Tipping Point

While I was reading Gladwell's Tipping Point, I considered the tipping point of a country's population level. Granted, short of the four horsemen, human populations do not generally plummet when past a tipping point. However, it is possible for a population to tip from growth into decline given certain factors.

Some countries have low fertility rates, and consequently an ageing population. Of course, this is an undesirable situation in terms of productivity, as the country's productivity declines as well. I believe the factors involved in aiding the tipping point along include high cost of living and high consumer demand.

In a scenario where the cost of housing is astronomical, as is private transport and that of bringing up children, the power of context drives people towards focusing more and more on productivity. This productivity is not aimed directly at acquiring luxuries, but in the basic things that are family life. This alone is not sufficient to tip the balance, as the incomes of most families can at least support housing and children.

However, when advertising and keeping up with the Joneses are thrown into the fray, the balance begins to shift. By desiring more than the basics of life, and even the drive to acquire luxuries that one would not otherwise need (that's just for keeping up with others), an average household's income simply cannot keep up with the demands. One of the many things that result is debt. In effect, earners become unable to build up savings for their retirement. More importantly, there is less of an income surplus to support children while maintaining a good quality of life. As a result, birth rate declines when parents decide they can afford one child at best.

A country that seeks to dig itself out of that rut would be rather unfortunate in assuming that the simple encouragement of people to have more children would work in isolation. That does not address the root of the issue. Unfortunately, tt is also incredibly difficult to lower the cost of living, though that would very likely help the birth rates. Moreover, it would be economically detrimental to actually lower consumer demand. Ironically, the best solution appears to involve allowing the population to decline. This may sound odd, but it seems that economies in countries can only comfortably support a fixed number of people before the balance becomes tenuous. After which, not only does the birth rate decline, it also becomes hard to attract foreigners to actually live where the basic costs of living are astronomical.