Demographics is straight-up an economic question. We need enough people to generate innovations, and certainly the unique, right-tail, step-change ones that change civilizations. And we mechanically need more people to carry the physical load of supporting the elderly and the sick.
In a piece for The Daily Economy a few years ago ("How Societies Save For an Uncertain Future") I laid out the 3 ways we can carry value forward:
I wrote that
In societies bigger than Dunbar’s number, (1) collapses. The history of human civilization has thus been a battle between (2) and (3) – between centralized structures that controlled mandated money, and structures using decentralized real-world resources for their monetary purposes.
Technically, they all condense to the same thing: generations have to carry one another, either stably rolling over or constantly expanding. The 20th century lived happily-ever-after on always expanding—thanks, Boomers!—but that trend hasn't just reversed but won't stop falling. We are fucked, one might say.
Today's world of aging populations in the West, a West filled with varying degrees of generous pension/social safety nets and highly regulated markets, thus find themselves in bigger problems. All countries have too few babies born, to increasingly elderly parents, unable to support more and more grandparents broadly speaking:
The FT has a long read this week about the baby gap, opening with a policy experiment in Finland: pay people €1,000 a year for 10 years to stick around and have babies. The inhabitants didn't. Oopsies. (I mean, 1. it's not enough money to make a difference, and 2. paying enough —maybe 10x or 20x that—wouldn't be economically sustainable.)
Policymakers around the world are grappling with the same problems as those in Lestijärvi: no matter what they seem to offer in the way of incentives, people are not having more babies. For the Finnish municipality it failed even to lure people from elsewhere: “It didn’t stop people moving away, and it didn’t attract new families,” Aihio said.
And these efforts have promising effects... absolutely nowhere:
China has offered free fertility treatments, Hungary big tax exemptions and cash, and Singapore grants for parents and grandparents. A Danish travel company even ran an ad campaign to “Do it for Denmark”. In Japan, the state funds AI-powered matchmaking, while Tokyo’s metropolitan government is offering a four-day working week to staff in an attempt to encourage people to become parents.
"Fewer babies and more older residents lead to a lower proportion of people of working age, denting tax revenues at the same time as costs associated with ageing societies, such as state pensions and healthcare, increase."
Put in meme form (the numbers are not quite right... no country has four elderly for one working person):
Any fixes?
“You can either increase migration rates or retirement age, or encourage people to have more children,” said Edward Davies, policy director at the Centre for Social Justice in the UK.
Well, the article covers all the ways in which encouraging people has failed (no response to money or flexibility or day care availability etc); The Economist ran a full special issue in the summer dedicated to the failures.
And migration is already about filled to the brink of what most European countries will accept; and vast increases in retirement age are both unfeasible and unpopular. Either way, vastly increased immigration only buys us a little bit of time, kicking the demographic can down a chaotic road.
Another suggestion, Svetski style(!) (#861088) is to roll back feminism:
Again, good luck with that—even if it worked/had potential to work, it's way too late for that!
While chanting "bitcoin" is a satisfying quick-fix, I'm not so sure it matters much. When people are asked why they don't have (more) kids (earlier), the answers are usually some combination of "too expensive" and "self-actualization." Higher education fucks with booth of those, as does globalization and technology, as does an overarching government siphoning off value left, right, and center.
A money that distributed productivity gains more evenly would help; a smaller/non-existent government would help; an afuera'd retirement system (i.e., one that outsources production for you in your old age to the global market) would help.
Still, nobody knows how to achieve/generate that, and it's doubtful that we'd have those productivity gains anyway. A better money (#793537, #809392, #839329) only does so much to make the real economic processes flow better.
Tl;dr—I'm pretty gloomy on this one.
non-paywalled here: https://archive.md/fLnZF