What did Keynes say were the effects of depopulation?

British economist John Maynard Keynes helped shape the postwar economic world. He also worried about declining population. Here are the core ideas from his paper, Some Economic Consequences of A Declining Population.👇👇👇

We assume the future will be very much like the past. Declining population is easily calculable. Yet, we struggle to see its effects, because in the recent past all we've known is overpopulation.

Business expectations are based on the current state of things. An era of increasing population leaves business optimistic, and it ramps up supply. As populations will begin to decline, demand will fall, and oversupply will be difficult to correct.

The shorter turnover of products. Highly durable objects were a feature of the past. Now, tastes change frequently; the focus is on quantity over quality. If the number of consumers begins to fall, this will only increase the demand-supply gap.

Increasing populations encourage both home and foreign investment. From 1860 to 1913, British population increased by 50%. Standard of living increased by 60%. This triggered further investments in expanding production and growing the economy.

Low foreign investment will lead to rising unemployment. As effective demand falls, companies will struggle with attracting new investment. This will create a vicious cycle of unemployment and under-consumption.

Falling populations do not lead to better living standards or technological advancement. If consumption stayed the same, we'd have greater resources per head. However, consumption inevitably falls with population. Moreover, fewer people means less technological innovation.

A static population might be a more robust solution. Keynes suggests a focus on policies that increase consumption, distribute income more equally, and increase demand through lower interest rates.

Bottom line: As Keynes puts it, “chaining up of one devil may, if we are careless, only serve to loose another still fiercer.” A declining population creates structural defects in the economy, and governments must guard against setting this devil loose.