Steve Lafleur: We'll probably be fine, actually
I’m not a gambling man. But you have to respect trends. Especially when they last for centuries.
By: Steve Lafleur
There has been a lot of pessimism in the air lately. With all that has happened over the last few years, it’s understandable why people are focused on the negatives. I think we’ll probably be fine, though.
It’s easy to worry about the current thing. During the Industrial Revolution people worried that machines would permanently displace human labour. In the 1950s people worried about the threat of nuclear war. In the 1970s it was the fear of overpopulation. In 1999 it was Y2K. Now it’s, well … everything. A global pandemic, a shooting war in Europe, inflation. Not hard to find something to be worried about.
That isn’t to say that we don’t have problems (we do). A lot of the things we fret about are, for lack of a better term, transitory. Some are longer term and structural. The most obvious is climate change. One that doesn’t get as much attention is demographics.
One of your Line editors is worried about population decline. Jen Gerson recently claimed in these pages that demographic collapse is the biggest existential risk faced by humanity. I’m not sure whether I’d put it at the top of the list, but I have no doubt that an aging population combined with a declining birth rate could lead to labour shortages and constrain the ability of governments around the world to finance public spending.
The thorny part of this, which she points out, is that it’s a global issue. That means that immigration isn’t necessarily going to bail us out. So demographics are a real challenge.
However, I don’t think it’s insurmountable. I’m not saying this because I have a specific solution to address these challenges. But there are two long-term charts that help me sleep at night.
The first chart is GDP per capita from 1820 to 2018. GDP per capita rose globally from $1,102 to $15,212 over that period. The change is even more dramatic if we look at a wealthy country like Canada. We went from $1,441 to $44,869 over that period, adjusted for inflation.
That’s a hard chart to bet against. Sure, there are dips here and there. But over time, per capita GDP has steadily trended upwards. Even though growth in developed countries has slowed to around two per cent per year in recent decades, that growth compounds.
Of course, GDP isn’t everything. It’s one of the handier ways to represent the rate of change of progress over time. But it’s not everything. So let’s look at another chart. Also a pretty good looking chart, right?
This one is global life expectancy between 1800 and 2021. Even after COVID trimmed life expectancy (hopefully temporarily), global life expectancy has increased about 2.5 times over that period. In Canada, life expectancy increased from 39 to 82.7 between 1831 and 2021 — more than double.
I’m not a gambling man. But you have to respect trends. Especially when they last for centuries. The trend is your friend, as they say, and the long-term trends in health and productivity are very good.
The changes in health and wealth over time are hard to fully appreciate. Had I been an adult in 1831 I’d probably be working a field somewhere with my bare hands, eking out a subsistence living (around $1,600 a year, adjusted for inflation). Statistically, I’d have been lucky to live to 40. Though given living conditions back then, I might have welcomed the sweet reprieve of death.
Today I statistically have another 40 or so years, I’ve got a nice apartment, access to public transit that frequently works, and all this cool stuff that lets me shoot my terrible opinions into your inbox (I’m not Al Gore — I can’t explain how this stuff works). That sounds a lot better than rotting in a ditch at 39.
These two charts bring us back to demographics. What they show is that, despite it all, we’ve managed to increase productivity and health over time. Longer, healthier lives mean that on average people can spend more time in the workforce. Higher productivity means that those workers can produce more.
Now, you might pause here and think this sounds kind of dystopian. Are we all going to have to work part time until we’re 90 or, god forbid, 100, because there aren’t enough kids to sling burgers or rotate tires? Must we toil through our twilight years serving our insatiable master, the consumer? Not necessarily.
Work has changed dramatically over the years. Part of that is because we’ve been able to automate away a lot of the most grueling work. Agriculture used to be the most common job category. Now it’s a small sliver of the labour force. Or consider manufacturing. You’d think from the headlines that North America manufacturing died. In fact, while employment in the sector has plunged, output has increased.
How is that possible? Increased productivity driven in part by automation. It doesn’t take as many people to build a car, so we get more cars with less back-breaking labour. While that has led to some short-term dislocations, over the long term everybody wins. Plugging away at Excel sheets is a much healthier way to spend your life than working an assembly line (just don’t forget to get up and stretch!)
I’m not suggesting that we can just turn a dial to increase productivity. Increasing productivity is really hard. The beauty of living in a free country is that no one has to have all of the answers. Stable political institutions and a relatively open economy fosters innovation. We may not have a quick fix to increase productivity, but we’ve got a lot of smart people working on it. I wouldn’t bet against them.
If the pandemic has taught us anything, it’s that we can solve big problems when they’re staring us in the face. Consider mRNA technology. Up until a few years ago mRNA had zero practical applications. It took less than a year to develop effective COVID vaccines. It now looks like we’ll also get an RSV vaccine and hopefully more effective flu vaccines. Take that, tridemic! There’s also some preliminary evidence it might help with certain cancers. mRNA might be yet another tool to increase health and longevity. And it probably won’t be the last breakthrough medical technology in our lifetimes.
Also consider nuclear energy. The Russian invasion of Ukraine brought the need for sustainable baseload energy into sharp focus. This has led to a renewed enthusiasm for small modular nuclear reactors. Four provinces have a plan to make them a reality. The hope is that each one will be able to power 300,000 homes for about the cost of a three-stop subway extension. That should help power our increasingly automated economy even as we gradually decarbonize. That’s something to be excited about!
Sure, you can say that I’m too complacent. We don’t have universal access to robot butlers or a socialist utopia that for once didn’t devolve into an orgy of death and destruction (whatever floats your boat). But things are pretty good. And they’re gradually getting better over time, hiccups notwithstanding.
So I respectfully disagree with your wise editor. While we face real demographic headwinds, I think we’ll muddle through them. We’re probably not doomed.
Now, plenty of stuff could go wrong. Death stalks us at every turn. It’s the human condition. But we’ve got a pretty good track record. It’s entirely possible that everything will fall apart and I’ll look like an idiot. But I’m betting that things will be fine.
Steve Lafleur is a senior public policy analyst with over a decade of experience working at various think tanks.
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