Peak People

If demography is destiny, the situation for the industrialized world is grave

May 21, 2023

**(An empty carousel in Florence, Italy. Source: Getty Images)**

Joel Bowman, surveying the scene from Florence, Italy...

Welcome to another Sunday Session, dear reader, that time of the week when we take a break from the markets and try to understand some of the deeper forces driving them.

As regular readers know, we’ve embarked on something of a “Junior Grand Tour” here in the Old World. We’re traveling with dear wife and daughter (8), taking in the sights and sounds as part of a self-styled “away schooling” experience. (Think “homeschooling” only... without the home.)

We teach math by doing currency conversions, counting time zone differences and reading train timetables. (The reader can fairly guess the associated penalties for incorrect answers.) Latin lessons have come in handy as a foundation for Italian, just as we hope dear daughter’s weekly classes in ancient Greek will prove useful when we hop over to the Aegean a little later on the trip.

Ah, but we’re getting ahead of ourselves...

Our first stop, Italy, was a favorite on the Grand Tours of yore, when educated young men of means journeyed from the UK and US to immerse themselves in the culture, art and invaluable lessons our forebears undertook to learn so that future generations may stand on their shoulders. As the inimitable Mark Twain explained on his own tour in The Innocents Abroad:

“The gentle reader will never, never know what a consummate ass he can become until he goes abroad. I speak now, of course, in the supposition that the gentle reader has not been abroad, and therefore is not already a consummate ass. If the case be otherwise, I beg his pardon and extend to him the cordial hand of fellowship and call him brother. I shall always delight to meet an ass after my own heart when I have finished my travels.”

And now, thanks to the wonders of modern technology and social progress, the opportunity to make an ass of oneself has extended to men and women of even modest means. More on this in future installments, no doubt...

But it’s easy, in the crowds and chaos, to forget that Italy is suffering a silent affliction, one that will impact the economies, cultures and societal structures of every industrialized nation on the planet. Read on for more...

Peak People

By Joel Bowman

“As the sound of the playgrounds faded, the despair set in. Very odd what happens in a world without children's voices. I was there at the end.”
~ Miriam, from the dystopian movie Children of Men (2006)

This year in Japan, adult diapers will outsell baby diapers.

In Germany, the number of young people (aged 15-24) has fallen to a record low.

In Denmark, there is a nationwide advertising campaign called “Do it for Denmark,” aimed at increasing a plummeting birth rate.

And in Italy – Catholic, family-friendly Italy – the fertility rate has hit a historic nadir as the rapidly aging population steps silently into the shadows.

The situation here has reached the level of national emergency. Last year, Italy recorded 12 deaths for every 7 births. A note issued by ISTAT (the country’s bureau of statistics) observed: “A major factor is the reduction and the aging of the female population in the 15-49 age group conventionally considered reproductive.”

Which stands to reason. Fewer children, ceteris paribus, means fewer future mothers. At just 1.24 children per woman (well below the “replacement level” of 2.1 children per woman), ISTAT forecasts that Italy will lose one-fifth of its residents within the next generation. That’s a “baseline” (read: rosy) prediction.

Alas, for human beings who are interested in the future of... well, human beings... the situation is not at all promising. Dire though Italy’s predicament is, it is not even the worst case in Europe. Spain’s fertility rate is 1.19 per woman. Malta’s is 1.13. All told, not a single country in Europe is even at the baseline replacement level. France tops the list at 1.84 children per woman. The European average is just 1.51.

If demography is destiny, as the French philosopher Auguste Comte is alleged to have said, the destiny of the species here on planet earth is, for want of a better word, grave.

Cradle to Grave

Noticing this phenomenon, data scientist and documentary filmmaker, Stephen Shaw, thought it worth further investigation. If populations really are collapsing across the industrialized world, as the data unequivocally demonstrates, what might this mean for modern welfare states, which rely on ever expanding tax bases to fund Social Security-type retirement programs? What might happen to pension systems, healthcare services, public utilities, without future generations to capitalize and operate them? What might the socio-economic fallout look like when states begin refitting public schools and kindergartens to function as aged care facilities, hospitals...and cemeteries?

Shaw spent four years traveling the world and interviewing hundreds of fertility experts, demographers, sociologists, professors and – of course, importantly – everyday women, both with and without children, to try and understand what is going on. The resulting documentary is called “Birthgap – Childless World.”

According to Shaw’s findings, seventy percent of the world’s population live in a country where the fertility rate is below replacement level. Not a single industrialized country stands in exception. Not one.

Nor is Shaw alone in voicing his concerns. Here’s Tesla CEO Elon Musk and Alibaba founder Jack Ma on stage at an AI conference in Shanghai:

Musk: Most people think we have too many people on the planet, but actually, this is an outdated view... I think the biggest problem the world will face in twenty years is population collapse.
Ma: I agree.
Musk: I want to emphasize this. The biggest issue in 20 years will be population collapse. Not explosion. Collapse.
Ma: I absolutely agree with that. The population problem is going to be a huge challenge. One point four billion people in China sounds a lot, but I think the next 20 years, we will see this thing will bring big trouble to China. And … the speed of population decrease is going to speed up. You called it a ‘collapse.’ I agree with you.
Musk: Yeah, accelerating collapse.

That was five years ago. At 1.28 children per woman, China’s fertility rate is now barely above Italy’s. In nearby Taiwan, it is just 0.98 children per woman. And in South Korea, where marriage rates have fallen by 35% in the past decade alone, the fertility rate has vanished to just 0.78.

Broadly speaking, two factors mask this problem:

Decaying vs. declining – At present, extending life expectancies are offsetting much of the visible impact on the planet’s net population which, indeed, will continue to grow over much of this century. In demographics, this is known as the “pig in the python,” where the “bulge” of more populous cohorts moves through the system.

Africa vs. Other – When it comes to demographic trends, the world is basically divided into Sub-Saharan Africa, where birth rates are well above replacement levels, and the rest of the world, where they are substantially below...and falling, rapidly.

Hard Math

Further compounding the problem for industrialized nations: Math. The lower fertility rates fall, the faster they will further decay (back to the “less children = less future mothers” reality). Shaw further explains exponential decay in his documentary:

“Nations with [fertility] rates at one point four children per woman will see their rates decay by one-third per generation, meaning that in two generations, the underlying population will fall by over half and in three generations, by seventy percent.”

What does this mean for the industrialized world? Even in the United States, which has to some extent been able to offset the declining births with net positive immigration, the fertility rate for all women in the US still stands at just 1.64 children per woman. It has been declining steadily since the 2007-08 recession. (A related topic for another time.)

Earlier this month, billionaire investor Stanley Druckenmiller reiterated his warning about un- and underfunded liabilities in a note to Bloomberg, writing that spending on Social Security, Medicare and Medicaid will have to be cut drastically in the future, if not today. Citing Congressional Budget Office estimates, Druckenmiller wrote that spending on seniors will account for 100% of tax revenue by 2040. And after accounting for future entitlement payments, he estimated the actual US debt burden is closer to $200 trillion, far more than the official $31.4 trillion debt limit we keep hearing about.

Such is the gloomy arithmetic for an aging population, as nations around the world are fast coming to discover...many for the first time in recorded history. As professor Noriko Tsuya of the University of Chicago told Shaw:

“For a society with a sizable population to experience continuous and very rapid population decline, in a prosperous and peaceful time, has never happened before in history. There is no precedent.”

One might think that, given such dire statistics, Shaw’s investigation would at least garner some interest at our own leading institutes of higher learning, perhaps prompt a polite exchange of ideas, even lead to a spirited debate about what might be causing such a worrying trend. Indeed, Mr. Shaw was invited to showcase his documentary at Cambridge University in the United Kingdom earlier this month.

That was, until the students “threw their collective rattle out of the pram,” according to the organizer, who was forced to cancel the event less than 48 hours before it was scheduled to begin after the predictable accusations of “misogyny,” “transphobia,” “homophobia,” and “racism” from the “tolerant and inclusive” student body.

Is it “racist” to notice that Sub-Saharan African nations are producing more children than in Asia, Europe, Northern Africa? Can facts even be racist? Is it “homophobic” to notice that it takes a male and a female of the human species to produce a child? Is it “misogynistic” to notice that every single human being in recorded history has... dare we even utter the word... a mother?

The (one is tempted to say “childish”) response echoed objections against the “Do it for Denmark” and subsequent “Do it for Mom” campaigns, when a British publication not worth naming accused them of carrying “explicit heteronormative and ageist tones” that “reflect a pro-natal and youth-oriented culture.”

Well, yes... babies do tend to be “pro-natal” and “youth oriented” and, had the authors of the publication bothered to attend a biology class between their intersectionality grievance workshops, they might have learned about the “explicitly hetronormative” activities generally required to reproduce.

Alas, as with so many important conversations in the modern age, activists would rather shout than listen, protest than participate, cancel than communicate.

Time was when lazy commencement day speechwriters used the hackneyed phrase, “the children are our future.”

But when children are our past, the future may already be behind us.

More, next week...

And that will do us for another Sunday Session, dear reader...

As always, we invite you to have your say in the comments section, below. What do you think about falling fertility rates in the industrialized world? Is it a cause for concern? Why aren’t more people talking about this phenomenon? Can governments do anything to help reverse the trend? Should they? What impact might such a trend have on our economies, cultures, societies at large?

The subject provides a rich vein for investigation. Tell us what you reckon, below...

Bonner Private Research

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