9 ms·

For beyond the population peak, these guys forecast too far ahead for their predictions to be realistic (there will be unknown confounding factors along the way

For beyond the population peak, these guys forecast too far ahead for their predictions to be realistic (there will be unknown confounding factors along the way). The "too few ideas" claim is also weird. For you to contribute some ideas to the global economy, at the very least you need some access to capital, that currently most of the world doesn't have. Having good education and some freedom from spending all time and all your energy just to survive on subsistence level also helps. In production of ideas, lifting people everywhere to the Western middle class standard of living and mindset is far more important than raw population count. This would probably require bringing industrial labor wages to a more realistic level everywhere, also in poorer countries. The whole system of relying on cheap labor in developing countries would have to change somewhat with decelerating population. The stuff in the West would be more expensive, although maybe with fewer workers wages couldn't be so stagnant. The model of buying materials and labor cheap somewhere and selling stuff highish to Western population would be harder to sustain, making many businesses less viable. Maybe this is especially scary for people that are heavily into capital. This is my personal take and it's somewhat related to the post-Black Death phenomena in Europe that the article mentions. There's also "The Great Demographic Reversal" book where the authors apparently also predict rising inflation and take into account aging of the population (I've only watched an interview with one of the authors).

eru 6y ago
> The whole system of relying on cheap labor in developing countries would have to change somewhat with decelerating population. The stuff in the West would be more expensive, although maybe with fewer workers wages couldn't be so stagnant. I don't think so. Lots of stuff we consume in the west is made in China. Chinese wages have gone up like crazy in the last few decades. (Not that they are particularly high now, they just used to be sooo low.) Yet, stuff hasn't gotten more expensive for us. The causality runs the other way: Wages go up when productivity goes up. Productivity going up in China means they can make more with less work. So if anything, the proportion of the price in our cheap imported stuff that goes towards labour costs tends to fall as Chinese labour gets more productive.
- starfallg 6y ago
  >Chinese wages have gone up like crazy in the last few decades. (Not that they are particularly high now, they just used to be sooo low.) Yet, stuff hasn't gotten more expensive for us. That's because of several factors - 1. China has a massive massive population and the majority is still relatively poor. This is still lots of untapped labour available at low cost. 2. The skilled workers that have been trained in the past 3 decades is allowing China to move up in the value chain. They are capturing more of the profits because of this. Look at how many Chinese tech brands establishing significant presence in western markets. They are able to offer lower prices as they are mostly vertically integrated and labour costs of even the skilled positions are generally lower in China (where they centralise a lot of their functions) compared to the west. 3. And at the same time, countries with even cheaper labour are competing with Chinese producers on the low end. You see this particularly with things like clothes and shoes which are labour intensive but relatively low tech.
  - cocoland2 6y ago
    Do not flame a nationalist thing just being very pragmatic here from what i read / watched from a few documentaties. Just paraphrasing what I saw on the netflix series where one of the furniture manufacturer candidly asks a Chinese factory how they are breaking even at the prices that are being sold. The exporter chuckles and says , this is an investment to bleed the local furniture manufacturer (effectively get more demand and forcing other competitors to close , akin to customer acquisition burning VC money ) and become a monopoly in a sense. This is very evident in PPE equipment , masks and on the rare earths supply chain.
    - starfallg 6y ago
      Same thing happening in electronics. The margins are so thin you'd be wondering where they get financing.
    - eru 6y ago
      Rare earths supply has diversified quite a bit in recent years. Of course, there has been some government intervention on all sides, but companies are also willing to pay a bit of a premium to secure a second supplier.
coldtea 6y ago
>The "too few ideas" claim is also weird. For you to contribute some ideas to the global economy, at the very least you need some access to capital, that currently most of the world doesn't have. Having good education and some freedom from spending all time and all your energy just to survive on subsistence level also helps. In production of ideas, lifting people everywhere to the Western middle class standard of living and mindset is far more important than raw population count. And yet, raw population count is crucial in "lifting people" to higher standards of living. It's about how dynamic an economy is, which is about momentum. An aging population is just not as dynamic... The decline in population in the west wont see the same wealth shared by fewer people, but less wealth produced, a shrinking economy, and more and fiercer fights for the smaller pie.
- throwaway316943 6y ago
  Do historical population declines bear this out? The Black Death is often credited for an increase in worker wages and a shift to a somewhat freer society with more freedom of movement and urban development. I can just as easily see that global population decline would lead to higher wages, immigration reform, more urbanization, development of automation, less focus on planned obsolescence and more on higher value goods that a wealthier population can now afford.
- stereolambda 6y ago
  I am not sure about the "crucial" part, regarding having growing billions upon billions of people. Obviously you need some people to have economy, but what they do is more driven by incentives than essentialist features like being older. What I'd argue is that there will be a need for different business models, with profitability arising mainly from things different than offshoring and relying on dampening wages. If there will be money in that (not as easy as today's business models, but still), it will happen. To make this happen we will also need, obviously, technology advances and organizational innovation. But to get more people for doing that, I would rely more on taking knowledge people out from industries becoming less profitable (a normal economic thing; many people would agree that currently smart people are attracted economically to many questionable enterprises) and lifting the developing world (as its population growth is slowing) than, as I said, growing raw population count. I'm assuming you don't mean that we absolutely need a pool of people willing to work for any wage due to fear of extreme poverty. I have a sneaking suspicion that this point might hide under the "we need more people for more ideas" argument in the article. But the reality shows that we don't need such a poverty pool for agriculture for a long time now (looking at the Western agricultural productivity) and we probably don't really need it for industrial production either. This is due to technological advances letting us produce more with less people.
dkjaudyeqooe 6y ago
> The whole system of relying on cheap labor in developing countries would have to change somewhat with decelerating population. The stuff in the West would be more expensive, although maybe with fewer workers wages couldn't be so stagnant. I don't think that's necessarily an obvious outcome. Right now cheap labor is taking away incentives to automate. Some things can't be automated economically, but given broad incentives across industry there will be a reorienting towards automation. For instance mobile phones components would be designed to be assembled without human intervention. Of course creating the automation requires labor but much less and it is more one-off.
pyuser583 6y ago
Demography allows for very long term predictions. We already know - with total certainty - the maximum number of 80-year-olds who will be alive in the year 2100. They’ve all already been born.

eru 6y ago

> The whole system of relying on cheap labor in developing countries would have to change somewhat with decelerating population. The stuff in the West would be more expensive, although maybe with fewer workers wages couldn't be so stagnant. I don't think so. Lots of stuff we consume in the west is made in China. Chinese wages have gone up like crazy in the last few decades. (Not that they are particularly high now, they just used to be sooo low.) Yet, stuff hasn't gotten more expensive for us. The causality runs the other way: Wages go up when productivity goes up. Productivity going up in China means they can make more with less work. So if anything, the proportion of the price in our cheap imported stuff that goes towards labour costs tends to fall as Chinese labour gets more productive.

starfallg 6y ago
>Chinese wages have gone up like crazy in the last few decades. (Not that they are particularly high now, they just used to be sooo low.) Yet, stuff hasn't gotten more expensive for us. That's because of several factors - 1. China has a massive massive population and the majority is still relatively poor. This is still lots of untapped labour available at low cost. 2. The skilled workers that have been trained in the past 3 decades is allowing China to move up in the value chain. They are capturing more of the profits because of this. Look at how many Chinese tech brands establishing significant presence in western markets. They are able to offer lower prices as they are mostly vertically integrated and labour costs of even the skilled positions are generally lower in China (where they centralise a lot of their functions) compared to the west. 3. And at the same time, countries with even cheaper labour are competing with Chinese producers on the low end. You see this particularly with things like clothes and shoes which are labour intensive but relatively low tech.
- cocoland2 6y ago
  Do not flame a nationalist thing just being very pragmatic here from what i read / watched from a few documentaties. Just paraphrasing what I saw on the netflix series where one of the furniture manufacturer candidly asks a Chinese factory how they are breaking even at the prices that are being sold. The exporter chuckles and says , this is an investment to bleed the local furniture manufacturer (effectively get more demand and forcing other competitors to close , akin to customer acquisition burning VC money ) and become a monopoly in a sense. This is very evident in PPE equipment , masks and on the rare earths supply chain.
  - starfallg 6y ago
    Same thing happening in electronics. The margins are so thin you'd be wondering where they get financing.
  - eru 6y ago
    Rare earths supply has diversified quite a bit in recent years. Of course, there has been some government intervention on all sides, but companies are also willing to pay a bit of a premium to secure a second supplier.

coldtea 6y ago

>The "too few ideas" claim is also weird. For you to contribute some ideas to the global economy, at the very least you need some access to capital, that currently most of the world doesn't have. Having good education and some freedom from spending all time and all your energy just to survive on subsistence level also helps. In production of ideas, lifting people everywhere to the Western middle class standard of living and mindset is far more important than raw population count. And yet, raw population count is crucial in "lifting people" to higher standards of living. It's about how dynamic an economy is, which is about momentum. An aging population is just not as dynamic... The decline in population in the west wont see the same wealth shared by fewer people, but less wealth produced, a shrinking economy, and more and fiercer fights for the smaller pie.

throwaway316943 6y ago
Do historical population declines bear this out? The Black Death is often credited for an increase in worker wages and a shift to a somewhat freer society with more freedom of movement and urban development. I can just as easily see that global population decline would lead to higher wages, immigration reform, more urbanization, development of automation, less focus on planned obsolescence and more on higher value goods that a wealthier population can now afford.
stereolambda 6y ago
I am not sure about the "crucial" part, regarding having growing billions upon billions of people. Obviously you need some people to have economy, but what they do is more driven by incentives than essentialist features like being older. What I'd argue is that there will be a need for different business models, with profitability arising mainly from things different than offshoring and relying on dampening wages. If there will be money in that (not as easy as today's business models, but still), it will happen. To make this happen we will also need, obviously, technology advances and organizational innovation. But to get more people for doing that, I would rely more on taking knowledge people out from industries becoming less profitable (a normal economic thing; many people would agree that currently smart people are attracted economically to many questionable enterprises) and lifting the developing world (as its population growth is slowing) than, as I said, growing raw population count. I'm assuming you don't mean that we absolutely need a pool of people willing to work for any wage due to fear of extreme poverty. I have a sneaking suspicion that this point might hide under the "we need more people for more ideas" argument in the article. But the reality shows that we don't need such a poverty pool for agriculture for a long time now (looking at the Western agricultural productivity) and we probably don't really need it for industrial production either. This is due to technological advances letting us produce more with less people.

dkjaudyeqooe 6y ago

> The whole system of relying on cheap labor in developing countries would have to change somewhat with decelerating population. The stuff in the West would be more expensive, although maybe with fewer workers wages couldn't be so stagnant. I don't think that's necessarily an obvious outcome. Right now cheap labor is taking away incentives to automate. Some things can't be automated economically, but given broad incentives across industry there will be a reorienting towards automation. For instance mobile phones components would be designed to be assembled without human intervention. Of course creating the automation requires labor but much less and it is more one-off.

pyuser583 6y ago

Demography allows for very long term predictions. We already know - with total certainty - the maximum number of 80-year-olds who will be alive in the year 2100. They’ve all already been born.