April 22, 2004

Interesting Hot Potato on the Corner
ECONOMISTS NEEDED: PRODUCTIVITY & FERTILITY [Jonah Goldberg]

...To sum it up, Americans -- like everyone else in the industrialized world -- are having too few babies. If, by "too few" you mean not enough babies to replenish the workforce going into entitlement-rich retirement. Not enough workers at the bottom of the system means not enough taxpayers to generate Social Security checks. In America we offset this problem to a certain extent with immigration. We import young workers to make up for the ones we don't manufacture at home.

Anyway, suddenly, some liberals are becoming pronatalists (i.e. someone who favors policy supporting higher birthrates) when a little more than a decade ago they were saying folks like Wattenberg were right out of the Handmaid's Tale. That's cool.

But here's my question and it is entirely theoretical (for I am still very much a pronatalist): Don't the unprecedented increases in productivity mitigate the pronatalist argument somewhat? In theory couldn't we make a comparatively small handfull of workers (or, heh, nanobot androids) so productive that we wouldn't need that many more workers? Is there anything in the realm of pure economic theory which says that a very large society couldn't simply exploit the highly productive (and therefore highly compensated) labor of a relatively small few? Or am I missing something having been absent from this issue for so long?

[Later]...PRODUCTIVITY AND FERTILITY [Jonah Goldberg]

Emails are piling in. Let me clarify one thing. I wasn't proposing, even hypothetically, that only a handful of people work and the rest of us spend our time around the pool (or reading the Corner). No, what I guess I'm getting at it is this: Couldn't you have a system extending pretty much the trends we're already seeing in which a huge proportion of the society are in service-area and artsy-fartsy jobs and a tiny number of "productive" workers do the same amount of work it took hundreds of people to do just a few generations ago. After all, a couple guys with tractors and combines do the work of hundreds of field hands today. Anyway, economics isn't my strong point but it just seems to me that if productivity keeps soaring that the old arguments about importing labor and/or increasing the birthrate change. That's what I'm really getting at (though I'd love to discuss the Nanobot Androids all day). Am I missing something on that point?
I'm no economist, but I wouldn't want to deny you my ignorance, so here goes: Why do we see so little fruit (in terms of leisure) from increased productivity? Because we spend 90% of any raise we get. The square footage of the average home has exploded over the past fifty years despite smaller families. That a couple guys with tractors and combines do the work of hundreds of field hands today is true, but the hundreds in the field turn around and want a bigger house, a pool, a DVR, etc...So we basically take all the benefits of technology and exchange them for more stuff instead of more free time. That's my best guess. Email me your best guess and become eligible for a drawing to win stuff.

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