Do you think the world has too many people or too few people? Odds are it’s the former. For decades now various types of Malthusians have been busily warning us that population explosion will destroy us all. They are wrong; it won’t.
At this point, what is more likely to destroy us, in the West at least, is the opposite. Even a cursory check of the numbers makes the point. In the majority of countries around the world the fertility rate has fallen below the replacement rate (this means an average of 2.1 children per woman). In many European countries it is far far below replacement rate. Think Italy at 1.27, Germany at 1.54, Spain at 1.24 and the UK at 1.6.
That doesn’t necessarily mean the global population isn’t going to end up unsustainably high – the UN is still forecasting a peak of well over ten billion people (up from 7.7 billion now). It’s just that all the growth it forecasts comes from just nine countries, all of which have very high fertility rates.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
That sounds plausible – until you actually look at the numbers. One of the main drivers is supposed to be India. But in India the fertility rate is already down to 2.12. It is already barely a generation away from being Italy.
This is not to say populations in low fertility countries aren’t going to rise a bit more in the coming decades – they are. But what growth there is will be driven not by new people being born but by old people not dying – something that will mean that the number of the old relative to the young is going to just keep rising.
This represents a huge change: instead of a small number of old people being supported by a seemingly limitless number of young people, we are moving into a world where one of our most important resources – the young – is scarce. Between 2009 and 2019 the number of children in the UK rose by 8%; the number of people over 70 rose by 24%. Are we ready for this? The message of the Covid years is: no, not remotely.
Society has always been based around there being lots of young people and not very many old people. The result has been – more often than not – that the young have taken pretty good care of the old, working to pay for their pensions and healthcare, listening to their opinions and the like. Here we are with things the other way around – lots of old people; not so many young. How’s it going to work?
One’s first instinct might be to assume that society would adjust to be super supportive of the young. In a normal economic model, scarce resources are prized – and highly priced. In our world, our scarce resources are none of these things. That was the case before Covid, of course: pensioners got a triple lock on their pensions, students got to pay an interest rate on their student loans based on the retail price index (a measure of inflation that comes in around one percentage point higher than the more commonly used consumer price index) plus up to three percentage points more. Today it is 4.4% but with inflation at 7% plus it could soar to more like 10% soon. But their parents can get a mortgage for 2%.
The frantic money printing of the last decade has been equally anti-young – it has pushed up the prices of the assets older people own and made it even harder than it is in normal times for the young to build wealth.
The tax system seems stacked against them, too. We insist in the UK – for reasons that after 30 years in personal finance I still really can’t grasp – on charging lower tax rates on the income from assets (unearned income) than we do from work (earned income), and of course from refusing to charge capital gains tax on housing.
But all the financial irritations aside, nothing has shown up how oddly skewed we are approaching this than Covid policy. Instead of looking at our children, thinking carefully about how reliant we are on them and long term success – and so doing everything in our power to make them barely notice a pandemic that was never going to have much effect on their health, we have ruined two years of their lives (so far). We’ve closed their schools, limited their movements, criminalised their socialising, forced them to wear masks we know make no real difference. Worse, we’ve treated them differently – in a bad way – to adults.
Last week I got an email about a board meeting I had in Scotland. I was reminded in it that I was to wear a mask in the common areas of the office building but also assured that once I was in the meeting room itself, sitting down and talking with my colleagues, a mask was not required. At the same time my daughter was at school. Different rules applied to her: while sitting in her classroom (not talking) her mask was very much required – as it has been for the last 18 months.
Scottish parents joke, bitterly, that you can spot a Scottish secondary school student anywhere: they are the ones with mask-shaped acne around their noses and mouths.
Why different rules for adults and children? No idea. But it might be worth noting that the Scottish population is on average older than the English (where children have been mask-free for some time). Might it be that the older a population is, the less politicians care about kids?
Either way the results are obvious: the mental and physical health of children has declined. During the Covid years the percentage of children in reception rated obese or overweight has risen from 23% (already high) to 27.7%. The biggest leap has been among the most deprived children.
The truth is that throughout the last two years adults have been bizarrely unkind to children and young people – and that doesn’t bode well for the future. It might have made sense to put the needs of the old first when there weren’t very many of them. These days, when it is children who are becoming a scarce resource, it really doesn’t. Our politicians have some thinking to do.
-
Christmas at Chatsworth: review of The Cavendish Hotel at BaslowMoneyWeek Travel Matthew Partridge gets into the festive spirit at The Cavendish Hotel at Baslow and the Christmas market at Chatsworth
-
Tycoon Truong My Lan on death row over world’s biggest bank fraudProperty tycoon Truong My Lan has been found guilty of a corruption scandal that dwarfs Malaysia’s 1MDB fraud and Sam Bankman-Fried’s crypto scam
-
UK wages grow at a record paceThe latest UK wages data will add pressure on the BoE to push interest rates even higher.
-
Trapped in a time of zombie governmentIt’s not just companies that are eking out an existence, says Max King. The state is in the twilight zone too.
-
America is in deep denial over debtThe downgrade in America’s credit rating was much criticised by the US government, says Alex Rankine. But was it a long time coming?
-
UK economy avoids stagnation with surprise growthGross domestic product increased by 0.2% in the second quarter and by 0.5% in June
-
Bank of England raises interest rates to 5.25%The Bank has hiked rates from 5% to 5.25%, marking the 14th increase in a row. We explain what it means for savers and homeowners - and whether more rate rises are on the horizon
-
UK wage growth hits a record highStubborn inflation fuels wage growth, hitting a 20-year record high. But unemployment jumps
-
UK inflation remains at 8.7% ‒ what it means for your moneyInflation was unmoved at 8.7% in the 12 months to May. What does this ‘sticky’ rate of inflation mean for your money?
-
VICE bankruptcy: how did it happen?Was the VICE bankruptcy inevitable? We look into how the once multibillion-dollar came crashing down.
