How many people is too many?

Tweet

 

Politicians are increasingly worried, it seems, about the low birth rate in the UK – a situation mirrored in many other developed countries. For some of them, there’s an element of racism in the argument: they are concerned that if we don’t have a locally-born workforce, the gaps will be filled by migration. The 20-year plus lead-time on sourcing new employees by increasing the birth rate is a bit of a problem, of course, but one they largely seem inclined to ignore. The other motivation is an economic one – a concern that a falling birth rate coupled with a rising population of older people means that fewer people are working to support more who are not. But the extent to which that is a ‘real’ problem, rather than one based on a particular ideological construct about economics, is a question which largely goes undebated.

There are various theories around about how many planets’ worth of resources would be needed if we were all to live at the standard of, say, the UK in 2025. There are problems with the detail of all of these, dependent as they inevitably are on a series of assumptions and guesses. The basic underlying point, though, is almost certainly true: the resources of the Earth, as currently being utilised, are inadequate to support extending the lifestyle of the richest countries to all humans. Increasing the population will only make that worse, and inequality is the inevitable result. The sort of inequality, in fact, which is one of the biggest drivers of migration.

There is an article on the Guardian’s website by Larry Elliott which challenges the prevailing consensus that a falling birth rate is necessarily a bad thing. It even suggests that a falling birth rate could be a good thing. He sets out some economic theory behind that: whilst a falling population might reduce GDP in total, it could increase GDP per head, a much more useful way of measuring economic performance as it affects individuals. He also suggests that it would require policy changes. I agree, but I’m not sure that changing a few policies such as getting more people into work will be radical enough. We also need to rethink what the economy is and how it works.

Capitalist ideology posits that there are only two productive forces at work in the economy. The most important (and therefore the one to be most handsomely rewarded) is capital itself, and the second is labour (which is what actually creates value). The political parties don’t often put it in such stark terms, but the persistent references to ‘working people’, as though the rest of us don’t count, are more than a minor clue. In such an economic system, those who provide neither capital nor labour – the young, the old, the sick, the disabled – are a ‘burden’ on those who do, who must give up part of ‘their’ wealth or income to support the non-productive.

It isn’t the only way of looking at an economy, however. An economic system is a human construct, not the result of some divine law. From an alternative perspective, the question is not how we maximise the return for those who supply capital and labour, and squeeze the living standards of everyone else to achieve that, but how successful an economy is in serving all members of the society which hosts it. If the output of an economy ‘belongs’ to all, then tax is not an imposition taking money away from those who’ve ‘earned’ it, but a mechanism for sharing and distributing the rewards of economic activity within the society. ‘Tax’ might not even be the best word to describe that. In such a scenario, a change in the age balance of the population doesn’t require a higher birth rate: that’s an answer to the wrong question. The question we need to be asking is how we shape an economy and share the benefits in such a way that it meets the needs of all. Productivity and equity are more important than demographics, but few seem to be asking the right questions based on that.