China's Demographics Spell Decline Not Domination

Demography isn’t destiny. If population size was history’s major determinant, China might have conquered Europe in the 15th century, and Britain certainly would not have conquered India in the 18th.

Little countries are capable of great things. Wee Scotland, the population of which was perhaps 1.3 million in the mid-18th century, made an outsized contribution to the Enlightenment, the Industrial Revolution and the expansion of the British Empire. Big countries can amount to very little. By population, Indonesia is the world’s fourth-largest country. But most Americans are barely aware of its existence.

Nor is population growth always a good thing, particularly in the absence of gains in productivity that keep a rapidly procreating people from starving. Yet population decline is rarely good news. The rise of Britain and then the US to positions of global dominance in the 19th and 20th centuries was in each case associated with rapid population growth. The slowing of that growth is not a cause for celebration.

Last week, I had the pleasure of attending the annual gathering of the Aspen Economic Strategy Group, the little brother of the longer-running Aspen Strategy Group. I went there expecting at least one enjoyable punch-up between the Federal Reserve’s critics and its current leadership. I was not disappointed. But the main event turned out to be a series of disquieting papers on US demographic trends and their implications. These turn out to be a big deal — and at first sight a rather bad one.