Why do capitalist governments see it as a problem if their country’s population is not continually expanding?

We’re told that, if a country’s average age is increasing, a growing proportion of the population will be retired, and the declining proportion of workers won’t be able to produce enough to provide for the retirees, whose pension payments will make up an increasing share of government spending.

It sounds like something we should be worried about. But it really isn’t. 

For a start, if life expectancy is increasing but population is declining or not increasing proportionately, it follows that children must be declining as a percentage of the total population. So, if the working age population has more retirees to provide for, there are also fewer pre-working age young people to be fed, housed and clothed.

According to a report by the Australian Centre for Financial Studies, over the 40 years to 2009, life expectancy in Australia increased from around 74 to 84 years for women and from 68 to 79 years for men. The number of working-age people for each person over 65 declined from around 7.5 to 5. But at the same time, the number of working-age people for each person under 15 increased from about 2 to 3.6. Overall, the number of working-age people relative to the number of children and retirees increased rather than declined: from about 1.7 to 2.

Second, if the government were genuinely concerned that there aren’t enough people working to provide for the needs of the old, there would be an easy and immediate solution: provide jobs for the 1.5 million unemployed and underemployed across the country.

Third, technological change means that the economy can produce more goods with fewer people. In the half century to 2017, Australia’s real per capita GDP increased from $28,000 to $69,000 (in 2014 dollars). For each Australian, whether young, old or in between, employed or unemployed, the Australian economy produced almost two and a half times as much in 2017 as it did in 1967.

What, then, is the point of the talk about “ageing population”? It is to conceal what the capitalists and their ideologists are really concerned about: that the ability of bosses to increase their profits depends on a constantly expanding population. It does so in two ways.

One, competition forces capitalists to reinvest at least part of last year’s profits, which means more people (workers) are needed this year, despite technological progress. For capitalists, employing the unemployed on a big scale is not a solution because high unemployment helps to keep wages down. More workers equal more profits, but only if unemployment persists.

Two, the profits created by those workers aren’t realised until the capitalist sells the products to someone. A constantly expanding population is one effort to provide that market.

There would be no need to worry about the age of the population if the aim was to provide for human need.