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The problem is thinking it’s as simple as resources divided by population, so shrinking the denominator means more per capita resources right? But a country’s
by wenc 4y ago
The problem is thinking it’s as simple as resources divided by population, so shrinking the denominator means more per capita resources right?
But a country’s infrastructure is built for a certain population size assumption, and the numerator has a highly nonlinear relationship with the denominator, and the denominator is further broken down into subpopulations that affect the numerator non linearly. It’s not a simple ratio.
You have to manage population shrinkage almost as carefully as growth, if not more carefully. Shrinkage almost happens in an unpredictable way and instead of ending up like Japan you might end up like Bulgaria. Also a country is not isolated — it’s subject to competitive forces in the world so if the labor force becomes uncompetitive, your economy will tailspin in a way that exceeds your proportional savings from population shrinkage.
Improperly managed shrinkage in the extreme can lead to unemployment due to lack of growth, the rise of a disgruntled class which can in turn lead to lots of internal conflicts. There is a lot of system inertia in countries and lots of unpredictable effects.