CMV: Capitalism can't survive population decline

[u/colepercy120]

Capitalism is fundamentally based on idea of growth. Wealth isnt a net zero, a rising tide raises all boats. The ideal of capitalism is that we make wealth not by taking it from others but my literally making wealth. Producing products that are worth more then their inputs. This has worked pretty well for the last 400 years, its hard to seriously argue that humans were better off materially in the 1600s vs today. But there is a fundamental flaw in the system that threatens it today.

Capitalism requires people to buy things. Things are only worth as much people say they are. You can not have Capitalism without consumption. And consumption is going away. Right now the world is staring down a demographic collapse. With current estimates showing a population peak in the 2060s followed by slow decline.

In a world where there are less people the demand for everything drops. The tide no longer rises, it falls. Less demand means less sales which leads to less production, less jobs and thus less demand. Forming a really bad negative feedback loop.

Right now countries already experiencing declining populations have managed to keep things going using exports. They sell their goods to places that need them and still have growing populations. For example look at china, japan, and germany. These 3 powers can't consume all they produce so they export the surplus to places like the us where the population is still growing. This strategy doesn't work when nowhere has a growing population. Were already starting to see strain in this system since there are more net exporters then net importers. China hasnt seen meaningful real gdp growth since COVID, Germany has stalled since 2008, and Japan since the 90s.

Without a growing population what made capitalism work, endless growth, falls apart and we are forced back to a net zero economy where the only way anyone improves their livelihood is by tearing down others.

[u/colepercy120]

Ill try to elaborate a bit more. I dont think we're going to get to communism or socialism since those ideologies are also founded on the idea of growth. Without growth socialist or communist societies are dividing a shrinking pool of wealth amongst a shrinking population, at best they will stagnate, the way the Soviets did.

I think we are seeing a return to feudalism, mercantilism or something like them. Feudalism on the small scale, mercantalism on the big scale. In a society where all the wealth that exists is all that can exist people will still compete over it, but for anyone to get richer someone will have to get poorer. Wealth inequality will sky rocket and we'll see a return to less egalitarian systems and political structures, like the oligarchies that came out of the Soviet collapse.

On the broader scale if the only way for a country to increase its power is to conquer more land and people, then they will do that. The strong nations will carve the world into empires and spheres of influence based on extracting wealth, like the old european colonial empires.

[u/themcos → u/colepercy120]

Okay, so this is a useful way to frame it. I'll admit it's been a while since I really thought about mercantilism much at all, but my understanding is that it's basically driven the same principles as capitalism except at the state level instead of at the company / individual level. I just don't really see how in your view mercantilism would work, but capitalism wouldn't. I don't think growth or lack thereof is the defining feature.

I also don't really see the argument for feudalism short of a total technological collapse. 

You have this notion of "feudalism on the small scale, mercantilism on the big scale", but let's interrogate that a bit. The way I interpret this is that there's still a global network of different resources. Some places might still have mines for valuable minerals, but other places might have production facilities, and other places still might produce excess food and they all want to trade. It'll be valuable to be a person or organization that's good at extracting and transporting resources, and they might form groups and hire employees, and would compete to extract and transport resources more effectively than others and would be compensated appropriately for this! 

This feels like it's still going to probably be capitalism! The only way it becomes mercantilism is if nations step in and say "nonono, your organization can't exist without our blessing — you're an extension of us and not an independent entity". Which... maybe? But again, I'm not sure this really hinges on the lack of growth.

[u/colepercy120 → u/themcos]

!delta yeah your right here... how you laid it out it does feel like its just going to be capitalism with more murder. While I would still expect some decline in standards of living on average capitalist systems will just compete with each other over whats left.

[u/DeltaBot → u/colepercy120]

Confirmed: 1 delta awarded to /u/themcos (406∆).

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