Low and falling birthrates are not an economic threat. Not remotely. The latter is not a Malthusian or Paul Ehrlich-ian statement as much as it’s a statement about production. The babies being born today will grow up and individually produce at levels that would have literally required thousands, and realistically tens of thousands of humans from the past.
To understand why the birthrate alarmists have so profoundly misread the future, it has to be stressed that no one buys anything with money. Instead, individuals produce in order to get the production of others. Money is just the agreement about value that facilitates the exchange of actual wealth, and it can always be found where production is, and as though placed there by an "invisible hand." Production quite simply is money, and the money it commands grows as the worth of the production does. Production that rates money exchangeable for commentsurate production is what constitutes “demand.”
Economists imagine “demand” is what powers economic growth, but in truth, demand is an effect of growth. Products buy products, so when economists focus on demand, their minds are wandering. Demand always follows production, and that’s true even if the producer is an ascetic.
Which brings us to the excellent Kathleen Parker at the Washington Post. To read her is to want to write like her. She’s very funny, combines words seamlessly, and she’s frequently very insightful. It’s why a recent column by her lamenting low birthrates was disappointing, but the guess here is that she could be persuaded to rethink her pessimism.
Parker’s column cited the work of Williams College professor Darel Paul who, according to Parker, “lays out a nearly apocalyptic forecast for human beings.” Yes, Paul is the latest to be tricked by low birthrates. One guesses his passion renders him unpersuadable, but perhaps not Parker.
For now, and channeling Paul, Parker writes that without a “replacement generation," there will be “Fewer babies, fewer jobs, less money to care for the sick, disabled and dying, and so on.” The bet here is that in time Parker will join her excellent Post colleague Monica Hesse (see Hesse’s takedown of the birthrate worriers here) in mocking all the apocalyptic fear-mongering promoted by the low-birthrate worriers.
To understand why, just look back to the 2nd paragraph of this write-up. It cannot be stressed enough that no one buys things with money. Say it repeatedly. Production buys production. This unspoken, but unbreakable economic law renders Paul’s alarmism rather empty.
Exactly because of amazing technological advances that will erase all manner of work formerly done by humans, the much fewer babies being born today will have the capacity to eventually produce staggering amounts of wealth while working alongside fewer and fewer humans.
It’s a reminder that wealth isn’t a function of demand, rather wealth is created. Demand is what follows wealth creation. Crucial here is that money that actually commands goods and services is an effect of production. Combine the soaring production of the future with the tautological truth that production will logically be mirrored by money, and it’s easy to see a future that’s defined not by a lack of money, but many, many multiples of the money circulating today.
Professor Paul’s desperate view of tomorrow imagines that fewer bodies mean less money, less demand, etc. No. Production is demand. Nothing else. And it’s worth repeating that the production of tomorrow overseen by humans armed with remarkably capable technology will make today’s look incredibly primitive by comparison.
Those predicting doom born of decisions (low birthrates) made in the marketplace of people have always been wrong. They’re wrong here too.
