Population Decline and the Recession



The economist Ettore Gotti Tedeschi, president of the Vatican’s
Institute for the Works of Religion and professor of Financial Ethics at the Catholic
University, is refusing to buy into the idea that population growth is a
threat.  Instead, he sees it as the
driver of economic growth. 

In an interview given in Vatican City, Tedeschi stated that demography “is a
key factor in economic growth and geopolitical balance.”  The world is split into two.  On one hand, the developed countries which
have not grown in population since the 1980s, which continue to consume but are
producing less and are seeing their GDP consumer debt growing.  On the other hand there is the developing
world which is made up of countries who are large producers but generally “eat
poorly”.  According to Tedeschi:

countries with the highest rates of economic growth and savings are those with
the highest populations”.

The real cause is not the banking system or corrupt
governments, but instead “demographic collapse that has struck progressive
countries since the 70s.”  As with all
things in life, the answer is not better systems, but a change in heart, in
morals, in attitude:  

“If less selfish thought had been given to the
poorest countries, today we would all be better off.  It is not just a
matter of conscience. There would be more wealth, more balanced economic
cycles, greater integration in the solution of the crisis, less exploitation.”

Tedeschi views are not new, he has been saying the same thing for some time now. A year ago
he was pinning the blame for the global recession not on upon any convenient
boogeymen (greedy fat cat bankers) but rather upon ordinary people who do not “believe
in the future” and have few or no children. 
That is, we in the Western world are all partly responsible for it, as
we have small families and do not save our money. 

“With the decline in births, there are fewer
young people that productively enter the working world. And there are many more
elderly that leave the system of production and become a cost for the

This stagnation of the
population has also lead to a decline in savings which is compensated for by
moving production elsewhere which can supply goods at a cheaper cost. These
goods must still be paid for however and Tedeschi notes the huge increase
in the debt of American households that has occurred in the last decade. 

I cannot do his argument justice here in this short blog (I certainly don't have the economic nous to do that!) so I would heartily
recommend that you take a look at these articles. They may give you a sense that maybe, just
maybe, our lifestyle of consumerism and no thought for the future (especially
no thought of children – they will cramp our lifestyle after all!) had
something to do with the recession.  But
then again, it is much easier to blame someone else. Especially when that means
we don’t have to re-evaluate our own lifestyles and priorities. 


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