An aging world cannot produce the recovery we need.
The demographer Phillip Longman has an important piece on BQO this morning, in which he argues that the aging of the global population is going to seriously reduce our chances of economic recovery. Excerpt:
At first, the global recession that began in 2008 seemed to have nothing to do with changing demographics. Economists and politicians pointed instead to the excesses of unregulated capitalism. Many thought that the prophesied demographic-driven entitlements crisis was still years away. But today it is becoming more apparent that Peterson was right: Europe’s demographic problems are not only forcing startling cutbacks in the welfare state but also are damaging the Continent’s prospects for sustained growth and economic recovery. Worse, Europe's today is the rest of the world's tomorrow.
We have now entered a radically new phase in human affairs. Due primarily to the global decline in birthrates, such population growth as remains is mostly in the form of increasing numbers of old people. The absolute supply of children is already in steep decline, not only in Europe but even in once highly fertile places like Russia, China, Mexico, and Iran.
Longman then makes a point that's a bit difficult to grasp (it was for me as I was editing his essay, but he then made it clear to me): the projected rise in global population over the coming decades, from 6 billion to 9 billion, is deceptive. That's because more than half of the "new" people added to the population rolls will be elderly. How does this work? I thought. If these people are already born, haven't they already been counted? Nobody is born elderly. Longman, who is a professional demographer, showed me that my thinking is fallacious. Look:
This may seem impossible, but when calculating population growth, declining death rates are just as important as rising birthrates. Today's children are more likely than their parents to live to advanced ages. Even without any new children being born, this decline in mortality by itself would add to the number of people on the planet. Today's population explosion among those over 60 will be echoed in twenty years by a population explosion among those over 80. Most of the predicted 2.2 billion in world population growth between now and 2050 will not come from children. Indeed, over that period, the population of young children (0 to 4) is expected to fall by 49 million.
Why does this matter? Longman says that economic growth and dynamism depends, and always has, on population growth. Obviously population growth is not the only factor, but it cannot be ignored. In his essay, Longman explains why this is (I'm especially intrigued by his point about how across societies and cultures, economic risk-taking and entrepreneurialism has depended on the 25 to 34 age group), and why the economic future belongs to societies that figure out how to keep their populations growing while not degrading the environment. So far, nobody has figured out how to do this.
There are lots of problems coming fast at us as a result of depopulation. For one, it is worrying to contemplate how aging Boomers in this country will take care of themselves; it is also worrying to think about how they could maintain their benefits by virtue of the vote, via extracting more in taxes from the smaller population of working-age people. I can't imagine that this isn't going to become a major source of conflict in the decades to come.
Read the whole thing. And, check out a proposal Longman c0-authored two years ago proposing a natalist set of policies that the US should adopt to counter the trend.
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