Millennial pessimism being a common affliction of thinkers throughout the ages, we should perhaps not be too surprised that we moderns, too, are prone to stroll along in its strangely seductive shadowlands of the mind.
Nevertheless, the ease with which members of the Nomenklatura can brazen out their 180 flip from worries about Peak Oil supply, Chinese insatiability, and the population bomb to this Unholy Trinity’s antipodean opposites, either side of the late Oughties financial seizure, is truly something to behold
Funny, isn’t it, how today’s reverse Malthusians all now think we are going to die out -and die poor at that- not through their predecessors’ iron law of scarcity, but through a velvet swaddling of welfare state overabundance?
It may sound like the grimmest of jests on a benighted continent where one in five of them cannot find a job, but it is nonetheless hard not to agree with one principal tenet of such despondency, namely that the current demographic situation points to a growing shortage of young workers. However, what such counsels of despair usually fail to appreciate is that this implies, pari passu, that a greater call upon capital must arise as its corollary.
Is it so hard to realize that if are too few workers to go around, then the robots – object of a highly contradictory strain of contemporary doom-mongering – will be well bid in their place and that the desire for the capital means by which to increase the necessary automation can only rise?
Hence, pressures on the demand side should mount and – unless offset by a corresponding increase in the willingness to forgo current consumption (i.e., by a decline in time preference) which one imagines will be all too difficult for the swelling cohorts of the income-restricted, interest-deprived superannuated to accommodate – ergo, natural interest rates should RISE along with them.
Any attempt to suppress these rates – whether due to crude Keynesian hand-waving about ‘effective demand’ or because of its more pathological form, a thoroughly false apprehension of the causes of our current ‘stagnation’- should be forsworn at once as being wholly at odds with underlying reality and hence inimical to the attainment of a better balance of productive activity.
As for that second canard – the weary reprise of the 1940s angst about a permanent state of stagnation – it is the gross central bank interference – enthusiastically cheered on by the intellectually-indistinguishable Nobeliat and the pampered priesthood of the IMF – in the pricing and use of capital means which is to blame for the dispiriting persistence of our present malaise.
Aggravating this ill, the inexorable encroachment of the hyper-regulatory state bureaucracy, in cahoots with its anti-competitive, Big Business, corporatist allies, also serves to sap the private sector’s exercise of its innate entrepreneurial skills. Such has been the associated drag on those who would venture to deliver recovery, regeneration, and revivification to the Body Economic that, this time around, they have not done so on a scale in any way comparable to what they have typically been able to achieve in the wake of crises past.
That said, the untrumpeted, much brighter side of the same shifting demographics is that, given a functioning labour market, it should also mean that real wages rise, both due to the heightened scarcity of said labour and (hopefully) to the rising capital endowment of each of the less numerous individuals who comprise its dwindling constituents.
Eventually, these higher wages, plus the lower accommodation costs and less onerous commuting times which one might anticipate to obtain, thanks to the shrunken population’s lesser competition for space, might even enhance average fecundity once more, long before the Omega point is reached.
Furthermore, it should not be overlooked that the increasing prodigies of medical science, coupled with a less strenuous (progressively robot-assisted?) work regime, equates to more opportunities for extending everyone’s working life. Those demographic bulges could therefore comprise not just a burden of greater dependence at their upper edges but also a rich vein of differently-utilized contributors in their belly.
Child care, wardenship, home maintenance, professional mentorship, education, Uber driving, Amazon delivery, etc, are the natural metier for time & space-rich, income-poor empty-nesters to exploit, especially for the more clinically-assisted, robust greybeards.
Thus can we institute a possible act of social symbiosis – one which also allows for higher female labour force participation at the younger end – by providing those contractual ‘grandparents’ whose traditional, familial counterparts the perverse incentives of the welfare state has largely eradicated.
If the rationale for the multi-generational family grouping of yore was exactly the seamless provision for young and old by a working cadre who themselves had been cared for and would again be cared for in their turn by their forerunners and after-comers, respectively, all the Greyer Economy needs is to find a way of reconstructing this inter-generational exchange so that the Young no longer feel victimised by the Old and the Old do not feel undervalued and antagonised by the Young.
As with most social problems, freer markets – including freer INTERTEMPORAL markets, regulated by the interplay of unadulterated interest rates – are the best medium within which these necessary solutions can spontaneously arise.
The promotion of such a happy coincidence of interests would therefore seem to require, among other things, a far lesser intrusion by the state into the matter of pension rules, retirement ages, minimum wages, etc, and NO intrusion at all with regard to that other vital interest – viz., the one payable on loanable funds!
Let us hope that the first things to become extinct in our ageing world will be the weary, old hangovers from the soft socialism of the past half-century and that, rare though they be, it will be the young, new ideas of adaptation which will in future prevail.