The biggest issue on Earth right now is demographics. Everything else is a sideshow.
We are living at a world-historical moment. Have a look:
Over the 20th century, we went through a phase of massive population growth enabled by the Green Revolution, improved hygiene, nutrition and development in general.
Since 1945, famines have only occurred alongside war or other political problems. The massive plagues of the past also appear to be over. Compare Sweden’s historic death rate spikes compared to the piddly, modern Covid bump:
They don’t make ’em like they used to.
According to Wikipoo, around 20,000 people died in Sweden of Covid.
In comparison, cholera outbreaks in the 1800s killed around 37,000. The 1770s famine killed around 100,000. The Black Death of 1350 killed as many as half a million.
All these amongst a much, much smaller and younger population.
The world-historical change taking place now is that declining birthrates are finally beginning to catch up with and overtake declining death rates. After the present demographic momentum runs out, the global population will likely begin to decrease. This is already happening in some countries, most notably Japan, Portugal, Italy and much of Eastern Europe:
Western Europe and North Asia will soon follow. North America and Australasia are still growing due to extremely high immigration levels and would be gradually declining otherwise.
Remember that the magic cut-off number is 2.1 births per woman. That is the break-even rate without immigration or emigration. A lot of countries are no longer so fertile as people think. Here are some of the most populous countries in the world:
The only countries where fertility rates are still very high are in Africa, plus Afghanistan. The death rates in those countries have also declined so their populations are predicted to continue rising even while others fall:
What was the point again?
There’s a lot of talk about how the West is in decline, including here at the People’s Blog. A while ago I pondered what country is doing well and found no obvious candidates. The suggested future Masters of the Universe – China, Russia and Japan – all have fertility rates in the toilet. The Arab world isn’t much better. The only countries likely to have large, young populations in the future are in Africa, which lacks the human capital to make much of the opportunity. The most accomplished Africans of this century will probably reside outside the continent. Even South Asia will have an aging population within a few decades.
But then I thought: this is the world now. Whoever can cope with this situation the best will win the 21st century.
‘Win’ probably won’t mean ‘lift fertility rates back up to 3.0 again.’ That is very unlikely to happen because the main force pushing them down is that kids are now a liability instead of an asset, speaking in purely financial terms. Contraception, feminism, soyboys and obesity aside, we no longer need sons to work on the farm.
Many people will still have kids because they want them, but one or two will scratch the itch. Six or seven are not required.
What’s the problem?
The problem is not that humanity is disappearing or that we desperately need to maintain high populations. The most fecund groups will keep breeding and at some point in the distant future, I suspect the global population will steady. That’s very hard to tell though because it’s ridiculously far out. We might be half-robot by then. In any case, we should not assume that like the mouse utopia experiment we’ll get down to zero. The Mennonites will still be around.
It is somewhat important to maintain a reasonably high population for economic and security reasons. A nation with few workers will struggle to pay for its defence. However, a gradual decline is probably manageable, especially if potential adversaries are also shrinking.
Just a century ago, the world had a much lower population and it didn’t cause any obvious problems.
So long as we were smart (ha) we could probably flourish with either 500 million people, which we had in the 1600s, or with 10 billion people as projected for 2100.
What’s the problem with population decline, then?
A traditional population pyramid looks like an actual pyramid. Because of high birth and death rates, it slopes steeply inwards like this:
With increased development, the population pyramid starts getting thicker at the top, but with vertical sides it still looks fairly stable.
And then things can go a bit too far.
Japan shows the path ahead:
A nation tends to be most productive when it has a large bulge in the 30-50 age bracket. This was true of much of the West as the Baby Boomers passed through and will be faintly echoed in the case of American Millennials.
However, this can only be temporary because that bulge of young people must eventually grow old and retire, as we see here with Japan.
This is a problem whichever way you look at it. With a national pension system, too few workers must support too many elderly. With families caring for their own, there are too few children in each family to share the load. There is also the issue of who will do all the work once there’s a labour crunch.
Almost every country outside Sub-Saharan Africa is heading towards this situation, some sooner, some later. Those that cope best will be the winners of the coming decades.
How can they do that?
1. Stabilize birth rates
As stated, fertility rates probably can’t be stabilized at 2.1 any time soon for the economic reasons discussed. However, holding them steady at 1.9 or so would prevent the population imbalance from becoming too extreme and keep the sides of the pyramid a bit closer to vertical.
While we can’t retvrn to the land and use hand tools to grow turnips anymore, there are other social changes that might help to stabilize birth rates. And that’s all I have to say about that.
Incidentally, lockdowns and mask mandates are not helping. Young people need to be able to meet each other and share a smile. I am not exaggerating when I say this is a matter of national survival. Masks are now so prevalent in Asia that many (most?) people of baby-making age are semi shut-ins, peering at the world from behind their comfort barrier and barely interacting at all. Marriage and birth rates, already extremely low, have plummeted.
Facemasks need to be banned at least in public, outdoor settings, perhaps for ‘security’ reasons. Nothing less will work.
2. Manage immigration
Moderate immigration can prop up the sides of the pyramid for a few decades while this demographic trend flows through. Few countries are managing the process well.
Japan shows what happens when you hide your head in the sand and ignore the issue. The screws are tightening on taxes and pensions. National debt is at 266% of GDP. Wages and conditions for the small number foreign workers are reaching Third World levels in some fields, which will eventually diminish demand. No one really knows how this will go, but we watch with interest.
Western Europe and the United States have deliberately lost control of their borders. That means future immigrants will self-select rather than being chosen by those nations themselves. Given the demographic trends illustrated above, countries will do best that can both attract the migrants they need while keeping out those they don’t need.
Canada, Australia and New Zealand’s selective immigration policies would be close to sensible if (a) the numbers were much smaller and (b) they ironed out some of the scams. Mostly (a). As of the last census, about half of Australians had at least one parent born overseas. Does that have any parallel in history? To state it like that gives the impression that there are lots of grouse Aussie halfies running around, but in reality some immigrant groups are becoming more insular than they ever were before because their sheer numbers makes that possible. If you’re the only Greek kid in the class then you have to learn how to play Aussie Rules football. If most of your classmates are fellow Chinese, you barely need to speak English.
Still, a moderate level of skilled migrants alongside a somewhat higher birth rate would make managing the population imbalance easier because it would increase the tax and labour base for the next step.
Easing the path for foreign spouses to enter would also help with the fertility rate. At the moment, a lot of countries make it ridiculously difficult.
3. Sort out the pension
This could mean finding the tax revenues to pay for a state pension as a last resort, setting up a self-funded retirement system, or some combination of the two. I don’t wish to get into an ideological debate here. The point is, every country is going to have to have a plan.
Australia has done better than most on this because they started a self-funded superannuation system back in the 1990s. A lot of Boomers are now retiring with a fair bit of their own money, which reduces the strain on the public purse.
There are many, many problems with Australian superannuation. Serious problems. However, it is still considered one of the best retirement systems in the world. Yes, most countries are doing even worse. What that tells you is that the world in general is not on top of the current demographic crunch.
The United States is middling. It has good, tax-effective retirement savings vehicles which you can mix and match, but not everyone is enrolled in them. There is half-decent social security but it is creaking.
So far as developed countries go, Japan appears to be the worst. Once again, the government has put its head in the sand and allowed the situation to become catastrophic. The national pension system is now dreadfully underfunded and no one wants to pay into it because they doubt they’ll get much back as the pool of future payers diminishes. Added to this, the elderly are now so numerous that they have massive electoral power, thus limiting possibilities for reform.
Little known fact: Japan actually has had an Australian-style, self-funded superannuation system for about twenty years but very few Japanese know that it exists, let alone pay into it. Instead the broke and hopeless National Pension service now sends guys around to your house if you get behind.
Most developing countries are heading in the same direction. If China is to deal with its aging population, it will need to develop a retirement system right now. Ten years ago would have been better. This is very tricky in a nation which is not yet wealthy and where low social trust makes investment fraught.
I suppose robots may help with labour and productivity.
However, they are not consumers. Humans aged 30-50 are better for that.
Robots will probably help preserve national security in an environment of labour scarcity.
Developing industrial robots might not be essential. If someone else develops them, other countries could simply import them.
In any case, there will still be many jobs that require human hands for the next few critical decades. Robots can soften the edges at best.
What do others think about this? I’m not an expert on any of this and its probably all wrong, but robots in particular are something I know little about.
The countries that manage to build a gentle staircase down the demographic cliff through increased birth rates, skilled migration and retirement schemes will best manage the transition away from constant population growth.
It is not clear to me what economic impact this new paradigm will have. With the measures outlined plus technological innovation, perhaps not so much as the doomsayers predict. We’ll see. The example of Japan is not a fair comparison for the reasons described.
Previous cases of successful, powerful nations – the Ottomans of the 1600s, Britain of the 1800s, America of the 1900s – no longer form useful examples of how to get there. Having a young, growing, ambitious and capable population is not practicable anymore.
Instead, future world powers will be those that can ease the burden on a proportionally smaller working-age population and give them enough breathing space to do their thing.
If the tax burden is too great, they’ll be unable to form households and families at a rate high enough to be sustainable and the situation will spiral downwards.
If the measures above help the young to keep the fertility rate at around 1.8 or 1.9, that should be enough to keep the nation chugging along until the end of this demographic phase, whenever that is.
I have no idea who will best meet this challenge and come out the winner except that it won’t be Japan.
How is your own retirement plan going? This will help: