The Brooklyn Rail

Jason E. Smith’s article, “After the Wave, Winter” in the July-August Field Notes provoked much response. Two writers sent in comments. We are publishing them here, with brief responses by Smith.

Jason E. Smith has written another banger for the Brooklyn Rail, on a topic I have long been curious about and which I have to come to see as a serious gap within current discussions about the trajectory of capitalism across the coming century: demography. Smith takes as his starting point the questions preoccupying the financial press, such as the Financial Times, which has since 2022 been investigating the ongoing “baby bust” in Europe and East Asia. As he writes:

For the governing elites of the countries coming to grips with this slow-moving tectonic slippage, the burning issue is not slowing population growth—or even outright decline—per se, so much as the changing age structure of these populations, and how these shifts might reshape, perhaps in some near future, the organization of society.

Already we see the difficulties. From an observation in the present about population and economy we must project a future course for population—yet modeling this future course requires assumptions about social organization that must be questioned, and furthermore this future course might itself redound upon social organization in such way that our assumptions no longer hold. While it remains certain that the population of the planet will hit a maximum and begin declining toward the end of this century—in what year and month this will happen and how high the score on the planetary pinball machine will go can only be approximated, since that maximum will depend upon social conditions not yet entirely established. Furthermore, as regards specific countries or zones—some of which having already hit their maxima and some of which may not for many decades yet—the predictions inspire even weaker confidence, since they will depend upon particular economic and political conditions on a warming planet that will challenge and perhaps even bring to ruin these economies and their politics. How can we be certain about birth rates and death rates without first making an assumption about how hot the planet will get and what this might mean for underlying economic conditions and the social organization of our societies?

From the standpoint of, say, the Financial Times—that is to say, the elites who make investment decisions—shrinking populations of workers in low-population-growth countries are a matter of direct concern, since what matters from that standpoint is aggregate economic growth, or the growth of particular sectors or firms, which can be seen to depend on the rate of growth of productivity and the number of workers employed. This is especially true in labor-intensive industries with low productivity growth. The first point that needs to be made, however, is that a shrinking population need not mean a shrinking population of workers, since as Marx pointed out, some large fraction of the population is held in reserve or surplus to the requirements of accumulation at any point. What matters for output is workers, not people. As Marx notes in chapter twenty five, expanded reproduction of capital and the reinvestment of surplus value presupposes a growing population not of people, necessarily, but of workers productively employed. “Accumulation of capital is therefore multiplication of the proletariat.” This proletariat can multiply absent any growth in the human population, however—since the number of humans either market-dependent and/or dependent upon the sale of their labor power has always only been some fraction of the humans on the planet, even now. And since capitalism seems, by all accounts, to be slowing down, the explanation for such a fact must lie elsewhere and be independent of demography.

Does the rate of growth of the population have any effect, then, on output measured as L or as GDP? Smith poses this question toward the end of his essay:

To what extent does the convergence of these two phenomena—contracting workforces and job growth in labor-intensive services—render capital accumulation in the high-income countries once again subject to “natural limits” of demographic change?

As far as I can tell, Smith doesn’t give us a full answer to this question, but there’s a reason for this, as I’ve come to realize. The rest of the essay instead considers the obverse question—which is how the course of capital accumulation affects population. Answering this question renders the flipside question unanswerable, since upon consideration we find that the deceleration of population growth which we observe is already itself determined by the (slowing) trajectory of capital accumulation—the countries where the population is falling fastest are those countries which were fully transitioned to capitalism in the last two centuries and are already embarked upon postindustrial stagnation. It is not possible for population to itself become the independent variable of a function for capital accumulation since it is already the dependent one.

At first, I must admit, in discussing this with the editor of Field Notes, I thought quite the opposite. It seemed obvious that, given the decomposition of GDP into rate of population growth plus the rate of productivity growth that a faster growth of the population would equal a faster growth of capital. If workers had fewer kids then capital would accumulate less quickly. One could measure the growth of capital in part by the rate at which the size of the laboring population grew—still rising today, let’s remember—plus the growth in the workday, plus the rate of increasing productivity. Less people, less capital, all other things being equal. This is true, as far as it goes, but also irrelevant, since wage-dependent workers are already having fewer kids in those postindustrial economies where demand for labor is weak. The deceleration of the world population is already itself the effect of demographic transition.

The complexity is that this transition has left much of the world unincorporated into capital or weakly incorporated. The exploding growth of the population in some countries presently, and in many countries across the twentieth century is, paradoxically, less a direct effect of capital since it is mostly a result of the lower death rate, and particularly lower infant mortality and mortality during childbirth—itself more directly an effect of technology than birth rate. There is a fraction of humanity not directly organized by capital, though nonetheless for the most part dependent, indirectly, upon revenue to capital or labor. This informal economy is already the reserve into which capital expands and into which it thrusts workers surplus to its needs. For such a reserve to be tapped and unable to provide more workers for the process of accumulation, the human population would need to decline precipitously, not just hit a maximum.

Why, then, the worry in the pages of the financial press about shrinking and aging populations in countries where younger workers are in shorter supply? Is this simply illusion? Where so many workers have exited the formal economy or never entered it in the first place, surely a reserve of proletarians adequate to capital’s needs exists? What elites care about, however, is not growth in the aggregate except inasmuch as it affects their specific interests. From the perspective of a nation, a sector, or a firm, more workers does mean more growth, and may determine that country’s, or sector’s, or firm’s receipts as a share of total profit. Pronatalist policies are, however, unlikely to make much of a difference where the problem is weak demand for labor, and so many workers opt out of the formal economy or were never in it to begin with. What does and what might make a difference in particular countries, however, are immigrant workers willing to work for lower wages. We might conclude then that, for the most part, concerns about low growth reflect, and disguise, concerns about immigration and the changing composition of the labor force. It is hard to predict, however, how any of this will play out anywhere, especially given that “pull” factors for migration—such as higher wages, and better economic opportunity—will increasingly confront an increasing set of “push” factors, such as war, climate catastrophe, and famine. Demography, it turns out, is less interesting than I had thought.

Here, then, as elsewhere, we find that capital is in the driver’s seat. Demography is a less interesting subject than it first seems, inasmuch as it tends to naturalize effects better seen as consequences of the development of capital and labor. This is true even when we look at things from the perspective of resources and planetary boundaries, from which standpoint it might seem obvious that fewer people means less resource use, less material throughput, and a better maintenance of planetary boundaries. This is also an illusion, however, since people in fully developed capitalist countries consume and have consumed so much more of those resources, and where a smaller population on a planet with more capital accumulation using the current technological package would be more destructive. Marx’s sentence can be reversed: multiplication of the proletariat is accumulation of capital—human population, counted so abstractly, is the mirage of capital accumulation.