family.

Even in the United States, where birth rates are still (barely) at replacement level, there are hints of the dislocations to come: In Pittsburgh, reports The New York Times, deaths now outnumber births and hospitals are closing obstetrics wards or converting them to acute care for the elderly. Pittsburgh's public school enrollment was 70,000 in the 1980s. It is 30,000 today - and falling.

By mid-century, according to one UN estimate, there will be 248 million fewer children than there are now. To a culture that has been endlessly hectored about the dangers of overpopulation, that might sound like welcome news. It isn't. No society gains when it loses its most precious resource, and no resource is more valuable than the human mind. The coming demographic winter will chill us all.
The Coming Population Bust - Jeff Jacoby (Boston.com)

A World Without Children - Jeff Jacoby (Boston.com)

Here's Longman himself:
It's true that the world's population overall will increase by roughly one-third over the next 40 years, from 6.9 to 9.1 billion, according to the U.N. Population Division. But this will be a very different kind of population growth than ever before -- driven not by birth rates, which have plummeted around the world, but primarily by an increase in the number of elderly people. Indeed, the global population of children under 5 is expected to fall by 49 million as of midcentury, while the number of people over 60 will grow by 1.2 billion. How did the world grow so gray, so quickly?

One reason is that more people are living to advanced old age. But just as significant is the enormous bulge of people born in the first few decades after World War II. Both the United States and Western Europe saw particularly dramatic increases in birth rates during the late 1940s and 1950s, as returning veterans made up for lost time. In the 1960s and 1970s, much of the developing world also experienced a baby boom, but for a different reason: striking declines in infant and child mortality. As these global baby boomers age, they will create a population explosion of seniors. Today in the West, we are seeing a sharp uptick in people turning 60; in another 20 years, we'll see an explosion in the numbers turning 80. Most of the rest of the world will follow the same course in the next few decades.

Eventually, the last echoes of the global baby boomers will fade away. Then, because of the continuing fall in birth rates, humans will face the very real prospect that our numbers will fall as fast -- if not faster -- than the rate at which they once grew. Russia's population is already 7 million below what it was in 1991. As for Japan, one expert has calculated that the very last Japanese baby will be born in the year 2959, assuming the country's low fertility rate of 1.25 children per woman continues unchanged. Young Austrian women now tell pollsters their ideal family size is less than two children, enough to replace themselves but not their partners. Worldwide, there is a 50 percent chance that the population will be falling by 2070, according to a recent study published in Nature. By 2150, according to one U.N. projection, the global population could be half what it is today.

That might sound like an appealing prospect: less traffic, more room at the beach, easier college admissions. But be careful what you wish for.
Think Again: Global Aging. Phillip Longman, New America Foundation

So are we talking about the wrong problem? Is the problem too few people? Is that a good thing or a bad thing, or both?

I think saying that birthrates are too low is a bit silly. Birthrates have to shrink sometime. They cannot go on increasing forever, as this article points out:
Back in “Fruits of Philosophy,” Knowlton used grade-school math to demonstrate the problem with sustained population growth. He imagined what would happen to the number of people on earth—at that point, around a billion—if it continued to increase “without check.” By the nineteen-thirties, it would reach eight billion. A century later, it would reach sixty-four billion.

Global population is expected to hit eight billion around 2025, which is to say about ninety-five years later than Knowlton predicted. No one in his right mind supposes that it could reach sixty-four billion without horrific consequences, except perhaps a few economists.
So we have to stop growing birthrates sometime. Why not now? If not now, when? It seems to me that now, with the earth's population already projected to head up to ten billion in a world of depleting resources, climate change, and mass extinctions it seems to me like now's is the perfect time to slow the birth rate. My question to Mr. Longman would be: if not now, when? And it's being accomplished without coercion, which is wonderful. People were envisioning some sort of draconian Chinese-style program to limit population growth. Instead, it's happening of it's own accord, and accompanied by things like women's rights, better education and prosperity. Increasing living standards should theoretically occur for shrinking populations, since there is less competition for resources. What's not to like? Imagine asking a five-year-old if they want to share a cake with five other kids or twenty. Then you've just figured out what any five year old knows but no economists can seem to grasp: there's more to go around for everyone.

Another rather silly objection is that the earth will depopulate and the human race will vanish. This is just plain silly. At any time we can increase birthrates very easily, and begin the upward curve again if the situation were to become so dire as to lead to an extinction of the human race.

Let's look at some of the false assumptions at play here. Let's start with this one about Japan:

"In Japan, where the fall in fertility rates began early, the working-age population has been a diminishing share of the nation for 20 years. Yet for much of that period, unemployment has been up, not down, and an economy that for a while was the envy of the world -- the Japanese Miracle, it was called -- ran out of gas more than a decade ago."

It seems we're damned if we do, damned if we don't. If you have more children, there's more competition for jobs and unemployment goes up. If there's less children the economy shrinks and there's more unemployment. Some of the wealthiest countries in the world have tiny populations: Luxembourg, Iceland, Norway. Some of the poorest have enormous populations: Nigeria, Indonesia, Bangladesh. Wasn't Japan's stagnant economy supposedly triggered by a housing bubble? Isn't that more common with lots of people and limited land? Is the Japanese miracle going to recur if one of the world's currently most crowded counties starts producing more children? Why? During the Edo Period, Japan maintained its living standards while keeping population steady for a hundred years. And relative to the whole world, the Japanese still have a very high standard of living.

Can we at least say that the relationship between prosperity and population is hardly as simple as the author makes it out to be?

"Gary Becker, a Nobel laureate in economics who appears in the same film, emphasizes that nothing is more indispensable to growth of any society than "human capital" -- the knowledge, skills, and experience of men and women. That is why baby booms are so often harbingers of economic expansion and vigor. And why businesses and young people drain away from regions where population is waning."

Population growth has only coincided with rising prosperity since the advent of the use of fossil fuels. Prior to that, it has always accompanied a decline in the standard of living, even in the face of better technology. See this fascinating Wikipedia article on Medieval demography. And the use of fossil fuels fed both "innovation" and population growth, so the connection between population growth and prosperity is not what it seems. I think there's a "correlation does not equal causation" fallacy here somewhere. Living standards would have risen drastically even if population growth had remained steady, perhaps even moreso.

“Never in history have we had economic prosperity accompanied by depopulation.”

Patently untrue. Related to the above, Andrew Leonard takes this one on:
I am reminded of a startling section from Ronald Findlay and Kevin H. O’Rourke’s “Power and Plenty: Trade, War, and the World Economy in the Second Millennium,” concerning the consequences of the Black Death for the European economy. Drastic depopulation in Western Europe appears to have led to a dramatic improvement in the living standards of the surviving working class. Total production, is is true, declined overall, but there was a significant rise in “per capita real income and wealth, since land and physical capital remain unchanged and the livestock population was apparently unaffected by the plague.” With less labor available, surviving workers were able to command a premium.

… The data suggest a sharp rise in English real wages from the middle of the fourteenth century. Real wages continued rising for about a century, so that by the middle of the fifteenth century laborers were earning more than twice as much in real terms as they had been doing on the eve of the Black Death…

I will concede that there is some cognitive dissonance to be mined in the concept of the Black Death having an upside. It’s not exactly a strategy one would recommend to labor organizers, for example. But the fundamental premise is provocative: a world with fewer people competing against each other could mean a better life for the workers who do end up getting born.
Which is not to say that depopulation is necessarily desirable, only that they are not always connected. Economist Mark Thoma comments:
I don't know world demographic history all that well, but in the cases where depopulation is correlated with falling prosperity, what caused the population declines? War, disease, famine, something like that? Were population declines the result of falling prosperity, or were population declines the cause of declining prosperity? In the present case, the (anticipated) population decline appears to be an individual or societal choice, it is not being driven by some other factor such as those listed above. For that reason, the correlation between prosperity and population could be quite different than other cases in the historical record.
"The catastrophes foretold by Malthus and his epigones - some of them in bestsellers like "The Population Bomb," which predicted that "hundreds of millions of people are going to starve to death in spite of any crash programs embarked upon now" - have never come to pass. That is because people are not our greatest liability. They are our greatest asset - the wellspring of every quality on which human advancement depends: ambition, intuition, perseverance, ingenuity, imagination, leadership, love."

"In the past two centuries, the number of people living on earth has nearly septupled, climbing from 980 million to 6.5 billion. And yet human beings today are on the whole healthier, wealthier, longer-lived, better-fed, and better-educated than ever before...True, fewer human beings would mean fewer mouths to feed. It would also mean fewer entrepreneurs, fewer pioneers, fewer problem-solvers. Which is why it is not an increase but the coming decrease in human population that should engender foreboding."

In other words, increased population means more "problem solvers". We'll produce more Einsteins and Edisons, or someone who'll invent a miracle way to make electricity flow from thin air or circumvent the laws of thermodynamics.

First of all, people living better lives is untrue: some are living better lives, many are living worse. A recent study found out that medieval European peasants were better off than the poorest of today's Africans, many of whom live in crowded cities and lack running water and basic sanitation. Many people around the world live on less than a dollar a day and are being kept alive and malnourished by cheap carbohydrates. They are hardly thriving. Wanting everyone to have an extremely high "American" or even "European" or "Japanese" standard of living and continuing population growth are mutually exclusive - Western lifestyles are dependent upon others being poor. This is not only because the teeming third world masses are a source of cheap labor, but because it would take several planet earths to secure such a standard of living for the people already extant today, never mind population growth.

And believing that we will permanently outrun a Malthusian catastrophe no matter what is more faith than fact. It like the jumper who says "so far so good" as he passes each floor.

Not to mention we already have more than enough tools to solve every problem we face right now. We just can't implement them. Already many of our "solutions" are being obviated by none other than population growth! When you propose alternative, sustainable agricultural methods like organic agriculture and Permaculture, you're told "we have to feed ten billion!" When you propose reducing carbon emissions by using wind and solar power, you're told "it can't provide enough power for everybody!" When you say that we need to move to a degrowth economy not based around debt, you're told "we need to provide jobs for a growing population!" When you suggest biofuels as an alternative to gasoline, you're told "it can't scale - we can't keep all the cars currently on the road running on them." In other words, we're already developed the damn solutions, it's just that our constant need for growth makes them impossible to implement. Yet more growth is supposed to solve them?! Insane!

Population increase is the very reason we've turned to fossil-fuel based fertilizers, pesticides, factory farming, deforestation, and pumping aquifers dry. I don't think that trying to come up with potential solutions to our problems by randomly producing more people who might come up with solutions is a winning strategy. In fact I think the "solution" that these future humans are liable to come up with is "stop population increase."

As for all those wonderful human qualities named above, they have a nasty habit of receding as people fight over scarce resources. For an extreme example, see the Ik people of Uganda. Scarcity of resources nearly always engenders war and conflict, which tends to put a damper on "ambition, intuition, perseverance, ingenuity, imagination, leadership," and especially, "love." Here's Andrew Leonard again:
Never mind that by mid-century, there will also be about 2.5 billion more people in total on the planet than there are now, which some people think will probably be quite sufficient to provide all the problem-solvers we’re likely to need. If Thomas Malthus really was wrong, as Jacoby confidently asserts, we’ll find out soon enough. How the World Works doesn’t rule out the possibility that human ingenuity will find ways to squeeze continued prosperity out of a shrinking planet, but I am also unconvinced by the argument that just because a couple of hundred years of technological progress have allowed us to escape the consequences that befall every other biological population that expands too quickly, we are guaranteed unlimited growth and prosperity, ad infinitum.
In fact, we know we've been able to outrun the Malthusian catastrophe by our use of fossil fuels. I think the global decline in population can best be explained by this chart:


It's a blunt calculation, but illustrative. Fossil fuel use per capita has been declining since the 1970's. The 1970's was also the last great population boom, engendering the vaunted "youth bulge" of the Arab spring and the ant tribes that make Chinese factories hum. Yet not only are fuel supplies not increasing as quickly as population anymore, they may actually start to decrease. Certainly the EROEI is set to decrease, along with the flow rate; that is, the actual energy readily available to world economies. With much of the world industrialized or industrializing, it is impossible to imagine increased living standards and increased population coinciding, even with improvements in efficiency. The current soaring population levels and economic growth both coincided with the use of fossil fuels. It is difficult to believe they can be magically decoupled, and we will enjoy ever-higher living standards in a "knowledge and service" economy divorced from energy considerations where we walk each other's dogs and write iPhone apps. If living standards are to be maintained the population has to decline. In fact, a shrinking population may be the only thing that will head off a catastrophe. Here's John Michael Greer:
... Still, it's important not to jump to the conclusion that this means current global population levels are sustainable. What William Catton, in his classic work Overshoot, called "ghost acreage" - the vast boost to the means of subsistence that comes from the unsustainable use of fossil fuels in growing, storing, and distributing food - has allowed the world's human population in the last few centuries to balloon to between three and four times what the earth can support over the long term. As the industrial age winds down, the surpluses of food and other resources and the infrastructure of public health that made this expansion possible will wind down as well, with predictable impacts on the size of the human population.

So far, this supports the catastrophist model, but there's a catch. The winding down of the industrial age isn't a fast process. The peak of worldwide conventional oil production may well have already happened - the best figures I've seen show that production rates reached in the fall of 2005 have not been equalled since - and the overall peak, including nonconventional sources such as tar sands and natural gas liquids, probably isn't far away. What too few people seem to have noticed, though, is that the Hubbert curve is shaped like a bell, not like a sawtooth.

That bell-shaped profile means, among other things, that about as much oil will be pumped out of the ground on the downside half of the curve as was pumped on the upside. It also means that production rates along the downside will be roughly commensurable with production rates at points on the upside the same distance from the peak. If peak production comes in 2010, in other words, the amount of oil produced in 2030 will likely not be far from what was produced in 1990; production in 2060 will be somewhere near production in 1960, and production in 2100 will be around production in 1920. Even after the peak comes and goes, in other words, there will still be a great deal of oil in circulation for many years to come. The same will likely be true of most other energy resources, and of energy as a whole.

Does this mean peak oil is nothing to worry about? Not at all. The fact that the "ghost acreage" that supports our huge global population is going away gradually, rather than all at once, does not change the fact that it's going away. Historically speaking, both a slow decline and a fast collapse produce population loss; the difference is that in a slow decline, depopulation tends to be a much more complex process, subject to major regional and temporal variations.

It actually doesn't take that much to change an expanding population into a contracting one. Modest changes in birth and death rates will do the trick, and such changes are predictable consequences of the twilight of the industrial age. We've already had a preview in the former Soviet Union, where the implosion of Communism launched a classic cycle of catabolic collapse in the 1990s followed by partial recovery in this decade.
It seems to me that this poses a challenge to our economic system more than anything else. Much of our economy is designed around the pyramid model, in which you have a larger population of young, and the amount of people of succeeding ages shrinks as you head toward the apex of the pyramid. But if that model changes, then things fall apart. Everything seems tied to that, economic growth, increased consumption, debt repayments, and of course, social programs (e.g. Medicare, Social Security in the U.S., pensions in Europe). Health "insurance" is certainly predicated upon that - and that's a topic I want to explore in more depth in the future. But of course, the problem is never assumed to be in the way we've structured our economic systems, it is always we who must conform to it, not the other way around. Missing in all this is any discussion of the effects on the planetary ecosystem. You always hear "yes, this is good for the environment but..." But? Come on now, really, why is this a tradeoff? The real problem is setting up an economy where you require constant population growth and an ever larger cadre of young workers in perpetuity. Because you won't always have that. Period. See this article from The New York times: Are The Good times Never Coming Back?:
The paper, entitled “Disentangling the Channels of the 2007-2009 Recession,” will be posted on the general conference Web site Thursday afternoon. The authors argue that the slow pace of recovery reflects a long-term deterioration in economic prospects. Specifically, they estimate that the trend growth rate of gross domestic product fell by 1.2 percentage points between 1965 and 2005. The economists who wrote the new paper, James Stock of Harvard and Mark Watson of Princeton, contend that the key reason for the faltering pace of growth is that the work force is expanding more slowly. Population growth has slowed, and so has the pace at which women are entering the labor market. “These demographic changes imply continued low or even declining trend growth rates in employment, which in turn imply that future recessions will be deeper, and will have slower recoveries, than historically has been the case.”

Indeed, recent growth has actually outpaced their expectations. “The current recovery in employment is actually faster than predicted,” they write. “The puzzle, if there is one, is why the recovery was as strong as it has been.” This general theory about the power of women has been propounded before, notably by the economist Tyler Cowen in his recent book “The Great Stagnation.”

In the current context, however, it is also deployed as a rebuttal to the many economists who regard the slow recovery as a consequence of the unusual nature of the recession. One such view holds that financial crises are particularly traumatic. Another common theory holds that high levels of debt are restraining growth. Both of these views carry the implication that the good times will return.
To which this comment made the most sense:
It is still striking to me that economists never consider the price of energy in their analysis.

From 2000 to 2003 the global price of oil (Brent) was between $24.5 and $28.8. The climb then began:

2004 - $38.25 2005 - $54.57 2006 - $65.16 2007 - $72.44 2008 - $96.94.

In 2011 it was $111.

So from 2003 until 2011 it went up by a factor of 3.8

And it never seems to occur to them that the price of energy could be strangling the economy. Look at these prices and then re-look at the first graph in this analysis.

Economic growth requires cheap energy. Liquid fuels are especially important due to their use in transportation and construction. Standard measure of such fuels - the EIA Crude and Condensate for instance - show little growth over the last 8 years. Is a flat economy culling demand for oil? Or is a plateau in oil production choking economic growth? Interlocking feedbacks, its tough to untangle.

Seems to me that both theories are true. We will not in this generation get back to the debt dueled halcyon days of the massive worldwide credit bubble... It just isn't possible. There is no doubt that 2003 to 2008 was a freak anomaly. But also there are demographic reasons why we will have slow future growth including less women entering the work force, an eviscerated middle class with continued pressure due to global wage arbitrage and US policies that favor capital over labor, and worst of all an aging baby boom generation that will soon retire, needing to draw down their savings (I.e investments) putting a crushing load in our safety net. That said, it is not surprising that we see these demographic issues combined with a credit bubble. The fed encouraged the bubble precisely to hide these symptoms from the average American. Without the bubble Americans would have revolted 10-20 years ago. The bubble allowed the greatest transfer of wealth (away from middle class to the hyper wealthy) ever imagined in the history of earth. The transfer is almost complete. Now they raid Medicare and the two prizes... Social security and 401k plans.
In addition to the common culprits - Urbanization, industrialization, better education and rights for women, and the need for decades of schooling to secure employment, here are some of the other major reasons population is declining:

1.) Lack of jobs. This is the big one. In the Middle East, a slang term based on the Arabic word "wall" has been applied to youth who have nothing else to do but lean against walls all day. In China, the massive amounts of graduates are compared to a tribe of ants and sleep several to a bedroom to make ends meet. In Europe, unemployment is endemic - as high as fifty percent for youth in some places. The same is true for the United States. The Japanese have seen their employment prospects dwindle for a generation already. Nowhere on earth is there a surplus of jobs. This is especially true for males, whose traditional tasks have been displaced by machines and computers.

2.) Declining Living Standards. When people see that their children will no longer be better off than they were, they are less likely to have them. It's finally sinking in after a generation that most Americans can look forward to nothing more than falling living standards, and working ever harder to keep what little they do have. Such trends are happening worldwide, even in "expanding" economies where people are working ever harder and there is no safety net.

3.) Extreme Inequality. People at the bottom see how the game is rigged against them and their children. The wealth is being hoarded at the top, and the benefits of increasing wealth accrue to an ever-smaller number of "owners" in the winner-take-all economy. Since the rich can set up their children never to fail and take up the few remaining good and rewarding jobs, the poor realize that their kids have no way to get ahead, so they don't have any.

4.) Temporary and uncertain employment. If your job could disappear in a puff of smoke anytime, how can you justify having an expensive child that you will need to take care of for possibly decades, no matter what? How can you be assured you can take care of a child, much less ensure his or her future success? By some measures, the cost of raising a middle class child has risen by 40 percent over the past ten years. Who doesn't want their children to be middle class?

5. Poor Social Services. Only true for some countries. Americans (and most third-world countries) get no support for daycare, child care, scant maternity leave, nonexistent paternity leave, little paid time off, etc. A tax credit for children is the extent of support, and this is less and less of an incentive. The opportunity cost of having a child is high, and if people decide they need that money just to survive, they will not invest it in a child whom they believe has no future thanks to all of the above. Even though social services in many industrialized countries are excellent, it is still not enough given the above factors.

6.) Lack of time. Monster hours on the job, the long commute, scant vacation, paying the bills keeping up the house, who has time for kids?

7.) Diversions. With so many other potential things to do with one's time, and so many other outlets for one's energies, there is less incentive to have kids.

So we see that people are doing the right thing - responding exactly as you would expect given the economic conditions in which they find themselves. In addition, we see that all of the above are caused by conservative policies! No amount of exhortation is going to change the trend, minus a change in the above conditions. In the age of "austerity", that seems increasingly unlikely. And maybe that's how it should be. Here's one commentator to the Brooks article.
Conservatives have the tendency to blame the individual for sweeping global trends. No one decides to jump on the low-birth-rate bandwagon. It's not a movement; it's a response to a perceived uncertainty about the future. Conservative governments are in large part responsible, as oligarchs hoard wealth while the rank and file worker gets little. There have been recent reports that Iran has an epidemic of un- and under-employed young men, many with higher education but no job prospects. How are they to marry and afford to raise children?
And another commenter:
It's possible that, in a finite world where we have long assumed limitless growth was forever possible, the world economy is trying to level off. No one controls this complex system we live in, and its behavior may be independent of our intentions on the level of policy decisions. If it's occurring, the leveling off of economic activity will not be painless or easy, but it may be the only viable option. Infinite growth in a finite world makes little sense.
Humans modulate their birthrates according to the environment and circumstances, and they know when those circumstances are not good. Depopulation always accompanies a collapse (e.g the end of the Western Roman Empire). Does anyone think the Russian economy will magically improve if people start producing more kids? No, most likely the other way 'round: people will have more kids if the economy improves. There are theoretically more than enough people in Russia now for that to happen. Without that simply exhorting people to reproduce will be to no avail. It's one of the paradoxes of capitalism - one of the many internal contradictions that cause its breakdown. It needs an ever-larger pool of workers and consumers to exploit, but it creates conditions nonconducive to having children. This is caused by increasing urbanization, automation, overproduction, and a "race to the bottom" in wages. Since children are a liability rather than an asset as they would be in agricultural societies, there is less incentive to have them. Extended family units are broken up by the need to move around the country or to other countries in search of work. Finally, with the entry of women into the workforce, there is no time to care for children. The novel method method of paying strangers to take care of your child seems to be receding, as few people can afford it anymore. Deteriorating economic conditions accelerate all these trends.

So to sum up, slower population growth will give some relief to the planet, eventually. Overall, populations will not shrink for some time yet. In the meantime it will present economic challenges our Ponzi-oriented economy in dealing with a high ratio of aging people who require expensive medical care with a smaller working-age population. This is a situation which logic dictates we would have to face at some point. I think this trend is one of the few pieces of good news we've had in a while.

And see this: Population growth isn't really our problem (BoingBoing):
Global population is going up, Pearce writes, but that's not the same thing as saying that birth rates are going up. And, in the long run, that distinction matters. Around the world—not just in the West—human birthrates are decreasing. And they've been decreasing for a really long time.

What I really like about this essay, though, is how well Pearce articulates the real problem, which is over-consumption. Population and consumption might appear to be intrinsically linked, but they're not. As Pearce points out, global consumption is increasing far faster than global population and the average American family of four uses far more land, far more water, far more energy and produces far more emissions than an Ethiopian family of 11.

This is important. I've heard many, many Americans express their fears about population growth over the years. Pearce's essay makes it clear that, when you do that, you're pretty much being a concern troll. The population problem, while still real, is well on its way to solving itself. The consumption problem, not so much. Population growth is a problem of the poor. Consumption growth is a problem of the rich (which, from a global perspective, includes pretty much everyone in the United States). So when you ignore consumption and pin the blame for global sustainability issues on population, what you're doing is blaming the 99% for the mistakes of the 1%.



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3 comments:

  1. "As for Japan, one expert has calculated that the very last Japanese baby will be born in the year 2959, assuming the country's low fertility rate of 1.25 children per woman continues unchanged."

    Longman doesn't take the opportunity to point out how patently ridiculous it is to extrapolate trends too far. With their strong ethnic dynamic, I feel fairly confident there will be Japanese babies born in 2959, as long as we haven't wiped ourselves out of existence in the interval.

    I immensely enjoy your posts on these subjects! Thanks go to Ran for directing me your way ;)

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  2. Hey I got here via Ran Prieur via No Tech Magazine too.
    Great post, couldn't read all of it, so no substantive comments, except to say for the 100th time economists are dumber than rocks.
    see this also
    http://physics.ucsd.edu/do-the-math/2012/04/economist-meets-physicist/

    BTW OpenID is not working correctly here, I see at my provider that it was verified here, but Blogger says "credentials could not be verified" - seems odd that it wouldn;t work, maybe a typo in the template?

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  3. nice idea.. thanks for sharing.

    ReplyDelete