09 September 2007

More Than Productivity

From Real Clear Politics comes an article by John Tammy concerning birth rates and economic growth. The title states Tammy’s point of view quite succinctly: “Don’t Sweat Low Birthrates.” His point is that even though birthrates in “wealthy nations” are falling, it is nothing for us to concern ourselves over. The reason: higher individual productivity will ensure that wealthy nations continue to prosper despite dropping populations.

I don’t see the picture as simplistically as that, and I say that Mr. Tammy’s view is simplistic only because it seems to be one dimensional – individual productivity is everything. It also assumes, it seems, that individual productivity will continue to rise, or at least that wealthy nations will continue to find ways to make it rise.

But Mr. Tammy should re-read his quote from Robert Mundell – “the only closed economy is the world economy.” Taken with a broader perspective, the world is interconnected in more ways than just its economy. Belief systems, identity, history and demographics have cross-border connections just like economies do. And while poorer countries with higher birthrates may not be on the verge of economic boom times, or far from them for that matter, that doesn’t mean that they won’t be players in extra-economic ways.

When those who don’t have and can’t create see something they want, there is a temptation to take. That’s why I believe the much more developed viewpoint comes from Mark Steyn. In America Alone, Mr. Steyn considers many factors in the demographic shift that the world is in at the moment. Man cannot live, cannot plan, by economics alone. While Mr. Tammy’s point about productivity is well taken, that productivity may in the future be taken by an angry many who want what they cannot create for themselves. Higher individual productivity will not protect from that angry many.

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