The world population today is reckoned to be approaching seven billion. In a scant thirty-five years, it is expected to increase by another two billion, a nearly 30% jump, topping out at about nine billion in 2045, after which it should begin declining. If demographic trends continue.
National Geographic Magazine’s current issue has a well-balanced piece on what the world might look like with two billion extra souls, and offers the range of impacts the additional people might effect.
The first question that arises, as always, is how so many more people will be fed? Additional people don’t add to the population numbers, or at least don’t for long, if there isn’t food for them to eat. The food supply managed to keep up with the population as it increased from about half a billion at the dawn of the industrial age to fourteen times that much today. On its face, feeding an extra couple of billion doesn’t sound like it should be all that difficult. With practically all of the population growth arising from or making its way into teeming cities, agricultural land is actually less densely-settled nowadays than it was before the onset of industrialization.
In the US, as I’ve pointed out many times before, the portion of the population tracing its roots to Western Europe, i.e., the white population, has ceased growing, and is now on the cusp of the great die-off, which is also happening to all the cultures from whence white Americans sprang (i.e., Western Europeans). Native Asian populations are experiencing much the same decline, as fertility rates in Asia, Western Europe, and among the US white population are either at or below replacement. The only growing population in the US is that of immigrants, mostly Hispanics, but others as well. The US is apt to suffer some intergenerational issues by 2045 that will also be tainted with cultural and racial biases.
There is a commercial put out by the Foundation For a Better Life that sums up the looming conflict, if accidentally, quite succinctly. In the commercial, a young Hispanic man, stout and somewhat thuggish-looking, is sitting on the bus listening to music through his earbuds. A frail octogenarian white female gets on the bus and traverses down the aisle, looking for a seat. When she gets to where the young Hispanic is sitting, the young man gets up and offers his seat, even respectfully asking her, “Ma’am, would you like my seat?” The Foundation for a Better Life’s implicit point is that we should be nice to each other, a part of which is that the young and healthy should be mindful of the old and frail. But their example cuts nearly too close to reality. If trends continue, it will only be by the grace of young and healthy Hispanics that old and frail whites ever get a seat, either on a bus as was depicted in the commercial, or at the metaphorical table of bounty that this land produces.
The Geographic article acknowledges that prophets of population doom, from Thomas Malthus in 1798 to Paul Erhlich in 1968, have long existed, yet have thus far proven incorrect. Each time when it appeared the earth would be swarming with under-nourished humans barely eking out a subsistence living, technological advancements in agriculture have ridden to the rescue. In Malthus’ day it was the application of industrial means of production to agriculture. In Ehrlich’s, the green revolution in crop biology provided ever-greater yields from lands already under cultivation. Whatever else is causing the recent increase in commodities prices, especially including agricultural commodities, it is not our inability at the moment to grow enough food to feed the world’s population. The human population did not decrease two years ago when agricultural commodity prices cratered, nor did it explode in just two years to create world-wide shortages such that prices should be in some cases doubled from the recent trough. The price fluctuations aren’t correlated to population fluctuations. Without correlation, there can be no causation.
Though the article explores some of the potential problems associated with an extra two billion people inhabiting the planet, it fails to discuss the problems that the impending leveling and then declining population might pose for societies and economies that have as their foundational assumption the continuation of growth. From Keynes to Friedman, economists have always just assumed that economic growth, which is in turn dependent on population growth, was the natural state of economic systems. The policy prescriptions for virtually every economist today turns on the assumption that economic growth is to be desired as the natural extension of properly-applied economics. What if the growth assumption is proved invalid, as it appears the impending end of human population growth implies? What will happen in Japan, for example, when by the time the world population reaches nine billion, it is in a demographic death spiral, with mountains of debt growing unsustainably higher on a per capita basis with each passing year? How will deficit spending by governments during times of economic contraction be justifiable considering that each dollar per person borrowed today becomes a greater burden for the citizenry in each succeeding year? Long-run demographic realities might finally put Keynes in the grave.
In truth, this reality is already lapping at the shores of Western economies and Japan, perhaps South Korea and others. This is the essence of deflation–debt becoming more valuable per person even as aggregate demand declines. The demographic realities faced by the US, Western Europe and Japan are the true cause of the world-wide financial system crisis. Because of aging and declining populations (or at least a subset of them in the US), aggregate demand could not keep up with aggregate credit creation, and something had to give. Demographic forces pushed demand downward while credit grew to the sky, and it was all finally resolved on the balance sheets of central bankers across the developed world. The next such disjunct between aggregate credit and aggregate demand might be impossible to so easily resolve.
As has been said many times, demography is destiny. It’s difficult for to understand why economists and central planners seem oblivious to the reality. Perhaps it is their inherent bias to believe that the future will be like the past. Perhaps it is that central planners and macro-economists are so confident in their policy prescriptions for growth that they fail to realize the premises upon which their prescriptions are founded might be invalid. Of course, demographic forces care not a whit about central planners or macro-economists. They just are, a truth that is likely to be driven home again and again in the coming decades as world population growth levels off and then begins declining.