Tuesday, March 22, 2005

The ghost of Bismarck

Mark Steyn in The Daily Telegraph today takes a look at "the strange death of the liberal West", noting that "almost every issue facing the EU - from immigration rates to crippling state pension liabilities - has at its heart the same glaringly plain root cause: a huge lack of babies."

Human inventiveness, he writes, depends on humans - and that's the one thing we really are running out of. When it comes to forecasting the future, the birth rate is the nearest thing to hard numbers. If only a million babies are born in 2005, it's hard to have two million adults enter the workforce in 2025 (or 2033, or 2041.

He links this with the highly sensitive issue of abortion – territory in which this Blog is not disposed to tread – but he does acknowledge that this issue is itself symptomatic of the broader crisis of the dying West.

Since 1945, Steyn tells us, a multiplicity of government interventions - state pensions, subsidised higher education, higher taxes to pay for everything - has so ruptured traditional patterns of inter-generational solidarity that in Europe a child is now an optional lifestyle accessory. Thus, he notes, by 2050, Estonia's population will have fallen by 52 percent, Bulgaria's by 36 percent, Italy's by 22 percent.

This is the political issue that will determine all the others, he concludes, with the payoff line: "it's the demography, stupid."

Avowed fans that we are of Steyn, we would hesitate entirely to disagree with the man, and he is far from the first to draw attention to the growing demographic crisis that is increasingly pre-occupying planners.

However, in the context that people are living longer and are more healthy, and where there are a wider variety of productive tasks that do not impose strenuous physical burdens, it seems a little simplistic to argue that the problems confronting the West are entirely due to a lack of babies.

Surely, another crucial factor is the setting of the current retirement age at 65 – and age set in 1889 by Bismarck at a time when only a very small proportion of the population was expected to live beyond that age.

And it is not only the question of people retiring at that age. This is taken as a "benchmark" with considerable numbers taking early retirement – some in their fifties – when they almost certainly have years of productive life ahead of them.

In an age when "modernisation" seems to be the watch-word, and almost everything seems to be open to change – sometimes just for the sake of it - it does seem odd that an age limit set by a German chancellor at the end of the last Century but one is taken as sacrosanct.

With the "social model" so firmly entrenched in the psyche of European leaders, however, it would be a brave politician who dared suggest that a population that has enjoyed unprecedented health in a stable political world should pay for that privilege by working for that bit longer in order to avoid burdening successive generations with unmanageable debt.

Not least, an economy which was not struggling to fund an ever-increasing pension liability could afford to invest in families and babies, putting tax incentives in the way of married couples and children, at least to ensure that the cost of furnishing the nation with a new generation is more equitably spread.

But that would be too much to hope for. The Western political sclerosis, typified by the dirigiste European Union, does not allow for innovation or imagination. Instead, we are locked in the past, bound by the ghost of Bismarck.

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