Chapter Four
Demographics
“Demography is destiny,” observed Auguste Comte, a French philosopher and sociologist who lived in the early nineteenth century, smack-dab in the middle of the Industrial Revolution. It was a time of tremendous transformation throughout society (particularly in Europe and America), during which the center of economic activity moved from the rural, agricultural labor of feudalism to the urban, industrial playground of capitalism. This move also helped undermine the power of feudal lords and landowners, leading to the abolition of slavery and serfdom. In this reorganization of power structures there was a strong current of social unrest that triggered political revolutions in America, France, Russia, Greece, Spain, and other countries. More and more people participated in public life, embracing the potent ideals of popular sovereignty, inalienable rights, and nationalism. A new infrastructure of roads, railroads, and canals, along with powerful steam engines in trains and ships, made a new world market possible, and established complex economic and political relationships among countries in Africa, Asia, Europe, and the Americas. As mechanical production in factories and commercial distribution across long distances increased, linked by the telegraph and then the telephone, people followed. The nineteenth century saw migrations of people in record numbers as they moved from village to city and from one country to another in search of work, mixing ethnicities and cultures in unprecedented ways.
True to the principles of technological progress, with industrialization came a more concentrated energy source, oil, accompanied by more efficient production of goods and services and a higher standard of living. According to economists Peter Lindert and Jeffrey Williamson, the standard of living more than doubled between 1819 and 1851, a period of just thirty-two years, and brought with it a stunning increase in population.1
Until the advent of agriculture, there had been scarcely more than ten million people in existence during the three million years that humans had lived on Earth. Able to support more people with the benefits of farming, communities grew to several hundred million. Suddenly, as the Industrial Revolution kicked in, population growth accelerated, expanding to 760 million in the mid-1700s, hitting the one billion mark in 1800, and doubling to two billion by 1927.
Such was the setting that inspired Comte to consider the implications of explosive population growth on the future. The three drivers of population change—fertility, mortality, and immigration—were quickly reorganizing the size and structure of groups in a dramatic way. Although more people could contribute to more production, more people would also require far more services and resources from society.
Although changes in the composition of a social group do not alone determine its fate, Comte was right about demography's being a force for the future. As we've established, the raw materials you have to work with—resources—are the primary force of change, and technology, our tools of invention, transform raw materials into things that make life easier, longer, and healthier. The next step is to evaluate the match of available resources and technology to the needs and abilities of the social group as a whole. Sheer size of a population affects productivity in both labor and babies, of course, but just as critical is the distribution of its age, gender, education, skills, language, and culture.
In this way, demography can indeed tell us quite a bit about what the future holds. A baby boom, for instance, holds the promise of many more people entering the workforce about twenty years later. As long as there are jobs and educated young people to fill them, all that activity will increase productivity and boost the economy. The average length of time that each generation is active in the labor force is forty years. During this same period, investment in industries and education is critical to ensuring that the next generation will have what it needs to carry and grow the economy. This ensures that, as the first generation ages out of the workforce, there is an infrastructure that keeps the economic engine running.
These basic requirements for a stable society, an infrastructure that includes such societal investments as education, industry, health care, and transportation, depend on long-term thinking and planning. This kind of planning and investment is the domain of the fourth force of change, and the subject of the next chapter, governance.
The reason for such explosive growth during the Industrial Revolution (and since) is not that modern technologies had an effect on people's sex drive—in fact, the average number of births per woman has been declining steadily over time—it's that fewer people died. The advantages of reliable shelter, heat, food, and sanitation meant that more babies survived infancy into childhood and beyond, and that people, overall, were living much longer. The most dramatic increases in population occurred in the twentieth century: in the United States, average lifespan grew from forty-nine years to seventy-seven years by 2000, a nearly 40 percent increase in lifespan in just one century.2 Following this trend is the rise in the number of people living more than one hundred years; currently the number of centenarians is increasing approximately 7 percent per year, which means that the centenarian population is doubling every decade, pushing it from some 455,000 in 2009 to a predicted 4.1 million in 2050.3
World Population, 1800–2050.
Source: Based on United Nations 2004 projections and U.S. Census Bureau historical estimates, http://www.unfpa.org
As the number of people on the planet continued to expand at an alarming rate in the 1800s, many more people joined Comte in considering what the effects on society might be. Among them were agronomists, economists, and militarists who wondered whether population growth would overwhelm the “carrying capacity” of the planet and cause an apocalyptic collapse of the environment, or whether human ingenuity and technological progress would be the ultimate renewable, natural resource.
Framing the pessimistic argument was Thomas Robert Malthus (c. 1766–1834), a political economist whose book An Essay on the Principle of Population (1798) suggested that the fast rate of population growth would outpace agricultural production. Society must prepare for the strain on limited resources, Malthus urged, for which he promoted two key strategies: population control and careful stewardship of the environment.
Malthus's ideas have had a profound impact on modern social theory and were a springboard for both Charles Darwin's theory of evolution and modern macroeconomic theory developed by John Maynard Keynes. In fact, there is much of our thinking today that is Malthusian, including the wide adoption of sustainability practices and the growth of a “green” economy.
However, the French philosopher Jean-Jacques Rousseau (1712–1778), did not agree with this orientation toward scarcity. Known for his treatise “On the Social Contract,” an argument for democratic government and social empowerment (an example of the new thinking that emerged during the Industrial Revolution) and a cornerstone of the Western political tradition, Rousseau took a more optimistic view of population growth. Humans, he believed, are endowed with an innate moral compass and a natural capacity for problem solving and, so long as they are free, will innovate their way out of the resource dilemma. Steven Mosher, president of the Population Research Institute, stated, “Population growth is an important driver of economic progress. Every stomach comes with two hands attached. Every mouth is backed by a creative human intelligence. We can solve the problems that are caused by our growing numbers. In fact, we have been doing so for many centuries now.”4 Whenever humans have come up against a significant resource shortage, whether food, water, forests, or minerals, they have invented technologies to enhance efficiency or find a suitable substitution (as Doug has done creating petroleum-like products from living plants and organisms).
Both arguments are supported by evidence and by reason. Global warming is real, oil is limited, and environmental degradation is occurring in every habitat from the Arctic to the Amazon, from Earth's oceans to its atmosphere.
Yet it is also true that through the course of history, life has gotten better and better for humans. Survival is easier; life spans are longer; lifestyles are comfier; and, contrary to Malthus's dire prediction, food has become more plentiful, not more scarce, as population has increased. In fact, as the standard of living has gone up, the cost of raw materials has gone down.5
By every material measure, life has improved for all peoples, making the business of survival a less brutal affair than in the past. This shift to a softer life has had a parallel effect on our psyche, too, asserts evolutionary psychologist Steven Pinker. With every technological revolution, social groups have grown larger, more diverse, and increasingly interdependent. There's far more to gain through cooperation than through crime, says Pinker, citing an overall decrease in slavery, despotism, human sacrifice, and torture, even as population has ballooned.6 In effect, the trend toward more complex civilizations has made us more civil, setting expectations (and laws) for moral conduct and civic duty, and elevating the notion of human rights.
The purpose of Think Like a Futurist is not to endorse one view over another, but to make it plain that a debate exists and that the interpretation of evidence is never simple. As we look to the future and imagine likely scenarios, it's important to allow more than one point of view into consideration. Some arguments may seem counterintuitive, or go against everything you believe to be true; even so, the more open you are to different interpretations, the more likely you are to arrive at solutions that fit reality in all its complexity.
An issue such as the booming world population is intertwined with economic, environmental, and security concerns. It links to challenges in health care and education, energy and agriculture, industry and immigration, and debates about whether family planning is a private or public concern. Each of these subjects is interconnected: make changes in one area, and the others will react. The best decisions, then, are those that consider reactions down the chain of connections.
You don't have to be an expert in all the related subjects (though you'll want to confer with such experts); you just have to gain as wide a perspective on the matter as possible. The full panorama comes into view only when you are at a high enough altitude, as if you were looking at a city's layout from an airplane window. From that vantage point, you can see whether it's a desert or pockmarked with lakes, where the city's business district is in relation to industrial and rural areas, what neighborhoods are most densely populated, and which byways carry the most traffic. You want to see it as a living system in which every part plays a vital role.
For future thinking, this panorama must include activities and changes in each of the four forces. As you step back to get perspective, you must also step away from any attachment to theories about how things should be. In meeting the challenges that a dramatic rise in population presents, for instance, we have to let go of both the fear that it heralds a Malthusian collapse of the environment and the blithe sense that it'll all just work out because it always has. Instead, we want to be able to ask good questions by looking directly at the three drivers of demographic change: fertility, mortality, and immigration.
Even though world population keeps pushing into the next billion, fertility rates have been falling steadily since the 1960s. This is especially true in industrialized countries (including most European countries, the United States, Canada, Japan, China, Australia, and many others) where some are so low that they've fallen below the replacement rate, meaning that each generation is smaller than the previous one.
Only a few of these countries have a declining population, however (Japan, Germany, Lithuania, and Ukraine); between an increased life expectancy of the current population and immigration, most nations are able to hold steady, or even grow, their total numbers.
At the same time, there has been a dramatic surge in the number of young people in developing countries. Just as improved health care is contributing to a larger proportion of older people in industrialized nations, the effect in the developing world is that of a rapidly expanding “youth bulge.” In parts of the world where infant mortality and childhood diseases have historically been devastatingly high, recent advances in health care, and access to it, have begun to reverse the pattern.
The result is a baby boom of major proportions: more than 30 percent of the population is under the age of thirty in Sub-Saharan Africa, southern Asia, and the Pacific Islands. The numbers are even more staggering in the Middle East, where 60 percent of the population is under the age of twenty-five. That percentage is expected to rise to 75 percent by 2015,7 in a region that also has the highest unemployment rate in the world.
Demographically, the world is situated as a precarious teeter-totter with lots of wealth and opportunity on the side with rapidly declining fertility rates, and a youth bulge on the other side, where economic opportunity is severely limited. In terms of matching working-age people to jobs, it seems that we have all the right people in all the wrong places. The following list shows the changing ratio of the number of people living in emerging-market countries compared with that in developed-market countries:8
| 1975 | 3 to 1 |
| 2009 | 4.7 to 1 |
| 2050 | 7.5 to 1 |
This economic-demographic paradox is one of the greatest challenges we face in the years ahead. Developed nations have been so successful in making a better life that many more people are living much longer, though they are having fewer babies. The problem is that at the point when older generations “age out” of the workforce, they also tend to require more social services, while there are fewer working-age people to support them. There is increasing alarm that the larger share of old people will overwhelm the capacity of social institutions to provide for their pensions and health care needs. This is the Malthusian view.
This relationship—the proportion of working adults in a society compared to the proportion of the nonworking population—is what economists refer to as the dependency ratio, and is used as a reliable indicator of a society's long-term economic and social health. Even if you have all the machinery of a mature economy—stable institutions, robust manufacturing and trade—if you have to take care of more people than are working, the numbers work against you.
A higher dependency ratio means that there are more people dependent on government services than there are people in the workforce. As societies become top-heavy with older, nonworking individuals (or with any nonworking individuals), their dependency ratio goes up. This is a structural constraint on economic growth that tells us a lot about how well a society is situated to provide for its people over several generations.
One of the most critical ways societies adjust to environmental, social, and economic stresses is migration. Currently, there are a number of factors that, when combined, act to accelerate migration, including globalization, economic differences (between countries or regions), conflict (resulting in forced migration), and aging populations (marked in Japan, Korea, United States, Western Europe, and Asia). As both world population and migration increase, they present new questions for us to consider, including
- What will the world look like ten to fifteen years from now, when the baby boomers in industrial economies are well into retirement, and swelling numbers of young people in developing economies are in desperate need of employment?
- What are the solutions for aligning population and labor across different geographies, ethnicities, cultures, and skill profiles?
- What if we just moved people around?
- What does it take to overcome a host population's fear of foreigners?
These are questions that David Bloom, a professor of economics and demography at Harvard University, set out to answer. By combining the dependency ratios of Western Europe and Sub-Saharan Africa, he found that it would achieve an even distribution of old and young people. He said, “It makes you think that if there is more international migration, that could smooth things out.”9
Alas, it's not that simple. Of course the dependency ratio is not the only factor related to economic growth, but it is most certainly a precondition for economic growth. No matter how well trained the people, how smart the policies, or how able the industries, a high dependency ratio can kill all that potential.
Increasing the labor pool is, quite simply, an economic imperative, and migration is the straightest line there. It's also what humans have always done; moreover, in order to prevent societies from collapsing under the weight of high dependency ratios, it's what must be done.
A rising population, when combined with a parallel increase in the dependency ratio and food insecurity, is a complicated challenge that will touch every country over the next three decades. Proactive solutions are desperately needed and will require a comprehensive plan and a delicate touch.
To correct for a high dependency ratio, on its own, there are five big-bucket considerations that can help moderate age distribution in a society:
- Population control (either by mandate, as in China's one-child policy, or by incentive, of which India's new Honeymoon Package, a cash reward to newlyweds for delaying a first pregnancy by two years, is one example)
- Raising retirement age in line with longer life spans, a concept people are embracing as “productive aging”
- Encouraging immigration of skilled workers
- Workforce development plans to move unskilled and underemployed people into jobs
- Shifting the burden of state-funded pensions to private investment
Figuring out the right strategy will take big minds and brave hearts. Beefing up jobs and the people to fill them will take innovative efforts in every area of our lives. Every country will have to align public policy with an intentional strategy to create jobs and a path for people to fill them. Individuals and businesses will have to do their part as well, adapting commitments to retirement, housing, and training for people at every age.
Adjusting for the demographic conundrum won't be much fun, and it certainly won't be popular. There's already been a steady exodus of jobs from industrialized countries to cheaper labor markets in both manufacturing and service sectors that has left a big hole in job availability for many working-age people. So when immigrants come to “take jobs,” people naturally feel threatened from all directions—from the loss of employment and services on the one hand to the influx of people moving to our country for our jobs on the other.
People need to eat.
There is no greater determinant of our future outlook than this most fundamental fact of nature, and to eat, we require easy access to fertile land, water, and energy (and a good pizzeria, if available). So when access to these basic elements shifts, through either natural or manmade forces, people will migrate to wherever land, water, and energy are most abundant.
Where food and other forms of resource wealth (the ultimate insurance of more food) are plentiful, people will fight to the death to secure their rights to it as “theirs.” In fact, all our systems of governance, diplomatic relations, and treaties can really be seen as territorial claims to resources made by resident groups. They are the legal equivalent of “You stay off my land, I'll stay off yours—though, if you want some of what I've got, we can talk about a deal.” Any violation of those agreements invites retribution, from name-calling to taxes and sanctions to all-out war.
We'll take a further look at how policy is used to secure a people's need to eat for the long term in the next chapter, Governance. Here we look at how a growing number of mouths to feed on the planet, combined with quickly changing availability and location of land, water, and energy, are intensifying the movement of people around the planet.10
Although immigration is quite natural, when people who have previously been Them want to become Us, they tread on a deeply rooted, hardwired survival instinct to protect the tribe from outside forces. This, too, is natural. However, it's not always in our best interest to resist newcomers, because the Us group also needs to secure its long-term ability to feed the tribe (otherwise known as one's country, the modern tribe). And, as the rising dependency ratio suggests, there's an urgent need to adjust the ratio of people to resources in many parts of the world, for which migration is a natural (though only partial) solution.
The conflict between the natural movement of people and the natural instinct to protect one's tribe must be handled with care. It's a highly combustible combination that has accounted for prejudice and horrific conflicts throughout history. As insecurity in regard to food, water, jobs, skilled workers, and freedom intensifies, competition for resources does, too, as does the pressure on migration.
How do we resolve a situation that pits identity (our conception of Us, an instinctive, emotional attachment) against our self-interest (a rational assessment of economic security)? Very, very carefully.
We've got to get some distance from the powerful Us-Them instinct that can overwhelm rational, analytical consideration of the future. To resolve an emotionally charged issue, such as immigration, we have to step back and question our own assumptions and mental models. Then we have to tackle it, not as a moral issue, but as a necessary economic policy. The bottom line on immigration, as five hundred economists put it in an open letter to President Bush in 2006: “Immigration is the greatest anti-poverty program ever devised.”11 If the solution fits (accounting for education and workforce development), it'll take care of some of the sensitive cultural issues as well.
Immigration not only provides the only readily available source of young workers but also contributes a healthy infusion of arts, ideas, foods, and values to the host culture, allowing it to adapt more readily to global markets and events. This is a premium benefit for a country that welcomes immigrants into its social and economic fabric, giving it a tremendous advantage in today's global economy.
Get ready: according to population projections from the Pew Research Center, more than 82 percent of population growth in the United States will be due to immigrants arriving between 2005 and 2050.12 In other words, as we look to the future, immigrants are us.
Some say money makes the world go round. Others claim that it's love, who you know, smarts, or power. Whatever your philosophy, what's certainly true is that for anyone's world to go round at all, you need people. People make the human world go round, and who's in it makes a world of difference.