A slew of articles from western outlets as well as the Hong Kong based anti-Beijing South China Morning Post have suggested that as China’s population is set to contract, this will have a negative impact on the economy. Ironically, this comes at a time when US Presidential candidate Andrew Yang is proposing a new economic model to deal with the rise of artificial intelligence (AI) and increased automation that will render many human jobs redundant sooner rather than later. As China is already a global leader in AI, China’s history of managing once uncontrollable population growth has led the country to be well positioned to avoid the pitfalls of an automated workforce while retaining all of the major advantages of automation.
In the 21st century, overpopulation brings with it the same detrimental conditions that it always has: inflated prices for basic goods, housing shortages, unsanitary conditions, food shortages, poor schooling conditions and a strain on medical services. At yet, whilst growing populations used to be seen as a prerequisite for rapid economic growth under the right political conditions, such a theory is increasingly becoming a thing of the past due to rapid advances in science and technology.
Not a problem but an asset
There is no rational reason to be worried by declining population trends in economically advanced countries during an age of automation, assuming that one adopts a national revenue generating mechanism that puts automated factories, increasingly automated farms and other AI driven sectors to work in the service of national wealth, rather than in the service of generating wealth solely for a small class of business oligarchs.
In 1979, China introduced the one child policy in order to curb unsustainable population growth. While agrarian economies require the use of more young workers than advanced industrial economies, China’s largely agrarian 1970s economy could simply not afford to support a rapidly ballooning population. Deng Xiaoping’s shift to an industrial economy further hammered home the need to get China’s out of control population into line with more manageable numbers.
Contrary to Sinophobic propaganda, China’s one child policy has been such a success that it eventually was relaxed to a two-child policy, whilst today, there is no longer a need to manage population growth using such a system. In the 21st century, China’s economic success is generated largely through an industrial sector that is rapidly evolving into a industrial-technical hybrid sector where innovation is becoming as important as production. The Chinese innovation revolution has been described by President Xi Jinping as a drive to replace “made in China” with “created in China”. This is further bolstered by the fact that as more factories become increasingly automated, there becomes a gradually decreased need for large numbers of factory workers.
While many western economies, including and especially the US economy does not have a safety net for those who lose employment due to automation and artificial intelligence, the market socialist economy of China is able to not only produce wealth but distribute it even more evenly in an age where mechanical rather than fleshy hands become those which drive production and consequently, also generate profit.
Profit for people – generated by machines
The Chinese model of market socialism that was first articulated by Deng Xioping and has since been expanded for the needs of the 21st century in Xi Jinping Thought on Socialism With Chinese Characteristics for a New Era offers a practical solution to the challenge of improving living standards in an age where fewer human workers are necessary. According to the Chinese model, enterprise and entrepreneurialism is not only allowed but encouraged, arguably more so than anywhere else in the world. However, the profits from the fruits of these enterprise remain centrally regulated, thus insuring that the capital derived from Chinese invention and labour is reinvested into Chinese society and the Chinese people.
The critical element of the Chinese model is that the phenomenon of capital flight which is such a widespread problem in the west, is tightly monitored due to China’s strict rules about capital outflow from the country. Because of this, China is well prepared for an age when fewer Chinese will be in factories but more will be using modern technology to invent the next generation of hi-tech marvels. Because the profits created by automation and artificial intelligence will be sustainably circulated and re-invested within China just as the profits created by the human hard already are, there is no danger of mass poverty among Chinese workers when more and more robots take the place of a human workforce.
In this sense, China has both a built-in safety net for its people and a means to actually encourage people to become more intellectually and mechanically creative as the economically advanced world stands on the cusp of an age in which machines will largely supplant the human time and effort needed to manufacture existing products. In the west by contrast, there is less and less of a satisfactory safety net for the unemployed. These problems will be compounded as more and more machines take more and more human jobs.
In the western world, when a man or woman is replaced by a machine, they are generally left with nothing or next to nothing. Furthermore, while China encourages an attitude of enterprise and invention once associated with the United States, many western countries continue to increase bureaucracy, regulations and restrictions just as China is reducing such things at a rapid pace.
Finally, China’s world-leading education system gives Chinese the tools necessary to become world leading originators of new products, ideas and technological systems while the western education systems, particularly those funded by the state continue to fall further behind.
More money – more resources
Consequently, if countries with naturally declining populations are able to develop a market socialist system with local characteristics, they will be able to use automation to generate wealth for ordinary people who will then be able to pursue other lines of work involving innovation for the benefit of the people as a whole. At the same time, as the pressure on infrastructure is relieved through smaller populations, countries can continue to invest in better housing, transport, improved public spaces and the arts in ways that are geared towards creating what China calls a “moderately prosperous society in all respects” rather than a society forced focus on mere subsistence based infrastructure due to uncontrollable population growth.
Furthermore, with automation generating a substantial proportion of national wealth, there is no need to worry about a young generation generating money for the old to survive. This will be accomplished largely through increasingly automated factories generating wealth across demographic lines.
Reasons for population decline
Traditionally, births decrease as a society becomes more prosperous. As agricultural societies become urbanised, civilised cultures come to realise that while a child can do menial but non-dangerous work in a farm, in industry one requires an adult workforce that are more technically skilled than the average farm hand. Consequently, fewer children are needed and likewise there is less space for large families in cities vis-a-vis rural environments.
Secondly, as industrial economies mature into innovation driven hybrid industrial/hi-tech driven economies, there is even less of a need for large families to provide members of a workforce. Furthermore, as living standards improve, the number of children who die in infancy dramatically decreases and hence, there is no need to compensate for such things by having an inordinate amount of children.
Neo-liberalism changes historic trends
While the countries that pioneered neo-liberal economies were the developed countries of Europe and North America, because these systems do not have the built in safety net of China which by most practical assessments is a developed and growing economy, the developed western economies are faced with societies that are technically wealthy, but whose wealth is concentrated in a very small portion of the population – the infamous 1%.
As a result, people who would in previous generations been considered part of a prosperous working class or middle class, are no longer able to afford the lifestyles of their parents’ or in some cases grandparents’ generation. Because of this, many people in developed neo-liberal economies have chosen to have smaller families based on a simple cost benefit analysis.
While the neo-liberal system is systematically unfair to those outside of the 1%, the silver lining is that with decreasing populations, it may become easier for citizens to demand a Chinese style system where the robots doing the jobs that the working class and part of the middle class used to do, generate their wealth in a way that is distributed more equitably among the 99% of the population who in recent generations have been deprived of the expanding wealth of the 1%. A similar argument can and ought to be made in terms of wealth generated from so-called outsourcing. As more wealth comes in, there becomes less of an excuse not to distribute it in an equitable and rational way.
Developed countries have no intrinsic need for large populations, especially in the age of automation and artificial intelligence. Furthermore, countries that seek to develop rapidly as China did in the second half of the 20th century ought to consider implementing their own one or two child policies in order to exhaust fewer resources of the country while preparing for an age where industrialisation and automation requires a smaller population in order to avoid a surplus of non-productive citizens.
This is one of the reasons why India retains a tremendous wealth gap. Although India has rapidly industrialised and modernised beginning in the 1990s, the problems of a wildly overpopulated society continue to plague India whilst by contrast, that this phenomenon no longer plagues China or most western countries.
The panic sowed over declining populations in developed countries is largely sensationalist or motivated by religious or ideological extremism. As the world becomes more mechanically self-sufficient, smaller work forces will gradually become an incredibly important asset. Such developments will be able to benefit countries as a whole so long as neo-liberalism gives way to a system of Chinese style market socialism where wealth generated in the country weather by man or machine, ultimately goes back into pockets of human beings.