Latest / Thinking Class / #151 - Paul Morland & Philip Pilkington - Britain Is Going Bankrupt And Nobody Will Say Why

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#151 - Paul Morland & Philip Pilkington - Britain Is Going Bankrupt And Nobody Will Say Why · Thinking Class

0:00
SPEAKER_02: Hello, classmates, and welcome to Thinking Class.
0:02
SPEAKER_02: I'm John Gillam, and today I'm speaking to Paul Morland and Philip Pilkington.
0:06
SPEAKER_02: Paul is a tomographer and the author of The Human Tide, Tomorrow's People, and No One Left.
0:12
SPEAKER_02: Philip is an economist and the author of The Collapse of Global Liberalism.
0:16
SPEAKER_02: Together, they have written BUST, The Economics of Population Decline, which is out in early November 2026.
0:23
SPEAKER_02: In this conversation, Paul, Philip, and I think out loud about why Britain's economy is a demographic Ponzi scheme, why the economic models we rely on were built for a world that no longer exists, what happens when the grey economy overwhelms the workers who sustain it, whether the West is heading toward state-sanctioned euthanasia as a fiscal solution, and why young people are already living under a form of demographic feudalism by renting their lives from the generation above them.
0:49
SPEAKER_02: This episode is brought to you by Aquinas Tuition, which provides bespoke academic tutoring informed by classical liberal arts principles.
0:57
SPEAKER_02: Whether your child needs support with GCSEs, A levels, or university entrance, Aquinas will pair every student with a tutor who cares about formation and not just grades, but they care about grades too.
1:07
SPEAKER_02: Visit AquinasTuition.co.uk.
1:10
SPEAKER_02: I am also the founder of the Albion Institute.
1:13
SPEAKER_02: This is an institution for the formation of nationally minded leaders and an informed public through the preservation, transmission, and renewal of the intellectual and cultural inheritance of the English speaking peoples.
1:23
SPEAKER_02: Lord Nigel Bigger has joined Albion as advisory board chair, and if you would like to learn more or register your interest, visit Albion Institute.org.
1:31
SPEAKER_02: And if you haven't already, go and watch The Call of England, my six-part documentary series following H.
1:36
SPEAKER_02: V.
1:36
SPEAKER_02: Morton's 1927 journey through England.
1:39
SPEAKER_02: The link is in the description.
1:40
SPEAKER_02: In the meantime, enjoy the show, classmates, and now Paul Morland and Philip Pilkington.
1:52
SPEAKER_02: Last year, Nigeria produced more births than the whole of Europe combined.
1:57
SPEAKER_02: 7.5 million children against 6.3 million from Portugal over to the Yale Mountains.
2:03
SPEAKER_02: And if you asked central banks or treasurers in governments what they ought to do, they would say, let's bring those people here.
2:11
SPEAKER_02: But what if those very people end up adopting the same birth rate as their host populations in the West within a generation?
2:19
SPEAKER_02: What if those countries end up running out of people themselves?
2:22
SPEAKER_02: Britain itself has gone from net emigration in the 1970s to hundreds of thousands per year, but GDP growth has halved in that period.
2:32
SPEAKER_02: So let's talk about what a good economic model, indeed a good demographic model, would look like.
2:38
SPEAKER_02: And joining me today is demographer Paul Morland and economist Philip Pilkington.
2:42
SPEAKER_02: Chaps, thanks so much for joining me.
2:44
SPEAKER_02: Pleasure to have you both back.
2:45
SPEAKER_02: Paul, let's begin with you.
2:47
SPEAKER_02: The book opens with a propagation, the book being Bust, your your your joint endeavour with Philip.
2:53
SPEAKER_02: And you have effectively argued that using newcomers to solve the demographic crisis is a Ponzi scheme.
3:01
SPEAKER_02: Tell us why.
3:03
SPEAKER_01: There are a whole list of reasons why immigration is not a serious long-term solution to the problem of having too few children.
3:10
SPEAKER_01: The first, which I think everybody knows, is that immigrants get old.
3:14
SPEAKER_01: And I was brought up in Wembley in the 60s, 70s, early 80s.
3:20
SPEAKER_01: There was a large influx of South Asian people from East Africa.
3:25
SPEAKER_01: Made Nigujati's mostly quite young.
3:27
SPEAKER_01: When I was taking my mother round the supermarket, sort of in the last few years, she's no longer with us, sadly, I could see all these people had aged, and most of them only had a few kids.
3:37
SPEAKER_01: They didn't have a very high fertility rate.
3:39
SPEAKER_01: So the first thing is that you need to have a constant inflow.
3:42
SPEAKER_01: It's not a one-off, it's a constant inflow.
3:44
SPEAKER_01: And if that inflow doesn't in turn have a very high fertility rate, then you need the inflow to carry on in order to support those people.
3:53
SPEAKER_01: If your objective is to have more working age people to support the retired population.
3:57
SPEAKER_01: And the fact is that most immigrant groups don't have a high fertility rate, particularly, partly because they conform to local norms, and partly because the places that we have been receiving our immigrants are no longer high fertility countries.
4:12
SPEAKER_01: Ireland used to be a major source of British immigration.
4:15
SPEAKER_01: The Irish now have a low fertility rate, whether they're in Ireland or Britain.
4:18
SPEAKER_01: The same is true of Poland.
4:20
SPEAKER_01: Even India's now gone below replacement level.
4:23
SPEAKER_01: In the US, the great inflow from Mexico, when it started in the 70s, they were having five, six, seven children each.
4:29
SPEAKER_01: And now they're having the Latino uh immigration, the Latino fertility rate in the States is similar to that of the general population, only slightly higher.
4:37
SPEAKER_01: And in Mexico itself, it might be lower.
4:39
SPEAKER_01: So moving people around the chessboard isn't going to solve the problem of too few young people.
4:44
SPEAKER_01: Then there are other problems.
4:45
SPEAKER_01: One is that if you're a very large country like China, you'd have to be moving people an industrial scale, pretty much hovering up everybody to keep your ratio of workers to retirees.
4:58
SPEAKER_01: Another serious issue is that there is a backlash.
5:01
SPEAKER_01: Not everybody is a liberal cosmopolitan who thinks that any individual is the same as any other individual.
5:07
SPEAKER_01: It really doesn't matter what the ethnic mix of your country is.
5:10
SPEAKER_01: At this point, I'm not saying that they're right or wrong.
5:13
SPEAKER_01: I have my views on the subject.
5:14
SPEAKER_01: But the fact is, in a democracy, people will vote against endless mass immigration from different cultures.
5:21
SPEAKER_01: And we're seeing that it's the main, probably the biggest issue for Trump was immigration, the biggest issue around Brexit and the rise of reform, maybe the fall of reform, but that has been about immigration very largely, similarly the AFD, similarly the Rassemblement National in France.
5:37
SPEAKER_01: So it's a big political issue.
5:39
SPEAKER_01: It can't just carry on forever.
5:41
SPEAKER_01: And there's also the point that two other brief points.
5:45
SPEAKER_01: First of all, that if we are going to get our immigrants from the remaining high fertility countries, we are effectively scraping the human capital barrel because the only countries which still have high fertility rates have very poor education, very poor infrastructure.
6:01
SPEAKER_01: When they come to the developed world in their 20s, they've generally been very poorly educated and therefore their contribution can be limited.
6:09
SPEAKER_01: It's not to say we can't improve their education, but taking someone at 20 or 30 and expecting them to become a high value added worker is a bit naive.
6:20
SPEAKER_01: And then finally, if you ever speak to anyone who's actually trying to do business in sub-Saharan Africa, they will tell you that the skimming off of the best and brightest is having a very detrimental effect on those countries.
6:33
SPEAKER_01: And so it's as if we're saying we're important, we're busy, we've got all sorts of things to do, we can't be bothered, or we haven't got the time or even the money, some would say, to have our own children.
6:44
SPEAKER_01: So we'll subcontract it and we'll ship people in according to our requirements, which I think a term Phillips used in the past is biological imperialism.
6:52
SPEAKER_01: So I think that's a pretty uh multifaceted and compelling reason why to think if this is a problem, as we believe it is, that there are too few people being born, shipping people in is at best a temporary solution.
7:05
SPEAKER_02: Philip Paul effectively has made the case that the entire model that Western economies have been built on is fraudulent intellectually, but also there are uh moral concerns with regards to the impact on the countries these people are coming from.
7:21
SPEAKER_02: Uh how do you think every serious institution, those that care about economic models and produce policy papers, missed this based on what you've just described as uh clearly uh big holes in the economic case for mass immigration?
7:39
SPEAKER_00: I mean, in a way it's kind of shocking.
7:41
SPEAKER_00: Um, to go into some of the more modern history.
7:45
SPEAKER_00: We actually have a chapter in the book on the history of economics and demographics and how they intertwined with each other, but we won't do an entire run-through of it.
7:52
SPEAKER_00: But to to start with the more modern history, there was um there was a uh a population slump during the Depression era in the late 1920s, uh, 1930s, early 1930s, mid-1930s, and obviously the baby boom after the Second World War.
8:07
SPEAKER_00: And um it was a big topic of discussion.
8:09
SPEAKER_00: There's a very interesting uh speech by John Maynard Keynes in the 1930s to the eugenics society in the United Kingdom, and the eugenics society, people don't like talking about it now, but they ended up transitioning into the uh pro-abortion movement, effectively, in many countries, not just in the United Kingdom.
8:28
SPEAKER_00: Um, so he was effectively telling, when you hear the eugenics society in the 1930s, maybe you'll think about, you know, pretty creepy stuff, and there was some of that, but mainly it was about population control, actually.
8:40
SPEAKER_00: And Keynes basically went to them and said, you know, this isn't really gonna work economically.
8:46
SPEAKER_00: You guys haven't thought it through.
8:48
SPEAKER_00: Um, the Keynesian economist Roy Harrod wrote a lot about um about uh population decline as well.
8:55
SPEAKER_00: He's he's one of the founders of modern growth theory.
8:59
SPEAKER_00: Um, and he had pretty intense debates with uh Joan Robinson, who was another Keynesian, and but she was kind of a uh kind of a leftist feminist uh who didn't really like the population arguments.
9:10
SPEAKER_00: But if you read their exchange, it's very interesting because she can't make a good economic case.
9:14
SPEAKER_00: She's only making a cultural or political case to Roy Harrow, who was a, I think, a Tory voter all his life.
9:20
SPEAKER_00: And um and then what happened after the Second World War?
9:23
SPEAKER_00: Two things happened, basically.
9:25
SPEAKER_00: So the the baby boom happened, and so the baby boom allowed economists to just assume the population uh question would take care of itself.
9:34
SPEAKER_00: And then later on, we'd get this actually the revival of the old eugenics society of the 1930s as the population control people in the 1970s, Paul Ehrlich and so on.
9:44
SPEAKER_00: But the and these uh completely uh continuous lineage um from those early eugenics movements, which people don't like talking about for uh understandable reasons.
9:54
SPEAKER_00: But um the uh basically what happened was so on the one hand, you had this um baby boom.
10:00
SPEAKER_00: Uh now, in context, the baby boom wasn't actually that large.
10:03
SPEAKER_00: You know, it wasn't large compared to 19th century Victorian era birth rates.
10:08
SPEAKER_00: The baby boom itself was only really called a boom relative to the population slump in the 1930s.
10:15
SPEAKER_00: So uh the fact that they were talking about overpopulation by the 1970s to me is kind of bonkers because you know we had much lower rates during the baby boom era than we did in Victorian England or prior to that.
10:26
SPEAKER_00: I suppose they'd say mortality rates had gone down and so on, but I think population growth was faster, faster under the under the previous regime of very, very high birth rates.
10:36
SPEAKER_00: So, anyway, that happened on the empirical side, you might say, and so it gave economists the space to ignore this.
10:44
SPEAKER_00: On the theoretical side, um, I mentioned earlier that Roy Hard founded growth theory in the in the 1930s.
10:51
SPEAKER_00: This is the the economic theory of how an economy grows rather than how it um interacts at a various point in time.
10:58
SPEAKER_00: So, you know, what is it that drives basically GDP growth in effect?
11:02
SPEAKER_00: And Roy Harold's model was very concentrated on population.
11:07
SPEAKER_00: And that was growing out of a number of things, but one of them was in the 1930s, these economists realized that population wasn't just a variable you can ignore.
11:15
SPEAKER_00: But there were also kind of theoretical reasons for why that was allayed into the model.
11:20
SPEAKER_00: Effectively, the economists of that era in Britain especially were willing to admit that capitalist economies could run into serious problems.
11:30
SPEAKER_00: And those could be problems with demand management, which was the 1930s depression, for example, or they could be problems with uh population growth.
11:38
SPEAKER_00: And so they were very, the the 1930s generation were, and Keynes' generation effect, were very willing to think about the potential crisis of capitalism, as it were.
11:48
SPEAKER_00: Uh, so were the Marxists for different reasons.
11:51
SPEAKER_00: And then after the Second World War, you had the baby boom, and the growth theory moved from very famously Cambridge, England to Cambridge, Massachusetts.
12:00
SPEAKER_00: It moved from Cambridge University in England, where it was started, to the to MIT, in effect.
12:06
SPEAKER_00: And it became associated with an economist called Robert Solov.
12:10
SPEAKER_00: And Robert Solov put together what is the contemporary growth theory model.
12:15
SPEAKER_00: It's called the Solov growth model.
12:17
SPEAKER_00: It's a modification of the Harold growth model from the, sometimes called Harold Domar, from the 1930s.
12:25
SPEAKER_00: And without boring people on the theoretical details, it sort of just proved that you should leave the economy alone in the long run.
12:33
SPEAKER_00: And it built in um uh assumptions about labor force growth, for example, that you didn't really need to think about it, you know, from the model's perspective.
12:42
SPEAKER_00: And it ultimately gave this um takeaway, basically, that uh policymakers, remember, this is kind of the 1950s, 1960s, it's a very optimistic period.
12:52
SPEAKER_00: A lot of, you know, people are going to space, all this.
12:55
SPEAKER_00: And the sell-off growth model basically said, focus on education and technology, and your economy will grow as well as it's going to grow, and then leave most of the rest up to the market, maybe do some Keynesian fiscal and monetary policy.
13:07
SPEAKER_00: And so the population question just dropped off.
13:09
SPEAKER_00: It completely dropped off.
13:10
SPEAKER_00: Now, why economists have been ignoring this for the past 25 years, I find it very hard to explain.
13:17
SPEAKER_00: Uh, but a lot of it has to do with the fact that they, in a master's program, one of the most um uh uh popular uh uh uh things to do for your thesis, even in a PhD program, but less rare, is the so love growth model, because it kind of ticks all the box.
13:32
SPEAKER_00: You can show that you know the mathematics, you can show that you you you use econometrics to to um to test the or to estimate the so love growth model.
13:41
SPEAKER_00: And so it's a very kind of if you go to um master's supervisor, PhD supervisor and go, I don't have any ideas, what should I do?
13:47
SPEAKER_00: The like say so love growth model, right?
13:49
SPEAKER_00: So a lot, it's very, very embedded in the way economists think.
13:52
SPEAKER_00: But still, I I don't understand, I don't think it's forgivable.
13:56
SPEAKER_00: If you're seeing below replacement fertility rates, I don't know why these economists have ignored it.
14:01
SPEAKER_00: And you know, I think a lot of it might actually be not just theoretical but cultural.
14:06
SPEAKER_00: The economics profession became dominated by the baby boomers themselves, and they tended to be kind of liberals and into all the cultural stuff that went on in the 60s and the 70s, which very much so fed into the, you know, you don't have to have kids, you should, or you know, have kids, but it's all about choice and all this kind of thing.
14:24
SPEAKER_00: So I think it was a variety of things, but um but the the theory is not actually there basically to deal with this problem at all.
14:32
SPEAKER_00: And I think part of the book, the reason we wrote it is to remedy remedy remedy that to at least some extent.
14:39
SPEAKER_02: It it it is remarkable how many times you find people making economic cases uh or economic remediation um uh policies, which never takes into account demography, both with regards to fertility, but also the contributions that peoples are likely to make on the basis of where they're from, because it's quite simple.
15:01
SPEAKER_02: You can look at economic output, and people have done that, like Garrett Jones, the culture transplant, 500 years of history, you can see which different peoples make what economic contributions.
15:13
SPEAKER_02: Uh do you think there is a reckoning coming that uh mainstream economists can't uh and journalists can't avoid the demographic question both fertility and origin of immigrants for any longer when it comes to talking about the economic scleroticism of Western nations?
15:31
SPEAKER_02: Paul.
15:32
SPEAKER_01: Well, that's two things.
15:34
SPEAKER_01: First of all, can they avoid the question of fertility and the um impact of very long-term low fertility rates on the drying up of and uh of the population, no growth, shrinkage, more deaths than births, aging, and a rise in the number of very old, all the impacts on expenditure of government, lack of innovation, lack of entrepreneurialism, huge government burden, spending seven, eight, nine times as much on an 80-something as a twenty-something on health and pensions, the increase in tax.
16:07
SPEAKER_01: Now, I think it it's extraordinary that we've got this far into the story, and it's still such a marginal part of how people think about things.
16:18
SPEAKER_01: So when I was looking at poor old Rachel Reeves struggling away with such a sclerotic economy, and and it's going to be the same for every Chancellor now for a very long time.
16:30
SPEAKER_01: And I wonder, do they not ask themselves fundamentally why is it like this?
16:34
SPEAKER_01: Why is it not?
16:35
SPEAKER_01: Why is there none of that buoyancy?
16:36
SPEAKER_01: So once you, I mean, when I went into the labor force in the mid-80s, um, there was a buoyancy in the economy with we'd kind of squeezed inflation out, uh, we'd had the early Thatcher Depression era, and and there was a real zing as a lot of people entered the workforce at my age, quite a big cohort born in the sort of mid-60s, and and you could feel that even if it wasn't commented on.
16:59
SPEAKER_01: So, how we've got this far with this kind of temp uh secular, very, very low grace, sickly growth, which which we could see in Japan back in the from the early 90s when because they had lower fertility for longer, and we can now see across almost everywhere in the Western world, um, there then are, you know, I I find it astonishing that people haven't commented on that and that so few economists are interested in questions of fertility.
17:27
SPEAKER_01: It may partly be because when you have children it takes a while for them to feed through the system, but nevertheless, you know, we've got to start talking about it now.
17:35
SPEAKER_01: We should have been talking about it 30, 40 years ago.
17:37
SPEAKER_01: Your other question, which is much even more sensitive, so so I think people don't like talking about family formation and birth, and they they they they it sort of triggers um all sorts of things.
17:50
SPEAKER_01: Um, but I think to talk about the fact that someone from a country with a GDP per capita of maybe a a couple of thousand dollars is going to be massively less likely to contribute than someone coming from a country with a GDP uh uh similar or higher than the UK.
18:07
SPEAKER_01: I mean, it's such an obvious point, but I think it cuts against the liberal notion that all human beings are are identical, that um uh uh issues of ethnicity, that some ethnicities fit in better with others, and that some uh groups are simply uh uh for for a whole host of reasons themselves, which are difficult to talk about, are effectively to use a rather ugly term, high human capital than others.
18:33
SPEAKER_01: I think that cuts against a certain bunch of liberal predispositions and is even more difficult to talk about than the issue of perennially low fertility.
18:42
SPEAKER_01: So I think both the low fertility and the kind of the quality of immigrant from purely from an economic point of view, if you take no other angle on it, both of those rub up against liberal sensibilities, and I think that's why they're very difficult to talk about, and I think we are probably sticking our necks out a little bit to to talk about them, but someone's got to.
19:05
SPEAKER_02: Well, this is a bit of a digression, Philip the Orblas' book, The End of Global Global Liberalism.
19:11
SPEAKER_02: Uh will will our liberal intelligentsia commentary at those who want to keep on relitigating the same arguments of 10 years ago and won't update their mental software, will will they start to reckon with the points that that Paul is making, that not all humans are the same?
19:31
SPEAKER_02: But uh, do you see uh a step change?
19:33
SPEAKER_02: Are there more people like you and Paul coming through the academia and through the institutions to be able to make this the cases that you're making, or are you very much in the minority still?
19:46
SPEAKER_00: I mean, I hope people uh change their tune, but I I I'm kind of pessimistic about that for a couple of different reasons.
19:54
SPEAKER_00: Um I mean, one of them is that um economics is kind of a there used to be an old uh philosophy of science term called a degenerative research program.
20:04
SPEAKER_00: And the idea there was that a science or a social science or anything like that could reach a certain point where it just stopped producing at all and it became kind of dead and uh half dead anyway.
20:15
SPEAKER_00: And economics has felt like that for for quite a long time.
20:19
SPEAKER_00: I mean, my first book was The Reformation in Economics.
20:22
SPEAKER_00: That was during the after the 2008 crash.
20:25
SPEAKER_00: There was a big re-evaluation of, well, there was, I should say, there was supposed to be a big re-evaluation of what uh economics did, what it was all about, and everything like that.
20:36
SPEAKER_00: And I was kind of part of that.
20:38
SPEAKER_00: There was a student movement, um, and I thought, you know, I'll write one of the books on it.
20:43
SPEAKER_00: There were one or two other books at the time, um, and it went nowhere.
20:47
SPEAKER_00: Economics just completely failed to reform.
20:50
SPEAKER_00: And after that, economics vastly lost its confidence.
20:53
SPEAKER_00: I think the profession lost its confidence.
20:55
SPEAKER_00: And if, you know, I mean, I you're this, you're relatively the same age as me, and obviously Paul's a bit older.
21:00
SPEAKER_00: And I think we all remember, like, before 2008 and after 2008, people talked about economics stuff all the time.
21:07
SPEAKER_00: Like, why did the banks crash?
21:09
SPEAKER_00: And then before that, people were fixated on Alan Greenspan and the stock market.
21:13
SPEAKER_00: Like, economic discourse was like definitely since I'd say since the end of the Second World War, but especially since the late 1970s and early 1980s, everyone talks about economic issues.
21:24
SPEAKER_00: And they they don't really anymore.
21:27
SPEAKER_00: And and it overlaps with the stagnant economy that Paul's talking about.
21:31
SPEAKER_00: It's almost like it's a combination of things.
21:33
SPEAKER_00: It's it's also kind of partially the collapse of liberalism, probably itself, the loss of self-confidence of these Western societies, which is so clear to me.
21:42
SPEAKER_00: Um, so I worry about that.
21:44
SPEAKER_00: I actually really do.
21:45
SPEAKER_00: I'm not sure.
21:46
SPEAKER_00: Uh, the other problem is, and it's part of the economics becoming a kind of a degenerative research research program, is economists don't really read books anymore.
21:55
SPEAKER_00: If you encounter an economist uh today, they'll say, Show me the study results.
22:00
SPEAKER_00: Or show me the mathematical formula that proves it and make sure it's a mathematical formula that I immediately recognize from my master's and PhD program, right?
22:10
SPEAKER_00: And you can't get them to read anything a lot of the time.
22:13
SPEAKER_00: This isn't all the time, but you can't, it's very hard to get economists to read new arguments.
22:18
SPEAKER_00: And so they like having everything nested, you know, within itself.
22:23
SPEAKER_00: Um so I I I don't know.
22:25
SPEAKER_00: I mean, I'm I'm uh obviously we wrote the book and I'm I'm hopeful that it'll it'll make an impact.
22:30
SPEAKER_00: And I think it's readable for an educated general audience, so I think that maybe is is in a sense um is in a sense uh more important.
22:39
SPEAKER_00: But the the economics profession really needs to get it acts its act together.
22:43
SPEAKER_00: There are some serious problems, and they wanted to put they wanted to bury the post-2008 period.
22:50
SPEAKER_00: They found it embarrassing.
22:51
SPEAKER_00: It did highlight holes in the way that economists were thinking about and uh and teaching economics, and they never they never really reset the you know, reset the table.
23:03
SPEAKER_00: And now we're in this situation where I'd say we have severe economic problems not just uh related to demographics, we have basically no public discussion of them.
23:12
SPEAKER_00: I mean, just take the example of Britain.
23:14
SPEAKER_00: Britain is borderline bankrupt right now.
23:16
SPEAKER_00: I mean, it's on the verge of bankruptcy, it literally is, and you'll occasionally see telegraph articles saying there's going to be an IMF bailout and stuff.
23:23
SPEAKER_00: And you'd think, you know, it's whistling past the graveyard.
23:26
SPEAKER_00: Nobody's talking about it.
23:28
SPEAKER_00: Um, so I think like to get to the point where we start talking about the demographics issue, which by the way is one of the main issues that Britain is nearly bankrupt, just FYI.
23:36
SPEAKER_00: Um, to get to that, we actually first need to get economists to like have a bit more self-confidence uh again and get the public reinterested in economic discussion.
23:46
SPEAKER_00: And then secondarily, they have to integrate this demographic question too.
23:51
SPEAKER_00: So I guess the optimistic reading is that that the bubbling up of discussions around demographics, which is definitely taking place now, will potentially give economists, younger economists, coming up, because I think frankly, my generation of economists are are pretty hopeless, and the ones uh above are kind of just boomers who've buried all the all the stuff that they they didn't like and all the embarrassment from 2008.
24:15
SPEAKER_00: And maybe a younger generation can come up and say, like, okay, well, we have this big demographic crisis, economists have a lot to say about it, let's talk about it.
24:24
SPEAKER_00: So I guess that's the optimistic reading.
24:26
SPEAKER_00: But there's a lot of um, there's a lot of headwinds there, to my mind, just even to get it accepted uh as kind of you know uh discourse in the in the in the in the public space or in the university.
24:38
SPEAKER_02: And lingering on one of the points you made there, the demographic reasons behind Britain's near bankruptcy, is are you referring to uh both or something else?
24:51
SPEAKER_02: Uh both an aging population, lots of pensioners, and importing lots of people who are uh largely their the largest of the taxpayer, uh or is it something else?
25:06
SPEAKER_00: The importing people, and this I think people on the right wing need to understand, the importing people, the Ponzi scheme that Paul talks about is to prop up state finances.
25:16
SPEAKER_00: Because even if even if somebody's a net um uh not if a even if somebody's a net beneficiary from the social welfare and tax system in the United Kingdom, they still add to GDP to the tune of what, on average, 35,000 pounds or something like that.
25:32
SPEAKER_00: And debt ratios are measured relative to GDP.
25:36
SPEAKER_00: Okay, so if your GDP goes up, then your debt metrics come down, your your public deficit, your your capacity to pay interest rates, et cetera, et cetera.
25:45
SPEAKER_00: And so what they're doing is they're propping up the entire half bankrupt system by bringing people in.
25:51
SPEAKER_00: I mean, literally that's the I won't say that's the plan, but like that's the policy.
25:55
SPEAKER_00: It's the US Treasury policy, and effectively, I keep saying this to people.
25:58
SPEAKER_00: Boris Johnson let it slip in a spectator interview shortly after he was uh he was out and he was asked about the so-called Boris Wave and so on.
26:05
SPEAKER_00: And he said the Treasury came and told me to do it.
26:07
SPEAKER_00: I said, I wish people would pay attention to what he's just said.
26:10
SPEAKER_00: It's not the Home Office, it's the Treasury.
26:12
SPEAKER_00: So that's the trick, right?
26:14
SPEAKER_00: But as Paul calls it, it's a Ponzi scheme because like you're just propping the GDP metric up, which is stagnant, and you're hoping that the debt metrics stay intact.
26:24
SPEAKER_00: Meanwhile, we have more and more older people who require medical care, they don't work, they require pensions, they're, you know, they're gonna suck up more and more of the care home economy, which is gonna uh take more of the lack of you know, the shortage of there's gonna be a shortage of people, and those people are gonna be disproportionately channeled into the care sector.
26:43
SPEAKER_00: So that yeah, it's it's just a like it's a giant Ponzi scheme.
26:46
SPEAKER_00: And um, I'm not saying it's the only reason for Britain's uh looming fiscal crisis, but it's one of them.
26:54
SPEAKER_02: Paul, uh I know you and your former PhD supervisor, Eric Kaufmann, have made the point uh that culture also that drives fertility and demographic trends.
27:06
SPEAKER_02: Um the Amish, I think.
27:08
SPEAKER_02: The population doubles every 20 years.
27:11
SPEAKER_02: Uh I think religious Americans, almost religious people everywhere, seem to have more than two children, and the non-religious have fewer.
27:18
SPEAKER_02: And I know people have written lots even about secular Israelis, they're not religious, but there's a national ideology that that makes them want to have children, which seems actually like an optimistic argument that decline in demographic trends isn't actually inevitable, and it doesn't always need to be an economic lever, it could be cultural.
27:38
SPEAKER_02: And uh I know Philip has spent time living in Hungary, a nation which itself has tried economic measures and cultural measures to boost fertility.
27:49
SPEAKER_02: What is your view, Paul, on whether Western governments, not in the Eastern Bloc, uh are capable of uh enacting some kind of cultural policy to boost fertility?
28:01
SPEAKER_02: Do you see it happening and around what basis would they do that?
28:04
SPEAKER_01: Well, I think before I get to that, perhaps I can just say a word about the relationship between culture, economics, and demography, because I think we need to understand that before we can really see what role um culture has to play.
28:18
SPEAKER_01: So the book really starts with a with a view of history, very simply, as pre-modern, modern, and post-modern.
28:26
SPEAKER_01: In the pre-modern world, economics constrained demography.
28:30
SPEAKER_01: In other words, this was the world that Malthus described.
28:34
SPEAKER_01: The there was a ceiling on how many people could be kept alive in an agricultural economy, and people would bounce up to that ceiling.
28:42
SPEAKER_01: Now you could have a plague, you could have a war, they'd go down, they might go back up.
28:45
SPEAKER_01: But effectively, economics was in the driving seat as a ceiling that moved very slowly.
28:51
SPEAKER_01: That's pre-modern.
28:52
SPEAKER_01: The modern period is a period in which economics dynamically, you get the industrial revolution, urbanization, education, rising incomes, and you get economics in the driving seat, but now it's on a journey.
29:03
SPEAKER_01: It's not a slowly moving ceiling, it's a world in which the richer you are, first of all, your mortality drops, your population goes up, and then your fertility comes down.
29:12
SPEAKER_01: And that I call modernity.
29:14
SPEAKER_01: And that was what was going through the what happened in Britain in the 19th century, but is still going through the last countries in Africa who are going through this.
29:23
SPEAKER_01: Many countries are through it.
29:24
SPEAKER_01: Now, once you're through that, the argument of the book is that the relationship is turned on its head.
29:30
SPEAKER_01: We are all, all, I mean, most countries and more and more countries are reasonably urban, reasonably wealthy, reasonably educated.
29:37
SPEAKER_01: They're through that process.
29:40
SPEAKER_01: And they have life expectancy of 70 or 80.
29:43
SPEAKER_01: I mean, I wonder there was a chart in one of my earlier books, Getting to Denmark, which is a Fukiyama phrase, which shows Denmark's fertility or mortality and the rest of the world converging on it.
29:54
SPEAKER_01: So if you look at India and the United States, for example, the life expectancy is much narrower, the difference than it used to be.
30:00
SPEAKER_01: So we're all catching all getting out of that kind of modernization process and through it.
30:05
SPEAKER_01: And then what happens?
30:06
SPEAKER_01: Well, then demography, if you like, is free of the constraints of economics.
30:10
SPEAKER_01: People are not going to starve to death in a Malthusian way, and people can control their own fertility if they choose to.
30:15
SPEAKER_01: And then the question is, what do they choose?
30:18
SPEAKER_01: They will live long.
30:19
SPEAKER_01: Very few people choose to, I mean, in sort of numbers, choose to die early, although that's another issue.
30:25
SPEAKER_01: So, but essentially the key thing becomes fertility and what people choose.
30:29
SPEAKER_01: And do you end up as a modern, urban, wealthy, educated society like Israel with three children per woman?
30:37
SPEAKER_01: Or do you end up as an equally modern urban, educated society like South Korea with 0.7 or 0.8 children per woman?
30:46
SPEAKER_01: And that's a total difference between night and day.
30:48
SPEAKER_01: And so no longer is economics in the driving seat, but economics is driven by demography.
30:54
SPEAKER_01: The relationship has been turned on its head, if you like.
30:57
SPEAKER_01: So then you have to ask the question, okay, if we're an economist, if we're interested in the economy, we now have to be interested in demography, because demography is in the driving seat.
31:05
SPEAKER_01: What then shapes demography?
31:08
SPEAKER_01: And increasingly, demography, if it's not constrained by economics, is constrained by culture.
31:13
SPEAKER_01: So without a doubt, if housing is expensive, if childcare is expensive in a world where women are educated and wish to work and fulfill themselves, then that will dampen uh the fertility rate.
31:25
SPEAKER_01: But these material I think these material conditions can and should be addressed by government.
31:30
SPEAKER_01: So we choose to have ridiculously expensive housing costs.
31:33
SPEAKER_01: For example, companies choose to put in gyms and not um uh nurseries.
31:40
SPEAKER_01: So these are choices that we're making.
31:42
SPEAKER_01: But beyond that, if you go to Korea today and say, why are you having so few children?
31:48
SPEAKER_01: People will say we can't afford to.
31:50
SPEAKER_01: And they're having 0.7 or 0.8 of a child, they're 40, 50, 60 times better off on GDP basis than they were then they were having six or seven children.
31:58
SPEAKER_01: So it's a lot about cultural predispositions.
32:01
SPEAKER_01: Now, that being the case, how do you what do you do about that?
32:05
SPEAKER_01: Do you just throw your hands up and say the culture is the culture, that is what it will be?
32:10
SPEAKER_01: Or do you acknowledge, and this is something that Philip and I have talked about a lot, and I've actually been quite influenced by Philip's thinking and writing on the subject, um, that actually politics need not be downstream from culture.
32:23
SPEAKER_01: Why should it not be upstream?
32:25
SPEAKER_01: If you look at the reforms of the 60s, uh views on homosexuality or the death penalty, um, were radically different from where the government took, certainly Britain took the legislation in the 60s, and it worked to change people's minds.
32:39
SPEAKER_01: If you look at sex education in schools, it's very much around the way the world was when I was a teenager, which was lots of teenage pregnancies and lots of sexually transmitted diseases, and that's what you had to warn people about.
32:52
SPEAKER_01: We're not creating a culture through our schools of telling people about the problems of not having children, of leaving it too late, the personal problems and the socioeconomic problems.
33:02
SPEAKER_01: So the idea that because it's cultural, governments can't do anything about it is obviously wrong.
33:10
SPEAKER_01: That doesn't mean there's an easy, ready-made package of things that can be done.
33:16
SPEAKER_01: It will very much vary on the country, on the culture.
33:19
SPEAKER_01: So the very famous example is in the Caucasian state of Georgia, where the head of the church said, for third children and more, I will personally baptize them.
33:30
SPEAKER_01: And that does seem to have had a positive effect on the fertility rate of Georgia.
33:34
SPEAKER_01: But that's the culture of Georgia.
33:36
SPEAKER_01: If the Archbishop of Canterbury made a similar offer, I don't think it would have much effect in England.
33:41
SPEAKER_01: Um so I think a a culture is a somewhat nebulous thing.
33:46
SPEAKER_01: Um I don't believe it cannot be influenced by government or by policy.
33:51
SPEAKER_01: Um, there needs to be a will and there needs to be smart thinking about it.
33:55
SPEAKER_02: Hmm.
33:57
SPEAKER_02: Very interesting.
33:59
SPEAKER_02: Wonder what will get we bricks to jump jump back into birds.
34:03
SPEAKER_02: Three three pines for everyone.
34:04
SPEAKER_02: That seems to be cut cut across the home nations.
34:08
SPEAKER_02: Um let's talk a little bit about um older people, impact of older people on all of this.
34:17
SPEAKER_02: Uh Philip, you you I think it was you who coined the term within the book, The Grey Economy, and you made some pretty alarming arguments in there, saying that population aging doesn't just slow growth, it does so much more than that, and that even those who are techno-futurists who hope that actually maybe we don't need loads of people, technology will save us, maybe that doesn't pass muster either.
34:44
SPEAKER_02: So perhaps you could begin by describing what you mean by the grey economy, its impact on Britain, for example, or other Western nations, and whether there might actually be a path out of this low fertility and a hopefully low immigration world, and technology will save us.
35:02
SPEAKER_01: Well, I think Paul came up with the term the grey economy, if I recall, but um basically the the Well, just very briefly, I talk about the four greys, the grey consumer, the grey government balance, um, and the grey investor and grey capital and grey labor.
35:19
SPEAKER_01: So those are the that's the way I kind of capture it.
35:23
SPEAKER_00: It has nothing to do with the infamous alien greys, but anyway, it's people with grey hair.
35:28
SPEAKER_00: But the um the although Trump is now telling us they're real.
35:32
SPEAKER_00: Um the basically the the issues with the the reason that we kind of framed it that way and called it the grey economy is because uh uh maybe we were a little bit misleading earlier to say that economists didn't think about these issues.
35:46
SPEAKER_00: They don't think about these issues systematically, but they do occasionally think of them in a very limited sector, which is how do you finance the pension system?
35:56
SPEAKER_00: Economists are somewhat obsessed with the question of how to finance the pension system, and often um politicians will rise to the top on the basis of pension reform.
36:07
SPEAKER_00: This is what happened in France with Emmanuel Macron.
36:10
SPEAKER_00: I mean, his basic entire policy was pension reform, and then he couldn't do it, so he became fixated on foreign policy.
36:17
SPEAKER_00: That's effectively what happened with Macron.
36:19
SPEAKER_00: But he's been in power for years, and his whole pitch, technocratic pitch, is pension policy.
36:26
SPEAKER_00: The issue is pension policy is important.
36:28
SPEAKER_00: Like everybody kind of knows how a pension works.
36:30
SPEAKER_00: There's no big pot of money.
36:32
SPEAKER_00: It's the young people of today, through their payroll taxes, they're paying for the old people of today.
36:38
SPEAKER_00: And if the mismatch takes place there, there won't be enough money, right?
36:42
SPEAKER_00: There's no pension pot.
36:43
SPEAKER_00: The pension pot is a mythology.
36:45
SPEAKER_00: Um, and that's important.
36:46
SPEAKER_00: So it'll be very hard to pay pensioners in the gray economy, right?
36:51
SPEAKER_00: Because there'll be less taxpayers relative to the beneficiaries.
36:55
SPEAKER_00: But the problem is that the the fact that that's it's um the problem's being phrased in that way means that people don't think about any of the other impacts on the economy.
37:05
SPEAKER_00: And when you think about this a little bit, it's very, very stupid.
37:09
SPEAKER_00: Because if you think about it intuitively, what really um differentiates younger people from older people?
37:16
SPEAKER_00: Well, there are many things, but one of them is old people don't work.
37:20
SPEAKER_00: What's an economy if not people working, right?
37:23
SPEAKER_00: So if you just start from that assumption, don't forget about the payroll tax and so on.
37:28
SPEAKER_00: That's that's one negative consequence of of this.
37:31
SPEAKER_00: But there's just physically not enough people working.
37:34
SPEAKER_00: An economy is just people working.
37:37
SPEAKER_00: So if you have um if you have a a pie chart and the retirees start to grow relative to the um to the workers in that chart, the economy will have to necessarily shrink, right?
37:51
SPEAKER_00: Because there won't be workers doing as much work.
37:54
SPEAKER_00: There'll be people consuming stuff, same amount of people consuming stuff, or whatever, you know, roughly the same amount.
38:00
SPEAKER_00: But there won't be the same amount of people working.
38:03
SPEAKER_00: Now, who produces the stuff that you consume?
38:06
SPEAKER_00: I mean, people may like ordering on AliExpress or whatever and thinking they're like it drops from the moon, but it doesn't, okay?
38:13
SPEAKER_00: The stuff that you consume, whether it's services, going in and talking to a person in a bank or um or food or manufactured goods, all these are created through human labor.
38:24
SPEAKER_00: It's created through human work, right?
38:26
SPEAKER_00: And so if there are less workers relative to the overall number of people, less stuff will get produced.
38:33
SPEAKER_00: And what this will do basically is it'll create a resource scarcity issue.
38:38
SPEAKER_00: Um there won't be as many resources available, whether that's services or probably even goods, relative to the overall population.
38:48
SPEAKER_00: And that will probably be expressed, and we explained it in the book, through inflation.
38:53
SPEAKER_00: Inflation will start to rise, everything will become more expensive, and the inflation will just structurally redistribute products from the workers to the elderly people.
39:03
SPEAKER_00: There'll also be a lot of pressure to put productive workers into, for example, the care home sector, which you might think of as gray services or something like that.
39:13
SPEAKER_00: And my main concern is that people are going to realize that this is going on.
39:18
SPEAKER_00: So we've already seen there's a public discussion in France, uh, a recognition that this is taking place.
39:24
SPEAKER_00: Now, the the center left or the left-wing people that are talking about it are pro-pensioner for now.
39:30
SPEAKER_00: In Britain, there's a lot more hostility around, for example, the triple lock pen the triple lock system, which protects pensioners uh from inflation in a way that workers aren't protected.
39:41
SPEAKER_00: And people are starting to begin to see, like, oh, wait, there's a distributional element to the entire economy based around inflation, inflation indexing, and so on.
39:51
SPEAKER_00: And I don't get as much resources as a worker if we give the resources to them.
39:56
SPEAKER_00: So that's kind of zero sum thinking, we call it in economics.
40:00
SPEAKER_00: And zero sum thinking is is kind of dangerous.
40:03
SPEAKER_00: If you have a society which can't see the entire pie growing and they're fighting over the limited pie, you tend to get conflict.
40:12
SPEAKER_00: And in the past, that would have been maybe class conflict.
40:15
SPEAKER_00: But what I think is going to happen is you're going to have intergenerational conflict over these distributionary issues.
40:20
SPEAKER_00: And that's very scary because there's not, there's only, there's not very many ways to solve that problem.
40:27
SPEAKER_00: The only ways to solve that problem, yes, you can push forward the retirement age, but it doesn't make much of a dent.
40:33
SPEAKER_00: It really doesn't.
40:34
SPEAKER_00: And I'm very skeptical of that for other reasons.
40:36
SPEAKER_00: I've I've worked in corporate enough to know that if founders and frankly elderly people stick around the office for too long, it can really damage a company.
40:46
SPEAKER_00: It can become very um uh uh lose its dynamism, uh, and so on, right?
40:52
SPEAKER_00: It's it's it's there are downsides to this.
40:55
SPEAKER_00: Um, but even if it doesn't actually make that much of a dent anyway, in terms of the overall numbers.
41:01
SPEAKER_00: And so the only way that you can really quote unquote solve this resource short shortage, uh, res uh resource shortage issue is to either starve the elderly consumers of resources, that is, um take off the triple lock, for example, but it could get more and more radical over time, basically squeeze their incomes.
41:21
SPEAKER_00: Or you can encourage euthanasia.
41:24
SPEAKER_00: And I personally think we're gonna end up heading in that direction because it it it the problem the problem, as it gets worse, will become so radical and will create so much tension in society of these older people kind of living off the backs of the of the workforce that'll have uh that'll be working as hard as they are and getting less for it and seeing that a lot of the resources are going over to the gray economy.
41:49
SPEAKER_00: I think that people are gonna are gonna start reaching for options that are are frankly scary, actually.
41:56
SPEAKER_00: But even if even if it doesn't get to the point of discussing euthanasia and so on, which by the way, I think will also be turbocharged by the fact that bureaucrats will have to allocate scarce healthcare resources, right?
42:08
SPEAKER_00: And so they'll have to say, well, for example, the NHS in Britain, they'll have to say, we have we have one and a half times, just for example, we have one and a half times the number of people using healthcare, and we have 0.75 times the number of workers and the number of tax contributions to keep the thing going.
42:27
SPEAKER_00: Well, then what are you gonna do?
42:28
SPEAKER_00: You're gonna start um uh uh rationing healthcare, right?
42:32
SPEAKER_00: And rationing healthcare is already done, as I point out, in such a way that uh uh ends people's lives and through qualities, uh, quality of life adjustment years and so on.
42:42
SPEAKER_00: So there's a whole bureaucratic structure in place in the healthcare system that'll almost automatically kick off to it could kick into gear uh with this as well.
42:51
SPEAKER_00: So I again one of the things as a book is to try and look at this from a policy point of view before we end up stumbling into a world where it becomes a political issue and we have no understanding of it, and it just turns into this di uh um uh distributional or resource grab.
43:10
SPEAKER_00: Uh, and I think that could uh go in a really scary, like a terrifying direction, actually, it could really ruin our societies.
43:18
SPEAKER_01: Perhaps I can just add a couple of things to that very briefly.
43:21
SPEAKER_01: The first is is Philip's point about moving the retirement age won't make that much difference.
43:26
SPEAKER_01: And this is a fact that I often quote.
43:29
SPEAKER_01: In 1960, there were 100 million Japanese, and the number went up, now it's going down, and it will be back to 100 million by the 2050s.
43:36
SPEAKER_01: And you might say, what's the big deal?
43:38
SPEAKER_01: Well, when there were a hundred million on the way up, there were eight or nine people of working age for every retiree.
43:44
SPEAKER_01: When it gets back to a hundred million in twenty or thirty years, there won't be eight or nine to one.
43:50
SPEAKER_01: There'll be one to one, almost one to one.
43:53
SPEAKER_01: So roughly one to one.
43:54
SPEAKER_01: So, you know, changing the retirement age a few years isn't gonna make that much different.
43:58
SPEAKER_01: The other, I mean it's it's The median age in China in 1950 or 1960 goes from 18 or 19 to 65 by the end of the century.
44:08
SPEAKER_01: So it's more cataclysmic, I think, than people realise.
44:11
SPEAKER_01: And the other point is that I think Philip talks about this in the show in the book, and it kind of gets back to this conflictual uh economics and the the uh the idea that instead of class you have generational conflict.
44:26
SPEAKER_01: There will come a world in which the state will reflect democratically the votes of the elderly, who will still be a large element, and will impose tax and spend and well.
44:37
SPEAKER_01: And the the so the votes are one way, but the muscles the other way.
44:42
SPEAKER_01: Are all the young, even if they're outnumbered by the older, forever going to say yes.
44:48
SPEAKER_01: I won't call it slavery, but I will pay away vast amounts of my income to keep this older generation going.
44:54
SPEAKER_01: And that could cause a political breakdown.
44:58
SPEAKER_00: Breakdown of democracy, because how if, as Paul said, older voters, there'll be more of them and they're more inclined to vote anyway.
45:06
SPEAKER_00: And actually, you saw a little bit of this conflict when the debate took place around the triple lock.
45:11
SPEAKER_00: People started awakening to it, not because they were reading our book, it wasn't out, but because people are kind of getting up to it.
45:16
SPEAKER_00: I agree with Paul.
45:17
SPEAKER_00: I think it'll cause a real political crisis.
45:20
SPEAKER_02: Well, this conflict, intergenerational conflict that you're on about.
45:25
SPEAKER_02: I uh and and the scramble for resources.
45:29
SPEAKER_02: I suppose where am I going to go with this?
45:32
SPEAKER_02: Is uh what what what analogy or metaphor do I have?
45:35
SPEAKER_02: People often talk about how fertility can sometimes be constrained by everyday things like the number of seats in a car.
45:41
SPEAKER_02: Uh, for example, people would have more children if they didn't have to go and buy a new car because it's all too expensive.
45:47
SPEAKER_02: A bit like the South Korea point that Paul was making.
45:50
SPEAKER_02: And uh, I'm just wondering whether a couple of factors since the 1960s might um have exacerbated the scrambling for resources, the scarcity question that we've obviously talked about the importation of lots of people and the the supply of the housing hasn't met the demand.
46:06
SPEAKER_02: So you you can say that people feel like they're they're scrambling around against other cultural groups for uh resources, but also primacy in the political sphere.
46:16
SPEAKER_02: But then uh to stretch the car analogy a little bit further, what what impact do we think perhaps losing the imperial hinterlands might have had?
46:24
SPEAKER_02: Because in the past, when Britain was highly fecund, um and indeed Ireland as well, but though it was for different reasons, escaping famine, is people would go, right, there's nothing left for me here, and off they'd go to Canada, Oz, the States, whatever.
46:39
SPEAKER_02: And that option's much, much harder to grab grab a hold of now.
46:43
SPEAKER_02: Um, do you think that there is a psychological loss from this hinterlands that was once there?
46:50
SPEAKER_02: There's a sense that there's nowhere left to build and you people feel constrained, or or is that stretching the car metaphor too far?
46:57
SPEAKER_01: I'd put it the other way around.
46:59
SPEAKER_01: I would say that um we have got used to, and this is another reason why immigration's not the long-term solution, we've got used to the idea that we are a very wealthy country in Britain, and I would say the same of other countries in the West, and that there is an enormous gap in living standards, and particularly when you look at the difference between GDP per capita on a PPP and an exchange rate basis, that the living standards nevertheless are very large.
47:24
SPEAKER_01: But if you actually come to Britain and you earn in pounds sterling or to Europe and you earn in euros, it's an even bigger difference if you can ri send back.
47:32
SPEAKER_01: And so we are attractive places for people to come.
47:35
SPEAKER_01: I think that's a luxury that we can't assume we're going to have.
47:38
SPEAKER_01: The idea that, you know, already in Britain, it's not two of our big sources of immigration, Ireland and Poland.
47:44
SPEAKER_01: Um, it's very unclear to me that if you come from Ireland or Poland to London, you'll re- in Poland you may have an exchange rate difference, you won't have a lifestyle difference, particularly.
47:54
SPEAKER_01: And in Ireland, probably neither.
47:55
SPEAKER_01: So, and that becomes more and more so it's the idea that we are, as I think I said earlier, busy, important, and rich, and we can therefore outsource this to other people.
48:05
SPEAKER_01: And and that those those are just the assumptions of of an imperial uh age and and of a grandeur that simply doesn't exist anymore.
48:14
SPEAKER_01: No one in the long term is going to be doing all that bearing of children, bringing them up and educating them for the imperial heartland.
48:22
SPEAKER_02: Demographic feudalism.
48:24
SPEAKER_02: Let's try to finish on on this point uh a little bit.
48:27
SPEAKER_02: Uh this is uh a very good term, Philip uh Philip, which I'll put to you.
48:32
SPEAKER_02: Uh, and this is uh one of the sections on the book of on housing, and I suppose this goes deeper into the the question of competition.
48:41
SPEAKER_02: Uh you have made the case that the economic argument for demographic changes is partly actually an argument for protecting the assets of the old at the expense of the young.
48:55
SPEAKER_02: Uh is there anything else that you'd add to that, this this notion of demographic feudalism that we're living under?
49:02
SPEAKER_00: Well, it's not really a in this case, it's not really a choice.
49:06
SPEAKER_00: It's not really like if they voted for it or anything like that.
49:10
SPEAKER_00: It's just a um a simple product of life, what's called life cycle models or life cycle savings models in in economics, which are kind of so stupid you don't even have to think about them for two minutes.
49:22
SPEAKER_00: As you get older, you save more money, right?
49:25
SPEAKER_00: In your 20s, you don't save that much.
49:27
SPEAKER_00: In your 30s, you start to save a bit.
49:29
SPEAKER_00: In your 40s, you start, that's kind of the peak saving, 40s, 50s.
49:32
SPEAKER_00: And then as you get older, you spend down the savings as you um as you enter retirement.
49:39
SPEAKER_00: And when you save, you don't just usually keep the money in a bank account.
49:43
SPEAKER_00: You you invest it, right?
49:45
SPEAKER_00: And you can invest in stocks and bonds, and particularly attractive to people increasingly, and I think it'll become even more attractive as we get an inflationary economy due to the demographic problems, is housing.
49:57
SPEAKER_00: And so basically, I think the major reason why young people can't afford housing has very little to do with supply and demand of housing.
50:04
SPEAKER_00: I think it has to do with the very simple fact that older people are buying up the housing and then renting it to the younger people.
50:12
SPEAKER_00: And it's a very rational thing for them to do.
50:14
SPEAKER_00: You buy a house, you you get a return on it every year because there's appreciation, and then you get rental income.
50:20
SPEAKER_00: It's called a rental yield in finance, in investment economics or finance economics, and you get a rental yield on it.
50:27
SPEAKER_00: Well, that's kind of feudalism, isn't it?
50:29
SPEAKER_00: It's a form of demographic feudalism.
50:31
SPEAKER_00: So in the past, you you didn't get to own your land in the feudal system.
50:36
SPEAKER_00: You you got you entered a tithing relationship with your lord, who is usually a protector of some sort, like a local policeman or military guy, and uh and you tithed the land.
50:46
SPEAKER_00: You you gave them a certain portion of what you got and you worked on the land.
50:50
SPEAKER_00: Well, that seems to me exactly what this um uh aging structure produces.
50:54
SPEAKER_00: So the older people will buy up the housing, which the young people will live in.
50:58
SPEAKER_00: They can just outbid the young people because they simply have more savings just because they've accumulated them over their lives.
51:04
SPEAKER_00: And then they'll also outbid the young people on, for example, the stock market, which is the actual ownership of companies.
51:11
SPEAKER_00: So you'll go to a company every day and work, and you can't own much of that company.
51:17
SPEAKER_00: You don't own any large stake in it as a young person, the old people own it.
51:20
SPEAKER_00: And then you go and live in a house that you can't afford to buy because you've been pushed out of the market by the people with the higher uh lumps of capital from their large savings accumulation pools, and so you'll rent the property from them.
51:33
SPEAKER_00: And of course, I'm not describing when I when I'm describing the serious resource uh situation, there's serious resource problems, that's in the future.
51:40
SPEAKER_00: We don't see them yet.
51:42
SPEAKER_00: We see some strain on the NHS, but we don't see them yet.
51:45
SPEAKER_00: What I'm describing, this demographic feudalism, we're already in it.
51:49
SPEAKER_00: This is the world we live in.
51:51
SPEAKER_00: So, but people don't understand this world because no one's been discussing demographic issues.
51:55
SPEAKER_00: And so everyone's talking about how to cut red tape around planning permission or something like that.
52:02
SPEAKER_00: And they don't they they haven't even looked around and said who owns all these properties?
52:07
SPEAKER_00: Oh, it's my parents.
52:08
SPEAKER_00: Oh, it's my uncle.
52:10
SPEAKER_00: How do how do some young people get access to the properties?
52:13
SPEAKER_00: Well, in Britain, it's called the Bank of Mum and Dad.
52:16
SPEAKER_00: I mean, you know, this is one of those things where like it's like in that film They live.
52:21
SPEAKER_00: When you put on this the sunglasses, you're like, oh, I get it now.
52:24
SPEAKER_00: Like, that's the reality.
52:26
SPEAKER_00: It's very simple to see once you start thinking of it in those terms.
52:29
SPEAKER_00: It's not really like, it's not really there isn't enough housing.
52:33
SPEAKER_00: Ask yourself, who owns the housing?
52:35
SPEAKER_00: It's disproportionately old people.
52:37
SPEAKER_00: And the young people who own the housing are getting subsidized by their wealthy parents.
52:41
SPEAKER_00: So it's effectively just an ownership structure with an old person anyway.
52:44
SPEAKER_00: And this problem is already at its peak.
52:47
SPEAKER_00: I mean, like, I I I I mean it'll probably get worse for what it's worth, but we already see it.
52:52
SPEAKER_00: And of course, it in turn crushes fertility rates because I'm not saying I make a very strong argument that um the fertility rate decline is not due to a lack of home ownership.
53:02
SPEAKER_00: But hey, it can't help, right?
53:05
SPEAKER_00: And people complain about it a lot, young people do.
53:07
SPEAKER_00: So these are self-reinforcing uh trends.
53:12
SPEAKER_02: Well, chaps, I know there's a hard stop coming right up, so I will give you the chance to hawk your wares.
53:19
SPEAKER_02: Full title of the book, where can people find it?
53:21
SPEAKER_02: And I know both of you are very, very busy with your your work.
53:25
SPEAKER_02: What can we expect from you next after this one?
53:28
SPEAKER_01: Well, I uh the the book's called Bust, the Economics of Population Decline.
53:32
SPEAKER_01: I've got a copy here.
53:33
SPEAKER_01: Um it will be out in uh early in November.
53:37
SPEAKER_01: Um and I will be um I'm really just starting to work on a another book which is um very, very different.
53:48
SPEAKER_01: It's a historical book about the um the the title is Peak Europe, and it's really trying to make the argument that there was something very dynamic um and in some ways the peak of Western civilization at the end of the 19th century, and that what started to go wrong in the early years of the 20th, demographically, of course, but out of demography comes economics, comes politics, uh comes uh culture.
54:13
SPEAKER_01: So it's a a challenging, uh a challenging book that uh I'm I'm only uh a a small part of the way through at the moment.
54:21
SPEAKER_02: Well, good luck with that.
54:22
SPEAKER_02: Silit, what about you?
54:23
SPEAKER_02: What else are you working on?
54:25
SPEAKER_00: I'm not writing any books for a while, I don't think.
54:28
SPEAKER_00: But the collapse of global liberalism is still going.
54:31
SPEAKER_00: It's it's actually taken off a bit recently, and it's just been translated into some unusual languages like Serbian, Bulgarian, and Japanese.
54:39
SPEAKER_00: So um it's still.
54:44
SPEAKER_01: How is it?
54:44
SPEAKER_00: Yeah, they're already interested.
54:46
SPEAKER_00: I have a sneaking suspicion Bust might uh get some international acclaim, but you know, fingers crossed.
54:52
SPEAKER_02: Yeah, fingers crossed.
54:53
SPEAKER_02: Well, as it happens, Philip, that collapse of global liberalism conversation you and I had last year, that remains one of my most downloaded conversations and continues to do so just all the time ticking over.
55:04
SPEAKER_02: So you've you've hit another green streak there, and I hope that's the same for Bust.
55:08
SPEAKER_02: Chaps, keep fighting the good fight.
55:10
SPEAKER_02: Pleasure to speak as always, and speak to you next time.
55:14
SPEAKER_02: Thank you very much.
55:15
SPEAKER_02: Thank you.
55:15
SPEAKER_00: See you guys, thank you.