If the peaceful world of markets as a road to the future is cut off, then the violent world of revolution becomes the answer by default
By Jerry Bowyer
Much has been
written about the various uprisings which have been gaining strength and
momentum since 2008. Usually it takes the tack of focusing on the abuses of the
particular regime in question, because the press tends to see things through
the eyes of the official underdog in any story based around conflict. Supply
side economists like me have pointed to the ways in which monetary debasement
by the United States helped set off a wave of food price spikes and launched an Inflation Intifada. My friend David
Goldman has documented the economic problems from a supply side perspective in greater depth here in the Asia
Times.
But very little
has appeared in the public discussion about the demographic component of this
wave of destabilization. That’s a shame because although there are real
economic risks in a country which gets out of balance and skews too old, there
are also severe consequences to a country which gets out of balance in the
opposite direction, at least when that occurs in conjunction with other risk
factors. Skew too young and you get a revolution: an analysis of all the
countries which have gone through a revolution, coup attempt or civil war in
the recent ‘Arab Spring’ shows that every single one of them had a median age
of 24 or younger. The story of political revolutions is more often than not the
story of starting with a nation which has low life expectancy and high birth
rates (hence a young median age) and adding high youth unemployment, one or
another radical ideology and a food price spike.
Photo source: census.gov
Photo Source:
census.gov
Skew too old and
you get a regime of ‘get off my lawn’: perfectly groomed, no change, frozen in
time, slow death. A Japan which dreams only of its former glories; thinks any
possible future lies with robots; is obsessed with horror movies about the
vengeful ghosts of discarded children, and sells more adult diapers per year
than it does baby diapers paints a sad but accurate picture of the future of
that nation. Interestingly, the Nordic types seem more cinematically captivated
by lurid crime films about murdered children who are avenged by girls with dragon
tattoos, than they are by waterlogged girl ghosts.
Photo Source :
www.census.gov
The traditional
remedies prescribed by global elite opinion don’t seem to help much. For
example, higher education is not a reliable social stabilizer. The old cliché
about universities as schools of revolution seems to match the history better
than the newer cliché about how sending them to college keeps them off the
streets. In terms of the Arab Spring, Egypt, for example, had perhaps the
highest proportion of college grads in the Muslim middle east.
But if a country
has a large youth co-hort and a high college matriculation rate and at the same
time has high unemployment, then higher education seems to function as an unrest
accelerant. It raises expectations, but fails to deliver on a higher standard
of living. It exposes young people to revolutionary ideologies, and instills
attitudes of condescension and even contempt for the more cautious politics of
their elders. And it connects people with these ideas and attitudes and
frustrations with other people who share them. This is a recipe for
violence and bloodshed. All of this is rendered even more heartbreaking when
one realizes that the pattern is that young people are typically the vanguard
of the revolution, not its eventual rulers. Self-sacrificing idealists start
revolutions, but self-seeking realists consolidate them. And if you don’t
believe me, than just ask the Egyptian military.
As my friend
Reuven Brenner has taught me, capital markets and revolutions are not
opposites. They are alternatives, alternative answers to the question which all
young people ask, “How can I create the future that I want?” If the peaceful
world of markets as a road to the future is cut off, as it has been for decades
in the countries under question, then the violent world of revolution becomes
the answer by default.
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