Population and the Economy
Hear that China is in trouble with an aging, decreasing population. Headline says that California is in trouble; decreasing population for the first time ever. Years ago now, we heard that Japan was in trouble with an aging, decreasing population. Japan’s doing fine, thank you. And, China and California will both be better off for the decrease. More is not always better.
We know where they are coming from with this stuff. They bought into the old perpetual growth, dance ’til you drop, capitalism pyramid scheme. The one where we were never supposed to look behind the screen, to look around and about; to stop digging and look up. We just might be able to get by without capitalism; we haven’t a chance without enough clean air, clean water, plentiful and timely rainfall. This growing our way out of growing isn’t working, isn’t going to. California and China need more people like Twiggy needed a girdle. The earth needs more growth and more population like it needs a few more holes in its ozone layer.
Texas wants more people, wants to grow. Oh goody, more people means more Louis Gohmerts, more Ted Cruzes. Texas is home to as good a bunch of Christians as you will find anywhere, home to a god fearing bunch of brave freedom loving people who don’t need science, thank you kindly, anyway. You’re much obliged. Especially when the science says that it, Texas, is doomed to becoming a living hell on earth from extreme temperatures and lack of water due to global warming caused by … the burning of fossil fuels. That’s Texas, as in the great sovereign state of Texas, the land of the big open prairie, big lies, and brainwashing.
How does one get off this merry-go-round? Where does the world get off? Right about here, about now, is as good a place and time as any.
Yep. Dead right. No more GDP. At the very least divide it by population.
Sure, except for liberal economics that makes us slaves to debt to GDP ratios. That is why Keynes told us to pay down debt during the booms.
Of course, Keynes was British and his economics was not explicitly for the US. Matter of fact, Keynes was opposed to the Bretton Woods system that bestowed exorbitant privilege onto the US dollar. The exorbitant privilege of the US dollar insulates our economy from the woes of excessive debt to GDP ratios until it doesn’t.
Without the advantage of exorbitant privilege then the Japanese yen sustains itself under the pressure of extraordinarily high debt to GDP ratio by virtue of Japanese as exceptional savers rather than exceptional debtors, such as US consumers. This is to say that Japanese consume less than they earn, while we consume more than we earn. Establishment of the US dollar as the global reserve currency which in turn places it as the global exchange currency (i.e., price basis for major commodities markets) makes the US privilege to consume exorbitant.
History ALWAYS repeats itself. Population is one of the important parameter in economic concepts. In Keynesian philosophy, population is one of the important aspect for the consumption function so as to increase the aggregate demand. If we take account of population only in terms of sheer numbers, rather than the productivity potential of large population, this merry-go-round is never going to stop soon.
Vipal:
Welcome to Angry Bear. Good comment.
The purpose of a society’s economy is to provide that society with the necessary goods and services. People have needs; there will always be a demand for goods and services. Capital may not need as much labor, but it does need a market for the produced goods. There will be a market for goods and services only if the enough of the populace has the wherewithal. Market plus wherewithal equals demand. If there is no demand, there is no reason to produce. In the past, wages provided the wherewithal; workers, coupled with the wherewithal provided the demand, produced a market. Of late, with the ever-increasing disparity, consumer debt has been used as wherewithal. Going forward, the question is how to give the populace the means for purchasing those goods and services, how to keep the production lines going for the long term?