The “Fertility Crisis” Is a Government-Caused Crisis


January’s report on fertility from the CDC set off a new wave of speculation in the media about the alleged “fertility crisis.”

We continue to see headlines like Fortune magazine’s article “Americans Aren’t Making Enough Babies, Says CDC ” and we hear from experts in this Marketplace interview that replacement-level fertility, “is needed to sustain high living standards and a high quality of life.”

This latter sentiment takes us to the heart of the matter: when we hear about the fertility crisis, it is usually packaged as an economic crisis. That is, we’re told that standards of living will collapse if people don’t start to have more babies.

This argument, of course, should be noted as being distinct from other arguments— namely sociological, cultural, political, and religious arguments — in favor of higher fertility. Some of those are compelling.

I remain unconvinced, however, that a stagnant or declining population necessarily presents an economicproblem or a threat to the standard of living. The problems we were likely to encounter result from government programs and government spending — not from demography or markets themselves.

Fewer People Can Mean More Resources per Person

As Peter St. Onge has pointed out, zombie movies have dramatized the relative plenty that could result from a cataclysm that destroys population without destroying capital. We can, of course, also point to a real-life version of this in which a population decline led to a higher standard of living: the Black Death.

When the Black Death finally receded — having peaked around 1350 — the survivors found themselves in a world with a reduced workforce, but with most capital in tact. Thus, as historian Christopher Dyer notes, “Unskilled workers’ wages rose more rapidly than those of the skilled after 1349, a sure indication of a labour shortage, and confirming Thorold Rogers’s aphorism that the period was the ‘golden age of the labourer.'”

Historians Tine De Moor and Jan Luiten Van Zanden also note broad social implications of this shift. In the wake of the plague, the “booming labour market” meant “In the century and a half following the Black Death, young women and men were able to free themselves from parental influence through their high real earnings.” Family formation, marriage age, and the extended family all changed as a result of a declining population.

In societal terms, this wasn’t without its down side. Social and political upheaval followed, and that often ends poorly. But when we’re looking at strictly economic factors like labor and income, there’s little to suggest that the steep declines in population experienced during the plague were an economic problem for those who survived to take advantage of the wealth left behind by the dead.

Now, one could point out that this is not relevant to the current situation since populations began to grow again once the plague was over.

That’s true, although there’s little to “prove” that population growth is the essential factor in economic growth. The empirical research on the relationship between population growth and economic growth in other contexts hardly produces a consensus. Conclusions are highly varied depending on the population being studied, and the methods used. Historians continue to debate the matter because just establishing correlations simply isn’t enough.

Economic Growth Comes from Productivity Growth

Good economic theory does tell us, however, that economic growth is not primarily a function of the number of people. It’s mostly a function of capital accumulation and worker productivity. What matters is not how many people there are, but how productive each person is, thanks to investment in capital that makes each worker more productive. More productivity results from more access to capital per person — or per worker. Higher worker productivity, of course, can then drive more population growth as standards of living increase. But there’s little reason to believe things work in the opposite direction. If that were the case, India and China would be far wealthier than they are.

On the other hand, it’s certainly possible to imagine some scenarios in which standards of living — in the aggregate — significantly decline as populations decline. These would be situations in which the number of elderly retired people incapable of working outnumber productive younger workers. Older non-workers might consume capital faster than new younger workers can produce it. But, again, even this scenario depends heavily on how much worker productivity grows.

A Government-Created Crisis

The problem of retirees, however, becomes an enormous political problem once governments enter the picture.

So far, we’ve been considering the effects of population decline in a relatively unhampered marketplace. But what happens if there’s a government which mandates large transfers of wealth and income from current workers to retired workers?

Then, we see that population decline becomes a big problem for policymakers, and those who depend on government programs. As Nathan Lewis at Forbes writes:

The main problems are, in my view, related to existing government policies and programs, which are based, overtly or implicitly, on expanding population. Basically, they are Ponzi schemes, which need to grow or die. This includes public pensions (“Social Security” in the U.S.), existing healthcare programs, and patterns of government debt and deficits. Many of these were conceived in the late 19th century, and expanded during the mid-20th century. They may have been appropriate for 1960 or 1970, but are not appropriate today.

For example, a pattern of continuous government deficits and growing total debt can be sustained for some time if nominal GDP is also growing quickly. The “debt dynamics” allow debt/GDP ratios to maintain some semblance of sustainability, at least until a politician’s term of office is ended. Alas, this continuous-growth Ponzi doesn’t work well in an environment of population shrinkage.

In a more laissez-faire economic environment, workers would work longer — especially now that frailty and disability arrive for workers much later than they did when Social Security was invented in the 1930s. Also, in a world where retirees could not reliably fleece younger workers, those who fully retired would have to substantially cut their spending. This is just the natural progression of working life. In a functioning marketplace it’s unrealistic to expect to keep spending at the same rates that one did when one earned a full time income — unless, of course, one has substantial savings.

But for most people, they’ll have to cut back as they retire. In a world with a large number of politically active pensioners, though, retirees can continue to maintain a high level of consumption if they can use the power of the state to subsidize their standard of living.

This is where the problem gets big.

In a world of declining population — if older populations are more numerous than younger ones — the burden of maintaining the retirees’ standard of living would continually increase on each individual worker. The only way to keep up pension payments at a constant or growing level will be to increase the taxes levied on current workers. This could have disastrous results by gradually siphoning off more and more wealth from current workers to maintain the standard of living of retirees. The long term effects would be to reduce the ability of younger workers to save and invest in capital. In other words, the economy’s resources would be shifted from production (by younger workers) to consumption (by retirees). This would reduce capital, saving, and, ultimately worker productivity. (Unrelenting consumption by retirees would also keep consumer prices high for current workers.)

The results then would be a true crisis.

So, we find that a declining population is not necessarily an economic problem — but it is a big political problem. The crisis we’re facing now is not a result of some built-in demographic phenomenon. It is, rather, a problem with government pensions, entitlements, and transfers from productive workers to non-productive retirees.


Ryan McMaken (@ryanmcmaken) is a senior editor at the Mises Institute. Send him your article submissions for Mises Wire and The Austrian, but read article guidelines first. Ryan has degrees in economics and political science from the University of Colorado, and was the economist for the Colorado Division of Housing from 2009 to 2014. He is the author of Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre.

Forget Guaranteed Income — Governments Should Stop Destroying Income First


In most countries, numerous government welfare programs provide benefits (often means-tested) to eligible recipients. Whether these payments arise from unemployment compensation, child tax credits, old age pensions, or a myriad of other programs, the outcome is the same: recipients receive guaranteed payments. The ultimate goal of many poverty warriors is a Universal Basic Income (UBI), often promoted as a supposedly cheaper alternative to the numerous welfare programs it is intended to replace. The UBI is a guaranteed income from the government which varies with age, but is otherwise unconditional. It is not means tested, which means everyone receives the same Basic Income, regardless of their employment status or employment income.

Alexandria Ocasio-CortezKamala HarrisBernie SandersAndrew Yang. These are just a few of the many proponents of UBI or a negative income tax , or some version thereof. The political justification for implementing UBI is to reduce, or even eradicate, poverty, though poverty is a relative term . The problem is that many advocates of the welfare state mistakenly believe that inequality causes poverty. Moreover, they do not understand that poverty reduction comes through the operation of free markets, not through government welfare programs which tend to benefit the bureaucracy by encouraging dependency.

Therefore, if UBI proponents are genuinely concerned about those on the lower rungs of the income ladder, they should abandon their minimum income crusade and instead pressure the government to do two things. First, immediately abolish all regulations which prohibit people from earning income. Second, announce that all welfare programs will be abolished in six months. In this environment, special interest groups (the 1%) lose the regulatory benefits they lobbied for, while the level of prosperity rises considerably for the former welfare recipients and other members of the 99%.

What are these regulations? And if they are abolished, how much higher can the level of prosperity be for the 99%?


This is a good definition of regulation: the imposition of rules by a government, backed by the use of penalties, that are intended specifically to modify the economic behavior of individuals and firms in the private sector. That is an accurate definition, and it should concern anyone who recognizes and supports the wealth enhancing effects of free enterprise.

When a special interest group (e.g. a corporation or group of corporations) lobbies the government to enact a new regulation, they are the intended beneficiaries, and they often write the regulation themselves. Politicians promoting a new regulation also act out of self interest, collecting rewards from the regulatory beneficiaries, such as political campaign contributions, corporate jobs after departure from political office etc. The propaganda used to justify regulations is that the government must protect consumers . This conveniently ignores the fact that in an environment of unfettered competition, profit-seeking firms who fail to satisfy consumers will lose those customers to competitors producing superior products. In other words, consumers benefit the most when they, not the government, pick the winners and losers.

Regulations have the effect of lowering the level of competition for the corporations that lobbied for the regulations, exactly as the lobbyists intended. This situation arises because regulations impose significant regulatory compliance costs on many companies. Kel Kelly explains the enormity of the regulatory environment:

There are hundreds of thousands of pages of regulations dictating what can and cannot be produced, how things should be produced, what prices can or cannot be charged, what workers should be hired and at what prices, and what requirements, approvals, licensing, and reporting must be undertaken or performed for each type of business, product line, or transaction. Further, government directly manipulates prices and production.

All firms may pass part of their regulatory compliance costs onto consumers and workers through higher prices and/or lower wages, but small firms operate at a disadvantage. Smaller firms have fewer employees and a smaller customer base, compared to larger firms. Therefore, the dispersal of compliance costs within small firms can produce larger price increases and/or larger wage reductions, as compared to larger firms. Thus, many small businesses are unable to compete, not because the entrepreneurs, managers, and workers are not good enough, but because they are compelled to obey authoritarian laws favoring large firms with more political influence. Consequently, many entrepreneurs are forced out of business, while many others are dissuaded from starting a business.

(Note: the regulatory ‘compliance cost’ which is ultimately paid by consumers and workers, is estimated to be almost $15,000 annually for each U.S. household.)

As per our definition, we see that regulations, by coercively “modifying economic behavior,” interfere with the voluntary interactions of individuals on the free market. Economic production falls considerably when the regulatory state is used to eliminate competitors. Less competition = less wealth creation, which is reflected in fewer jobs and lower incomes for the 99%. This does not concern the 1%, whose objective is to grab a larger slice of the smaller economic pie. This is not capitalism. This is crony capitalism .

Prohibited Income

In 2013, John Dawson (Appalachian State University) and John Seater (North Carolina State University) published a long-term study (see here or here ) of the effects of U.S. Federal Regulations on economic growth. They estimate that “annual output by 2005 is about 28 percent of what it would have been had regulation remained at its 1949 level.” Their sample period ends in 2005, but under the assumption that the ratio of 28 percent carries forward to 2011, they say that nominal GDP in 2011 would have been $53.9 trillion instead of $15.1 trillion, and “an annual loss of $38.8 trillion converts to about $277,100 per household and $129,300 per person.”

Remember, they are estimating the amount of economic output which has been prohibited by all U.S. Federal Regulations implemented since 1949. So, in 2011, each U.S. household was legally denied the opportunity to increase their income by an average of $277,100. Imagine this happening each year, because that is the reality. For those who would disbelieve, Dawson and Seater simply point out that “Our estimates are consistent with previous estimates obtained from both aggregate and disaggregate data. In fact, our estimates are on the low side compared to many previous results.”

Their calculation captures data only at the federal level. The figure of $277,100 would be higher in consideration of the lower economic output due to prevailing regulations at the state/city/county level.

If all regulations were abolished, individuals’ creative juices could flow freely because innovation would no longer be suppressed. Unfettered competition would produce new products, higher quality, and lower prices. The demand for labor would explode, and incomes, as we have seen, would rise considerably.


As Senator Elizabeth Warren officially launched her 2020 presidential campaign, she expressed concern about “a rigged system that props up the rich and powerful and kicks dirt on everyone else.” She is correct, but this is nothing more than a sound bite designed to resonate with the general public. As with most political speeches, Warren’s comments are vague, providing no details about how the system is rigged with thousands of regulations. Instead of accurately describing the problem, we get hypocrisy: “She wants large companies to be more tightly regulated.” Beware of people like Elizabeth Warren. There are many like her. They are wolves in sheep’s clothing.

Welfare programs and wealth taxes: the government’s pretense of transferring a little bit of wealth from the rich to the poor is a smokescreen for the massive amount of wealth surreptitiously flowing in the opposite direction. So, when Ocasio-Cortez, Harris, Sanders, or anyone else proposes any type of guaranteed minimum income scheme, tell them “No, my preference is to liberate all prohibited income.”


Following a 23-year career in the Canadian financial industry, Lee Friday has spent many years studying economics, politics, and social issues. He operates a news site at


We’re all very happy to support your work Lada. Superb job on these podcasts, excellent production value and unparalleled intel. If it wasn’t for dark state shadowbanning… which goes to prove your point about US Inverse Collapse at work! I can only laugh at the transparent lies and tactics employed by Trump and gang, Bolton is such a doofus! 🙂

Futurist Trendcast


NEW Earth Shift Podcast (ESP) on Lada Ray YouTube Channel update:



I know that many of you are readers, not so much listeners. Plus, my accent… But I still hope some of you got the chance to listen to new ESP: Final Battle for Russian Gas! Can US Stop Nord Stream-2? (EarthShiftPodcast8)

Az and I worked hard on it. Even if it’s not perfect (I get too excited about the double standards, open lies and aggression of the US, when I speak), we still need your support for our budding ESP project on YouTube!

Az is all fired up to do more regular podcasts on various serious topics. Some of these will be current events, geopolitics and global economy oriented. Some will be Earth Shift, Quantum Calibrations and Multidimentional. As a matter of fact, Az wants us to record…

View original post 231 more words

Urgent! What Nazarbayev Sudden Resignation Means for Russia, China, Iran & US? (EarthShiftPodcast9)

Amazing update, another great example of your Earth Shift theory regarding the inverse collapse of the West. Us is desperately trying to control the inevitable collapse by pressuring other nations, politically, economically, extortion etc. So oppressed countries are learning to respond and play the game, to the detriment of the US/ West which can no longer follow that rotten CIA playbook of unrestrained US imperialism.
Kazakhstan will survive, don’t think I can say the same about Us underhanded tactics and aggression. Nyet on Syria, Korea, Iran, Venezuela… now Kazakhstan?
And besides, you don’t run the same gag twice. You do the next gag.

Futurist Trendcast

Repost from Lada Ray Patreon

Something very important happened yesterday!

At 8 am ET today we have posted urgent EARTH SHIFT PODCAST on YouTube: 

What Nazarbayev Sudden Resignation Means

for Russia, China, Iran & US?


It was clear that Nazarbayev, at his old age, won’t be there forever. It’s possible there are hidden health issues, or as I suggest in this podcast, it is a ‘castling of the king.’

The government of Kazakhstan was dismissed, also suddenly, 3 weeks ago. 

The long-stranding leader of Kazakhstan has been replaced with the new face, a pro-West, as he is being characterized by some, speaker of the Kazakh parliament. 

Therefore, the outside pressure is definitely a factor. Listen to the podcast to hear my assessment of him, along with my urgent overview/assessment and predictions on what’s happening in and around Kazakhstan, including the strategically important Caspian.

But it gets worse…


View original post 226 more words