Alan Reynolds: Demographics and destiny
Another Alan Reynolds article, this time on demographics. (I'm working through a passel of saved favorites in alphabetical order, so Alan gets 2 in a row!)
The rapidly changing demographics of the industrialized, developing, and under-developed world will have profound effects on the future. However, as Mr. Reynolds points out, the effect need not be catastrophic:
In some parts of the world, such as China, India and Mexico, labor will be relatively abundant and capital scarce. In other parts of the world, such as Japan, Europe and the United States, capital will be relatively abundant -- at least in comparison with an increasingly scarce supply of willing and able workers. How willing and able those workers will be, however, is more a matter of incentives than demographics.
Demographics alone present no fundamental economic problems for free and open economies. Nations relatively short of labor can either import workers through open immigration policies or they can import labor-intensive goods and services through open trade, including electronic imports of services. Nations relatively short of capital can either import financial capital by providing secure property rights and competitive taxation, or they can import capital-intensive goods and knowledge-intensive skills through open trade.
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Nations with free and open economies, frugal governments and predictable regulatory regimes will prosper regardless of demographics.
Posted by georgegmacdonald at July 17, 2004 11:00 PM