REDUCED POPULATION ECONOMICS: A Dialogue of the OPT UK Forum

--- In mailto:optimumpopulation%40yahoogroups.com, wrote: simon.optblog@googlemail.com > Hi all,> > Great to find OPT and this forum! I've been thinking a lot about the> future recently, what with the financial crisis, and longer term the> worries I have for my children's futures. I'm 33, have 3 kids of which> the eldest is 5 and I work in semiconductor/chip design.> > I have been doing a lot of independent research on the issues of> demographics and economics, which has led me to the followingconclusions:> >

1) I think that the population of the developed world is going to> moderate much quicker than people think - probably along the lines of the UN 'low' scenario. (Dan)It's not just the developed world we're worried about. (Simon)>

2) I think the current financial crisis is partly due to the falling> population growth rates and hence lower gdp growth of the developed> world and monetary economy since the 60's. The 2008 credit bubble may have been a mistaken attempt to stave off this outcome. (Dan)The alternative of growing population growth rates would be worse. (Simon)>

3) History shows that tough economic times lead to lowered fertility,> and times are about to get very tough indeed as the boomers retire and> depression bites, which will in turn lead to even lower fertility in> the developed and developing world. (Dan)> Good, hope so. Though that doesn't explain why the poorest countrieshave the highest birth rates. (Simon)

> It seems to me that once population growth of the monetary economy> really slows or stops, then GDP growth will basically stop which will> result in our current financial system - which needs growth to remain> stable -stop working completely. This can happen even while overall> population continues to grow worldwide, and I expect that it will take> the form of repeated recessions that will follow any recovery from the> present one. (Dan)Peak oil and climate change won't help either. (Simon)> >

However on the upside the imminent threat to our financial> infrastructure should help to focus minds on how to organise a> political economy which is not predicated on continued population and 'economic' growth. > > I have plenty more ideas along these lines but for now I'll leave it> here by way of an introduction. I'd love to be able to discuss some of> these trends in more detail. (Dan)

Go for it (Simon)> > Regards to all,> Dan
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Adrian Stott replies

Daniel et al.,> 1) I think that the population of the developed world is going to> moderate much quicker than people think - probably along the lines of the UN 'low' scenario. (Daniel)What makes you conclude that? I fear that the only reason it is likely to be the case is if one or more of the horsemen increase death rates. Which is worryingly likely. (Adrian)>

2) I think the current financial crisis is partly due to the falling> population growth rates and hence lower gdp growth of the developed> world and monetary economy since the 60's. The 2008 credit bubble may have been a mistaken attempt to stave off this outcome. (Daniel)I doubt that. I think a lot of it was due to unwise financial engineering. The loss of confidence this generated led to bouts of selling of both assets and commodities, resulting in large price drops and thus significant reductions of personal wealth. This then produced declines in demand for manufactured goods. I think none of that chain was much affected by population growth rates.OTOH, I'm confident that the selling of commodities has been greatly overdone. As population continues to increase, demand for commodities (especially food-related ones) is bound to increase too, while increases of supply will become ever more expensive to produce. (Adrian)>

3) History shows that tough economic times lead to lowered fertility,> and times are about to get very tough indeed as the boomers retire and> depression bites, which will in turn lead to even lower fertility in> the developed and developing world. (Daniel)I think that "tough times" have not been noticeably reducing fertility in poor countries, where people are still having lots of kids even when living at subsistence levels. > > It seems to me that once population growth of the monetary economy> really slows or stops, then GDP growth will basically stop which will> result in our current financial system - which needs growth to remain> stable -stop working completely. I suggest that the the key statistic is not total GDP growth, but GDP growth/capita, which, if positive, represents an increase in standard of living. That can occur without population growth, as a result of demand for a better standard of living and to increases in productivity. (Adrian)>

However on the upside the imminent threat to our financial> infrastructure should help to focus minds on how to organise a> political economy which is not predicated on continued population and 'economic' growth. (Daniel)

You wish! (Adrian)Adrian Stottmailto:reply%40sdfg.co.uk