The Great Depression was a global event in the 1930s. There are proposed definitions of economic depressions, which are
* a decline in real GDP exceeding 10%, or
* a recession lasting 2 or more years.
A recession is defined as negative economic growth over two quarterly GDP measurements. This is 6 or more months of a shrinking economy.
The Great Depression is the economic Boogie Man. It was the worst economic period for the industrialized world. There are many stories, books and movies describing the hardships of that period.
I recently wrote how the world could drop from 8 billion people today to 250 million people in 2200. This means there will only be about 3% of today’s population in 2200.
One way to calculate national GDP is Number of people times the average economic activity per person.
This economy is also mostly dependent up on the working age population actually working and being productive.
How big would a global economy be that has 3% of the people and only 2% of the working age population? For the world economy to be the same size, you would need to have 33 times the per capita income. This is just to be equal and have overall economic stagnation.
I do write about and believe we can have an AI and humanoid robotics revolution. However, there is always the chance these technological things do not happen. We would be left with massive economic headwinds.
People do not get how terrible the problems will be as this happens.
People do not get how the global financial system that we have made depends upon population growth.
People do not get how fast and how hard this has already been hitting Japan.
People do not get how much this will hit China and Japan from now to 2050 and beyond.
The shrinking and aging population problem for China, South Korea, Italy, Spain and Japan from now until 2050 is pretty unavoidable at this point. These countries are 25% of the world’s economy and they have many of the largest banks in the world.
Those country could be losing 1.5 to 2% of their working age population each year and 30% of the remaining population could be shifting into productivity and spending decline. This could be 2-4% negative headwinds each year to overall economy and to real estate markets.
People think the financial and banking crisis of 2008 and recently were bad events. People think the real estate crash of 2008-2009 was bad.
Instead of Banks worth a total of $600 billion collapsing it could many trillion dollar banks and financial institutions.
If the world might normally be able to generate 3% growth but 2% came from true technology and productivity improvement and 1% from population growth, we could shift to an overall -1% GDP growth where we had 2% technology and productivity improvement but -3% from shrinking workforce and aging people spending less and becoming less productive.
This means if the population shrinkage becomes too steep, the world would fall into permanent recession. This would also be a depression because a recession that lasts more than 2 years is also a depression. There would be constant banking and real estate crisis.
There are some commenters who say, Nextbigfuture is a “future-forward” site. Why is Nextbigfuture writing about this doomer scenario? I am writing about it because it has already been happening in Japan. Japan was the second biggest economy in the world and is now third and will soon drop to fifth. I am writing about it because I see the math and the population demographics. I see there are too few babies and there are too few women of fertile age. I see the fertile women numbers dropping. This problem is over ten times bigger than climate change. I see the risk to the China and Japanese banks and the global financial system. There is no uncertainties like in some climate science. There is no disputing how many women are in each 5 year bracket of various national population pyramids. Only countries in Africa do not properly count their people. China many now be lying to say they have more people than they actually have.
We should not be allowing this to happen.
I am optimistic that this is solvable, but only if people become fully aware and we rapidly fix it. It is fixable and must be fixed. We have to do it.
I also have a belief about what humanity must do for the far future. We have to exist and exist in large numbers to achieve what I think we can and should achieve.
Serious, Boiling Frog
China will be aging at the same time that its population is shrinking. China will be going from an average age of 38 now to over 50 years in 2050. The aging population will be a 20-40% hit on GDP. China is 20% of the world economy and Japan is still 5-6%.
Population growth and productivity improvement are like two legs for running our world economy. Yes, it is possible to hop on one leg. We are purposely handicapping the world economy by not having population growth. 25% of the world population has already allowed itself to fall into shrinking population, shrinking working age population, shrinking number of fertile women. It has been happening for decades in much of Europe, Japan. Now 60% of the rest of world is clearly on track for the same situation. India and Bangledash have fallen below replacement. Japan’s economy went flat at about $5 trillion about ten years before its population peaked in 2008. Japan had a GDP of $5.5 trillion in 1994. The GDP today is $4.9 trillion. Japan got as high as $6.3 trillion with innovation but then it collapsed back over 20%. Other large industrial countries like Germany, France increased their GDP by 50-80% in the same period. They also have gone flat for the past decade. Other countries like the USA, Canada and Australia have more than tripled their national economies since 1995.
Japan has been technologically innovating but all that innovation has been barely keeping it from decline. The USA, Canada and Australia did not have some technological miracle that Japan missed out on and that Europe partially missed out on. The three countries kept immigration of young, educated people to fully make up for the same low birth rates for the existing citizens. There are only a net 4 million people immigrating around the world. The USA, Canada and Australia take over half of those people.
Below we compare Japan’s historical GDP with the USA.
The projections of working age population for China below are likely overly optimistic. China fertility rate dropped from 1.5 to 1.18. It has been 1.18 for the past 3 years. This means China goes to 1.1 billion from 1.42 billion instead of 1.3 billion. It means working age population could drop below 600 million by 2050.
China is going to give their next generation half as many working age people in 2050. No problem, just work three times as hard and we grow our economy 50% or come up with some extra technological miracles.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
Known for identifying cutting edge technologies, he is currently a Co-Founder of a startup and fundraiser for high potential early-stage companies. He is the Head of Research for Allocations for deep technology investments and an Angel Investor at Space Angels.
A frequent speaker at corporations, he has been a TEDx speaker, a Singularity University speaker and guest at numerous interviews for radio and podcasts. He is open to public speaking and advising engagements.
Only upside is that we can’t have too few workers and too few jobs needing to be done at the same time. Hopefully some form of moderate AI productivity gains and any significant healthy life extension will give us a soft landing. 🙂
I am so tired of seeing linear predictions of population and productivity as if the former producing the latter is a fixed equation.
We lose so much possible productivity in stunted and suboptimal lives, it’s almost impossible to predict what’s possible if people ever reached their full potential at scale. And that’s before even factoring in the exponential growth in technology including now, AI and robots.
Most of all, we have to curb all rent-seeking.
Here are some ideas, out of many: https://scheerpost.com/2023/07/12/ellen-brown-the-federal-debt-trap-issues-and-possible-solutions/ Read especially the section on The Interest Monster and Taxing the Bubble Economy.
For more solutions, read my book, “America is Not Broke!” still available on Amazon though out-of-print (small publisher, big ideas).
Cities and states going bankrupt is so easy to fix I boiled it down to 3 simple Tweets (now Xeets, or whatever…):
1/3 How to pay for every mayoral candidate’s plans:
1. Change City Charter to permanently increase city pension
plan payments to cover payouts, forever, with COLAs & a
small increase to incentivize acceptance.
2/3 2. The pension fund retains roughly 95-100% every year, never paid out, more than that, net of fees & contributions. This is a massive gift to Wall Street, doing little for NYC and increasing borrowing costs.
3/3 Repurpose $250b pension fund for: Public Banks ($40b), 2nd Avenue subway ($20b), fixing NYCHA housing ($40b), etc. Jobs, investment, innovation – that’s how you fix NYC, forever.
If you doubt that the pension funds are so inefficient – up to 100% not going to pensioners, net of (many) fees and poor performance – read former NYC Comptroller Scott Stringer’s 10-year study (2005-2014): https://comptroller.nyc.gov/newsroom/comptroller-stringer-billions-in-pension-fund-fees-paid-to-wall-street-have-failed-to-provide-value-to-taxpayers/. Stringer said ““When you do the math on what we pay Wall Street to actively manage our funds, it’s shocking to realize that fees have not only wiped out any benefit to the funds, but have in fact cost taxpayers billions of dollars in lost returns. It’s clear that the status quo needs to change.” The status quo change should be eliminating pension funds entirely and just paying pensioners from a guaranteed pay-as-you-go fund, while returning trillions to economy where it can do some good.
IF all leaders became fiscally responsible then debt problems and city finances would be better, but instead almost all nations and many if not most cities have debt and financial problems.
IF no one overeats then no one would be overweight, but instead we have an obesity epidemic.
We have to deal with the reality and how people and leaders actually behave. My observation is where over 20% of the world population is already in stage 2 of the problem I describe (shrinking overall population where the fertile female population has nearly halved from the peak). 80% of the world population has fallen below replacement and is thus on track to a shrinking population within 40 years or less. This is 97% percent of world GDP.
Which nations and cities are good on finances and debt? What good is telling cities and countries the right thing to do, if they do not do it.
This is one of my predictions for 2037, published in 2012:
32. Due to the intentional choices of their leadership (in promulgating policies for their own aggrandizement that are contrary to the expert advice they have copious access to), some countries, particularly in the third world, will continue to exist in perpetual states of grinding poverty, disease, and starvation for large segments of their people (and some people in both those and other countries will continue to blame this primarily on the greed of those in countries that are better off)
Starting to look like I should have mentioned Russian and China in there as well, possibly.
Here here!
Don’t forget the anti aging medicines currently being developed that will really change the population dynamics if the max working age goes from ~65 to 80, 100 or infinite.
Also a smaller richer population with plenty of existing and experience in automation (like the US) is better poised to purchase & adopt early robotics, AI & new medicines over say say a country like China that has a much larger & poorer populace with less automation and access to western medicine.
I think in twenty years we’ll be looking at the folks currently screaming about the Thucydides Trap the same way we look at the peak oil crowd who ignored fraking research over twenty years ago.
Productivity will rapidly increase as robots and automation replace the useless eaters.
The cure for senescence has been solved. The herd is as receptive as they were to Galileo.
Ooo! What is the cure for senescence pray tell?
His user name is KGB, can you guess what that state mechanism
I see that there is a problem to be recognized but fail to see any reason for panic. The radical increase in global population began its take-off in the mid-18th century with the start of the Industrial Revolution. This was because productivity as well as the creation of goods and services expanded dramatically accompanied by advancements in food production. This is because not only could technology together with economic and social organization introduce and support greater numbers of people, but it also offered most people a high enough standard of living to afford to eat and live better than generations before them. Still, well into the 20th century a significant portion of the population depended on farming, perpetuating the social value of having large families.
Together this came to create our first panic of overpopulation in the 1960s. Now that we are experiencing the natural progressive maturation of industrialization and urbanization where since the 1400s it has been recognized that having large families was a deficit, this reality has since spread across the globe leading to this new panic of under population. The panic lies not in the trend itself but how we think of it. This impulsive reaction comes out the recognition that things can’t be the way we have become accustomed to, and everything based on our expectations and plans that there will be such-and-such more people in 2070, 2100 and so on will just have to change.
Yes, we will have to move on from our system of extractive capitalism, however with advanced automation, materials and cognitive technology, and economic order where everyone owns a part of the total productive base, we will be able to create a more sustainable system giving people a higher standard of living. As with the increase in population that came with the first industrial revolution, the demographic trend should be seen more broadly in the context of our evolution as a species from Homo sapiens to a form more human than we are currently.
“I recently wrote how the world could drop from 8 billion people today to 250 million people in 2200. This means there will only be about 3% of today’s population in 2200.”
Given the almost certain explosion in Life expectancy (and upgrades) that will occur long before 2200 doubt if the population would fall by that much. Probably looking at maybe 1-2 billion.
“The UN estimated that the world population reached one billion for the first time in 1804”
https://en.wikipedia.org/wiki/World_population_milestones
One billion seems about right to me. There were large cities in 1804 but also lots of small towns/villages/etc and lots of undeveloped land for those who like the “great outdoors”. Picture large cities connected by monorail (or some such) separated by lots of sparsely populated land allowed to pretty much go back to a managed fallow. Whatever population expansion is still occurring, well that’s what the “final frontier” (space) is for. We may even have reverse engineered UAP craft/tech (the ultimate “wild card”) by then.
As someone who will be dead in 50 years or less and who will never have children because I can’t afford to. I just do not care. Let the world burn. The universe will wipe us all out eventually anyway. I am no longer an optimistic 20 year old. I have lost my ability to care. The world is corrupt and lacks equality of opportunity and an equitable distribution of income. I’ve realized now it doesn’t matter how hard you work. You have to be lucky and have social connections. We are reverting to the historic trend of a tiny elite and mass serfdom. Only this time around people can survive reasonably well without the financial devastation of children. So we are. If you want people to have children then through policy reorganize the economy from people building mansions, yachts, and private jets for a tiny elite to an economy where people are building affordable working and middle class homes and we have well funded universal healthcare and can afford a useful relevant financially productive education without six figures of debt. Raise the minimum wage. The statistical middle class and lifestyle middle class are very different. Children are for the wealthy who have nannies or the poor who get welfare. Those of us in the middle are checking out. You have to be very careful how you fund efforts to increase fertility. The more you squeeze those in the middle for cash to fund the programs the less children we will have.
“If you want people to have children then through policy reorganize the economy from people building mansions, yachts, and private jets for a tiny elite”
I think most of the money is sucked up by the government; “rich people” at least as far as private wealth is concerned is only a small fraction anymore. We live in a world of trillion dollars deficits barely being noticed. Even the social programs like SS and Medicare are just paid from government to large corporations and then back to government. Maybe pre-WW2 that argument might hold water.
There are a finite number of workers in the population. What they produce and for whom matters. The political and financial elite both inside and outside the government are funneling resources from the productive to the unproductive. Those trillion dollar federal deficits and the trillions more created by the fed without debate are taking purchasing power from some and giving it to others. This is what causes the cost of living crisis. Those who work for their money doing something productive are being taken to the cleaners. Those who are connected both at the elite level and the masses who sell their votes for cash come out ahead despite not building or maintaining anything of value. We need workers building affordable homes and building and staffing affordable educational and health care industries. If your sitting around all day collecting passive income for doing nothing to contribite to society you are the problem whether you are getting that money from the government or a trust fund.
“If your sitting around all day collecting passive income for doing nothing to contribite to society you are the problem whether you are getting that money from the government or a trust fund.”
So according to your metric of societal value if someone for instance invests in their 401K/IRA for 40+ years of working taking a portion of their pay and investing it (rather than spend it) when he/she reaches a point where they can retire on their on dime they become “the problem”? I would say that someone who lives off the public trust (they never paid into much or at all) arguably is, as far as “trust fund folks” are concerned if someone wants to leave/give someone else their money for whatever reason that is their business. What the government is doing now is stealing the value of people’s money and spending it as they see fit to accomplish what they see fit.
I have been working two jobs for the past 5 years. I have been maxing out my 401k/403b/roth ira contributions. Despite being “responsible” and saving and investing I have gotten nowhere. My investments are all down in real value because the market is so distorted by government/fed money creation and inflation. My purchasing power and the purchasing power of everyone else who works for a living is being stolen. I cannot afford an education, house, or children. I do not expect to ever be able to retire. I survive by staying debt free. I work service jobs serving people that collect government checks and people who live off of wealth. Today the local roads were closed to traffic so a bunch of rich people could compete in an ironman triathlon preventing working class people from even commuting to work.
Regardless of where you stand politically the bottom line is this: Those who don’t work and produce goods and services have to be supported by those of us who do work and produce goods and services. If you don’t make stuff there is no stuff. The fewer people working the fewer people producing the fewer goods and services to go around. This is the worrying theme in all the articles Brain posts on fertility. The goods and services being produced are being concentrated more and more into the hands of those who do not contribute to their production.
From my perspective without a more equitable distribution of purchasing power there will not be a significant and sustained increase in the fertility rate.
I would propose cutting government spending especially pensions. Banning Fed money creation. Let the market determine interest rates. Put in place policies that encourage production. Stop giving out federally backed student loans for worthless degrees. Tax the wealthy and financial elite to pay for in demand educational opportunities. Do this by taxing investment income at the same progressive rates as wages. Eliminate payroll taxes. Fund Social Security with an income tax surcharge on high incomes and increase the minimum age to 70. Implement a VAT dedicated to Medicare for all. This encourages savings, cuts business expenses, and allows workers to take more risks in changing jobs for higher pay. Increase the minimum wage and keep increasing automatically with inflation. Put a cap on executive pay as a multiple of employee pay stock options included. If the executives want to make more they have to pay the rank and file more. Increase property taxes on non primary homes. Change land use codes to allow and encourage denser development. More housing and more affordable housing.
When people can afford a useful education and get a job that pays enough for them to buy a home and don’t have to worry about one bad medical expense leading to bankruptcy perhaps then they just might decide to have children. You can’t save up until your retired to afford these things. You have to be able to afford them young enough that you are still healthy and fertile.
You better let the woman of Niger know this profound information. They have 6.7 children per woman and are one of the poorest countries on earth. What a miracle that they can achieve this without universal Medicare or even soaking the rich. Some one better barge into their bedrooms and let them know this could negatively affect their 401k’s.
Calling it as i see it. I cant speak for everyone but i can speak to my own reasons. I have family friends and co workers single and married not having children for the same reasons. This is not shocking to any of us. What shocks us is no one believes us when we answer their question about why we are not having kids. Its pretty universal in my circle no money no house no kids.
As to women in Nigeria they are earlier in the demographic transition. I am talking about developed countries and the pattern is the same in pretty much all of them. When countries develop people see a different some would say better life is possible and they want it. Then they see all the roadblocks in their way. Something has to give. You can afford a decent life of your own or a modern subsistence life of raising kids into their own life of subsistence. I think its clear what choice most people are making.
I agree, it is clear what choice people are making. Sadly the 4 billion year history of passing along genes doesn’t care. Guess it will be a battle between Amish and Africans to see who inherits the earth. Looks like modern western man is an evolutionary dead end. Hopefully the Amish remember us kindly as we remember the Dodo.
“I do write about and believe we can have an AI and humanoid robotics revolution. However, there is always the chance these technological things do not happen. We would be left with massive economic headwinds.”
Well Brian seems to me the answer to this problem is in your above statement. We will likely in the coming not to many decades have both your “AI and humanoid robotics revolution” and likely large extensions in life expectancy in the not so distant future. Followed quickly by biological/cybernetic “upgrades”; you not only don’t get old and decrepit, instead your physical/mental abilities will actually increase over time driven by the afore mentioned AI. No historical model of what typically happens when a country falls below replacement rate would be applicable to this situation since it hasn’t happened before.
One aspect is the USA can keep growing through this for at least several decades to come. Even as developing countries are falling in population the US can still keep getting net immigrants from them.
How is the Great Depression a “Boogie Man” (sic)?
Boogeymen are specters of ill fortune or evil that are, like the name suggests, not actually real. The Great Depression was extremely real lol.
What if these developed countries with declining populations add immigrants like Canada? This could be a solution.
4 million total NET immigration annually around the world. The migrants are mostly from China and India. China and India are already leaking many of their best and most educated people. The USA, Canada and Australia are already taking about 60% of those people. Germany is taking about 10%. France and UK are taking immigrants in fairly large numbers. China is also shifting its own people from rural areas to cities in massive numbers. Urbanization doubled China’s workforce over the past 40 years it was a significant part of the economic miracle of technological catch up. Immigration is not enough.
Economic growth is based on two factors. Population growth and productivity improvement. If the population stops growing or declines, then productivity improvement is the sole factor that can drive economic growth. As long as you have technological innovation, you can have economic growth even with a declining population.
Population growth and productivity improvement are like two legs for running our world economy. Yes, it is possible to hop on one leg. We are purposely handicapping the world economy by not having population growth. 25% of the world population has already allowed itself to fall into shrinking population, shrinking working age population, shrinking number of fertile women. It has been happening for decades in much of Europe, Japan. Now 60% of the rest of world is clearly on track for the same situation. India and Bangledash have fallen below replacement. Japan’s economy went flat at $5 trillion about ten years before its population peaked.
Japan has been technologically innovating but all that innovation has been barely keeping it from decline.
Cut pensions and give it to parents, this is really not easy to be a parent today ( I get 2 kids) , cost awful money and this is really taking all your free time…. So what do we expect in that situation ?
But we shouldn’t view such a “Great Depression” as particularly similar to the 1930s Great Depression. Just how depressing would that last Great Depression be if they all had multiple cheap robot servants, cheap 3D-printed homes, cheap food, cheap cars, etc. Elon is correct. It’s hard to say what an economy looks like when you have end-to-end automation. But it isn’t food lines.
We need to beware of drawing too many lessons from historic analogies. More often than not they are misleading because the relevant factors are almost always different.
The problem isn’t really the cost of building homes (although cheap 3d printing would be nice). It is government restrictions on building on existing land that keep prices of homes very expensive. Local landlords voted for the council members who enact these restrictions as they like collecting high rents (economic rents, ie rent above what they would collect in a free market). In a lot of western democracies we are now in a mechantiliat capitalist economy rather than a free market capitalist economy in some critical sectors.
Yes, it will not be food lines. Japan still has a comfortable society. There is no breakdown yet. But the pension program could virtually disappear..soon. There can be you only have your savings or you work til you drop. But the alternative without the problems of the last 40 years would be a country with a GDP of $9-12 trillion and a population of 140-150 million people instead of 122 million and $4.4 trillion. They would have a birthrate holding at 2 million per year instead of 750-1000k per year.
It won’t happen. But if it did, the cure is simple. Increase the Minimum Wage to account for the increase in productivity. We need to consume what we produce and the rich aren’t doing their fair share of consuming.
There is massive differences in minimum wages between countries, states and regions. If your simple cure is correct then there would be a correlation between high minimum wage and fertility rates. I do not see this in the data. Can you show me where you see this in the data?
No population in nature only increases in size. Humans are no different, we are going to have ups and downs in our population curve. Since this is a normal part of the natural order we better learn to deal with it.
The biggest problem I see is governments and economies designed to run like Ponzi schemes. Social Security is a very large and very obvious Ponzi scheme. And like all good Ponzi schemes when the flow of new suckers stops, they collapse. There’s a solution here, just look at Norway’s sovereign wealth fund. Norway invested all of their social security payments instead of wasting them. Now as Norway’s population ages they have plenty of money to pay pensions. On the other hand the US government has spent all of our Social Security contributions and replaced them with IOUs from future generations and that’s the definition of a Ponzi scheme. Ponzi schemes and declining populations are a toxic mix.
I also agree with Brett, the measure to look at is Per Capita GDP not total GDP. As you say in the article GDP is population times productivity. That’s two variables, if population is declining then we better focus on increasing productivity. Just look at that equation, it is certainly possible to have a rising standard of living while the population is declining. That is effect is happening right now, it’s called wealth inequality (ignore inheritance which I despise) and it is driven by some people in the economy having much greater productivity than others.
I think a declining human population is inevitable starting around 2100. The way to deal with that is focus on productivity. And that means fixing our schools so that everyone receives a quality education. The solution here is to make EVERYONE more productive. In today’s world much of the population is only marginally productive.
Long term I see the population falling until the standard of living rises enough that people want to start having kids again. This is just simple microeconomics. A child on a farm has a positive value to a farm family via their labor. In today’s world a child born to an urban couple has a strong negative economic contribution their parent’s wealth. We have to work to change that equation. A rising standard of living will lower the relative cost of having children and at some point the joy of having them will exceed the negative financials and the population decline will reverse.
On the other hand, it may take a long time to purge the existing Ponzi schemes and while they are still with us we will see continued economic decline. Note that all government debt is a form of a Ponzi scheme. If is fine to borrow to build assets. Borrowing to defend yourself in a war will also happen. Government borrowing to finance consumption is a toxic Ponzi scheme.
Here’s a question to ponder, as the world’s population falls how is the mix of highly productive vs marginally productive people going to change? If we lose all of the highly productive people them the permanent Great Depression happens. But if we lose all of the marginally productive people, does it really have much of an impact?
Also consider the urban vs farm mix. Will a declining world population proportionately increase the farm populations? History tells us that all rural populations have high birthrates.
The industrial revolution (physical automation) increased the average wealth of US households to about 180 times (over two orders of magnitude) what it had been in just a bit over a century and a half. There is every reason to believe that cognitive automation, whatever we decide to call it, will do the same and that, in the greater scheme of things, 2023 may be remembered as the year it started really becoming a thing. Given the accelerating rates of change in scientific discovery, and technological innovation, there is every reason to believe that this change’s impact will occur far faster.
But it will likely occur even while other parts of the world are rapidly declining in, well, everything. Does anyone really see much economic hope for Russia, China, or several other large areas in this century? So we may see a world where where large geographic areas will almost seem to have gone backwards in time, rather than forward, in terms of nearly every measure, while other parts will continue on to the future.
Depressing in some ways, but overall positive as we don’t want everything falling to the least common denominator. That way leads nowhere good.
“History tells us that all rural populations have high birthrates.” Correlation, not causation. Historically urban dwellers have been a small minority due to the limits of muscle powered farming. You needed a lot of people to work a farm to make a surplus (usually) and kids were cheaper than hired help, plus they were your retirement plan.
We do not have an example of a rural industrialized farming society to compare to. Farmers make up a small percentage of an industrialized society which developed in conjunction with mass urbanization.
When the “family” unit was farm based, (a few generations ago), additional children was almost a necessity to assist with farm based activity as this labor was free and the “family” had no intention of leaving the farm.
The crushing cost of raising and educating a child today is overwhelming to most and I don’t see that changing in the near term.
Look, you seem to be rather insistent on not normalizing for population, which makes no sense in this context.
If you could wave a magic wand, and transform today’s China into today’s Monaco, by your proposed standard of gross, not per capita, GDP, the new country would be in an unimaginably deep depression. It’s just that all the actual people would be very well off…
The proper measure has to be per capita GDP, ideally on a PPP basis.
That said…
There are two things to fear from the population implosion.
The first to hit is that a population that is shrinking due to a failure to reproduce implies a very distorted age distribution, very heavily loaded in the direction of unproductive and medically expensive elders. The lower average productivity pushes down per capita GDP at the exact time that the elevated medical expenses divert more of GDP into unproductive uses.
The last to hit is when population shrinks to the point where society can no longer maintain the level of complexity and specialization needed for a modern industrial society.
In between, the diversion of so much of GDP to medical support, together with the reduction of the percentage of productive population available to sustain other specialties, means that a society with declining population fails to maintain necessary complexity at a much higher absolute population level than a society with a stable population would.
So, solutions.
The “front end” solution is restoring conventional reproduction rates. It’s difficult to motivate people to do this, because societal expectations for living standards shift in the direction of consumption rather than child raising, as fewer children get born. In a democracy is may be simply impossible for the government to adopt policies extreme enough to restore fertility, because so many people who are voters aren’t having children, and don’t want to pay for other people having them.
The “back end” solution is life extension / rejuvenation. I don’t think it faces the same democracy issues, because very few people actually want to grow old and die, but pulling it off is rather more speculative, while getting people to reproduce is largely just a question of throwing money at the problem.
A more speculative front end solution would be to use artificial wombs and robots with social AI to either lower the personal cost of reproducing, or simply add extra reproduction that’s not initiated by parents. But the obvious problem with this is, “Who programs the AI?”; Can you even imagine, given modern trends, that the AIs wouldn’t be programed to mass produce an army of Red Guard?
Wow! There’s something to think about. Who raises the kids and so what sort of people will they turn into?
If we thought that how we educate our kids are the battle royale, how they are raised would be an equally contentious battle royale.
“Getting people to reproduce is largely just a question of throwing money at the problem”
No, it isn’t. If it was we’d have seen consistent, long-term improvement in birthrates in countries that have tried this. However, we don’t, because throwing money at this problem is emphatically not a workable solution.
Brett, Lars and others who I have convinced of the big problem,
How to get the most result from throwing money at the problem? NOTE: Japan, Sweden and many other countries facing these issues have been devoting tens of billions per year at this problem already. 10-25% improvements. 1.3 to 1.5 for awhile in Japan. 1.6 to 1.85 for a while in Sweden.
Observe what is being tried and what helps and exactly how much.
This is a big problem that threatens major and escalating financial and societal damage. It weakens the finances of the country to respond. Japan had more money and better finances 30-40 years ago. Japan will financially weaker in 2050 and beyond. We need to target the money and programs to convert people in the most cost effective manner. The DWave multi-variable optimization could determine what are the relationships and parameters that impact the actual choices and how to maximize programs and dollars to results. My belief is that targeting programs at people with less money (new immigrants, rural people in China for China) and already willing to have kids (paying some for 30% people to go from zero to one versus spending and supporting ten percent to go from two to six or 20% of people to go from one to three.) You support all buckets and options to a certain extent but you track results and optimize. Also, use the surrogate birthing options.
If Japan and China will take a 20-50% GDP hit over the next 25 years and then another 20-50% hit every 25-40 years there after if they fail to solve it then how much should they spend now to actually turn it around?
“My belief is that targeting programs at people with less money (new immigrants, rural people in China for China) and already willing to have kids (paying some for 30% people to go from zero to one versus spending and supporting ten percent to go from two to six or 20% of people to go from one to three.) ”
That makes sense if you treat people as fungible. They’re not remotely. Not genetically, not culturally.
If you take the least successful segment of society, and pay them to reproduce, sure, that will be more cost effective in the short term, you’ll get the most kids for the money spent. And then a generation later you have a lot more poor people! You’ll literally be breeding for poor people. Both genetically AND culturally. That’s exactly what you don’t want to do.
Now, targeting the least successful for jobs as surrogate mothers, that might be more cost effective than artificial wombs. So long as the children get raised by successful people, anyway. I think this is probably politically problematic, though.
Which is why you pay the poor and those willing to surrogate for the desired genetics, on top of their own kids.
If a government really is serious about increasing its birth rate?
Well, to start with, we assume the country is somewhat developed and able to afford this, as it likely wouldn’t be having a depopulation problem in the first place, otherwise (with some exceptions).
Here’s a few:
Uncle Sam also picks up the ticket for infertility issues, for OB GYN visits, and for all costs of medical treatment during pregnancies, for childbirth (deliveries), and for a basic level of medical care for all children under 18. Basic levels of national health care to remain a separate issue, for now.
There would also be basic allowances for children’s clothing, food, shelter, and education, with some serious safeguards to ensure they are getting these things. For example: you might have to issue something like food stamps for children’s clothing, with limitations on what it could be used for.
And, a real big one, free childcare, as well as childcare credits if you want private childcare or no facility is near you.
Sounds too expensive? Hey, I thought you said you really wanted these kids? Put your money where your mouth is or go home. Kids aren’t cheap; that’s a big part of the problem.
Beyond that?
Additional non-monetary rewards might be offered to those who are active in ways perceived as positive for society, perhaps something along the lines of the multiple vote system seen in Nevil Shute’s novel “In the Wet”.
In that novel, a citizen can have up to seven votes. Everyone gets a basic vote. Other votes can be earned for various achievements. The ones in the book are rather dated now (being an official of a Christian church?) but the concept holds.
Things along the lines of: 1) completion of higher education, 2) at least two years of government service (military or civilian), 3) earning one’s living overseas for two years, 4) marrying and raising two children to the age of 18 without divorce or juvenile delinquency, 5) volunteer work for various designated causes (ecology and environmental support, care of the elderly and disabled, as well as children), or 6) paying a set level of income taxes each year for at least ten years. The seventh vote could be reserved for winners of the Presidential Medal of Freedom.
Attach enough status and many people will actively seek these things. Likewise, if they are on some sort of dole or universal income plan (I suspect a lot of people will be if automation really takes a few leaps forward), these might be affected by how many votes they have earned.
That’s like saying that parachutes don’t work because your pocket hanky won’t slow you enough to survive jumping out a plane.
We have estimates of the sensitivity of reproduction to financial incentives, and the problem appears to be that the typical incentives are too small by a factor of 10 or more. But there isn’t a lot of question that people WILL reproduce if you pay them enough. And “enough” looks like it’s financially feasible as a fraction of government spending, at least in the more prosperous societies.
Which I contrast with solutions that are more speculative, like automation
The real problems with paying people to reproduce is that governments don’t want to spend that kind of money when they can just let people in from third world countries. And the people most responsive to being paid to reproduce are probably the people you least WANT to have reproducing and raising the next generation! But just try making policy based on that observation in a democracy…
So, paying people to reproduce? Technically feasible, but politically all but impossible.
I think we’re going to need a technological solution. Artificial wombs so that women can have kids without the inconvenience of pregnancy. Android nannies so that raising kids doesn’t cut into your lifestyle. Gamete subscriptions so that you don’t have to find a willing partner, just volunteer to live with one of those robot nannies.
Those are what I call “front end” solutions.
Back end solutions would be life extension, and ideally, rejuvenation. So that people who are already acculturated to having children can have another go at it, and so that they can be productive, instead of dead weight.
A “side end” solution would probably be something like high enough levels of automation and AI servants that the distortion of the demographic curve doesn’t ruin society while populations decline. If we can hold things together a few generations, the subcultures that favor reproduction should solve the problem by ending up dominant; The future belongs to those who show up, after all.
Possibly the least resolved aspect in your reasoning is what makes for the minimum cohort of a complex, sophisticated, industrialized, and technologically-capable society (and whether that increasing GDP has any relationship to that). I believe that it is a lot less than One thinks. I am surprised that there is not several papers on it – one always hears about the minimum skill set to start and prosper on a deserted island (often in literature).
You could very likely cut the entire population of the earth away below Mexico and to either side of North America – and it is very likely that the lifestyle, goals, and wide sweep of civilization would be delayed but only a little -still travelling to the Moon, EVs, nuclear/ fusion, rich assortment of consumer goods, full assortment of basic commodities, dynamic urban and rural lifestyles, etc., etc. It is very likely that North America could not only be self-sufficient but thrive magnificently above current levels of progress and innovation. Most of the world’s population is holding human civilization back and will likely continue to stagnate and tread water – increasingly devouring resources as they struggle towards modernity, peace, and economic viability. As North America aspires to on-shoring almost all (in the sense of variety not quantity) of its industrialization, resource extraction, and truly integrates verticality in all sectors, we will see a level of resilience and opportunity not previously available under the poker game and over-stated promises of Globalization.
I think you can probably design a society to minimize the population necessary to sustain complexity. Whether or not you’ll accidentally fall into that design in the middle of a population implosion is another question.
It’s something Musk and his Mars colonization team ought to put a lot of thought into, because they’re aiming for a lifeboat. That means both self-sufficiency at the smallest possible population, AND a population that reliably reproduces above replacement.
You might think of Mars as the lab to try out solutions for Earth.
You might enjoy reading Eric Flint’s 1632 series, where a single small and unremarkable (by modern standards) town from year 2000 West Virginia finds itself transported to the middle of Europe in 1631.