So what I want to talk to you today about is population decline in the contemporary world, particularly in the developed world,
about how it comes about what its consequences are and what, if anything, we ought to do about.
For quite a long time, we haven't been worrying about population decline or even thinking about it,
as you know, for the last 200 years or so, it's been two centuries of population growth.
We've become accustomed to the idea that population growth is the norm.
The population growth is the natural state of affairs in inhuman or indeed any other kinds of populations.
And that we therefore should should construct our ideas about population in the context of constantly increasing numbers.
In fact, this is this is a rather unusual era in the long history of human populations for quite a long period of time in the past.
Population growth was on average anyway, so small as to be hardly perceptible in the 18th century.
There was a considerable controversy amongst educated people in in Britain and elsewhere as well.
The population was growing over. Instead, as many wise people believed it was in a state of constant decline from a previous kind of golden age.
And then meagre data could not conclusively establish one way or the other what the truth of the matter was.
We now know, of course,
that the 18th century was a period when population growth was starting to accelerate from faltering beginnings through the demographic transition,
the mild but constant and substantial population growth in the developed world, and into the so-called population explosion of the Third World.
But these are transient processes that they are already coming to an end in some parts of the world,
in increasingly large parts of the world, they have already come to an end and have been reversed.
And this is an attempt to try and put all this in a historical context.
Concern about population decline started back in the 1930s, when, for the first time,
fertility rates started to decline from their previous natural uncontrol levels within marriage and were techniques of
population projection enabled the consequences of this decline to be worked out numerically and they were not very attractive.
So now population declines back on the agenda after a short absence and we have to start thinking about it.
This has revived all kinds of issues which were written about a great deal, 1930s quite sensibly.
Keynes, the great economist, concerned himself, although a muddled way must be said with population decline and its economic consequences.
Read away, discuss it in more measured fashion, in a more regular fashion.
And his work in 1938 is still worth reading.
Although, of course, the economic context of industrial society has moved on quite a bit from the numbers.
Those were relatively new concerns, but they revived ancient ones for almost as long as there have been states,
for almost as long as there have been rulers.
As I pointed out in the very first lecture back at the beginning of last term, rulers and countries have been concerned about population size,
especially in the past, at a time when it was almost impossible to improve productivity per person.
The only way in which the output of a realm of an empire in economic terms could be
maintained or increased was by maintaining or increasing the number of people who are then,
as I said, are of course a very important factor of production. But then they were much more predominant element of production.
The more people who had, the more wealth you had, the more tax you could gather, the bigger armies you could you could support of the bigger projects,
canals, pyramids, whatever you wanted to do, you could maintain with a large workforce.
All this makes perfectly economic sense. Is not folly to be in favour of large populations, especially if you are a monarch or a government.
So these are very ancient concerns about security, particularly in the mercantilist context of old fashioned economics,
where where the economy was essentially a zero sum game and then someone gained you lost.
One of the reasons why population decline is makes governments and individuals uncomfortable is, of course, because it means that other people,
other populations who are not experiencing this decline or not in the same degree are going to get
relatively bigger and more important on the international scene than you are more important economically,
more powerful militarily, more effective diplomatically. And relative population decline is, of course,
one of the chief element of concern about Europe's decline from about 20 percent
of world population in recent historical passed down to about seven percent,
which is an almost inevitable development arising out of the growth of Third
World populations and the failure of growth in much of the industrial world.
So we have all sorts of questions arising. Is global population decline likely to take place before the end of the century, as as many people observe?
Our esteemed colleague Sarah Harper is ageing,
is giving a great lecture in London next month about this century being the century of the end of youth.
Essentially at the end of youth means, of course, that is also a century of ageing, but it also may bring in its train.
The fact is going to be a century of global population decline for the first time for a very, very long period.
This is unacceptable to many too many economists who axiomatically feel that growth is good for environmental purposes.
It may be a much more attractive for me in the end be desirable and essential as global climate change reduces the whole world's carrying capacity,
which may well happen according to the more pessimistic scenarios.
So let's first of all, think about some of the categories of population change to avoid muddling myself.
There is, I think, a distinction between getting smaller as a population and being small,
which I hope will be a constant recurring theme of the next 40 minutes or so.
Becoming smaller probably brings problems of a psychological kind of an adjustment kind.
The result, though, of being small or being small, if you have a group in the first place, may well be beneficial.
There appear to be, if you look across the international scene, no particular problems about being small at least.
And in times of peace, in times of conflict, that's a bit different.
There are also different processes behind population decline, which we can see happening in the modern world.
At the present time. Some processes decline are the result of of events and developments which are clearly part of.
Illogical and undesirable, the failure of survival to improve in the in many of the East Bloc countries,
the persistent high death rates in Russia, Ukraine,
Belarus, to some extent, Bulgaria, which contributes, amongst other factors,
to their to their failure of population growth and their population decline. Large scale emigration from countries like Bulgaria,
indicating the profound dissatisfaction amongst many members of the population with conditions in that country,
are clearly pathological, ultra low birth rates, which persist as being ultra low birth rates,
indicating a lack of confidence by by women and by couples in the future of the economy and the stability of society,
which is apparent in many parts of the world.
Another reason why why population decline is a symptom of undesirable developments in the country concerned elsewhere,
of course, population decline is occurring in countries of of greater and increasing prosperity,
of continually improving levels of survival and standards of living like like Japan,
like Germany, like one or two others which are tipping into decline.
Italy is another example where the position is rather more subtle,
is not a consequence of crisis, is not a consequence of any kind of social pathology.
It's something which is more more interesting in many ways precisely because it is not problematic in its causation.
We also have to try to distinguish between population decline at the national level,
which is what I'm most going to be talking about, and population decline at the subnational level.
Throughout history, it's been normal for cities to grow and other cities to decline merely because the locational advantages
which caused cities to grow in one place one particular time ceased to be operational as circumstances,
economic, geographical trade change, trade routes, change in cities depended upon trade routes may grow or decline correspondingly.
Modes of production changed cities which were once located close to sources of water.
Power for watermills no longer need that and could be located elsewhere is the activity changes because the nature of power changes.
Likewise, one time cities were conveniently grew up in areas where coal resources were were
were abundant for four blast furnaces and other kinds of industrial production.
Likewise, steel factories, steel mills were located in the areas of iron ore.
Other cities are located in other areas of essential rocks and minerals for their processes.
These things change. The economy moves on, the cities decline. Others of a more modern can't grow up.
So it's not necessarily a disaster in the long term.
Anyway, the some cities decline. Liverpool is one example of that.
Often said there is no room in the northwest of Italy to Conservation's Liverpool and Manchester.
The transatlantic trade on which Liverpool flourished is much diminished compared to what it used to be.
It's move to Rotterdam and elsewhere. It would be unreasonable to expect Liverpool to be the same population size as it was fifty years ago,
in exactly the same way as it would be absurd to imagine that Kings Lynn and Norwich,
once premio towns in England, should should maintain their current then rank order.
If they had then kings in Norwich, we now have populations of well over a million.
If they occupy the same rank order as it did say fifteen hundred, that would be absurd.
There's no reason why that should be the case. There's also the question of regional population decline.
Sometimes this is because whole areas lose their economic viability.
The so-called rust belts of of the northeastern United States of northern Britain,
where whole ranges of towns and cities once depended upon coal mining,
steel making, cotton spinning and textile manufacturer have lost their markets to other countries or by the economic activity,
has moved on to more modern processes.
It's tragic for the few populations who live there, but that is something which is bound to happen because of economic development.
And people do move people to find other jobs elsewhere and have done so in large numbers in this country over the last hundred years or so.
First of all, moving up to those areas back in the nineteenth century when there was movement from the south to South Wales,
from the south up north to where the jobs were and now since the Second World War in reverse.
So not necessarily a long term tragedy. I want to talk mostly about national populations, because the decline of cities and regions in a city,
in a country can be counterbalanced by the growth of other cities with newer economies.
Are the regions with your economies in the same country? What matters rather more, I think, in whole populations are declining the national level.
This is the a couple of diagrams showing the beginning of this process of decline.
This is the first evidence of a threat of population decline,
of the actual reality of population decline taking place in Western Europe at the end of the 19th century and the beginning of the
20th century when birth rates really started to go down in a continuous fashion as a consequence of the fertility transition.
You see on the left the graph labelled a of the period fertility rate in France and below it the the thing irregular line enabled B,
which is the cohort rate, as always, the cohort rate be more stable than that than the period fertility rate.
And you can see it went right down to for about three and a half at the beginning of of the graph 1875,
down to about two in cohort terms by the 1930s and down to about one and a half
in imperial terms during the First World War of considerable cause for alarm.
Because if that trend continued, as may well have been the case, according to contemporary observers at the time,
if the trend a pattern that 25 continued and zero in due course, absurd to us,
but that was a real fear because they did not understand why the birth rate was declining.
So in the case in Germany, here's the total fertility in Germany, 1921 1931, two point three to about one point six here going around that time.
That, of course, continued TFR one point six implies very substantial population decline as well as, of course, very substantial Asia.
Likewise, the similarly low level in France, throughout Europe.
Therefore, at that time, a whole raft of policies intended to encourage fertility, to encourage marriage,
to make the costs of children more affordable by various kinds of subsidies were introduced.
I'll go into that next week. But how far they were affected is unclear.
The advent of the Nazis with their retirement programme and their policy of of encouraging marriage and childbearing may well have had some effect,
as you can see from this graph. But it is controversial.
And what is clear is that despite all the bumps and troughs of baby boomers, of recessions and so on, it's remain, as we all know,
round about to ever since and is now considerably less than to both in both parts of
Germany and France over the birth rate has remained more robust and has been is now,
of course, still the highest in mainland Europe of any important state.
This is some projections made in England and in Germany around that time to show the
depth of the pessimism to which demographers and economists were then experiencing,
this is millions in this scale here, his 10 his 20 or 30 years, 40 and 50, 60, 70 in relation to Germany's larger population.
This is for the more optimistic of the graphs.
This is what happens if the birth rate remained as it then was actually dropped in a child up at about 1935 with sub replacement, you see.
So population growth, momentum, the population would decline and go on declining.
This is if the rate of decline were the rate of decline that remained constant.
And this is where to accelerate.
According to that projection, you see, it would be down to about nine million population in England, Wales by this time.
That has not come to pass, as you may have noticed in Germany,
a similar kinds of projections of various degrees of pessimism, neither of which came to pass.
But but this one in Germany is now coming to pass. Germany has, as you know, already slipped into population decline.
The population of Germans in Germany has been declining for much longer, for several decades now.
So that we may think this is quite amusing at the time, but it is now coming home to roost, as it were, as reality.
This is a sort of pattern which we have in the 1930s to the point of view of net reproduction and total fertility,
quite a lot of countries even back in the 1930s. I'm sorry to remind you about this, but it's very important to keep it in mind.
60 years ago, 70 years ago, populations already had reproduction rates, which were less than one.
That is to say, they are not producing enough children to replace the population in the long run.
Even Australia, just less than one in the world,
is considerably less than one Frances amongst journalists and one New Zealand and Sweden and the US all less than one in that respect,
not the same or even lower than the other present time. The reproduction rate in the US is higher than this.
In Sweden, it's higher than that in New Zealand. It's higher than that in Germany it's lower.
So there's no real consistency about this. These are some surprising reasons.
Total fertility, generally speaking, as you are about to point nought five on the conditions of low mortality,
gives you that reproduction rate of about one point nought.
Interestingly enough to me, anyway, the emphasis back in the nineteen thirties was all about population decline.
They knew about population ageing. And this poster put up in it for an exhibition by the Population Investigation
Committee in 1986 shows they were they were aware about population ageing.
This is a diagram you can't read it very easily, which is the projected change of the age structure of the population from 1935,
which is here up to 2025, that the the red our children ought not to north to 14, the black or old people 65 and over.
You will see at that time a very healthy concentration of population in any way of life in working age.
This was this was the era of the demographic bonus in the Western world.
This bird is shrinking. As time goes on, children become smaller in number of the elderly increase.
This is perceived to be a really major threat by 2050.
Five, the other 65 on this very pessimistic projection reckoned to be, as you see, more or less, 50 percent of the population over pessimistic.
But we are all heading for something around this sort of level in quite a few of the countries.
The well, not so bad in England, but certainly so in, say, Southern Europe or East Asia.
Quite wide population ageing didn't attract the excitement then that it does now.
I'm not quite sure, but it was very much to do with population decline, perhaps population ageing just too far, far away at time.
So what's the current position?
As you know, we've moved sort of out of the end of the demographic transition into this unknown world, this unknown world.
We don't really know where the birth rate is going to go next and where our current
experience in the developed countries shows it pointing in all sorts of different directions
with a range of almost two fold from the one point north of Taiwan to the two point
nought five of France and the US and the one point nine five of the UK and Scandinavia.
So a really not too much of a clue as to which way people are going to decide to go in terms of their reproduction,
looking simply at the range of options on offer in the contemporary world.
We've got the serious decline on offer in central and Eastern Europe, especially in the former Soviet Union,
moderate decline in southern Europe and East Asia for, as I mentioned earlier, a non pathological reasons.
Interestingly, more and more countries in the developing world are also heading for population decline if current trends in the birthrate continue.
Now, you will have seen from the past projections that current trends in the birthrate often don't continue.
Nonetheless, there are good reasons for supposing that the birth rates in many developing countries will continue to decline,
not least because many of the female inhabitants of those countries,
when, when quizzed in surveys, keep saying they are having somewhat more children than they actually want,
and they often regret the last birth that they had as an unmet need for contraception.
The United Nations expects that the birth rates in many developed developing countries will go below
replacement rate and indeed below the level of north Western Europe in the next 30 or 40 years.
The 2010 U.N. population projections suggested all sorts of French rather unexpected countries.
Some of the countries in the Gulf, for example, some countries in Latin America,
some countries in Asia will achieve birth rates lower than that of North Western Europe.
And indeed, apart from tropical Africa,
North Western Europe may they have the highest birth rates in the world for some period of time in the middle of this century
until the postponement goes away in the developing world and their birth rates rise up to something closer to replacement.
So the U.N. thinks anyway, what this means is that by 2050,
about two point four billion people in what's now the developing world are expected to be in populations where the numbers are actually going down,
not up. This would include China, Brazil, Indonesia, Thailand, Taiwan and a number of others,
which perhaps one might not think about in terms of population decline at the present time.
As the global population this is one of those candidates is well known probabilistic projections of which
the thin red line in the middle is the media and perhaps the thing to to accommodate these bandshell,
increasing uncertainty of projection as time goes on, according to this formulation.
And as you see around about 2070, that expectation is the population will start to go down on a global stage.
This is not mean, naturally, that every country in the world is going down.
On the contrary, this will be a mixture of populations, some of which will be in decline.
Others which almost certainly in tropical Africa will still be increasing quite vigorously.
And we see a similar diversity, if you look at the major regions of of Europe, the US here is in blue,
just as a contrast, Eastern Europe is red on top, already in decline since the end of communism.
Northern Europe at the bottom in orange, still growing quite vigorously.
And the regions in the middle are somewhat intermediate. And a similar contrast.
If we look at different countries in Europe, the red line at the top is Germany already just slipped into decline and projected
to be overtaken by the U.K. and possibly also by France by by mid century.
These are only projections and the projection for the UK, for example, particularly assumes continued migration at the present,
but even higher than the present high level of assumed 130000 net four years.
If that if that drops, then that graph will not intersect the graph of Germany's growth.
And these are these are four major countries already in decline, Germany, Japan, Russian Federation and the Ukraine.
I think you can pass over that. This is an extreme example of a pessimistic population projection.
You may feel it echoes the the unwise pessimism of the 1930s.
Nonetheless, it's certainly interesting that our unofficial national website is possible to find a projection of a country's extinction.
This is a very long range population projection of the population of Japan from the present time, up to about 2000 to about 3000.
It's an awful long way into the future, so that quite a lot can go wrong with that projection, as you might imagine.
Nonetheless, it's instructive because it does show in the blue line the decline in the population.
This side of the graph here, about 130 million at the present time.
Here's two thousand one hundred, then down to about 60 or 70 million by boat by two thousand two hundred, but down to about 10 million.
And then the last Japanese is wandering about vaguely around this time.
And then the last day is another march anymore. More Japanese.
I find that that projection from the national security population such profoundly and unrealistically pessimistic,
it assumes a continuous TFR of one point three, four, forever and ever.
I'm sure it's not going to happen for all sorts of reasons. There is one instructive aspect to this graph.
You will forgive me, draw your attention to that is to say that while some replacement fertility.
Generates continuous population decline, this is assuming no migration. Nonetheless, it does not imply continuous population ageing.
These shaded areas here show the proportion of the population aged.
Not to 14 in this band here, 50 to 64 up here and 65 and about, you know, of all the ageing is concentrated in the first 50 years or so.
Absolutely. As population 30 really want to expect population.
Age structure depends entirely on the balance between constant birth rates and constant death rates.
Once the birth and death rates have been in operation for two generations,
a new population structure comes into existence different from the previous one, forgotten its past and is maintained permanently.
From that time onwards,
there's no further deterioration in the pattern of population ageing from 50 years after the beginning of the drop in the birth rate.
No matter how long it goes on for population decline, there is continuous.
Well, I mentioned the US already, I think this is just an example of how much migration matters in the future populations of Europe.
I mentioned that that Japanese projection assumed there would be no migration.
There is some in Japan, not very much, but it is assumed know migration.
This is a projection for Sweden after mid century,
showing that the projected population assuming migration, which is the red line going up, as you see,
and the projected population assuming no migration either in or out,
which is the blue line showing some increase arising out of residual population momentum, but then a gradual decline.
That's pretty much par for the course in many European countries.
This is the case for the United Kingdom. This is the 2008 population projection.
The 2010 world is quite similar. So I'm not ashamed. Having shown this slightly obsolete diagram, the blue line here is the only central projection,
assuming a TFR of one point eight four, it's now higher, actually, assuming net migration of 180000 is now 250000.
So we can take the high migration option as being more likely one.
And this here is a projection. If there's no migration at all in or out, so-called natural change population, as with Sweden,
there's an increase thanks to population momentum, quite a large one, actually, up to about 65.
And then it declines gradually and doesn't go back to its previous levels until two thousand sixty one.
So one still encounters newspaper comments about Britain's declining population, Britain's declining birthrate.
This is total fantasy. Britain is not declining.
And even if there were no migration at all, as you see, the population will continue its present level for the next 50 years or so.
This is a particularly powerful example of the effect of migration on population change in north Western Europe.
Most of the Scandinavian countries also have quite a lot of migration, but perhaps not not quite as much as in that graph there.
This shows how migration matters in different, different countries.
The blue line, the blue bar here, rather. Is the percent of projected population changed in this century with migration?
This is a scale here, as you see, this would imply about 25 percent population growth in Norway, assuming migration levels.
His UK, assuming that 23 percent population growth and migration, the then current levels.
And so here, Sweden, Spain, France, Denmark, Finland, Netherlands,
Italy and Germany arranged in declining order of projected population size increase with migration without migration.
And we have the Dakar's Norway slow growth, UK still grows faster growth.
All the others decline to modest or quite substantial degrees and Germany declines
whether there is migration or whether there's no migration on that projection.
And I keep on saying or projections are subject to considerable error and depends entirely on their assumptions.
That I think we can dispense with.
So back to the dynamics of the matter, um, the interest recently, unlike the 1930s, Michigan ageing are not in decline.
It's sometimes thought that one causes the other somehow. Rather, this is not the case for population.
Ageing doesn't cause decline. Population decline doesn't cause ageing. They're both.
The consequence of underlying processes in birth and death and migration are usually low birthrate.
Low birth rates typically cause both of these things. One does not cause the other.
As far as the other factors are concerned, immigration of the usual pattern, normally moderate's population,
ageing and also normally moderates or reverse this population decline for obvious reasons.
Sometimes it doesn't. When you have retired English people and Germans and Dutch people migrating to the cost of geriatric care in Spain,
then of course the next population older, not younger. But that's our exceptional decline in the death rate has an opposite effect.
Decline in the death rate makes population ageing worse.
That makes population decline less less bad for obvious reasons and more people, even though they're older and possibly not working.
And this is an example of diversion effects of mortality recorded on population size and and structure.
So what are the consequences, why do people get concerned about this, particularly economists and businessmen?
The worry is that the.
Benefits of population growth, which many assumed to be axiomatic, as long as it's not too high, we'll simply get removed or even reversed.
If population growth ceases and if numbers go into decline, it's not unreasonable to assume there are benefits in large population which are growing,
which I briefly detailed right at the beginning questions,
security, questions of a large workforce, the capacity to raise large armies, to confront external threats,
and the way in which population used to be regarded as the major factor of production.
And it's still a very important factor of production.
And the absence of this is perceived with with very considerable distress by some economists and businessmen, particularly across the Atlantic.
Less so perhaps here. Alfred Sauvie was a very noted French theoretician of population.
France, for historical reasons, as you know, is that we are traditionally, instinctively paternalist.
So we consider that that population size really was very important and the population decline should be avoided.
And although he also pointed out the different levels of population growth benefited different components of the population,
a very large population which might somewhat impoverish the individual, was best for the state because it gave the state more power,
more tax, bigger armies, a smaller population might give individuals a better chance because it meant that workers were
more scarce and therefore command higher wages and therefore accrues themselves a higher slice,
as it were, of the national cake. So he was also keen on the idea that population ageing and population decline was bad intellectually,
that in his memorable phrase that countries were defining populations were characterised by old men and old buildings thinking old ideas.
He also pointed out that many others have pointed out the large populations and growing populations permit economies of scale in manufacture.
If you can make things on a large scale, sell them on a large scale, you could do it more cheaply,
more profitably than if you're doing it on a sort of cottage industry basis and you have a large domestic market in insulates you from from the
vagaries of international exchange rates and the failure of demand in overseas countries whose economies you have no no control whatsoever.
So a number of perfectly cogent reasons for thinking the population growth and large populations are
rather beneficial for the national economy and ipso facto for the people who are living in that economy.
The downside is, is, however, more interesting, it appears that even though you can show that that gross domestic product naturally,
inevitably gets bigger as populations get bigger because gross domestic product is has a very important factor of population built into it.
Nonetheless, there's no evidence that gross domestic product per head, which is a very crude proxy for for individual income,
has any is affected at all by population growth or decline in the developed world.
I'm not talking about the developing world or by population size. In fact, slightly the reverse.
As I show in a moment when the Royal Commission on Population came to inspect this problem of population decline back in the 1930s,
the first time that population have really been addressed by a collection of experts appointed by the government,
they pointed out that population growth generated or could generate a balance of payments problems,
a chronic difficulty for this country that as now and increased import dependency for food and raw materials,
particularly in respect of a country which like this one, is not about losing land area and whose population is rather larger than it's easy
to to to feed excess elementary level for its own domestic agricultural projects.
There's another downside of population growth in that if there's a constant increase in the supply of labour,
either from a high birthrate or from immigration or from both,
it means that marginal populations can be ignored when you have populations
of young people who are who are not in employment or education or training.
So who needs you now? Number a million in this country aged between 16 and 24.
It doesn't matter all that much from the point of view of labour supply because there's a good supply coming in from overseas,
for example, which, of course, is generating population growth.
If you have population growth, it means you can continue producing the same old stuff in the same old way,
possibly an increasing volume merely by increasing the labour input,
not by putting putting in more capital and therefore thereby improving productivity and ultimately,
therefore improving the rates of growth of incomes.
The only way in which incomes really grow in the long run is by productivity increases, not by increasing the total output,
merely by increasing the number of people who are churning out the same old stuff in the same way.
There's also the downside, again,
in a population inhabiting a limited land area that housing costs in richer things keep on going up and a rather larger than otherwise
proportion of national income has to be devoted to building new houses as opposed to renewing old ones or other kinds of improvement.
And the effect on the environment is, I think, pretty obvious, certainly to most of us here.
This depends very much upon the density of the population,
if the population is living in a continental sized landmass like the United States or like Canada or like Russia,
there are many of these problems of population growth, particularly those related to overcrowding,
to environmental damage, to cost of housing, are going to be very small if nonexistent.
It's understandable, therefore, the population is dealing with enormous amounts of space to their disposal, especially the United States,
to some extent, Australia, Russia also should not be concerned about about population growth, but instead should fear population decline.
More understandable, the population like the Netherlands, Britain, many others, north west Europe, with much more restricted land areas,
much more restricted capacity for increasing agricultural output, and all the rest should be more concerned.
I return again to the issue of the process of decline versus being small.
It's understandable the process of decline should cause a certain amount of of alarm and despondency,
particularly to those involved in investing for the future.
A decline in numbers is, generally speaking, a sort of conventional indicator anyway of of a failure and withdrawal.
If you're an investor, then it's very helpful. If you can look forward to a projected increase in customers,
a projected increase in the workforce, who will buy your products and make your products?
Of course, the alternative for that is, is to export more.
And indeed, small countries tend to export a higher proportion of their GDP than the large countries do for entirely obvious and sensible reasons.
The failure of demand arising out of population decline alarm both Maltose and Keynes and many others as possible,
leading to it to a negative spiral of downward economic recession, the contraction of certain kinds of infrastructure, schools, colleges and so on.
The decline remaining population may be regarded either as a benefit or is a problem,
depending on on whether you can redeploy the personnel involved or whether
the buildings can be converted to some of the more competitive markets that.
Um. I suppose you would, but you would at least have a bigger playing field, as it were, in which to expand your activities,
whereas if you imagine if you got a declining market and even the same number of individuals still producing the same goods and services,
then the competition has got to get tighter and that some of those producers or innovators drop out of the market by being bankrupt.
And that might be you. So I think it's not a wholly irrational fear.
This is just a graph to show that population growth and size within the Western world,
it's important to emphasise, doesn't appear to have any bearing on individual welfare.
This is this is what we got here. I can't read the writing is so small.
This is GDP per per head and population size in Western countries and Japan around 2000.
And as you can see, there really is if there is a relationship, it is it is a very slight one.
It and it would appear from this the smaller countries on the whole do slightly better.
The relationship is, in fact not statistically significant, but certainly not the case that small countries do badly.
And all you have to do is think of some of the small countries in Europe, Denmark, Switzerland,
Sweden, notoriously the most prosperous ones in Europe by some degree, the smallest one of any size.
Luxembourg has by far the biggest GDP per head. But that's rather a special case.
And I would I would pray that in aid of my of my argument,
this is a relationship between the growth of the GDP on the one hand, and the growth of population in Western countries.
As you see, again, there's no relationship. Of course, you may argue that in due course, given a few decades of population decline in Germany,
in Japan, in other countries, this relationship may change.
That may well happen. But at the moment, it doesn't seem to be of any importance.
So what about being smaller? Well, I feel small. Of course you haven't in the nature of things, got such a big voice on the international scene.
You can't so easily defend yourself against your neighbours. You've got to join alliances.
Nonetheless, you may be rather crucial in those alliances, depending on which side you choose to be on.
And also, it means that if you're small and can't defend yourself, you can cut your defence spending.
A small countries in NATO do not contribute very much to NATO's budget in proportion to their numbers.
It may mean that you can't generate.
Technical innovations of your own, of a kind which are very demanding of capital, as Wolfgang Lutz points out, quite a lot.
Nonetheless, it's instructive to see that quite small countries like Sweden, with a population of just under 10 million,
managed to produce a very large number of highly innovative products,
particularly the defence field where there were the intent to be self-sufficient, to be a neutral non native country.
And Finland, with an even smaller population, is the homeland of Nokia,
which produces many of the mobiles in your handbags and pockets at the present time.
So it's maybe the present level of average population size in Europe.
About five million isn't so small that it cuts out technical innovation altogether, which you can't do very,
very large things, of course, but it doesn't seem to to obviate high tech development or rather impressive kind.
There's also the case that if you're smaller,
it may encourage a more equal society if you have do not have large reserves of manpower to to rely upon.
Assuming, of course, that migration is not large,
then it means that workers may be rather scarce and that means that workers may be able to demand higher wages than otherwise would be the case.
That being the case,
it may be expected that the population would be rather more equal in terms of its incomes and a living wage would be the case in a large population.
I don't know if there is actually a statistical relationship of that kind. It's something we'll take a look at, but it is a possibility.
What is the actual experience?
Well, we haven't got much recent experience, as I mentioned, it's only just recently that populations have started tipping into decline.
Migration has moderated this decline and prevented it happening.
There've been no migration and the population of Germany,
of Italy and other European countries would have been in decline for much longer overall than has been the case.
And we do have a few examples. Some countries, of course, have lost population by boundary changes.
Austria lost a huge part of its population when the Hungarian empire collapsed in 1918.
Germany lost a huge area of population where East Prussia was transferred to Poland, where 12 million Germans to emigrate back to Germany.
But. But. But some stayed put. And the U.K. lost population when one and left the United Kingdom in 1920.
One or two. There's no discernable effect on GDP per head.
Of course, it may be argued that what was being lost were marginal unless well-off populations.
I'd hazard a guess that if Scotland succeeds the United Kingdom, then the per capita GDP of what's left will be higher than previously was the case.
The example of population decline in Europe in the 19th century and into the 20th was Ireland.
The Irish population started to decline for about eight million or so at the time of the
potato famine in 1846 and had gone down to about three and a half or four million by 1950,
despite the fact the birth rate remained very high over that period.
Nonetheless, immigration became so ingrained in national habits that a third of each birth cohort emigrated.
The population kept on declining. Nonetheless, per capita income kept on increasing.
Whether it would have increased further had the population remained high is not clear.
Although Ireland was regarded as being very overpopulated as an agricultural country back in the 1950s.
And likewise, a period of decline in West Germany in the 1980s was not accompanied by any blip in the economy,
although to be sure, it was a very short period.
And perhaps that is too, too short a period to judge when there are one or two ancient historical examples,
very convenient historical example, because it was unlike the present period of population decline,
not associated with population ageing, which therefore was quite a handy natural experiment,
although not so agreeable for those who are obliged to take part in it.
I'm, of course, talking about the very substantial reduction of population which took place in Europe and many other areas, including China,
from the Black Death of the of the mid 14th century that took the population of Europe down to about two
thirds of the previous level and kept it at that low level for the next hundred and fifty years or so.
The consequence appears to have been, according to many but not all economic historians, that the capita income,
especially of Labellers peasants, agricultural workers, building workers, went up substantially.
Some economic historians call it the golden age of the peasant,
simply for the reason that but by by becoming scarce while the area of land remained the same,
while the number of of magnates and feudal overlords remained the same,
they could command higher wages for their services, or they could erode the feudal system by obliging feudal landlords to commute a service,
compulsory service in the Lords fields to to rent payments of more and more rational kind.
And you can see from this graph that this is a rather long range, ambitious graph.
It starts at thirteen hundred here, ends up at nineteen hundred and thirteen here.
These are the real wages of unskilled construction workers in European cities,
construction workers, because it's only in buildings that there are regular payments,
regular records of payments made cathedrals, castles, royal palaces, buildings, a very long, long life which have records of very long life.
They're content. They contain records of the wages paid to labour so we can reconstruct indices.
Anyway, this is where I hear this is Istanbul.
This is Florence and Milan. This is Antwerp and Amsterdam. And this is London.
And as you can see, there's a very considerable increase in the real wages on this index here.
The scale doesn't matter from from before that.
The Black Death up to after the black death, which is maintained, then declines gradually as time goes on.
And only and then it really gets much bigger right at the end of the 19th century.
So some evidence of an improvement in wages of ordinary people in real terms, an improvement in conditions of life because of its corrosive effect.
So it's the claim on the feudal system.
And also it is also claimed an impetus to rather a better means of production and impetus is claimed for more efficient kinds of watermills,
windmill's other kinds of techniques, admittedly, of a simple kind by our standards, but an advance in terms of the Middle Ages.
The question is, how far is this reduction of population a feedback effect?
We rather cease to think about feedback effects in bottom population dynamics,
the connexion between population size and growth on the one hand, and individual family behaviour on the other hand,
which is which is evidenced and documented quite well in reality in Schofields work on the relation between population, real wages, marriage,
the birth rate and back to population again in the Schofields reconstruction of England's population from 15 Seventy-one, 15, 51 to 1871.
That's that's thought to be a thing of the past.
In recent thinking, there's been disconnection between population phenomena on the one hand and family decision making on the other.
Maybe that's not right. Maybe what we're seeing seeing in terms of some replacement fertility for a while is a kind of
delayed response to to to population size and the effects of density on on on wage competition,
the effects of density on on on accommodation prices and so on,
which is overshot because once once conditions of life start to become apparent in such a way that families start limiting their size
because that the the there's no benefit in having additional children and a considerable pressure on individual standards of living.
Once that starts happening, there's still lots of growth left in the population because as you know,
population momentum means even when families have reduced their family size to a level which they find convenient to say to children,
population will continue to grow because of the accumulated inheritance of a youthful population structure from the past.
And it will take 25, 30, 40, 50 years for that to to to to burn itself out in terms of population growth.
So the population will continue to grow for longer and become bigger than was even was the case when,
let's say it helped to induce families to limit their birth to a lower level.
Consequently, it become too large in relation to the contemporary family size.
Maybe, therefore, a family size will go down as a consequence until such time as a population size has gone down again
and things can accelerate and and the birthrate can recover replacement of a highly speculative idea.
So it's that there isn't really very much evidence, frankly.
But but it would it would be one way of imagining the reconnection of population size and growth to talk to
family behaviour and also might help to explain why birth rates are so low in so many parts of the world,
including simple, not simple societies, including the developing world outside Europe, of which more later.
So. Why are a population decline some reasons to worry about it, but but not others?
I think it's the end of the day it's going to be inevitable thanks to global climate change that's going to depress population,
whether we like it or not. And the sooner that we start limiting our numbers in terms of global climate change to avert harmful consequences,
then the better that our arguments in favour of population size of a very long standing,
but not thereby irrational kind of to do with power and security and investment, there's no advantage to the individual from population growth.
It would appear a no harm either from modest, modest decline and certainly no relationship between between per capita income,
individual welfare on the one hand, and population size of countries in the modern developed world.
Important, rather, the process of decline on the one hand and being small or big on the other are different.
Also important to remember that population decline does not cause population ageing and population ageing does not cause population decline.
They are parallel developments of similar with similar causes underlying them.
So on that uncertain note, I will stop and resume the story on Thursday.
Thank you.