While conservatives rightly talk up free markets and freedom to choose, their analysis of how the world works frequently tramples on their rhetoric. See their endless crisis-mongering about low U.S. birthrates.
There are countless examples of this, and Ted Jenkin at Fox News is the latest to traffic in the seemingly “wrong” choices made by Generation Z on the matter of kids. In his words, “America needs babies. In 1960, the average woman had 3.6 children. Today, it’s just 1.6 – well below the replacement rate needed to sustain a healthy population. If these trends continue, we’ll face shrinking tax bases, fewer workers to support Social Security and an aging population that strains the system.”
Jenkin would be wise to trust markets over the conservative tendency to see a “crisis” behind every tree. Lest Jenkin forget, South Korea has the lowest birthrate in the world in concert with the highest suicide rate in the world, yet global investment that is a speculation about the future continues to flow into Seoul and beyond. The U.S. similarly remains a magnet for foreign capital, easily the biggest global magnet of all.
Which raises an obvious question: why do market forces mock the endless scaremongering of conservatives? The answer can not-so-ironically be found in China.
In the past year alone, Chinese factories installed roughly 300,000 working robots. And while U.S. factories installed a comparatively small number (34,000), it’s a reminder of two things: for one, market forces always and everywhere work around any shortages of human and/or physical capital via the globalization of production, automation, or both. To use but one example, the Apple iPhone is comprised of parts made on six different continents.
For two, the proliferation of robots that do and crucially think for us will render the 1.6 “replacement rate” that occupies the minds of conservatives an enormous irrelevancy. Which on its own is interesting. For decades allegedly “supply-side” oriented conservatives obsessed with increasing the flow of tax dollars to Washington have begged the OMB to “dynamically score” their tax cut proposals to reflect the changes in behavior that spring from tax cuts.
It all raises the question why birthrate-obsessed conservatives don’t “dynamically score” the staggering productivity increases that will be enjoyed by the 1.6 percent babies being born today, and in the future. Rest assured they’ll be the production of equivalent of thousands and tens of thousands of babies born in the past.
Which brings us to the Keynesian quality of the right’s birthrate obsession. Ever since they happened on birthrates as yet another “crisis” to needlessly scare their flock about, they’ve promoted the fiction that fewer humans will result in less “demand,” plummeting tax collections, and unfunded entitlement programs allegedly born of falling demand and tax revenues. It’s what John Maynard Keynes would have said given his obsession with “demand,” but it’s total nonsense.
That’s because there’s no such thing as “demand.” There’s only production. All so-called “demand” springs from production, and as the proliferation of robots attests, production stateside is on the verge of soaring. Which likely explains why actual markets aren’t going haywire (think soaring Treasury yields, seniors and future seniors clamoring for Social Security and Medicare reform) to reflect the birthrate “crisis” that Jenkin and seemingly every other conservative economic commentator has been promising for decades.
There’s nothing to it. Not only do the economics of what Jenkin describes as a “looming demographic crisis” in no way pencil, it’s quite simply not very conservative to reduce the beauty of childbirth and kids to “replacement rates” allegedly necessary to support the federal government and its various promises.
