when horsemouth started this living lark he was very young.
but later on he was older
and later on, he was much older still.
and, perhaps because it's expensive to raise children these days, there are more older people about in the west these days (and far fewer youngsters). this is known as demographic transition. (there are other factors but let horsemouth shuffle them to the side for the time being).
this is a bit of a problem
this is a bit of a problem because older people tend to retire, stop working, start taking their pensions and live longer before they die (sadly not all in good health and this can also rapidly become expensive).
meanwhile there is a shortage of younger people to do the actual work and pay the taxes (that fund the state portion of the pensions enjoyed by the old). the non-state portion of the pensions enjoyed by the old are funded by dividends from investments which again depend on the overall state of the economy and a supply of younger workers to do the work.
efforts to encourage younger people to have more kids to produce more workers seem to be failing all over the world.
there are three solutions to this problem
- immigration, import more young workers,
- decline, let the economy stagnate and reduce, or
- innovation, where new technology increases productivity so that more work can be done by fewer workers.
horsemouth supposes that what eventually happens will be some combination of all three in various proportions (and he doesn't hold out much hope for innovation).
horsemouth has nothing against immigration (his life has been immeasurably better because of it and he expects that to continue) but a vocal minority in the UK are against it so he expects it to continue to happen but to simultaneously be disparaged by the political class who will continue to talk about trying to solve it as if it were a problem.
even without further large-scale immigration the population will not fall below 2022 levels until 2072.
horsemouth has nothing against decline either. he's not a cake-ist (you can have your cake and eat it) he's a pie-ist (there's a pie of a limited size - the gross domestic product or GDP) and what ordinary people need is a bigger slice of that pie (not GDP per head but workers share of GDP).
the overall size of the pie may shrink but the ordinary people's slice of the pie may increase.
still horsemouth is doubtful. he thinks what we are headed for is decline, with ordinary people's slice of the pie decreasing even faster.
larry elliot in the grauniad thinks a falling UK birthrate could be a good thing.
'the combination of an ageing and gently falling population could result in living standards rising. older people tend to save more and that means the ratio of capital to worker will increase. there will, in other words, be fewer workers but they could well be more productive.'
horsemouth thinks that the relationship between capital employed and productivity is not that simple (as a pie-ist horsemouth thinks that old people do not automatically save more and have more of the pie - and even if they do having to spend it on care and health costs doesn't mean they get to keep it. care and health are not necessarily the most innovative and productive bits of the economy).
'if there are going to be fewer young people, it is bad for the economy as well as a waste of individual potential for them not to be working. to that extent, the motivation behind the government’s botched welfare reforms makes sense...'
at some point the young will give up on reforming the system and start to EXIT from it in significant numbers. moving abroad for significant proportions of their working lives, dropping out of work and consumer society, merely working enough to survive etc. etc.
the problem will then be to produce a new culture of capitalism that will entice the young back in - a seeming change in their political representation and reward and life chances.
the alternative would be to close down all possibilities of EXIT.
or a combination of the two.
horsemouth is old(er) but he's also not quite out of the woods yet.
horsemouth is back from the bell-ringing and slightly bruised by beer. he seems to have a blocked nostril.