Demographic Lessons from the Mongols

cutouts of children and families

Massive population shocks are nothing new; just look at the Mongol invasions or the Black Death. But is the demographic collapse of today comparable to those historic cases? Or are we staring down the barrel of something entirely new?

Well, we’re not going to get a step-by-step guide by looking back at the Mongol invasions and Black Death, but there is a lesson in there. The collapse happens fast (relatively speaking). The building back and transitional times…that happens over generations.

So, demographic collapse isn’t the end; it’s the start of a long and painful process of finding a new system that works. Japan, China, Germany, and Russia will do a bit of guinea pigging for the rest of the world, but everyone’s heading there eventually.

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Transcript

Hey, all, happy autumn from Colorado. Peter Zeihan here. Today we are taking a question from the Patreon crowd specifically. Could I take a look at the demographic decline that’s going on today and compare it to past periods where there’s been population collapses, specifically, the Mongol invasion of the 1200s and the Black Death of the 1300s. Okay. 

Great idea. I’m not sure we’re gonna be able to draw too many comparisons here, but I’ll give you my thinking. Which shapes why I’m very circumspect when it comes to specific forecasts based on demographics. The situation we’re in today is because of industrialization. We all started to urbanize, which means we all started to have fewer kids because on the farm, kids are free labor in the city. 

They’re just an expense. And people can do math, which means that over the course of the next ten year period before 2035, about half of the developed world, plus China is basically going to age into an environment where our economics models don’t work anymore, and they’re all looking at some sort of national, civic or economic collapse going to be pretty ugly beyond that. 

So let’s start with the Mongols. Among us were some scary dudes. And when they started rampaging across Asia and getting to the eastern rim of Europe, they had such a reputation that people ran before them literally until they could get to what is today Poland, because in Poland there were forests. And when the Mongols would charge into the forest, they couldn’t really operate as horsemen. 

They had to dismount. And then all of a sudden they were numbered 100 to 1. So Poland was kind of where the line was. And then, we had a government change among the Mongols. It was a clan based structure. And when Big Papa died, all the little boys went back to Mongolia and basically had an argument over who was going to be the next big papa. And that triggered, civil unrest and basically led to the end of the Mongol Empire. 

Later, a few decades, a new government rose on the scene called the Polish-Lithuanian Commonwealth. Basically, Poland and Lithuania, had some neighbors, the Latvians, the Germans, whatever. And when they went into those lands, they discovered that there was resistance. 

But if they went east, the lands were almost completely empty. So they started going east, and then they found one another and they had a little spat as expanding empires do. They cut a deal. They formed the Commonwealth, and over the next century they became the largest, most sophisticated political and economic structure that Europe had known to that point. 

So clearing the decks demographically can generate something new and maybe even something wonderful if you can get through the transition. The second example is, if anything, even more poignant. That’s the Black Death. When rats carried by traitors spread bubonic plague. Went throughout all of Europe. 

And based on where you were, either one third of your population died, if you were lucky or maybe even over half, that generated a different sort of transformation. largely because of population dynamics. Even after the Black Plague swept through western and southern Europe, these areas had higher population densities than the lands east of Poland did before the Mongols arrived. So these places suffered hugely. But they weren’t emptied out and what they discovered is to maintain the bones of civilization, much less build something new. 

Nobody had enough skilled labor to handle the metal of the wood or whatever it happened to be. So from the Colonel, survivors of skilled labor, we saw an explosion in training, as everyone had to figure out how to do more with less. That’s another word for technology. And so we triggered the Renaissance, which led in time to the Age of Discovery and ultimately the industrial age. 

So both of these examples are great for showing how demographic collapse isn’t the end. But you have to keep a few things in mind. Number one, it takes some time in the case of, the Mongol invasion, for example, it was roughly 1240, 1242, I think, when the Mongols went home and never came back. Poland, the Polish-Lithuanian Commonwealth wasn’t finalized until like 150 years later. 

So, you know, you’re talking 3 to 5 generations of time where you basically had a lot of empty, the area would have been called something like marches. In the case of the Renaissance and the Black Plague, it was faster because the population wasn’t wiped out, but still, Black Plague hit about 1350. It wasn’t until 1400 that the Renaissance got going, and the Age of Discovery started 50 to 100 years after that. 

But for that to shape the general political environment took a lot longer. During this time, during the dark Ages, which was, you know, at this point, almost 800 years in, it was a horrible system, but it was stable. The most powerful country in the world was Ottoman Turkey, because they had a defensible core in the Sea of Marmara region, and they had access to multiple maritime routes of expansion, the Levant, the Aegean Sea into the Mediterranean, the Black Sea and especially the Danube. 

And they would basically expand down those maritime routes. When the Age of Discovery clashed with the Ottomans, the first time it happenedwas in 1529. You know, it’s a couple centuries after the Black Plague and it was indeterminate. 

In the meantime, you had the Age of Discovery continuing with the Portuguese and eventually the Spanish, discovering the new world, stitching together new routes, the old world technology generally progressing, and it would in time overpower the Ottomans. 

But the high water point for the Ottomans didn’t happen until the late 1600s. And it was another century after that, until you got the revolutions of 1787 that actually broke Ottoman power. And even then, the Ottoman Empire lasted for another 40 years before ultimately dying in World War one takes a lot of time for stable systems to unspool. 

So when you’re using these lessons and looking at our near future, yes, the demographic transition from our point of view is going to be very fast the next ten years, or it’s going to be lightning fast and the collapse of individual systems, we’re going to feel in our bones, but waiting for something that is stable to replace it on the other side. 

That requires inventing new models. Ever since the Age of Discovery, we’ve become inured to this idea that the patterns are permanent for every year except for 1 or 2 of the last 500, the human population has gotten bigger. And because of that, economic models that favor expansion do really well. That’s socialism, capitalism, fascism and communism. But if the population starts to shrink, those models aren’t going to make sense anymore. 

And we’re gonna have to invent something new. And the places that have to deal with that first are the ones where the demographic decline is going to come first and be fastest, and the countries on my list for that, that really matter are Japan, China, Germany and Russia, in no particular order. And if you know anything about the histories of those four countries, when they get insecure, things get a little exciting. 

So I can guarantee you that things are going to change. I can guarantee you that the models which we run our economic systems by are going to be different. What I can’t tell you is when this is going to settle out, because I’m probably not going to be around anymore at that point.

The Last Generation to Protest

A large protest made up of thousands of people

Staging a meaningful protest requires several things, and a large young population is one of the key components. So, what happens when there aren’t enough young people left?

Youth movements have been a driver for massive change across the globe, from politics to war and everything in between. Demographic trends show us that populations are growing older and taking the wind out of the sails of the youth. Countries like the US, Mexico, India, and much of Europe have already eclipsed the “youth protest” phase. We can still listen to For What It’s Worth by Buffalo Springfield…but those days are over.

Sure, there are countries with the youth to protest, but we’re talking about places like Nepal, Madagascar, and Nigeria, which simply don’t move the needle on a global scale.

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Transcript

Peter Zeihan here. Coming to you from Colorado. Today we’re gonna talk about these Gen Z protests that are bringing down governments, most notably in Nepal and in, Madagascar. And if these are two places that you don’t know much about. You’re not alone. What to keep in mind. Young people protest. Young people bring down governments. 

That’s just part of the math. They have less of a stake in the system. They have less experience, and they don’t see the cost to them as a society, and certainly not personally. Now, once you have kids, once you have a mortgage, once you have something to lose, then you have more of a vested interest in, say, reforming the system rather than overthrowing it. 

And so when you look at youth protests, you have to make sure that there is a youth to protest. So if you dial back to, say, the 1970s, in the 1980s, the most active student protest movements in the world were in, say, South Korea, where there was a large chunk of the population that was under age 30. If you look around the world today, there aren’t a lot of those places left. 

As you industrialize, as you would urbanize, birth rates drop. And so here in the United States, we’re now below replacement levels, while in Europe they’ve been 

below replacement levels for 50 years. Places like India and Mexico and Indonesia, Turkey, they all fell below replacement levels even before the United States did. So when you think of a place that matters because they’re economically large or strategically viable, all of these places have kind of aged out of the protest stage. 

And what’s left are much younger countries where the birthrate is still falling, but there’s still a substantial percentage of the population that’s below age 25. So we see Nepal and Madagascar. We’re seeing Yemen. We will see places like, Nigeria and maybe even Pakistan fall into that category. But for the most of the world, this youth bulge is long gone. 

And so the places where you can or might see youth protests actually change in government structure. They’re becoming fewer and fewer and fewer and places that are less and less important to the wider world.

Slavery Can’t Fix China’s Demography

Young Chinese children

To be thorough in our discussion of China’s demographic collapse, we must explore as many potential solutions as possible…even if one of those is a UAE-style model of imported workers (aka slavery).

China is already implementing quasi-slavery to help feed their solar industry, but this barely dents the demographic problem. The scale needed to flip the demographic script just isn’t feasible; we’re talking about importing at least 100 million workers. Any idea where that would come from?

The reality of the Chinese demographic situation is that their traditional system cannot withstand it, but that goes for capitalism and socialism as much as communism. So, new economic models will be ushered in, we just don’t what those will look like yet.

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Transcript

Everybody car video today, running errands, and they don’t have time. Anyway, I’ve got a question here that’s come in from the Patreon crowd. And it’s about experimenting with new economic models. So the world that we’re moving into is facing population collapse among people who are under age 55, having places like China, Japan, Korea and Germany and Italy first, and then moving on from there to other places. 

So the question is, how about some models that we generally look down upon because they’re, you know, gauche, like slavery, specifically, could China replicate something like, the United Arab Emirates has done where the population, is basically sustained by a huge imported workforce that does all the serious work. Could you do something like that while the Chinese agent of mass retirement. 

Two problems with that strategy. Number one, they’re already doing it to a degree. Keep in mind that while 90% of the population of China is Han Chinese, there are a number of minorities that haven’t been completely genocidal into nonexistence. And one of them, the Uyghurs of western China in the Zhejiang region are already existing in a degree of slavery. 

They they stationed Chinese Communist loyalists within the homes of people to make sure that people don’t have kids. And anyone who shows any sort of religious inclination, like wearing headgear, for example, or maybe saying a prayer in private is sent off to a reeducation camp, which is basically a work camp. And so almost everyone who has installed a solar panel in the last four years is benefiting from that system on a global basis because the silicon is processed and turned into solar lakes, in Zhejiang. 

And that really hasn’t moved the needle very much. Now, of course, there are only so many viewers versus, you know, ¥1 billion. Which brings us to the second problem is scale, when you’re in the United Arab Emirates and you only have a single digit number of million of Arabs that need to be supported with imported workforce, that’s one thing, especially when you’re drawing people from, say, Palestine or Pakistan or India. 

But there are a lot more Han. And so you would need to import bare minimum cheese. At least 100 million people in order to make a system like that work. And the scale of that just is not possible. And if you look at the countries that border, 

China, there’s no easy source. Russian Siberia is largely unpopulated. 

Everything east of the Urals is under 15 million people. Kazakhstan has of more people than that, but most of them aren’t in the border region. Most of them are further north. You get to Duke of standing Kyrgyzstan again. The eastern reaches are completely uninhabitable. And if you go south, you’re hitting Vietnam. And if the Vietnamese hate the Chinese more than anyone else. 

Myanmar is jungle and mountain, and most of their people are again on the other side of the mountains. And and of course, India is on the other side of the Himalayas, and that is everyone. So, you’d be having to bring in literally tens of millions of people from at least a couple thousand miles away. So the feasibility of that is not great. 

But keep questions like this coming, because we’re gonna have to figure out something as the world the populates the relationships among supply and demand and labor and capital are all breaking down. And the models that we have now, whether it’s fascism or socialism or communism or capitalism, simply aren’t going to work much longer for a lot of countries. 

And the sooner we come up with some other ideas, the better.

These Six Countries Are Running Out of People

kids holding hands

We’ve kicked, flogged, and beaten the snot out of China’s demographic horse, but what other countries are facing a similar demographic decline?

Germany, Japan, and Italy are first on the list. These countries got an early start on industrialization and urbanization thanks to their geography. Thus, rapid aging and population shrinkage was locked in for these WWII Axis powers. South Korea’s rugged terrain meant urbanization was essential, which has translated to them being one of the fastest aging societies in the world.

India and Brazil started down this road much later than the rest of this list, but decades of low birth rates, low fertility, and limited technological upgrades put them in a difficult position. Should these trends continue, they could face severe demographic and economic challenges before reaping the benefits that come along with industrialization.

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Transcript

Hey all, Peter Zeihan here. Coming to you from your cemetery park, the northwest part just above Tilden Lake over there. And, it’s chit chat and peek in the back. I’m not sure about that, though. Anyway, taking another question from the Patreon page. 

Aside from China, which has the worst demographics in human history and is looking at societal collapse within a decade. 

What other countries make your top ten list? Let me give you six. How about that? Just one video. The first three, are the countries that industrialized first and urbanized heavily first. And they are Germany, Japan and Italy. 

The situation all three of these countries is that they were among the first countries to pick up the industrial technologies and get what they needed to go into urbanization in a very big way. 

It happened in Germany very, very quickly because Germany used to be a series of a number competing regions. And so when all of a sudden they got electricity and rail, it was very easy for these regions to each set up their own node. They tried to compete with one another a little bit. We had a series of conflicts in the 1800s, and eventually we got the urbanized Germany that led into the world wars, in Japan, very similar. 

The region’s topography is very, very rugged. So as soon as the technologies were available for people to live better, they chose to and they moved into high rises. Italy’s a little different. Italy’s population is concentrated in the Po Valley. And if you remember your Machiavelli, Italy is a series of, again, competing city states. And so once you got the technologies to go up instead of out, everyone did it anyway. 

These three countries, their geographies and their political history is really meshed with industrial technologies. You will notice that all three of these were the axis powers in World War two. That is not a coincidence, because when these countries started to urbanize and industrialize, they got a burst of national power that they used, perhaps unwisely. But that’s not a coincidence. 

Next country down is Korea. Korea is the head of the what they used to call the mix. The newly industrializing countries of East Asia. 

Korea’s geography is a little bit like Japan’s in that it’s very, very rugged. And people live on a few chunks of flat land. And so when industrial technologies came about, you could move from rice farming into a high rise. 

And that was kind of a no brainer for most people. In addition, they had so little land that once they got the industrial technologies, they were able to reclaim land from the seas. And those again went straight up. as a result, with the exception of China, Korea is arguably the fastest aging society in the world now. 

The next two are countries that I’m not worried about now. But if things don’t change, right, I’m going to be worried about them. Very much so in 20 or 30 years. Not that that’s going to be my problem at that point. But anyway, and those are, Brazil and India. Now, these are countries that came late to the game. 

They didn’t really start seriously industrializing until the 1980s, early 1990s. But because the path has been paved and all the technologies have had been invented, they were able to adapt those technologies very, very quickly, urbanize very, very quickly. And so as a result, their birth rates are significantly below the United States at this point. If they keep aging at their current position, they’re not going to enter a Japanese style crisis until like 2070. 

I mean, there’s still a lot of time for this to go a different direction, but we’ve already had 40 years of record low birth rates for both of those large developing countries, and unfortunately, they have not moved up the value added scale like, say, the Germans or the Japanese or the Koreans have in the time that it’s taken them to industrialize. 

So if, if if nothing changes on the birth rate front, those two countries will be looking at, demographic degradation without the attendant increase in technological prowess, skilled labor, or standard of living. So, you know, if you’re in India or if you get in Brazil, chop, chop. You got some work to do. Yeah. That’s top six. 

Okay. That’s it. See you guys on the other side of the lake.

The Demographic Crisis in Russia

Photo of St Basil Cathedral in Red Square, Russia

The Russian demographic crisis is worsening. So, let’s look at the long-term structural, social, and economic problems, as well as some of the more recent changes hurting the Russian population.

Forced urbanization under Stalin and Khrushchev meant fewer children. Major wars led to dramatic population holes. Substance abuse, both drugs and alcohol, has raised deaths and lowered birth rates. Economic instability discourages family growth. High abortion rates, well that one is self-explanatory.

And now the Ukraine War has accelerated this demographic decline, especially amongst men under 30. Rather than addressing the root causes, the Russian government would rather push its propaganda; like a new law that bans any media that doesn’t promote childbearing. And of course we can’t get reliable data out of Russia, so things are worse than advertised.

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Transcript

Good morning All, Peter Zeihan here coming to you from Zion National Park’s infamous West Rim Trail. Good morning. Today we’re going to look at something that’s happening in Russia with their demographic work. Before I give you the trigger, let’s give you the background. The demographic situation in Russia is bad and has been declining for the better part of a century. 

Basically, there are three interlocking trends. First is that whenever any country urbanize or industrialize is, the birth rate drops because people move on from farms where kids are free labor to cities where they’re an expense. And you fast forward a couple of generations and the numbers just get worse and worse. In the case of Russia specifically, however, Stalin and Kristoff are the people who are responsible for the industrialization and the urbanization. 

So people were forced into small apartments, that were efficiency or at most one room, which really, dissuaded having more kids. And you had collectivization, in the agricultural sector where people no longer could profit from the work that they did on the farm. And there just was no impetus for people to want to work. Therefore, there was no impetus for people to want to have children. 

On top of that, you have these giant gouges out of the demographic structure of Russia from major events like, say, the world wars, where, you know, several million people were killed, and, or were away from their spouses for a long period of time, making the formation of families at all very, very difficult. Now, the second big issue is drugs and, alcoholism. 

One of the first things that the Russians industrialize was the creation of vodka. And vodka still today, is, day to day plague. Beer is considered not an alcohol. You can actually get it in a lot of vending machines on your way to work if you want to, but hard drugs were the real problem. 

When the Soviets went into Afghanistan, one of the things they discovered was heroin. Because the largest poppy fields in the world at that time were in, Afghanistan. And because there were now transport links between Afghanistan and the former Soviet Union. We saw three of the four major heroin smuggling routes in the world. Trans north through Russian positions and into Russia and into the rest of the world. 

It’s a lot worse than it sounds, because even when the Soviets left Afghanistan, they left a buffer force behind in Tajikistan. Even after Austin got independence. And the soldiers there who were supposed to keep, keep the Taliban from interfacing with the rest of the former Soviet Union didn’t only fail. They then took a chunk out of the drug trade and actually facilitated its flows into Moscow. 

So we had at some point something like 10 million heroin addicts in post-Soviet Russia, a country with under 150 million people, very, very bad for demographics, kept the death rate high, kept the birth rate low. And then third and most, finally, you have significant economic degradation. The Soviet Union was a superpower, but it never really was an economic superpower. 

They never achieved the types of growth after about the 1960s that was necessary to advance a technological population. So we had long periods of stagnation under Brezhnev, and then we had the post-Soviet collapse and now the Ukraine economic contraction, all of which have convinced people that tomorrow is going to be worse economically for them today. And that is arguably the single worst thing for convincing people to have kids. 

If you don’t think there’s going to be a world for them to live in, you usually don’t want to have them. And so Russia traditionally has the world’s largest and highest abortion rate as well, with some statistics suggesting as many as 70% of all pregnancies are terminated. On top of that, most recently we have the Ukraine war. 

When the Russians started mobilizing, a million men aged 30 and under fled the country. And since the war began three years ago, a million men, mostly aged 30 and under, have either been killed or incapacitated to the point that they’re functionally non workers within the Russian system. So this is bad. It’s only going to get worse. And so the trigger what’s making me talk about this today is that there is a bill going through the Duma. 

That’s the national parliament in Russia that would criminalize, the publication or the broadcasting of any media that does anything other than glorify the production of children. So if there is a character in the show that, for whatever reason, has chosen not to have kids and say, you, like, have a career that is now going to be illegal in Russia, and before you say, that’s going to have no end, in fact, keep in mind, this is Russia, in fact, and fiction are oftentimes intertwined. 

Back during the 2000, there were several provinces in Russia that criminalized death. On Mondays, Wednesdays and Fridays. That’s how they were going to cut the death rate in half. And you know what? It worked because people just stopped reporting deaths. Which brings us to the final point here. Statistics in Russia, on a good day are kind of Potemkin. 

And on this topic in particular, the Russians have not been collecting, much less analyzing, much producing any reasonable statistics on birth or death rates now for over 15 years. So we really don’t know what the real picture is. We can only guess now. When the Russians did their first post-Soviet census back in the 2000, the best guess is that the population of Russia proper was about 140 million. 

The census found another 4 million people somewhere, and now they’ve said they’ve had 144, according to the official statistics. That has now been whittled down to 141. Ignoring the Ukraine war, ignoring the X migrations. In reality, we’re probably closer to 130, but there’s really no way to confirm that. All we know is that the clearest sign that the Russians are facing a real pressure in the demographics is going to be what happens with the Ukraine war, because if they simply run out of men who are under 30, who can fight that, it’s going to be very, very visible. 

But we’re not there yet. They started the war with their own statistics by 8 million people in that block between X migrations and deaths and casualties. We’re now down to about 6 million. So they can keep this pace up for several more years. Just the question at the end of the day is of the younger generation, people 20 under how many were there ever? 

And we have never had a good count of that number. But because of the war, we’re going to find out pretty soon.

The Fire Hose of Chaos: How Do You Lose 100 Million People?

Chinese men and women walking in the street

Over 100 million people are missing in China!? No, the Chinese aren’t playing the world’s largest game of hide and seek, instead there’s widespread fraud in their data collection system. Yay! Government officials are admitting that they’ve been fudging their population numbers for quite some time, overcounting by at least 100 million (with some private estimates up to 500 million).

This starts from day one. Births often go unregistered, then local officials inflate vaccination and school enrollment numbers to secure funding. And by the time these imaginary people would theoretically enter the workforce, start paying taxes, and provide their first reliable data point to the government…there’s already been two decades of faulty statistics baked into the system. Now, the Chinese have a cohort of 20-somethings that’s over 100 million smaller than initially believed.

The future of China’s demographic stability and workforce is now in question, and there’s no plausible fix. While the US has better systems in place, the recent cuts to data collection under the Trump administration risk sending the US down a similarly dysfunctional path.

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Transcript

Hey, all. Peter Zeihan here. Coming to you with a woodshed edition of our daily videos. Today we’re taking a question from the Patreon crowd about China. Specifically, over the last couple of years, the Chinese have steadily revised down their estimates of their total population, with Chinese statisticians, government statisticians regularly opining now that they’ve over counted the population by at least 100 million people. 

And a lot of private estimates say that the over count could be as many as a half a billion. And, well, this is not my, projection. I have no way of doing a snout count of the Han Chinese. The question is, you know, how how do you lose that many people? 

Really? If you want to sum it up in one word, it’s fraud. Which the Chinese are very good at, especially at the government level. There are certain points in your life where the government becomes aware of your existence. In the United States, that’s when you’re born. That’s when you die. That’s every year when you pay taxes is or when you get a Social Security number, when you get a driver’s license, things like that. 

China is not nearly as economically developed as the United States. And government services are not as robust. So there are fewer points where the government becomes aware of your existence. And birth is not one of them. A lot of people in China are still born in either rural hospitals or maybe not in hospitals at all. 

The first time the Chinese become aware of you is when a doctor gives you your initial set of vaccinations. That is a census point. The second time they become aware of you is when you show up for your first day of primary school, think kindergarten, and then the next time they become aware of you is not until you pay taxes for the first time, which if you’re going to be blue collar, it’s probably around 16 to 19 and it’s going to be white collar. 

That’s probably going to be around 21 to 24. So those three points, well, here’s the issue. The doctors have falsified their documents for the immunization, saying that they’ve given more immunizations than they have because they get paid per shot. And then when you get to primary school, the local governments have lied about how many people have showed up for school because their government subsidies are based on the number of people in their province, and this is the primary method that they have for collecting census data. 

So these two first points at, when you’re an infant and roughly age five, the data has been fabricated on a massive scale. And the thing is, the national government in China did not figure this out until their own data didn’t match up. And remember, if you dial back about 25, 30 years ago, that’s when China was in the midst of the early stages of its industrial boom. 

Everyone was working in manufacturing, and they had just started in a big way, building out their white collar workforce, starting with their educational system. So since roughly 1992, but really not picking up until roughly the year 2000, the Chinese went very big into white collar training and thinking that they were going to evolve into a services economy. Now, that didn’t work out for them, but that’s a different issue. 

Bottom line is they established a system of training, tertiary education, college and grad school where a huge number of people were drawn out of the workforce and stayed in education for two, three, 4 or 5, six more years. And so the Chinese didn’t get their first data point as to how many people they had. The federal government didn’t get their first data point until how many people they had, until these people turned 21 to 24. 

Well, if this process started in roughly 2000, they didn’t get their first real data until 2021 to 2024. And that is the window when the Chinese started looking at their data at the national level and realizing it didn’t match up with the data they had been getting for 20, 25 years from the local level, that the number of kids that they’re supposedly born of blacks 20 years actually worked. 

And the result is a difference of at least 100 million people. Which means if the Chinese want to fix this problem today, they won’t get more workers for another 25 years. Because first, you have to encourage people to have more kids, and they have to have more kids, and then they have to grow up and 

Fixing the statistical system is a little late. That should have been done, you know, 20 years ago, but bygones. Now, the result here is that the Chinese data 25 years out of date, basically grossly overestimated the number of people that they have that are 25 and under. Suggests that the Han ethnicity is, well, to be perfectly blunt. 

Do they have not had enough live births to even continue it? And now that they’ve discovered it, basically everyone in China who’s over or under age 40, so roughly 25 to 40, they’d have to basically have five kids if they were going to save the ethnicity this century. It’s that bad at this point. Can’t really fix that with policy. 

And for those of you is like, oh, those stupid Chinese. That could never happen here. Well, yes, we have more data points. Things like driver’s license. Yes, we collect better data at the local level because in the United States, local and state authorities have the authority to tax in a way that local governments in China cannot. 

So local governments basically just get a big subsidy from the federal government every year here, there’s different stages of income at different stages of government. So the data is much better. But one of the things that the Trump administration is doing with all of its cuts is basically going after statisticians because it’s perceived as something that is kind of a waste. 

Now, I personally find that horrific. So we’re not collecting data anymore on disease transfer. We’re not collecting data anymore on energy, inventories. We’re not collecting data anymore on fraud. And we’re not even enforcing white collar fraud laws that are on the books. So we are setting ourselves on a path towards Chinese level statistical dysfunction. There are a lot more safeguards. 

There are more points of contact with the population in government than there are in China. The sense of fraud has not become ingrained in society here like it has there, but we are absolutely going the wrong way. Does this mean we’re going to be missing 100 million people in 50 years? I doubt it, but the idea that a government can function if it blinds itself, that’s a bit of a stretch.

The Fire Hose of Chaos: Xi’s Power Chokehold

Photo of Xi Jiping

Xi Jinping continues to push China closer and closer to that scary edge they’ve been staring at for quite some time. So, what will the fall of China look like?

History shows that over-centralized authority leads to progressive breakdowns, fragmenting the regions, and eventually warlords pop-up all over the place. But things are different now. China has industrialized, allowing it to sustain its large population. Once this infrastructure begins to falter, mass starvation and depopulation could follow in short order.

Xi’s extreme centralization has kept him insulated from the truth and unable to make informed decisions, which will likely speed up the rate at which China falls.

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Transcript

Forthcoming….

The Russian Depopulation

Photo of Russian dolls moving down in smaller size

Today we’ll be discussing Russian birth and death rates since we’ve got some new Russian demographic data to look at. So, go ahead and grab that truckload of salt.

Russian birth and death rates have fluctuated quite a bit due to major events. The most notable was the demographic “death cross” in the 1990s where deaths outnumbered births; this sent the Russians down a dark path of population decline. Despite some brief recoveries throughout the past few decades, new data out of Russia has confirmed things have worsened.

That recent Russian data is likely overly optimistic, so things are bad. Combine that bleak demographic outlook with no improvements to infrastructure, education, or public health, and you can do the math. Of course, the Ukraine War has accelerated this crisis, as the Russians have sent wave after wave into the meat grinder. That current strategy is unsustainable, but a victory in Ukraine could at least put a little bit of air into the Russians’ lungs. A loss or stagnation would suck even more air out.

Either way, Russia is quickly hacking away at its final opportunity at demographic recovery, which brings long-term viability as a functional state into question.

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Here at Zeihan on Geopolitics, our chosen charity partner is MedShare. They provide emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it, so we can be sure that every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence.

For those who would like to donate directly to MedShare or to learn more about their efforts, you can click this link.

Learn about medshare here

Transcript

Hey, everybody. Peter Zeihan here. Coming to you from Bell Block, New Zealand. Today we are going to discuss the newest data that’s out from the Russians on their demographics. Russia stopped collecting, demographic data about 17, 18 years ago and have really just been making it up ever since. Now, if you look back through Russian history, there have been a lot of, dark chapters. 

And as a rule, when people are depressed, they don’t feel it’s a good idea to have a lot of kids. So these giant rises and dips in the Russian birth rate and death rate, based on what’s going on culturally and economically with the country. Now, the biggest ones, of course, are World War one, World War two. There was a time when Khrushchev tried to shove everyone into small apartments because he thought that was modern, less room for kids. And then, of course, the biggest one is the post-Soviet collapse, when the bottom two, a lot of the Soviet system and we had extended period about 20 years, where basically nothing got better. 

You combine this with rampant heroin use and, alcoholism. That is just atrocious by most modern country. Measures, and you get something called a Death cross that happened in the 1990s. And that’s a point when the birth rate and the death rate crossed so that the death rate is higher. And even before you consider incremental mortality issues, you have population shrinkage. Now, a couple of things to keep in mind. 

Number one, the Russians back in the mid 80s had this moment of opening and perestroika where we thought maybe, just maybe, we can save the Soviet system. And there absolutely was a little baby boom. And if you fast forward 25, 30 years to just a few years ago, the children of that baby boom, also had kids at a time when Russia was riding high on high energy prices under Vladimir Putin, in the late 2000. 

I’m sorry, 20 tens. And so we got another little mini beanie boom. And so that death cross re crossed into a life cross very, very briefly for a very, very low cross. But it was successful and at least for a couple of years bringing the birthrate back up about the death rate. Well with the new data it is clear that that has now reversed. 

And remember, this is new data provided by the Russian government is undoubtedly overly optimistic. But even by their own data, they’re now back in the negative territory. All right. So this takes us two places. Number one, none of the underlying issues that have plagued Russia for the last century have gone away. All of them are more intense. 

The infrastructure of the Soviet period is still degrading. The Russians have still been unable to rebuild their educational system. Alcoholism is still arise. Drug use is still rife. I’ve run out of speech. Going to go the other way now. And so you shouldn’t expect any improvement because it’s going to be another 25, 30 years before now, the grandchildren of perestroika could be born. 

And so you’re dealing more now with the aftereffects of World War one and World War two and oppression and the post-Soviet collapse. And it’s more likely that this period of death is going to be far more intense than what we’ve seen before, because all of the younger people are now older. You know, the boom that they had, say, in the 70s, and they’re just unable to have children now. 

The next generation that will be able to have children will be doing it for another 20 years. And second, and far more intensely, is the Ukraine war. As you will notice from this most recent death across it began before the Ukraine war, before Ukraine, or before it began, before the Ukraine war, before Russia became a pariah again, before Russia was under the most extreme sanctions that any major country has ever been on before. 

The Russians started seeing massive battlefield casualties. So we are again, in one of those moments in Russian history where people are unsure of their future and they’re not having kids. In addition to the fact that the demographic moment has already passed from the perestroika boom echo, we are already seeing on a daily basis for the last year and a half that more Russian men are dying on the fields of battle in Ukraine than, Russian boys are being born. 

And we’ve even had a few days where more men have been dying in the fields of Ukraine than the total number of births – boys and girls. 

So We are seeing the Russians waste their last chance to have positive demographic growth ever. And there’s no reason to expect that there’s anything in the Russian system that’s going to improve the, the birthrate or decrease the death rate anytime soon. One of the reasons why Russia has been a major power for so long is numbers. 

They have a lot of hope, you know. We’ve had a large country with a lot of ethnic groups and disposing of surplus ethnic groups in the middle of war has long been a Russian strategy for managing their population. They’re doing that now. But you can only do that so long. And that always assumes that you have a robust birthrate, which the Russians don’t anymore. 

So the Russians have never been really able to upgrade and update their military strategies in the post-Cold War era to reflect the changes in the demographic picture that just no longer exist and really haven’t existed for decades. So it’s all about lots and lots of artillery. It’s all about what they call meat assaults. It’s human wave tactics, and that works as long as you massively outnumber your foe. 

And there are roughly four Russians for every Ukrainian. So it’s not a strategy that is stupid, but is a strategy that if you keep using it when you don’t have a bottomless supply of fighters, that you really eat into what allows your country to exist in the first place. Now, even with this going on, the Russians have more time on their demographic clock than a country like, say, China that has had a rock bottom birth rate now for 40 years. 

But when you start burning more people in their 20s than you’re generating babies. You are definitely on a starvation diet. And the question in my mind has always been, when this century, does the Russian ethnicity lose sufficient coherence that it can’t even maintain a state? If they win the Ukraine war, they establish a better external buffer system. 

I would say that that would probably be the 2070s or 2080s. But if they become stalled in Ukraine, if they get forced into a piece or a battlefield defeat, that means that they have expended all of the costs of fighting a major war without getting many of the benefits. Then you’re looking at this happening 20, 30, maybe even 40 years earlier. 

So, believe it or not, we’re in this weird situation where as long as the Russians are doing this terrific meat assault, it’s really good for the rest of the world. Unless, of course, you happen to be the country that’s on the receiving end. That would be Ukraine. Because it brings forward the day where the Russians just can’t fight any longer at all.

The Real Secret to Saving Birthrates

Photo of babies

Today’s conversation might piss off a few prophylactic companies (no, I’m not suggesting we buy thumb tacks and go crazy). The question of the day is…how can we get people to procreate?

No, the lingerie and aphrodisiacs aren’t going to save us this time, we’re talking about bigger changes. A good starting point is making having kids easier: lower costs for essentials like housing, electricity, and food. But then you still need those parents to remain part of the workforce. So, the sticking point is childcare.

Affordable childcare might just be the most effective policy to sustain birthrates and keep your workforce intact in the process. Certain industries in the US (like healthcare) and countries (like Scandinavia) have somewhat figured this out, although it can be pricey.

Once you get the childcare piece taken care of, then you need space for these children to play and grow. Take New Zealand for example, they’ve found a way to keep children (and tipsy adults if we’re being honest) busy for hours and hours…

Prefer to read the transcript? Click here

Here at Zeihan on Geopolitics, our chosen charity partner is MedShare. They provide emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it, so we can be sure that every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence.

For those who would like to donate directly to MedShare or to learn more about their efforts, you can click this link.

Learn about medshare here

Transcript

Hey everybody. Peter Zeihan here, coming to you from Tongariro National Park in New Zealand while I’m doing the Tongariro Northern Circuit, that is mountain Guro in the background, which is and we basically we’ve been going around it the whole time. So why it’s called Tongariro Circuit, not in the whole circuit, I don’t know. Anyway, you might recognize that mountain from Lord of the rings that is Mountain Doom. 

So I prefer to call this track the Doom Loop. Anyway, today, taking a question from the Patreon crowd. And that’s specifically if demographics are so core to the success and failure of countries, what are some policies that could be adopted to encourage demographic expansion? Just great question. Quick review. People between 20 and 45 are the ones who are raising kids and spending money and building homes. 

That’s where most consumption comes from. People between roughly 45 and 65, the kids have moved out. The house has been paid for, but they’re earning a lot. So the consumption is down, but their income is high. And so they are investing. And that’s where the capital in the tax base comes from, having a balance between those two. Without too many retirees, but enough children to generate the next generation. 

That’s ultimately what you want anyway. In most of the world, that’s not what we have. Birth rates have been declining for so long that most of the advanced world, including China, in that are not just running out of children. That happened 20, 30, 40 years ago. They’re now running out of working age adults. So for many of these countries, it’s too late, but not for everybody. 

For New Zealand, France and the United States and the Scandinavian countries, the demographic structures are much younger, and so there’s plenty of chance to rehabilitate. Really, it comes down to one thing. Whether you make it easy to have kids, financially speaking, so low cost of electricity, low cost of land, low cost of food, those are all real impetuses. 

And finding ways to manipulate those things is absolutely important. But the biggest thing is making sure that would be parents are able to still make choices. And for that, you need to keep both parents in the work force should they so choose. And so it isn’t so much subsidization or paying people to have kids that rarely works. 

Instead, it is making sure that there are abilities, the parents can still work and have kids. And that really comes down to childcare. If you can provide affordable, easily accessible childcare, that’s the single biggest thing you can do to keep the birth rates high, because parents, whether men or women are going to not feel like that, they have to make sacrifices in order to have a family, in the United States. 

I would argue that the only place that we get this right is with health care personnel. Because if you’re on call and you have to run into the hospital or the clinic, then your kid has to go somewhere. And so there’s a really robust system in the United States for that, for that specific subsector. But for everyone else, you’re kind of on your own. 

If you don’t have a grandparent or an aunt or uncle nearby. The Scandinavians have done this a different way where they just have state subsidized health care for everybody. But that gets really expensive really quickly. Hopefully we can figure out something in between in the United States, before the birthrate drops to low. 

Okay. We’re going to finish this one up for menopause. Now, as any parent will tell you, there’s one other thing that you have to have if you’re going to be raising kids in that space and the transition from agrarian to industrialized lifestyles, we all started moving into towns and the ability to banish kids to the outside went down. 

So even more than needing childcare, you need the ability to put your kids somewhere. Well, in New Zealand, they’ve got that in spades. Not only is there a lot of green space in the country, but they have gone out and built in every major population center, including all the minor ones. Something really special.

Boomers, Xers, and Budgeting

Photo of old commodore computer and retro items

Today, we’re talking about America’s Gen X, aka the best generation, and our role in the US economy moving forward. Let’s look at the current situation and what to expect in the coming decade or so.

It all starts with the Boomers biting off more than they could chew. They built a welfare state but couldn’t fund it and are leaving massive deficits as they retire into their beachfront mansions. Now, me and my fellow Xers, despite being the second smallest generation, are going to have fix all those problems.

As the Boomers retire, Gen X will come into its economic peak, meaning it controls the wealth, property, and investments. This means a nice period of record wage growth for Gen X, but that won’t last forever. Eventually, the Millennials and remaining Boomers will burden Gen X and force them to make larger contributions to bail out the economy.

So, all my Xers should be “getting that bread” while they can because Uncle Sam is going to come knocking at your door soon enough.

Prefer to read the transcript? Click here

Here at Zeihan on Geopolitics, our chosen charity partner is MedShare. They provide emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it, so we can be sure that every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence.

For those who would like to donate directly to MedShare or to learn more about their efforts, you can click this link.

Learn about medshare here

Transcript

Hey, everybody. Peter Zeihan here. Coming to you from just outside of longs Bay in New Zealand. Coromandel region, taking a question from the Patreon crowd today, which is one near and dear to me because it talks about two issues that I care about a lot demographics and me. And the question is, what is the future of America’s Gen X? 

Are we simply doomed to pick up the trash after the boomers kegger party? Yes and no. So, the back story, demographically speaking, you can cluster people into different financial groups by age. So folks under age 18 are typically dependents. People age 18 to 45 are the big consumers. They’re spending a lot of money raising kids and buying homes, but their incomes are low. 

So high outflow, high consumption, high growth, high inflation, but low capital generation, low tax base. Then once you turn 45 and until you retire at 65, you are saving for retirement. Your income is at it’s the highest it will be in your life. The kids have largely moved out. The house has been paid down. You’re starting to think about downsizing different economic model. 

in this sort of system. The tax base is huge. There’s a lot of capital running through the system. Capital cost, borrowing costs are low. The government gets lots and lots of income that it uses to expand the state technical training, infrastructure, that sort of thing. But consumption has dropped off. And then you turn 65 and you retire and you liquidate most of your financial assets and go into low risk stuff. 

No stocks, no bonds. Typically T-bills, cash and real estate. That money is no longer available for the tax base. It is no longer available for investment capital. And then you whittle away on that as you retire. So the baby boomers have been the largest generation ever in American history for two reasons. Number one, when the GIS came home, they basically founded modern America. 

They had large families and they moved to establish new territories that we now know was the suburbs. In addition, they were the first generation born during a period when the country had already been industrialized. And what happens when a country industrialize is it’s not just that you get rail lines and electricity, you also get antibiotics and hospitals. So the highest death rate for any age group preindustrial is 0 to 5 years old. 

Newborns and young children who, tend to die off. And so people always have replacement children. If that sounds familiar. Anyway, doesn’t really happen for the boomers for the first time. And you combine health care with a new generation that’s large, they live longer. And so we got a double population bulge with the baby boomers. And it was so huge relative and remains so huge relative to all other population groups that they have basically dominated American economic and cultural life ever since. 

So when they were going through their, early adulthood years in the late 60s to the early 80s, labor costs were low because we they supersaturated the labor market. Inflation was high because of their demand. And all of the American pressures were demand based. Then from the late 80s until roughly 2015, when they had their kids had moved out, and they were generating all that capital inflation dropped quite a bit. 

Growth slowed, too. But all of that investment capital that they were generating pushed things forward, like, say, the tech revolution. That also allowed for the expansion of the government under Johnson and Nixon and Reagan. And during this time, the boomers, because the cash flows were robust, built a larger and a larger welfare state, primarily looking at themselves. 

You fast forward today. Now two thirds of them are retired. They’re taking their money. They’re going home. The taxes that they’re paying have dropped off. And we are left with a welfare state to fund their retirement without their income to pay for it all. And the next generation down, the one now entering the capital rich part of their lives is generation X, which is the second smallest generation the United States has ever had. 

So simply on the numbers between the exiting boomers and the entering Xers, we’re looking at chronic budget deficits. Assuming the government was relatively circumspect in its spending. But our last few boomer governments Trump, Biden, Obama, w Bush have been the most fiscally proliferate in American history. And so we’re looking at absolutely massive multitrillion dollar deficits every single year. 

To be continued. 

Okay. Continuing from Buffalo Beach and city on go. So anyway, deficits, massive locked in as long as the boomers live, which is going to be on average, you know, another 15 to 25 years based on who’s doing the math. And during that whole time, the boomers have created a social welfare state for themselves. So they have had never had any intention of paying for. 

And since the next generation down, that is now and coming capital riches, Gen X and the boomers have always outnumber Gen Z by substantial margin. So you financial burden will fall on them. In this, the boomers can count on getting voting backstop against any sort of fiscal reform from their children. Who are the millennials who are maybe the second most selfish generation in American history? 

So you can count on these two voting blocs agreeing that extra should pay for everything. So assume me if at some point there is any effort in Congress to actually rationalize the budget, you’re going to have these two voting blocs, the two largest voting blocs in American history, forcing that rationalization on the group that is most capital rich Gen-X. 

Now, that’s the bad side. That’s the cleaning up the solo cups argument. But there is a positive side here. For some people, specifically with the boomers leaving, we have a lot of tension and tightness in our labor market. They were the largest generation ever. Which means they were the largest work cadre ever. And because there were so many of them in the 60s, 70s and 80s, they pushed down the cost of labor, which made the labor market hyper competitive. 

From a global point of view, and we had inflation due to their consumption from any number of points of view, but from their earning potential was actually fairly low. So most of the hand-wringing during that era about wage increases being too low for the inflation rate was totally rooted in the size of the boomers. 

And that disconnect, in order to make ends meet, that made the boomers the most mobile generation we’ve ever had in history since the time of the pioneers, because it was all about going to wherever they could get a little bit more income. And it also pushed, women into the workforce in order to get a second income. 

Now, you play that forward for a couple of decades and you change the labor market. You change social norms, you get the sexual revolution, you get the women’s rights movements. All of these things were because there were so many boomers. But now that all of that labor is leaving the market. We have something that from a global point of view, is a lot more typical, and we’re just not used to it. 

And so we have labor inflation eating into the system. Now. Now something to remember about the boomers when you have a two income household because you have to for financial reasons, the pressure on the family unit and the pressure on married couples is really robust. And so the boomers also had the highest divorce rate ever in American history. 

Now Gen X coming up behind them looks at this. It’s like, no, we’re not doing things that way. The boomers have always said that they value their money more than their time. We see the pain of that and we are not going to make that mistake. We are far more likely to value our time over our money. So unlike the boomers, who have lots and lots and lots of two income households, and high labor rates as a result actually went the other direction and have a relatively low labor participation rate with a lot more single income households. 

That puts you under a lot of financial pressure, because not only is there half as many people working and earning, it also means that you’re less likely to move and you’re also at the bottom of the totem pole with all these boomers above you. So you Xers were working in a super saturated labor market that they couldn’t really affect because they were down at the bottom, and they were less likely to work in order to preserve their families. 

Gave us a much lower divorce rate, much more stable relationship rate than anything that the boomers had. But wow, did we pay for it.  

We saw the lowest increases in take home pay on an annual basis of any worker generation in American history, until about five years ago, when one third of the boomers had already retired. And now in the last five years, we’ve seen the greatest increases in take home pay of any American generation ever. Because all of the skilled, all of the upper level management jobs are becoming available at the same time. 

And even if everyone in Gen X wanted to work, and I guarantee you we do not, there would have never been enough of us to fill all of those boomers shows shoes anyway. And so from the extra point of view, we’re seeing record increases in take home pay for the first time in our adult lives. Now, the rest of the world knows that as labor inflation. 

But honestly, the rest of you can suck it because we’re finally having our moment at some point in the next 10 to 15 years, when the axes are at the peak of their income and the peak of their wealth. Because of this delayed gratification, there is going to be a conversation in the United States led by these six millennials who can do math about rationalize the budget. 

So Larry, Moe, curly, Thelma Louise, and Lafond are going to sit down and run the math and realize that the only way they can make the budget make sense is to basically gut Gen X, and they’ll have the voting power to do it. Now, until we get to that point. It’s a X world. We’re going to control all of the money. 

We’re going to throw the majority of the property, we’re going to dominate the stock market. And we’re in a situation of supply and demand. If capital is available, unlimited supply if demand is robust at a time when the millennials are having their kids and building their homes, large generation demand and we need to re industrialize the United States, doubling the size of the industrial plant. 

Whoever has the capital, Gen X is going to be able to demand exorbitant rates for it, and it’s going to be a great time until such time as the millennials actually run the numbers. So if you’re an Xer, our time has finally arrived. But it’s only going to be a moment. So make the most of it. Get your money where it’s going to be protected, because sooner or later the millennials will figure this out and we will find a way to get the budget back into some degree of balance. 

 And it will be Gen X. It’s paying for it, but not today.