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The End of Economic Growth? Unintended Consequences of a Declining Population [pdf]

73 pointsby davidayover 5 years ago

14 comments

mark_l_watsonover 5 years ago
I am in a minority, but I would welcome the economic decline that would come with growth reduction if it were accompanied by using less manufactured goods (like cars), more locally grown food, more craft and art locally produced, more travel done in VR (with addition that local guides would be there to talk with you), etc., etc.
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travisoneill1over 5 years ago
The important part of economic growth is GDP/capita, not total GDP. And if we are to keep growing GDP/capita without destroying the environment, a population decline is absolutely necessary. Increasing population is only economically beneficial in the most short term sense.
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adrianNover 5 years ago
Why would you care about economic growth in absolute terms instead of productivity per person?
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pdimitarover 5 years ago
I am not an economy expert by any stretch. Just going to share my take.<p>Growth cannot go forever due to these factors I observed:<p>1. More and more wealth seems to be captured and locked away somewhere while the rest of the populace is left to having to cope with globally dwindling redistributable capital.<p>2. Population isn&#x27;t even declining everywhere but I&#x27;ve read several times here in HN that white people in first-world countries procreate less and less. Reasons can be a lot and my anecdotal evidence is that the cost of a basic life and some small extra affordances goes up every year. Families get more and more conservative on their spends and&#x2F;or jobs. Many people here in Eastern Europe just decide to live on welfare and half-day crappy jobs somewhere but at least these jobs aren&#x27;t stressful and don&#x27;t require 2-3 hours in traffic every day. When you do the math such a way of life nets them 70-80% of what they would otherwise make so their choice is really quite logical. In these conditions the economy stagnates and companies get desperate for good staff while the government couldn&#x27;t care less.<p>3. The population declines at places because people view raising kids as a huge financial and stress investment and not as the life-fulfilling purpose that raising kids is usually viewed as. This is mostly related to how much time is needed for a young person these days to actually start contributing to their raising (or new) family. Many people are just scared if they are going to be able to be financially stable for 25-30 years in the future. Others like myself are just burned out.<p>4. The economy gradually seems to be taken over by the very classic breed of venture investors that don&#x27;t give a hoot about organically growing your customer base or actually taking care of your employees. Even in a presumably more conservative market like Europe, I see this more and more. Can we even discuss growth if, even against all odds, your company becomes hugely successful BUT has to return the investments tenfold? Again, this is a captured wealth going to somebody else&#x27;s pocket (and they don&#x27;t seem to be interested in redistributing it).<p>---<p>I could be gravely mistaken and be a victim of living in a filter bubble. Of course.<p>But it&#x27;s what I am seeing periodically and it worries me. People just don&#x27;t care that much for making kids or looking for jobs since it all just guarantees suffering and sacrifices and nothing much else.<p>Many elderly people tell me that they regularly chat with their kids (now 30-45) and are convinced that having a fulfilling life was easier even as back as 20-30 years ago. They might be right.
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nordsieckover 5 years ago
&gt; It is a distinct possibility — highlighted in the recent book, Empty Planet — that global population will decline rather than stabilize in the long run. What happens to economic growth when population growth turns negative?<p>IMO, this is a pretty silly idea.<p>The fundamental problem with this theory is that there are sub-populations that have been able to maintain high fertility despite the decline in broader society.<p>For example, the number of Amish doubles every 20 years. Today, there are 1&#x2F;3 of a million Amish. At the current rate, it&#x27;ll only be 200 years until there are more than 300 million Amish in the US.<p>No idea if that will actually happen, but if everyone else dies off, there no reason they wouldn&#x27;t just take over.
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sadmann1over 5 years ago
Isn&#x27;t the underlying assumption that economic growth is tied to an ever growing population being tested in the age of automation?
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pimmenover 5 years ago
I think this will have unforseen effects on real estate.<p>If the population globally is shrinking, that means the likelihood that any given town will increase in size is also shrinking. At first, this might look like the real estate prices across the board will decrease but I don’t think so. I think that when people factor in that the town they are in currently will not increase in size they look at cities that already have good markets and move there instead, driving up the prices of already established cities.<p>This is basically what is already happening in European countries with falling birth rates.
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mrwhover 5 years ago
Is the idea that technological improvements are tied to _increasing_ population somehow? What&#x27;s the mechanism there?<p>Being only slightly facetious, but if everyone had no more than one child, that leaves a lot more time in which to invent stuff. And true, over time there will be fewer people doing the inventing, but a world with ~a billion people in it still managed to invent flight, and one with billions fewer than today still got to the Moon.
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Nasrudithover 5 years ago
Anyway it is a pet peeve of mine about talking about economic growth and ending. Growth isn&#x27;t just more stuff but also better stuff and how it is used.<p>If there is no growth even in such hypothetical extremes as a fixed population sustainable everything model then society is fundamentally doing things very wrong. Because you have global workforces working at things and nobody is learning to do anything better. A newbie having the exact same productivity as a veteran. In every field. That is deeply contrary to the state of being of everything and implies truly epic levels of mismanagement.
sienover 5 years ago
The book Empty Planet is a very interesting read that looks around the world at various countries where population is declining such as Korea and Japan and European countries where this is about to happen as well. The book is mentioned in the paper.<p><a href="https:&#x2F;&#x2F;www.goodreads.com&#x2F;book&#x2F;show&#x2F;37585564-empty-planet" rel="nofollow">https:&#x2F;&#x2F;www.goodreads.com&#x2F;book&#x2F;show&#x2F;37585564-empty-planet</a><p>This paper on the economic consequences is also interesting. It popped up on various economics blogs when it came out.
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carapaceover 5 years ago
I <i>think</i> it&#x27;s saying that the &quot;optimal allocation&quot; &quot;of people into workers and researchers&quot; can result in ... uh, something they&#x27;re calling &quot;expanding cosmos&quot; (as opposed to &quot;Empty Planet&quot;) but I couldn&#x27;t find any mention of space colonization.
naveen99over 5 years ago
Real estate is currently the largest asset class. Maybe it will lose some of its importance when most people inherit housing. Home ownership rates are already over 60% in the us, and over 80% in india.
knownover 5 years ago
10% Owns 82% Wealth <a href="http:&#x2F;&#x2F;archive.vn&#x2F;1zpaE" rel="nofollow">http:&#x2F;&#x2F;archive.vn&#x2F;1zpaE</a><p>&quot;The significant problems we have cannot be solved at the same level of thinking with which we created them&quot; --Einstein
salawatover 5 years ago
This paper really annoyed me last night.<p>The assumptions made don&#x27;t even render a world that looks remotely similar to what we have, and that abstracting away of messy complexity actually makes the central characteristics of the problem harder to wrap your head around, even if it does make it easier to reframe into a paper that&#x27;d look good in an academic journal.<p>Case in point:<p>You don&#x27;t need higher math to understand that human beings are fundamentally lossy in nature. Perfect replication of the information required to sustain the current cumulative knowledge level doesn&#x27;t happen because there is no guarantee that any one person that knows a thing can successfully communicate it to someone else in a way that can be understood, and that in the process of doing so, that that information isn&#x27;t mutated in such a manner that something important isn&#x27;t lost. Children amuse themselves with this phenomena all the time. It&#x27;s called a game of &quot;Telephone&quot;. Given an acknowledgement of this, the tendency for population decline to result in problems for a world that has been architected around the guarantee of population and economic growth is immediately intuitive.<p>As death removes older generations, the knowledge they had and failed to clearly replicate dies with them. Each new member of the population birthed in is a new crank on the slot machine of information propagation. Their life circumstances might allow them to understand that bit of arcane knowledge that no one else was able to do anything with because it didn&#x27;t make sense to them because the constellation of shared lived experience between communicator and communicated necessary for comprehension wasn&#x27;t there. New idea formulation, or old idea reformulation and propagation becomes reliable and less likely to snowball out of control to irrevocable loss as long as you keep throwing new blood at it.<p>If there is no new blood though, the numbers quickly begin to favor the life experiences required to underpin all the minutiae to sustain the corpus of knowledge as is not reoccurring in total across the entire breadth of the population, and you start to find your smaller remaining population further and further isolated from the practical experiences that made the linguistic representations of knowledge written down understandable. The knowledge then becomes useless, a dependency in the infrastructure that enables efficient physical completion of labor is lost, thus your population&#x27;s output of tasks done per unit time drops, thus more work must be done just to keep things running, and so on and so forth until basic principles are again reformulated, and efficiencies from a chance rediscovery of the necessary experience underpinning a lynchpin technology can be realized again.<p>Just as information transfer is lossy, so is physical labor. If you have 1 million tasks that must be done in a day to maintain a stable level of output, and you decrease the number of agents available to do the tasks, the math simply works out that more work has to be done per agent to maintain output in a steady state, and we all know that the work output of a human being isn&#x27;t trivially scaled up without ballooning the prerequisite knowledge required to do the task (I.e. skills at using tools, skills to teach the skills to use the tools, the tools to make the tools, the skills to operate the tools to make the tools, etc...) all of which themselves become tasks added on to the overall workload of your dwindling population who are working harder and harder to maintain the highest level of output possible.<p>The other issue not even touched on is the desirability of continued high growth regimes in the presence of a near tipping-point constraint violation to which a remediary measure has not been formulated. I.e. Excess carbon footprint. If you stay in your high growth regime in a wager to get that innovation faster from a new member, you&#x27;re still templating your current footprint of resource use, and accelerating reaching your tipping point, with no guarantee you&#x27;ll find it in time. Decline is a natural outcome in an organism facing this type of environmental dynamic constraint to buy time for other (in this paper, unrepresented, but which one can represent as decreased demand to output more of the destabilizing factor by your population, or natural processes operating to free up buffer space by things like carbon recapture and sequestration) processes time to shift the dynamics back in favor of supporting a new high growth regime.<p>I have the utmost respect for those that can trivially converse in the higher maths; I&#x27;ll admit I had to crack open some books to understand what the heck they were getting at and whether it even made sense. I draw the line though where doing your analysis as they did takes you right out of reality into the atrophied realm of post-facto narrativization.<p>Those equations are meaningless to most readers, whereas putting things in terms of tasks to be completed, and characterizing overall knowledge level management as what it is, a bunch of overhead tasks draws the same Senate picture that it took them mucking around in control theory to even tangentially articulate. It started a conversation yes, but by constraining it to the realm of finance and economics, and leaving out the <i>rest of the world</i> you run afoul of that great aphorism that &quot;problems cannot be solved with the same level of thinking that created them in the first place&quot;, which is exactly what this paper appears to be an example of doing.<p>Gah!