You could increase population growth by not screwing millennials at every step of their life. If housing, school, food, cars didn’t cost substantially more in inflation adjusted dollars than it did for their parents, or if their incomes at least caught up to inflation.
In general, taking long-term views toward priorities of incentives would help a great deal, as opposed to the "gotta-meet-next-quarter's-numbers" priorities we have now.
I don't know how exactly to get there (I have a variety of ideas about things we should be doing differently as a society, but none that specifically address the level of short-term thinking we are plagued by), but we definitely need to do something about it.
I’d love to hear your ideas. Side note: is there a subreddit or other forum for people to share and debate big picture ideas about what we should be doing differently as a society? Seems different ideas are debated in different places but I haven’t found a single place where ideas can be debated, voted upon, ranked, etc.
I mean, honestly, they're nothing particularly new or noteworthy; they're a collection of progressive ideas you've probably heard a lot, starting with universal basic income and single-payer universal health care.
As far as fixing our corporate culture, I think making judicious but expressive use of the corporate death penalty, combined with aggressive enforcement of antitrust laws, using a much broader metric of harm than has been used in the past few decades, would be a good start.
I also think that a true universal basic income—one that would allow someone with no other source of income to live safely, if not luxuriously, in most parts of the country—would slowly but surely start having huge effects on nearly every aspect of work, as removing the constant fear of homelessness and death from poverty made the "labour market" much more like a genuine free market. I can only begin to imagine the shifts in our society that that would result in, and it's really hard to say just what other measures would be rendered unnecessary by them.
Immigration is the ultimate get-out-of-jail-free card when it comes to deflation. Just ask the Europeans or even more so - the immigration hostile Japanese (yes, I know Abe is turning things around, this is an oversimplification).
It's amazing how it is basically impossible to influence birth rates, one way or the other, up or down. I am yet to find a convincing example of a concerted effort at increasing or suppressing birth rates by a centralised authority. Please share one if you know it, I find birth rates to be far more mysterious than any other commonly talked about "macro" rates, such as riskfree rates or various risk premiums.
China's birthrate did decline with the one child policy (1979). But it declined way more in the decade prior to the introduction of the one child policy.
"晚、稀、少" : “late marriage, longer spacing, and fewer children” was a little known policy introduced in 1970 that encouraged late marriage and fewer births, and which had way bigger effects than the compulsory one child policy.
The policy existed but, after talking with some Chinese friends about this very topic, they said the system was corrupt. Anyone who want to get around the system just had to bribe a local official, and there were zero consequences.
It wasn't even a bribe, It was worse than that. It was literally, "You can only have one child unless you pay for each extra child you want." I mean, getting around the policy, was actually written into the policy. Which is kind of insane if the purpose was to control birth rates.
Wait, it's not that simple.
Depending on where you were working and living, the policy was different.
National-level, f you worked for the government (military, healthcare, PCC) you weren't allowed to have more than one child without loosing your job (if you were grunt-level) or paying and having your career path stilled (if you were CO-level).
For other workers, it was more or less a "state-level" implementation with governors deciding how to enforce the rule. In most places, farmers had the right to have two children and could ask to have one more. City workers only one and had to pay different amount depending on the city and the governor for the second. Some governors were really, really hard on enforcement (forced abortion...) while other were more lax and made people pay acceptable amount for the second child.
Still, even without hard enforcement, the illegal child have no paper, cannot join legal school and isn't present on the family register (and can't work/live anywhere legally). This is one of the 3 internal problem the Chinese government will have with the generation.
No it didn't, have you ever looked at the charts? They had the "Chinese Boomers" which were naturally followed by "Chinese Millennials". And then in 2015 the policy was abandoned but the birth rate has not bulged at all.
And it is not like the Chinese govt didn't try, they were serious about it. It's just that birth rates are mysterious. People will have kids when they want to, and will stop having kids when they want to, and they will listen to nobody. No authority.
From https://en.wikipedia.org/wiki/Deflation#Effects, it sounds like it would _increase_ the incentive to lend, but would decrease the incentive to _borrow_. Inflation, conversely, seems to decrease the incentive to lend (the inflation-adjusted return is less than the nominal rate). Naively, it's not clear to me why the latter is better for the economic system we live in (would that be free-market captialism? or something else?). Can you elaborate?
Either way, both of these seem different from eliminating the incentive to loan or borrow. People know how to consider inflation-adjusted rates of return and invest accordingly. Soon these same lessons will be applied in negative interest rate scenarios, which I guess counts as deflation.
> People know how to consider inflation-adjusted rates of return and invest accordingly. Soon these same lessons will be applied in negative interest rate scenarios, which I guess counts as deflation
This is part of it. Deflation means my money is worth more tomorrow than today. If due to 10% return just by keeping my money under my mattress due to deflation, why would I ever risk loaning it out into an investment opportunity. Essentially the risk-free return is now 10%, so for any investment to be worth wild it must return even higher than that. That's hard to do. The higher the deflation, the higher the baseline return needed. As a result any business that might've returned 5% is now no longer a viable option. So it reduces overall investment because it raises the bar for success.
Similar is for purchases. Why buy something now, when I can wait 6 months and get it cheaper. As a result everyone stops spending, and everyone stops investing. Now that there is no spending, there is no money to pay salaries, so people have less money to go around and so again money becomes more valuable and you get a downward cycle.
Imagine I said, at midnight january 1st any money you have in cash or in a bank will be worth 50% less. You'd buy up anything you could or invest in anything you could to get rid of cash and put it in hard currency. Even if someone had a business that would lose 10% over the year, that'd still be better than losing 50%.
Deflation is the opposite. Any cash or bank accounts you have will double. You'd sell your items, but nobody would want to buy. They could buy two couches with that money the next year.
Overall if money always is slowly decreasing in value, people want to find uses for it either consumption or investment which move the economy. If it's increasing in value (ie deflation) they wan to do the opposite. Hoard it.
Some of your point sounds a bit like this (please correct me if I'm wrong): "Deflation is always bad because it could be hyperdeflation." Namely, if deflation is significant enough that it incentivizes me foregoing a purchase for a few months (and then another few months, etc) it's _significant_ deflation. But why not make the equivalent argument "inflation must be bad because we can imagine hyperinflation" as well?
But instead of hyperdeflation, if we had -0.1% risk-free interest rates, would people really forego all purchases? I don't see why. If I need a new toaster, or some clothes, or gas for my car, I would not delay the purchase for 6 months to save 0.05% on the purchase. This seems like a realistic number if the deflation is caused by a population contraction in a country with an advanced economy.
It seems real-world encounters with deflation (at least since the inception of central banking and planned expansions of money supplies) have come largely during periods of _sharp_ economic contraction. But is such a scenario really comparable to a slow decrease in population?
Moreover, if monetary policy can offset deflation, what creates the need for immigration to offset the deflation? Why isn't the monetary policy enough?
> Some of your point sounds a bit like this (please correct me if I'm wrong): "Deflation is always bad because it could be hyperdeflation."
I'm not an expert at this, I'd suggest looking at it in this manner instead. You are correct that other than the psychological (which does matter), there is no magic barrier that once inflation crosses the zero point and becomes negative things will spiral out of control. Instead it is a sliding scale 10% inflation will produce less investment than 20%, and 5% will produce less than 10%, and 0% less than 5%, and -5% less than 0.
Deflation frequently comes sharply, but it also often immediately comes following a period of credit expansion. Pretty often you'll see a sudden contraction after a bubble. In my understanding, a modern view of a "stable" economy is one that is at least slowly growing. And so even one that is holding still is "shrinking". Some degree of this is psychological as well. Debt becomes harder to handle, some businesses go bust, so people become less willing to lend money again.
I do think that yes, in the most cases deflation can be handled via monetary policy. But by essentially borrowing from the future and increasing demand. But that means the way out is essentially putting free money in the hands of the people most likely to spend it. The poorest.
A lot of politicians are more comfortable with giving money to banks or businesses than to low income citizens. But they are the ones who will spend it directly to increase demand. So in essence, in my opinion, it really boils down to political will to spend your way out of a deflationary cycle. That said, economists aren't all in agreement about these types of things. Dig into it a bit more yourself and see what's written on it.
Well if the value of money is going down then the price of everything else goes up (land, stocks, precious metals). The incentive is to convert cash into these alternatives.
Seems to me the same is true for borrowers. Borrowing money to buy land/stocks/etc is still a smart move as long as they keep trending upwards faster than the loan rates. Of course this requires sufficiently low interest rates be available, which is where the reference "our system" comes in I suppose, with a federal reserve maintaining artificially-low rates to drive this wealth transfer from savings to borrowers.
This is just the sideshow of wealth moving around, of course. I don't really buy that that if this game ended it means the death of the entire economy. It's just the part that can be subjected to manipulation. Obviously the point of earning money in the first place is to spend it, not just save or transfer it from one medium to another. Money is just an exchange itself. In deflation, things get cheaper and supply-and-demand curves says more people will buy things.
"This means that people with money have zero incentive to spend..."
Except for food, housing, healthcare, entertainment, and well, pretty much everything people spend money on. You can't be alive or enjoy that life without these things. People wouldn't refuse to spend their money and starve to death because then they wouldn't be around to use it.
> Hypothetically, you could adopt an economic system that would not be affected by deflation,
You need money to expire (or, more specifically, lose nominal value faster than deflation reduces nominal prices) if not spent, then people have an incentive to spend their money as they receive it even though nominal prices are decreasing, because you can't hoard surplus to immediate need money for future purchases at lower prices.
No, I'm talking about individual units of issued currency (e.g., physical bills in the simplest case) losing nominal value, which can be done while the underlying currency is gaining real value (in deflation).
Yes, obviously you can avoid deflation by creating enough money that you instead have inflation, but I'm talking about having a monetary system that avoids some of the negative incentives of deflation even when it occurs.
> The world population is projected to peak around 2100
If you only take natality prospect, yes. However we're on our way to hit +3° average around 2080. The average temperature difference between the last ice age and our age is ~5° for comparison. The agricultural change this 3° will have unforseen effects (well, not really unforseen, look what happened circa 2010 in Egypt and Tunisia), without taking into account the groenland melting (this is unavoidable anyway) and the wetbulb temperature being reached more than 100 day a year in eastern India/Bangladesh (and Florida won't be any better, if i remember correctly it will be ~80day/year for most of southern Florida). This will probably regulate the population a bit faster than predicted.
People invest because the return is higher than the return on deflation. For example, if cash is worth 1% more next year, you can invest in the S&P 500 and make more money than holding cash. If cash is worth 10% less next year but the S&P 500 crashes, you'd make more money (have more purchasing power) with cash. It has nothing to do with whether money is more or less valuable, it has everything to do with comparative investments.
That can be true and it could still be higher than the rate of deflation.
Right now banks lend businesses money because the business is projected to be able to make payments at an interest rate higher than the federal funds rate. People have to buy food. People will buy the new iPhone. People pay rent. People like to travel. All of those things happen no matter what the value of money is doing, so there will always be economic incentive to start businesses that can be profitable.
My point is that it's not so one dimensional. Deflation doesn't have to be bad. You can create value without reducing the value of everything else.
In a deflationary world, it would have a lower rate of return, while hoarding cash would have a higher rate of return.
This would attack investing at both ends. Currently, the spread between inflation eating your money, and the SP earning you money is 7%. That compensates for a lot of risk. Drop that down a few percentage points (by making cash attractive), and a few more percentage points (it's harder for firms to earn profits in a deflationary environment) while keeping the risk the same, and the SP becomes a worse and worse investment.
The S&P tracks a certain basket of companies. If other companies held more value it would track those companies. There are a lot of percentage points between 7 and 0.
Deflation means USD value goes up. It doesn't mean USD value goes up 5%. A "deflationary world" could have 0.5% deflation. Or 0.00001% deflation. Again, it is incredibly narrow to view economics in this way. You lose 50% of the possible worlds you could inhabit and the economic systems and incentives you could have.
Inflation/deflation is a proxy for population growth + productivity growth + looseness of monetary policy.
Loose monetary policy can't be maintained forever (You get stagflation, which is even worse - just ask Japan), year-over-year productivity growth can't be maintained forever, and the subject this thread is discussing is 'what happens to the economy when population growth goes negative?'
So yes, a deflation of 0.5% wouldn't be devastating. A deflation of 3% would be a stop-the-presses-the-world-is-going-to-hell-we-need-a-new-economic-system event.
The problem is that you can't loose-monetary-policy your way out of deflation, because one of the factors contributing to a loose monetary policy is how willing banks are to lend money to people. In a world where the money base is shrinking year-over-year, in aggregate, lending money to people is a terrible idea, because there won't be enough money in circulation next year to make interest payments. This leads to a reduction in lending, a reduced appetite for risk in lenders, and a reduction in the amount of money created by fractional reserve banking, which further pushes you into deflationary territory.
Another oppressive pro-natalist policy was pursued by the Islamic government of Iran in the 1980s. It ended in tears though as Iranian women did not see the sense in birthing children to be cannon fodder in the Iran-Iraq war. What followed was the steepest drop in birthrates ever recorded. So the government did influence the birthrate, but not in the intended direction.
France and Hungary have had limited success with more humane pro-natalist policies.
However, there is a proven and highly effective way for governments to reduce birthrates. Educate women. That is actually the main driver of falling birthrates worldwide.
It quickly becomes a pyramid scheme based on ever looser credit to ramp ever scarcer housing, if no additional action is taken to address the need for ever more youth to prop up pension obligations. Which then further suppresses family formation.
This actually exacerbates the problem of lower birth rates. Longer life expectancy mean an even greater portion of the population is non-working and dependent on the shrinking share of working-age people. If people worked a greater portion of their lifespan that could compensate for lower birthrates but increasing retirement ages is extremely unpopular.
I would interpret "longevity and health" not just to mean increased life expectancy but to also mean increased time until you are infirm. This expands the percentage of your life that you produce more than you consume (i.e. 20 to when you become infirm for the average person), and decreases the percentage of your productivity that goes towards raising children (since you have more overall productivity but roughly the same amount goes to raising kids).
This would seem more credible for evaluating the US if most states with high minority populations didn't give a disproportionate amount of support to minorities. If you make minimal effort to prevent immigration and you give most family support to minorities then of course minorities will be your main high growth population. Non-racially targeted support is made increasingly difficult by the environmentalist doom cult that believes growth is bad but which can't attack support for minorities because race trumps environmentalism in US politics. It's about as mysterious as a company with more investors growing faster than its competitors, sometimes the underdog wins but capital is usually king.
I dont have any reference to support this, I think Thomas Sowell or someone else on one of the Hoover Institutes youtube videos, said this, Israel is the only first world country that does not rely on immigration to support population growth, so i would assume all other first world countries population growth is due to minority immigration
? I guess it depends on what you classify as immigration. Israel has depended on a far flung diaspora returning, but I don’t know the numbers, so I’d prefer to see native born growth versus “returnees”.
I was surprised to see that many of the eastern European/Russian immigrants moving to Israel over the last 40 years don't supply any evidence of Jewish heritage (i know USSR and other European countries discriminated against Jews so it would make sense that there are a lot of Jews who don't really have the papers to prove it for a few generations).
An article I read said many French jews immigrated to Israel (due to rather recent French anti-semitism sentiment) but immigrated back to Europe once economic advancement for them wasn't attained.
Looks like Israeli society has had kind of an open door policy to Europeans who are able to attain employment (i assume in the tech scene there).
One thing to keep in mind is that “white” many times absorbs the other populations. In the past, for example, Italians and other Southern Europes were not considered “white”. Now they are. Add to that intermarriages, and likely the proportion of people who identify as “white” will be likely be constant or grow in the future.
This is an important point, especially with respect to the Hispanic population. It's often referred to as a race, when it's more like a cultural category - individual Hispanic people often identify as white, indigenous, or black though racial identity tends to be more fluid due to greater historic rates of intermarriage. I come from a Hispanic family, my grandparents more or less exclusively speak Spanish. My parents who were born a couple years after my grandparents immigrated would only be recognized as Hispanic if they made that part of their identity known. If I were asked to identify myself racially I'd say white, not Hispanic. I see myself as Cuban-Americans not as a racial identity buy as an ancestry - the same way people are Irish-American or German-American. 65% of Hispanics in the US identify as white: https://en.wikipedia.org/wiki/Hispanic_and_Latino_Americans#...
I would not be surprised if by the 2060s (40 years, ~2 generations) that Asian Americans and Hispanic Americans get rolled up into being 'white'. Rates of intermarriage between groups seem to be on the rise  though Hispanic data is not well represented in my quick googling.
More hopefully, people will simply not care and diversity will be celebrated, not denigrated as we've awoken to since George Floyd.
> I would not be surprised if by the 2060s (40 years, ~2 generations) that Asian Americans and Hispanic Americans get rolled up into being 'white'.
Hispanics are predominantly White by the standards by which race has any meaning at all (though also several other races are represented), Hispanic is an ethnic rather than racial category.
> Hispanic data is not well represented in my quick googling.
It's not going to show up in data on race because it's not a race.
> More hopefully, people will simply not care and diversity will be celebrated, not denigrated as we've awoken to since George Floyd.
The people marching in parades with Confederate flags haven't awoken to anything. And each of America's periodic awakening on this issue has been accompanied by exactly that kind of reaction and a hardening of White supremacist ideology. It may be a shrinking minority each time, but it's also increasingly committed, or at least renewing it's commitment each time.
> In the past, for example, Italians and other Southern Europes were not considered “white”
This is absolute bullshit. There was rampant and socially acceptable prejudice against Southern and Eastern Europeans as well as the Irish, North Africans, Levantines and Central Asians. They were however all legally white. There was no attempt to stop their immigration as such as there was with Japanese, Chinese, Indians and other Asians. They were not classified as legally distinct like Black or Indians (Native Americans).
Racism was completely compatible with considering the othered group white. Italians, Irish, Swedes, Germans, Poles, every non-Anglo white ethnic group suffered discrimination but the idea they weren’t considered white is ahistorical trash.
Fiorello LaGuardia was elected Mayor of NYC in 1933. Francis Spinola was the first Italian Congressman to serve a full term in 1887. Anthony Ghio was Mayor of Texarkana in 1880. Andrew Longino was the first Italian Governor, Mississippi 1900.
American racial politics was always about black and white with other differences paling into insignificance. Ethnic and religious prejudice there was aplenty but at no point in American history were Europeans considered non-white.
> However, "color challenges were never sustained or systematic" when it came to Italians,:28 who were "largely accepted as white by the widest variety of people and institutions" throughout the U.S.:6 Even in the South, such as Louisiana, any attempts to disenfranchise them "failed miserably".:28
Is minority a shorthand for not white or black? Why is that the dominant axis for parsing the population growth difference? Is the correlation with racial distribution more pronounced than with other axes, or is this article aimed at people too stupid to understand that people differ in more ways than race?
One would think with automation on the horizon the government would aggressively curb immigration. The people already here responsibly having children are having a hard enough of a time with the cost of everything.
Back in high-school, I had a (white) history teacher that made it a whole unit in her class. Her thesis was that white people were the only thing in America holding back progress, and that when the US was majority minority we'd reach an inflection point where 'we' (progressives) would be able to implement policies that might absolve the country of its sins, and tied it all into the MLK arc of history quote.
Looking back now, I can't help but wonder if it didn't drive a few of my classmates to some of the more reactionary and racist politics on the right.
I had two of those. One was particularly fixated on how the Japanese were going to bury us. They don't call it "the long march through the institutions" for nothing. The idea that one should get into a position of power to teach a select portion of children that, because of their ancestry, they have a sin for which they must work their whole lives to atone for does call for a reaction.
At least with the religious, you can be saved by Jesus or whatever, but for this group, you are always guilty, by virtue of your skin color.
This is the progressive “demographic destiny” fever dream. Non-whites aren’t that progressive.
For example, non-whites are much more religious than whites. Just 35% of white people say that belief in God is “necessary to be moral” versus 55% of Hispanic people and 63% of black people. That’s particularly remarkable because the median white person is 42 the median black person is 30, and the median Hispanic person is just 28. Religious belief increases with age, so black and Hispanic people in the age groups that vote heavily are likely even more religious compared to whites.
Hispanic people, meanwhile, are quite conservative on criminal justice issues. They are consistently more conservative than white people when it comes to ending things like mandatory minimums for drug crimes. Again, this is remarkable considering the age distributions. It’s very interesting to look at polls of Hispanic people’s’ opinions with respect to policing and the George Floyd protests: https://docs.cdn.yougov.com/7msyzunum9/tabs_HP_Police_Reform...
8% of both Hispanic and white people say the system needs “no improvements” compared to 3% of black people. Just 21 and 22% of Hispanic people and white people, respectively, say the police system is “not sound” and “needs significant changes” versus 45% of black people. On nearly every policing issue, Hispanic people are a bit more liberal than white people, but I’m not even sure that difference would remain if accounting for age differences.
On the economic front, asians and Hispanics are close to white people in capitalism versus socialism, with just about a third of each group supporting socialism: https://www.cato.org/blog/59-americans-have-favorable-views-.... Again, an interesting result given that support for socialism goes down significantly with age, and both Hispanics and Asians are significantly younger than whites.
Right now, a lot of conservative people of color are forced into a coalition with increasingly radical white progressives due to real and perceived Republican racism. When that pressure disappears, I think you’ll see a reshuffling of the coalitions. I can already see the seeds of this happening. My parents are Bangladeshi immigrants. They’ve voted Democrat in every selection since they became naturalized citizens. They voted for Hilary Clinton not because she was the lesser of two evils, but because they liked her. They’re the people who overturned the Sanders/Warren applecart when they got around to tuning into the Democratic primary. My mom explained to me today what she thinks makes America great. “You can drive to an intersection at 1 am and if there is a red light, people will stop. Even if the streets are totally empty, people will stop and wait for the green light.” She is worried about the protests and said “if we aren’t going to have law and order in America why shouldn’t I go back to Bangladesh?”
My dad is the more progressive of the two. He’s a Clinton Democrat who likes that Bill cherry picked the best parts of the Republican agenda. He is alarmed at the Warren/Sanders wing and was very nervous when everyone thought Biden was done. His take on the idea that billionaires shouldn’t exist: “that’s stupid.” He’s upset that people are lobbying to change the name of the high school I went to (Thomas Jefferson in Virginia). But he is convinced that the Clinton/Biden/Obama camp will hold, and says “America is an established country, you won’t see radical change.”
Where by "forced into a coalition with increasingly radical white progressives", you probably mean "are running the table in a a party with a noisy but politically ineffective faction of radical white progressives". Did we not just watch the same 2020 Democratic primary? In the primary I watched, two small, white, disorganized primaries created a brief and embarrassing media blip of Sanders inevitability, followed by an unholy whupping in every subsequent primary state. Sanders lost Washtenaw County Michigan to Biden. Washtenaw is Ann Arbor. He lost the Berkeley of the Rust Belt. To Joe Biden.
A lot of what you have to say about politics is well-taken. From everything I understand, you're right: people of color are indeed more conservative than Very Online White People. But then it seems like you go a little off the rails: the (relative) conservatism of Hispanic and black voters is reflected in the Democratic party. If there's a shuffling of the party, it's going to be angry DSA people to a long trip to the political wilderness of the Green Party.
I agree with you, and at least I meant to say the same thing. I read OP’s teacher as saying that when the US became majority-minority, that would eliminate the remaining roadblocks to a progressive remaking of America. And I think that’s premised on the misunderstanding that because people of color vote Democrat, they agree with progressive white Democrats that such a remaking would be desirable.
As you observe, the 2020 Primary is an example of this phenomenon. Progressives try to explain it away by saying suggesting “people of color really agree with Warren, they’re just more concerned about electability.” But my guess is that for the most part they, like my parents, actually like Biden. And that should give anyone who believes in “demographic destiny” pause.
White people are on average will have more socioeconomic freedom, so less reasons to walk around in a band or associate with anyone for survival value. This naturally leads to drop in birth rate.
Poor people have more reasons to band together, pool their money to afford nicer things. And they've more reproductive pressure because of this reasons, so they are bound to grow population wise. This is seen nearly everywhere even in places where there are no good social weflare programs like India.
It's a curse that comes with freedom, individualism and prosperity - you've end up with no reasons to reproduce or find it very difficult to associate with someone because it seems so limiting.
If having kids is profitable or not is open debate.
Most people I know would love to have kids but they don't want to have them with a wrong person.
And what is considered "wrong" have changed over time.
Many people want to have kids on their own terms, not the terms of their partner. They want to have zero compromise in personal freedom - so they don't takers for that offer resulting in them not having any kids.