Our economy is built on consumerism – an expanding population buying more stuff every year. If that changes, what would the future look like? If consumer demand declines production would decline with it, and as jobs dry up wages and consumer demand would fall further. There’d be no place to invest capital since businesses would not need to expand. Low wages, bubbles wiping out savings from time to time. We’d see empty housing and shrinking bankrupt towns as people consolidate into major cities.
This isn’t as crazy a concern as you might think. The recent Great Recession offered a taste of life in a failing economy. It made people angry and fearful as well as poorer. And population decline is happening today with the aging of Japan. Fertility rates are dropping while the percentage of old and elderly increase.
A range of economic and cultural factors contribute to Japan’s decline in childbirth: later and fewer marriages, poor work–life balance, increased participation of women in the workforce, a decline in wages and secure employment, small living spaces, and the high cost of raising a child.
Although most married couples have two or more children, a growing number of young people postpone or entirely reject marriage and parenthood. [wikipedia]
Wags have even calculated when the last Japanese baby will be born: the year 3011 (which allows a lot of time to ponder the issue) and offer more causes: men called “herbivores” who are not interested in sex, young women who prefer being single and child-free, and a preference for “virtual” friends among younger people.
Japan leads the way, but other countries are on the same path – including America (where immigration hides the trend.)
I think of America’s shrinking rural towns (like my own) and the Rust Belt. Those areas are responding to a loss of jobs, but what will happen when there’s a nationwide loss of people who need to buy stuff and services?
If automation and robotics keeps production high, maybe stuff will get cheaper and those people who are left will live like kings. But Japan’s economy has been stagnate for decades and the cost of living remains high.
Of course, human beings are complex. Germany has one of Europe’s lowest fertility rates and seems to have a robust economy. Both low fertility rates and emigration affects Eastern Europe, so they may look more like America’s Rust Belt than like Japan.
Sub-Saharan Africa and the Middle East, in contrast, have population booms. As their people spread across the world – as they no doubt will – cultures will change everywhere. It’s historically appropriate to expect the next great tide of human migration to come Out Of Africa.
I’m sure the Great Depression, which forced so many families off their subsistence farms, was a disaster for those who lived through it – but how many of us would go back? From the other side of whatever shift is coming, I optimistically assume that you and I will be an unlamented barbaric past.
I recently heard a TV interview with Emrys Westacott, author of The Wisdom of Frugality-Why Less is More.
For more than two millennia, so many philosophers and people with a reputation for wisdom have been advocating frugality and simple living as the key to the good life… [but] most people have ignored them.
Perhaps people in the future will take those philosophers up on their advice. But it’s scary. As Scott Adams’ cartoon character Dilbert once said, “Change is good. You go first.”