World Population: Slowing Growth
I have speculated that economic and population growth will not meet conventional expectations, contributing to a challenge to capitalism to grow. As fertility rates (live births per woman) fall below 2.1, Zero Population Growth is achieved. The slowdown of population growth is big news and deserves some attention. If population slows within a decade or two, capitalism must adapt. How? With what consequences?
When I was born in August, 1945, the world population was just below 2.5 billion. As I write on May 25, 2019, the world population was about 7.6 billion, according to the U.S. Census Bureau. Thus the human population tripled during my lifetime, adding another 5 billion humans. Read that sentence again. Grasp its significance for yourself before reading any further. Get it. Only then move on.
Demographers, a cautious lot, follow professional authoritative sources, such as the U.N. The projections of the U.N. predict that the population will hit 9.8 billion by 2050 and 11 billion by 2100. Keep in mind that vital statistics (pertaining to births and deaths) are highly reliable.
What Population Growth Means
Population growth underlies economic growth, thus capitalism. Lower population growth suppresses total economic growth, not necessarily growth per capita, however. So consider these effects that are at stake:
Consider: Lower Productivity Times Fewer Workers = Degrowth, Stagnation, Steady State
Thus: Active workers times productivity = economic (monetized) production. I will argue below based on solid authority that both the size of the workforce and its productivity will continue to rise but more slowly than at any time since the period of industrialization (Industrial Revolution in England starting around 1750 and the inauguration of the Anthropocene — a big topic to be considered later. Thus, economic growth will slow, approaching stagnation.
However, it you belong to the ecological camp of Herman Daly, you look forward to the realization of the steady-state economy, or, as others put it, de-growth. This is a dramatic consequence to be digested with deliberation.
This means a larger work force to help the growing aging population (like me, at 73 — but I am at work as I write, just not paid) create a rising dependency rate (I have saved and invested, most have or can not), and provide the future’s consumers (aggregate demand) and workforce. Consumers with adequate income purchase these goods and services. allowing for capitalism to grow, which it must.
In this context, consider this article by demographer and economist Neil Howe appearing in March 29th, 2019, Fortune magazine, a proponent of capitalism, Nations Labor to Increase their Birthrate. He advocates pronatal policies, including a neoliberal subsidy to have children:
“What are countries doing about it? Many governments have taken a neoliberal approach by offering direct financial incentives to families with children, such as tax breaks, housing assistance, or discounts on public services. ”
William Reville argues the same in the Irish Times in March 7th, 2019. He cites evidence that the human population will never rise above 8 billion.
See recent data on fertility rates by country; USA is 2.06, where Zero Population Growth is below 2.1 births per woman.
The size of human population by mid-century may prove critical in the trajectory of capitalism. I will soon spell out the ramifications of these possible trends:
- Reductions in the workforce and even worker shortages could occur as population declines or simple ages.
- Decline in the worldwide productivity per worker continues.
- Shift of capital investment to social overhead capital to mitigate and to forestall the effects of climate catastrophes. Expect interest rates to surge, crowding out private investment.