Tuesday, May 13, 2014

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The End of Humanity, or a least Modernity

The Associated Press has picked up on the idea from our article series The End of the Modern World. From the AP…


…The financial crisis that followed the collapse of U.S. investment bank Lehman Brothers in 2008 did more than wipe out billions in wealth and millions of jobs. It also sent birth rates tumbling around the world as couples found themselves too short of money or too fearful about their finances to have children. Six years later, birth rates haven't bounced back.

For those who fear an overcrowded planet, this is good news. For the economy, not so good.

Surprise, when culture changes – and in this case it’s the culture of having families, it doesn’t just “change back”.  The AP worries this is an economic problem, but if birth rates stay below replacement level, there literally IS NO FUTURE for humanity.

We tend to think economic growth comes from working harder and smarter. But economists attribute up to a third of it to more people joining the workforce each year than leaving it. The result is more producing, earning and spending.  Now this secret fuel of the economy, rarely missing and little noticed, is running out.

You mean is gone.

Births are falling in China, Japan, the United States, Germany, Italy and nearly all other European countries.

Well, that’s the whole Western and Modern world.  It also includes Russia and Canada among others.

Growth in the working-age population has halted in developed countries overall. Even in France and the United Kingdom, with relatively healthy birth rates, growth in the labor pool has slowed dramatically. In Japan, Germany and Italy, the labor pool is shrinking.

This means it’s not a future problem, that people aren’t having children today and there’s a problem in 20 years.  It means THE PROBLEM STARTED 20 YEARS AGO and is hitting NOW.

The drop in birth rates is rooted in the 1960s, when many women entered the workforce for the first time and couples decided to have smaller families.

A related point is the EASY ABILITY to control fertility – meaning “the pill”.  The ability to avoid having children plus a reason to avoid it (career or simply increased family income) equals less children.

The effects on economies, personal wealth and living standards are far reaching:

- A return to "normal" growth is unlikely: …the main reason: Not enough new workers.

Births might pick up again, of course. In France, where the government provides big subsidies and tax breaks for children, birth rates are back where they were in the early 1970s. In other countries, women who put off having children in the recession might play catch up soon, as they did after World War II.  But even a snapback in births to pre-recession levels will leave families much smaller than they were decades ago, a shift that has already affected industries and economies around the world.

In Japan, sales of adult diapers will exceed sales of baby diapers this year. In Germany and Italy, towns are emptying as families shrink and there aren't enough children to replace older ones who are dying. And in South Korea, where births have fallen 11 percent in a decade, 121 primary schools had no new students last year.

Economists say it is rare for the number of working-age people as a share of the total population to fall in so many major countries at the same time. It's usually because of war and famine. The six countries with declining proportions of working-age people now, plus China, accounted for 60 percent of global economic output in 2012.

Others note that smaller families are associated with some social benefits for societies. Births have plunged in countries where education has improved, the middle class has expanded and women have gained more freedom and rights.  Still, even optimists see the world at a delicate crossroads.  Societies are unsure of their goals now that easy economic expansion is over. "We have no plans for how to run a society without growth," he says.

In aging societies, the big fear is that paying for benefits for the swelling number of retirees.

Declining societies… it’s the “new normal”.  How long can the decline occur before real collapse sets in?


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