Is Population Decline Catastrophic?

Tyler Durden's picture

Authored by Peter St.Onge via The Mises Institute,

In the 1970’s we heard the earth was going to get so crowded we’d be falling off. Now the panickers have flipped to population decline. They were wrong in the 70’s, so are they wrong again? Is a declining population catastrophic?

Countries from Germany to Japan are investing in mass immigration or pro-birth policies on the assumption that they must import enough warm bodies to stave off economic collapseI think this is mistaken.

Falling population on a country level is certainly no catastrophe and, indeed, may be positive. I’ll outline some reasons here...

Historically, the first question is why population declined. If it’s the Mongols invading again then, yes, the economy will suffer. Not because of the death alone, but because wholesale slaughter tends to destroy productive capital as well.

On the other hand, if the population is declining from non-war, we have a well-studied natural experiment in the Black Plague. Which is generally credited with the “take-off” of the West. Because if the population declines by a third while capital including arable land stays the same, you get a surplus. Same resources divided by fewer people.

Think of zombie movies where dude’s running around with unlimited resources at his disposal — free cars, riverfront penthouses. That, in diluted form, is what a declining population gives us — more land, more highways or buildings, more resources per person.

Now, if the population’s declining not because of a terrible disaster like the Plague, rather because people simply want fewer children, then you don’t even get the massive hit from losing productive people. A worker dying at 40 takes a lot of productivity with him, while a child unborn isn’t actually destroying anything but hopes and dreams.

So if the Plague was a per capita economic bonanza to Europe, having fewer children should be an even larger per capita bonanza.

Take Germany; before recent rises in immigration, Germans averaged 1.25 children per woman. This translates into a 1/3 decline in population per cycle (i.e every 75 years if people are living 75 years). So without immigration, Germany might expect a 1/3 decline by 2100. Is this good or bad?

The question breaks into 2 parts: absolute number of people, and changes in age composition. On numbers alone, it’s great for Germans; same physical capital, same amount of land and air and water. True there are fewer taxpayers to amortize shared costs like defense, but these costs are small and, empirically, often scale to the population anyway. For example Holland’s military budget and population are both about 1/5 of Germany’s.

So on numbers it’s great — more stuff for fewer people.

Now the second question is age profile. The key here is that a declining population means fewer working-adults to pay out pensions, but it also means even fewer kids. Who are very expensive. The number that captures both is “dependency ratio,” which is the ratio of workers to children-plus-elderly.

To take a real-world example, the UN expects Germany in 2100 to have 68 million people, compared to today’s 82 million — about a 20% decline. The age profile shifts so they expect a third more over-65’s — from 17 to 23 million. Meanwhile, children 14 and under fall from 11m to 9m. So total dependents goes from 28 million today to 32 million in 2100. Meanwhile, population age 15 to 64 goes from 54 million today to 36 million in 2100. Upshot is today a single working-age person supports half a dependent — 54 million carrying 28 million. But in 2100 that worker will support a single dependent — 36 million carrying 32 million. So far so bad, right?

Well, there are 2 big caveats here, both based on long-lasting trends.

First, for over a century now people are not only living longer, but living healthy longer. This is called “health expectancy” and, sticking with Germany, is rising by about 1.4 years per decade.

 

This implies that 65 year-olds in 2100 will be as healthy as 53 year-olds today. While today’s 65-year-olds are as healthy as 2100’s 78-year-olds. This alone would bring the elderly numbers back down to today’s, but the lower number of children means worker burdens actually decline.

 

Of course, this would require raising retirement ages in line with health expectancy - 1.4 years per decade - which politicians are obviously deeply reluctant to do.

 

Second caveat is another long-term trend, economic growth. The irony here is that, from a population growth viewpoint, economic growth is actually the worst-case scenario. Because if the economy crashes instead, then historically the population actually soars — kids become your safety net if the welfare state goes bankrupt. So if we fail to grow, the demographic problem actually solves itself anyway. Either we grow, or population decline was a false alarm anyway.

 

Quantifying this growth, over the past 50 years Germany has grown 1.65% per year, real per capita. That trends puts a 2100 German worker making 4 times what they do today. Keep in mind this is likely underestimating the benefit, because any outperformance makes Germans richer yet, while any catastrophe probably makes them have more kids.

So, summing up, rising health expectancy implies there will actually be fewer dependents in 2100 Germany, while economic growth implies German workers will be 4 times richer, just on growth alone. The demographic burden plunges by 80% or more.

By the way, if you’re freaked out at the prospect of working an extra 1.4 years per decade, that economic growth alone suggests a 50% decline in worker burdens - twice the dependents on four times the income. So even if politicians are spineless, the welfare burden declines even with more dependents.

Bottom line, whether we look at total numbers or demographically, population decline coming from simply choosing to have fewer kids is nothing remotely catastrophic.

Now, a final point: in a worldwide context, more people does tend to increase investment, therefore innovation and economic growth. This is obvious in the aggregate - there wouldn’t be any factories if there weren’t any humans - but people forget. So, on a world-wide level, we should have a bias towards more humans, while recognizing that, on a country level, a shrinking population is certainly no catastrophe.

 

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R.W.D.S.'s picture

it is for the banks as most are tapped out 

MillionDollarButter's picture

Well, depends if your definition of catastrophe is the decline of (((real estate values))).

TBT or not TBT's picture

It's Catastrophic to pension plans, welfare states, heavily indebted governments, and their dependents/subjects.

Common_Law's picture

It's a shame someone put so much thought into this piece without considering immigration. Because that affects every point t they made.

So, I guess it's all just hypothetical.

ThirdWorldNut's picture

As we move to an age where robots/AI would take up more and more jobs, we should be celebrating declining population (less unemployed, less benefits etc.) and not use that as an excuse to import anybody who would not mind sucking on the tits of welfare system. 

Japan has declining pop for a while now, Krugman and his likes have predicted disaster for decades yet Japan thrives (who cares about falling gdp, its a crap measure anyway - why must tomorrows's fewer people consume more than today's many?).

BennyBoy's picture

 

"Is Population Decline Catastrophic?"

 

Only to bankers.

JRobby's picture

There will be less higher income tax payers so prudent logic would conclude that there will need to be lower GOVT spending and debt.

So expect more immegration gtting free GOVT support. Because "our leaders" will never be guided by prudent logic.

skbull44's picture

Finanacialised economic system = Ponzi

Ponzi requires infinitie growth. 

Lack of growth causes collapse of Ponzi. 

So, the question to ask is: Is it catastrophic if our financialised economic system collapses?

 

https://olduvai.ca

fleur de lis's picture

The author did not reallly explain how importing millions of primitive and socio-culturally unassimilable migrants would add to and support highly sophisticated digital societies.

Nor did he address the massive financial and social drains of these unskilled migrants who require extensive management, instruction on the most basic behavior, soak up freebies, require ever more resources, and give nothing back but police problems.

Just wait until their numbers swell to the point where they can survey the socio-political landscape, organize and rebel, and carve out their own enclaves.

A home away from home with EU bennies.

Of course the Europeans will continue to supply the maladjusted misfits with social benefits lest their rights are violated and the EU courts get called in.

It would appear that the only ones who will really benefit from the population transfers will be the police, courts, and urban planners who will be very busy accommodating the angry and exceedingly ungrateful newcomers.

And of course the EU that will continue stripping tax money from the dwindling supply of workers. 

 

 

 

MEFOBILLS's picture

The author did not mention the type of people.  There will be 4.2B Africans by 2100, at current birth rates.  Think carefully on that large number.  Fourth Ice Age peoples (Han's and Whites) are in birthrate decline.  In other words, the world's types of people will become more R selected and less K selected, which means civilizational decline.  K types are the bearers and creators of civilization.  Decline is a foregone conclusion.

Overall population of R breeders is increasing, and importing them into K selected countries is a disaster in the making.  Don't tell our bankers and bondholder masters this,  as they want their debts paid, and they think an increasing population is necessary requirment to keep their usury spice flowing.  Never mind high social friction and high costs of school, medical, welfare and general mayhem caused by importation of R breeders.... the ((.01%)) are doing very well by cost shifting onto white working class, while living in their isolated communities.

Backin2006's picture

Until the takeoff in global population in the early part of the twentieth century we had been dealing with a cool, sustainable 2 million people. Central planning of everything - with socialism, communism, crony capitalism etc. - ruined everything. Case in point the one child policy which actually led a spike in the Chinese population translating into an extra 140 million Chinese alive today. Counter-intuitive, but true!

Minarchism, by contrast, rocks! Global population will return to sane levels once people are left alone.

 

flapdoodle's picture

It is all about power and control, and maintaining it. The present Ponzi scheme requires continuous growth, but (((TPTB))) are more interested in the end game.

"We intend to turn Europe into a mixed race of Asians and Negros ruled over by the Jews"

-- (((Richard Coudenhove-Kalergi))) Praktischer Idealismus 1925

Of course, its not just Europe they intend to rule.

The above quote gives away the game and perfectly explains the goal of Cultural Marxism and the Frankfurt School, whose strategy is to destroy existing culture that binds people to society, and replace it with synthetic Jewish Hollywood values which create Coudenhove-Kalergi's compliant mestizo underclass.

The enemy to (((TPTB))) are social relations, the bonds of community that tie people together. Nemesis to their power is people actually talking to their neighbor - the NWO depends on the anonymity and dissolution of the social fabric.

A smaller population goes against this - visit Alaska sometime to discover how smaller populations tend to communicate better and help each other out.

The Black Plague, of course, gave rise to the modern Western concepts of personal freedom and rights - this was because each person became more valuable since there were fewer around to exploit by the elites... a lower world population could lead to the same dynamic...

waspwench's picture

I think the point being made was that we do not need immigrants.

jin187's picture

The Fed members probably have nightmares of the not-so-distant future involving torches and pitchforks. They're determined to prop up this lie right to the bitter end, when they'll flee the country on planes full of loot. Probably headed to their private island to hand out with their buddies Barry, Clitty, and Gee Dub.

Itinerant's picture

It's not good if there are huge levels of debt, regardless of welfare benefits.

In Europe the politicians are not afraid of changing retirement ages; they already have, in some cases it is tied dynamically to life expectancy.

More catastrophic is opening your borders to everybody who would prefer to live in a western society. There is no limit to the billions who would rather eke out an existence here than there if they could muster the airplane fare. The idea that we need immigrants is the craziest of all ideas, marking the end of society as we know it and completely destroying mutual and inter-generational solidarity.

AGuy's picture

1. Rising Debt & decreasing tax payers or those able to service the debt is catastrophe,

2. Technology is reducing the need for a significant number of workers need to support basic needs.

3. While Population growth is slowing, The number of people is still increasing, mostly in places with the least education, poorest, and have radical religion beliefs. Only High educated/skill people are in decline or nations that have excessive "socialism". Socialism is a drag on young families as they are burden down by excessive taxes and lack of time to raise a family. Usually families in "socialist" states require a two parent income to meet ends, which leaves little time to raise children.

logicalman's picture

Catastrophic to a debt based, fractional reserve monetary system, for sure.

7 billion is not sustainable, long term, so the population will decline at some point.

Could be slow and relatively painless, but more likely quick and very nasty given the state of the world and the level of corruption and insanity shown by those who claim to be leaders.

 

NoDebt's picture

Is population decline catastrophic?  Only if you have unpayable debt that requires endless geometric population increase to support it.

 

my new username's picture

Default. All currencies fail in the long run.

Midas's picture

You will be pretty damn aware that population growth is a problem when the island you live on capsizes.  Can you hear me Brits?  The people of Guam have already been warned.

Ms. Erable's picture

Can the .0001% make money on it, or gain more control? If yes, it's a fucking disaster of epic proportions.

Stuck on Zero's picture

It doesn't matter what the population number is ... it's the general IQ that counts.

cynicalskeptic's picture

TPTB WANT dumb worker drones but with advances in automation and robotics they don't need as many.  

They want COMPLIANT easily controlled people and are well on their way......   I'd be worried about the super soldier caste - bred for strength endurance and absolute obedience.

BennyBoy's picture

 

The monetary system relies on exponential growth of debt. A little debt to start then exploding, unpayable debt (bubbles popping). Timing is always unknown.

US gov debt is only going to grow to take up slack in reduced consumer debt growth. It will continue until it explodes.

Then it will be "you can only see bubbles in the rear view mirror", "who cudda seen this coming".

Deflation kills this deeply flawed (except for banks) monetary system.

AGuy's picture

"TPTB WANT dumb worker drones but with advances in automation and robotics they don't need as many."

1. Politicians gain the most by pandering to the people that are most dependent on gov't. so they've established a system around it.
2. automation & robotics has its limits. In the case of the USA & Europe, its cheaper to set up automated factories overseas where the population is usually better educated and had better work ethics.
3. The mountain of debt, is going to topple sooner or later.

"I'd be worried about the super soldier caste"

This is the exact opposite of what is happening. The West is full of SJW's, 90% is unfit for duty (overweight, taking excessive levels of prescribtion drugs - most are mood altering). FWIW: I think we are headed for the "perfect" storm: Debt, demographics cliff (entitlement/pension/taxes), Snowflake/SWJ/digital destracted younger population, Declining resources (energy, clean water, Critical resources - Phosphate, Rare Earth Elements), End of antibiotics (drug resistant bugs), Return of major diseases (Hepatits - 700M in China infected) STDs, & increasing belligerent nations - global economic/political/religious stabilty. As one problem become more difficult is causes the other problems to get worse to.

JRobby's picture

They have flouride, chemtrails, GMO's and let us not forget vaccines and big pharma to keep that "quotient" declining.

Antifaschistische's picture

I'm pretty sure, if a few of us from ZH could pick the first billion to go...the rest of the world would be just fine.

IH8OBAMA's picture

It depends upon which few of us from ZH you are talking about.

 

Implied Violins's picture

Yup. The ZH Hasbara posters would decide the first *six billion* to go, and their initial targets would come from these pages.

JRobby's picture

It's the merger of Hasbro and Hanna-Barbera.

a Smudge by any other name's picture

Wait. So all Hitler had to do was get them all to run to one side of the island?

waspwench's picture

But Hitler had a problem.   Germany is not an island.  

cynicalskeptic's picture

The current world monetary system DEPENDS on ENDLESS GROWTH.   That's what happens when you have to pay interest on every monetary unit that's created.  The curent pension/social security systems world wide are also ponzi schemes that depend on INCREASING numbers of people paying into the system to pay benefits.   The problem is that endless growth is NOT sustainable.

A planet with limited resources is incapable of supporting endless growth - no matter what your position on climate change or peak oil or whatever.....  Too much of the current world's population is living in poverty and are viewed as 'useless eaters' by the top .01%.  They do not earn enough to pay their own way in the current world economic system.  This COULD be less of an issue if the top .01% were willing to give up some of the wealth they have accumulated but that isn't going to happen.   You can argue the finer points all you want but the truth is that the wold WOULD be better off with less people.  We've gone from 1 billion to over 7 billion in under two centuries and made a mess of things in the process.

Frankly, I expect the world would be FAR better off if you eliminated the top .01% inherited wealth bunch and redistributed the 40% of the world's wealth they control.

TPTB clearly plan on a drastic reduction in the world's population - perhaps a pandemic that sweeps through the less developed world along with other factors that will affect the more developed nations.   This time the wealth will go to THEM, not shared among the whole population.

Quantify's picture

I agreee except for the redistrubtion, taking money from one person and giving it to another won't make the poor any more productive or intelligent.

kellys_eye's picture

What would be more beneficial - killing those that create the debt or those that owe it?

jin187's picture

It's a proven fact that if you give stupid people money, they waste it. 80% of people that win the lottery go broke in 5 years.

What's really funny about how the poor dumb 99% trash think, is their obsession with the supposed cash value of their betters. You tell them Bill Gates is worth 100 billion dollars, and they imagine some guy swimming around in gold coins like Scrooge McDuck. Truth is that Bill Gates just has a bunch of Microsoft stock certificates that other people feel are worth 90 billion, with the actual value depending on the paper they print it on. If MS stock drops to $.01 tomorrow, he's broke. If he decided to sell it all to the highest bidder using his Ameritrade account tomorrow, he's not getting 90 billion for it. Probably not even 10 billion, assuming his contract with MS even lets him sell it all whenever he wants. So he's stuck with an asset that is currently incredibly valuable, but volatile, and mostly non-transferable.

So how are we gonna Robin Hood that shit to the 99%? We gonna kick down his door, demand he give us his stock certificates, and give everyone in the country a share of MS that pays like a $.30 a year dividend? Boom, there goes world hunger! Thanks Obama!

JRobby's picture

Breaking the middle class so they don't want to have children or work anymore might have been a factor?

toady's picture

Exactly. Totally missing from the article.... The problem is government and financialization and their constant need for taxpayers to milk.

Deflation, of government and the financial sector(s) , as well as a move away from the "growth" model to "sustainability", is what the world needs, but NOBODY even talks about it...

We're all gonna die.

Endgame Napoleon's picture

Is population decline bad? No, it is not bad, especially since automation is reducing the number of full-time jobs for humans. Machines will do many of the physically demanding things that young humans used to do. Computer programs have already reduced the workload in many businesses, resulting in lots of temp gigs and part-time fare at wage levels insufficient to cover household bills. We do not need a maximum numder of humans chasing the available jobs. Population decline aligns naturally with the decline in real jobs. As noted in the article, resources, including jobs, will be more abundant without an avalanche of population growth.

Teja's picture

Well, if you look at innovation and motivation in a workforce, I am not so sure if the demographic shift connected with population decline is helpful. Older people are more fearful, avoiding change, avoiding new ideas.

What happens if you have a smaller group of people who pay more into the system than they would ever expect to get back, who feel that the political power is controlled by others with whom they do not share values or interests?

In Catalonia, which fits this description, you have secession.

Between young and old population groups in a demographic shift scenario, secession is not really possible. You get either flight (from the countryside to the cities, or even to other countries) or passive resistance (by not marrying, not getting children, low motivation to work). Both happening right now around you. And both not improving the issue of demographic shift at all.

I believe the reason why "conservative" people tend to deny that the demographic shift is a major issue, long term, is that to accept it as an issue would put into question their values of consumerism, male dominance and ignorance of social and environmental issues. Deep in their hearts they know that demographic collapse in First World nations can only lead to catastrophic collapse of their societies at some point in the future.

Blue Steel 309's picture

Best comment you have ever made, NoDebt. Well done.

1 Alabama's picture

by this logic, you should be planning to leave the U.S. soon, but you are not, so is confusion/deception, the order of the day?

historian40's picture

Not as long as white people stop having babies.  /sarc

vealparm's picture

It's funny,  angry Blacks blame Whitey for all their problems......they will be in deep shit when Whitey is gone.

jin187's picture

If whitey disappeared in a puff of smoke tomorrow, niggas better learn Chinese real fucking quick, along with the rest of the world. They better learn not to talk shit in Chinese either, unless they want to find out what real police brutality is. Well that, or what the bottom of a tank tread looks like.

my new username's picture

I agree.
Economies grew with smaller and less healthy populations, with infant mortality rates far in excess of today, with poor hygeine, limited food and early death.
We can thrive with shrinking populations.
But we will die with mass immigration.