The Economist and Population Decline

Well, fresh from my recent exchange with the Economist’s Central European correspondent (and see my original Afoe post which sparked the reply), it is pleasing to be able to announce that that very same journal this week contains a series of interesting articles on some of the very topics which were at issue. In the first place there is a leader on the central big-issue question of population decline, and its possible short and longer term consequences. There is also a very timely account of just how population ageing is starting to affect the political process in Japan, together with a brief review of Italy’s most recent endeavour to pedal backwards on the topic which takes the shape of a pensions system “anti-reform”.

Dare I say that it is possible to note an ever-so-subtle shift of emphasis here? I personally am convinced you can, especially in statements like the following:

If the world’s population does not look like rising or shrinking to unmanageable levels, surely governments can watch its progress with equanimity? Not quite. Adjusting to decline poses problems, which three areas of the world—central and eastern Europe, from Germany to Russia; the northern Mediterranean; and parts of East Asia, including Japan and South Korea—are already facing.

Think of twentysomethings as a single workforce, the best educated there is. In Japan (see article), that workforce will shrink by a fifth in the next decade—a considerable loss of knowledge and skills. At the other end of the age spectrum, state pensions systems face difficulties now, when there are four people of working age to each retired person. By 2030, Japan and Italy will have only two per retiree; by 2050, the ratio will be three to two. An ageing, shrinking population poses problems in other, surprising ways. The Russian army has had to tighten up conscription because there are not enough young men around. In Japan, rural areas have borne the brunt of population decline, which is so bad that one village wants to give up and turn itself into an industrial-waste dump.

Now it may be that from where I am sitting there is still rather a long and hard road to be traveled here (if you want a concise – or maybe on second thoughts, not so concise – summary of the major points check the comments section on the Economist blog post linked above), but it would be singularly uncharitable of me not to recognise progress where progress has indeed been made. The great debate is finally moving on. Well done Economist!

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About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".