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The Consequences of a Plummeting Birth Rate
Back in March, Ben Domenech interviewed Lyman Stone on the Federalist Radio Hour. Stone is an economist who writes for The Federalist, AEI and the Institute for Family Studies. He and his wife live in Hong Kong.
The whole interview is great and I recommend it. Stone shares a great many unexpected insights. The following is the one that stood out to me the most:
Stone: “We are at the lowest fertility rate in our history right now. We just hit it quite recently and we’re still going down, so we’re going to get lower. Whenever you hit ‘lowest in history’ you are in an anomalous moment. The pace of decline is matched by the pace of decline that we saw after the baby boom, in the 60’s, really, which is striking. That was a period of extremely rapid fertility transition and now we’re seeing it again, but starting from a much lower base. We are rapidly approaching the fertility rates we see in East Asian countries like Korea, Japan, Hong Kong (where I live), Taiwan, and where there are serious social problems associated with it.
Domenech: “Tell me a bit about those social problems.”
Stone: “One is simply long-term economic growth, right? So, we think a lot about Social Security and Medicare: if there aren’t young workers, who will pay for those? So then you get this sort of Libertarian response of ‘Well, then I’ll just save for my own retirement.’ But, hold on, who’s going to buy the hot dogs that prop up the value of the company you are invested in? Heck, who’s going to buy the shares when you try to sell them? Where will the value of the home—that you are leveraging for consumption—come from if there’s not a next generation to buy it?
“There’s an increasing amount of research suggesting that faster population growth yields faster per-person economic growth. People have this idea of population and the economy as a pie, that the pie can stay the same, but if you shrink the number of people you each get a bigger slice. It turns out it’s the opposite; the more people there are, the bigger a pie you bake for everyone…. If the number of future consumers is shrinking, companies understand not to invest.”
There are many other gems in this interview.
(If you enjoy Lyman, Jack Butler has a shorter, less formal interview with him on the Young Americans podcast.)
Published in Economics
Google has a remarkably cool presentation of fertility rate data over time. Check it out, and spend some time exploring:
https://www.google.com/publicdata/explore?ds=d5bncppjof8f9_#!ctype=l&strail=false&bcs=d&nselm=h&met_y=sp_dyn_tfrt_in&scale_y=lin&ind_y=false&rdim=region&idim=country:USA&idim=region:NAC:ECS&ifdim=region&tdim=true&hl=en_US&dl=en_US&ind=false
The same people who pay for it today: money printers.
Doesn’t matter all that much in the face of the greater hazard: If one piles up any sort of assets for retirement, with the expectation of selling them to live on the proceeds, there must be younger people to whom to sell those assets. If the supply of younger people falls, the demand for those assets fall in real terms, regardless what inflation has done.
On top of that, after selling assets for funds, you then need to use those funds to buy the consumables of life (food, clothing, utilities, transport), and if the supply of people that can produce those consumables has fallen (non-retirees), the crowds of retirees will bid up the prices in the chase.
Failing to produce the next generation has terrible consequences.
A long time ago, 1999 or so, I had a published article that revealed where all the pesticide use, the GM foods in the diet, the increased radiation would lead us, and the editor titled the article “Insects’ Revenge.”
Already people living in affluent areas in the nation see more twins and triplets being wheeled about in strollers than solitary infants. Multi births out number single births due to fertility treatments being needed for couples to have children.
The miscarriage rate now stands at 20%, up from 10% in the early 1970’s.
One of the most well documented risks of being continually exposed to long wave microwaves from 4G cell tower installations and also to exposure of short waves from things like the coming 5G are how the DNA strands of mammalian life are slammed and broken apart.
But hey, at least for a little while we all had perfectly weed-free yards, plenty of cheap soda pop, and the coming ability to download entire movies in half a nano second tops!
I took this thought-experiment to its logical conclusion, for a country like Japan, which has positively discouraged immigration (logically, since they are the most homogeneous population on the planet, with the longest history). If there are no young people to populate the military, they risk invasion by any of a number of stronger nations. If they cannot defend their country, they risk annihilation entirely, or absorption by a China or Russia.
This effect can be achieved by increasing density. The idea that we need a growing population to keep the economy growing is wrong. Prosperity is measured on a per capita basis and it comes from productivity, not population growth.
Very interesting. Thank you, @dontillman.
I think so.
The US, northern Europe and Scandinavia are all pretty much the same value.
Southern Europe and Japan are significantly lower.
India is a straight line downward.
Worse, due to certain population control policies that next door neighbor (China) has a population heavily shifted toward the male side of the spectrum (i.e. an extreme shortage of females to pair up with). Guess what (or who) will be a hot commodity when the “absorption” happens. Alternately, guess what (or who) will be a very expendable commodity. It could get quite ugly.
Interesting data.
I have not listened to the interview linked above but on a related topic (one I think I have brought up here before), I have long been interested in any studies / models of the U.S population age distribution pyramid showing the now multigenerational effect of Roe vs. Wade. I suspect it would show that the decision was rather suicidal, societally speaking.
Why do you think Japan invests so much in robotics research?
And is that the answer to the productivity problem? Won’t we need fewer people to maintain the same levels of productivity?
Two countries with even worse birthrates?
Also, I visited Lyman’s church yesterday, and was informed that he and Ruth are currently expecting their own modest increase to the birthrate.
I think this is true, but we are too stupid to adopt polices for this. The whole planet. Also, I think the formula for GDP growth is 2/3 population growth and 1/3 productivity.
But, GDP growth is not the goal unless you are interested in fighting a war. What matters is per capita. We hear this all the time in the immigration debate. “every immigrant grows the economy” is a good talking point, but prosperity is per capita, not aggregate. Unfortunately, if you are controlling the economy you care more about growth than per capita, but I digress.
That makes a lot of sense to me.
IMO, Western monetary policy in the end is about geopolitical leverage / war in the same sense. It’s not about a fair and prosperous economy.
Population absolutely leads to more per-capita wealth, in free societies. The data is quite clear on this. The wealthiest places, per capita, have high population densities: Singapore, Hong Kong, Netherlands, etc. Big cities make more money per capita than the countryside.
This is because people wait to have children. Lots of health consequences of having a first child at 35 or 40 instead of 20.
Data like this is always suspect. Reporting is not consistent, then OR now.
It is like child mortality, when some places only record live births for children without defects and/or who survive past a present period after birth – and others record every child who took a breath after delivery.
OR… radio waves are just like any other form of stress: beneficial at moderate amounts, detrimental when there is too much or too little. This is true for everything we have good data on, from exercise to food to radiation to arsenic.
The only question becomes “what is too much?” The dividing line is not necessarily (or ever) “The levels in a State of Nature.”
Immigration combined with assimilation replenishes a philosophy-based society like ours. But immigration without assimilation replaces, rather than replenishes, the population.
Substituting one people for another, one set of ideas (limited, local government; minimally restricted commerce, freedom of expression/religion, etc) for another (expansive, centralized government; command economies, the state as religion, etc), does not maintain a society. A country is not just a track of land where any people will do. We have distinct countries because differences matter.
Our demographic situation is unlike Japan’s. The greater challenge for them is native birthrates. The greater challenge for us is the recovery and transmission of ideas. We not only fail to assimilate many immigrants but are losing our own children to rampant delusions and statism.
There is no demographic model by which a Ponzi scheme like Social Security can work.
I love this.
You have the causality backwards. Certain places have high density, because the population can afford it. You have also listed a lot of financial hubs. Although per capita income is high in financial centers, it is not clear they are actually helping with overall productivity rather than simply succeeding in rent-seeking. Does it feel to you that the big insurance companies centered in Hartford are making the medical industry more efficient? Most people would say “no”.
Per capita income (not wealth) comes from increased productivity. Productivity comes from ever improved use of capital (human, intellectual, equipment, and financial). Density helps some, but there are diminishing returns.
We are not ruled by rulers that think about this stuff.
And it could be we’re detecting more miscarriages because we’re detecting pregnancies earlier. I suspect many early pregnancies were unknowingly lost and thought to be a hard period previous to technology which detects pregnancy within days of conception.
Miscarriage rates also go up when the children are conceived later. One assumes that the conductors of the study know that and are correcting for it. Sometimes that assumption is valid.
What matters is who is immigrating and who is having children. Slower population growth won’t harm us, we’ve a lot of absorption to perform. Immigration by some folks will harm our ability to absorb. Abstract numbers about immigration and birth rates by themselves are worse than meaningless.
I thought that the USA was honor and treaty bound to defend Japan, since we did not want them to build up their own military after WWII. So not sure that I follow your statement that they couldn’t protect themselves from China or Russia.
Every point you make is spot on.
As far as your point on immigration: The PTB are very aware that no citizens, if left to think clearly on their own on the issue, would desire to have their culture be suddenly shoved underground and then replaced by a new culture.
It is also true that most Americans are quite deeply influenced by the idea of each citizen’s need to be compassionate and humanitarian… So the PTB have been quite careful to frame the issue of immigration with televised sound bytes that it is a mere four thousand people with crying babies at the border, or 12,000, or at the most some 22,000.
However those of us who have lived here in California & heard the same talking points back in the 1980’s are also aware that what is attempting to gain a foothold is the abolishment of ICE and a total open borders policy. But the propaganda via news media and social media is working nicely.
This is the Globalists’ wet dream. The UN’s Commission on Migration is demanding that some 250 million people be relocated from any areas where there are economic hardships or some cataclysmic event, such as cyclones, flooding or volcanic eruptions. So Europe, the USA and Canada, & Australia are suggested places for these economic and climate refuges to relocate.
The biggest problem is that those of us who are seeing the society flip from Anglo to hispanic cannot convince the sincere and compassionate Americans who are misguided on the issue. They’ve been carefully taught that anyone who might resist massive amounts of immigration is selfish at best and barbaric and White Supremacist at worst. Also they are now taught that our nation’s entire history is racist: that we should not only ignore the need to have a culture – but we must actually demand that culture’s erasure. When their own neighborhoods are filled with apartment buildings soon converted to day labor tenements, when their own school districts have no teachers who speak either English or Spanish but some pidgin, non-comprehensable version of the languages, then & only then will they wake up. But then it will be too late.
Most people believe that their own culture (however they define it) is good. That’s close to being a universal, even for immigrants.
Except for whites in America.