Comments on: Depopulation cont.

By: wcw

wcw — Thu, 06 Apr 2006 21:01:57 +0000

Locally expensive real estate stays expensive when aggregate prices change. I picked up a dusty book off a shelf once that plotted Chicago real estate prices along various streets by decade as lines. Each street would look like a succession of lines, with peaks representing locally desirable properties. As decades passed, aggregate price levels rose and fell, but the local peaks were quite consistent.
I find your other current arguments unpersuasive, but as you’ve moved on from your breathless omg-Italians-are-going-extinct thesis, I can’t muster the energy to respond.
Kudos for being more reasonable this time.

By: fishbane

fishbane — Wed, 05 Apr 2006 18:39:33 +0000

How much would the US population have to fall until the backlog of people who want to live in Boston, SF, or New York was small enough that they became cheap? How much of their attractiveness is precisely owing to their local high density, public transit, walkability, diverse neighborhoods and all that follows from that?
Another aspect of San Francisco or NYC housing is a sort of self-selecting elitist thing. There is a high density of interesting people around, and other people who are interested in interesting people (who tend to be interesting) will pay to be there.
I spent 10 years in San Francisco, and now 4 in NYC, for precisely this reason. Having grown up in the rural south, I’m very familiar with boring. That I’m waiting for the housing bubble to go before snatching up a nice property in Western Mass. has more to do with the fact that my work is location independent and I’m getting older, and am sick of paying $3500/mo. in rent. Cities are great for young people; I wouldn’t have spent my youth any other way.

By: paul

paul — Wed, 05 Apr 2006 14:23:19 +0000

You write:
Actually life in Italy in 1920 was so generally awful that a flood of Italians left for the US and Argentina and the rest elected a fascist dictatorship
The Wikipedia entry on Mussolini says nothing about coming to power through elections, but rather that the king appointed him PM to forestall a civil war between the fascists and socialists.

By: Robert the Red

Robert the Red — Wed, 05 Apr 2006 12:43:30 +0000

NITPICKERING: “a day at the Musei Vaticani” — of course, this isn’t actually IN Italy.

By: Doug

Doug — Wed, 05 Apr 2006 10:49:18 +0000

Demographic change in Europe is one of our recurring topics at Fistful of Euros. Pull up posts from Edward Hugh for lots of thoughts and info on Spain and Italy in particular. Germany is more my metier; I last wrote about it on March 16, prompted by a study by the Berlin Institute for Population and Development.
The very short version of our discussions would be that getting democratic governments to address long-term problems is no easy task. Some are proving more adept than others, of course, and Italy is on the wrong side of a fairly large number of indicators. So it’s a good place to look for the challenges, if not necessarily the solutions yet.
A prolonged period of below-replacement fertility is indeed a new development, and it challenges the way that European states finance their welfare provision. The systems built for an age pyramid perform poorly with an age column.
On the other hand, Europe has produced an enormous amount of wealth in the postwar period. For the first time since the 19th century, two generations have grown up without seeing their countries ravaged by war, and this accumulated, undestroyed wealth is helpful for making the transition to an age column.
(Why, exactly, does that new age mix imply a much-diminished quality of life for everyone? I don’t see this argument being made in the post. I also missed the argument for shrinking economies.)
One of the changes is the extension of working lives. The US began to grapple with this problem at the national level at least 20 years ago. It is that much ahead of most European nations. Italy has one of the lowest actual retirement ages (mid-50s, if memory serves), making it one of the places where reform is most necessary.
Immigration is also part of the mix. Britain is one example. And it’s not as if integrating immigrants is foreign to European traditions; this is a fairy story put about by conservative parties. Berlin, at one point, was almost one-third Huguenot, for example. Post-war West Germany integrated millions of people who were immigrants in everything but name.
Government policies to make child-care easier would no doubt help. Though lack of those policies in the US does not seem to be a barrier to fertility.
In sum, there’s no need to panic (demographic panic was yet another unsavory element of interwar European political culture), there’s no silver bullet, and lots of room for incremental improvements that will add up.

By: Steve Waldman

Steve Waldman — Wed, 05 Apr 2006 09:53:56 +0000

You might add that the existence of expensive, durable infrastructure to support a large population means there will be a lot of resistence to allowing populations to fall very dramatically, as this will lead to financial crises (infrastructure that is costly to maintain can’t be supported by a small tax base, local asset valuations can’t be sustained, neighborhoods turn to half-vacant slums). This creates a strong incentive for encouraging immigration rather than letting below-replacement birthrates cause depopulation. Whether or not this is a good thing depends on your values, and the manner and character of the immigration.
Some mix of “better” immigration, however defined, and enhanced incentives to reproduce might work to help European countries stabilize population levels.
(Consistent with Andy’s piece, stable rather than growing populations may be a reasonable outcome, although this would still require economies and welfare states to change some assumptions.)