[Futurework] Two predominant trends

[Ed Weick]

Hi Keith, Here we go again, but it’s getting more complicated. Your stuff and my old stuff is in black and my new stuff is in blue. I’m afraid we are beating each other black and blue. We haven’t done that for some time, have we? Best regards, Ed <<<< KH Any thoughtful person must be worried about what is happening to modern society. In all sorts of ways there are very real fears and insecurities. I don't propose to start listing and discussing them here, save one, and some much more detailed analysis must be given to what is going wrong and whether anything can be done to correct the trends or whether we just have to hope for the best. The most serious problem is that in all the developed countries (and also in the sometime developed countries of central Europe) the birth rate has been declining steeply in the last few decades. It is now well below replacement rate in most of Europe -- and very steeply so in what ought to be the most pro-natalist country of them all, Italy. The same applies in Japan. In America, the birth rate has also come down and is hovering at about the replacement rate, though what the birth rate is among the average and better-off white population -- the most 'developed' in terms of living standards -- I don't know. As far as I know, the data don't distinguish between these and the poorer and non-white part of the population. One of the results of this is that, in a decade or two, the developed countries will face a health-care and pension crisis because there will be an insufficent number of workers to pay for the ill or the retired. And then this will be followed a decade or two later by a steep population decline as the demographically old population start to die in large numbers. And this applies whether we are considering countries with widespread welfare systems, such as the UK, or in countries in which pensions and health care are largely privately administered, as in America. >>>> <<<< EW I know we worry about the ability of a reduced younger population to support a growing aging one, but the falling birth rate in the advanced world has had some positive consequences. Instead of staying home and looking after a dozen children, women have been able to become educated and fulfill themselves. Instead of masses of adults and kids living at or below the poverty level, families, most often with two earners, are able to live at a decent standard. >>>> But of course -- parents have been having far fewer children for selfish motives (and also children have become more difficult to raise for all sorts of reasons). Selfishness may be one way to characterize it. In medieval times and until quite recently people had lots of children because they knew some would die but enough might survive to provide family support. One of my aunts, an immigrant from central Europe in the late 1920s, had 17, of whom 12 survived. Other aunts and uncles had six or seven. The kids helped to work rather miserable little farms on the Canadian prairies until they left, many to start miserable little farms of their own. Very few completed secondary education, and even fewer went on to post secondary education. All of those children were the product of the custom among the poor of Europe of the times and, following immigration, the Great Depression. During the depression, there was nowhere for the poor to go. As a very young kid, I heard about universities, but family tradition had it that they were places that only the rich could hope to get to. What ended all of that was the Second World War and the tremendous demand for labour after the war. Class concepts were overturned and ceilings were shattered. Suddenly anything was possible. Ever so many kids, including returning veterans, that would have been stuck in miserable little jobs or on miserable little farms before the war were able to move on and fill out a growing professional and managerial class. Nowadays, people don’t have many kids because there is no need to have many kids, and they look after them far better. A substantial workforce has emerge around an abundance of quality daycare, freeing parents to get on with their lives. But, I would also suggest that people are having fewer kids because the economic slots (jobs) into which those kids might be fitted as adults have decreased or become filled up. When I left university with an undergrad degree in the late 1950s, I had six firm and good job offers in hand. It is now probable that fewer than one in six grads has a job offer in hand. This may change as the baby boomers begin to retire. This will happen soon and replacements will be needed. <<<< EW Support of the growing aging population is a concern, but much depends on three things. One is the productivity of the working population. If that remains high, the means to support the aging population is likely to be there. Another depends on what redistribution policies governments pursue. If they are willing to tax with courage and put enough money into health care, there will be less of a problem. Yet another is the wealth in the hands of the aging population. Many, having accumulated decent pensions, may not need that much help. I would also note that family size seems to shape itself to changing economic opportunities. >>>> Yes. <<<< EW There are only so many jobs available in the modern economy. Burdening that economy with far more people than it can handle might lead to a excess of pizza parlours, but we already have those in spades. >>>> No, I see this the other way round. More people don't create more jobs, only more consumer demand does so. One of the things that, in my opinion, is going to bring modern economies to a screaming halt (and may already be beginning to do so) is that consumers have no time or energy to spare for anything really new. The best they can do (which doesn't require more time or energy) is to spend surplus money on plasma TV instead of their old-fashioned tube TV, or to buy a bigger house, or a SUV instead of a car. I call these status symbols. Status goods, on the other hand, are those brand new types of goods (such as the car or the TV in the last century) which sweep through the whole population from the top to the bottom and have a much more stimulatory effect. I think what you’re missing is that something has to fuel consumer demand. After WWII there was a tremendous surge in demand because consumer demand had been "pent up" during the war. As well, Europe had to be rebuilt, and Canada and the US undertook large capital projects that had been postponed. Much of that was over by the 1970s and the rate of growth declined. It recurred of course, but on a more sporadic, regional and sectoral basis. In Canada, the oil shocks of the 1970s led to boom like conditions in the west and the Arctic. The high tech boom of the late 1990s grew Silicon Valley and the Ottawa area ("Silicon Valley North"), and of course the stock market. If you want to call expensive housing a "status good" there are many examples of such goods in the Ottawa area, including my neighborhood. During the past three years or so there have also been a growing number of "for sale" signs. When one thinks about growth, one might have to distinguish between long term surges, such as the two or so decades following WWII and short term booms, such as the recent high tech boom. I would suggest that the former has far more impact on demand, both producer and consumer, than the latter. <<<< EW Family size is also related to mortality and morbidity rates. Parents can now expect a high proportion of their children to survive, so they don't need as many of them to ensure family continuity. >>>> Yes. <<<< KH One solution given by the more liberal elements in developed countries (and I am not using "liberal" pejoratively) is that immigration should be encouraged. This usually attracts young energetic people, usually males in the first instance, who can then start paying taxes or stimulate business firms which will then start to balance up the worker-dependency ratio. The evidence here is, though, that once the immigrants have families of their own and reach the same standard of living as the indigenous population they, too, will also have smaller families. This happens within two generations and, a generation later, they too will start to experience a shortage of productive workers and the beginning of their own population decline. >>>> <<<< EW Yes. We have quite a few Somalian kids in our general neighborhood who either came to Canada as refugee immigrants or were born here to refugee immigrant parents. Some of them attended my daughter's high school. All seem to have adapted to Canada very quickly. Most are bright and eager to learn. One became president of the students' council. Quite a few of them will likely go into the professions or skilled trades. Ottawa as a whole has also had an extensive Lebanese community for some time. Again, many have done well. >>>> I have long thought that there is an 'Immigrant Effect' by which most immigrants of most cultures are a great deal more enterprising than the indigenous population. I think the reason for this is that they are not aware of the invisible conventions or inhibitions (or even the laws) of the host population. So they attempt all sorts of innovative things. Another reason may be that they are confronted with a much more open world than the one left behind. They recognize that the repressive walls and ceiling are not there, and are able to take full advantage of the situation. <<<< EW However, what we may now be seeing is an increasing tendency to export jobs instead of importing immigrants. It's far cheaper to get trained people in India to do high tech work than to have Canadians or Americans do it. >>>> I really don't think that the main reason is cheaper wages. As regards factory-type jobs, wages catch up very quickly to those of the host country (within about six or seven years on average). As regards high-skill software jobs in India, say, they were started by Indians who had come to America, started companies ikn Silicon Valley and then returned home. And then they were able to recruit a much higher quality staff than they could have done in America. For example, one such firm called Office Tiger in Madras has 75 PhDs and 300 postgraduates out of a total staff of 1,000. (Also see, my copy of the FT article in my next posting.) Keith, I’m pretty sure it’s a fact that wages, even for PhDs are far lower in India than in the west. However, they are high in relation to other wages in India. <<<< But leaving that particular problem on one side for the moment, I think there is widespread unease in all developed countries, particularly among the middle-aged who are imminently facing old age, but also among a minority of the more thoughtful and intelligent young. Many of these, however, because they haven't much experience of life tend to blame causes which can be easily labelled, such as "globalisation" or "capitalism". Globalisation and capitalism are certainly part of the problem, but they are only outward manifestations. Ever since man began long-distance trading in pigments and ochres more than 75,000 years ago, so we are told by paleoarcheologists, and ever since a certain amount of additional time and effort had to go into the business of trading -- that is, capital -- then the evidence is highly suggestive that globalisation and capitalism are very much part of our basic nature. They are fundamental features of our species which made us different from the other primates and caused us to break out of the narrow confines of the group or the tribe with fairly well constrained territories for the most part and into governances which became successively more powerful and centralised. >>>> <<<< EW I don't accept this. Evolutionary psychologists like Pinker argue that some things, like an ability to learn language and to fit into a social group, may be part of our basic nature, but I think saying that capitalism and globalization are is taking things much too far. People have shown an ability to create, and adapt to, a remarkable range of social circumstances. Trade, either local or more extensive, was present in all of them, simply because individuals or small groups could not produce everything they might need. >>>> But the original human groups had everything they needed by way of food. It was the newly acquired frontal lobes which made them more curious and imaginative than they need to be in those circumstances. This is what drove them into trade with other groups. Where I wrote "the evidence is highly suggestive that globalisation and capitalism are very much part of our basic nature" that was clumsy. What I mean was that as homo sapines and his predecessors began acquiring much larger brains it not only made them more successful at ordinary hunter-gatherer things but also gave them an itch for trade, for novelty, for using goods to enhance their tribal customes and rankings. This is what I meant. They had acquired an "additional" human nature (of globalisation and capitalism) as it were. OK. I’ve seen several references to something that happened to the human brain 60 to 75 thousand years ago. What I’ve read suggested that people began to think abstractly and aesthetically, and began to put things together in new and different ways. <<<< EW In the smallest of societies, such as Arctic Eskimoan groups, trade was institutionalized as sharing. If a stranger came along and needed something, you shared with him. In such societies, capital existed, but in the form of tools, not as something used to exploit labour and make a profit. As for capitalism, I've just barely gotten into Hernando de Soto's "Mystery of Capital", but have noted his central question of why many people in poor countries have not become capitalists despite possessing the physical means to do so. Only Americans and Europeans have seemed to think that way. >>>> AS I understand de Soto he is saying that inept and corrupt governments won't legitimise the poor people's use of the land so that they can use it as surety in borrowing money and starting enterprises. They most certainly *do* want to become capitalists. I’ll have to get on to Chapter 2. <<<< KH Which is where we are today. And we don't like it, because developed populations are now on strike. We are signing our own death penalty by not replacing ourselves. >>>> <<<< EW I don't think we can have it both ways. One of the major current concerns, globally, is population growth. With the introduction of modern science, medicine and sanitation, it was phenomenal in Europe during the past three centuries, and it's been phenomenal in the third world during recent decades. Hopefully, with rising standards of living in places like India and China, global population growth will slow and perhaps even decline. >>>> Well, I'm afraid that we *are* having it both ways just at the moment. The undeveloped world is still over-producing children, and the developed world is under-producing. Then there'll come a stabilisation point. And then, if the undeveloped become developed, like us, then they'll be on the downturn. <<<< KH If we can't blame globalisation or capitalism without blaming ourselves as a species then is there anything else we can more usefully blame? I think there is. One of the consequences of economic growth is that throughout history it has needed ever larger supplies of energy to power its manufacturing systems, the predominant one in the last two hundred years being coal, oil and natural gas. (In the same period agriculture has also depended on fossil fuels in order to make the nitrogenous fertilisers which are necessary to grow food intensively for the still-growing population in the undeveloped world.) The main consequence of vast amounts of fossil fuels has not so much been globalisation or capitalism -- because they have always existed -- but mass production. More importantly, mass production depends upon mass markets. <<<< <<<< EW Keith, I think you are using both capitalism and globalization far too loosely here. Mind you, they do invite loose usage. >>>> I don't understand you here. I probably don’t either. I have to quit and get a pizza for supper. Please feel free to respond, but I think I’ll leave the discussion where it is at the moment. It’s been great, but I do have to get on with other things. Perhaps Harry can join in and show us where we are both wrong. Best regards again, Ed