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Science advances one funeral at a time
Is Europe doomed?
Max Planck was a famous scientist, not only a Nobel prize winner but “having a universal constant named after him” famous. And he was very well aware of how difficult it was (and still is) to use science to advance society as a whole.
And he coined the Planck’s principle:
A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die and a new generation grows up that is familiar with it ...
often summarized as:
Science advances one funeral at a time
I know, I know, Planck’s principle is often criticized because no actual statistics support this claim. But it’s a good way to introduce a problem that is dear and near my heart: the intellectual decline of European countries.
The structural problems of Europe
Europe is getting old, really fast
Let’s take a look at the data from Eurostat, the board of statistics of the EU.
The population of the EU on 1 January 2022 was estimated at roughly 447 million. Young people (0 to 14 years old) made up 15% of the EU’s population, working age (15 to 64 years old) 64%, and Older people (aged 65 or over) 21%.
This doesn’t tell us much, it’s not Nigeria but is also not Japan. The problem with this data is that it lumps together people of very different ages, from teenagers to middle age. So let’s look at how the “population pyramid” changed in the last 15 years.
Now the trend is slightly more clear, the high longevity and low fertility of the European countries means that the population structure just shifted 15 years.
Will this trend continue? Eurostat thinks so and projects this incredibly scary pyramid:
Where the 85+ group is the dominant group, essentially projecting that the life expectancy of millennials is around 100 years and fertility rates will keep declining.
Just to give some perspective, here’s the population pyramid of India in 2020:
Older people are more involved in decision-making
The EU elections of 2019 were celebrated for their record turnout and high share of young voters. Let’s see the data:
As we see in many countries, older people have a higher turnout even when young people are targeted specifically.
Let’s look at public company boardrooms:
And homeownership follows a similar trend, for example, this is a chart for southern Europe:
The troubles of the financial market, changes in the job market, and the reduction of housing supply in big cities all contribute to a poorer younger generation.
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Europe is losing ground in innovation and R&D
This chart from McKinsey is pretty depressing!
Europe has a large gap with the United States (our closest military ally and economic frenemy) when it comes to the Tech sector, the highest-growing sector of the last 20 years. If you look at the NASDAQ largest company by capitalization you will see Apple, Microsoft, Alphabet, Amazon, Tesla, Meta, and Nvidia.
The closest European technology company is the Dutch ASML (market leader in high-tech machinery for chip making), with a much smaller market cap.
But there is a sector in which we lead the way!
The European Union invented the “Brussels_effect”, a way to use the biggest consumer market in the world to advance European regulations beyond its legal borders. For example the Cookie Law, GDPR, DSA, and the upcoming AI act that has done incommensurable damage to the startup environment in Europe while doing nothing to stop the American incumbents.
Is this a problem though?
It’s a fair question to ask, I don’t believe there is an expert consensus on the answer.
My feeling is that this is a severe problem and that Europeans are not ready for the consequences that this demographic shift entails.
The older people get, the less they consume, the less innovative they become, and the more they vote. This, combined with the demographic shift, means that our society will end up putting the brakes on every possible change, and the world is changing way faster than 50 years ago.
We don’t need more risk aversion
Older folks are more conservative, not in the political sense (or not only) but in their way of thinking. They have seen crises and think that stability is the only way to go, they experienced the “golden age” and think that there won’t be another, they have a lot of savings and are not keen on betting on those savings.
The aversion to risk is something natural for all humans but in Europe there’s a little extra: the way our common institution works shows how the “precaution principle” (any type of innovation must be stopped unless we can prove that is not a risk) dominates how lawmakers and voters feel about the world, think our response to AI or the rollout of COVID vaccines.
Retiring in 2050
In Italy, they say that even Julius Caesar complained that the youth was lazy and unwilling to work and spend like the previous generations.
What’s new is that now we have a large amount of old people who are retired and not working, and they vote.
The retirement system in Europe is unsustainable, as much as we’d like to think otherwise. It’s a giant Ponzi scheme in which the young pay for the old, hoping there will be enough young people when they are old.
The demographic projections are telling us that there won’t be.
So either the retirement age will go up (a lot), or the benefits will go down (a lot).
And the problem is that nobody will vote for either.
The higher turnout means that every politician will defend the current system and will try to change it as little as possible, kicking the can down the road.
Can we do something about it?
I am not an expert on this, and I apologize in advance for not having incredible solutions to offer. Sometimes we see the iceberg coming and can only brace for impact.
But I will try, although you might find my proposals a tad controversial.
Upper age limit for voting
The original idea around voting rights was that only the people who had a stake in the well-being of the country should be allowed to vote. This is intuitive but problematic, who decides who has “a stake”?
Eventually, through a lot of struggle and battles, liberal democracies got to a system in which the only requirement is to be “mature enough”, therefore imposing a minimum age for voting.
I find this system incomplete, why is there no upper bound? Do people have a stake in the future of their country after a certain age?
I think that a simple (and politically impossible) action should be to define an upper limit for participating in voting and being elected. Even the U.S. is not immune to this, having two presidents in a row, and many senators, past their retirement age.
This solution will undoubtedly be unconstitutional in most countries, so it’s not feasible, but is worth thinking about the implications.
Why don’t we lower the voting age? Why eighteen?
The flip side is that the current voting age is pretty arbitrary, some countries have already tried lowering it to 16 to balance things out. The current younger generation is more informed and mature than past generations, there is no reason to not try.
Challenge our risk-aversion with a real innovation policy
Europe has a lot of history, it went through tremendous catastrophes and exciting innovations, and it has all the ingredients to rise again if we choose to do so.
We could be leaders in renewable energy if we can take the courage and stop thinking about how “our beautiful landscape” is somehow ruined by solar panels or windmills. And that industry would foster innovation in batteries, smart grids, and chip making. We could also embrace nuclear power, but I am afraid that ship has sailed.
The older population also means incredible opportunities for healthcare innovation, we could embrace automation and Artificial Intelligence to help the already overworked folks in the healthcare sector.
All this would require different people in charge, younger and focused on “what can we do right” instead of focusing on “what could go wrong”.
This mindset seems to also permeate Europe’s private companies, and a change in mindset at the public level would have positive effects in the private sector.
A better immigration policy
You would think that an area that is struggling with a population pyramid going in the wrong direction would have a strategy for immigration.
The European Union likes to project an image of an open area, where everyone is welcome. The reality is that there are very few ways to immigrate regularly to the EU unless you have a passport that shows that you don’t have a reason to immigrate to the EU, it follows that the EU also has no policy on immigration as a whole.
Our main strategy so far has been to pay dictators or war criminals to detain as many people as possible and deal with the consequences later. And if people die while trying to reach our borders, too bad they had it coming.
But even once they get inside the EU there is no policy, people can’t work because they are illegal immigrants, there aren’t enough work permits for legal migrants already, and no intention to attract any other kind of migrant.
So we leave the future of new migrants to luck or, worse, to organized crime.
It’s not a surprise that immigration had such a bad rep in the EU so far.
I don’t know what the right solution is, but sure as hell the current situation isn’t sustainable.
Can all this happen? Can we reverse course? I am not sure, but we ought to find out