Eamonn Keane
May 24, 2010
Imploding populations and faltering economies
By Eamonn Keane

Taking recent rioting in Greece as my starting point, in this essay I argue that Western nations are in terminal decline unless they can rediscover the true meaning and value of marriage and of the blessing of children as a gift to married couples and to society in general.

Greek Contagion: Economic and Social Implosion

As widely reported in the media, three bank workers were killed in riots in Athens on May 5th as Greeks took to the streets in a nationwide strike to protest austerity measures involving new taxes and government spending cuts. These contractionary fiscal measures were demanded by the International Monetary Fund and other European Union member countries as a precondition for granting a loan package to Greece that would temporarily enable it to avoid defaulting on its sovereign debt servicing obligations.

Alongside the sovereign debt crisis in Greece, the May 23, 2010 edition of London's Sunday Times reported that fears of further volatility in financial markets have arisen over revelations that Spain has been forced to bailout one of its largest regional banks. Fear is mounting that the Eurozone is unsustainable and that its dissolution will plunge global financial markets into chaos.

Attempts by governments of Western countries to minimise the effects on their real economies of the ongoing global financial crisis are, I believe, nothing more than Band Aid treatments. I think governments have overstretched Keynesian economic policy in their attempts to shield their economies against the dangers of prolonged recession. Coupled with this, since the fall or near collapse of several major banks in the US and elsewhere, and the consequent choking of interbank lending, and to a wider extent, lending to the private sector, governments have intervened by either purchasing the toxic debt of banks or by supplying them with cheap debt, which has in turn been borrowed from vacuous central banks. This has transferred the private debt of the financial industry to governments, which is now underwritten by taxpayers. In effect, banks have been put on welfare and their insatiable demand for debt is akin to that of a drug addict dependent upon his family for his next fix.

While in the short-term governments in Western countries can shore up aggregate demand and lend a certain appearance of stability to financial markets, they cannot solve the longer-term problems that will increasingly assail their economies. The underlying problems in these economies are more a consequence of spiritual and moral malaise than anything else.

Ethical Relativism: Social Chaos and Demographic Winter

Returning now to the recent rioting in Athens. The deaths of the bank workers occurred when they were trapped in a building set ablaze by hooded rioters hurling Molotov cocktails. Expressing his concern over the situation, the Greek President, Mr. Karolos Papoulias said: "I have difficulty in finding the words to express my distress and outrage...The big challenge we face is to maintain social cohesion and peace. Our country came to the brink of the abyss. It is our collective responsibility to ensure that we don't step over the edge" (Times Online, May 6, 2010).

On what basis should the activities of the rioters in Athens who caused the deaths of the bank workers be judged? If there is no objective moral order, meaning no universally binding absolute moral norms that should never be violated, then we cannot say the rioters acted immorally unless we first consider their motivations and intentions. Indeed, by extension, we would have to say the same about the concrete murderous acts of every tyrant in history, including Hitler, Stalin and Mao. In the absence of such an objective moral order adherence to which is a prerequisite for humane social interactions, then what is evil or unjust in any particular situation can only be deemed so to the extent that it is classed as such by those who wield power in society.

If we forsake the natural moral law which points to the existence of universally binding objective moral absolutes, embracing instead relativistic moral perceptions which make individual choice and personal desire the final arbiter of the distinction between what is good and what is evil in concrete human acts, then what grounds can there be for classifying as immoral the actions of bond or derivative traders who unduly risk the life-savings of superannuants and others in order to maximise possible benefits to themselves?

The connection between instability in economic structures and ethics was referred to by Pope Benedict XVI in a Letter to the British Prime Minister Gordon Brown on March 30, 2009 for the start of the Group of 20 Summit dealing with the global financial crisis. He said: "If a key element of the crisis is a deficit of ethics in economic structures, the same crisis teaches us that ethics is not 'external' to the economy but 'internal' and that the economy cannot function if it does not bear within it an ethical component."

One ethical question regarding economic structures that needs to be urgently addressed is to what extent have the economic policies of Western governments and the lending policies of banks discriminated against married couples desiring to have a relatively large family? Following on from this, we can ask to what extent will demographic implosion in Western countries drag down their economies? Further to which we can ask, how sustainable is Western civilization in its addiction to contraceptive and abortion practices.

The major threat to Western nations is not global warming but rather demographic winter. This question demographic implosion in Western countries was addressed recently by Mark Steyn. In reference to the riots in Greece, and after first stating "unlovely as they are, the Greek rioters are the logical end point of the advanced social democratic state: not an oppressed underclass, but a pampered overclass, rioting in defence of its privileges and insisting on more subsidy, more benefits, more featherbedding, more government," Steyn went on to add:

    "The mob is rioting for the right to continue suspending reality until they're all dead. After that, who cares? Greece has run out of Greeks to stick it to. So it's turned to Germany. But Germany too is in net population decline. The Chinese and other buyers of Western debt know that. If you're an investor and you don't, more fool you. Tracking GDP versus median age in the world's major economies is the easiest way to figure out where this story's heading" (MACLEANS.CA, May 20, 2010)

The problems associated with demographic implosion in Europe bears out what the historical record shows which is that population decline is a negative phenomenon. It stifles cultural and economic creativity and it places a heavy burden on the young who have to support an ever growing proportion of dependent elderly. Rather than being a cause of prosperity, population decline causes the rate of increase in demand for goods and services to fall and thus it reduces economic opportunity.

As our population ages and the dependency ratios increase, the per-capita costs of delivering the levels of social security and welfare we have become accustomed to will increase. This implies that workers will have to pay higher taxes or the elderly will have to settle for reduced Government welfare support. Medical personnel now discuss the distribution of health services on the basis of cost effectiveness as distinct from the principle of need. Coupled with this, in many Western countries there is a dual system of aged-care services emerging with one for the relatively rich and the other for the poor. Coupled with this, the private health insurance funds in many of these countries seem intent on transferring as much responsibility as they possibly can for the medical care of the elderly to governments. This may place an insupportable burden on public health systems which already have long waiting lists for certain treatments.

In regard to the demographic question, one of the most destructive myths of more recent memory has been the widely accepted notion that population growth necessarily causes poverty and environmental destruction. As opposed to this, the causes of underdevelopment in various regions of the world can be both internal and external. The internal causes may include poor political and economic administration combined with widespread corruption, exaggerated military budgets in contrast to inadequate spending on health and education, fratricidal wars, overconcentration of productive capacity in urban centres, the unbridled pursuit of profit at the expense of the common good, the heavy burden of foreign debt accompanied by lack of controls on the flight of capital, unequal access to property, restrictive influence of certain religious and cultural practices etc.

Externally, developing nations can be the victims of an inequitable distribution of the world's resources as well as of international trade agreements and financial arrangements which work against them. Also, due to the lack of solidarity between nations, they are often unable to gain quick and affordable access to the technology they need to further the development process. [1] Problems such as these can only be eradicated through personal conversion for individuals, and through the pursuit of cultural and social transformations which will enable integral development to occur. The proliferation of population control policies only exacerbates problems of underdevelopment. They undermine authentic human and family values, and they divert attention from the main causes of underdevelopment, resulting thereby in the misallocation of scarce economic resources.

Human Capital

The historical data supports the view that over the longer-term population growth is a positive factor in the economic and social development of nations. As Professor Julian Simon pointed out in his 1996 classic work The Ultimate Resource, the key factor in world economic growth is the human capacity for the creation of new ideas and the expansion of knowledge. The more people who live on the planet and who can be trained to help solve economic and environmental problems, the faster we can grow economically and the greater will be the economic inheritance we will pass on to succeeding generations. Simon summarised his ideas on how population growth contributes to human wellbeing by saying:

    "Humanity by now enjoys extraordinary advances in communication, transportation, nutrition, health and freedom from pain, and the general standard of living. Can it be doubted that this is a miracle age of liberation from the bonds in which nature has kept us shackled throughout all our history? The increased size of the human population is a fundamental cause of these gains...A large population influences the production of knowledge through both supply and demand mechanisms." [2]

There is ample evidence to indicate that the best nurturing ground for human capital is the traditional family based on marriage between one man and one woman. By having, rearing and bearing children, and by nurturing them in the human virtues, such families fulfill a vital role in building up the economic and creative potential of a nation. Hence, governments should adopt policies that are supportive of stable family life and which encourages married couples to be open to the gift of children.

Professor Gary Becker, who won the 1992 Nobel Prize in Economics, has done much to draw attention to the importance of human capital and stable family life in the process of economic and social development. In one of his more important works titled Treatise On The Family, Professor Becker referred to the perennial value of the family in economic and social development by saying: "The family merits the great attention it receives from both scholars and laypersons, for despite major changes over time and enormous variations across social and economic environments, it remains the most influential of all institutions." [3] At the same time, Becker produced conclusive evidence that "fertility is reduced when divorce becomes more likely," and "that couples who anticipate higher probabilities of divorce have fewer children while married." [4] Also, statistical data from many sources around the world points to the fact that married women have more children than women in de facto relationships. Basically, what this data points to is that there is a link between a married woman's openness to new life and her sense of the permanence of the marriage bond.

In the broader scheme of things, while fertility decline is related to many factors such as interest rates, changes in real income, rising divorce rates, employment opportunities for married women etc, it is also strongly related to the spread of the contraceptive mentality which sees children as having less value than say career or more luxurious living.

Support the Family Based on Marriage between One Man and One Woman

Given what has been said above about the negative social and economic effects of demographic decline, what are Western nations to do? If it is true that human capital is the most vital resource in a modern economy, then public policy economic, social, legal, educational, political and cultural should be supportive of married couples who wish to have large families. This support for families must be such as to make it easier for married women to remain at home on a full-time basis in order to look after their children if they so wish. Coupled with this, governments should grant privileged status to the natural family based on marriage between one man and one woman, not undermine it by establishing surrogate forms alongside it such as so-called 'same-sex marriage.'

In order to stabilize family life and to help get the birth rate rising again, it will not be enough to merely increase the number of 'family-friendly workplaces.' While valuable in themselves, such initiatives are nevertheless still very much predicated on the notion that women and society are best served by multiplying the opportunities for mothers to hand the care of their young children over to professional careers. Instead, the institutional changes required have to run deep. A first step in this regard could be to change taxation systems in Western countries from ones based on the individual to ones based on the family. This would be a practical way for society to recognise the centrality of the family and to acknowledge that the ability to pay tax is related to the number of dependents an income earner has.

Concluding Remark

To guarantee future prosperity and human flourishing, Western nations have to rediscover and promote the authentic values that underpin stable marital life and its connection to human procreation. Such values are not compatible with liberal divorce laws and a contraceptive mentality.

NOTES:

[1]  Cf. Ethical and Pastoral Dimensions of Population Trends, Pontifical Council For The Family, March 1994, pp. 14-15.

[2]  Julian Simon, The Ultimate Resource: Revised Edition, 1996, Princeton University Press. p. 382

[3]  Professor Gary S. Becker, A Treatise On The Family (Enlarged Edition), Harvard University Press, Massachusetts, 1993, p. 19

[4]  Ibid. p. 355

© Eamonn Keane

 

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Eamonn Keane

Eamonn Keane is married with five children. He studied Commerce and Education at the National University of Ireland and Religious Education at the Catholic Teachers Training College in Sydney, Australia. He currently serves as Head of Social Science at Sydney's Redfield College... (more)

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