Monday, January 21, 2013

Robots Don't Buy Cars

Kevin Kelly is worried. His answer to Edge's 2013 question - what should we be worried about? - is: the under-population bomb. That's right: forget the earth over-shooting it's carrying capacity - it looks like we're in for a long undershoot instead. But while that might mean good news for the earth's ecology, it might not be so good for the earth's economy. Here's Kelly:
A lower global population is something that many folks would celebrate. The reason it is scary is that the low will keep getting lower. All around the world the fertility rate is dropping below replacement level country by country so that globally there will soon be an un-sustaining population. With negative population growth each generation produces fewer offspring, who producer fewer still, till there are none. Right now Japan's population is way below replacement level, as is most of Europe, Eastern Europe, Russia, the Former Soviet Republics, and some Asia countries. It goes further; Japan, Germany and Ukraine have absolute population decline; they are already experiencing the underpopulation bomb.
Slate covered the issue recently: quoting one set of forecasts that estimate a halving of the global human population by 2200. And it's all down to... no one particular thing. Slate says the education of women, others say better contraception and still others point to urbanisation. The recent documentary - Demographic Winter - illustrates just how complex the various factors are - and how difficult is any answer to the problems that arise:


While a falling population can be a good thing in the short run (on a per capita basis, the economic cake gets divided among fewer people), it's not that sustainable in the long run. In fact, we've never had to deal with anything like this before - here's Kelly again:
Here is the challenge: this is a world where every year there is a smaller audience than the year before, a smaller market for your goods or services, fewer workers to choose from, and a ballooning elder population that must be cared for. We've never seen this in modern times; our progress has always paralleled rising populations, bigger audiences, larger markets and bigger pools of workers. It is hard to see how a declining yet aging population functions as an engine for increasing the standard of living every year. To do so would require a completely different economic system, one that we are not prepared for at all right now.
We can see some pointers to this already, in Japan for example, and in Germany. Note the gradual, long run decline in car sales in Germany, despite a better economic performance than most. Robots can build cars, but they don't buy them. Here in Ireland we're still some way away from the demographic cliff facing parts of central and Eastern Europe, but deferred gratification will eventually work its effects here too. 

Robots don't pay taxes either, come to think of it.

1 comment:

  1. Perhaps Kevin Kelly's fears about the world needing a 'completely different economic system' isn't something he or the rest of us should worry about too much.

    If we can safely predict a future where population is in decline and the economic growth model we've been using is no longer useful, then we should probably take a leaf out of our ancestors' book and start changing to greater self-reliance - both as families and communities.

    After all, when you live in a world where a constantly expanding market is no longer assured, you need to make the most of what you already have, and in Ireland's case, that's our plentiful natural resources and our productive land.

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