Kids These Days
Ross Douthat recently caused a stir with this piece in the New York Times in which he bemoaned the recent decline in the American birthrate. While the immediate cause of this fall could, as Douthat recognizes, be a function of today’s hard times, he worries that it may persist and that the economic consequences for America will not be pretty:
Today’s babies are tomorrow’s taxpayers and workers and entrepreneurs, and relatively youthful populations speed economic growth and keep spending commitments affordable.
That might have been true in the past. But now? We live in an age in which production relies ever more on technology and ever less on a large workforce. And when it does still need the latter those factories have a nasty habit of migrating abroad.
The traditional idea that (per capita) economic growth relied on population growth has been looking a little tired for quite some time, and the increase in the numbers of the elderly depending on social security does not alter that fact: the unemployed are not going to be able to pay for the pensions of the retired.
What counts is not the size of a population, but its productivity. That’s not yet something that the baby boosters are prepared to acknowledge, but why should they? Many of them are bothered by something else altogether, as is evident from this passage towards the end of Douthat’s article:
The retreat from child rearing is, at some level, a symptom of late-modern exhaustion — a decadence that first arose in the West but now haunts rich societies around the globe. It’s a spirit that privileges the present over the future, chooses stagnation over innovation, prefers what already exists over what might be. It embraces the comforts and pleasures of modernity, while shrugging off the basic sacrifices that built our civilization in the first place.
Well, you can agree with that or not (let’s just say that I am unconvinced), but one thing is clear, this is not an argument that has much to do with economics.
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Comments:
Re: Kids These Days
Stuttaford on Ricochet is awesome.
Even if employment were higher, it wouldn't be enough to handle the entitlement crisis looming for our country in general (and states in particular)-- but it would help.
Re: Kids These Days
Well, we might wish to consider the massive entitlements promised to an aging population. How many people working does it take to pay for each person drawing social security/medicare again?
As David Goldman points out, there are different investment patterns for young and old. Japanese innovation is focused now on gerontology. That is an effect of an aging population.
Then there are prosaic matters like national defense etc. Demography used to be considered an element of national strength. Thinkers like John Locke, who knew something about capitalism and good government, thought a decreasing population was a sign of bad government.
Edited on December 9, 2012 at 1:37amRe: Kids These Days
Mollie Hemingway, Ed.: Stuttaford on Ricochet is awesome.
1 minute ago
Drat. Mollie got to say it first. Andrew, but having you join us is simply splendid. Welcome! (You, me, Delingpole--that's three UKIP sympathizers right there. Not bad for a site run on computers in California.)
Aug '12
Re: Kids These Days
Peter Robinson
Mollie Hemingway, Ed.: Stuttaford on Ricochet is awesome.
1 minute ago
Drat. Mollie got to say it first. Andrew, but having you join us is simply splendid. Welcome! (You, me, Delingpole--that's three UKIP sympathizers right there. Not bad for a site run on computers in California.) · 2 minutes ago
Well hey, let me be the first non-editor to say it then! I don't always -in fact I'm not sure it isn't usually either -agree, but it's great to have him here.
Alas, I have to step out like... 3 minutes ago, so I leave it to the rest of you to argue with him for the next hour.
Apr '11
Re: Kids These Days
That I think is the point. If people earn X and X is fixed then you always need more people to achieve a given number. Now you can achieve the same number not by tinkering with the population but by increasing X.
I think everyone has their causality backwards. Making more children will not create wealth. Wealth allows for more children to be made and sustained. I think that is what we should focus on.
Jul '10
Re: Kids These Days
Having children is a vote for the future; declining birthrates is an attempt to conserve what is now. If you are rich, you have little reason to have a lot of children because they will dilute your wealth. If you DO have a lot of children, you are betting on the future being bright enough for them to be successful.
Tinker with the numbers all you want, I believe it boils down to the above.
Jun '10
Re: Kids These Days
While I do understand the fiscal picture of having/not having children, the choice to have our children was not made over dollar amounts.
In the choice not to have more than our two, dollars did play a role. It is a decision I regret often.
Children are far more than dollars and cents. I am sorry that this seems to be loss — an unexpected consequence of modernity.
Re: Kids These Days
Andrew: welcome aboard! Great to have you here - and I still owe you a drink!
Aug '11
Re: Kids These Days
Andrew, I am very happy to read you on Ricochet. I enjoy your posts on NROs Corner.
I think your post is unnecessarily either/or with Roth Douthat's argument, and nothing you posted showed any inconsistencies. Old people stop working and go on social security, younger kids will be paying into that, or someone's social security.
A driving theme of Gilder's Wealth and Poverty, if I have it correctly, is that markets are successful (largely) through the actions and passions of free individuals. Children are certainly a driving engine of economic growth if that is true. If we were talking about immigrants we'd probably understand "these are future doctors and tech giants and so on." As novel technological discovery becomes more difficult we will need more people working on the issues and experimenting to create things ("happy accidents" and "luck").
I also agree with Douthat's last quote, and Mark Steyn has echoed similar sentiments as well. I think he said "The future belongs to those who show up for it."
Mar '12
Re: Kids These Days
Andrew makes a great economic point: assuming higher population equals higher productivity betrays an agrarian/early industrial thinking that isn't necessarily true in a capital intensive age. My sense is that productivity in the 21st century will take fewer highly trained workers working in a very capital intensive environment. Of course, a old age retirement system of taxation that assumes the opposite, high numbers of employees of varying skill, makes the sustainability of such a system questionable.
Of course, more births of low-parental investment children certainly won't help anything economically or culturally. If the falling birthrate is disproportionately felt in single mother births, that would be a good thing, from either viewpoint. Douthat doesn't acknowledge that, needless to say.
Sep '10
Re: Kids These Days
Sed Contra: Since the origin of the Greek word that gives us economics refers to the household, this argument seems to have everything to do with economics. And re acquaintance with Christopher Dawson on the nascent effects of technology -- origin techne -- would seem to be in order.
Deus ex machina with emoticons.
Edited on December 9, 2012 at 4:25amSep '10
Re: Kids These Days
And lest that last quote leave you in too cheery a mood:
Welcome to the optimist club.
Jul '10
Re: Kids These Days
Sumomitch:
Of course, more births of low-parental investment children certainly won't help anything economically or culturally. If the falling birthrate is disproportionately felt in single mother births, that would be a good thing, from either viewpoint. Douthat doesn't acknowledge that, needless to say. · 14 minutes ago
I agree that it's needless to say. The trend is in the opposite direction.
Andrew should account for it. He'd have a good point, perhaps, if the decline were demographically uniform. But how strong is it if relatively educated, affluent, employable people are the non-reproductive group?
If one in twelve of your neighbors perpetually lives on the dole, it isn't necessarily a huge problem... if they have an eighth of the kids it can become one pretty quickly.
Nov '11
Re: Kids These Days
I look forward to the technological Garden of Efficiency, in which Adam and Eve frolic among the Six Sigma Skyscrapers.
Mar '11
Re: Kids These Days
I can't disagree more. There are only two ways to get economic growth, increase productivity per working in a nation, or increase the number of workers at the same productivity rate. The idea that just because someone is more productive therefore we need less workers is non-sense. Don't get me wrong this as been a huge argument in economic development whether population growth is good or bad and I have always been in the pro camp.
That technology will create a ceiling on employment therefor work will somehow disappear is just the same old tired arguments someone brings up every few years and becomes popular every generation for a bit. I don't know how many times in history and how my sci-fi's prophesied mans irrelevance to productivity from technology. Sorry but it is total science fiction.
History says your wrong, never go against history when it comes to basic economic principles. Technology improves wealth and only evidence that is might cause broad short term unemployment, however, over the long term it only improves well being and there is always productive work that people can do.
Nov '12
Re: Kids These Days
I believe Douthat is a gen-xer not a boomer, maybe that's pedantic, but the shot at the boomers seemed gratuitous to Mr. Stuttabord's point. As for what economic insight Douthat provides in the last paragraph Mr. Stuttaford excerpts, I don't think there was supposed to be any. Douthat had already made his economic point; he was merely speculating on the cultural factors underlying the economics. Nothing wrong with that is there? It may not appeal to Mr. Stuttaford, and it may not qualify as scientific, but it just might be a testable hypothesis. And that's the beginning of scientific inquiry, right?
Anyway, maybe Andrew is right and our technological advances will carry the day, outpacing the decline in manpower. However, who's to say the declining number of workers manning these evermore ingenious machines will be willing to give up an ever bigger chunk of the technologically enabled fruits of their labor to the increasingly decrepit and growing number of non-productive citizens? If to keep 100% of the population prospering, the 20% of the population that does all the work has to give up 60%, 70%, or more of what they make, will they?
Edited on December 9, 2012 at 5:53amMar '11
Re: Kids These Days
Speaking as an owner of a manufacturing operation, I can tell you that my 3 production employees, with the automation at their disposal, outproduce a room of 10 people a mere 15 years ago.
So yes, there is the trouble of finding work for the upcoming generations.
But our system, geared as it is to wealth transfer, makes it hard for me to employ more.
As far as I'm concerned it's a sort of societal death spiral.
Jul '10
Re: Kids These Days
That is an excellent point which supports an important part of Douthat's argument: having a relatively youthful population matters.
Social Security, Social Schmurity. Old people tend to need expensive health care maintenance.
I suppose we could get around this with "Death Panels."
Problem solved. Three cheers for declining birth rates!
Edited on December 9, 2012 at 6:25amAug '12
Re: Kids These Days
In theory, higher per-capita productivity could solve the social security problem, but there a myriad other problems it doesn't solve -ranging from future belonging to those who show up to rendering savings useless (as there are not enough entrepreneurs to loan to, interest rates go to the floor, at which point retirees might as well just spend the principle).
But even in practice I think it's a dubious idea. Economic growth in general is presently anemic, and may remain so for a while it Tyler Cowen is correct. The share of what growth we have attributable to technology is a fraction of that attributable to human capital and social capital. Cut birthrates and we lose the human and social capital, and our economic growth rates will fall even further.
And that societal death spiral might have something to it -I seem to recall a thread a week or two ago that pointed out the effect of low economic growth is to make communities insular -so that what lending and entrepreneurship that does happen is done informally. Without community and family, we won't even get that.
Jan '11
Re: Kids These Days
When you apply new and better technology to a situation, the productivity goes up, which means the jobs go down.
The trick to stopping technology from killing jobs is to have the new technology enable new situations. That means one of two things - either the new situation is a new industry, or it's more competing firms in the same industry. More competing firms in the same industry leads to lower prices for consumers, which leads to more purchases, so we make up in volume what we once gathered through higher prices.
If you have no new industries and no new competitors in the same industry ...improved productivity becomes a vice.