If you listen to or read major economists discussing what they think are big-picture problems, then their list usually includes three topics: Fertility, Culture, & the Fiscal Health. On the wonkier side, you’ll also hear that housing scarcity and affordability is a problem, but let’s stick with the first three.
Fertility
People are deciding to have fewer children for a variety of reasons. In no particular order, the reasons include greater access to financial institutions, more popular female education, higher female wages, lower infant mortality, and falling religiosity. Some also speculate that housing affordability, safety regulations, and social safety nets contribute too.
What’s wrong with lower fertility? In an objective sense, there is nothing wrong. But, in the sense that people value similar things, we are in somewhat uncharted territory. Realized fertility is dropping across the globe. We know that economies of scale increase productivity and real wages. We also know that technological innovation comes from having more minds engaged with economic problems. It’s possible that labor productivity rises faster than the productivity that we lose with smaller scale, but it’s an open question. What happens to the liberal societies and polities when the liberals fail to persist? These are big geopolitical concerns.
Culture
People seem to be more fragmented religiously and culturally. Social scientists used to discuss Judeo-Christian norms more often. Sometimes you’d hear about English or Roman legal tradition or enlightenment values. But now, there seems to be very little in terms of common social cohesion. In the USA, the general common culture seems to be ‘smile and be nice’. That’s not the worst common rule, but it’s not enough to hang our hat on for a capable liberal state.
The lack of cultural cohesion isn’t my own particular concern – public intellectuals in economics and elsewhere feel like there is a problem. There is a mix of reasoning behind the concern. Some people are worried about transmitting values to the next generation, some are worried about how people behave when no one’s watching, and still others are worried about simply lacking a Schelling point that coordinates large scale economic cooperation.
Fiscal Health
By this time, the poor fiscal health of the US government is renowned. We have growing transfer obligations and no politician has done much to address the looming problem of unfunded liabilities since US president George W. Bush failed to introduce a small reform more than 20 years ago. Republicans keep cutting taxes and neither Republicans nor Democrats are willing to meaningfully cut spending on the larger parts of the federal budget. The trend has been for the federal deficit to grow as a percentage of GDP throughout the 21st century. Since 1980, the federal debt has climbed from 30% to 118% of GDP. Especially in light of the falling fertility, there is increasing concern that the US may need to monetize parts of the deficit/debt, potentially resulting in greater inflation. Right now, economists broadly agree that the deficit places upward pressure on nominal interest rates and makes private investment in productive endeavors more difficult.
Passe Solutions
Economists and other social scientists are generally happy to perform analysis until they are blue in the face. But the above long-run problems are slightly awkward topics for a “value-free” science. If you can’t already tell by my tone, there is a lot of ‘if-then’ analysis and many are not willing to put their neck out and say that there is a real threat to our way of living. After all, who’s to say that we should have more children? Who’s to say that we should attend and fund a weekly religious service? Who’s to say that we ought not monetize the debt?
The problem with these topics is that there is only a problem if you have values. Do we value having more people, or even some arbitrary number of people? If the answer is no, then there is not problem. Do we value specific common goods and beliefs? If not, then zero overlap among our values is the ultimate degree of individuality. The government may default on its debt, but that’s only a problem if you care about the US government’s continuity and capacity to act. Having values among social scientists is passe because it’s not detached and makes one’s argument vulnerable in ways that can’t be addressed with logic and math. It’s not scientific – despite the work that’s been done on culture, public choice, positional goods, etc. We study the pool, but we don’t jump in.
Even popular intellectuals who are worried about these three threats to our flourishing society tend to shrug. They acknowledge the problems and continue about their day. The economists who advocate for having more children, or who bear more children themselves, are few. Some lament the decline in religious participation, but then don’t participate themselves. The public debt problem is a little bit different in that we can’t lead by example with our actions. But we can and should lead by voicing our values.
For the record:
- I have 4 children, and a 5th on the way. I think that you should have kids or babysit for your friends or pay for their pizza.
- I’m Catholic and I attend weekly mass. I think that you should go to mass too – or something.
- I think that the social security retirement age should be 1) higher and 2) a proportion of the average life expectancy. I think that you should wear your ideas on your sleeve, and tell me about them.
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