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I have a theory that may not be popular around here. I also probably have not thought this through and researched it enough, but I will throw it out there anywa

by lpaone 9y ago

I have a theory that may not be popular around here. I also probably have not thought this through and researched it enough, but I will throw it out there anyway. I would love to have it torn to shreds by someone who has studied economics or more likely this is something that has already been extensively researched. It seems to me that real sustained economic growth cannot happen without population growth, at least the way things work right now. Efficiencies gained through technological innovation and financial manipulation cannot sustain growth indefinitely, they just smooth out the bumps and with population growth help increase the rate of economic growth. And without economic growth, we are going to keep running into these issues and others brought up in the article. Look at Japan, no amount of economic/financial manipulation has really helped them. Their main economic issues stem from the fact that there are not enough young people. Aside from epidemics/catastrophes, there has almost always been sustained population growth through human history. It is in our nature to multiply and expand. I feel this is why so many people are fascinated with space and space colonization. The current demographic trends in western society is unprecedented and in my estimation, I do not think it will end well unless someone finds another solution, or these demographic trends are reversed. Feel free to rip apart my theory. I would love to hear what someone with a better understanding of this area has to say.

ianai 9y ago
I think we covered this in my Econ courses.
flushandforget 9y ago
When you have population growth (or non-native settlers), they prop up the old. It's a pyramid scheme.
- _pmf_ 9y ago
  > When you have population growth (or non-native settlers), they prop up the old. It's a pyramid scheme. It's literally a pyramid scheme: the population pyramid is supposed to have a broad base, but today it's upside down.
- usrusr 9y ago
  And if it is not occasionally reset by natural catastrophes it will be reset by man-made ones. In the 1980ies we feared man, today we are blindly growing towards destruction (by population growth domestic or imported). Some people cite Japan as an example of failure, I see them as an example of sustainability: they abstain from the quick and easy wealth fix that could be had by pyramid-scheming.
beaconstudios 9y ago
I'm no historian but I believe that there is a precedent for the current demographic trends - the late Roman Empire. From what I've read, birth rates didn't sufficiently outpace infant mortality rates during the late days of Roman rule, which may have been a contributing factor to the fall of the Empire.
mattmanser 9y ago
This is basically conventional wisdom. Why do you think politicians say they will sort out immigration, but then encourage even more immigrants? They want more workers. I am not so convinced, given that our jobs are all supposed to be automated soon, we shouldn't have to rely on more humans to grow economically. In the UK they claim we need mass immigration for growth, but jobs that teenagers used to do are now being done by grown adults, so I don't believe it. We also apparently have terrible productivity compared to other countries. I think that if we stopped relying on extra humans, productivity would suddenlg rocket.
- lpaone 9y ago
  How do you reconcile this with what is happening in Japan? Do you think huge amounts of automation would fix their problems? Isn't much of their manufacturing already automated?
  - glenneroo 9y ago
    Not to mention their extremely widespread usage of vending machines, which, Vox (from YouTube) posits is a result of their shrinking workforce.
    - rangibaby 9y ago
      Reasons vending machines are popular in Japan - they were an easy place to get beer before convenience stores sold alcohol or became open 24/7 (this is a bit before my time so maybe someone else can elaborate) - a vending machine requires less space than a store. - there is not a large difference in price buying from a vending machine or convenience store (10 yen or so). - It is very hot in summer and very cold in winter, so people like having access to a hot or cold drink. - a lot of people operate on a tight schedule, so their only "free time" might be when they are walking between places (home and train station, train station and work etc) - vending machines are useful in a disaster. I believe they will give out free drinks in an emergency.
      - 9y ago
ENTP 9y ago
Could this be a reflection of our monetary system (the fact that we cannot possibly repay all the money because there is interest that is owed to the lenders, and where does that extra interest come from? The lenders!)? This means we need more people to earn more money to pay it back ad nauseum leading to an exponential problem? I'm not an economic expert but believe the basis of the above is rooted in reality but happy to learn more if someone can correct me!
- lucozade 9y ago
  That's only true if the interest payment is larger than the income that can be made available to pay it. If you live in Greece then, yes, this is a bit of an issue. The solution there is likely to be some form of writing down of the debt.
- joyofdata 9y ago
  what you described is essentially a global ponzie scheme. and that's what it is at the bottom line - the growth feeds on itself - no more growth - everything crashes. is that sustainable or even reasonable by any standard - the answer is an obvious "no". but it benefits the powerful.
- stephen_g 9y ago
  No. The error that you have made is confusing stocks with flows. Your problem would be true under two circumstances - if all debts had to be paid at once, or if money disappeared when spent. But when you introduce the time dimension, the system works. The money supply is a 'stock' of some quantity, but payments (principal and interest) occur over time, making them a 'flow'. Those payments will then generally be spent back into the system, which circulates (all expenditure is someone else's income). This circulation is measured as the 'velocity of money'. So interest isn't a problem ultimately, but the increasing accumulation of wealth by the most wealthy may become more and more of an issue.
klodolph 9y ago
Exponential population growth is fundamentally unsustainable. Given a population growth rate of about 2% per year, like it was in the 1960s, an average mass of 60 kg per person, current world population of 7 billion, and a total mass of the universe of 3x10^52 kg, we can calculate the amount of time before humans consume the entire universe, including dark matter. It's a little under 5000 years, far shorter than the record of human history. So, this is a fact: we cannot grow exponentially for very long. Also a fact: humans have survived the vast majority of human history with near zero population growth, if we consider human history to be 200 millennia old and population growth to be a factor of a million during that time, average growth is 0.007% per year. Economic growth is also the wrong thing to measure. Surely something else, like quality of life, would be more appropriate. You say that "no amount of economic/financial manipulation has helped [Japan]" but does Japan really need help, or are their citizens enjoying a relatively high quality of life?
- lpaone 9y ago
  "...are their citizens enjoying a relatively high quality of life?' I would say yes. To me, the question is: can their high quality of life be maintained if there is no economic growth? Is it possible to print money/borrow indefinitely to support this quality of life? Especially with regards to the article, I think these are valid questions.
  - noja 9y ago
    > Is it possible to print money/borrow indefinitely to support this quality of life? Why do you need to print or borrow money to sustain a quality of life?
    - ejolto 9y ago
      Some people think money has inherent value..
      - ionised 9y ago
        They would be wrong.
zurn 9y ago
Productivity growth per capita (= "economic growth even without population growth") has been happening since the industrial revoluation, and lately it's moved more and more into immaterial / less resource intensive domains. You don't seem to present any arguments as to why it wouldn't happen without population growth. It has been rather self-sustaining. (A different questionis whether we should aim for economic growth - given our biggest problem now is climate change).
spin 9y ago
In college I had an econ friend who said that there's basically only three ways to grow an economy: more workers, better technology or more capital. If you look at technology, then I think "yes!" it has improved the economy. Look at engines and trains and telecommunications. The first world economy today, per person, is rip-roarin' compared to 100 years ago. Many western economies haven't noticed the decline in the birth rate yet because of so many immigrants. Japan is unique in that they are a modern country, with a declining birth rate, but very low immigration.
- Markoff 9y ago
  doesn't declining population mean also lower expenses on infrastructure and everything?
  - zer0tonin 9y ago
    No because you might need a lot of infrastructure to keep up with the fact that the largest part of your population is old.
  - zanny 9y ago
    Populations don't decline uniformly and people don't naturally optimize for infrastructure use and the best use of existent resources. You don't have to even wait for population decline, we already have more unoccupied homes in the US than homeless by an order of magnitude, but all those homes are in "dead" areas where industry or resource extraction came and went. Now those houses and all the infrastructure around them decay without use, while elsewhere infrastructure is overburdened with concentrated people. If anything, declining population means more per-capita expense on infrastructure, and the per-capita costs of maintaining current infrastructure (at least in the US) is out of control.[1] [1]: https://www.strongtowns.org/journal/2017/6/4/this-is-why-infrastructure-is-so-expensive https://www.strongtowns.org/journal/2017/6/4/this-is-why-inf...
lentil_soup 9y ago
This video seems relevant: https://www.youtube.com/watch?v=FACK2knC08E https://www.youtube.com/watch?v=FACK2knC08E According to Hans Rosling we've reached "peak child", meaning we're almost at 2 children per woman globally. This means population will continue to grow for a few years as globally there are more children than adults but will stabilize after that around the ~11 billion mark. And as long as we stay at that "peak child" number we won't go any further. I really recommend his videos if you haven't seen them.
tmnvix 9y ago
My intuition tells me that productivity per capita has been increasing; we have not been relying on population growth alone to grow the economy. The catch is that the increased production is not distributed equitably. For the average (more productive) worker, the things that they need such as health and housing are not any 'cheaper'. So where is their 'share'? As productivity increases, credit expands to capture it. This is how, ultimately, those with the capital end up with the increased productivity. Just a thought.
OliverJones 9y ago
Is economic growth necessary? Is it valid that no growth / slow growth is the same thing as stagnation? What does a world look like when the population is staying roughly constant, with births and deaths in balance? Japan has been in a situation like that for a while now. Instead of poo-pooing it as a long recession, maybe the rest of the world should try to learn from it.
deleted 9y ago
[deleted]

by lpaone 9y ago

ianai 9y ago

I think we covered this in my Econ courses.

flushandforget 9y ago

When you have population growth (or non-native settlers), they prop up the old. It's a pyramid scheme.

_pmf_ 9y ago
> When you have population growth (or non-native settlers), they prop up the old. It's a pyramid scheme. It's literally a pyramid scheme: the population pyramid is supposed to have a broad base, but today it's upside down.
usrusr 9y ago
And if it is not occasionally reset by natural catastrophes it will be reset by man-made ones. In the 1980ies we feared man, today we are blindly growing towards destruction (by population growth domestic or imported). Some people cite Japan as an example of failure, I see them as an example of sustainability: they abstain from the quick and easy wealth fix that could be had by pyramid-scheming.

beaconstudios 9y ago

I'm no historian but I believe that there is a precedent for the current demographic trends - the late Roman Empire. From what I've read, birth rates didn't sufficiently outpace infant mortality rates during the late days of Roman rule, which may have been a contributing factor to the fall of the Empire.

mattmanser 9y ago

This is basically conventional wisdom. Why do you think politicians say they will sort out immigration, but then encourage even more immigrants? They want more workers. I am not so convinced, given that our jobs are all supposed to be automated soon, we shouldn't have to rely on more humans to grow economically. In the UK they claim we need mass immigration for growth, but jobs that teenagers used to do are now being done by grown adults, so I don't believe it. We also apparently have terrible productivity compared to other countries. I think that if we stopped relying on extra humans, productivity would suddenlg rocket.

lpaone 9y ago
How do you reconcile this with what is happening in Japan? Do you think huge amounts of automation would fix their problems? Isn't much of their manufacturing already automated?
- glenneroo 9y ago
  Not to mention their extremely widespread usage of vending machines, which, Vox (from YouTube) posits is a result of their shrinking workforce.
  - rangibaby 9y ago
    Reasons vending machines are popular in Japan - they were an easy place to get beer before convenience stores sold alcohol or became open 24/7 (this is a bit before my time so maybe someone else can elaborate) - a vending machine requires less space than a store. - there is not a large difference in price buying from a vending machine or convenience store (10 yen or so). - It is very hot in summer and very cold in winter, so people like having access to a hot or cold drink. - a lot of people operate on a tight schedule, so their only "free time" might be when they are walking between places (home and train station, train station and work etc) - vending machines are useful in a disaster. I believe they will give out free drinks in an emergency.
    - 9y ago

ENTP 9y ago

Could this be a reflection of our monetary system (the fact that we cannot possibly repay all the money because there is interest that is owed to the lenders, and where does that extra interest come from? The lenders!)? This means we need more people to earn more money to pay it back ad nauseum leading to an exponential problem? I'm not an economic expert but believe the basis of the above is rooted in reality but happy to learn more if someone can correct me!

lucozade 9y ago
That's only true if the interest payment is larger than the income that can be made available to pay it. If you live in Greece then, yes, this is a bit of an issue. The solution there is likely to be some form of writing down of the debt.
joyofdata 9y ago
what you described is essentially a global ponzie scheme. and that's what it is at the bottom line - the growth feeds on itself - no more growth - everything crashes. is that sustainable or even reasonable by any standard - the answer is an obvious "no". but it benefits the powerful.
stephen_g 9y ago
No. The error that you have made is confusing stocks with flows. Your problem would be true under two circumstances - if all debts had to be paid at once, or if money disappeared when spent. But when you introduce the time dimension, the system works. The money supply is a 'stock' of some quantity, but payments (principal and interest) occur over time, making them a 'flow'. Those payments will then generally be spent back into the system, which circulates (all expenditure is someone else's income). This circulation is measured as the 'velocity of money'. So interest isn't a problem ultimately, but the increasing accumulation of wealth by the most wealthy may become more and more of an issue.

klodolph 9y ago

Exponential population growth is fundamentally unsustainable. Given a population growth rate of about 2% per year, like it was in the 1960s, an average mass of 60 kg per person, current world population of 7 billion, and a total mass of the universe of 3x10^52 kg, we can calculate the amount of time before humans consume the entire universe, including dark matter. It's a little under 5000 years, far shorter than the record of human history. So, this is a fact: we cannot grow exponentially for very long. Also a fact: humans have survived the vast majority of human history with near zero population growth, if we consider human history to be 200 millennia old and population growth to be a factor of a million during that time, average growth is 0.007% per year. Economic growth is also the wrong thing to measure. Surely something else, like quality of life, would be more appropriate. You say that "no amount of economic/financial manipulation has helped [Japan]" but does Japan really need help, or are their citizens enjoying a relatively high quality of life?

lpaone 9y ago
"...are their citizens enjoying a relatively high quality of life?' I would say yes. To me, the question is: can their high quality of life be maintained if there is no economic growth? Is it possible to print money/borrow indefinitely to support this quality of life? Especially with regards to the article, I think these are valid questions.
- noja 9y ago
  > Is it possible to print money/borrow indefinitely to support this quality of life? Why do you need to print or borrow money to sustain a quality of life?
  - ejolto 9y ago
    Some people think money has inherent value..
    - ionised 9y ago
      They would be wrong.

zurn 9y ago

Productivity growth per capita (= "economic growth even without population growth") has been happening since the industrial revoluation, and lately it's moved more and more into immaterial / less resource intensive domains. You don't seem to present any arguments as to why it wouldn't happen without population growth. It has been rather self-sustaining. (A different questionis whether we should aim for economic growth - given our biggest problem now is climate change).

spin 9y ago

In college I had an econ friend who said that there's basically only three ways to grow an economy: more workers, better technology or more capital. If you look at technology, then I think "yes!" it has improved the economy. Look at engines and trains and telecommunications. The first world economy today, per person, is rip-roarin' compared to 100 years ago. Many western economies haven't noticed the decline in the birth rate yet because of so many immigrants. Japan is unique in that they are a modern country, with a declining birth rate, but very low immigration.

Markoff 9y ago
doesn't declining population mean also lower expenses on infrastructure and everything?
- zer0tonin 9y ago
  No because you might need a lot of infrastructure to keep up with the fact that the largest part of your population is old.
- zanny 9y ago
  Populations don't decline uniformly and people don't naturally optimize for infrastructure use and the best use of existent resources. You don't have to even wait for population decline, we already have more unoccupied homes in the US than homeless by an order of magnitude, but all those homes are in "dead" areas where industry or resource extraction came and went. Now those houses and all the infrastructure around them decay without use, while elsewhere infrastructure is overburdened with concentrated people. If anything, declining population means more per-capita expense on infrastructure, and the per-capita costs of maintaining current infrastructure (at least in the US) is out of control.[1] [1]: https://www.strongtowns.org/journal/2017/6/4/this-is-why-infrastructure-is-so-expensive https://www.strongtowns.org/journal/2017/6/4/this-is-why-inf...

lentil_soup 9y ago

This video seems relevant: https://www.youtube.com/watch?v=FACK2knC08E https://www.youtube.com/watch?v=FACK2knC08E According to Hans Rosling we've reached "peak child", meaning we're almost at 2 children per woman globally. This means population will continue to grow for a few years as globally there are more children than adults but will stabilize after that around the ~11 billion mark. And as long as we stay at that "peak child" number we won't go any further. I really recommend his videos if you haven't seen them.

tmnvix 9y ago

My intuition tells me that productivity per capita has been increasing; we have not been relying on population growth alone to grow the economy. The catch is that the increased production is not distributed equitably. For the average (more productive) worker, the things that they need such as health and housing are not any 'cheaper'. So where is their 'share'? As productivity increases, credit expands to capture it. This is how, ultimately, those with the capital end up with the increased productivity. Just a thought.

OliverJones 9y ago

Is economic growth necessary? Is it valid that no growth / slow growth is the same thing as stagnation? What does a world look like when the population is staying roughly constant, with births and deaths in balance? Japan has been in a situation like that for a while now. Instead of poo-pooing it as a long recession, maybe the rest of the world should try to learn from it.

deleted 9y ago

[deleted]