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​.popu​la​tion​in​sti​tute​.org/​?​g​c​l​i​d​=​C​N​T​j​h​e​G​A​p​a​M​C​F​Q​F​v​b​A​od8nQA4A

    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/​m​e​m​b​e​r​/​a​t​g​v​g​/​a​r​t​i​c​l​e​s​/​4​4​8​4​3​1​8​/​F​r​i​t​z​+​H​a​b​e​r​+​P​l​a​c​e​+​H​i​s​t​o​r​y​+​H​o​w​+​F​e​r​tilizers

  • 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.

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