StrategyUnit

Summary

Declining birthrates in places like Europe, Japan and Russia and increasing immigration in once homogenous states (like France) is becoming an issue of mainstream discussion. Just last week (January 04 & 05), the WSJ and the Economist both ran articles on the issue of demographics, commenting on the opposite ends but equally faulty premises. One seeing immigration and demographics change as signaling the decline of the West (WSJ) and the other tends to underplay the challenge of declining birthrate and changing demographics (Economist).

The impact of changing demographics are analyzed through the New Republic’s piece on the Netherlands, on the effects of Muslim immigration and the socio-political upheaval (a turn to the Right) it has caused in a state stereotyped as an uber-liberal country.

The challenge facing Netherlands (and other countries) is a major one: it is the challenge of successfully transitioning from a nation-state to a market-state. Indeed, Philip Bobbitt has already foresaw such issues in his seminal work The Shield of Achilles:

“Whereas the nation-state based its legitimacy on a promise to better the material well-being of the nation, the market-state promises to maximize the opportunity of each individual citizen…The current conflict is one of several possible wars of the market-states as they seek to open up societies to trade in commerce, ideas, and immigration which excite hostility in those groups that want to use law to enforce religious or ethnic orthodoxy.” (Emphasis mine)

The Economist Optimist versus WSJ “Death of the West”

Economist: The Market Will Solve Everything

Here’s an except from the Economist (Jan 5th 2006), Incredible shrinking countries:

The crucial question is therefore what the effect of demographic decline is on the growth of GDP per person. The bad news is that this looks likely to slow because working-age populations will decline more rapidly than overall populations. Yet this need not happen. Productivity growth may keep up growth in GDP per person: as labour becomes scarcer, and pressure to introduce new technologies to boost workers’ efficiency increases, so the productivity of labour may rise faster. Anyway, retirement ages can be lifted to increase the supply of labour even when the population is declining.

The Economist seems to completely ignore the host of issues surrounding population decline: 1) Solvency on Social Welfare; 2) How to fashion smart immigration policies; 3) Deep socio-cultural questions of what it means to be a nation with a shrinking population; 4) Potential geopolitical consequences (think “emptying Russia v. China”); and so on.

The fact that the article completely ignores the pressure for immigration to solve labor shortage and the difficulty many countries face integrating immigrants is dismaying. Indeed, last Wednesday the U.S. Chamber of Commerce mentioned:

“The United States faces a severe worker shortage in the near future, the U.S. Chamber of Commerce said Wednesday in advocating better education for Americans and changes in immigration law to allow in more foreign workers.”

Additionally, the Economist blindly places its faith on the Market to produce “new technologies”, but many states do not have an effective market, the ability to invest in new technologies or lack of good governance.

Mark Steyn at WSJ: The Muslim Horde is Coming!

And here’s a bizarrely alarmist opinion piece on WSJ by Mark Steyn, “It’s The Demography, Stupid“:

The al Qaeda nutters can never find enough suicidal pilots to fly enough planes into enough skyscrapers to topple America. But unlike us, the Islamists think long-term, and, given their demographic advantage in Europe and the tone of the emerging Muslim lobby groups there, much of what they’re flying planes into buildings for they’re likely to wind up with just by waiting a few more years. The skyscrapers will be theirs; why knock ‘em over?

The latter half of the decline and fall of great civilizations follows a familiar pattern: affluence, softness, decadence, extinction… A society that has no children has no future.

Mark Steyn paints the picture of a great Muslims Horde overrunning the West, probably starting with Europe. He seems to fear some growing tide of “non-natives” taking over “our land” with their “different” values. This is the stuff of “Bill the Butcher” from “Gangs of New York“.

The Challenge in Netherlands

It would be foolish not to say that the French Riots of 2005 has put some currency in Steyn thinking. Indeed, such problems even exist in Netherlands, a country seen by many as a liberal ideal. Many have turned reactionary right in the face of Muslim immigration. As noted in TNR, Holland has the “second-largest per capita Muslim population in the European Union, after France.” And with comes with the fear like that of Pim Fortuyn, the seemingly paradoxical fear against Muslims immigrants because of the perception that they will undermine Holland’s liberal culture:

And, in June 2004, a study showed that 86 percent of Dutch natives felt threatened by Holland’s Muslim population–this while only 33 percent acknowledged knowing anything about them other than what they saw on television or in the streets.

Reading the entire TNR piece is a must, but it suffice to say here that especially since Fortuyn and Van Gogh murders, Netherlands has seen its political landscape shifting to the right, especially regarding immigration, Islam and terrorism. Related to this is a recent flight of Dutch natives to Anglo states like Canada and New Zealand. A slew of new laws on terrorism and immigration have made Netherlands from required “social orientation” classes for immigrants to government surveillance of most forms of communications.

All of this, along with the French Riots, sounds like the fulfillment of Mark Steyn views, but suffers from the inability to see any alternative future. What the French Riots and the situation in Netherlands represents is the challenge of adjusting to new realities. Europe and other places like Japan need immigrants to sustain the labor force. The Economist is correct that the focus should be on “growth in GDP per person”, but it obvious that there will be labor shortage in certain industries. For example, U.S. agriculture is heavily dependent on Mexican migrants. Most Americans would shun such backbreaking labour.

Declining birthrates of “natives”, increasing immigration and changing demographics bring up several important issues to a State:

1. Immigration: what type of immigrations do they want? What policies can encourage such immigrants to come?
2. National Identity: How do states like those in Europe build a national society beyond the idea of shared history and ethnicity?
3. Integration: Related to National Identity is “how to integrate and define the relationship of immigrants?”
4. Effects on the Socialist Economy: Labour practices in places like France make it difficult to fire employees, which also make it difficult to get hired unless a person has special connections – something recent immigrants are at a disadvantage for.
5. Solvency of Welfare System: Declining population (esp. lost of potential high income earners) put stress on the Welfare system that needs to be adjusted.

In essence, its becoming all about the market-state. What policies should the government take to help maximize

Conclusion
Changing demographics (like changing climate) will become a bigger problem and challenge for many states than the “Global War on Terrorism”. But we cannot approach the demographic challenge by placing full faith on the Market, or turn xenophobic in our fear of some “Muslim Horde” (or the “Yellow Horde” if you are Russian).

Many of these issues listed above are not only about building a multinational state but part of a larger conflict and larger evolutionary step towards a market-state.

I cannot comment too much on Japan, China or Russia’s demographic challenge, but for Europe it is ultimately the next generation of Europeans, those who have no recollection of what it was like to be German or French before all the changes of the Maastrict Treaty, that will lead Europe to a market-state system.

Just last week (January 04 & 05), the WSJ and the Economist both ran articles on the issue of demographics, commenting on the opposite ends but equally faulty premises. One seeing immigration and demographics change as signaling the decline of the West (WSJ) and the other tends to underplay the challenge of declining birthrate and changing demographics (Economist).

The impact of changing demographics are analyzed through the New Republic’s piece on the Netherlands, on the effects of Muslim immigration and the socio-political upheaval (a turn to the Right) it has caused in a state stereotyped as an uber-liberal country.

The challenge facing Netherlands is a major one: it is the challenge of successfully transitioning from a nation-state to a market-state or to maintaining an ethnic-based nation-state idenity while risking demographically imploding. Indeed, Philip Bobbitt has already forsaw such issues in his seminal work The Shield of Achilles:

“The current conflict is one of several possible wars of the market-states as they seek to open up societies to trade in commerce, ideas, and immigration which excite hostility in those groups that want to use law to enforce religious or ethnic orthodoxy.”

Economist Optimist versus WSJ “Death of the West”

Economist: The Market Will Solve Everything

Here’s an except from the Economist (Jan 5th 2006), Incredible shrinking countries:

The crucial question is therefore what the effect of demographic decline is on the growth of GDP per person. The bad news is that this looks likely to slow because working-age populations will decline more rapidly than overall populations. Yet this need not happen. Productivity growth may keep up growth in GDP per person: as labour becomes scarcer, and pressure to introduce new technologies to boost workers’ efficiency increases, so the productivity of labour may rise faster. Anyway, retirement ages can be lifted to increase the supply of labour even when the population is declining.

The Economist seems to completely ignore the host of issues surrounding population decline: 1) Solvency on Social Welfare; 2) How to handle immediate needs on military manpower; 3) How to fashion smart immigration policies; 4) Deep socio-cultural questions of what it means to be a nation with a shrinking population; 5) Potential geopolitical consequences (think “emptying Russia v. China”); and so on.

The fact that the article completely ignores the pressure for immigration to solve labor shortage and the difficulty many countries face integrating immigrants is dismaying.

Indeed, last Wednesday the U.S. Chamber of Commerce mentioned:

“The United States faces a severe worker shortage in the near future, the U.S. Chamber of Commerce said Wednesday in advocating better education for Americans and changes in immigration law to allow in more foreign workers.”

Additionally, the Economist blindly places its faith on the Market to produce “new technologies”, but markets in many states can be far from functioning and may not be effective enough to allow the needed technological innovation. And some states may not be able invest in these new technology for a lack of good governance or a host of other reasons.

Mark Steyn at WSJ: The Muslim Horde is Coming!

And here’s a bizarrely alarmist opinion piece on WSJ by Mark Steyn, “It’s The Demography, Stupid“:

The al Qaeda nutters can never find enough suicidal pilots to fly enough planes into enough skyscrapers to topple America. But unlike us, the Islamists think long-term, and, given their demographic advantage in Europe and the tone of the emerging Muslim lobby groups there, much of what they’re flying planes into buildings for they’re likely to wind up with just by waiting a few more years. The skyscrapers will be theirs; why knock ‘em over?

The latter half of the decline and fall of great civilizations follows a familiar pattern: affluence, softness, decadence, extinction… A society that has no children has no future.

Mark Steyn paints the picture of a great Muslims horde overrunning the West, probably starting with Europe. He seems to fear some growing tide of “non-natives” taking over “our land” with their “different” values. This is the stuff of “Bill the Butcher” from “Gangs of New York“.

Case Study in Netherlands

It would be foolish not to say that the French Riots of 2005 has put some currency in Steyn thinking. Indeed, in Netherlands – the bastion of all things liberal – the we see this problem most acutely. As noted in TNR, Holland has the “second-largest per capita Muslim population in the European Union, after France.” And with comes with the fear like that of Pim Fortuyn, the seemingly paradoxal fear against Muslims immigrants because of the perception that they will undermine Holland’s liberal culture:

And, in June 2004, a study showed that 86 percent of Dutch natives felt threatened by Holland’s Muslim population–this while only 33 percent acknowledged knowing anything about them other than what they saw on television or in the streets.

Reading the entire TNR piece is a must, but it suffice to say here that especially since Fontuyn (sp) and Van Gogh murders, Netherlands has seen its political landscape shifting to the right, especially regarding immigration, Islam and terrorism. Related to this is a recent fligh of Dutch natives to Anglo states like Canada and New Zealand. A slew of new laws on terrorism and immigration have made Netherlands from required “social orientation” classes for immigrants to government surveillance of most forms of communications.

All of this sounds, along with the French Riots, sounds like the fullfillment of Mark Steyn views, but Steyn fault is his inability to see no alternative future. The American transformation to a multinational state (or rather a “United States”) is what the Netherlands should look closely at. Ethnic strife is not the only possible future, but policies in Europe and elsewhere must change.

What the French Riots and the situation in Netherlands represents is the challenge of adjusting to new realities. Europe and other places like Japan need immigrants to sustain the labor force. Economist is correct that the focus should be on “growth in GDP per person”, but it obvious that there will be labor shortage in certain industries. Take for example, U.S. agriculture is heavily dependent on Mexican migrants. Most Americans would shun such backbreaking labour.

Declining birthrates of “natives”, increasing immigration and changing demographics brings up several important issues to a State:

1. Immigration: what type of immigrations do they want? What policies can encourage such immigrants to come?
2. National Identity: How do states like those in Europe build a national society beyond the idea of shared history and ethnicity?
3. Integration: Related to National Identity, is how to integreate and define the relationship of immigrants?
4. Effects on the Socialist Economy: Labour practices in places like France make it difficult to fire employees, which also make it difficult to get hired unless a person has special connections – something recent immigrants are at a disadvantage for.
5. Solvency of Welfare System: Declining population (esp. lost of potential high income earners) put stress on the Welfare system that needs to be adjusted.

Conclusion
Changing demographics (like changing climate) will become a bigger problem and challenge for many states than the “Global War on Terrorism”. But we cannot approach the demographic challenge by placing full faith on the Market, or turn xenophobic in our fear of some “Muslim Horde” (or the “Yellow Horde” if you are Russian).

Many of these issues listed above are not only about building a multinational state but part of a larger conflict and larger evolutionary step towards a market-state. States will need to adjust to the economic and security challenges of declining birthrates with proper polices on immigration and integration being an essential part of that adjustment.