It’s the population, stupid!

The Worlds Largest Pyramid Scheme (also known as ‘The World Economy’) is approaching its endgame.

Since The Wealth of Nations, economic theory has had a great run, peaking during the 20th century and morphing from describing the show, into becoming the show itself.

Even returning economic crises have not managed to shake its reputation, because it has been a successful predictor most of the time, and it does have its merits (no doubt).

But one factor, with tremendous economic impact, is glaringly overseen: The population explosion of the past century.

Never in the history of mankind has the economic growth been so high during a century, and never in the history of mankind has the world population growth been so high during a century.

Is there perhaps a connection somewhere?

If so, it’s scary: The population growth curve has peaked. Even so-called developing countries across the globe are seeing lower population growth rates as their women want higher standard of living by working, thus giving birth to fewer children.

Fewer children per family, is of course not scaring, it’s healthy. The scary part is that the world economy is designed as the ultimate pyramid scheme: The sheer population growth has been feeding the world economy (read: Dow Jones index) for the past 100 years. Whether or not these people could afford all the goods offered by the industrialized, it never the less contributed to the expectations of the CEOs, traders, economists and others that prognosticated based on this.

In the near future, however, Europe will enter population stagnation, even decline within a few decades. As more and more ‘developing’ countries around the world become ‘westernized’, their population growth will slow down significantly, too.

Just like pyramid schemes collapses completely when ever more idiots stop entering at the bottom level, the complete world economy will run out of this fuel soon. There is no smooth landing for that recession…

But then what? Do we start spending even more to ‘save’ the economy?
Can the planet handle 10 billion people consuming like the 2 billion in the western world are doing today? No, it can’t!

Doesn’t “spending will save the economy” just confirm that we are already screwed? Yes, it does!

So the world needs a new economy, and not like the dot.com-new-economy (which is a perfect example of the flaws in the present ‘pyramid scheme’ world economy). The world needs an economy that counters Wall Street’s greed, the west exploiting the third world, and above all; that does not need consumption-for-the-sake-of-consumption-for-the-sake-of-saving-it-from-crisis over and over again.

An economy not based on growth and consumption; is that even remotely possible, given the human nature?

Twenty years ago, the world’s biggest problem was overpopulation in the future. To economists, those were the days.

/Finno

8 Comments

  • Thanks for the post. I am not an economist of any kind — I’m a philosopher of science and novelist by trade — but I have lately become interested in economics/politics because the political situation in the US seems to be on the verge of disaster, especially as the truth about the NIST report starts to mushroom. After but a brief look into reports on the economy and population growth, I realized almost instantly that it was a pyramid scheme. I googled it and found your site. I read them some of your other posts and found I agree with many of your expressed opinions, e.g. on religion and science, the founding fathers and etc. Thanks for the insights. Tori

  • Thank you for your feedback, Tori!
    /Finno

  • Great site. A lot of useful information here. I’m sending it to some friends!

  • Sergio wrote:

    This organization has been ineffectively working on this problem for decades:

    http://www.populationinstitute.org/?gclid=CNTjheGApaMCFQFvbAod8nQA4A

    It is difficult to overcome religious, cultural, and political obstacles. Some say that nature will take care of it…I agree but it will not be pleasant.

  • Espen Vedlog wrote:

    Finno, this was a great read! I have actually realized this connection last year while doing a presentation in my ethics class. Overpopulation, and it’s impact on our acceptance to technology that today is broadly viewed upon as ‘unethical’. One of my lead themes was human greed, and with what affect the population growth would impact the world economy. I came to compare the ‘world economy’ to the population growth, and asked myself the same question as you have asked, and answered in this blog post. Have also the economy reached it’s peak?
    A very interesting, though somewhat scary scenario!
    To present the ‘consumption-for-the-sake-of-consumption’ as a pyramid scheme is a pretty accurate description, and the lack of fuel to make the pyramid build higher will increase even more now that the water supplies will become more and more inconsistent for most of the world’s population. There is no way that the earth can deal with billions of ‘big spenders’. I remember reading in my science book around 10th grade that the earth can not hold more than six million human beings, without them leaving a biological footprint. That is a long time ago.
    I guess the only thing that can save our pyramid is that it is growing so big that no one dears to let it implode. We will have to inflate it with (more) ‘air-money’ in stead of people, to make the bottom line keep growing.

  • Hi Espen,
    thanks for the thoughtful comment!

    To answer you directly, I don’t think ‘air-​money’ will cut it: It’s been tried before, and to quote George W. Bush: “Fool me once, shame on.. .. shame on you?.. .. Fool me.. eeh… you can’t get fooled again.”

    To me, the interesting part is how (not if) we will deal with this. When the crap hits the fan, this ‘mother of all recessions’ will leave no one untouched, but human beings will adapt as always.

    First of all, I think it will force us to reconsider what we value. Value is a relative thing, gold is only worth something because we agree that it has value—it has no intrinsic value, although it has some industrial value as for instance heat shielding on space shuttles, electricity conductors, dental fillings, etc. But this does not explain the quadrupling of the gold price the last decade; this is all ‘pyramid’ effect.

    What we value may drastically change during this transition. Consuming vs travel experiences, finding ‘yourself’ vs keeping up with the Joneses etc. Another option, as opposed to the collapse, is continued growth on these premises. One billion Nouveau Riche Chinese might want to travel into space rather than buying the second home and the third car, so it’s anyones guess what the future will bring.

    But I am sure about one thing: The current ‘pyramid’ setup will collapse…

  • Sergio wrote:

    Harry S. Dent has written about this dynamic in very detailed and impressive terms. I agree with much of what you say.

    Interestingly, the natural world could only support about 2 billion people. Franz Haber changed the world by inventing a method to produce synthetic nitrogen for use as a fertilizer.

    See: http://www.zimbio.com/member/atgvg/articles/4484318/Fritz+Haber+Place+History+How+Fertilizers

  • Thanks for commenting, Sergio!
    I’m hardly the first to see the connection, I am however more interested in how we will cope with the future economic situa­tion.
    Even though the world can harbor 10 billion (or more) food-wise, it cannot handle 10 billion “big spenders”. And even if the planet could handle us spending for the sake of saving the economy (pyramid scheme), it doesn’t seem very wise.

Leave a Reply