Demography and World Power, With Nicholas Eberstadt

LINDSAY:
Welcome to The President's Inbox, a CFR podcast about the foreign policy challenges facing the United States. I'm Jim Lindsay, director of Studies at the Council on Foreign Relations. This week's topic is demography and world power. With me to discuss critical demographic trends in China, Russia, and the United States and how they might shape geopolitical competition is Nicholas Eberstadt. Nick is the Henry Wendt Chair in political economy at the American Enterprise Institute. He is also a senior advisor to the National Bureau of Asian Research. Nick has written extensively on demographics and economic development generally, and more specifically on international security in Asia. Nick simply is the best at what he does. Nick, thank you very much for joining me.

EBERSTADT:
It's a pleasure. Thank you for inviting me, Jim.

LINDSAY:
Nick, you have heard the phrase "demography is destiny" probably more times than you care to. I want to actually explore that claim. And could you first tell us what do we mean by demography, and to what extent does it shape our destinies?

EBERSTADT:
Well demography is a ... it's a word that ... based in Greek parts. But it's a French word from la démographie—means the study of people, the study of populations. The phrase "demography is destiny," not surprisingly, it sounds a little bit French, doesn't it? It's associated, correctly or incorrectly, with the great nineteenth century polymath, Auguste Comte. He was, I guess, a genius. But he was also a Frenchman and a socialist, and I'm neither a Frenchman nor a socialist. So if I were to make an American-friendly amendment to that aphorism, I'd try to be a little bit more pragmatic about it. I'd say that population change, slowly and gradually but also quite unforgivingly, changes the realm of the possible in social, economic, and global affairs. And so, what I would insert that is missing from the glorious ad astra of "demography is destiny" is human agency. There is a realm of possibilities in human affairs, and you have to take that into account. Population may change the goalposts gradually over time, but things that happen are kind of left up to decision makers in the real world.

LINDSAY:
My sense is, Nick, that my friends in the marketing business would say that Professor Comte has it over you in terms of brevity in being able to fit his slogan on a bumper sticker.

EBERSTADT:
Well, that's why he rules and I don't.

LINDSAY:
Okay, fair enough. Let's dive in, and let's begin with China. It is, or has long been, the most populous country in the world. But last year for the first time in decades, China's overall population dropped. And my understanding is that this year, India surpassed China as the world's most populous country. So, sort of walk me through what you see as the demographic challenges in major trends in China.

EBERSTADT:
Well, China is a country of over 1.4 billion people. So if it has peaked and is starting to shrink, it's got a long way to go before it gets back to Adam and Eve, right? It's going to be an enormous country of more than a billion people for a very long time, no matter how quickly its population drops. We don't know as much about the particulars of population in China as we ought to because China still does not have accurate and timely vital statistics reporting. It does fintech. It does AI. It's on the frontiers of technology. But it can't accurately and reliably count births and deaths and total population from one year to the next. And this tells us something about politics and social control in a would-be totalitarian country, as well. From what we know, however, China's extraordinary economic transformation that began under Deng Xiaoping in the late 1970s and very early 1980s coincided with an absolutely ruthless one-child policy. The government made the claim that it knew how many children parents should have. No previous totalitarian country had made that claim. 

And so, during this period of extraordinary economic growth, China's fertility level was, so to speak, suppressed by bayonets. It was a terrible human rights tragedy. That policy ended in 2015. By that time, China's fertility level, we believe, was quite a bit below replacement, so far below that the government was becoming worried about this. So they suspended it, and they thought they could fine tune the number of births in the country. What happened instead was after a slight uptick reported in 2016, births plunged by 50 percent between 2016 and last year. A 50 percent drop in six years compares, for example, to a 40 percent drop in births during the famine. I mean, this is like a shock. This is not something one ordinarily-

LINDSAY:
This is a major event.

EBERSTADT:
Major, major unexpected shock. It was attended by a flight from marriage. So, we tend to think this is real, not Memorex, that something big had changed even before the harsh lockdowns. And the arithmetic works out that if you have a plunge in births and you have mortality patterns that, more or less, unchanged, you start to open up a gap between births and deaths. And if you don't have much migration, that means that the birth-death gap is what's going to be determining the overall population trend for the country. And that's where we are now. I mean, demographers were expecting China's population to peak in any case because its fertility level was so much below the replacement level; it just happened a lot faster than the established authorities thought it was going to happen.

LINDSAY:
Now Nick, I've read a lot about the decline in China's overall population, the decline in the birth rate, which you just mentioned. I've also heard a lot of talk about the aging of Chinese society, that China is getting much older very rapidly—and that, by some accounts, by 2050 people of retirement age in China will account for perhaps 40 percent of the population. First off, is the aging of China a real thing, and what do you see as its significance?

EBERSTADT:
Interestingly enough, Jim, as an arithmetic proposition, it's small families, not long lives, that make societies go gray. You squeeze the base of the population pyramid and a higher share of country is going to be senior citizens. And China's fertility drop has been so fast and so radical that its population is aging on an extraordinary trajectory. China's median age will soon be higher than that of the United States. Its proportion of people sixty-five and older will soon be higher than that of the United States as well—not the U.S. today but the U.S. in 2040. The only country that's ever ... big country that's ever gone gray at the same trajectory as China is Japan—did that in the past generation. But as you know, Japan got rich before it got old. And as they say, China's going to do it the other way around, and it is a whole lot less fun. You've got a whole lot fewer options.

In part, we have to bear in mind that China's rural hinterlands still comprise a very significant portion of the overall population, and income levels in rural China are an order of magnitude lower than in Japan. The pension guarantees for people in the countryside are really penurious. We're talking about tiny monthly pensions, $20, $25 a month. It doesn't go that much further with Chinese purchasing power. So, the real social security safety net in China is still the family, as it has been since the time of Confucius. Except, with the withering away of the family with a sub-replacement fertility for decades, and decades, and decades, the question of just how well families are going to be able to support the rising burden of ancient parents and ancient in-laws is going to come to a test pretty soon.

LINDSAY:
So that gets back to your point about demography basically constraining what societies can do, imposing major tests on them. In this case, the Chinese are going to have to figure out some way to match their aging society with what is a pretty limited social safety net, but there's a lot of choice inbetween. How do you see those challenges shaping or constraining the choices that China may make in its foreign policy?

EBERSTADT:
In two important ways. We can see the train coming, and it's going to be very hard to divert the train from this track of momentum that it's on. One way we've already discussed, which is the obligations for men and women looking after their ancient surviving parents. With a colleague at Penn State, Ashton Verdery, I did some work to kind of look into this, to model this stuff a little bit more. Just to give you an example, 2040 is not that far away from us in demographic terms. It's seventeen years. But by 2040, we estimated that three quarters of Chinese in their sixties, a husband-wife couple in their sixties, three quarters would have at least one parent or in-law to take care of. Half would have two. A quarter would have three. By that sound, it sounds like the Chinese economy is about to become a machine for taking care of ancient parents and in-laws, and that's going to make for big demands for social welfare benefits for older people. Even if China is nowhere near being a democracy, those pressures are just going to be there. And that will have an effect on the resources that will be available for the dictatorship in its international policymaking.

The second thing that we can see coming is the rise of a only child People's Liberation Army. This because only children are becoming so important and may become predominant in the cohorts of young men who will be of military recruiting age. Why would only children PLA be a consideration? Because of casualty tolerance. Even if China is not remotely close to being a democracy, how are people going to feel about mass casualties in an international engagement if this means the end of the family lineage? Casualties in a family are always a catastrophe. They're always a tragedy. But in a Confucian tradition society, the end of the family lineage is fraught with even more metaphysical calamity. I can't answer this question for you, but I can assure you it's going to be an important one.

LINDSAY:
Okay. Nick, I'll just note that you've written a lot about these specific topics in, I'll call the popular press—Foreign Affairs, Washington Post, Wall Street Journal. We'll provide links to what you've written in the show notes for the episode. I want to move on to the question of Russia because you've also written extensively about the demographic challenges that Russia faces. Sort of walk me through those.

EBERSTADT:
Sure. Well, Jim, I mean, I like to say that Russia's demographics is a good news/bad news story, except that there's no good news. From a headcount standpoint, Russia's overall population has been shrinking almost since the collapse of the Soviet Union. Its deaths have almost every year exceeded its births. Its working age, conventionally defined working age population, has been shrinking for a very long time. Now, most of that is true in Germany as well, but we know that Germany is able to maintain prosperity because of health and education and its technological advance and a pretty pragmatic business climate and also immigration.

Russia has this mystifying paradox. It's a high educational attainment, low human capital society. In terms of years of schooling achieved, Russia's population looks pretty similar to a lot of Western Europe. But in Western Europe, high education goes along with low mortality. In Russia, high education, overall education levels, at least in terms of years of schooling, are associated with catastrophically bad working age adult mortality. And just to give you one example, the World Health Organization estimates life expectancy at age fifteen for young men. Before the pandemic ... things got a lot worse in Russia during the pandemic. But before the pandemic, life expectancy at age fifteen for a young man in Russia was indistinguishable from the WHO's estimate for Haiti.

LINDSAY:
For Haiti.

EBERSTADT:
For Haiti.

LINDSAY:
One of the poorest countries on earth.

EBERSTADT:
One of the poorest countries. And in fact, if you take a look at the estimates for Russia's life expectancy for young men, they're less favorable than a lot of the UN's least developed countries—the fragile states, the very worst income levels, and the very most problematic governance situations. So, somehow Russia has been able to come up with new and modern ways of achieving premature mortality.

LINDSAY:
Do we understand what the causes are, Nick? Because this is pre-Ukraine war, so you can't argue that the casualties suffered in Ukraine are causing this drop.

EBERSTADT:
I did a book on this a while ago, Jim, on Russia's peace time demographic crisis, and I had a chapter in there called "The Enigma of Russian Mortality." Because we know that there's drinking. We know that there's smoking. We know that there's ... people have kind of problematic blood pressure, all of these, you know, kind of Framingham Heart Study sorts of things. The risks are about twice as high as in Western Europe. The mystery is that the death rates for cardiovascular disease are four times as high as in Western Europe. So, there's some sort of special sauce that you wouldn't want to have added to the flavors there. For some reason, Russian mortality has been ... and this goes back to the Soviet era but unfortunately it has continued after the Soviet era. It's much worse than you would expect if you looked at other things that are comparable in more advanced societies. So, there's the mortality problem. There's also kind of a knowledge production problem. And, you know, metrics for knowledge production, I will grant you, are kind of, you know, debatable.

LINDSAY:
What do you mean by knowledge production?

EBERSTADT:
Well, advances in inventions and applications that kind of make people more productive and make them more affluent and allow societies and economies to become richer and more developed. So, the U.S. does this award for inventions called the Patent and Trade[mark] Office, so you can apply to these and get a patent. And people do that from all over the world because the U.S. market's so important. On an annual basis for all of Russia, for the entire country of Russia ... and this is not a new invasion of Ukraine sort of development. This is a longstanding trend. The entire country of Russia earns in any given year about the same number of patents as the U.S. state of Alabama. Okay. Alabama is about one fortieth the size of Russia, and it may not be our biggest knowledge production center.

LINDSAY:
I'm going to hear from people in Alabama, I suspect, on that one.

EBERSTADT:
Well, I'll tell you what I mean by that, is that Huntsville, Alabama and the country of Russia are on par with each other. So, there is something that Russia is not doing that it should be doing given all of its population and all of the talent there. So, given the weakness of human resources in Russia, I can't explain to you, but I can describe to you the economic potential of the society, and thus the economic potential of the Russian dictatorship can draw upon, are strangely limited. And the trends are very unfavorable for the Kremlin because the world is exploding with health, and the world is exploding with education, and the world is exploding with invention. And so, Russia's share of all of those things is constantly declining.

I had thought, back up until the invasion of Ukraine, that the Putin government was taking demography into account in a sort of a perverse way, that it was engaging in increasingly risky international behavior to compensate for the decline in the, what you might call the demographic foundations of power for the society. And up until the invasion of Ukraine, that risk taking looked like it was, you know ... brinkmanship was kind of working. But eventually, I don't think it is sustainable. Eventually, the power at hand for the Kremlin is going to match its economic and demographic and technological resources, and it's going to be a much smaller reach than the ambitions of the Kremlin today.

LINDSAY:
Yeah, I imagine that's actually the big question: How long will it be before that eventuality comes around? And I think that's something people can debate, and it may be something that when it does happen could happen very quickly. It doesn't have to unfold on a long timeline.

EBERSTADT:
What we might call the attitude adjustment could happen very quickly and in some very unpleasant ways, but that's not something that demography can give you much insight into.

LINDSAY:
Right, that's back to the issue of human agency.

EBERSTADT:
The imbalance, it, you know ... I can point out the imbalance to you. I can't tell you how it's going to be resolved.

LINDSAY:
Let's talk about the United States because the United States is also affected by demographic trends. You know, you've written in Foreign Affairs about "with great demographics comes great power," explaining much of America's power in the world. But as sort of you look at U.S. demographic trends, what stand out to you either positive or negative?

EBERSTADT:
Well, the U.S. is the third most populous country in the world. And we have an extraordinarily productive population due to our business climate, our political and legal institutions, and the quality of our legal economic system, to the education of our population, to the relative health of our population. Given those advantages, it's very hard to see how another country is going to surpass the U.S. economically anytime soon. There was a lot of talk about China passing, as you'll recall, but you don't hear much of that lately.

LINDSAY:
And now we hear about peak China.

EBERSTADT:
Yeah, but I don't want to sound like a triumphalist because I'm not, and I think that there is a lot of reason to be concerned, if you are an American, about the quality of human resources in the United States. We have, to begin with, a pretty serious health problem. We've been seeing our improvements in life expectancy flatline for a decade, and this is before the pandemic when life expectancy in the U.S. went down sharply.

LINDSAY:
Yeah, it's now declined, correct?

EBERSTADT:
Yeah, it is coming back, but it was a catastrophe for the United States. As you know, we lost more than a million people in the pandemic. Our educational system on the whole, I think, is still kind of the envy of the world, especially our technical university, higher education system. But I don't think we have a lot of room for hubris in there either. We all know about some of the problems in the U.S. educational system. We have also found ourselves in a much slower pace of advance in overall years of schooling than was the case from the end of the Civil War until, you know, more or less the Reagan era, the beginning of the Reagan era. And it's not because we can't get any further. There are other countries that are now surpassing us. So, none of that is a cause for complacency, and there are also questions that we might have about our business climate and so forth.

What I would say is if you look at the possibilities for a greater North American collaboration, if you add Canada and the U.S. and Mexico together into a sort of a hypothetical demographic baseball team, the numbers look really compelling. In terms, for example, of highly educated working age population, much more than, for example, all of the European Union, which is a larger populace than those three countries I just mentioned. If you compare it to India or to China—again, I think more compelling—larger total numbers and a better quality of education. The reason this is so intriguing, I think, is because we don't see what's going on beneath the headlines in Mexico.

I mean, the headlines are terrible coming out of Mexico about the drug cartels and the corruption and the murder, and all of that is true. But quietly and, if you will, subterraneanly, there's been a health revolution and an education revolution in Mexico. And the gap between Mexico and U.S. levels of life expectancy before the pandemic were smaller than between the U.S. and Canada. So, there's a lot of human potential there if we can figure out how to make it work a little bit better for everybody.

LINDSAY:
Well, that gets us back, Nick, to the question of political choice. It's easy to see how you could build on the strengths of the three countries of North America, but our politics often get in the way on all sides of the border. It's not just a matter of sort of attitudes in the United States. I want to ask you just quickly about the issue of declining U.S. life expectancy. There's been a lot of talk about deaths of despair, that the decline of life expectancy, particularly among white males is up. Help me understand that.

EBERSTADT:
Sure. Well, the phrase "deaths of despair," which has become so current, was coined by the economist Anne Case and Angus Deaton, her Nobel laureate husband, both from Princeton University, in 2015, when they noticed that for less educated Anglos, non-Hispanic whites, death rates had been rising for some time—deaths due to drug poisonings, suicide, cirrhosis of the liver, which is associated with alcoholism. It is a disturbing factor, by the way, to note that the health science industry in the United States had overlooked this problem for a disadvantaged group in America, these disadvantaged Anglos, for almost two decades. Does not speak well for, among other things, social trust in the United States.

But this is a problem which has been exacerbated since Case and Deaton recognized it. As you know, drug overdoses continue to increase. Suicide levels have not been dropping. Cirrhosis is not improving. Interestingly enough, in arithmetic terms, the big driver of the U.S. life expectancy problem ... and I say it's more, overall, it's more stagnation than decline. But the big driver of the stagnation has been cardiovascular deaths, has been heart disease and strokes. In an arithmetic term, that's been the real killer in the U.S. And for someone like me who has followed the Soviet and now the Russian health crisis for decades, this looks a little bit too close to what we've seen in Russia for comfort, for me as an American.

LINDSAY:
Well, and certainly, Nick, as you look at the phenomenon of deaths of despair and the factors leading into it, it's not hard to come up with an argument that that is helping fuel our dysfunctional politics, which in turn make it harder to solve many of these problems. Again, getting us back to the issue of the connection between demography in political choices being made. I'm sure you could write volumes on that score, but I just want to shift gears quickly. As you look to Europe, as you look to South Asia, you look to Africa, what do you see as the significant demographic trends there that we should be paying attention to?

EBERSTADT:
Europe is now a net mortality zone. It has been for a little while. Europe's population decline will be cushioned to some degree by immigration. The question is whether European nations are going to be able to turn their immigrants into loyal and productive newcomers. And the unspoken Voldemort there is Muslim migration from Muslim majority societies, very different records of different migration flows to different receiving societies, but it's still politically incorrect even to ask or talk about those in Europe.

LINDSAY:
Well, it's also a function of how welcoming the societies are.

EBERSTADT:
Of course.

LINDSAY:
And my sense is it varies across societies.

EBERSTADT:
Just to give you an example, you never ever hear in the news about migrants from Indonesia to the Netherlands. Why? Because it's not a problem. Because this is an example of a very successful Muslim majority flow coming to a receiving country in Europe where things have kind of worked pretty well. So, a lot more has to be examined there and understood. India is now a below replacement society in terms of fertility, if you can believe that. Calcutta, which I first visited in 1975, now is reporting one birth per woman per lifetime, if you can imagine that.

LINDSAY:
And that's well under the replacement rate, correct?

EBERSTADT:
Half of what would be needed for replacement, 50 percent below replacement. So, India is heading in the direction of eventual depopulation. What I think makes the situation more complicated for India than for some other countries are the big regional differences, the big differences between states and between ethnic groups and language groups in India, and the big gap in education. If health is Russia's demographic Achilles heel, lack of education for hundreds of millions of people who are coming into the labor force is the Achilles heel for India. 

Then for Africa, Sub-Saharan Africa is the only big region of the world that still has above replacement fertility. Three quarters of the people in the world today live in countries with below replacement fertility. The Sub-Sahara's fertility level is almost 100 percent above replacement. Africa is not going to be able to save the rest of the world demographically, however, until the human resources of this tremendous increment in humanity match the global needs. And Sub-Sahara is the area that has the lowest health of any large group, and also the weakest education, weakest in terms of the lowest level of years of schooling for the rising generation. Quality of schooling is also a real problem because of underfunded school systems, teachers who don't show up, kids who aren't getting enough to eat to be able to learn as well as they might. Africa can still rescue the rest of the world, but there's going to have to be a human resource revolution there for this to occur.

LINDSAY:
I will note, Nick, that many of the problems you've flagged in Sub-Saharan Africa also reflect political fragility, ineffective state government, corruption, the rest. But it also argues, certainly for U.S. foreign policy, that investing in Africa may be the smart thing to do.

EBERSTADT:
Of course, the governance question in Africa is crucial. The business climate question is crucial because to unlock the value of human resources, you need to have an environment in which this can be done. If we are going to be playing a long game in U.S. foreign policy, we can't avoid looking at and thinking of Africa and trying to figure out how we can help Africa succeed.

LINDSAY:
Alas, I think right now playing the long game seems to be a reach for the American foreign policy community.

EBERSTADT:
You said it, not me.

LINDSAY:
One can hope. One can hope, Nick. On that note, I'm going to close up The President's Inbox for this week. This has been an incredibly stimulating conversation. My guest has been Nicholas Eberstadt, the Henry Wendt Chair in political economy at AEI. Nick, again, thank you for sitting down with me.

EBERSTADT:
Jim, thank you so much for inviting me. It's been a lot of fun.

LINDSAY:
Please subscribe to The President's Inbox in Apple Podcast, Spotify, wherever you listen, and leave us a review. We love the feedback. If you want to reach out, please email us at [email protected]. The publications mentioned in this episode and a transcript of our conversation are available on the podcast page for The President's Inbox on CFR.org. As always, opinions expressed in The President's Inbox are solely those of the host or our guests, not of CFR, which takes no institutional positions on matters of policy. 

Today's episode was produced by Ester Fang, with Director of Podcasting Gabrielle Sierra. Special thanks go out to Michelle Kurilla for her research assistance. This is Jim Lindsay. Thanks for listening.