September 26, 2023

The Economist: ‘Global fertility has collapsed’

The Economist, an oracle for politicians, journalists, and economists the world over, has turned bearish on the future of humanity. The leader accompanying its latest cover story declares: “in much of the world the patter of tiny feet is being drowned out by the clatter of walking sticks. The prime examples of ageing countries are no longer just Japan and Italy but also include Brazil, Mexico and Thailand.”

The focus of The Economist’s concerns is old folks’ creativity. An ageing population will not be innovative.

Older countries—and, it turns out, their young people—are less enterprising and less comfortable taking risks. Elderly electorates ossify politics, too. Because the old benefit less than the young when economies grow, they have proved less keen on pro-growth policies, especially housebuilding. Creative destruction is likely to be rarer in ageing societies, suppressing productivity growth in ways that compound into an enormous missed opportunity.

So what is to be done? Dunno. The Economist – like nearly everyone else – is stumped. One by one, it ticks off solutions which are being proposed around the world:

Immigration? Nope. “The global nature of the fertility slump means that, by the middle of the century, the world is likely to face a dearth of young educated workers unless something changes.”

Pro-family subsidies? Nope. “Singapore offers lavish grants, tax rebates and child-care subsidies—but has a fertility rate of 1.0.”

More and better education? Nope. There are short terms gains to be made by educating people in Africa, China and India. But “encouraging development is hard—and the sooner places get rich, the sooner they get old.”

ChatGPT? Aha! Possibly! The Economist wheels AI out as its most promising nominee for a productivity revolution.

“An über-productive AI-infused economy might find it easy to support a greater number of retired people. Eventually AI may be able to generate ideas by itself, reducing the need for human intelligence. Combined with robotics, AI may also make caring for the elderly less labour-intensive. Such innovations will certainly be in high demand.”

Even to the author of the leader, this must sound deluded. The leader limps along to its facile conclusion: “Fewer babies means less human genius. But that might be a problem human genius can fix.”