Tuesday, March 10, 2015

Peak Children

A recent trip to Milan got me thinking about babies.  The lack of them, that is.  Italy's birth rate recently reached its lowest level since the foundation of the state in 1861, and the Italians are worried that their country is dying.  Even Pope Francis has quipped that Italians seem to prefer pets to children.  Though on the strength of a few days in Milan I'd say it's still 50/50.

All this demographic soul-searching in Italy was prompted by a 1% drop in the number of births year-on-year.  Meanwhile here in Ireland the CSO recently announced a 3% drop in the number of births in Ireland and there wasn't even a murmur. Okay, we still have one of the highest birth rates in Europe, but the number of births per 1,000 population is clearly trending down, as the chart shows.  This comes after a brief, Celtic Tiger era echo baby boom as the Pope's children became parents (that's John Paul II, just to avoid confusion).

Still, the baby issue is going to be big.  Or smaller, to be precise.  We've reached Peak Children apparently, which means there'll never be more children alive than there are today. Which I find kind of sad, but that's probably just me being sentimental.  Still, there are a few downsides to falling birth rates, including:

  • An end to Ponzi-style pay-as-you-go pension schemes that effectively require more workers entering the labour force than pensioners retiring (that's just about every welfare system in the Western world)
  • A flight from the family that means fewer people to care for - or care about - increasingly dependent elderly populations
  • The onset of secular stagnation as ageing populations save more and invest in non-productive assets such as houses

There are a few upsides, of course:

  • Just as the Black Death flipped the balance of power from surfeit capital to suddenly scarce labour, so fewer workers will ceteris paribus enjoy much higher wages, or so thinks Stratfor's George Friedman
  • While a shortage of people will accelerate the emergence of artificial intelligence and 'caring robots' - as is happening in Japan already
  • Pensioners eventually draw down their savings, so interest rates will go up as capital becomes scare, providing valuable interest income for pensioners after a long period of low rates

But while all these trends and projections make for interesting speculation, they are mostly exercises in extrapolation.  I think a more interesting exercise is to think about the cultural consequences of a world that has more elderly people than children.

One of the most interesting writers on the psycho-cultural aspects of demographic transitions is Sarah Perry.  Her magnificent essay on The History of Fertility Transitions and the New Memeplex was one of the smartest and most original blog posts I read last year. As she explains it, historically European culture prevented people from restricting family size within marriage.  But a new pattern, originating in New England and France in the late eighteenth century, allowed for the control of fertility within marriage and pretty soon (within a couple of centuries) became the norm. Hence Peak Children.  As she notes dryly:
Once the fertility transition to controlled fertility occurs in a population, its fertility generally continues to decline until it is below replacement. The benefits of the new pattern are increased material wealth per person, a reduction in disease, starvation, and genocide, and upward social mobility. The main drawback is the onset of a dysgenic phase that may end civilization as we know it.
The end of civilization definitely counts as a downside in my book, and she does make her case rather well.  It's a long post, but well worth pouring yourself a drink and enjoying the read.  Though it does point to a few, rather more serious downsides to Peak Children:

  • We are having fewer children because they are no long an asset (materially or otherwise) but a liability, and we now value children less than any other civilization in human history
  • The rich and intelligent have fewer children and aren't replacing themselves, risking the emergence of an 'Idiocracy' (but without any improvement in equality)
  • A rising share of childless adults in the population (and Ireland has one of the highest shares for women in Europe according to UCD's Tony Fahey) means a generation with less 'connection' to future generations and an increasingly 'high time preference' culture (it was, after all, low time preferences that gave us civilization in the first place...)
  • We may even be experiencing our own 'Mouse Utopia' as a species, with all that entails, including the Sexodus that will in turn accelerate the decline in births even further.
After all that I think it's time to take the dog for a walk...

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