The Empty Planet

The stark implications of the global fertility collapse

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Just a generation or so ago, Paul Ehrlich's book, The Population Bomb, sold millions of copies. It continued a long tradition of Malthusianism, predicting that the world would soon be overpopulated, resulting in mass starvation and death. Of course, the dire predictions did not come to pass, food became more abundant than ever. Instead, we face a new and greatly underappreciated risk: population collapse. Falling global fertility rates risk an “empty planet” and a dark future.

Malthusianism

The term Malthusianism is derived from the name of Thomas Robert Malthus, who at the beginning of the 19th century, famously theorized that because the population was geometrically while food output was constrained to grow linearly, mass starvation was inevitable. Malthus made this prediction when the population had just crossed 1 billion. Ehrlich’s book was released in 1968, by which time the population had more than tripled, yet no worldwide famines materialized. On the contrary, the global population has since more than doubled to some 8 billion people, and the global incidence of hunger and the frequency and severity of famines have declined dramatically.

Malthusian reasoning appears sound enough, so why were these forecasts so wrong? There are many factors to consider, including human innovation which enabled us to grow more food with less land. Malthusians also missed the mark on fertility or the number of children born per woman. Instead of remaining constant, it steadily declined as countries developed and living standards improved. In times past, it was accepted that a large fraction of children would not live past the age of five. Families preferred to have many children as a kind of “insurance” for their old age. Technological advancements greatly reduced child mortality rates worldwide. Meanwhile, growing opportunities for women in the workforce raised the opportunity cost of having children.

As a consequence, the global fertility rate peaked around 1965, at just over 5 children per woman. Since then, it has been in steady decline and is now down to just 2.3. A fertility rate of 2.1 is considered to be the minimum threshold that separates a growing population from a shrinking one. This means that humanity now stands on the precipice of a population cliff. Due to declining fertility rates, the world population is now expected to level off around 10-11 billion people before beginning a slow-motion collapse. Instead of a population “bomb,” around half of the world's population lives in countries with fertility rates below replacement level. Overpopulation is no longer a concern; the emergence of an “empty planet is.”

A New Stage of Demographics?

Courtesy of Max Roser: https://ourworldindata.org/population-growth | https://creativecommons.org/licenses/by-sa/4.0/deed.en

Demographers have identified four stages of demographic development. Stage 1 describes societies with high birth and death rates, keeping the population largely static at a low level. This describes humanity for most of its history. Since most people are children, the “dependency ratio” (ratio of people who can work to those who cannot) is relatively high. New lifesaving technology and better living standards, such as those seen at the beginning of the Industrial Revolution, kickstarted Stage 2. In this period, death rates fall while birth rates remain elevated. Thus, the population soars upward.

Society adapts a generation or two later, with couples having fewer children in Stage 3 of the cycle. This gives rise to what is often called a “demographic dividend” where there are many working-age people relative to children and the elderly. The demographic dividend lends itself to higher economic productivity and faster innovation. Much of the world benefitted from this “dividend” in the 20th Century. Now, however, many countries are entering Stage 4. In Stage 4, births continue to decline while the population rapidly ages, throwing the dependency ratio in reverse, this time with more elderly than children. What happens from there is unknown, but most forecast shrinking and aging populations going forward into “Stage 5.”

Recent research published in The Lancet projects that the world population will peak at about 9.7 billion in 2064, before falling to 8.8 billion by the end of 2100. In more than 23 countries, populations will shrink by more than 50 percent. These include Japan, South Korea, Thailand, Spain, Portugal, and Italy. In other words, for the first time since the Dark Ages, there is a possibility that cities like Rome may once again be partly abandoned. The streets of Rome would once again be lined by ruins, not of colosseums or aqueducts, but homes, offices, and shopping malls.

The Impact of a Greying World

Economist Charles Jones sought to investigate what happens to economic expansion and technological advancement amid negative population growth. In a study published in the National Bureau of Economic Research, he concludes that negative population growth, what he calls the “Empty Planet” scenario, is particularly harmful to society as knowledge and living standards stagnate for a population that disappears.

National pension systems like Social Security were designed in Stage 2 of the demographic cycle, assuming that couples would continue having children as previous generations. Thus, there would always be enough working-age citizens to support retirees. We now know that this is not the case. The kneejerk reaction in the US and elsewhere is to raise taxes on the young to fund depleted pensions. However, couples frequently cite financial considerations as the primary reason for having fewer children in the first place. Raising taxes further threatens to exacerbate the fertility problem at its roots.

Degrowth advocates might celebrate our shrinking numbers, falsely believing that fewer people would mean lower prices, better living standards, and environmental sustainability. This is mistaken. Most consumer products, for example, have high fixed costs and low marginal costs. An investor or entrepreneur needs a sufficient market size to sell enough products to justify that high fixed investment cost. The steady improvements that we have come to expect in our products and technology depend upon market growth. We have better and cheaper products because there are so many of us, not despite this fact. Absent market growth, consumer prices will likely rise and innovation stagnate.

Remember also that economic growth is a function of improved labor output. Thus, as the labor force shrinks, labor productivity needs to rise much faster for growth rates to remain stable. A shrinking labor force makes growth all but impossible absent significant technological leaps. Perhaps armies of AI agents could replace the lost workforce and keep productivity growing. The problem is that a shrinking and greying population would also depress innovation at the same time.

Lessons from Tasmania

About 12,000 years ago, rising sea levels submerged the land bridge that connected Australia with Tasmania. The native population of Tasmania was cut off from the rest of Aboriginal Australia, an event that gives us some insight into what happens when populations become smaller and more isolated. The archeological record indicates that once the population became isolated from the mainland, the abundance and variety of bone tools steadily declined before disappearing completely. Tasmanians, once technologically equivalent to their brethren in the rest of the continent, slowly slid backward, their numbers too small to support the technology.

The larger a population is, the better it can be at creating more ideas and iterating faster. Also, with more people at hand, labor can better specialize in specific skill sets. A small and isolated population cannot generate as many new ideas and, with time, may actually lose the technology it once had. A shrinking population, ceteris paribus, should translate into a slower pace of innovation and slower (if not stagnant) economic growth.

It may not require a shrinking population to stunt innovation, however, an aging one alone will do. Younger people have more of what psychologists call “fluid intelligence,” or an ability to come up with truly novel ideas. Older people have more of what is known as “crystallized intelligence,” which allows for more incremental solutions to problems built upon past knowledge. Both forms of intelligence are important and complementary. A study by Mary Kaltenberg, Adam B. Jaffe, and Margie E. Lachman analyzed millions of patents filed over 40 years for disruptiveness. They found that although the raw patent productivity of researchers peaked around 40 years of age, truly disruptive work was the domain of the youngest inventors.

This fact doesn’t bode well for an aging planet. Indeed, by looking at Japan, arguably the front-runner of global depopulation and aging, we can get a sense of what this future looks like. In 2010, Japanese inventors led the patent world in 35 key global industries, but by 2021, Japan led in only three. In another analysis by the London School of Economics’ Centre for Economic Performance, it was noted that Japan’s contribution to novel industries, from blockchain to genome editing, has nearly evaporated. Japan has fallen behind the US in many areas, despite low birthrates in the latter as well. The US, crucially, benefits from hefty inward immigration that Japan does not.

Populism and Progress

Finally, while we are just getting our first glimpses of the political ramifications of depopulation, they also appear dire. On a granular level, once the population of a city or town begins to age and fall, something of a “death spiral” begins. Tax revenue falls, local businesses leave, and unemployment ensues. It should be of no surprise that these very localities, in the words of

Brink Lindsey

, can become “hotbeds of authoritarian populism.” One analysis by the Brookings Institution noted that about half of U.S. counties depopulated during the 2010s and President Trump won a majority vote in a staggering 90 percent of them. This trend doesn’t appear to be limited to the U.S. Depopulation and rising unemployment in small localities could be a key factor in the rise of authoritarian populist movements worldwide

Thus, the global fertility collapse presents something of a triple threat to human progress. First, depopulation creates economic and financial challenges. Second, it simultaneously threatens to dampen our innovative capability at a time when we need it most. The third, the most pernicious consequence of depopulation may be the political element. As people in dying towns see their way of life disappear, they yearn for a nostalgic (and false) memory of how “great” things used to be. Fed by a media that enthusiastically reports current events in negative framing, authoritarian populists are more than happy to promise a return to the “good old days.”

They promise to enact counterproductive protectionist policies to “keep the jobs here.” They promise bans on immigration favoring nativist groups. They promise to restrict the marketplace of ideas and a return to “traditional" values. Most importantly, however, they abhor the democratic process which they see as a threat to their idyllic vision of how things “should” be. The populists’ “solutions,” obviously, will only accelerate the rot of these small towns, and their policy prescriptions will ultimately spread their decay to cities, the nation, and perhaps the world.

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