The Economist writes about greying economies and declining fertility rates: “The obvious way to compensate for dwindling birth rates is immigration, which is on the rise in much of the rich world, despite the political tensions it has generated in recent years. But as demographic decline affects more and more countries, educated migrants will become harder to find, even as the shrinking of the native-born population accelerates in many rich countries. For China, with a population of some 1.4bn, the notion that enough immigrants could be found to reverse the effects of dwindling birth rates is fanciful. Although India’s population is still growing, it will peak in the 2060s, if not sooner. Sub-Saharan Africa is the only region of the world that seems likely to be a big source of potential migrants for many years to come. But even there, birth rates are falling more quickly than past projections predicted. Although immigration will continue to temper demographic decline in many countries for decades, in the long run, it cannot fully compensate for the baby bust in big economies.” More: “In 2000 the world’s fertility rate was 2.7 births per woman, comfortably above the “replacement rate” of 2.1, at which a population is stable. Today it is 2.3 and falling. The largest 15 countries by GDP all have a fertility rate below the replacement rate. That includes America and much of the rich world, but also China and India, neither of which is rich but which together account for more than a third of the global population. The result is that in much of the world the patter of tiny feet is being drowned out by the clatter of walking sticks.”
Pulapre Balakrishnan: “The economic reforms of 1991 [in India] were undertaken with a view to raising the presence of manufacturing. To this effect, the trade and industrial policy regime had been overhauled. However, it overlooked the need for an entire ecosystem, including schooling, training and infrastructure for manufacturing to flourish. This has to be built. It cannot be achieved merely through legislation. Liberalising reforms have run their course in India.”
FT: “Spun out of Philips in the 1980s, ASML started its operations in a portacabin in the car park of its parent company’s site in Eindhoven, a small city of less than 300,000 residents. Today, ASML is Europe’s most valuable tech company, with a market capitalisation of about €275bn. From its headquarters in Veldhoven, just a few kilometres away from that portacabin, ASML produces machines capable of vaporising tiny droplets of molten tin up to 50,000 times a second, creating a 13.5nm wavelength of light. This EUV light is then bounced off a series of mirrors inside a vacuum chamber, narrowed and focused until it hits a silicon wafer. “Moore’s Law is a vehicle of economics: every two to three years you can double the performance at the same cost,” says ASML’s chief executive, Peter Wennink. But, he adds, “there’s another Moore’s Law function nobody talks about: the Moore’s Law of complexity. Every two to three years there is a new generation of chips. It’s not getting easier. The complexity also goes up exponentially.””
Robert Whaples: “Historically almost everyone was dirt poor. Our ancestors who were hunter-gatherers or peasant farmers or serfs or slaves would marvel at the standard of living of today’s poor. They were malnourished, lived in hovels (if that), and would consider our hand-me-down clothes a luxury. The poorest 5 percent of Americans today also consume at a level that exceeds 97 percent of the people born between 1650 and 1850, exceeds 80 percent of those born after 1850 but are no longer living, and exceeds about 68 percent of people living today. When you add all the numbers up, the consumption levels of the poorest 5 percent of Americans today stand at the 95th percentile of all people who have ever lived. We have achieved this success by tempering our envy. Instead of trying to pull down those who have more than us—and pulling ourselves down in the process—we have adopted cultural values that accept the autonomy of other people and have gained autonomy ourselves. Simultaneously, we have established a political and economic system that allows us to interact peacefully with each other, to cooperate without the fear that someone else will steal what we have produced. We have learned that trade and secure property rights benefit everyone—and evidence shows that the biggest percentage gains go to the poor. We’ve learned that almost everyone will work hard, work smart, and innovate if you give them an incentive to do so. Envy is a truly deadly sin, but if anyone has reason to be envious it is our ancestors, who lived poor. From them we have learned the values that help make us so prosperous.”
