"Demographics is Destiny?"

 As a fan of Anthony Trollope, I got a smile yesterday in reading a review of The History of England’s Cathedrals in The Wall Street Journal by Benjamin Riley. The book’s author, Nicholas Orme, quotes the diarist Henry Channon who, with a few friends, sat down with Francis Underhill, bishop of Bath and Wells, in the early 1940s. Underhill, a devotee of Victorian literature, quipped: “There is nothing I like better than to lie in my bed with my favorite Trollope.”

 

With an abundance of negative news I thought re-telling the story might, too, produce a smile.

 

As for this essay, the subject is one widely discussed in think-tanks, books, academia, and the media, but it is an issue that politicians, in a commendable bi-partisan coming-together, have chosen to ignore, as addressing its consequences might affect their re-election chances.

 

Sydney M. Williams

www.swtotd.blogspot.com

 

Thought of the Day

Demographics is Destiny?

March 4, 2024

 

“If global population stops expanding and then contracts, capitalism – a system implicitly predicated

on ever burgeoning numbers of people – will likely not be able to survive in its current form.” 

                                                                                Zachary Karabell (1967-)

                                                                                Founder, Progress Network at New America

                                                                                Reviewing The Human Tide (Paul Morland) in Foreign Affairs

                                                                                September/October 2019

 

Apart from Israel, which has a TFR (Total Fertility Rate) of 2.9, no Western nation (including Japan, South Korea, and Taiwan) has a birthrate above replacement rate, which implies – barring immigration – a West that faces aging and, ultimately, declining populations. (It is only fair to point out that China, Russia, and North Korea also have declining birthrates.) 

 

As Mr. Karabell wrote in the review quoted above: “Governments worldwide have evolved to meet the challenge of managing more people, not fewer and older.” Yet the opposite is in the offing. The effect on living standards could be startling. Economic growth depends on many factors: free markets, rule of law, global and fair trade, the right to property ownership, innovation, entrepreneurship, secure borders, but also on an expanding working-age populations.

 

Or, at least, a growing population has always been a key driver for economic growth. However, in a 2019 review of Paul Morland’s The Human Tide, Jason Willick wrote: “New technology such as cloning, space travel and artificial intelligence could mean the current demographic slowdown is not an endpoint but an interregnum before another era of radical political change sweeps all before it.” That is possible, and it is also possible that artificial intelligence will forego the need for additional white-collar jobs. But there is no way to avoid an aging population, along with ever-higher costs of healthcare for the elderly. Robots and computers do not pay taxes; people do.

 

The United States is better situated than most Western nations, as it attracts migrants to offset declining birthrates, though our population continues to age. Europe, as well, attracts migrants from the Middle East and North Africa, but at a lesser rate, and with less assimilation. While birthrates have declined in developing countries, many are still positive. Nigeria, for example, with a population of 226 million and a TFR of 5.3, is projected to have a population of 550 million by 2100. According to projections both Pakistan and Nigeria will surpass the United States in terms of population by 2100. China’s population will shrink to about one half that of India, the only country predicted to have a population over one billion in 2100. 

 

The study of demographics – the statistical study of human populations, how they change through fertility, deaths and migration – has been around for a long time. The economist and Anglican cleric Thomas Malthus is famous for the prediction in his 1798 book, An Essay on the Principle of Population – that an increase in the world’s food production would lead to more births and declining living standards. What he failed to anticipate was the Industrial Revolution. While the world’s population grew eight-fold over the past two hundred years, the percentage of people living in extreme poverty shrunk from roughly 90% to about 10%.

 

The problem facing much of the planet is the opposite of the one that concerned Malthus. Population declines, at this stage, have been masked by increasing life expectancy and, in some countries, by immigration. Nevertheless, over the past three years Japan’s population has declined by 1.4 million, China’s by 700 thousand, Russia’s by 600 thousand, and Italy’s by 400 thousand. Germany has shown a small decline, while France and the UK have had modest increases, largely due to immigration. A United Nations’ study in 2022 predicted that by 2050 population declines of greater than 15% will be experienced by two Baltic nations, Lithuania and Latvia and seven eastern European countries – Bulgaria, Ukraine, Serbia, Bosnia-Herzegovina, Moldova, Hungary, and Croatia. Portugal and Italy are expected to have population declines of more than ten percent. Declining birth rates are affecting the United States as well. Here, in 2013, with a population of 316 million, there were 3.9 million births. In 2023, with a population of 334 million, there were 3.7 million births. While the number of births exceeded the estimated 3.3 million deaths in 2023, the ratio is shrinking.

 

In the recent issue of The Spectator, Paul Wood wrote of the situation in Italy, in an essay titled “Empty World.” In it he noted that Italy’s TFR is 1.24. Deaths, he pointed out, have out-numbered births “for more than thirty years.” His analysis suggests that one cause has been an increase in childless couples, that if “a couple does start a family, it is likely to be as big as in decades past.”  But couples who delay the start of a family often wait too long.  London’s left-wing The Guardian suggested that right-wing policies might be, in part, to blame, as families have had to assume some of the costs of the care for their elderly, as the State has become financially strapped. Wood quoted Giulio Meotti, a columnist for Il Foglio: “We are in serious trouble…waiting for the inevitable. It’s a slow suicide.” 

 

The immediate problem for the United States is the one of aging – the increase of those in retirement years and their increased health-related expenses, and the decrease of those of working age.  In 1960, life expectancy (70) was almost ten years less than it is today (79), while the number of working-age people per retiree (6) was twice as many as today (3). For decades politicians have successfully avoided the unpleasant task of reforming Social Security and Medicare. They won’t be able to do so much longer. According to the Social Security and Medicare Board of Trustees’ 2023 annual reports, Medicare and Social Security unfunded long-term liabilities now exceed $78 trillion, over $600,000 for every U.S. household. 

 

The question of demographics raises issues. Why does marriage seem a rite easy to postpone and why are couples having fewer children? Will retirement ages be raised? Will life expectancy continue to increase? What are the economic and social consequences of fewer children, a shrinking workforce,[1]and an increase in retirees? On the other hand, is it possible that today’s demographic Cassandra’s fail to foresee political, social, or technological changes that could alter what otherwise looks to be a bleak and costly future?

 

Is our destiny predicated on trends in demography? Certainly, at least partially. But our future well-being also depends on a vibrant democracy, sensible and legal immigration, individual innovation, education, and culture. The most harmful consequences of birthrates below replacement may not be felt for several years, but it is an issue that should be debated and addressed now.

 

 

 

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[1] In fact, and as noted by University of Amsterdam sociology professor Hein de Haas in last weekend’s edition of The Wall Street Journal, a need for lower-cost labor in industries such as hospitality, healthcare, restaurants, cleaning, and agriculture is a major reason for the migration surge at our borders.