The depopulation bomb

Today, the spectre haunting the global order is not communism, as Marx predicted, but seemingly relentless demographic decline. We can already see its consequences in everything from the fight over pensions in France to the persistent labour shortages across almost all the high-income world. In the future, a lack of human labour is also likely to accelerate a shift towards automation, reshaping economic and political conflict for decades to come.

The world’s population has long been growing on an upward curve. About 75 per cent of the world’s population growth has occurred over the past 100 years, more than 50 per cent of it since 1970. But now, according to the United Nations, population growth is on course to drop to near zero, especially in more developed nations. Globally, last year’s total population growth was the smallest in half a century. By 2050 it is estimated that some 61 countries are expected to experience population declines.

A majority of the world already lives in countries with fertility rates well below the replacement level (2.1 births per woman) – the level, that is, at which a country’s population would remain steady. By 2050, UN data suggests 75 per cent of countries will have fertility rates below replacement level. Some UN demographic projections now contemplate that world population could peak in 2086, with the global population about one billion below today’s level by 2100. Ours will become a rapidly ageing planet. In 1970, the median world age was 20.3 years. By 2020, it had increased to 29.7 years, and it is expected to be 42.3 years in 2100.

It’s no longer a question of if, but when global populations will start to decline. We are entering a new epoch, defined by the first large population declines since medieval times. A series of plagues halved Europe’s population between 1346 and 1460. The primary causes today are not war or disease, however, but social evolution, including the decline of the family and religion, as well as diminished economic opportunity and a soaring cost of living. Most rich countries have to contend with birth rates well below the replacement rate. Japan, which has a fertility rate consistently 50 per cent below replacement, is likely to see its population drop from 126million in 2021 to under 90million by 2065. Indeed, last year, Japan recorded twice as many deaths as births.

Similarly, Europe’s population growth has been tapering for a generation. European fertility rates fell from 16.4 babies born for every 1,000 persons in 1970, to 9.1 in 2020. Last year the UK’s birthrate also hit a record low, with fertility rates for women under 30 at their lowest levels since records began in 1938. A fifth of all British women are now childless by middle-age.

The decline in fertility rates has also been evident in North America, traditionally a bastion of stronger demographic growth. US population growth, according to the Federal Reserve Bank of St Louis, has fallen to the lowest rate in peacetime since America’s founding. China’s birthrate has also cratered, causing its workforce to shrink by 41million – equal to the entire German workforce – in just the past three years. And it’s now slated to drop by a further 20 per cent by 2050. Over the past few decades, fertility has dropped precipitously across east Asia, including in Taiwan, South Korea, Hong Kong and Singapore.

This demographic decline is already reshaping the world economy. As economist John Maynard Keynes warned as early as 1937, the ‘chaining up of the one devil’, overpopulation, ‘may, if we are careless, only serve to loose another still fiercer and more intractable’ – the devil of demographic decline. The US population aged between 16 and 64 grew by 21 per cent during the 1980s, but in the 2010s grew by less than three per cent – shrinking as a proportion of the population. Consultancy Korn Ferry projects a deficit of at least six million workers in the US by 2028. Even greater declines in the workforce can be seen in the UK, the EU and east Asia.

The shrinking of the labour force combined with growing numbers of the elderly is already generating political unrest. Take the widespread protests over pensions in France. Strikingly, it’s not the elderly who are protesting, sometimes violently, on the streets, or failing to collect garbage. The protests are driven by working-class voters who are themselves a decade or two from retirement. While more than the 63 per cent of the total population favour the protests, more remarkable still is that 71 per cent of those aged 18-24 are in favour. They fear that they will lose the secure retirement that was once considered a natural right in France’s statist economy.

French president Emmanuel Macron has justified lifting the pension-qualifying age from 62 to 64 by pointing to the fact that France’s retirement population is due to rise from its current level of 16million to 21million by 2050. Other countries, like Germany, are confronting the new demographics both by raising taxes as well as raising the pension age. Other countries across the OECD will be faced with similar dilemmas.

These trends will impact both the current economic superpowers, America and China. America’s social-security system is on track to be depleted by 2034. In 1970, there were 18.7 persons aged over 65 for every 100 of working age, but this has increased to 26.4 in 2022. The UN projects it to increase to 57.1 by 2100 if constant rates of fertility continue. China, which once boasted a huge, growing and youthful population, has seen its labour force decline since the 1990s, and it will be fully a third smaller again by 2035. The senior population in China is expected to have more than tripled by 2050, one of the most rapid demographic shifts in history.

Clearly, it’s time to turn the page on biologist Paul Ehrlich’s long-standing prediction that humanity is doomed to ‘breed ourselves to extinction’. In the coming decades, many of humanity’s challenges will likely be products of depopulation, not overpopulation, including a brewing generational conflict between a generally prosperous older generation and its more hard-pressed successors. The erosion of young people’s input, notes economist Gary Becker, also tends to slow the rate of innovation.

In an ageing, slow-growth world, young people are clearly disadvantaged. Indeed, most in the high-income world believe the next generation will be less well-off than the current one. In virtually every high-income country, notes Pew, the vast majority of parents – 80 per cent in Japan and over 70 per cent in the US – are pessimistic about the financial future of their offspring. Young people have a similarly negative outlook, including in the US. Understandably so, given that for initially middling earners, the chance of moving to the top rungs of the earnings ladder over a lifetime has dropped by approximately 20 per cent since the early 1980s.

Resentment of the Baby Boomer generation in particular (born 1946-1964) is likely to only increase, as it is set to hold the most wealth in the US until well into the 2030s. Remarkably, Boomers, many of whom are well into their 70s at least, now account for almost two in five new homes bought in the US – more than Millennials (born 1981-1996) and many more than Generation Z (born 1997-2013).

This alienated young generation is likely to be more radical and less tolerant than the one raised with the expectation of expanding opportunity. Already, barely half of voters for the Democratic Party, the dominant party among Millennials, believe that hard work actually pays off. And as political scientist Yascha Mounk found in 2018, while over two-thirds of older Americans consider it ‘essential’ to live in a democracy, only one in three Millennials feels the same.

Unable to achieve a middle-class standard of living, many young people in France are rejecting society entirely – what Le Monde describes as ‘political de-socialisation’. And many others are drifting to the political extremes, such as supporting the ex-Trotskyite, Jean-Luc Mélenchon, or the doyenne of the French hard right, Marine Le Pen. Both benefit from the popular anger at Macron’s pension reforms. Similarly in the US, younger voters have tended to favour more ideologically hardline candidates, like Bernie Sanders, with his promises of debt forgiveness and permanent subsidies. In the 2016 presidential primaries, Sanders won more votes from people under 30 than Donald Trump and Hillary Clinton combined.

The demographic crisis is also reshaping geopolitics. The Ukraine war has become a war of attrition between two countries that are running out of young people. According to UN projections, Ukraine’s population will fall 18 per cent from 2022 to 2050. This is without accounting for the impact of the Russian invasion, which has sent seven million people out of Ukraine. Arch-rival Russia also faces inexorable depopulation, likely to worsen due to its botched invasion. But even before the war and the pandemic, 2019 deaths were running about 50 per cent higher than births. Standing at 145million in 2022, the Russian population is expected to drop to 133million by 2050, according to the UN.

With both countries lacking reserves of soldiers, much of the war has consisted of an exchange of drones and missiles, able to terrify populations without massive army losses. Automated warfare seems the future for militaries like the United States, which also is having trouble filling its ranks.

A similar substitution of technology and capital for humans will drive economic competition as well. Already, large tech firms are finding they can operate profitably with dramatically reduced workforces. Asian countries, like Singapore and China, are looking at AI and robots to maintain their industrial prowess as their population ages and declines. A diminished ability to exploit low wages makes technological preeminence more essential. The current battles over China’s tech firms, like Huawei and now TikTok, suggest control of intellectual property may prove a critical determinant of global economic power.

Perhaps the biggest demographic issue pertains to those parts of the world still with growing youth populations, largely in south Asia and Africa. Although India’s birth rate has slowed considerably, it is estimated to have already overtaken China as the most populous country in the world, and is now the fastest growing big economy on the planet. India is also experiencing a rising tide of tech and manufacturing investment. So we may well see a brief period where Beijing displaces New York or London as the world’s economic capital. But, given China’s rapidly ageing population, the day of New Delhi and Mumbai could soon follow.

The main area of global population growth, however, will be in Sub-Saharan Africa. Between 2022 and 2050, UN projections indicate that nearly 55 per cent of world population growth will occur in Sub-Saharan Africa. Between 2050 and 2100, Sub-Saharan Africa is projected to account for all population growth. This last refuge of Marx’s ‘reserve army of the unemployed’ represents a challenge that must be met, through immigration and through investment in their economies. Or else it will create a source of permanent chaos.

The very things places like Sub-Saharan Africa need – new energy sources, growing export markets and capital investment – will not be easy to procure from stagnant Western economies concerned largely with satisfying their pensioners. Indeed, the West may well choose to protect its economy through ‘the fight against climate change’. In practice, this means imposing carbon taxes on poor-country imports, which the West has already begun to do. Sadly immigration, one obvious palliative, has proved highly unpopular in almost all rich countries, and is leading to tighter border controls across Europe.

For the future, finding common ground between ageing countries and still youthful populations will be critical. To date, the West still seems asleep. It is more obsessed with gender ideology, racial reparations and climate change than the economic growth desperately needed by the developing world. In a sensible world, the West, as well as China, would find a way to use the current surplus labour and to integrate these countries more fully into the world economy. If not, the demographic crisis will lead to ever more conflict, and a world even more unstable than ours is today.

Joel Kotkin is a spiked columnist, the presidential fellow in urban futures at Chapman University and executive director of the Urban Reform Institute. His latest book, The Coming of Neo-Feudalism, is out now. Follow him on Twitter: @joelkotkin