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July 10, 2024 - Truth Podcast - Vivek Ramaswamy
58:35
Lyman Stone on Demographic Decline | The TRUTH Podcast #55
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We live in an era of catastrophic predictions.
A lot of these come from the modern progressive left, no doubt.
The catastrophic predictions of global climate change by way of global cooling in the 1970s, which actually never transpired, after which those catastrophic claims became ones of global warming, which still haven't transpired.
You saw the same catastrophism at work with the advent of COVID-19.
You see a lot of it right now, perhaps on better footing, perhaps not, with respect to catastrophizing the rise of AI. But what's interesting is you hear a lot less concern about what I personally believe could be one of the great catastrophes in a way that just has plain facts already staring us in the face that we don't have to theorize much about, which is the decline of fertility rates, particularly in the modern West.
First of all, when you have fewer children, you're less happy.
There's well-established studies on the rates of human happiness and human flourishing when you're bringing fewer children into the world.
But I don't mean this in a deep, psychological, touchy-feely sense.
I mean this in a sense of raw mathematics, in a sense of raw economic productivity and raw sustenance of a society.
Where if you now have medical breakthroughs, as we've been fortunate to have, that allow people to extend their lifespan from dying of cancer no longer at the same age as they used to, due to the advent of modern medicine, due to the advent of better human health, at least in the developed world, On one hand, you're seeing people living longer and longer lives, and on the other hand, you're seeing people having fewer and fewer children.
That imbalance could be the stuff of crumbling of great nations and great societies as we know them, because the number of people who are able to work productively in their working years is scant to be able to support not only the children that they're having or the fewer children they're not having, But more importantly, to support the elderly portion of the population who isn't working anymore.
Japan faces a near catastrophe on this metric, but so too does the United States and Canada and much of modern Western Europe as well.
Yet this is under-discussed.
I personally believe this will pose a greater threat to the future existence of the United States and the modern West and human society as we know it than any of the other threats postulated by the modern left, ranging from COVID-19, which is now behind us, to global cooling, which never transpired, to global warming, which is still yet to happen at a level that is problematic to humanity.
This is the problem that I believe no one's actually talking about that we ought to be talking about.
But in part because it's also a solvable problem.
The role that the government should play in it is a subject for debate, and it'll be one of the areas of our discussion today in my podcast.
But the reality is it is an under-discussed issue that ought to at least be discussed before we're able to get to actual solutions.
And that's what we're about to do today when I welcome a guest who I'm looking forward to talking to, my guest Lyman Stone.
He is a sociologist, With an expertise in demography, studies population change.
That's what he does.
He's from the Institute of Family Studies, amongst other affiliations he also has, and he's a scholar in the area we're about to dive deep into, which is population change, not just in the United States, but in the West and in developed countries around the world.
Lyman, welcome to the Truth Podcast.
Don't hold back.
We're going to have a far-ranging discussion today.
I've been looking forward to this conversation, and thank you for taking the time to join us.
It's absolutely my pleasure to be with you.
I mean, I couldn't agree more that falling fertility and aging populations are a serious challenge for the future, and not just for the future, but for today.
It is here.
We don't have to wonder, oh, is fertility going to fall at some point in the future and cause a big problem for us?
It's here.
We already observe it.
If you want to see the challenges that face a society with falling population, all you have to do, yeah, you could go to Japan or Korea or Bulgaria, but you could also just go to Appalachia.
You could go to a lot of rural or post-industrial parts of the U.S. and just observe what happens when population declines to a society.
And it's not a pretty picture.
So I think this is actually a really, really important area to discuss.
It's a serious problem that's here now.
I'm sometimes a little wary of crisis or catastrophe language, precisely because it seems like we over-catastrophize everything in our society.
It's a very real challenge, but one that I think we can tackle by addressing thoughtfully and seriously and better understanding the roots of the problem.
Yeah, I agree with you.
I think that the catastrophization of everything that actually wasn't a catastrophe is in some ways immunized our ability to have genuine concern about the things we ought to be concerned about.
I also think that this is one of the topics worth discussing right now because this is still addressable, right?
We're not past some point of no return.
But I think the way the math works out is there might be a certain point at which the problem becomes incorrigible.
And it's ironic that it's sometimes the issues that actually are most correctable and maybe most important that actually get the least airtime in modern political discourse.
On the left and on the right, by the way.
I don't think either the left or the right has made this a particularly great priority.
But let's talk about the specifics of the issue.
And maybe sometimes you can see your own country with greater clarity if you go to another country first.
I'd love to understand your study of, and for you this is basic, you know, Demography 101, but some of the lessons from China's one-child policy, how that experiment fared, what the initial premise was behind it, And then how that's actually created what's been the great impediments to China.
It's actually, in some sense, a boon to the United States, because were it not for that, China might actually have leapfrogged the United States permanently, but that hubris, I think, is one of the gating factors that has limited China's ability to eclipse the United States.
Talk to us a little bit about the history of that, and then I want to bring it back home here to the United States after that.
Yeah, so the one-child policy was...
It's a very famous policy where China limited the number of children that most people, in particular, the Han Chinese people in China, could have to one.
They couldn't have more than one.
Now, if you're an ethnic minority in the past, you could have more than one.
Now, this actually wasn't their first major contraceptive or birth limitation policy.
Before it, they had a policy called Later, Longer, Fewer.
That might seem like getting in the weeds, but this turns out to be important because China's fertility, which up to then had been very, very high, like, you know, five, six, seven kids per woman, actually began to fall very rapidly under this policy called Later Longer Fewer,
which is basically a campaign of contraceptive promotion, healthcare interventions, and public propaganda to discourage having big, tightly spaced families earlier in life.
Now, Later Longer Fewer reduced fertility, but it didn't reduce it fast enough or hard enough to meet the lofty goals of the wise bureaucrats of the CCP, so they implemented one child.
And the one child policy took what had before been kind of Still a pretty aggressive and often coercive nudge, but put really, really stiff penalties on having more children.
And it gave local party officials much more clear targets and goals to hit.
That they needed to reduce fertility by this amount or have this many women.
Why did they want, I mean, what was the original policy objective for saying that we want to have fewer children in the first place?
I mean, they went through great efforts.
So China had this huge, yeah, yeah, yeah.
So China had a big famine in the, I believe it was the 60s.
Was there this, one of the last great famines of, you know, Any large human society and it really traumatized the society and then in the 60s and 70s as these kind of depopulation ideas that we're going to have a food crisis because of overpopulation as those spread in many countries they they kind of took root but we said ah we we can probably deal with it but in china who had a living memory of a serious famine they said oh wow yeah that's right and so they were deeply influenced
by people like Paul Ehrlich or the club of rome To adopt these population control policies.
And the net result of them is, yeah, fertility fell.
But it's not just that it fell.
It fell a lot and it created norms, okay?
So China's one of the only countries in the world where if you ask people, how many kids do you want to have, they say a number way below two.
On average, it's like between 1.2 and 1.5.
In almost every country in the world, even very low fertility countries, women still report wanting Maybe two, 2.2 kids.
But in China, they report far fewer because the government successfully propagated new norms of a much smaller family size.
And those norms are now basically just wrecking The Chinese government's ability to increase fertility because today, China's trying to raise birth rates.
They now have a three-child policy for Han Chinese people.
Interestingly enough, at the same time, they are trying to suppress fertility of non-Han Chinese people, so like Uyghur or Kazakh minorities.
So the groups that were having big families, now they're trying to crush.
The groups that they spent decades crushing, they're now like, okay, please have babies now.
And it's not working because they successfully created norms of low fertility that are really sticky and hard to change.
Just for the old history of this, because I think it's interesting, what was their logic for focusing on the Han Chinese reduction in population growth while permitting that for minority population?
Because that was interesting and new to me, and I would love to understand the why behind that.
Yeah, so it comes to an in-house debate within Marxism About whether the progress of true socialism is a universal thing experienced by all peoples in a similar path or whether different peoples and cultures might have different paths to Marxism.
And for whatever reason, the Chinese variety of Marxist governments adopted the view that there could be multiple paths to true socialist liberation and that the minority groups were Underdeveloped.
And so they needed to have other forms of education development first, and then they could have modern family norms.
In particular, early Chinese communism was uniquely hostile to traditional Chinese culture.
They waged really an intense culture war on traditional Chinese forms of burial, ancestor worship, traditional Chinese religion.
Early Chinese communism was, in some sense, very anti-Chinese nationalist.
Even the adoption of Mandarin Chinese as a language.
Mandarin is a hybrid language of traditional Chinese and basically Manchu, which was a foreign dialect.
Whereas a more historically exclusively Chinese language like Cantonese, which was a candidate for a national language early on, was passed over.
Right?
So it's important to understand that early Chinese communism was kind of anti-Chinese nationalist.
Whereas today the modern variety of the CCP is very Chinese nationalist.
There's been a radical change in their view of Chinese culture, Yeah, I mean, that's a fascinating dynamic that I think many in the West fail to appreciate about the history of China.
And I think that that failure of that appreciation of the history in some ways makes us think that we're a lot more different than we actually are.
One of the things that is a, I think, laughable irony of many, even in the conservative movement today, is in so many ways we'll look at China And point to all the things that are antithetical to our own value system as Americans.
And somehow the behaviors that we then adopt are weirdly imitative of those same mistakes that China and China actually made.
Look at this unfree society.
Can't we be more like them?
I mean, look, I lived in Hong Kong a few years, which is different from mainland China, but still you get a lot of exposure.
And I gotta say, There are very few areas in which I think to myself, I wish...
Yeah, exactly.
And the irony is, there's a double irony because most people in the United States say the same thing, including in the American right.
Oh, I don't want to be more like China.
And then the behaviors that you adopt is thinking the way you're being different from China is by acting more like China.
And so we can, you know, that's come up in a few policy circumstances over the last year, but that's not actually the direction I wanted to go with that.
The direction I wanted to go with it was In some ways, reminiscent of a middle school analogy, and I'll give it to you.
It's for fun, but there's a common thread here.
So it used to be the rebellion at the junior high school that I went to when they implemented a dress code.
The dress code, or when there was discussion about implementing a dress code.
The idea of everybody wearing polo shirt tucked in with a belt, and I don't remember, shorts below your knees or pants, something like this.
And the idea was, we as students can't express ourselves.
We can't possibly express ourselves if we're wearing a dress code.
So then, okay, the dress code got canned.
And yet you see the way everybody's actually trying to dress is literally, at least in the 1990s version of it, You know, Abercrombie and Fitch, what the advertisement puts up on television becomes your uniform.
There's a uniform.
It just changes every two years.
Yeah, exactly.
And it somehow is not centrally enforced, but it's culturally enforced instead.
And so, anyway, it's a long, circuitous way of drawing an analogy to this discussion about family structure and demographic policy, where China implemented the one-China policy, and you saw it declined in fertility rates.
And we will sit here and laugh at that.
It's been...
It's disastrous for China in its results.
And in some ways, for all the mistakes the United States made, the fact that China made this one was actually the one that prevented China, I believe, from separating itself economically from the United States.
So in some ways, it was a boon to the US in some perverted kind of way.
And yet, the cultural trends that we see in the United States of America to say, we're free, we would never adopt a government-ordained top-down one-child policy, is one of which the cultural norms are like those middle schoolers who said, we don't want the dress code, to vehemently adopt the kind of norm that didn't have to be a government-created norm, as was the case in China, amongst the Han Chinese population, but amongst the American-American population, has become the new educated, dare I use the word, elite.
And I think it spans a lot of different demographic groups as well.
What do you make of that?
Do you think there's a parallel there that over the same time that we think we're different from China, but we begin to, in some ways, adopt ossified norms?
Do you think that that same norm that exists in the Han Chinese population in a weird way is codifying itself as a norm amongst certain segments of the U.S. population that account for our decline in fertility rates as well?
Yeah.
So I think there's basically three elements of this question of kind of the emergence of a low fertility norm, even in societies that didn't have the government aggressively reducing fertility.
And the first one is there's just been this big structural change across like every economy.
It's called skills bias technical change and basically what it means is modern economies are complicated.
They create bigger rewards to skills and experience.
Like in the past The amount of economic gain you got from more years in school or more years of experience was relatively modest.
Whereas today, the economic gain to more schooling and more years of experience is quite large.
And so that means that basically young people who are in the years where you really want to be doing family formation, marrying and having kids, are in much worse economic situations relative to other people in society.
And so they feel worse off.
So they feel more precarious and less able to have children.
And that's particularly true for young men.
Young women have done I've had a little more improvement over time, which is because of a diminishment in discrimination against women in the workforce, which great, wonderful, love it.
But at the same time, we do have this challenge that there's been a side effect of people falling behind their own family desires.
So that's the first factor.
Skills, bias, technical change.
It happened everywhere.
Some societies adapted a little bit better than others, but it's happened everywhere.
The second one is to just have a little honesty about our own society.
We call ourselves a free society largely by contrast.
We contrast ourselves with things like Communist China or previously the U.S. But it's not as if our government didn't actively try to reduce fertility, right?
Forced sterilization in the U.S. didn't end until the 60s and 70s.
Was it that late?
Of, you know, people with mental disabilities.
Yeah.
Now, it wasn't as widespread necessarily, but particularly in Puerto Rico or people with mental or physical disabilities in a variety of states.
What was the latest in the non-Puerto Rico even, but just for the 50 states of the United States?
What was the latest that forced sterilization laws ended?
I want to say it was in the 60s.
And the main thing that happened was not actually that we just decided this was a horrible idea as a society.
It's that forced sterilization was largely replaced by more widespread use of abortion.
The people who would have been sterilized instead are aborted or their children are aborted.
So legalized abortion stepped in.
It's not that we necessarily became a more pronatal and humane society.
We just changed our, where we did the work, where we did the dirty work.
So that's part of our own history.
And then beyond that, we can think about government policies, right?
To this day, the Earned Income Tax Credit, which is a great policy for a lot of things, encourages work.
It lifts people out of poverty.
I'm not opposed to the EITC, but it is a true fact that if you have a couple and they're dating and they have a baby, Um, uh, and they're both working, you know, working class jobs, not, not, you know, awesome jobs, but you know, they're working McDonald's or Walmart or something.
Um, if they stay single, they will get a lot more money from the EITC. But if they have the audacity to move in together and marry, they will lose thousands of dollars of government benefits.
Why is this?
Well, there's a variety of historical reasons, but you look at almost any of our policies and this is true.
Well off people, when they get married, we subsidize it.
We have various subsidies for marriage of well-to-do people.
But lower income people, we penalize their marriages very, very extensively through government policies.
In many cases, we penalize their childbearing.
And the result of this is, unsurprisingly, that lower income people don't get married as much.
In fact, as much as a third of the total decline in US marriage over the last several It's causally driven by marriage penalties in a small number of programs that have been well studied.
So I think it's important to recognize that our government did have its thumb on the scale in a way that discouraged marriage and family.
And then the third thing to recognize about norms is related to this is that we often think about small family norms as an elite phenomenon.
Low family, like this is elites telling people not to have kids.
But one of the salient facts of demographic change in the last 40 years is that fertility rates have not declined very much for highly educated people.
Almost all of the decline in fertility in America is among less educated people, lower social, lower socioeconomic status people.
So what's actually happened is today in America, fertility rates rise with income.
That's not quite true.
Depending on how you measure it, they're either flat or rise with income and social status.
It depends on the exact measure you use.
There's different ways to measure this, but there's no negative gradient of fertility with social status in the U.S. And this is because most of the decline has been among lower income people.
So I think when we realize that we really need to understand what's going on here is not so much that elites adopted a small family norm.
It's the elites promoted a small family norm that they did not themselves adopt.
And does the same go for marriage too?
Does the same go for marriage race?
Yes, the same goes for marriage.
That elites tend to marry.
People with higher socioeconomic status tend to marry at the same time that they talk about how marriage should be optional.
We shouldn't be stigmatizing non-marriage.
All these different things.
They say, oh yeah, we need to have family diversity and allow these things.
And by the way, we're going to continue to conventionally marry and have kids like a 1950s couple.
Very interesting.
There's kind of a liberalism for the but not for me kind of thing going on with high socioeconomic status Americans.
So given that history, that's actually...
An interesting point that I wasn't aware of until quite recently.
I've actually learned about this in the last couple of months in preparation for my own book.
My book Truths is coming out in September, and one of the chapters is on the nuclear family structure.
And that was actually where it surprised me, is the rules for thee, not for me.
But against the backdrop you just laid out, it's actually historically unsurprising, right?
You could tell a completely different narrative around the same set of facts, which is that The elite, and I usually don't like the use of that word, but for the purpose of this conversation, let's just go ahead and use the word for economically well-off people who are well-regarded in an institutional life or whatever, at the top of an institutional hierarchy.
For the purpose of this discussion, let's use that as that working definition of a word I usually don't like, the elite.
But nonetheless, Let's suppose that actually you see consistency throughout history, where what you saw initially was what you described as sterilization policy, to say that there are certain populations that we proactively went out of our way to have sterilization laws for that lasted far more than most people even recognize,
according to you, through the 1960s in certain states, in states that required mandated sterilization for certain populations that we just didn't want to see populate themselves more broadly.
That became a softly enforced norm through abortion policy, keeping in mind that even Planned Parenthood and the Margaret Sangers of the world had a mostly eugenic vision.
Yeah, they weren't always soft about it.
Oh, no, no, they weren't soft at all.
It just got soft in its presentation, but the Margaret Sanger's of the world, I mean, this abortion began as a eugenic project in the United States of America, as promoted certainly by the Margaret Sanger's or Planned Parenthood.
So you see forced sterilization laws, then you see abortion in the original version of its promotion through the softer effects, even though its proponents would no longer claim that as an objective.
And then as a natural extension to that, you just see another soft Progeny, descendant of that same ideology, which is to say, preach fewer children to those amongst the plebeian masses who will listen, while not actually behaving that way amongst the so-called enlightened elite.
So in a certain sense, it's not comfortable to observe, but there's a historic coherence.
There is a through line.
And I'll say that, first of all, I think it's worth noting that norms are a way more powerful technology than sterilization or abortion.
Of course they are.
The research on demographic history suggests that the main factor driving changes in fertility rates is not this or that technology.
It's social norms about what's acceptable, reasonable, desirable, and prestigious.
If we think of norms as a technology, they are way more powerful than these other technologies.
They're achieving the end of these other technologies.
Couldn't.
And secondly, if you go in the deep historic human past, you know, before 1750 or much farther, across almost all human pre-industrial societies, higher social status people have more children.
This has been the norm almost everywhere.
It's actually a unique oddity of kind of 20th century societies that this was not true, that higher social status people had fewer children for like a short window of time.
But throughout most of human history and probably throughout most of the human future, it will continue to be the case that higher social status people will have more children.
And why is that?
Well, having children is costly.
You know, it takes time.
It takes money.
Especially if you want to do it in a way that doesn't lead to you sacrificing a ton of stuff you like.
Consumption, status, vacations, whatever.
Sleep.
So higher status people just tend to have more resources.
They tend to be more, they tend to, you know, have an easier time finding marriage partners.
In ancient times where polygamy was morally authorized, you have multiple partners.
Today, multiple partner fertility is possibly higher for higher status men, though there's some caveats to that.
But in general, it's just resources, right?
Higher status people have more resources and having children involves sacrificing a lot of resources.
And so that's something that a lot of people prefer not to do.
That is a little different from older agrarian societies where one of the objectives certainly amongst bringing more children into the world was Especially with early childhood mortality, a probability curve of just ensuring that you're going to have more people to be able to carry out the responsibilities, the economic responsibilities of that agrarian unit.
And that's a different norm when the structure of our economy has changed, and that's partly why it became more of an economic phenomenon where people in lower economic strata found it less easy to have children, whereas in a prior era, it might have been the reverse of that phenomenon.
Yeah.
Yeah.
So, the interesting thing about agriculture, we can talk about agricultural fertility, you know, subsistence economy fertility for a long time.
I'll very briefly just say, what's really going on there is that when we think about people in a subsistence economy as being like farm owners, yes, it makes sense to have lots of children.
Because those children, a lot of them will die, but some of them will survive, and they basically become your retirement.
Yes, exactly.
And they manage the family farm as you get older.
And in America, because we have this vast expanse of land, farm owners are a huge share of the population.
But in Europe, in the old world, this is actually kind of not the case.
A very large share of the population spends a lot of its life not as a farm owner, as hired labor on farms.
In some societies, like ancient Rome or something, a lot of the population is a slave, or of course in the American South.
A lot of the population is enslaved.
So it turns out that, yeah, farm owners who are actually kind of high-status people, so they have a lot of kids, but a lot of your non-owners in subsistence economies don't have children because they never marry, they never have the resources to present themselves as a good marriage campaign.
So our vision of past societies is sometimes skewed by an American experience where like Everybody is like a Jeffersonian yeoman farmer.
It's like that's actually not how most past societies worked.
A lot of people were basically landless poor.
That's a fair point.
So in some sense, your point about the economic well-off trend applying even actually recreate landowners.
So now let's come to the social implications of this and the economic implications for our future.
The simple fact of the matter is you have more people aging out of the workforce, but who are still alive and in many areas living longer, and yet fewer people to serve as the retirement plan for those people.
And you see that show up symptomatically in the Social Security Trust Fund, where you have less money going into it than coming out of it.
Medicare, more money going into it than coming out of it.
You could say the tax base more broadly, the economic base more broadly.
Where do you think that puts us in the United States right now as we think about both, not only how to rectify that, but for the first step of it, how do we deal with that?
What are the needs that are going to be required to be filled in order to manage a population that is A lot older than it historically has been.
That's not working against the backdrop of people that are here in my age that are going to be working as we get into that new population distribution.
Those of us who are going to be working forever to pay for these...
So I think in all these things, it's important to start with the good news, which is it's wonderful that people are living longer.
All too often, this can sound like we're saying, oh, wouldn't it be great if we just had a few more years of COVID to kill more whole people?
No.
It's wonderful that we have these technologies.
And some of these technologies allow people to work longer years happily and comfortably, which many people like to do, which is great.
But there is a problem, as you said, with population aging, having a lot of older people compared to younger people.
And I think the first solution is to just tell the truth.
And right now, our planning bodies, like, say, the Social Security Trustees, are failing on this basic test.
The most recent Social Security Trustees report forecast that U.S. fertility is about to rise dramatically.
That in the next 10 years, U.S. fertility rates will rise by...
It's a lot.
They believe that fertility rates are going to rise by 0.3 children per woman, which is a lot.
That's a lot.
And it's not going to happen.
And because of that forecast, they have a fairly rosy forecast for the outlook for Social Security.
And they also have this problem that they assume that low fertility will have no effect on the pace of wage growth in our society.
The problem with this is if we know anything about wage growth, it's that younger people have faster wage growth.
So if fertility is low and you have fewer young people, then wage growth will slow down.
We also know, I've actually written a paper summarizing the evidence on this, that older populations have lower rates of innovation and productivity growth.
That is, they don't patent as much.
They don't form businesses as much.
They're slower to adopt new products.
They require more of labor to be devoted to low productivity growth sectors, like human care.
They're just less innovative.
And this isn't pejorative, okay?
I don't expect, it would be unreasonable to say I expect a 70-year-old to be as economically innovative and productive as a 30-year-old, okay?
That would be a grossly unfair expectation of that person.
And so as societies age, we can actually expect that wage growth will decline.
And as a result, the tax base will underperform.
So if you look at something like Social Security, they're not only forecasting excessively high fertility, they are correspondingly assuming that whether we get low fertility or high fertility has no effect on whether we get low or high wage growth.
When in fact, it's likely to be the case, sadly, that we will get low fertility and low wage growth, which is just like a perfect storm.
And not only low wage growth, but low productivity growth due to advent of technology.
We hope that these are the same thing.
We hope that wages will track productivity.
Alas, it is not always so, but we hope that they will be.
Now, we think of this as a problem for Social Security or Medicare.
And then people say, well, then we should just invest in the stock market.
Alas, I have bad news.
The stock market is just Social Security and Medicare.
That is, a company's returns depend on their being productive workers who generate economic sustenance to use to purchase the goods they make.
That is, the same things that affect Social Security and Medicare have the exact same effect on the viability of, say, US-listed companies.
Now, then you can say, okay, so let's invest in emerging markets.
Well, that's not where I would go next, actually, because I think you're leading us down to an interesting cascade.
Because I think that that road ends in the same place, right?
Exactly.
It's the same thing.
Fertility is falling everywhere.
I do think that one of the...
And this is a completely different way to back into a subject that we often use other routes to back into that causes us to see it through a different prism, which is the rise of AI or new alternatives for changing the dynamics of what can increase And so I think if the feature of what they would call generative AI,
everyone just spits that word out because it makes them sound slightly smarter.
If you don't just say AI and you put generative AI or gen in front of it, then it's like this new trend.
I've noticed that people have no idea what the difference is between generative AI or non-generative AI or whatever the heck that means.
Somehow, if you say AI and you want to be in a polite company, regard it as a little bit more erudite, you put generative in front of it.
But I think one of the things that is interesting about generative AI, or you could do that as redundant AI in a sense, Different from other technologies, it can be self-generative in its own innovative capacity in a way that may have shown up precisely at the time when otherwise we're toast as a society because wage growth in part overlapping with, in part maybe independently productivity growth going down as the youth's share of the overall population That is unable to support an elderly population.
That might actually be either a coincidence or a non-coincidence, depending on what your theological...
It's not a coincidence.
Regardless of theology, it's not a coincidence that companies are facing real labor issues.
And so they are investing in labor-saving technologies and AI has the potential to be a labor-saving technology, right?
That's not coincidental that a lot of these companies are saying, oh, the reason we should, you know, the justifying reason for dropping, you know, $200 billion on AI-focused data clusters, okay, is that, like, even if Even if this is only slightly better than an existing worker, there just aren't going to be enough workers in the future.
To pause there, it's kind of an interesting thought because usually the discussion around one of the concerns about AI is the displacement of jobs that people won't have out of work.
It's a totally different prism.
I think the way you're back into it from a demographic standpoint is, no, no, no, our problem isn't that we're going to be displaced workers.
Our problem is we don't have enough workers in the first place right now.
Is that a fair characterization?
Right.
I'm not, yeah, to be honest, I'm not super worried about AI displacement.
Humanity has had very disruptive technologies many times and we find humanity classically has insatiable wants.
We always find something that can't be provided by current technology and we buy it from each other.
So, you know, we'll just all become like wellness coaches.
That's right.
A podcast for everyone.
But no, but regardless, I think this is an optimistic story about AI. It might be that it's coming at just the time we need it.
I'm not advancing that, but I'm offering it as an experiment.
It's a possibility.
It's a possibility.
Now, my skepticism on that to some extent is there are scale problems, right?
So, you know, AI is useful Insofar as it has a big, big user base.
You need a huge amount of energy for the compute that makes the AI work.
That's only justifiable if you actually are getting a lot of use.
If there were only eight people in the world, AI wouldn't be useful.
So the question is, is the scale of AI that we need to make it actually a human replacer Is that scale actually going to survive the next 100 years?
Or in 100 years, will human population have declined so much over the next 100 years or 200 years that AI is no longer economically feasible because the energy demands or the scale demands can no longer be met by the user base?
And that's a long-term forecast that's totally speculative.
But fundamentally, it really is the case that you can replace a lot of human functions.
At home, I use a dishwasher instead of washing most of my dishes.
Although here on vacation, I still have to wash my hand because my family cottage doesn't have a dishwasher.
But, you know, some things never change.
But nonetheless, humans always find something to want from each other.
And low fertility is a problem even in a generative AI world because you fundamentally still have to justify the massive scale required to make it cost-effective.
So I think that that's an interesting debate, I think, on its own terms of whether or not it actually would be able to generate its own returns to scale, even against diminishing population.
To be clear, though, just to level set, we're not in a diminishing population state right now.
We're in a diminished population growth state.
In the US, we are not yet in a diminishing population state, although we are getting close.
Without immigration, we're getting close, basically.
No, including immigration.
I think during COVID, there were like a couple months where we actually did decline.
But with immigration, we continue to grow at a declining rate.
Many, many countries are actually at a decline.
Like?
Japan.
Japan, China, much of Eastern Europe.
Much of Southern Europe, I think, is there.
I'd have to review that.
If they're not there, they're very close.
China's there.
India will be there in a few decades.
The list gets more numerous.
What's your perspective on the use of government policy to promote the...
Advent of having more children.
I mean, Hungary style or forget even Hungary style, any style of just Singapore style.
Pay people to have more children.
What's your perspective there?
So, at the Institute for Family Studies, we've launched a pro-natalism initiative that I'm leading that is basically premised on the idea that policy does matter.
Now, policy is not a silver bullet.
There's not one thing that if you just legislate that, people will have two kids.
That's not a thing.
But there are lots and lots of policies that nudge a little bit each.
And we can put them broadly in three buckets.
One is fix what's broken.
So I mentioned the EITC. The EITC currently discourages marriage.
Marriage has a huge causal effect on birth rates.
So we need to fix the discouragement of marriage.
That means fixing programs like the EITC or SNAP or Section 8 housing vouchers, making them removing marriage penalties and removing any fertility penalties in them.
So fix what's broken.
The second is pay for it.
So we should give people money to have kids because raising children is socially valuable.
It's not a handout.
When parents raise a child who is a functional citizen, they are doing hundreds of thousands of dollars of labor that is transferred to the taxpayer.
Through future tax revenues of that child.
I want to come back to questioning on that, but before we get to that, what was your third one?
The third area of policy?
And then the third one is we should change the rules.
So there are places where we don't have to pay for things, but we can change rules.
Things like allowing more flexible use of land that people own.
Right now, we greatly restrict people's property rights to the use of their land to build houses or build more houses on that land.
Housing is the single biggest cost of raising children.
And so if we build more of it, we know from good, high-quality, causally informative studies That making housing cheaper gets you more babies.
And there's other places, occupational licensing, where we have unnecessary labor regulations that prohibit people from being a hairdresser until they complete some, you know, absurd number of hours of schooling.
There's all kinds of places where we have rules in our society, legal rules or normative rules.
You must have a college degree to do this job.
Well, really?
Do you need a college degree for that job?
Where we force people To delay their lives or we prevent people from accessing or using their own rights and property in ways that reduces fertility.
So these areas basically fix what's broken, pay for it and change the rules are key areas where we need to make changes to enable people to have the families that they say they want in surveys.
What's interesting from a philosophical perspective, which I am increasingly deeply fascinated by, which is a potential, I don't want to call it a rift necessarily, but a potential diversity of approaches to the future of the conservative movement, even the nationalist conservative movement here.
Yes, there is diversity of opinion at exactly these points.
I say that because there's a deeper rift between maybe the neoconservative movement of the past and the America First nationalist vision of the future.
But within that America First nationalist vision of the conservative movement, I think that there is a fork in the road, and I'll be talking about this in other forums more extensively, but I think there's a rough fork in the road that the rubber hits the road on where is your Where's your skepticism of the regulatory state in your hierarchy of priorities, right?
I start generally from a place where I am deeply skeptical of the regulatory state, not just because it's an impediment to freedom, but because I think it's actually been net bad for workers, net bad for family formation for some of the same reasons.
That you articulate here.
And when I look at those three categories of what you call pronatalism policies, and pronatalism, I think, is a worthy goal.
The question of how to get there is an open question.
You know, number one and number three, which is sort of fix what's broken and You know, change rules, which are antithetical rules that have created perverse incentives.
Regulations and things that are broken.
Yeah, or anti-regulatory state.
But number two requires a regulatory state effectively to administer the payment for what types of behaviors ultimately are rewarded.
And I wonder whether we...
With the best of intentions, and I see this in the area of economic policy, of so-called industrial policy, I see it with respect to consumer protection regulations or antitrust laws, it shows up in the immigration debate in certain senses too, of effectively...
Profiting an oxymoron of a menu of policies, which are to acknowledge the existence of regulatory state that gave us what is the failed incentive structures we've created today, and yet somehow supposing that we could have an alternative edifice That gave us something better than the actual bureaucratic apparatus that got us to where we are.
I just think it's an interesting fork in the road for the future of the conservative movement and the nationalist right.
Is it principle number one or principle number zero to say that we are hostile to the existence of the regulatory state where I land?
Or is it that we just believe it's been used or engineered in the wrong way?
You know, I think you can tell where I land on that by the fact that of my three big buckets, two of them are basically we probably need to regulate less.
I think that an intense amount of skepticism and frankly, we should have a baseline hostile relationship with the idea that the solution is that the government needs to fix it.
And so, yeah, I mean, we have to start by Finding all the areas where we've broken things and stop doing that.
And sometimes that means a policy is just wholesale repealed.
Sometimes repeal is not politically viable or there's other reasons why even if the policy is inefficient, maybe we can't get rid of it.
But we at least need to fix what's broken.
A lot of the rules we need to change are basically just removing rules.
I say change the rules, but often it's just remove them.
But I'm pay for it.
I don't think that all states are necessarily regulatory states.
And what I mean by that is, you know, I don't think the existence of, say, a military means that you inhabit, like, a regulatory welfarist state, okay?
Pronatal incentives go back to, you know, Caesar Augustus implemented pronatal incentives.
Trajan, the Emperor Trajan, implemented pronatal incentives.
Multiple French kings in the 1600s and 1700s Implemented pro-natal incentives.
These people did not have regulatory modern welfare states.
These kinds of policies are literally thousands of years old.
So I think that what we can say is that it's possible to have quite slim, this can sound like an oxymoron, but Relatively slim bureaucracies whose job is basically to write people checks for relatively easy to identify behaviors like, you know, Having custody of a child.
And at the same time, say that same bureaucracy probably doesn't need to decide whether or not you're allowed to be an interior designer.
I think we can draw some bright lines in that there are some government functions That really don't require much of a regulatory state.
And that there are other functions that require this sprawling and interventionist apparatus.
And I should say that there's a very real political divide on this.
Me and a scholar at the American Enterprise Institute, Scott Winship, have disagreed about this a lot.
That I would prefer to get rid of programs that require social workers to visit people's houses and check up on them regularly.
And instead, just give cash incentives to encourage work.
Like the EITC, okay?
Or a cash incentive to encourage children.
Whereas he, in the current dominant view at the American Enterprise Institute, would favor these really interventionist and bureaucratic interventions.
Like, actually, we should have all these elaborate work requirements that require us to check up on people and have social workers visit them and all these things that are basically a regulatory state.
Whereas I would say, let's get rid of the regulatory state.
And just make really simple, you know, essentially transfers that if need be, you could fire the bureaucrats and just like have a couple lines of code do it.
Yeah, I mean, I think, you know, I think you and I share strongly overlapping instincts.
There might be one sort of quibble even I have about the earned income tax credit, characterizing it as a cash, as a cash incentive.
That's a detail.
I'd put a footnote to that.
I think one of the issues is many people fail to even understand What that earned income tax credit actually is versus just giving them cash, right?
Like literally, if that were just sending the tax-free check into somebody's account or mailbox, that might have actually a greater...
No, they have to earn money to get it.
But also even the second order effect and the psychology of how that affects your behavior of knowing that you're going to get a tax credit when you file your taxes is one step removed away.
But that's a detail-oriented discussion for another day.
One topic I'd like to close with moving away from government policy, but maybe just thinking about economic opportunity, even wearing an entrepreneurial hat, is whether there isn't a greater segment of new company formation that's available against the backdrop of an aging population.
One of the things that I've noticed as an entrepreneur myself Is that young people build companies that are generally, especially technology companies, that are built with a younger user base in mind.
I actually happened to co-found a company several years ago that's doing quite well, but with a much narrower scope now than what we founded it with.
Thinking about the idea of building a technology company with an elder-first mentality.
The company is called Chapter.
It's now focused on Medicare Advantage plan selection for elders who often end up with the wrong Medicare Advantage plan, which is a shame.
But like many companies that have to succeed, it ends up finding an area of focus and that company is going in its own direction.
But the broader theme that led me to Fountain Chapter still persists, and it's interesting.
It's part of why I'm interested in the conversation about demographic change is This might open up a range of opportunity for addressing this population imbalance, not necessarily through the 200-year version of making sure that we don't have the population imbalance itself, but in the next 50 years, what types of economic opportunities does that open up as well for innovation in ways that service a population that's largely been ignored by hotbeds of innovation like in Silicon Valley or elsewhere?
No, I think that's a huge question.
I mean, obviously, like you said, tech is usually designed for young people, and that's really unfortunate because most of the users are going to be older people who are just frustrated that the button is too small for them to click.
So I think that's a huge area of opportunity.
I will say, and I think there's probably a lot of very wholesome and good areas of opportunity to To look at how our society is changing and think about, okay, you know, so there's demand for things that are useful for other people.
I will say there's also unwholesome areas of opportunity, okay, where as fertility falls, the one child people do have becomes this You know, ultimate super high stakes child.
So you get this massive proliferation of tutoring services that we know empirically have no effect on child achievement, but parents spend thousands of dollars on them, you know, or services that will let you eugenically select the best embryo, even though the actual genetic research underlying this is It's not very credible and only applicable to certain subsets of people.
Or you have businesses that increasingly will...
I mean, I've lived in Canada for several years, that are effectively marketing suicide for older people.
That's a booming industry in a lot of the world, is marketing opportunities for old people to kill themselves.
So obviously pain management drugs.
As we have an older and older society, our booming market that has caused real problems in our society.
And so I think there will be markets for lots of products, and many of them like, yeah, helping old people select a Medicare Advantage plan, that's a complicated thing.
We need help.
That's wonderful.
There's also places where our society, I think, is not adequately thought about the kinds of unwholesome and exploitative and sometimes murderous Business plans that are emerging out of our ongoing demographic change.
I think that that's at least a positive way to think about at least what we can do to drive change, which is a little bit outside of the government policy realm, which I think has its own trade-offs.
But from the point of view, I would give to entrepreneurs who are thinking about areas that the PAC hasn't run.
The top piece of advice I give to an entrepreneur or any entrepreneur is, go where the PAC isn't.
Be contrarian and make sure you're right.
Well, here, you're going to be right if you're betting on demographic change because that's a fact that's staring us in the face.
But you're also contrarian because it's definitely happening.
It's definitely happening.
And it happens to be a contrarian move to be able to say that, you know what, we're building technology not for the next generation that's adopting it, but actually for prior generation for whom the interfaces or the user interfaces or the user experiences may be very different in the way they're built.
And, you know, I think if somebody wanted to start a venture capital mega fund or was looking at new areas for starting a new company, it's not just one thesis.
I mean, it's almost a superset of an entire segment of an economy that I think is underdeveloped today.
And I think that's exciting.
And it applies even...
It applies even within sectors.
So you think about like educational technology, okay?
People think of educational technology as for young people, but the truth is educational technology aimed at 13 year olds is going the way of the dinosaur, okay?
Because there's just not that many of them left.
But educational technology for 40 year olds who need to retrain for a new job, that's a boom market.
Or for 60 year olds who want to pick up a skill in their retirement, that is where there's definitely something to be done.
So I think, like, educational technology is one where I'm interested in it, and I feel like there's a ton of investment going into, like, can we make three-year-olds do calculus?
And I'm like, do you realize that the number of three-year-olds is falling, like, 4% every year?
Like, how about you make it so that you can make, like, you know, turn a 55-year-old into, like, a useful web manager for their neighborhood?
Absolutely.
And we're hungry for it.
That's where we need educational technology.
Especially with that phenomenon, which is a good thing, as we noted, of people living longer.
But the retirement age still remaining as a social norm, fixed around 65. You also have people entering a phase of their life who, actually many of whom may be healthy, but are devoid of the purpose they had during their work year.
And they want to do something.
The first chapter of your life, you were in school.
The second chapter of your life, you were working.
The third chapter, which is now becoming the longest chapter of all just by a number of years, you literally have nothing fixed to do.
And so that's a major opportunity.
A number of years ago, I... A number of years ago I bought my wife a dulcimer she wanted to learn and the guy who made it was like a former a head engineer for an auto company but he was retired he's like I'm gonna pick up a skill and he learned to make like some of the he's like now one of like a a really high-end dulcimer manufacturer I love um a custom so like you know there's a lot of people doing this it's it's it's really a revitalization of craft industries especially with like 3d printing um I've got a buddy who's
really into 3D printing, making all sorts of products, some of them maybe that are challenging the limits of the Second Amendment.
So there's a boom in craft industry that can happen with the expansion.
Yeah, and I think that you and I began this conversation with a shared skepticism of the over-catastrophization of everything, but I think that there's an under-opportunization as well.
And I think that the more we're able to see the flip side of this as an opportunity for people who are thinking about using their talents not to create the next app that allows a 12-year-old to click on a little mustache incrementally faster on some new iteration of a Snapchat, it actually might be energy directed in a different way.
It can be part of the solution.
Exactly.
It may be part of the solution as well.
So I appreciate that.
One complaint I hear from older people a lot is that they feel disconnected from younger people.
Nowadays, I just wrote a book for my daughters.
I'm not an illustrator.
I don't know how to do that.
So I used Upwork and I hired an illustrator that was super cheap because he used AI to supplement his illustrating abilities.
And as a result, I made a book that encapsulates my values, my attitudes, you can find it on Amazon, for my kids.
It cost me nothing to put it on Amazon.
Hiring an illustrator wasn't that expensive.
I can use publicly available software to package it.
And I'm thinking these older people who have all these ideas, experiences, values, But they feel like kids aren't connected to them.
You can make a children's book easily and for almost no cost for your grandchildren.
It's funny you mention this.
So the company that I found is now called Chapter, it was incorporated as Memoir, Inc., and actually began with the idea of production of books from an older generation to educated older generation.
Now it turns out there's the business realities that actually made the business, the chapter, entered far more high growth and, you know, Prosperous as a business.
But nonetheless, it's interesting.
Long before I entered politics, I've been circling this hoop as an entrepreneur, and I still think it is a hoop worth circling for other entrepreneurs who are looking to channel their talents in a way that's a little bit different than the rest of their pack is running.
This was a great conversation in that direction.
I appreciated it.
And I hope this is not the last time we'll be chatting.
And I wish you and everyone else at the Institute you're at the best in opening up new ideas that we need to tackle the challenges of demographic change that I'm sorry to say the politicians in both parties have all but ignored.
It's wonderful to be with you and to have this conversation.
Thank you, man.
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