🍼 Peak Human: What happens when global population soon starts falling (part two)

Slow economic growth ahead, unless AI comes to the rescue

Quote of the Issue

“History, which interprets the past to understand the present and confront the future is the least rewarding discipline for a dying species.” - P.D. James, The Children of Men

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The Conservative Futurist: How To Create the Sci-Fi World We Were Promised

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The Essay

🍼 Peak Human: What happens when global population soon starts falling (part two)

Peak Human is coming, and it’s coming fast. As I wrote in the previous issue of Faster, Please!, today’s Millennials and younger Gen Xers — setting aside any huge longevity leaps for the Boomers — will likely see the start of a long-term decline in human population due to the global collapse in fertility. According to University of Pennsylvania economist Jesús Fernández-Villaverde (whose recent essays and papers I will be focusing on ):

The [global population] — is already below replacement rate. Which means that the world population will start falling some moment around the late 2050s to early 2060s. Of course, this depends on how people will react over the next few decades, how mortality will evolve. But what I want the listeners to understand is, for the very first time in the history of humanity — humans have been around for 200,000 years — we are below replacement rate in terms of fertility. … My argument is the United Nations is underestimating how fast fertility is falling. Instead of [the UN forecast of a peak of 10.4 billion in] 2084, I'm pushing this to 2060, let's say [with] a  peak around 9.2 billion, 9.1 billion, and then we are going to start falling.

What are the implications of Peak Human? If you’re looking for good news in these projections, here you go: Population decline should mean less pressure on natural resources. Of course, advanced economies are becoming "weightless," requiring fewer resources due to digitalization and innovation, such as the shift from physical books to e-books. At least with rich economies, such as America’s, economic growth doesn’t require more resources per person.

Fernández-Villaverde:

We get better and better at recombining ideas in incredibly creative ways to generate much more added value.  …  For its part, the United States consumed 2 percent less oil in 2019 than in 1978, while its gross domestic product was, in real value, three times larger (and the United States has not been overly concerned with saving energy).

The same point is made in the eye-opening 2019 book More from Less, in which Andrew McAfee of MIT highlights declining resource consumption by the US economy. He notes that consumption of five key  important manufacturing metals — aluminum, copper, steel, nickel and gold — has dropped by 15–40 percent since 2000, even as GDP has expanded. It simply takes much less material input to produce economic output today versus 50 years ago.

Unfortunately, the downsides of (relatively) rapid population shrinkage outweigh, in my view, any beneficial upsides of Peak Human.