One reason I’m not optimistic about the global economy over the next decade or two is demographics. There’s an old saying: “Demographics is destiny.” Yes, I’m well aware that demographic issues can be overcome by technological or even cultural and social forces. But usually they’re not, and the demographic trends on the horizon have no obvious social or technological cures. Historically, in fact, demographic trends of this sort have led to either economic disaster or social disaster, or to wars.
The first trend line to watch is the low birthrates in the western world. Through a combination of factors, the western world has been well below replacement rate for some time. In many western European nations, this has already resulted in declining populations. Despite what many hippie types would tell you, declining populations are bad. Really bad. The effects can be offset by things such as technology and enhanced productivity, but throughout all eras of history the immensely strong correlation can be summed up very simply: Growing Population = Good For the Economy, Declining Population = Bad For the Economy. Yes, within periods of growth you have bad years and within periods of decline you have good years. But over the long haul (decades) these trends are very strong. Take a look at Europe after the black plague hit in the 14th century. Somewhere between 30 and 60 percent of Europe’s population was wiped out within a few years. It took over a century for Europe to recover. Nothing will destroy a prosperous society faster than population decline.
So far, the US and some western European nations have been “saved” from population decline by our next disturbing trend: immigration. Don’t get me wrong – I’m not against immigration. But recent immigration in both the US and Europe has two very serious problems with it. First, it’s massive (and coupled with declining native populations). The immigration is large enough that it’s substantially effecting the cultural institutions that made the western world prosperous to begin with. This is exacerbated by the fact that most of the immigration is coming from cultures (Latin American immigrants to the US and Middle Eastern immigrants to Europe) that in a very real sense can be viewed as “failed” cultures – meaning only that they’ve failed to reap the prosperity benefits of the modern world. [Yes, this is a social and cultural problem, not because the Imperial White Man is somehow keeping them down. I could write volumes and volumes about this, but for today I'm going to take it as a given.] Second, in both Europe and the US these immigrants are not being well assimilated into the parent population. They’re living in very segregated communities, failing to learn the local languages, and failing to adapt local customs and traditions. In Europe and even Canada it’s gotten so bad that the Islamic immigrants have even developed their own formalized parallel legal system based on Sharia law. This is a recipe for massive social unrest, and we’ve already seen it start to happen in Europe (the Paris riots of 2005, etc).
Our third disturbing trend is gender imbalance. You think it’s bad in the feminized western world? Take a look at the demographics of India and China. Extreme, government mandated population control has had serious problems. In both Indian and Chinese societies, traditionally, have placed a very heavy burden on parents to provide a large dowry for their daughters in order to attract the best men as husbands. Also, their cultures are traditionally very patriarchal. All in all, they have a very strong preference for sons rather than daughters. Then along comes about four decades of government enforced population control – eg, China’s infamous “one child per family” law. It’s not legal and it’s not officially sanctioned, but what do you think happens when you combine this? In most human societies, about 105 boys are born for every 100 girls born. This should make a lot of evolutionary sense to anybody who’s been following the Game community or the manosphere for any length of time. Women are naturally far more risk averse than men, and far less likely to die prematurely from accidents, violence, etc. Mother nature has accounted for this. But in China and India, government intervention has seriously skewed this. In recent years, China’s gender balance at birth has been closer to 120 boys for every 100 girls born. That’s right, China is producing 15% more boys than girls, and they’ve been doing it for decades. 15% may not sound like a lot. But consider that China has a population of approximately 1.2 billion people. Add it all up, and China’s sitting on approximately 25 million men who will never be able to be married – unless something changes, there simply won’t be women available for them to marry. That’s 25 million men, probably pretty angry, ready to drop out of society – or decide to take what they want by force. That number is still growing, and India’s in similar (if not quite as bad) shape. Note that China and India are, after the US, Europe, and Japan, the biggest drivers of the world economy, and that China is growing fast. Take away the incentives from a large portion of their populations and you’ve got a huge economic problem on your hands.
Demographic trend #4: for completely different reasons (liberal divorce laws), the US has a similar (if much smaller) problem. Here’s how it happens in the US: an older couple gets divorced. The woman goes out into the dating world and finds that she has little value in the dating marketplace – especially if she has kids. Her Sexual Market Value (SMV) is so low that she’s essentially off the market. Meanwhile, her husband goes out to find that his age and accumulated wealth and status has actually increased his SMV. Instead of marrying (or having a long term relationship, but for now let’s simplify and say marrying) another older woman like his ex, he marries a younger woman – sometimes much younger. It’s not at all uncommon for men to marry women 10 years or more their junior in their second marriages. The problem is, now those women are unavailable to the men ten years his junior. And the older women have little to no value to those same younger men. Multiply this a few times as the more alpha men marry and remarry (my father-in-law is on his third marriage now, to a woman ten years his junior), and you can see how the problem grows. Our population is a lot smaller, so numerically this isn’t as big a problem as the Chinese/Indian problem. Also, it’s not totally hopeless for the younger men. If they wait it out, things will get better when they’re old enough to become the alpha male to a younger woman (this is, essentially, what happened to me before I was aware of Game). But by percentage, it’s a bigger problem than China or India have. Up to 30% of men in their early 20s are now basically shut out of long term relationships (or even casual flings) until they get another decade under their belt. More than feminism, more than a lack of game, this is the single biggest reason that young men are “dropping out” of society and choosing to play video games instead. In the “real world,” they’ve already lost and they know it. It’s also why many of them rejoin society in their late 20s or early 30s. All of a sudden they have a chance again.
Our fifth and final demographic trend: the aging Baby Boomers. This trend is a doozy, and whatever happens in the rest of the world, this single trend alone has me concerned about the American economy for the next 20 years. Maybe more. Fact #1: the Baby Boomers control more than 80% of all personal financial assets in the United States. They’re responsible for more than half of all consumer spending (a major driver of the US economy). And they’re all about to retire. My father is among the oldest of the Boomers. He was born in 1947 (the Boom is considered to have begun in 1946). Odds are high he’ll be retiring in the next few weeks. The rest will be following over the next decade or so. This is going to have some major effects on the US economy.
Note: they control 80% of all personal financial assets. And they’re going to have to start selling those assets to pay for their retirements. But nobody else has the money to buy them. Supply and demand is going to see a pretty big shift, with coinciding price shifts. It’ll hit the stock market first as they sell off their stocks and mutual funds. The massive sell off is going to result in a substantial price drop. Our already battered housing market will be insulated for a while, as the Boomers will likely keep their homes for some time (they’re in far better health than their parents were at the same age). But when they do start going to nursing homes and/or dying off (probably in about 10-15 years), you’re going to see the housing market hit hard, too. Again, nobody else can afford all the McMansions the Boomers have bought. Expect their prices to crash, and hard. But at the same time, unless immigration grows even more than it has been, it’s entirely possible that as the Boomers die off we’ll actually see a population decrease here in the US as well. The Boomers didn’t do a good job of replacing themselves (instead choosing to abort over 30% of my generation). Population decrease is going to mean a smaller demand for housing – but houses are the ultimate in durable goods. There will still be plenty of them around, even with fewer people buying. The double whammy is going to be pretty hard. On top of that, we already know that their collective retirement is going to blow up Social Security (and with it the already dire federal budget).
It’s very possible that any of these trends could be countered by strong economic growth in other areas. But all of them? We’ve hit one of the great synchronicities of history, with all of these trends hitting at once in a massively interconnected, globalized world. Add it all together, and I’m just not very optimistic about the economy over the next two decades. And this is just the demographic trends. There are a whole host of social, economic, political, and cultural trends that are also looking pretty grim. But that’s a topic for another day.
