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May 15, 2018 - Freedomain Radio - Stefan Molyneux
44:39
4090 Problems In China | Economics and Demographics
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You know, if we as a species could just find some way to let go of our mad delusions that coercion leads to paradise, we could actually create sustainable, free, growth-oriented societies.
Because there's always some next thing that's going to escape.
The next superpower, the next empire that's going to escape the stone-wheeled, grim cycle of history.
From freedom, to wealth, to the growth of the state, to the strangulation of those freedoms, to collapse.
There's this fantasy that the next empire, the next country, is somehow going to escape all of this stuff.
You know, it's like somebody who's like, well, the last 15 women I kidnapped and locked in my basement ended up not loving me, but the next one, she's going to be my devoted and sweet soulmate until the end of time.
No, we just, well, of course, it's my job to help people escape these delusions.
The cycle of history, the path, the course, the rise and fall of empires, It's simply the price we pay for believing things that aren't true.
So when I was a kid, the country that was going to escape this grim cycle was Japan.
Japan was gonna kick everyone's butt because they had gone from like junky stuff you find inside cereal boxes to TVs and Walkmans and consumer goods and they were brilliant engineers and they were hard-working and boy they were just gonna take over the entire world.
And what happened? Well, they had some freedoms, particularly after the Second World War, just like Germany did.
They had some economic freedoms, which led to massive amounts of economic growth.
It's an extraordinarily high IQ society, and therefore, like Germany, it recovers very well from being bombed into near oblivion.
And so what they did was they applied their geniuses to free market, to engineering, to other wonderful capitalist opportunities, and they grew their economy like crazy, and they started taking over and buying up, and it was going to be, boy, they're going to just be the bee's knees, they're going to take over everything.
And what happened? Well, what happened was what always happens, which is that when you have a government with the capacity To control the economy, to create money out of thin air, to print, to borrow, to steal, to beg.
Well, no, they never beg.
They're the government. They have way too many guns to beg.
So what happened was they had a lot of economic freedom.
They had the growth of the free market, particularly in such a high IQ society, the growth of wealth, and then Massive increases in taxation and anticipation of the receipts of future taxation gave the Japanese government the right to borrow like crazy.
And then, because the government had the power to borrow like crazy and print money, create money out of thin air, all of the financial oligarchs, the arch-capitalists or crapitalists, really crony-capitalism or crapitalism, When they faced problems, the zombie, the banks, they weren't zombie banks yet.
When they faced problems and they faced losses, they ran to the government.
And then the government propped them up and gave them massive bailouts, which has been going on for decades now.
And so massive debt, a decaying zombie financial infrastructure, and of course, associated with all of this, All of this artificial wealth with high taxation and a massive suspicion of the workaholic culture of the 80s has led to a huge drop in population combined with increased healthcare resources which prolong the life of the elderly almost to like virtual undead status and then you get a collapse.
So the next one is supposed to be China.
See, China is going to be the next...
Giant, great, it's already the biggest, second biggest economy in the world, but China's going to be this massive empire and political and economic power that is going to escape the grim cycle of history that happens when you have a state of society, a government-run society, and so I'm just going to tell you it's not going to happen.
Yeah, there'll be some growth and there may be some opportunities, but it is going to go the path of Every other society that has a big giant government and I'm going to tell you why.
So recently China is very much into consumer goods and you know status symbol the more luxurious the better.
And in order to grow the economy, which is the Chinese government's goal, they want to double the economy between 2010 and 2020.
So what are they doing?
Well, they're of course printing a lot of money.
They're borrowing a lot of money and they're driving this massive tumoresque consumer spending spree, which naturally is driving up the debt of the country as a whole and individual household debt in particular.
So household debt is going through the roof, government debt is going through the roof, but of course they have their 10-year plan to double the economy, so they're going to have to borrow more, they're going to have to print more, and so on.
So in 2008, China's debt was only, I shouldn't say only, was only 141% of GDP. You understand that, right?
141% of GDP. So that's like making $100,000 a year and being in debt $141,000.
So that's obviously not very sustainable.
So in 2008, it was 141% of GDP. But in 2017, it had risen from 141% of GDP to 256% of GDP. Now, when you get this kind of massive growth in debt, there's usually a crash.
There's usually an adjustment, a correction.
The cocaine crash, you can call it.
And everybody's kind of keeping their eye on China because of that.
Of course, there are other countries that have large debt-to-GDP ratios.
Of course, Japan, I think, leads the pack.
The US and the UK also have them.
But of course, Japan, UK, US, well, they are rich countries.
And China has just kind of come to the middle.
China has about 15,400 in household purchasing power every year.
That's only about a quarter of what goes on in the US. So because there's high debt to GDP ratio and because there's low household income relative to other countries, it's kind of quicksand to get out of that.
Now, how do you know something is opposed to the people?
Well, it has the word people in the title.
So the People's Bank of China, owned by who?
The people. Serving who?
The people? No. Serving the government, serving the politicians, serving the financial oligarchs.
The People's Bank of China has been, well...
Open Bombay dumping massive amounts of cash into the semi-feudalistic, semi-communistic, vaguely remnants of the free market-ish system and, of course, dumping cash into a system with structural issues like massive coercive control over money and debt and interest rates and the movements of goods and services.
It's kind of a mandate over a sucking chest wound.
It makes you feel like you're doing something.
But you're actually just making things worse because you're not pursuing other solutions that you should be pursuing rather than pretending you're solving something.
Historically, this does not end well.
So just looking historically, 43 countries have experienced an increase of credit to GDP of more than 30% within five years, right?
So this is where China is in this situation.
So of those countries that have experienced this kind of massive growth, out of these 43 countries, 38% of them actually faced financial disaster.
So how does that look?
So China trades like crazy, as you know.
The economy is second in the world.
It has the third largest bond market, which means that if something undermines or Causes a crash within the Chinese economy, it's going to have a massive ripple effect around the world.
So, I mean, Malaysia, South Korea, Vietnam, and so on, the surrounding countries are going to be hit the most.
U.S. economy is not going to escape because U.S. companies, as you know from the number of Workers throw themselves off the roof in factories in China.
China is a huge market for a lot of US companies, particularly high-tech companies, and if purchasing power or demand collapses in those countries, that's not a good situation.
I mean, if you just look at Intel, the chip manufacturer, Revenues from China in 2008 were 13% of total revenues, but then by 2016, only eight years later, it had risen to almost 24% of total revenues.
So if there's a drop in demand in China, that means that Intel and other companies are going to face a lot of problems and the layoffs.
This is the house of cards that is built when you have fiat currency made up value and massive value.
Debt. Now, credit in China recently has been fairly easy, fairly available.
So what they do, of course, is they control the interest rates, dump lots of money in, right?
So if a lot of money gets dumped into a system, interest rates should almost immediately begin to go up.
Because the value of each dollar is going to go down and therefore if you lend someone a dollar that's only going to be worth 90 cents next year or 50 cents next year, you need to build that into your interest rates.
So when central banks pump a lot of money into a system, they need to control the interest rates.
To avoid the effects of them dumping a lot of money in.
Now what this does is it just means a huge amount of malinvestment, wasted time, wasted money, wasted effort.
Businesses started that can't possibly be sustained and most importantly, at least for consumers, when you dump a lot of money into the system you make credit very easy.
And when you dump a lot of money into the system, the interest rates should rise, but you keep those interest rates down, then what happens is people borrow a lot of money, particularly for cars and particularly for houses, and then eventually the interest rates have to go back up.
And when the interest rates go back, as you saw in the housing crisis in America 2007-2008, people can't afford their variable rate mortgages that have hit the roof, or hit the stratosphere really, and then you get a housing crash, housing crisis.
Banks begin to go out of, well, they actually don't have enough resources to cover sometimes even their deposits.
They have to run to the government for Japanese-style bailouts, you know, this kind of stuff.
So, the People's Bank of China, very much against, once more very much against the people, the People's Bank of China has held the interest rate at 4.35%.
I mean, everyone's aware of the debt problem, but if you raise interest rates kind of like that old thing, like if you've got a tiger by the neck, you can't let it go.
It's going to eat you. But holding on to it is kind of tiring.
But that's what happens when you pump a lot of money and you keep the interest rates low.
People make a bunch of borrowing decisions that they can't sustain should interest rates rise to even cover inflation, let alone reasonable profits.
And so then what do you do?
Well, people have already made these decisions, you've got this illusory economic growth, and they're happy with their government.
Look, there's tons of money without the associated increase in interest rates, so free stuff, right?
It seems like free stuff.
And if...
You then allow interest rates to rise again, which eventually you have to.
Then people are very unhappy.
They lose their houses. They get mad at the government.
And so, you know, often this is inherited from previous governments.
But, well, let's just say there seems to be just a little bit more continuity in the Chinese government than there are in other governments.
So, even though low interest rates and...
Lots of free money, lots of easy money.
There still are bad loans.
So in 2016, 41 banks wrote off 576 billion won in bad loans.
Now, that's pretty bad.
But the 576 billion won written off in bad loans...
Compared to 2013 when it was only $117 billion, right?
So what is that? 500% increase in a relatively short amount of time.
Now remember, when the bank writes off a loan, that is a very, very big deal, right?
So there's this old rule about banking.
It's called the 363 rule, which means you borrow at 3%.
As a bank, you borrow at 3%, you lend at 6%, and you go play golf at 3 o'clock in the afternoon.
So let's just say that the bank only makes 2% off its loan.
Well, what that means is, if the loans are the same amount, let's just say, I don't know, $100,000, $10,000, it doesn't really matter.
So if the bank is only making 2% off a loan, Then if one loan goes bad, like if you have to write off 100% of it, the other 50 loans need to go perfectly just to make up the whole of the first loan, right?
Because you lose, like if you're only making $2,000 from a $100,000 loan, if $100,000 loan gets written off completely, you need another 50 loans to go perfectly in order to get your money back.
Now I know loans are multi-year and so on.
It's a very sort of simple exercise.
It's a boiled down exercise.
But the point is... That for banks to have loans go bad is extraordinarily bad for the banks because all the other loans need to go perfectly.
This is why it's so easy for banks to snowball and to run out of money to cover deposits, especially because they're fractional reserve lending, which means that they lend out far more than they actually have in the bank.
Now, Chinese economic growth, well, it's what Western economic growth used to be before the sclerotic, hardened arteries phase of late statism kicked in.
So, in 2017, the GDP growth was almost 7%.
How much of that is real?
It's very hard to know.
One guy goes to therapy and works very hard, gets very unhappy for quite a long time and emerges as a better person.
Another guy snorts a bunch of cocaine off a hooker's belly and says, why on earth would I go to therapy?
This is great! Well, you'll see.
We'll see over time how much this is real and how much...
Now, governments, of course, love when they fence in money.
They've got a closed economic system to some degree.
They pump a lot of money into it.
They keep interest rates low. That promotes a lot of growth, which promotes higher tax revenues.
And that's great.
Now, if they can keep this growth going, then the debt-to-GDP ratio could remain fairly steady at a little under 300%.
But how likely is that?
So people have bought a lot of houses and they're laying out mortgages.
Now, of course, just because you pump a lot of money into a closed system and you keep interest rates low, it doesn't magically produce houses, right?
And so what happens is when there's a huge demand, when interest rates are kept low and there's a lot of money sloshing around, people feel wealthy, so they want to go and buy a bunch of houses.
And what that means, of course, is you don't magically...
It's easy to print a whole bunch of money or type whatever you want into your own bank account if you're the People's Bank of China, but that doesn't magically create all the additional houses.
So it rises demand without rising necessarily as quickly.
The supply of houses, which means that the property prices go through the roof.
It's kind of like immigration. Immigration keeps the value of...
The boomers' property high, particularly their houses, because immigration drives up demand very quickly for houses.
Like if a society...
And this is one of the reasons why all of this mass immigration is occurring.
They don't care about population replacement.
They don't care about any of that. What they do care about is they need to keep the value of the boomers' houses high.
And because birth rates have collapsed throughout the West, among whites in particular, what's happened is...
If you have a bunch of kids, they usually don't start buying their houses until they're 25 or maybe 30.
And so if you're just allowing for the birth rate of the population to maintain the value of houses, when you have a boom followed by a collapse in birth rates, what happens is you're chewing under the base of the support structure for high house prices because there's going to be fewer kids who grow up to want the houses of the boomers and therefore the boomers House values are going to collapse.
Now, if the boomer's house values collapse, well, that's a big problem.
They're going to get very upset, very angry, and those particularly who've taken out reverse or second mortgages and so on will be unable to pay them back.
And, of course, banks have the value of property as part of their assets if there are still mortgages outstanding on them.
And if the value of those houses go down, then the banks have to write off a whole bunch of Artificial value that they have down.
Say, oh, this house is worth a million dollars.
Well, maybe it goes down to 750,000, a half a million.
Well, you've got a 25 to 50% drop in your assets, which means you've got to call back a bunch of loans to cover the loss in your assets, which means that the loans may fail.
And you understand that immigration is a way of just keeping whatever is necessary to keep the value of houses up.
For the boomers and for the banks, that's another reason why this is going on.
Because if you get a family coming in from overseas, from the Middle East and so on, they immediately need a house.
Whereas if you just wait for the birth rate to grow into people who need houses, well, you'll be long dead by the time their diminished demand.
Hits your house. So that's an important thing to understand as well.
So in China, mortgage debt has gone up by 25% in only two years.
And the people who are buying the houses because of the economic boom are facing, well, absolutely enormous mortgage payments, up to about half of their monthly income.
And of course, the more money you're pumping into the mortgage, the less you have for other consumer goods, which drops demand.
And that is a big problem as well.
So the government is trying to get people to buy a whole bunch of stuff to, quote, grow the economy, although you buy a bunch of useful stuff, a bunch of consumer goods, not, right, that there's There's things you buy that increase in value and things you buy that decrease in value.
And economic growth generally comes from buying things that increase in value, although we do have to buy things that decrease in value as well, like food.
But that's been a big change.
So when I was younger, and this is the same pattern with Japan as well, China went from a nation that exported a whole bunch of stuff to a nation that now just consumes oil.
A whole bunch of stuff and the government wants to keep that consumption going and it wants to keep people's liquidity high so that they can or at least their opportunities to get credit high so that they can go and buy a whole bunch of stuff.
Now the spending of course this multiple of GDP close to 300% is unsustainable.
Now That's sort of the one side of the equation.
Now, the other side of the equation regarding China is birth rates.
My word. You know, you hear about this stuff in Europe, like the demographic decline and so on.
And there is a general tendency in advanced or free market economies, free market-ish economies, There's a general tendency that the higher the household income becomes, the fewer children are had.
Of course, right? And this is for a number of reasons.
Of course, you used to have a lot of kids because they used to die.
Infant mortality rate was like 50% in some places or even higher.
And so you had a lot of kids because you needed kids to work on your farm, to take care of you in your old age and so on.
And of course, prior to birth control, you had a sex drive, and a sex drive meant kids in general.
So you had a whole bunch of kids.
And also for women, because they were constantly having kids and so on, they really weren't able to go and do other kinds of jobs.
This is why women were generally kept out of professions, like being a doctor and a lawyer, before the Industrial Revolution.
Not because anyone hated women, it's just that what was the point of training someone to be a doctor if they were just going to spend their life...
Having children and breastfeeding and possibly dying in childbirth, what's the point?
I mean, you can only train one person in the village to be a doctor, so you wouldn't train a woman because you would end up with no doctor, most likely.
So, this is why it went to men.
And so when an economy becomes wealthier, then your kids are going to do better.
They're more likely to survive. And you also can make enough money to save for your own retirement, or governments put in predatory on the young, vampiric, suck-the-jugular-of-youth pension plans that, you know, they say, oh, we'll take the money from all of these workers.
We'll spend it so that we pretend that we're creating economic value, and then we'll just tax the young to pay for the old people's retirement when it comes about.
And so in a free market, you can save for your own retirement.
You don't have to rely on your kids.
Your kids are going to be liabilities for longer because rather than just being taught maybe even how to read and write in their single digits and then joining the workforce on the farm by the time they're eight, they become people that you kids, you know, you've got to put them through 12 years of government schools and then post-secondary education and hundreds of thousands of dollars.
You can't afford that many.
And also because birth control and the outsourcing of parenting, that is nannies and daycares and all this kind of crap, as well as government schools, women are free to pursue more enjoyable careers than were available in the past.
So there's a wide variety of reasons, but as the country gets richer, there are fewer careers.
Children, which is exactly how nature should work, right?
Because you just don't, when you're, well, first of all, when you have automation, you need fewer people, and when each person creates that much more economic value in a society, you just don't need as many of the children.
So China has got this big, you know, we're going to double our economy, we're going to start dominating the military sphere over the next several decades, but here's the problem.
The problem is their fertility rate has collapsed.
Now, not only has their fertility rate collapsed because of the incomes in the household becoming greater, but it's also collapsed because, as you know, I'm sure they had a one-child policy for many, many years.
And so they have the bulge of the elderly population that was around in the post-war period before the one-child policy came into place, right?
And this is just part of governments think that they can just move these massive dials of fertility and birth and breeding and Income redistribution and borrowing and interest rates like it takes a truly psychotic individual to think that they can move the levers to positively affect a billion or more people's lives in a highly complex post-feudal economy.
I mean, it's just mad.
It's mad. I won't even tell my neighbors what to do.
I don't tell my listeners what to do, but somehow central planners around the world know exactly what everyone should do, pretty much at the point of a gun.
And so you had a boom in children after the Second World War, to some degree, in China.
And then you had a one-child policy, which means you've got a mushroom, right?
You've got a very top-heavy kind of society marching towards becoming elderly.
And so you have a shrinking fertility rate, and you have a massive elderly population, and so you just don't have enough.
And of course, there's no money in the bank for all of this pensions, and the welfare state and pension is pretty underdeveloped, so to speak, in China.
And so, yeah, it's pretty bad.
Now, it's interesting because there's a parallel in an odd kind of way to what happened in Europe during the Black Death.
It wasn't just one plague.
It was a whole series of plagues brought, I think, from lice on the backs of rats that came in from the Middle East to Europe.
And there were a whole series of waves, killed up to a third of the European population in some locations.
And what happened was the rich tended to do better because they were in the country rather than in the city.
So they were protected from the worst outbreaks.
And so what happened was in Europe, because the labor pool shrank because of, well, these plagues and the death of a third of the population or more, sometimes up to 50%, Then the remaining workers had a lot of leverage, and therefore they began to get out of feudalism and just sort of laid the foundations for the Industrial Revolution down the road, because they could demand more because there were fewer workers.
So in the same way, in China, right, there was no plague, but there were government regulations in the one-child policy, which means that there's a very small labor pool relative to what there used to be, and certainly relative to the retiree demands that are going on in China.
China has this insane policy.
Well, you can retire at 55.
And being Chinese or being East Asian, then, of course, they live forever, right?
So, you know, 95, 105.
I think it was one of the Japanese politicians recently was like, how are we going to get rid of all these old people?
They won't die! So, you got this mushroom society, right?
You have a lot of old people.
You have very few young people. What that means is that wages are going up, right?
Because there are fewer workers and there's a demand from the elderly population.
There are fewer workers and high demand.
And therefore, when there's high demand and less supply, the value or price of the labor is going to go up.
So wages are going up, but there's more spending on pensions and health care and so on, right?
And so... What could happen is when you have fewer workers producing value, producing taxes, and you have more and more old people who require pensions and healthcare and housing resources who aren't paying taxes, of course, by definition, they're retired, you've got hundreds of millions of retirees that may not have the ability to take care of themselves or perhaps even to be taken care of.
And... That is pretty rough.
So by 2050 in China, there will be 1.3 workers for each retiree.
Now, there's 2.8 right now.
It's going to be 1.3.
Completely unsustainable.
Now, this is the funny thing about massive social engineering that occurs.
You can implement the social engineering very quickly, but the effects can be felt for generations, if not forever.
So, you know, you can invite a bunch of third-worlders into your country, and they can all come pouring in.
That just takes a year or two.
But the effects of that will linger for generations.
So, is there much that can be done now to change this?
Well... Some demographers say, well, no.
No, you can't.
Because when you have massive government programs, or restrictions in particular, like the one-child policy, it changes the entire culture of the country.
And that's a very, very important thing to understand.
So, the birth restrictions, of course, should never have been implemented, and they should have been lifted long ago.
Because there's an argument from the demographers that the low fertility trend can't be reversed.
Just in three decades from now, a third of China's population is going to be over the age of 60.
And that is astonishing.
Especially if you look at the fertility window for women.
Fertility window is a lot shorter or narrower than a lot of people imagine.
People are... Fantasizing because they hear some IVF miracle birth from some woman in her 40s, some celebrity usually.
But the fertility window for women is usually quite low, quite small.
So, I mean, obviously it starts younger than...
Well, it starts young.
But then what happens is women generally don't get into having children until they're in the late 20s, early 30s.
Because everyone says to the young women, well, you should go to school and you should have a career and you should be educated and you should have fun and you should party and so on.
And so they're wasting their most attractive years on a series of fly-by sausage fests that don't add up to any particular value in terms of family and children.
And then what happens is they kind of panic in their early 30s and they try and find a guy and they try and settle down.
But by that time, they're in their mid-30s.
Fertility is down. Birth defects are up.
And if they can get out one kid, they're kind of lucky.
And so the whole culture would have to change.
And I've been talking about this with women.
If you want to have kids, have kids when you're young.
Have kids in your... Late teens, have kids in your early 20s.
You'll have lots of energy and then you can raise your kids to the point where they're self-sustaining.
You go off and have a great career for decades, but have kids early.
Because if you want lots of kids, and they are great, if you want lots of kids, then you want to do it when you're young, when you have the most options.
If you wait till later, there's less of a supply of available men.
You've lost your capacity to pair bond with a man because, you know, penises destroy pair bond.
That's the big chant that you need to understand a woman's Capacity to pair bond diminishes the more boyfriends, the more sexual activity she has, which is why it used to be no hymen, no diamond, and now it's like, wow, that's a pretty used-up glove, but I guess I'll put my hand in it and see what kind of puppets I can make.
A woman's much more likely, and it's dose-dependent, right?
A woman's much more likely to divorce you if she's had more and more and more boyfriends, so...
It's really tragic.
So the whole culture has changed for freedom, for partying, for education, for a career and so on, not around babies.
And the same thing, of course, has happened in China as well.
And so when you have a lot of old people and you have fewer young people, and those young people are, the young women in particular, are conditioned into, you know, educate, party, travel, career, and then they don't have kids until later, then that's an entire culture that has changed.
So, from relatively recently, Until 2033, and this is quite important as well, there is a net outflow, and that's very important because, of course, a lot of people leave China.
A lot of people left China because they wanted to have more kids and all of this kind of stuff, and that is a huge issue as well.
So it's not just that there aren't enough kids being born, it's also that a lot of people are leaving China At the same time, and that is a huge, huge effect.
So from 2018 through 2033, China, which also has net emigration as well, is going to see an average annual decline of almost 6 million Chinese who are capable of having babies.
So that's astonishing.
And that's the kind of death spiral that a culture can get into.
Because if you end up with fewer and fewer fertile women, then they can make fewer and fewer fertile women.
And how do you change all of that?
So if you look at that drop of 6 million fertile Chinese women, or fertile Chinese people, That's astonishing.
That's per year. So that's the equivalent of losing the population of Missouri or Maryland or Wisconsin every year for at least the next decade and a half.
And that's astonishing.
Now, because there has been, I think it was the 80s that the one-child policy came in.
So now, you know, decades later, you have a one-child or at least anti-big family kind of culture.
Because people were attacked for wanting more than one child.
It was considered selfish. It was considered against the proletariat.
It was considered against the people, against the government, against the culture.
It was dishonorable. You can't just make all of that up and embed it in your culture and then just snap your fingers.
And pull it out. You know, it's easier to pour milk into the water than it is to get the milk out of the water.
And so you've got a whole bunch of Chinese people, of course, the majority, they grew up with no siblings at all.
No siblings. And so that's what they're used to.
And just saying, well, they'll just be fine having a whole bunch of kids now, doesn't really happen.
Because there's been such a focus.
And when you want a population to depopulate itself, then you preach empowerment and careers and sleeping around and so on at...
The women, right? Because then they just won't have kids.
And then, of course, you can say, well, we'll give you these maternity leave policies and so on.
But once women are in a career, a lot of Chinese women say, well, if I take my maternity leave twice, like for two kids, that's really, really bad.
An old China Women's Federation survey found that of the women who had one child, 53% of them didn't want a second child.
So, that's pretty terrible.
So, let's say that they reverse all this tomorrow and start putting out ads for more kids and more kids and more kids.
Well, it actually turns out for governments, it is far easier to get people to have fewer babies than it is to change the culture so that they want more babies.
And that is a huge, huge issue.
So, If we're looking at just over the next five years, you may have a drop in...
Again, may... I understand it's all theoretical, right?
Chinese economic growth as a result of this mushroom society, more retirees, fewer kids, and so on.
And remember, if you have fewer kids as a society, you gain artificial economic growth in the here and now.
It's burning the present...
Sorry, it's burning the future to light the present, right?
Because if people...
If women, instead of having kids...
They go out into the workforce, they are professionals, they consume, they produce, they pay taxes, they have an income, a salary, a whole career arc.
Well what that does of course is it stimulates your economic growth in the moment because the women out there working And producing resources, producing value, rather than being home with kids where the kids consume stuff without producing economic value directly and immediately.
And the women are parenting, they're being mothers, rather than being out there working and paying taxes.
So you get... This is one of the reasons why governments love it when women...
Defer having children because it gives them economic growth in the here and now, while of course eating out the possibility, destroying perhaps the possibility of the culture, the society, to survive in the long run.
This is one of the problems you have.
It's more than the problem.
This is one of the catastrophes that manifests almost inevitably.
Same thing happened in the late Roman Empire.
Divorce, free and easy divorce, and non-standard sexual arrangements, and polygamy and so on, and feminism, and empowerment, and...
No kids, and then...
You know who was having kids?
The barbarians. Having a lot of kids.
So, when you have a government in charge of society, you get just this kind of social engineering.
Now, as I mentioned, China's got a crazy low retirement age, about 55 on the average.
And of course, nobody wants to raise it.
And you can't raise it in any practical sense, politically.
Because if you say, well, next year, we're going to raise it to 65, then everybody who's like, I don't know, like that traditional cop who's three minutes from retirement and looking at pictures of his family before he gets gunned down.
If you're like, well, I'm going to retire next year, and then they push it off 10 years, you're going to get really, really mad.
Right? So they'd have to say, well, it's 20 years down the road, but what politician wants to deal with policy 10 or 20 years down the road?
They want something right now.
So, yeah.
I mean, they keep talking about it, but it's not really going to happen.
It's like expecting the U.S. government or Western governments as a whole to deal with massive unfunded pension liabilities for both the general population and for government workers.
I mean, it's not really going to happen.
So, they did end the one-child policy, and what happened?
So, the first year, without the policy, newborns rose by 1.3 million, right?
So, 2016, 2015, they ended the one-child policy.
So, the first year, there was a growth, 1.3 million newborns more than whatever, right?
But that was less than half of the official projection.
So the total was 17.86 million.
And that's not particularly great.
And then in 2017, births slowed down again.
So 2016, 17.86 million births.
2017, 17.23 million.
Now the government had forecasted more than 20 million.
And so, yeah, quite a lot down.
And that's a huge problem.
And... There's a story, I'll put the link to the article below, but there's a story.
Ms. Li, the Jingdao Professor, sorry I don't know why I have to use that voice, she refused to abort her third child and her university employer said, you're selfishly putting at risk your supervisor's careers.
You hag! I'm just editor realizing a slight bit.
The school needs a future, your co-workers are going to have bonuses and if you take off your mat leave it's going to be terrible for everyone.
And so, of course, she had church friends and her family then moved to the Philippines where she gave birth last November.
Now, of course, the traditional answer to prop up the value of housing and to give the illusion of economic growth continuing, because this is a weird thing.
If the government prints a bunch of money, hands it out to immigrants and to migrants and to refugees in the form of welfare, and then they go and spend all of that, it looks like you've got economic growth.
When you really don't.
In fact, you have an economic liability and so on.
And so, of course, a lot of countries are either raising their retirement age and or relying on mass immigration.
You know, there's this whole thing where they say, zero population growth is really, really important.
You shouldn't have too many children. It's really bad for the environment.
It's really bad for the world. It's really bad for the planet.
Oh, psych!
Now we're going to replace your population with third world migrants because you didn't have enough kids.
Too bad for you. Ugh, crazy.
Now, Japan's got an interesting solution to all of this, is that they're basically saying, hey, if you're healthy and you're a retiree, you're going back into the workforce.
And they've actually, because, you know, Japanese people, stereotypically great engineers and so on, have created these exoskeletons that make up for, you know, bone density loss and weakened muscles of old people.
And so there are people who have a hybrid assistive Limb, it's called, or Hal, because I guess they never saw or weren't scared of 2001 A Space Odyssey.
And so they actually have these exoskeletons that allow people to, like, stack boards and lift bricks and move stuff around like they're kind of half themselves and half a forklift truck.
And that, of course, is one of the ways in which they're trying to solve the problem of an aging population.
So the president in China says, yeah, we've got to breed the livestock people.
We're running out of milk. We don't have enough meat for our table.
So in 2015, he said, yeah, we need more births in China.
And there's this obligatory reference to, like, family planning, which basically means not having children.
Family planning means...
It's like you're planning a vacation.
It's called vacation planning, and the whole goal is to not have a vacation.
Family planning, the whole goal seems to be to not have much of...
A family. And so when you're trying to get the votes of people who are of voting age, well, you don't care about the next generation because you're a politician who wants to harvest votes in the here and now, which means you put the fertilizer of sophistry and promises and fiat currency on the potential seeds of your livestock, your tax livestock's vote, and then of course it all comes like you exhaust the soil.
It's what they used to do. Right?
The problem of the commons, right?
The idea that if you have a bunch of farmers around a central area that nobody owns, everybody wants their sheep and their cows to graze in the central area, it gets denuded and then becomes barren because it's strip-mined of resources.
Well, the government. They say, well, we need a government to solve the problem of the commons.
It's crap. Government is the problem of the commons.
Nobody owns the government, and so they strip-mine The people through the agency, the power of the government, and they just then move on.
So you get votes by saying to people, don't have kids.
You get votes for saying to people, here's all this free stuff.
You get votes for saying to people, here's free money and I'm going to keep your interest rates low.
And you get all these votes, you get your power.
And then you retire and you go elsewhere or you stay around in a gated community while society goes to hell around you because you can sell off the next generation to bribe voters in the present.
So, this is another challenge, which is that totalitarian systems, if they're totally totalitarian, then they can change on a dime, right?
Like this, we've always been at war in East Asia kind of stuff.
But if they're somewhat totalitarian, and particularly if they live in a sort of Inverted pyramid of respect, like you respect your political leaders, you respect your elders and so on, then if your political leaders have been saying don't have kids for a long time, it's really tough to just turn that around and say, now we're going to say have kids.
You've got to have kids now because then people say, well, wait a minute, I'm supposed to respect you, but you're changing on a dime here, so that's really, really terrible.
So the reason I wanted to tell you about all of this is don't fear the reaper.
No, fear the state. The idea that China's going to escape the exact same pattern that has happened repeatedly throughout history, nobody gets to escape this pattern.
The moment you have a state-centered society, a society with a massive state, or a small state, which then grows to become a massive state because the people are...
It's rendered insensate and incautious, because when the government grows through debt, it doesn't directly impact people in the here and now, right?
So if the government's spending all this money and you're getting wealthier, but it's all debt, your natural pushback to the growth of government is kind of put to one side.
You're drugged, right?
I mean, you're drugged.
You know, it's one thing to steal your wallet from your pocket when you're up alert and walking around.
It's quite another thing to steal your wallet when you've passed out from drink right under the table.
It's easy, right? So they can render your fight-or-flight mechanism insensate through debt, which means the government grows without the pushback from the people.
This is always going to happen.
This is how the government grows.
It grows through debt, so it doesn't alert you and alarm you about its growth.
And then by the time...
The bill comes due.
It's too late. And there's a collapse.
This is what happened. Like, it will never be any different.
Right? I'm an advocate for a stateless society.
A society without a government. People say, oh, that's so dangerous.
That's so dangerous. No, no, no.
You understand? You look throughout history.
Nothing is more dangerous than the state.
Every single time.
And I invite you to look for alternatives.
If... You find this kind of analysis and conversation helpful, and I hope you do.
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