WSJ Growth Fiction

It’s easy to spot someone who’s been programmed from birth to believe there is a pot of gold at the end of the growth rainbow. When they write about economic or population growth, it’s simply assumed that more is good, faster is better, and there is no question or debate about that.

I was struck by these assumptions in this piece found in the weekend Wall Street Journal’s Review section on Saturday:

Asia’s Promise Gives Way to Its Growing List of Troubles

I’m not sure what to call the piece. It was too long to be an op-ed, but it was written not by a Journal employee, but by Michael Auslin, a scholar at the American Enterprise Institute. Of course, that “institute” is a think tank funded by some of the biggest growth profiteers on the planet – very pro-growth and pro “free market.” It turns out this piece was adapted from a book by Auslin, The End of the Asian Century: War, Stagnation, and the Risks to the World’s Most Dynamic Region.

There’s your first hint the author is a disciple of growthism. “Stagnation” is one of the dirty words used to describe the absence of growth by those who believe in the fairy tale of perpetual growth. The next hint comes with the author’s reference to “Asia’s rising power and prestige” over the past few decades – based on the growth of its population and economy. Then, we’re notified of the perilous slowing of economic growth in the region:

“Asian countries are struggling to maintain growth, balance their economies and fight slowdowns…. Perhaps the greatest risk is the dramatically slowing Chinese economy…. China’s leaders will have to craft meaningful reforms to maintain even moderate growth in the years ahead.”

Next up, we have the continued wringing of hands over Japan:

“Japan continues to search for ways to end 25 years of economic torpor. …the economy has limped along…. Most Japanese have a comparatively high standard of living, but decades of stimulus packages and a focus on exports have failed to nudge Japan beyond an average annual growth rate of barely 1%, according to World Bank data.”

This is so interesting. The Japanese have demonstrated that a decent life can be achieved without robust economic growth. But prosperity-from-growth mythology is woven so deeply into the DNA over at AEP, Auslin is just sure that 1% annual economic growth can’t be good (the standard of living evidence notwithstanding).

Auslin reveals his ignorance of the realities of demography and physics two paragraphs later:

“The country’s health and welfare ministry and other experts worry that the number of Japanese, which stood at 127 million in 2014, could fall by as much as a third by 2060. One result of this failure to reproduce is that Japan, according to the U.N., ‘is home to the world’s most aged population,’ with 33% of its citizens 60 or over in 2015; the country is thought to have more than 58,000 centenarians. No modernized society has ever faced such a challenge.”

Notice that choosing NOT to reproduce like bunnies is characterized here as a “failure. OMG some 33% of the Japanese are over 60. The citizens clearly forgot that a population Ponzi scheme is the only way to make sure someone will bring them their teeth every morning once they’re in the later stages of life. Auslin gives no consideration to the fact that Japan is an island. On that island you won’t find adequate resources to meet the needs of 127 million. Isn’t it smart, on a full planet, for the island population to contract to a sustainable level? But it’s not just Japan:

“The direst scenarios for South Korea’s population, for example, predict a drop from 50 million today to just 10 million in 2136, thanks to a low fertility rate of 1.19 children per woman. As populations shrink, these countries will struggle to maintain their labor forces, stay competitive, fund entitlement programs and reshape their societies to deal with mostly elderly populations.”

Let’s unpack that list of problems:

“struggle to maintain their labor forces” – With a shrinking population, why wouldn’t a shrinking labor force be a good match? Seems like it’s only a problem if you conflate GDP with well-being.

“stay competitive” – We hear this all the time. Nations have to compete in the global market. Why? Why must a healthy economy be a competition, with winners and losers? Can’t an economy that meets the needs of its people be considered healthy? Can’t nations cooperate instead of compete?

“fund entitlement programs” – Ah, that’s the multi-level marketing scheme at work in the retirement arena. If each generation must be larger than its predecessor in order to fund pensions and health care, then we are headed toward some very serious problems. It’s a tough enough world with 7.4 billion of us competing for land, food, water and jobs. Imagine how tight things will be when there are 20, 40 and eventually 80 billion. At what point do we stop with the Ponzi thing?

“deal with mostly elderly populations” – As any nation’s – or the world’s – population contracts back to a sustainable level, a bubble will indeed move through the population, leaning it more toward the elderly. But while there is a temporary increase in the aged, there will also be fewer babies, toddlers, children and teens to care for. And it will be a temporary condition. So this represents a relatively minor challenge, and is certainly not such a problem as to warrant staying in perpetual population expansion mode. That would create – and already is creating – problems that will dwarf the minor adjustments an elderly bubble will create. But wait, here’s a surprise:

“At the opposite end of the demographic spectrum lie countries such as India and Indonesia. Much of South and Southeast Asia face the risk of too many people. The U.N. predicts that India’s population will surpass China’s by 2022, turning the world’s largest democracy into the world’s most populous country.

For governments, this youth boom means a growing demand for education, jobs, infrastructure and rising living standards. Though having a surplus of young people might seem like an economic asset, most poor countries have failed to turn abundant labor pools into lasting prosperity.”

Ah, so it is possible to have TOO MANY people. That is fascinating, since any country responding to Auslin’s birth dearth worries by getting back on the perpetual population growth Ponzi wagon will eventually be in this “too many people” boat. Apparently it is smart to stop growing your population at some point. Auslin is just having a hard time imagining when that is.

Near the end, we’re treated to this buffet of goals that will apparently be missed:

“this panoply of problems suggests that the years ahead in Asia won’t be an era of peace, expanding freedom and accelerating growth.”

News Flash: Accelerating growth will not result in peace or expanding freedom; it will guarantee their demise. If my critique leaves you stumped and scratching your head, if you’re puzzled by the notion that pursuit of perpetual growth will lead to disaster, please explore the More About Limits to Growth section of this website. It’s a shame the Wall Street Journal is running pieces like this that get all so wrong. At the very least, the journal should slap a big “opinion” label all over this, to make sure no reader thinks there is any objective reporting therein.