Diminished Economic Prospects

As the world settles into a low-fertility cycle, we will see an increasing transformation of the age structure. Societies have been getting older for some time. Initially, the graying of society was driven by great things — better health and more wealth meant longer life expectancy. In this next round of aging, the engine has changed. Stable or slowly rising life expectancy is accompanied by very low birth rates.

Take, for example, South Korea, which currently has a total fertility rate (TFR) of 0.7 births per woman. Asia as a whole has a TFR of 1.8, well below replacement. In fact, Africa is the only continent that still has a TFR above 2.1. Africa, carried by the sub-Saharan countries, is at around 3.8 — but is also quickly following the rest of the world. The primary driver of aging societies is no longer that we live longer, but rather that we produce fewer young people.

An obvious direct result of an aging population is greater strain on social services. This is because population aging results in higher dependency ratios, or the number of the population outside the labor force relative to the number of working people. As a result, there are fewer people supporting more people, an arrangement that is economically difficult to sustain. Population aging thus results in higher average medical costs and strained retirement programs on one side. On the other side, welfare states are squeezed by lower tax revenue resulting from the smaller workforce. If fertility continues to sink, the welfare state, as it is currently constructed, will be in mortal danger.

Then there is the state of the economy as a whole. The fewer working-age people an economy has, the smaller its size. Ditto for the number of consumers. Thus, a declining population puts downward pressure on economic growth. When the expected future market is smaller than the current market, firms become reluctant to invest in capacity. While there are always reasons for businesses to reduce costs or increase efficiency, the difficulty comes when bringing on more efficient production techniques doesn’t mean adding to productive capacity but removing older vintages altogether. In this scenario, future innovation becomes much more expensive — and we can therefore expect less of it.

A future characterized by welfare state insolvency, economic contraction, and sluggish innovation is not something anyone can look forward to. This includes the Left, which, however much we enjoy pointing out the problems with the existing capitalist economic system, tends to fare better in times of abundance than in times of crisis. When it comes to the economics of low fertility, there is simply no reason for optimism.

Graying and Politics

But what about politics? Here, too, declining birth rates paint a bleak picture.

Socialism is a bet on the future. The whole project requires that we fight to replace otherwise stable institutions with untested new ones in order to fulfill lofty goals and ideals. Each change comes with uncertainty and some waiting period. Rarely are the payoffs to a political project so immediate that we could reasonably imagine profiting from them right away. To commit to a reform agenda or even a revolution (not necessarily advisable) means incurring risk and deferring benefits. And the larger the segment of the population nearing the end of their lives, the less politically attractive these deferred benefits may become.

Imagine a worker co-op. If it were mostly older workers nearing retirement, would they support delayed retirement to make large investments in upgrading the capital stock that would not begin to bear fruit for many years? It’s possible. But that would be an altruistic choice. If the investments were to happen, it would be the result of the kindness of the older employees rather than a change that resulted from the collective interests of the group as a whole.

Adding to that, it’s almost a truism that as people age, they become more politically conservative and risk-averse. This makes sense: people spend their entire lives making choices within a system, even if the system itself is not of their choosing. They buy homes, plan retirements, sacrifice their present for an expected future, and become generally adjusted to life as it is. Little wonder that the politics of revolution and transformation have so long been associated with the young.

Now imagine an aging society. Not just any aging society, but one in which many of the aged have no grandchildren. (We might argue that grandchildren project some hint of self-interest past death and, vitally, provide a direct connection to the aspirations, struggles, and concerns of the young.) Let’s also imagine that this society remains democratic. Current population projections indicate that this is exactly the sort of society we are moving toward. What kind of politics would you imagine resulting from an age structure like this?

If you are committed to any sort of approximate materialism, you would expect people would, at least in general, support policies that advance their interests. As low birth rates and slowly increasing life expectancy transform the age structure of a society, a growing bloc of elderly voters will have increasing power in the democratic process.

The sorts of policies or broad political programs that this bloc of voters would seek to advance would be those that maximize comfort and abundance for the old. Investments in medical research, for instance, that promise to marginally prolong life or delay various morbidities would be highly valued over, say, blue sky research, climate change mitigation, or grand infrastructure projects — all of which primarily benefit future generations, not those who have fifteen or twenty years left to live.

You can imagine simple trade-offs of this sort throughout the economy. Would a mass of elderly voters be keen to invest in parks and mass transit? What about high-quality secondary education? Why would an elderly voting bloc support a twenty-five-year plan to transform a national infrastructure when this would take revenue that might otherwise go to projects that directly benefit them here and now?

And why would elderly voters, staring down at the end of their life, feel compelled to take huge risks on social investments or political transformations when doing so means incurring an enormous amount of risk? Any institutional change comes with risks. The more profound those changes are, the greater the risks. An octogenarian simply cannot weather a crisis — asset price recession, fiscal contraction, periods of political and social instability, etc. — the way that a young person can. The struggle for socialism is a much easier gamble to make if you have many more decades left to live than if you are well into your golden years.

There are also arguments to be made around the essential dispositions of human beings at different stages of their lives. It is more folk wisdom than observed fact that caution and commitment to tradition are the inevitable consequences of aging. However, it is not unreasonable to imagine that there is some truth to this. Regardless, a basic materialist outlook on the self-interest of involved parties yields the same result as speculation on the political disposition of different age groups.

Declining fertility in its current form is not just a function of people having fewer children. It seems to also be driven by fewer people having children at all. As such, we should expect a meaningful share of people in our projected elderly bloc to have no grandchildren. Many will surely still care in some abstract way about the fate of the young, of humanity. But it is not unreasonable to assume that, on average, people without grandchildren will be less invested in the future than those who do. And even those grandchildless elderly who have a very high abstract commitment to youth and the future will have less frequent and less intimate contact with the generations that will eventually inherit the earth from them.

The Great Struggle for a Better Day

Socialism has always been humanity’s most ambitious bet on the future — a wager that we can transcend the limitations of existing systems to create something fundamentally better. This bet requires not just hope but often the willingness to sacrifice present comfort for uncertain future gains, to risk institutional stability for transformational change, and to invest in generations yet unborn.

The fertility collapse threatens to shrink the constituency for such audacious thinking. As societies age and fewer people have direct stakes in the distant future, the political space for socialism contracts. This is not merely a crisis of numbers but of imagination — a world where the most transformative political project in human history finds itself increasingly out of step with the demographic reality of the societies it seeks to change.

The future of socialism depends on sustaining humanity’s capacity to dream beyond the horizon of our own lifespans. As Eugene Debs famously phrased it, socialism is synonymous with “the great struggle for a better day.” The more future days lie ahead of the bulk of humanity, the easier our task will be.