I'm not sure whether birthrates are just a symptom of that same problem - lack of resources does seem part of it, but it's not like it's a simple linear relationship. There also doesn't seem to be a direct correlation between the countries worst affected (which as far as I know are Japan and South Korea) and a certain kind of capitalist practice. There is clearly a cultural element playing into this. — Echarmion

For sure, it would be too difficult to consider every country which is why I narrowed down to my own. It would be great to consider others though, even if a broad picture is out of reach. Affordability is my interpretation of the data but it makes sense to me. When you have to afford university and house deposits, that has to place a severe cap on the number of children you can afford on lower incomes, especially when the probability of survival of one child is extremely high.

If we're moving toward a hereditary mortgage system, only one child can keep that mortgage going. Again, that's going to have an impact on decisions about how many children to have.

I think the problem with birth rates might be less one of capitalism in theory, and more one of where capitalism has ended up in practice. — Echarmion

I think all problems with capitalism are practical ones. I think the attraction of pluralism is that you can let capitalism adhere to theory, let it succeed or fail in practice, and, if it fails, not bring everyone down with it. The ideal, and the theory, is that the failure of a trader will destroy that trader, not the market or the country.

What I am reasonably confident of is that most people no longer implicitly trust that their children will have it better than they will. That "american dream", seems very much dead. And that has an obvious implication for having children. — Echarmion

Same here. My generation is the first for a long time to be less well off than our parents, and it's by quite some margin.

I know what you want to say here, just want to note that capitalism has always been backed up by the state in practice. The idea that capitalism represents a free economy in opposition to the state is a myth. — Echarmion

I know, but the counter-argument tends to be along the lines of "the market takes care of itself" when history tells us it does no such thing. In this sense, a pluralist approach allows for a more capitalist capitalism, just not as the only gun in town.

(You can extend this idea beyond birthrates and climate change. Take cyber security, for instance. The state is being forced to intervene because corporate practices are both a commercial and national security issue. Capitalists might shudder at the regulation coming in, but a pluralist approach would allow for state-approved corporations that obey regulation and cooperate with inspection in return for not being fined millions when they're hacked.)

As long as there are so many people on the planet, there is no danger to capitalism. — baker

So part of the OP is on this point. Capitalism depends on growth, on consumers, and on cheap labour.

If the worker pool contracts, rather than many people competing for the same jobs, you'll have corporations competing for the same workers, which drives up wages. This is already evident in some job roles in rapidly expanding industries, such as IT. There hasn't been a bad time to be a programmer ever, even after the dot-com bubble burst.

Likewise if you have less people to sell shit to, you have less profit. So from both ends, a contraction in the population is a contraction in the markets.

And let's not forget, we're talking about the future here. The number of people in a given market is not the problem: it's the direction that number is going and the speed it is moving there.

Welfare states will certainly suffer from declining birth rates. Declining birth rates imply a decline in the population, which also means a decline in the labor force, which means a decline in government revenue and a decline in the need for government services. This spells a decline in the welfare state itself.

But, as we’ve seen, rather than reduce the welfare state or better focus its spending on an aging population, the welfare state will seek to protect itself and move to replace its declining labor force through policies such as immigration.

The point is that society is based on an infinite number of things going on at the same time. Nobody can understand this kind of complexity, yet proscribe solutions for it.
— synthesis

I'm arguing that the state should create an environment in which capitalism runs things more sustainably. — Kenosha Kid

I know, the problem is that the state cannot do such. It can do things like provide defense or build roads, etc., but it does this at TREMENDOUS costs. When you apply the same to capitalism, you will fail because of the incredible inefficiencies baked into everything governments do (and how they do them).

Governments are great at taking money from other people and (doing whatever...good, bad, or indifferent), but they suck at doing anything efficiently so they are the last people you want influencing your economic system.

The banks should have been allowed to fail in 2008. — synthesis

Should, according to capitalist theory, yes. A few banks (Barclays being one iirc) refused the bailout, but most took it (and used it to pay banker bonuses), so corporations cannot even be trusted to adhere to this capitalist ethic.

But the consequences of not bailing out the banks would have been catastrophic, not just for the market, but for the entire country. And that of course was the scam. Banks provide an essential public service, and so cannot be allowed to fail. What I'm arguing for is an environment in which banks can be allowed to fail, properly, and people can choose (freeeeeedom!) between trusting capitalist banks and risking failure or underwritten, regulated banks which will not perform as well in the short term but will abide such catastrophes.

Does that clarify at all? — Isaac

Thank you.

The idea is that you want to simplify processes, that is, individualize them (if possible) because simplification is the antidote for complexity.

Joe Blow is in a much better position to ascertain the needs for himself and his family than is a politician attempting to make the same decisions for a million of his closest friends and neighbors.

But, as we’ve seen, rather than reduce the welfare state or better focus its spending on an aging population, the welfare state will seek to protect itself and move to replace its declining labor force through policies such as immigration. — NOS4A2

To get immigration, you have to be a nation that is attractive to live in. If it were true that socialist states have more, that would suggest that the world's workers are betting on those states.

Welfare states will certainly suffer from declining birth rates. — NOS4A2

This doesn't appear to be the case. Eastern Europe has the fastest declining birthrates in the world since emerging from communism. After that, Japan.

is capitalism about to f — Kenosha Kid

Here’s my take:
In the past , growing populations were
am indication of prosperity and scientific, technological and economic progress. I think it is the reverse now. The most educated and prosperous a society is, the more likely it is to be experiencing shrinking birth rates.
Among other things, robotization is a cause of this trend , which I think will only accelerate. I also think that, as a reflection of choices people make for their own benefit , it will benefit capitalist economies. The current panic-mongering among economist over
population decline is the result of relying on old and outdated models to understand the relationship between economic growth and population.

I also think shrinking population and what is driving it has much to do with the rise of populist movements around the world. Essentially a growing percentage of our populations are becoming obsolete and they are sensing this. Small towns across the U.S. are crumbling and simply vanishing, as everyone heads to megalopolises.

I think this is a tragedy without a political solution.

The banks should have been allowed to fail in 2008.
— synthesis

But the consequences of not bailing out the banks would have been catastrophic, not just for the market, but for the entire country. And that of course was the scam. Banks provide an essential public service, and so cannot be allowed to fail. — Kenosha Kid

That's total bullshit. This is what the politicians and bankers were telling everybody. I wonder why??

It is imperative that banks fail! It's how the markets must work. If you want to insure the depositers (moral hazard) that's one thing, but to not allow them to fail is why we are where we are. Banks used to fail all the time (and good riddance to them).

What I'm arguing for is an environment in which banks can be allowed to fail, properly, and people can choose (freeeeeedom!) between trusting capitalist banks and risking failure or underwritten, regulated banks which will not perform as well in the short term but will abide such catastrophes. — Kenosha Kid

Nobody is arguing against regulating banking. Personally, I believe banking is evil, but that's another story. Risk and failure is an essential component to this economic system. It doesn't matter what you are selling, if you do it poorly, you should fail.

So from both ends, a contraction in the population is a contraction in the markets. — Kenosha Kid

Which is still not a problem, as long as the capitalist aims to be proportionally/relatively wealthier than others.
Ie. for such a capitalist to be successful, wealthy means to have x-times more than others. Whether this means having 10 billion when others have 10,000, or whether this means having ten horses while others have one donkey.

Yes, someone will ALWAYS have an advantage. You are looking for heaven on Earth. It's simply not possible. — synthesis

I'm saying you are the one looking for heaven on Earth, when you say:

the best path seems to be to allow for each participant to chart his own course (within the context of respecting others' rights to do the same). — synthesis

Therefore you allow those participating to figure out what works best for them in their situation (and guard against folks over-reaching and corruption). — synthesis

I know, the problem is that the state cannot do such. — synthesis

This is what needs to be argued. The most sustainable economy in the world is Switzerland, which no one would consider a socialist country: it has the most corrupt banking sector in the world and a regressive corporation taxation approach. However... it also has one of the most progressive human development programmes, the tightest environmental safeguards, and a progressive income taxation effectively set by the people in the most progressive parliament ever. It is a little anomalous, but even here a pluralistic approach is evident: let banks and corporations do as they will, but invest in the people from the proceeds.

Next are Sweden and Denmark, both progressive countries with strong socialist and environmental policies to complement their capitalism.

Fourth is here, the UK, which also has a strong history of socialism: the National Health Service, the welfare state, and an on-again off-again progressive taxation system. (Even the regressive Conservative government that scammed its own people by riding on a ticket of economy savings before undervaluing and selling banks nationalised in 2008 and cutting tax for the richest and frontline services saw the benefit of the bankers bonus tax.) However, right now, all of that is under threat, although we are currently enjoying the most environmentally conscientious government we've had for a hundred years.

Governments are great at taking money from other people and (doing whatever...good, bad, or indifferent), — synthesis

Well, that's what the OP is arguing for: take money from the rich and the corporation's to invest in those people who are retreating from raising children in order to sustain capitalism in the future.

Among other things, robotization is a cause of this trend , which I think will only accelerate. — Joshs

Well, I for one welcome etc.

I also think that, as a reflection of choices people make for their own benefit , it will benefit capitalist economies. The current panic-mongering among economist over
population decline is the result of relying on old and outdated models to understand the relationship between economic growth and population. — Joshs

Can you bring us up-to-date? For instance, a rebuttal to:

If the worker pool contracts, rather than many people competing for the same jobs, you'll have corporations competing for the same workers, which drives up wages. This is already evident in some job roles in rapidly expanding industries, such as IT. There hasn't been a bad time to be a programmer ever, even after the dot-com bubble burst.

Likewise if you have less people to sell shit to, you have less profit. So from both ends, a contraction in the population is a contraction in the markets. — Kenosha Kid

To get immigration, you have to be a nation that is attractive to live in. If it were true that socialist states have more, that would suggest that the world's workers are betting on those states.

I think more people try to escape from socialist states than move to them. The Venezuelan refugee crisis and Cuban exodus give us reasons as to why this occurs.

That's total bullshit. This is what the politicians and bankers were telling everybody. I wonder why?? — synthesis

Because it's not total bullshit. Growth depends on banks loaning money. After the collapse, even after we bailed the banks out, recovery was protracted because banks were cautious to lend. So how could that have not been worse if there had been far fewer banks to lend?

Most homeowners in my country have mortgages. Banks can recall those loans at any time, and seize those homes upon default. The alternative would be to flood a failing market with mortgage deeds. Possibly many homes could have been protected this way with a massive transfer of collateral from the few to the even fewer, but a lot of people would have lost their homes (in fact, a lot of people did, but scale that up).

Even governments depend on lending. Unlike the aforementioned Switzerland, the UK has been essentially bankrupt since the second world war, exacerbated by Thatcherism and the financial crisis.

And that's before we get to savings, which would have been wiped out.

The idea that all would have been well had the banks been allowed to fail is, in your parlance, total bullshit.

Banks used to fail all the time (and good riddance to them). — synthesis

When they were small enough to insure, to fail, and for insurers to be able to pay out the odd failure, yes. Insurers would no better have weathered the collapse of the entire sector.

Which is still not a problem, as long as the capitalist aims to be proportionally/relatively wealthier than others.
Ie. for such a capitalist to be successful, wealthy means to have x-times more than others. Whether this means having 10 billion when others have 10,000, or whether this means having ten horses while others have one donkey. — baker

Take a look at the typical fate of a business with falling or static stock prices. It's a problem.

I think more people try to escape from socialist states than move to them. The Venezuelan refugee crisis and Cuban exodus give us reasons as to why this occurs. — NOS4A2

And, again, the mass exodus from former communist states after the fall of communism in Europe tells the opposite story. And let's not neglect those rapist Mexicans. At best, you've hit upon an irrelevancy.

Phew! I caught up! Time to do the dishes.

But the consequences of not bailing out the banks would have been catastrophic, not just for the market, but for the entire country. And that of course was the scam. Banks provide an essential public service, and so cannot be allowed to fail.
— Kenosha Kid

That's total bullshit. This is what the politicians and bankers were telling everybody. I wonder why?? — synthesis

As an addendum to this, and perhaps an opportunity to bring it back to the OP, consider those countries for whom it was genuinely catastrophic, i.e. those that couldn't bail themselves out, like Italy, Portugal and Greece, the three countries in western Europe that also have the steepest decline in birthrates.

Take a look at the typical fate of a business with falling or static stock prices. It's a problem. — Kenosha Kid

It's a problem for that business, but not for capitalism on the whole. One business fails, and another one flourishes. That's capitalism.

It's a problem for that business, but not for capitalism on the whole. One business fails, and another one flourishes. That's capitalism. — baker

What you're describing is equilibrium. But what's being discussed is not an equilibrium condition. Irrespective of how individual businesses fare, the market as a whole would contract. (Pending elaboration on Josh's objection.)

I am hoping that the crisis of the current time may call for the best combination between capitalism and socialism. Consumer materialism is starting to collapse and this was happening before the beginning of the pandemic and is likely to increase more than ever now.

I feel that the battle between capitalism vs socialism needs to be transformed altogether to meet the needs of humanity in the widest possible sense.

Thank you? :wink:

One example is the cost of education in a capitalist society. There will exist a gradation from those for whom the expense is negligible to those for whom the expense is prohibitive.

Another is cost of housing. In some European countries, and my own is contemplating this, the idea of buying your own home in your own lifetime has been dispensed with, replaced instead by the idea of passing your debt on to future generations who might pay it off in theirs. — Kenosha Kid

Fertility rates have plunged also in countries with free education and adequate housing. The most important reason is that with prosperity and women joining the workforce people don't need offspring to take care of themselves when they are older. More affluent people have had far less children than poorer people for a very long time. And that the fertility rate has dropped also in non-Christian and non-Western countries tells quite well how universal this demographic transition is. Only the poorest countries have high fertility rates.

Above all, this transition has happened irrelevantly of a country being socialist or capitalist. (Here's the Soviet/Russian Total fertility rate)

This doesn't bode well for capitalism, which requires a) consumers, and b) a worker resource that is much larger than its needs (to drive down wages and job security). — Kenosha Kid

I don't think this a problem for capitalism, the private ownership of industry, but for the monetary system and the financial system. Also it's an obstacle for a pay-as-you-go social welfare system that would need to function correctly a growing population. If the younger generations are smaller than previous ones means simply that more of that capital is inherited by them. (This naturally doesn't go equally.)

Irrespective of how individual businesses fare, the market as a whole would contract. — Kenosha Kid

Yes, and as long as capitalists are willing to adapt, this is not a problem for them.
The kind of capitalist who just aims to have 100x more than a poor person seems to be more flexible and better off. Because it seems to be always possible that a person can be much better off than the poor, regardless of the state of technology/civilization.

But owning a lot of wealth in absolute terms (such as 1,000 kg of gold or 5,000 km2 of land) seems to be much more difficult with a shrinking market, so fewer people will be able to do so.

The idea that all would have been well had the banks been allowed to fail is, in your parlance, total bullshit.

Banks used to fail all the time (and good riddance to them).
— synthesis

When they were small enough to insure, to fail, and for insurers to be able to pay out the odd failure, yes. Insurers would no better have weathered the collapse of the entire sector. — Kenosha Kid

Kid, you don't understand how banking works (but that's OK because very few people understand finance and banking in the least).

The FED could have re-capitalized the banks ten times over for what they have done to keep these zombies alive.

When you have a FIAT system, you can do WHATEVER you please (as evidenced by the shenanigans that have been going on since 1971).

Had they let the banks fail, nothing would have happened other than the system would had gone through a much needed re-set (as happened in Iceland). The depositors would have been bailed-out, the debt written-off (what needs to happen!!), and lots of wealthy people would have lost lots of money.

It was total bullshit. 100% grade A prime bullshit.

I feel that the battle between capitalism vs socialism needs to be transformed altogether to meet the needs of humanity in the widest sense
possible. — Jack Cummins

Hear hear.

Thank you? :wink: — ssu

You've arrived, how lovely!

The most important reason is that with prosperity and women joining the workforce people don't need offspring to take care of themselves when they are older. — ssu

And yet what we see in the UK data is the opposite: birth rate is highest where the mother either has a middle-management position or does not need to work full time, and lowest where women are unemployed or employed full-time in dead-end jobs.

More affluent people have had far less children than poorer people for a very long time. — ssu

The most affluent and the poorest have tended to have more here. It was generally the middle classes who had the least children, which speaks to precisely the concerns I raise in the OP. Aspirational middle class parents want their children to be well-educated home owners. This means focussing resources on usually two children. The rich can afford as many degrees and houses as they want, and the poor hope for neither.

What I think we're seeing is that the middle- and lower-middle class couples are reducing the number of children to one, because they can only afford to school and house one child. It's not the case that those children can fend for themselves: most of my and later generations cannot afford to join the housing market and rely either on inheritance or the Bank of Mum and Dad.

I don't think this a problem for capitalism, the private ownership of industry, but for the monetary system and the financial system. — ssu

Well let's say you run a business and you need to recruit, but your recruitment pool has contracted. This means that the probability of a potential employee choosing you over a competitor will shrink unless you offer more financial incentives to join your business. The same number of recruitments, but at more cost to the company, or else fewer recruitments.

What we might see is a return to human investment from the private sector, such as a lowering of qualification requirements, a return to training, more apprenticeships. But again this is at the company's expense (although apprenticeships, in my experience, offer good value for money).

Also it's an obstacle for a pay-as-you-go social welfare system that would need to function correctly a growing population. — ssu

In some ways that's already happening. The shrinking birthrate in the UK has left a small number of taxpayers to foot the bill for a large number of state pensions which, last time I checked, accounted for almost a third of the annual budget.

But a smaller recruitment pool driving up prices and/or increased human investment from the private sector seems to me likely to alleviate the welfare bill.

If the younger generations are smaller than previous ones means simply that more of that capital is inherited by them. — ssu

That is not the direction capital seems to take. Here as in the US and elsewhere, capital is moving from the many to the few. The proportion of UK wealth owned by the top 1% is soaring.

I feel that the battle between capitalism vs socialism needs to be transformed altogether to meet the needs of humanity in the widest possible sense. — Jack Cummins

There is only one economic system. Socialism is the political process of reallocating the proceeds. And there really is no battle, it's just a matter of the degree of how much the politicians can be corrupted to act either in the interests of capital (by rigging the system) or in the interests of the masses by attenuating the tendency of capital to accumulate (which hurts everybody in the long-run).

And, again, the mass exodus from former communist states after the fall of communism in Europe tells the opposite story. And let's not neglect those rapist Mexicans. At best, you've hit upon an irrelevancy.

I’m not sure how that tells the opposite story. It tells the same story. People largely run from socialism, not towards it. The list of failed socialist states is vast, and the track record of socialism is reason enough to see why this occurs. The state never “withers away”, like Engles promised; it becomes bigger and more totalitarian, it turns to free market (capitalist) reform, or it collapses beneath its own mismanagement.

But as I mentioned, welfare states have trended upon the same course, getting bigger instead of withering away, to the point where the UN advocates offsetting this decline by importing a labor force from elsewhere. Japan’s familialism, on the other hand, may provide a different method.

I don't think that you can possibly explain the whole division between capitalism and socialism in one sentence. It is so much more complex. You say it depends on much the 'politicians can be corrupted' in the favour of the masses or in the accumulation of capital. I don't consider myself as a political expert at all but do not believe that the politicians, from their point of view see it as being 'corrupt' as such.

I don't come from a wealthy background, so was initially drawn to left wing politics, but then moved more in the direction of thinking about the ideas of the 'new economics' as suggested by Fritjof Capra and E. F. Schumacher. These thinkers point to the whole way in which need to go beyond the surface of the left and right, socialism and capitalism, to find ways beyond the basis of the consumer culture. I

t may involve a whole new way of thinking about money and also addressing the needs of ecology, but on a deeper level. Perhaps, we have got to the point of crisis, as many people are going to be plunged into poverty, where people have to unite rather than be caught in the conflict between capitalism and socialism. Perhaps, the distribution of the vaccine in the world may be about ending divisions which have been prevalent.

Yes, and as long as capitalists are willing to adapt, this is not a problem for them. — baker

Again, this isn't how they react though. Long-term falling and plateauing stock prices don't end well. The faith that they'd adapt for the sake of the market seems ill-placed. The actions of stockholders aren't those of stock traders: they're not based on the relative value of the company wrt the market; they are based on the relative value of the company wrt yesterday's value. If that value plateaus, the results can be disastrous even if the business is profitable, especially if it depends on outside financing as many businesses do. It doesn't matter if the competition is failing commensurately or even if the current profit is perfectly sustainable: sustainability and competitiveness are not good enough for a large business to be viable.

In good times for a market, when a company's stock plateaus or falls, that company can rely on borrowing, essentially selling a part of its future growth. However if a long-term contraction is inevitable, that is no longer an attractive investment.

Beyond the obvious incentives of lenders to turn away and owners to cut and run, plateauing and falling stock prices effect employee retention. If the job market is already an employee market due to a contracting recruitment pool, this will exacerbate the problem. Either stock incentives will have to be replaced with hard cash incentives, or businesses will lose employees.

If you want to see what falling prices in a contracting economy looks like, check out the Lehman Brothers.