Digital Age, Economy / Finance, Population

From Doom to Doom: Population Explosions and Declines

Jan 16 2019

By George Friedman* – Geopolitical Futures

As population growth booms and slows, the only constant is panic

The United States appears to be facing a possible population crisis. Statistics from the National Institutes for Health show that the U.S. birthrate has declined to the extent that it cannot sustain the current population level. Conventional wisdom suggests that countries experiencing population decline – largely industrialized nations – face serious problems. Yet in the latter half of the 20th century, we feared the threat of an exploding population. There are some subjects for which any outcome appears dangerous: a growing population because it outstrips resources and a declining population because it threatens to slow the economy. Are warnings of a new crisis valid?

In 1968, Stanford University biologist Paul Ehrlich argued that by the 1970s, the world’s population would outstrip its resources, leading to hundreds of millions of deaths from starvation – including tens of millions in the U.S. Other researchers suggested the catastrophe was less imminent but agreed that population growth, paired with resource stagnation, would inevitably lead to an apocalyptic scenario. The perceived danger posed by population growth became utterly mainstream thinking. But it was based on two key errors. First, the population growth curve did not materialize as anticipated, as the global population grew at a lesser rate because of slowing growth in advanced industrial countries. Second, the assumption that resource production had peaked and had no further room to grow proved incorrect. Considering these fears, it seems ironic that the recent news of population decline should be greeted with such dread.

As I have written elsewhere, population decline is closely related to the movement of people from rural to urban areas, and that movement coincides with industrialization. In preindustrial agricultural societies, children were a valuable, productive asset – even a six-year-old child could carry out essential household tasks. The global population surged, in part from necessity, as families needed more productive hands, and boosted by advances in medicine that reduced perinatal and infant mortality. The industrialization of society changed things. Children, in an advanced industrial society, attend school into their late teens or 20s, constantly consuming wealth and rarely producing it. Parents in urban areas like London or San Francisco find they can satisfy their emotional needs with only one child. They do not the need eight or nine children to work as field hands, as in previous centuries; further, outside the least developed countries, having eight children would be economically catastrophic.

Children, of course, are born not only of microeconomics but also of lust. The development of hormonal contraceptives in the 1960s coincided with – and mitigated – the panic around population explosion. If a couple has less than two children, the birth rate will decline. Add this to the Industrial Revolution and to declining real prices of energy and other resources, and Ehrlich’s models collapse.

Just about everyone believed in the population explosion that Ehrlich and his ilk predicted – making today’s scenario most unexpected. But is it a problem? The emerging economic model of the advanced industrial world is as different from the industrial era as the latter was from the agricultural. Industrialism depended on populations large enough to staff the factories at the heart of the economic model. Workers on production lines required only limited training, and a relatively small cadre of highly skilled technicians and managers designed and oversaw the operation.

The extension of industrialism is a technological society. Both are based on the contrivance of machines to facilitate production. But technology takes industrial production to new levels, radically reducing the number of workers needed. In the transition to the technological economy, a great deal of U.S. industrial capacity shifted overseas to countries with large, trainable populations. U.S. industrialism was left in tatters. What has emerged is the production of wealth based on information, which is now the driving force in American production. The workforce required for this production is much smaller and needs much higher levels of education than the workforce that staffed the production lines of the 1920s.

If that’s the case, a declining population does not pose a problem – as long as the available workforce is appropriately trained. Per capita gross domestic product could still grow in spite of a contracted work force. Indeed, if total GDP fell more slowly than population, per capita GDP would still rise. If the two fell in tandem, per capita GDP would remain the same.

This model assumes that per capita productivity will rise as the total workforce contracts, which in turn assumes major technological inputs. However, as I argued last week, the microchip-driven economic surge has matured, and therefore a new core technology must emerge. My article was uncertain about what this technology would be, and many readers wrote in to argue for biotech. That would allow people to live longer – an effect that would seem to reverse the population decline we’re currently seeing. At this point I have no opinion on that prediction, but it would seem to complicate demographic modeling.

The human race has endured many predictions of the apocalypse, and I was particularly jaded to apocalyptic visions in the era of population explosion. By understanding why the initial population explosion took place, and why population growth is now slowing around the world and even reversing in some advanced industrial countries, we can get a sense of why population decline may not pose a problem, but simply creates a new social and productive model.

I do have to admit a sense of amusement seeing the apocalypse then turn into the apocalypse now. It’s not so much that humankind dodges a bullet, but that the seers see bullets in too many places. As a professional seer, I write these words with humility.

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* George Friedman is a Hungarian-born U.S. geopolitical forecaster, and strategist on international affairs. He is the founder and chairman of Geopolitical Futures, a new online publication that analyzes and forecasts the course of global events.

 

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