Geopolitical strategist Peter Zeihan’s new book, The End of the World is Just the Beginning, considers the consequences of two megatrends. First, in most of our planet’s wealthiest countries, people have stopped reproducing at rates sufficient to maintain their populations. Second, without the Soviet Union as a rival, Americans are tiring of providing the global public goods that make globalization possible.
Zeihan’s predictions are, in a word, bleak. With a decrease in global trade and fewer workers supporting the surging retiree population, we will all have to get used to a lower standard of living, what Zeihan calls the end of more. The end of more combined with greater retiree dissaving means that easy credit and hyperfinancialization will no longer be a thing. As trade and finance networks break down, there will be disruptions in supply chains for energy, materials, manufacturing, and even agriculture, leading to famine.
In Zeihan’s telling, these consequences will be unevenly distributed, depending on his analytical mainstay, geography. The United States will muddle through better than most, thanks to decent fertility, good internal transportation networks, energy and food independence, no rivals threatening invasion, and a large internal market. Other countries without these attributes might completely implode due to a lack of people, access to markets, energy, and food.
The book is strident and, as with all attempts to predict the future, will undoubtedly be wrong in many particulars. Nevertheless, I find it valuable as a specimen of big-if-true model-based thinking that provides endless food for thought. One train of thought it stimulates: What could make Zeihan’s bleak predictions wrong? Assuming demographic decline continues and America stops propping up globalization, how could things still work out OK in the end?
An obvious first answer is innovation. Our species got to where it is by using technology and cleverness to overcome the challenges of geography. How could or should we respond to Zeihan’s scenario?
The world is not having enough babies. Fewer babies means our population “pyramid” will get increasingly top-heavy, with more and more elderly people per worker. How could we get more babies, more working years per baby, or more baby substitutes?
One solution is to make it cheaper to have children by reducing the cost of housing. Sam Bowman, John Myers, and Ben Southwood note in their “housing theory of everything” that high housing costs mean that more people will live in smaller spaces, tight spaces that make choosing to have another child difficult. If we were to make housing more abundant and affordable, we would reverse some of the effect of urbanization on fertility rates.
Another avenue would be to extend the working years for most people. In the US, the average retirement age is 65 for men and 62 for women. What if we could get an extra 20 years of work per person?
This could eventually be a reality through geroscience. While geroscience is often touted as extending lifespan, it turns out that it is basically impossible to extend lifespan in lab animals without also extending healthspan. Any successful longevity treatment will compress morbidity, resulting in healthy, able-bodied octogenarians and beyond, who, ideally, stay healthy enough to work until they just drop dead one day.
If our elderly become strong and healthy, why should so many people retire in their sixties? By extending the years in which we have the option to work, we can reduce the stress on the economy associated with a bulge of retirees.
Geroscience could also help by extending the female fertility window. These days many people spend their twenties and thirties getting financially established before having children. When they get around to having children, pregnancy is riskier for the mother. In most surveys, women end up having fewer children than they would like to have. If medicine could make it less risky and challenging to have children in a woman’s forties, society might have many more children.
Surrogacy is an innovation that is already possible. In-vitro fertilization allows embryos to be carried to term by someone other than the genetic mother. There is a lot of squeamishness around surrogacy contracting, and not every US state has surrogacy-friendly laws, but the age-old logic of division of labor still applies.
More speculative is the idea of an artificial womb. Testing on human fetuses has been limited, but scientists have kept lamb fetuses alive and developing for weeks outside of a womb. Whether through surrogacy or artificial wombs, reducing the physical toll of having a baby could lead to higher fertility.
Another way to deal with a demography-induced labor shortage is to build a lot of robots. Once we can create versatile robots, we will be able to make as many of them as we need. They will do all the dangerous, repetitive, and boring tasks. In addition to mitigating the demographic problem, high-productivity robots would mean that we don’t need to send manufacturing work across the ocean where labor is cheap.
Finally, we can deal with our demographic problems through increased immigration. As Zeihan’s scenario plays out, governments all over the world are going to start competing for people. The United States is fortunate that it has a tradition of assimilating immigrants. It will do a lot better than, say, China in this new normal.
In one key way, immigrants are better than native-born people because our society doesn’t need to pay as much to raise and educate them. To some extent, the receiving country’s gain will be the sending country’s loss, but if the senders are poorer countries with healthy demographic pyramids, then the migration can be positive-sum even excluding the pecuniary gains to the immigrant population.
Immigration can also boost native fertility by reducing the cost of child care. The median American family now spends about 20% of their household income on child care. Importing carers from poor countries where those individuals don’t have as much opportunity could dramatically reduce the cost of care here in the United States. A lower cost of care, in turn, makes having that third child significantly more affordable.
A major part of Zeihan’s thesis is that the United States is retreating into greater isolationism and a narrower view of national interest. The US Navy has functioned over the last 75 years as a guarantor of safe passage on the high seas, keeping piracy and privateering at bay. As the Cold War fades from memory and America comes to see this role as not really its business, lightly-manned, slow-moving cargo ships with millions of dollars of goods on them will be juicy targets. A higher prevalence of piracy will make maritime insurance for certain routes untenable. This will cause trade along those routes to collapse.
To avoid this scenario, one approach would be to change cargo ships to make piracy on the high seas more challenging. Ships could be smaller and, thus, less juicy targets. They could travel faster. They could be unmanned and remotely piloted, eliminating the crew that pirates could otherwise hold hostage. Smaller and faster ships would be more expensive, but they would also have much higher performance, enabling more direct service and cutting cargo transport times significantly. They could also access shallower ports, allowing more flexibility and convenience.
Cargo ships could be armed, as they were in the days of sail. Today, armed merchantmen are rare, used only on such occasions as transporting spent nuclear fuel and reprocessed uranium, which could be used to make nuclear weapons. But if the Jolly Roger returns to the high seas, why shouldn’t we expect part of the response to be the same as it was the last time pirates were a major threat on the high seas?
Cheaper air freight could help us avoid the piracy problem altogether. This might come in the form of improvements in conventional aircraft, or it could come from new types of aircraft. Particularly promising would be an intercontinental cargo airship. Airship performance improves with size, so the airship would need to be large enough to achieve a price/performance point similar to domestic trucking.
Aside from new and improved transportation options, the other major way we could adapt to the lack of a US Navy guarantee on the high seas is to embrace technologies that make shorter supply chains less disruptive. I have already mentioned that robots could obviate the need to use cheap foreign labor in manufacturing, but there are other production methods that could improve domestic resilience.
Additive manufacturing, also called 3D printing, is a technology that could be used to make a lot of products just about anywhere, provided sufficient feedstocks are available. Unfortunately, today’s 3D printing is slow. It is great for making prototypes but less useful for mass production. More advanced 3D printing—especially its logical conclusion, productive nanotechnology—could make us radically independent of global supply chains.
Energy and minerals
Fossil fuels are rooted in geography, and they are a big part of Zeihan’s story about why changing geopolitics will create global economic chaos. Asian demand for oil is thousands of miles away from Middle Eastern sources, and with the US Navy scaling down its protection of the oceans, that supply becomes more fragile.
Non-fossil energy is an alternative, but not every form of it works in every location. Wind and solar potential, too, is rooted in geography. In addition, renewables have their own supply chain challenges, and the need for battery storage compounds them.
New technologies can at least diversify our energy supply chain. Conventional lithium-ion batteries require certain relatively rare minerals, while lithium ferrophosphate batteries use more common ones. New solar panel designs could economize on scarce materials as well. In addition, deep geothermal and small-scale nuclear technologies could further diversify the input mix. They would also reduce the dependence on geography, being available even during Dunkelflaute periods when wind and solar power can’t be produced.
Furthermore, there is a lot more we can do with mining. A lot of traditional mining processes are a bit nasty, and we have effectively forced them into deeper use in countries that don’t have a lot of environmental protection. With newer processes and a recognition that a small amount of domestic environmental harm may be better for the environment than a large amount of foreign environmental harm, we could increase production of what are misleadingly called rare-earth elements. We have these industrially important elements (like gadolinium and praseodymium) in the United States, we’ve just made it very hard to mine them.
For battery metals, we could turn to seabed mining. There are parts of the ocean where nodules of battery metals are sitting visibly on the ocean floor. The nodules are literally sitting on the ground, there for the taking. Harvesting these metals has been opposed by environmental groups who argue that it will destroy seabed ecosystems. Yet companies are hard at work developing underwater robots that could gently pick up the metal nodules without serious disruption to flora and fauna.
To me, the scariest part of Zeihan’s book is the section on agriculture and famine. Many parts of the world are net food or fertilizer importers. If globalization breaks down, these regions may not get enough to eat. Problems of food scarcity must be resolved in days, not months, or people simply die. Times of famine also result in deep political unrest, potentially causing further supply chain breakdown.
Perhaps the first step to address any concern about food scarcity is simply to eliminate obviously inefficient agricultural policies. According to one estimate, about 155 million acres are used to grow crops for ethanol and biodiesel around the world. That is an area about the size of France. Converting this land to food crops would increase output by a modest yet meaningful amount.
Breaking the link between agriculture and geography is also possible, although it will require more energy use. For example, using desalination and water reclamation technology, Israel has become a major agricultural player, despite being located mostly in a desert. With cheaper energy, more countries would be able to follow the same playbook.
It’s possible to go beyond water and control the entire growing environment, again assuming more energy use. Conventional farms get sunlight for free, but contend with weather, pests, and wasted nutrients. Indoor vertical farms have to use artificial light for photosynthesis, but they benefit from a perfectly controlled climate, lack of pests and pesticides, and efficient use of minerals and nutrients. Indoor farms work equally well at all times of year, at all latitudes, and on top of any soils. With sufficiently low energy costs and high levels of automation, precision indoor farming could be used to grow a wide variety of crops anywhere in the world.
With more research and development, even more exotic food production forms could be possible. Some version of this vision has been around for almost a century. In the 1930s, there was concern that the Nazis were figuring out how to turn coal into butter, which was partially true. Synthetic nutrients, including both fatty acids and proteins, are possible and with sufficient effort, could be developed to ensure that famines never happen again. Even if these nutrients don’t taste especially good, they could be used for animal feed, freeing up more land for crops for human consumption.
The bottom line
One reason Zeihan could be wrong is that humans still have agency. We could, in theory, observe Zeihan’s terrifying predictions and collectively decide to change course. This would mean having more children in all industrialized countries and for the United States or a coalition of like-minded nations to start taking global public goods production more seriously. These actions could keep the global order in place—judge for yourself how likely they are to be taken.
If the global order is collapsing, as Zeihan says, then innovation is our best response. If we instituted all the policies and developed all the technologies mentioned above, I’m confident we could weather the storm that Zeihan predicts. In reality, we remain complacent. Some of these technologies will be developed, and some of them won’t. Whether the world’s response will be enough to muddle through remains to be seen.