Author: Brian Carnell

Once again the WorldWatch Institute has released its widely read State
of the World report which was quickly attacked by the CATO Institute’s Jerry
Taylor. According to Taylor, “The report’s findings are, oddly enough, always
the same: the state of the world is dire and economic and environmental collapse
is inevitable unless we undertake radical social change.”

As Taylor points out, this defies the record even of the brief decade and
a half that WorldWatch has published its annual State of the World publication.
“In brief,” Taylor writes, “the WorldWatch Institute and its president, Lester
Brown, have a track-record matched only by the late Jean Dixon of National Enquirer
fame. For 15 years, the State of the World reports have predicted famine,
resource exhaustion and environmental collapse on the near horizon. But like
the horizon, the foretold apocalypse continues to recede as we advance upon
it.”

Taylor’s rhetoric is a bit heavy-handed, but his analysis is solid. Readers
skeptical of Brown’s predictions might want to remember back to August 1997.
At that time grain prices were going through the roof due to back-to-back lowered
harvests. Brown and WorldWatch released a report claiming “rising grain prices
may be the first global economic indicator to tell us that we are on an economic
and demographic path that is environmentally unsustainable.” I pointed out then
that grain prices were going through a rather predictable price cycle and as
farmers saw the higher prices they would increase production and the price would
fall.

So what happened? Well in case Brown hasn’t noticed, there’s currently a glut
of grain and every other crop in the world market at the moment. As a result
(with some help from the Asian economic crisis) the cost of food is at record
low levels for many crops. In the United States, president Bill Clinton and
members of Congress want to spend billions of dollars to bail out farmers who
can’t make a profit on such low prices.

Now here’s my prediction for the next two years. Remember — farmers react
to prices. As the world food glut continues, many farmers will leave the business
or dramatically cut back on the amount of land they put in to production.. Two
to three years down the road, once again grain prices will begin climbing and
once again Brown and WorldWatch will point to the rise and claim the sky is
falling and the end is near. The one thing everyone can count on is Brown won’t
learn a thing from his failure in 1997 to predict world grain markets. He’ll
just go on ignoring the evidence.

Sources:

The State of the World: Doom or Boom? Jerry Taylor, Cato Institute Commentary,
January 26, 1999.

A far more disruptive phenomenon than the aging of the population is China’s
sex ratio which has only grown worse in the past few years — the Chinese Academy
of Social Sciences in Beijing reports that there are now 120 males for every
100 females in China. Historically, China has had a high sex ratio, but this
level is unheard of in modern times.

The culprit appears to be modern technology combined with the one child policy.
The male to female gap has grew significantly in 1980s and 1990s with the introduction
of ultrasound and amniocentesis technologies into China. Both techniques made
it much easier for parents to determine the sex of a fetus and abort female
fetuses if desired. A study of the sex ratios of live births at 900 Chinese
hospitals found the sex ratio increased from 108 in 1989 to 109.7 in 1991. Other
Asian nations have seen their sex ratios increase as well, though none to the
extent of China’s.

Ironically China’s one-child policy indirectly encourages couples to abort
female fetuses. Since many Chinese still see the ideal family as one boy and
one girl, a relaxation of the one child policy would likely discourage the strong
tendency to use sex selective abortion to ensure the first child is a male in
case the parents don’t get the chance or can’t afford to have a second child
(in many parts of China, large fees are imposes on couples who have more than
one child).

Sources:

China reportedly has 20 percent more males than females. Agence France-Press,
Jan. 7, 1999.

6.3 brides for seven brothers. The Economist, December 19, 1998.

For the last year and a half Ben Wattenberg and others have been writing ominous
articles and op-eds warning about the so-called “birth dearth” — declining
rates of population growth in many industrial parts of the world that will,
among other things, lead to a long-term aging of those nations’ populations.
When examined with a critical eye, the careful reader may end up scratching
his or her head wondering what Wattenberg is talking about.

Wattenberg offers two possible outcomes, both negative, that he argues will
result from low fertility levels in Europe.

First, he quotes French demographer Alfred Sauvy who “glumly and famously
predicted that Europe would become a continent of ‘old people in old houses
with old ideas.'” Is this supposed to be a serious reason to make people shudder
with fear? Because a depressed French demographer shuddered in horror at the
thought of a Europe populated with a lot of old people? The last time I checked
many of the people responsible for Europe’s faltering economy and double digit
unemployment were still relatively young (odd of a conservative to disparage
age considering the role an elderly man, Ronald Reagan, played in its rise to
ascendancy). At the very least it is incumbent upon Wattenberg to provide some
(any?) evidence that a society dominated by older people will be more sterile
and less innovative than younger societies.

Second, Wattenberg wonders who is going to support all these old people when
there are fewer young people to pay into Europe’s various tax-funded pension
schemes. This is an odd concern from someone who is toting credentials from
the American Enterprise Institute of all places. As a cursory glance through
the AEI’s position on the United States’ Social Security system reveals, the
solution to that problem is not more young people but an end to the Ponzi scheme
that government-funded pension plans have become (in other words, the answer
is privatization not fertilization). It is interesting, however, to see a member
of a free market-oriented think tank argue that people need to have more babies
in order to preserve failed government programs.

How would Wattenberg solve Europe’s problems? Immigration might provide more
tax payers to support elderly Europeans, but as Wattenberg notes European countries
aren’t exactly known for their friendliness to their current immigrants. The
odds they would welcome even more immigrants with open arms is small. This leaves
increasing fertility as the only way out.

There is only one problem with increasing fertility — it merely delays the
onset of problems in state-funded retirement programs at a cost of greater social
instability. Imagine we have 5 million old people and only 1 million young people
paying taxes to support them. Ideally we want two young people for each old
person (which is actually a rather small ratio — typically such programs need
4 to 5 workers per retiree to remain solvent without unduly high tax burdens).
The state encourages those 1 million young people to breed like rabbits and
actively promotes immigration. Soon 10 million young people are working to support
the 5 million old people. What happens, though, when those young people get
older? They need 20 million young people to support them and the generation
after that needs 40 million people and so on. As Wattenberg certainly knows,
regardless of what the birth rate is, state-funded pension schemes, like all
Ponzi schemes, must fail sometime, and usually sooner than later (Wattenberg
could argue that the productivity of those future generations will increase,
as it most certainly will, but this will not solve the problem as the demands
of the retired persons would also likely rise).

In 1984 Wattenberg wrote an excellent book titled The Good News Is The
Bad News Is Wrong which deflated media pessimism about the future. He should
take time out to re-read that and get off the pessimistic doomsaying.

Sources:

Tres Gray: The ‘Birth Dearth’ in Europe. Ben Wattenberg, Intellectual Capital,
Jan. 21, 1999.