
The End of Economic Growth? Unintended Consequences of a Declining Population [pdf] - daviday
https://web.stanford.edu/~chadj/emptyplanet.pdf
======
mark_l_watson
I am in a minority, but I would welcome the economic decline that would come
with growth reduction if it were accompanied by using less manufactured goods
(like cars), more locally grown food, more craft and art locally produced,
more travel done in VR (with addition that local guides would be there to talk
with you), etc., etc.

~~~
dx87
I feel the same way as you. It seems like "economic growth" is being used to
justify ignoring other societal issues. For example, you can pretty regularly
see people on this site saying that retired people should be forced to
relocate out of SV because they aren't contributing to economic growth as much
as a high density apartment building filled with recent STEM grads would.
Having everything focused so much on growing makes it feel like I'm stuck on a
runaway train, where I'm forced to either spend most of my life trying to feed
the "economic growth" engines, or risk dropping into poverty if I live a
simple life how I actually want to.

~~~
thatfrenchguy
The issues with retired people in the Bay Area that they have prevented any
housing construction at all in the last 30 years, while living in gigantic
houses for now one ortwo people: that’s why they get so much hate.

~~~
14
I imagine from their prospective they have worked hard their whole life to
build up these communities to which they maximize their own feeling of safety,
enjoyment, belonging as well as many other sentiments I am sure. Perhaps it is
their belief that the stand of trees preventing a skyscraper is much better
served as a stand of timber for nature and other outdoor activities. My point
is they have as much of a say in the world as the next guy. I wonder if what
is happening is a bit of ageism where the younger generations think they know
what decisions are best for a community while dismissing retired people’s
desires. How we can compromise I do not know that answers.

~~~
int_19h
The way it works in practice, they have _more_ of a say, because they own all
those properties.

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travisoneill1
The important part of economic growth is GDP/capita, not total GDP. And if we
are to keep growing GDP/capita without destroying the environment, a
population decline is absolutely necessary. Increasing population is only
economically beneficial in the most short term sense.

~~~
redahs
A population decline is certainly not necessary to continue growing
GDP/capita. What kind of neo-Malthusian nonsense is that? The economy is
operating nowhere near peak performance... at least 1/3 of GDP is lost
annually due to private capture of economic rent.

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adrianN
Why would you care about economic growth in absolute terms instead of
productivity per person?

~~~
LatteLazy
Investment only cares about the total growth in a market, and investment is a
big chunk of the economy.

If I know I'll be selling 20% less widgets in 5 years as population falls, I
wont upgrade my widget making machines. Suddenly the people making widget
making machines are all unemployed. They stop buying widgets and my sales fall
even further. That's ok when it happens in one sector but what about when it
happens in every sector?

There are other examples: researching a cure for a disease might make sense if
there are 100,000 sufferers but not 20,000. If x% of the economy is used for
scientific research, you can afford a lot more LHCs with 500m people than 50m.

Growth has to fall as we have to cut population or nature will do on it for
us. But it will be a difficult project with strange political outcomes.

~~~
fauigerzigerk
_> Suddenly the people making widget making machines are all unemployed_

More likely they are going to retire before they are unemployed. Working age
population always declines earlier than population as a whole.

I think it's pretty clear that there is a rate of population decline that is
consistent with rising living standards as long as the decline is ultimately
limited.

We should indeed focus far more on productivity. If the number of sufferers
from a disease falls to a fifth while research productivity increases five
times, finding a cure will make just as much sense as before.

~~~
LatteLazy
Retirement and unemployment are basically the same in this case. Generally in
the US, people do neither, they become disabled. I don't mean they literally
suddenly need wheelchairs. I mean that when a large factory in a town closes
down, within a year or two, the number of people on disability linked benefits
goes up enormously. Then they die "deaths of dispair", suicides, opioid over
dose etc. I know this sounds pretty fucking dramatic, but go look it up. Plus
you get the likes of Trump elected...

Im all for productivity, but we are very very bad at making sure productivity
growth doesn't mean shrinking incomes for the majority. So be careful
welcoming the closure of the widget machine factory (or it getting more
efficient and laying people off).

There is a rate of population decline that's consistent with economic growth.
But its very small.

Three things generally grow economies: pop growth, productivity improvement
and technological advance. If your pop growth is negative, you need the others
to be big positives. Except that productivity growth is hard to achieve, hard
to measure, and (as above) needs a lot of political management to achieve
without leading to serious social issues. So you're reliant on technology. And
technology isn't really moving much at the moment.

Japan and China have both suffered these combined effects for a while.
Falling, aging populations. China has been fine because they can increase both
the technological and productivity levels of its economy. It can move from
doing things manually to semi automation (now basically done) and it can move
from doing low productivity work (putting things together) to making entirely
new products. Japan can do either.

Thats why China has managed huge growth (maybe not as good as they like to
claim but still) over the last 30 years. And Japan has basically languished.

We are turning into Japan, not China.

~~~
fauigerzigerk
_> There is a rate of population decline that's consistent with economic
growth. But its very small._

I didn't say economic growth. I said living standards. The important
difference is that living standards can go up while GDP is falling.

 _> We are turning into Japan, not China._

Japan proves my point. The country isn't exactly impoverished, nor is it
getting any poorer. They have very low unemployment and GDP per capita has
grown about 10% between 2010 and 2018. That's compared to 12.5% for the US.
Not a bad outcome in spite of a steep decline in population.

------
pdimitar
I am not an economy expert by any stretch. Just going to share my take.

Growth cannot go forever due to these factors I observed:

1\. More and more wealth seems to be captured and locked away somewhere while
the rest of the populace is left to having to cope with globally dwindling
redistributable capital.

2\. Population isn't even declining everywhere but I've read several times
here in HN that white people in first-world countries procreate less and less.
Reasons can be a lot and my anecdotal evidence is that the cost of a basic
life and some small extra affordances goes up every year. Families get more
and more conservative on their spends and/or jobs. Many people here in Eastern
Europe just decide to live on welfare and half-day crappy jobs somewhere but
at least these jobs aren't stressful and don't require 2-3 hours in traffic
every day. When you do the math such a way of life nets them 70-80% of what
they would otherwise make so their choice is really quite logical. In these
conditions the economy stagnates and companies get desperate for good staff
while the government couldn't care less.

3\. The population declines at places because people view raising kids as a
huge financial and stress investment and not as the life-fulfilling purpose
that raising kids is usually viewed as. This is mostly related to how much
time is needed for a young person these days to actually start contributing to
their raising (or new) family. Many people are just scared if they are going
to be able to be financially stable for 25-30 years in the future. Others like
myself are just burned out.

4\. The economy gradually seems to be taken over by the very classic breed of
venture investors that don't give a hoot about organically growing your
customer base or actually taking care of your employees. Even in a presumably
more conservative market like Europe, I see this more and more. Can we even
discuss growth if, even against all odds, your company becomes hugely
successful BUT has to return the investments tenfold? Again, this is a
captured wealth going to somebody else's pocket (and they don't seem to be
interested in redistributing it).

\---

I could be gravely mistaken and be a victim of living in a filter bubble. Of
course.

But it's what I am seeing periodically and it worries me. People just don't
care that much for making kids or looking for jobs since it all just
guarantees suffering and sacrifices and nothing much else.

Many elderly people tell me that they regularly chat with their kids (now
30-45) and are convinced that having a fulfilling life was easier even as back
as 20-30 years ago. They might be right.

~~~
digitalengineer
Looks like you’re not too far off. World fertility rates are dropping very
sharply: “ The world is undergoing an unprecedented demographic
transformation. Between now and 2050,the number of older persons will rise
from about 600 million to almost two billion. In less than 50 years from now,
for the first time in history, the world will contain more people over 60 than
under 15.”

[https://www.cassandracapital.net/post/the-unprecedented-
demo...](https://www.cassandracapital.net/post/the-unprecedented-demographic-
boom-and-bust)

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nordsieck
> It is a distinct possibility — highlighted in the recent book, Empty Planet
> — that global population will decline rather than stabilize in the long run.
> What happens to economic growth when population growth turns negative?

IMO, this is a pretty silly idea.

The fundamental problem with this theory is that there are sub-populations
that have been able to maintain high fertility despite the decline in broader
society.

For example, the number of Amish doubles every 20 years. Today, there are 1/3
of a million Amish. At the current rate, it'll only be 200 years until there
are more than 300 million Amish in the US.

No idea if that will actually happen, but if everyone else dies off, there no
reason they wouldn't just take over.

~~~
01100011
This.

There's a reason why religions exist. If they didn't increase the fitness of
their adherents, they'd die out rather quickly. We may get caught off guard by
shifting demographics and a decline in secular value systems. There are many
religions which preach the 'fertility gospel' in one form or another. If the
religion is effective in keeping the new generations devout, and that is an
important question, we're going to have a population explosion.

~~~
nordsieck
> If they didn't increase the fitness of their adherents, they'd die out
> rather quickly.

Counterpoint:

The Shakers, a Christian sect that enforced complete celibacy (pretty much the
definition of decreased fitness) was founded in 1747 and apparently continues
to this day [1] (although from the looks of it, it probably won't last another
50 years).

That being said, I largely agree with your point. Religions that make up
substantial portions of society are probably beneficial for the fitness of
their members.

___

1\.
[https://en.wikipedia.org/wiki/Shakers#20th_century_to_the_pr...](https://en.wikipedia.org/wiki/Shakers#20th_century_to_the_present)

------
sadmann1
Isn't the underlying assumption that economic growth is tied to an ever
growing population being tested in the age of automation?

~~~
Pandabob
Sure, but one would then assume that in the age of automation, our
productivity rates would be skyrocketing. It seems that that hasn't been the
trend after the great recession [1]. Not to say that it couldn't change, but
seems to me like there's some kind of narrative violation going on where
"thought leaders" preach about automation, yet we can't see it in the
statistics.

Edit: Although, there's also a change that we're just measuring productivity
incorrectly right now, and not correctly taking into account the way the
online economy works.

[1]: [https://www.bls.gov/opub/btn/volume-6/below-trend-the-us-
pro...](https://www.bls.gov/opub/btn/volume-6/below-trend-the-us-productivity-
slowdown-since-the-great-recession.htm)

~~~
blencdr
Productivity by automation is constrained by the available energy, also
economic growth could already be limited by the lack of availale energy.

[https://energyeconomicgrowth.org/sites/eeg.opml.co.uk/files/...](https://energyeconomicgrowth.org/sites/eeg.opml.co.uk/files/2018-02/1.1_Stern_0.pdf)

~~~
adrianN
Solar panels are pretty cheap. If lack of energy were a problem, I'd expect a
lot more of them.

~~~
ben_w
They are cheap, but production of them is currently growing roughly
exponentially, so I don’t think your argument holds.

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pimmen
I think this will have unforseen effects on real estate.

If the population globally is shrinking, that means the likelihood that any
given town will increase in size is also shrinking. At first, this might look
like the real estate prices across the board will decrease but I don’t think
so. I think that when people factor in that the town they are in currently
will not increase in size they look at cities that already have good markets
and move there instead, driving up the prices of already established cities.

This is basically what is already happening in European countries with falling
birth rates.

~~~
leetcrew
this could also cause a vicious cycle for the towns and smaller cities.
there's a certain amount of fixed cost to maintain existing infrastructure. if
a significant number of properties become vacant, the municipality will have
to start hiking taxes to keep the same revenue, making the place even less
desirable and causing more tax base to leave.

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mrwh
Is the idea that technological improvements are tied to _increasing_
population somehow? What's the mechanism there?

Being only slightly facetious, but if everyone had no more than one child,
that leaves a lot more time in which to invent stuff. And true, over time
there will be fewer people doing the inventing, but a world with ~a billion
people in it still managed to invent flight, and one with billions fewer than
today still got to the Moon.

~~~
newyankee
If it was true India and China would've been much more successful ( i know
China is now due to the miracle they had) a lot earlier

~~~
imtringued
They are much more successful than a China or India with only 10 million
people.

------
Nasrudith
Anyway it is a pet peeve of mine about talking about economic growth and
ending. Growth isn't just more stuff but also better stuff and how it is used.

If there is no growth even in such hypothetical extremes as a fixed population
sustainable everything model then society is fundamentally doing things very
wrong. Because you have global workforces working at things and nobody is
learning to do anything better. A newbie having the exact same productivity as
a veteran. In every field. That is deeply contrary to the state of being of
everything and implies truly epic levels of mismanagement.

------
sien
The book Empty Planet is a very interesting read that looks around the world
at various countries where population is declining such as Korea and Japan and
European countries where this is about to happen as well. The book is
mentioned in the paper.

[https://www.goodreads.com/book/show/37585564-empty-
planet](https://www.goodreads.com/book/show/37585564-empty-planet)

This paper on the economic consequences is also interesting. It popped up on
various economics blogs when it came out.

~~~
mirthandmadness
What are some of these "good economics blogs" you mentioned? Would like to
subscribe.

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carapace
I _think_ it's saying that the "optimal allocation" "of people into workers
and researchers" can result in ... uh, something they're calling "expanding
cosmos" (as opposed to "Empty Planet") but I couldn't find any mention of
space colonization.

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naveen99
Real estate is currently the largest asset class. Maybe it will lose some of
its importance when most people inherit housing. Home ownership rates are
already over 60% in the us, and over 80% in india.

------
known
10% Owns 82% Wealth [http://archive.vn/1zpaE](http://archive.vn/1zpaE)

"The significant problems we have cannot be solved at the same level of
thinking with which we created them" \--Einstein

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salawat
This paper really annoyed me last night.

The assumptions made don't even render a world that looks remotely similar to
what we have, and that abstracting away of messy complexity actually makes the
central characteristics of the problem harder to wrap your head around, even
if it does make it easier to reframe into a paper that'd look good in an
academic journal.

Case in point:

You don't need higher math to understand that human beings are fundamentally
lossy in nature. Perfect replication of the information required to sustain
the current cumulative knowledge level doesn't happen because there is no
guarantee that any one person that knows a thing can successfully communicate
it to someone else in a way that can be understood, and that in the process of
doing so, that that information isn't mutated in such a manner that something
important isn't lost. Children amuse themselves with this phenomena all the
time. It's called a game of "Telephone". Given an acknowledgement of this, the
tendency for population decline to result in problems for a world that has
been architected around the guarantee of population and economic growth is
immediately intuitive.

As death removes older generations, the knowledge they had and failed to
clearly replicate dies with them. Each new member of the population birthed in
is a new crank on the slot machine of information propagation. Their life
circumstances might allow them to understand that bit of arcane knowledge that
no one else was able to do anything with because it didn't make sense to them
because the constellation of shared lived experience between communicator and
communicated necessary for comprehension wasn't there. New idea formulation,
or old idea reformulation and propagation becomes reliable and less likely to
snowball out of control to irrevocable loss as long as you keep throwing new
blood at it.

If there is no new blood though, the numbers quickly begin to favor the life
experiences required to underpin all the minutiae to sustain the corpus of
knowledge as is not reoccurring in total across the entire breadth of the
population, and you start to find your smaller remaining population further
and further isolated from the practical experiences that made the linguistic
representations of knowledge written down understandable. The knowledge then
becomes useless, a dependency in the infrastructure that enables efficient
physical completion of labor is lost, thus your population's output of tasks
done per unit time drops, thus more work must be done just to keep things
running, and so on and so forth until basic principles are again reformulated,
and efficiencies from a chance rediscovery of the necessary experience
underpinning a lynchpin technology can be realized again.

Just as information transfer is lossy, so is physical labor. If you have 1
million tasks that must be done in a day to maintain a stable level of output,
and you decrease the number of agents available to do the tasks, the math
simply works out that more work has to be done per agent to maintain output in
a steady state, and we all know that the work output of a human being isn't
trivially scaled up without ballooning the prerequisite knowledge required to
do the task (I.e. skills at using tools, skills to teach the skills to use the
tools, the tools to make the tools, the skills to operate the tools to make
the tools, etc...) all of which themselves become tasks added on to the
overall workload of your dwindling population who are working harder and
harder to maintain the highest level of output possible.

The other issue not even touched on is the desirability of continued high
growth regimes in the presence of a near tipping-point constraint violation to
which a remediary measure has not been formulated. I.e. Excess carbon
footprint. If you stay in your high growth regime in a wager to get that
innovation faster from a new member, you're still templating your current
footprint of resource use, and accelerating reaching your tipping point, with
no guarantee you'll find it in time. Decline is a natural outcome in an
organism facing this type of environmental dynamic constraint to buy time for
other (in this paper, unrepresented, but which one can represent as decreased
demand to output more of the destabilizing factor by your population, or
natural processes operating to free up buffer space by things like carbon
recapture and sequestration) processes time to shift the dynamics back in
favor of supporting a new high growth regime.

I have the utmost respect for those that can trivially converse in the higher
maths; I'll admit I had to crack open some books to understand what the heck
they were getting at and whether it even made sense. I draw the line though
where doing your analysis as they did takes you right out of reality into the
atrophied realm of post-facto narrativization.

Those equations are meaningless to most readers, whereas putting things in
terms of tasks to be completed, and characterizing overall knowledge level
management as what it is, a bunch of overhead tasks draws the same Senate
picture that it took them mucking around in control theory to even
tangentially articulate. It started a conversation yes, but by constraining it
to the realm of finance and economics, and leaving out the _rest of the world_
you run afoul of that great aphorism that "problems cannot be solved with the
same level of thinking that created them in the first place", which is exactly
what this paper appears to be an example of doing.

Gah!

