Over at NRO,
If there is one word that captures many Europeans’ response to the continent’s financial crisis, it is denial. Witness the description by the editors of France’s newspaper-of-record, Le Monde , of France’s S&P credit-downgrade on January 13 as ” un non-événement financier .” The fact that this “non-event” will increase France’s borrowing-costs (not to mention those of the EU’s own bailout fund) at a time when France’s government is already struggling to contain spending apparently escaped Le Monde’ s attention. This habit of ignoring reality, however, goes beyond blinkered reactions to one-off occurrences. It’s also reflected in many Europeans’ perceptible inability to acknowledge some of the deeper dynamics driving the crisis. Here most of us think of unaffordable welfare states and other sinking ships to which many Europeans cling like limpets. But there is one element at work in Europe’s crisis that even fewer Europeans will openly acknowledge: the economic forces set in motion by Europe’s slow-motion population implosion. The demographic facts concerning European population-trends are clear. The replacement level for a population (what keeps it stable) is a fertility-rate of 2.1 children per woman. According to the UN, the average fertility-rate of European women was 1.53 between 2005 and 2010. The figures for Greece (1.46), Spain (1.41), Portugal (1.36), Italy (1.38), and Germany (1.36) were especially depressing. France (1.97), Britain (1.83), and Sweden (1.9) did marginally better. Ireland alone managed to attain the 2.1 threshold. All these figures represented decline from 1955-1960 rates : Greece (2.27), Spain (2.7), Portugal (3.29), Italy (2.29), Germany (2.3), France (2.7), Britain (2.49), Sweden (2.23), and Ireland (3.58). These developments translate into more old people, fewer young people, and, eventually, shrinking populations. But it also shifts what’s called “the dependency ratio”: the ratio of retirees per member of the labor force. On some estimates , Italy, Spain and Germany will have very high dependency ratios by 2050: every two workers will be supporting one retiree. Those working will also have to pay either greater contributions or higher taxes to fund existing pension systems. The present situation is further worsened by another ominous trend: the growing exodus of tens of thousands of young EU citizens searching for work to Latin America, North America, and Asia. Similarly, hundreds of thousands of young immigrants to the EU from developing nations are heading home. The odds that many will return to Europe in the near-future are dim. These facts have made some Europeans willing to ponder the necessity of labor-market and welfare reform, not least because those countries that have weathered the crisis better than others (e.g., Germany and Sweden) actually implemented such changes in the 2000s. Getting Europeans to talk publicly about the continent’s population-trends and their economic consequences, however, is a different matter. Why? One reason is that many Europeans have long been in thrall to the over-population gospel. Long before Paul Erhlich’s The Population Bomb (1968) — whose doomsday future-scenarios of a world devastated by famines, mass disease, and social unrest unleashed by overpopulation never materialized — numerous European economists had bought into this thesis. In 1798, the Anglican vicar and one of the first modern economists, Thomas Malthus, published his Essay on the Principle of Population . This argued that growing populations would produce an increasing labor-supply. The result, Malthus insisted, would be lower wages and therefore mass poverty. “The power of population,” he claimed, “is so superior to the power of the Earth to produce subsistence for man, that premature death must in some shape or other visit the human race.” Another English philosopher-economist, John Stuart Mill, was so convinced by Malthusian arguments that he actually spent time in London parks distributing birth-control pamphlets to bemused onlookers. By the 20th century, plenty of other prominent European economists were getting into the act. Knut Wicksell, a Swede whose thought was immensely influential upon often otherwise-opposed economic schools of thought, loudly proclaimed depopulation’s economic benefits. Likewise the German economist Wilhelm Röpke conjured up visions of a world overrun by teeming masses unless birth rates radically declined. (Oddly enough, John Maynard Keynes was one of the few economists to abandon his earlier Malthusian views and argue — to the British Eugenics Society no less! — that population-growth helped create demand and thereby fuel prosperity.) But it’s not just economists who have propagated anti-natalist positions. For decades, European governments have been pushing population-control programs upon developing nations (including trying to force them to legalize abortion) by making foreign-aid dependent upon adopting such policies. The phrase “neo-colonialism” comes to mind. Then there’s the Swiss theologian Hans Küng who — as if locked in a 1970s time warp — avowed in 2010 that the Catholic Church’s teaching on contraception was facilitating “overpopulation.” And, as always, we have environmentalists adamantly maintaining that population growth is putting the planet’s future at risk. The existential scale of Europe’s present economic crisis may, however, at last be providing space for those Europeans unconvinced by neo-Malthusian orthodoxies to crack the consensus on these matters. One such figure is Ettore Gotti Tedeschi, the Italian economist who heads the Istituto per le Opere di Religione (otherwise known as “the Vatican Bank”). In article after article, Tedeschi has observed that graying and dwindling European populations imply not only reduced demand but also higher tax burdens on those who are young and working. The resulting shrinkage of disposable income discourages those of child-bearing years from having more children. This in turn gradually narrows the dependency ratio, thereby creating even greater strains on Europe’s already-tottering welfare states and over-loaded tax base. So while deficit-reduction and welfare reform matters, perhaps the biggest long-term test for Europe is to break the vicious cycle fueled by population aging and decline that could worsen the already-bleak fiscal future for young Europeans. But this will require many Europeans to do something they find even more difficult than scaling back welfare programs. And that is to break through the politically correct taboos that presently strangle objective discussion of Europe’s population challenges, and concede their miscalculation of the economics of population. I’m not holding my breath.
Originally posted here:
Europe in Demographic Denial
Yep, one of the PIIGS, Spain, let the cat out of the bag. Their deficit numbers ended the year higher than anticipated and may go higher. “I regret the sizable fiscal slippage” to a deficit of 8.0 percent of GDP instead of 6.0 percent initially targeted, Economic Affairs Commissioner Olli Rehn said, while welcoming the
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Oink, Oink!
Over at the American Conservative , Daniel Larison seems to have developed an interesting definition of “intervention” in the affairs of other nations when it comes to the Founding Fathers. Aside from giving the erroneous impression that I am endorsing endless foreign interventions (Uganda anyone?), he appears to be redefining “intervention” so that it applies only to Europe and Asia. Notably not counted by Larison is perhaps one of the biggest interventions in all of American history — the Monroe Doctrine. Ron Paul and other “non-interventionists” love to quote John Quincy Adams to the effect that America does not go abroad in search of monsters to destroy. This sounds lovely… but for the fact that it was Adams himself as Secretary of State who wrote the Monroe Doctrine for Founding Father President James Monroe. The Monroe Doctrine, of course, roped off basically half the earth (!!!) in the form of the Western hemisphere, specifically intervening in the affairs not only of every nation in the hemisphere that is not the United States but not coincidentally also intervening in the affairs of European nations that wished to involve themselves further in Latin American affairs. In fact, the U.S. was working with Britain on this quite specifically to keep various European powers out of the Hemisphere as various Latin American countries gained their independence from, for example, Spain or Portugal, effectively intervening in European affairs on a massive scale. This Founding Father intervention invention was so potent John F. Kennedy would cite the Monroe Doctrine well over a century later
[Posted by Karl] Newt Gingrich is currently having a good run, getting kind words from sources as far apart as New Hampshire’s Union Leader and fmr. Pres. Bill Clinton . Accordingly, he probably won’t notice if I offer a few words of criticism on the way to discussing an issue he clearly finds important. Given that Clinton wanted to run for reelection in 1996 against the Dole-Gingrich ticket — and spent a fair amount of money linking Dole to Gingrich — the former Speaker and his supporters might consider that Clinton’s latest praise may have a tinge of mischief. Clitnon may well hope that Obama gets the chance to actually run against Newt, while Clinton had to make do with the illusion. And why not? TIME and Newsweek made sure to introduce the last generation of voters to Newt as The Gingrich Who Stole Christmas and Uncle Scrooge for his positive comments about orphanages. After all these years out of power, Newt still has a habit of making comments easily caricatured as Dickensian. Indeed, Newt’s characterization of child-labor laws as “truly stupid” caused NRO’s Kevin D. Williamson to neologize: “newt, [noot; nyoot] v ., to put one’s foot in it while putting one’s finger on it.” I would suggest Newt made two errors here. Even if our child labor laws are stupid, they are not the most problematic barrier in our current economic stagnation, which extends well beyong the young. Even minimum wage laws are probably a bigger problem in the current context, though suggesting they be reformed or repealed would be just as easy a target for Dickensian caricature. Of course, Newt was thinking more about the big picture, as he often does, but Newt is a problematic as a candidate at that level as well. As Williamson implies, the work ethic is as much an issue of values as policy: Gingrich was right to say that the real value of a first job isn’t the money one earns but the lessons one learns: how to show up on time, how to be honest, how to be dependable, how to take direction, how to separate one’s personal life from one’s professional obligations, etc. Having fewer 16-year-olds working as part-time janitors does not mean that you will have proportionally more of them fine-tuning their Harvard admission essays. Having more 16-year-olds working as part-time janitors does not mean that we will have proportionally fewer rocket scientists and Ezra Pound scholars down the road. Most of our young people aren’t headed down that route. One of the most dangerous and destructive tendencies in American public life is the upper class’s habit of generalizing its own desires, tastes, approaches, and interests onto the body politic at large. Thus did (for example) Governor Reagan help transmit the Hollywood elite’s culture of at-will divorce to the middle and lower classes. Unlike the rich and famous, the women and children of the middle and lower classes are not protected by vast amounts of money and social capital, and therefore were poorly positioned to endure the havoc that no-fault divorce wrought upon American family life, a development from which the nation probably never will recover. (Oops.) Our elites seem to be imagination-challenged, and they can never quite realize that other people are making their life choices while consulting a very different menu of options. This class blindness is the source of Karl Rove’s sputtering horror at the idea of his children “picking tomatoes.” It is also the source of Barack Obama’s managerial liberalism, which implicitly holds that if the poor ignorant wretches in the non-elite classes would only make the same life decisions as Barack and Michelle Obama, then they would get (roughly) the same outcomes. But that is not the case. It is fairly easy to conclude that Gingrich would have some difficulty running on a family values platform, but let’s stay focused on the work ethic. Newt might be a more credible messenger on this issue than, say, Mitt Romney, who would likely be Obama’s preferred opponent for a campaign based on class warfare. However, I do not think it off-base to suggest that if you asked a random sample to describe Newt in a word, adjectives like “warm” and “cuddly” would not come up much. Fairly or not, people do not mistake him for Father Flanagan. The US still believes more in self-determination than people in Germany, Spain, Britain or France., but Newt is far from the ideal messenger on this issue. Indeed, to come full circle, consider Gingrich’s signature achievement is making Bill Clinton sign welfare reform into law. That was largely possible because Clinton himself had campaigned on the issue. The position did not hurt Clinton much politically because, for all of his own character baggage, no one could really challenge his work ethic (albeit a Blue one) and his rise from modest circumstances. Without Clinton, Newt might be easily caricatured as the candidate of orphanages and (now) workhouses. –Karl
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Newt Gingrich and the Work Ethic
