The end of growth has consequences, but also opportunity


Takeaways

  1. World population to peak at 11.2 billion by 2100.
  2. Falling fertility rates will push many countries—and eventually the world—into population declines.
  3. Can we adapt to a “shrinking” world?

The United Nations thinks the world is going to get more crowded—but at a slower pace. By 2030, it believes that global population will hit 8.5 billion. By 2050, 9.7 billion. And by 2100, 11.2 billion.

According to The Washington Post, “the UN has had a pretty good track record with its population predictions, as in 1948 it projected world population would be around 6 billion in 2000, only less than five percent off from what it was that year.”

While population is still growing, there’s light at the end of the tunnel.

Already, population growth has slowed to 1.18 percent per year from 1.24 percent a decade ago. This deceleration is expected to continue. In fact, the United Nations believes that there is a 23 percent chance that the world population will peak, or even begin to fall, by 2100.

The slowdown in population growth is easier to predict that you might think. According to the National Center for Biotechnology Information:

Economists and demographers for the most part agree that important ingredients of improved living standards, such as urbanization, industrialization and rising opportunities for non-agrarian employment, improved educational levels, and better health all lead to changed parental perceptions of the costs and benefits of children, leading in turn to lower fertility. In other words, there is no longer much debate about whether or not improved economic conditions, whether at the family level or at the societal level, lead to lower fertility.

Indeed, that’s what we see in the United Nation’s numbers. Nearly every country will see progressively lower fertility rates, assuming long-term growth in global incomes. We explored this idea further in Japan Isn’t Dying: We All Are.

Africa is the only region expected to continue fueling global population growth over the next century.

By 2100, the population of Africa is expected to double, with its global population share increasing from 16 percent to 49 percent. With nearly half of its population under the age of 25, plus the world’s highest fertility rates, Africa is nearly guaranteed to continue its population explosion.

But even with Africa’s population boom—which slows in magnitude over time—massive declines in Asia should start to stem the tide. Considering it’s currently the largest continent on the planet by far, Asia should prove a worthy combatant to Africa’s surge.

According to The Economist, Asia is already starting to put up a fight:

Three-quarters of all the people in countries with exceptionally low fertility live in East and South-East Asia. Prosperous Japan, South Korea and Taiwan have fertility rates of 1.4 or below. The fertility rate is the number of children a woman can expect to have during her lifetime. A rate of 2.1 implies stability: the population is replacing itself. Demographers refer to rates of 1.4 or less as “ultra low”.

Hans Rosling—a Swedish physician, academic, and statistician—believes that rapid reductions in poverty can fix population growth faster than the United Nations expects.

“Up-to-date statistics show that recent global progress is the greatest story of our time – possibly the greatest story in all of human history,” he says on Gapminder. “The goal seems unrealistic to many highly educated people because their worldview is lagging 60 years behind reality.” He believes that continuing to raise the living standards of the poorest will stop population growth at 9 billion people in 2050.

I use the term “continuing” because, despite popular perception, the earth is increasingly becoming a better place to live.

Hans Rosling conducted a survey asking people about shifts in extreme poverty across the world. About 88 percent of respondents thought extreme poverty had remained constant or increased over the past 30 years. This couldn’t be farther from the truth.

For nearly 200 years, estimates have continually concluded that levels of extreme poverty have been falling. Since 1980, data from the World Bank pegged 44 percent of the global population as living in “absolute poverty.” In 2015, the figure fell below 10 percent for the first time in history.

So, there’s a growing body of evidence showing that increases in income, especially at the lower end, result in lower fertility rates. We’re seeing this play out in a majority of the world’s countries. Although exceptions do exist, they hardly break the overall momentum.

And while the Guardian estimates that “up to 70 percent of people in developed countries have seen incomes stagnate,” it seems as if most have already reached the point of no return. The United Nations estimates that the average fertility rate of developed countries is 1.7 children per woman, well below the 2.1 children per woman rate necessary for a stable population.

The result: Expect a shrinking world, even if it takes some time for falling fertility rates to be reflected in total population statistics. What does this mean for us?

Richard Heinberg’s The End of Growth describes what policy makers, communities, and families can do to build a new economy that operates within Earth’s budget of energy and resources. “We can thrive during the transition if we set goals that promote human and environmental well-being, rather than continuing to pursue the now-unattainable prize of ever-expanding GDP,” he writes.

Suprisingly, little research has been able to support that people living in countries with high-growth economies are always happier. For example, between 1946 and 1970, the U.S. experienced its strongest sustained economic boom in its history. And yet surveys failed to show any upsurge in happiness.

Writing in the Harvard Business Review, Selin Kesebir says that “What we can say for sure is that it’s a fallacy to equate GDP with well-being. It’s not a foregone conclusion that growing the economy will make for a happier people.”

Growing national wealth not always being accompanied by growing national happiness has been termed the Easterlin Paradox, after the economist Richard Easterlin, who first discovered the phenomenon.

In his paper, The Economics of Happiness, Easterlin postulates why economic growth doesn’t always bring happiness along for the ride:

In psychology, “set-point theory” has gained increasing attention in the last decade or so. Each individual is thought to have a fixed setpoint of happiness or life satisfaction determined by genetics and personality. Life events such as marriage or divorce, loss of a job, and serious injury or disease may temporarily deflect a person above or below this setpoint, but in time each individual will adjust to the new circumstances, and return to the given setpoint. Psychologists call this adjustment process “hedonic adaptation.”

One setpoint theory writer states flatly that life circumstances have a negligible role to play in a theory of happiness. If this is correct, then there is little that you or I can do to improve our well-being, and public policies aimed at making people better off by improving their social and economic conditions are fruitless.

Subsequent research has repudiated Easterlin’s claims. Research from the National Bureau of Economic Research found “evidence that happiness rises with GDP per capita has started to accumulate,” with one notable exception. “The failure of happiness to rise in the United States remains a puzzling outlier.”

The reasons for the United States being an exception are multivariate, including the Protestant Ethic to an arms-race mindset. What we do know is that, regardless of self-reported happiness statistics, entire societies and cultures will need to reframe their identities and sense of value.

In his book, World After CapitalAlbert Wenger outlines the struggle ahead:

It’s important, first of all, to acknowledge the profound psychological dimensions of the breakdown of the industrial society. Social and economic disruption makes life more stressful; we’re more afraid then ever of losing our jobs, and we’re in general unsettled by what we perceive to be the heightened pace of change. For the knowledge loop to truly succeed, each of us as individuals must adapt.

As we break with ways of thinking associated with the job loop and scarcity, we must identify the deep-seated fears and emotional attachments that hold us back from engaging fully in an economy bereft of jobs. Until we do…we will never feel the sense of security and calm we crave.

In this time of upheaval, economist John Maynard Keynes saw opportunity. “All kinds of social customs and economic practices, affecting the distribution of wealth and of economic rewards and penalties…we shall then be free, at last, to discard.”

To learn more about how the future will unweave centuries-long cultural and social customs, check out The Future of Work (and Your Identity).


Learn More

  1. The Best Stats You’ve Ever Seen — TED
  2. The Future of the World’s Population in 4 Charts — The World Bank

  3. Play With the Data — Gapminder