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.
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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.
Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).
After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times
Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast - but still writes for Moneyweek monthly.
Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.
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