• Source: Economist: 24 Mar 18 "Gorbachev's grandchildren"         

    Russia pop pyramidThe term "Gorbachev's Grandchildren" refers to the generation born in 1985, the year Gorbachev came to power in the old USSR with his focus on human values, individual well-being, perestroika (restructuring) and glasnost (openness). This generation is the largest age group in Russia today and as they enter their thirties, they are becoming more politically active. They also have a generational identity based on a shared trauma (see German sociologist Karl Mannheim for more on this idea of generational identity). For Gorbachev's Grandchildren, the shared trauma is the reversal of Gorbachev's values when Putin came to power, and their replacement by propaganda, aggression and lies.

    Putin runs what Douglass North calls a "natural state". Rents are created by controlling access to economic and political resources and the limits and restrictions are enforced by the security/police - what North calls "specialists in violence". Putin has ruled like a warlord. Boris Nemtsov, an early liberal challenger to Putin was killed in 2015. Current opposition leader Aleksei Navalny (also a member of the Gorbachev Grandchildren generation) was convicted on trumped-up fraud charges and barred from running in the 2018 election, where Putin achieved a 75% victory amidst charges of election fraud. 

    Putin runs a system in which entitlements, privileges and rents are allocated not according to law or merit but by access to resources and by position in the social hierarchy. From the article: "this system of conditional property rights has allowed Mr Putin’s friends and cronies to put their children into positions of wealth and power. Examples: the son of Nikolai Patrushev, the secretary of the National Security Council and former chief of the FSB, heads a state-owned bank. The son of Sergei Ivanov, another former KGB officer and old friend of Mr Putin, is the head of Alrosa, a state-owned firm which mines more diamonds than any other in the world. The son of Mikhail Fradkov, a former prime minister and intelligence service chief, heads a private bank which is the staple of the military-industrial complex. Many children of Mr Putin’s friends and cronies hold senior positions in Gazprom, Russia’s gas monopoly, or own firms that depend on its contracts. All of them enjoy positions and wealth thanks largely to their family names."

    Gorbachev's Grandchildren started to get involved in the political process after the 2011 parliamentary election, seen as being rigged in favor of Putin and his cronies. This was also the year that Putin took back the Presidency in a trade with Medvedev. From the article: "Many care instead about what they can accomplish professionally rather than what they can get and about what they share, not what they own. They do not envy Mr Putin’s cronies who live behind high fences, fly on private jets and have built special rooms for their fur coats. They ridicule them. They hate the propaganda of state television, which for a long time was one of the main instruments of social control. It now irritates people more than the stagnating economy, according to Lev Gudkov of the Levada Centre, a think-tank. They live online in a world of individual voices. They speak a direct language. Hence the success of Yuri Dud, whose YouTube interviews of people with something to say, be they politicians, actors or rappers, are watched by millions. These are neither pro- nor anti-Kremlin but are simply outside the system."

    From the article: "There are two parallel countries,” Mr Ovchinnikov says. “There is a country of smart and energetic people who want to make it open and competitive. And there is another country of security servicemen who drive in black SUVs extorting rents.” 

    Looking into the near future - Putin is barred from serving past 2022. How will he and his cronies maintain their access to rents and who will succeed him?

  • Source - Economist, November 24, 2018: "Baby bust"       

    The US birth rate has been falling and is more in line with European birth rates. The downward change is especially large in Hispanics and urban families.

    US vs EU birthrate

    All from the article: Soon after the great recession hit America, in 2007, the birth rate began to fall. Many people lost their jobs or their homes, which hardly put them in a procreative mood. But in the past few years the economy has bounced back—and births continue to drop. America’s total fertility rate, which can be thought of as the number of children the average woman will bear, has fallen from 2.12 to 1.77. It is now almost exactly the same as England’s rate, and well below that of France.

    What changed? One possibility is that the drop is little more than a mathematical quirk. The total fertility rate is calculated by adding up the proportions of women in each year of life who had a baby in the previous year. It is affected by changes in birth timing. Suppose that all American women have exactly two children. If a cohort of women move to have those children later, the fertility rate will temporarily fall below two. This happened in the late 1970s, when the rate dipped to 1.74 before recovering.

    To some extent, history is probably repeating itself. In 2017 the mean age of a first-time mother was 27, up from 25 in 2007. The teenage birth rate has halved in the past ten years—something that Power to Decide, a campaign group, attributes to less sex and better contraception. Colleen Murray, its senior science officer, says that Obamacare has made long-acting contraceptives like IUDs available to more young women. The trend of Americans giving birth at ever older ages could run for a while. In Europe, women’s mean age at first birth is 29. In Japan it is 31.

    Urban vs rural And with every passing year the drop in American fertility seems less temporary. Some data suggest that people have come to desire small families. The large National Survey of Family Growth shows that 48% of American women with one child expect not to have a second. Some religious conservatives fear that a broad cultural shift is under way. According to Gallup, a pollster, the share of Americans who never go to church has risen from 10% to 27% since 2000. That could be connected to falling fertility. Churches tend to be in favor of children—more so than the other places where people hang out on the weekend, such as gyms and bars. But it is hard to disentangle cause from effect. What is clearer is that America’s fertility rate is being pulled down by two specific groups of people: Hispanics and urbanites. Hispanic women still have more children, beginning at a younger age, than non-Hispanic whites, blacks or Asians. But their fertility rate is falling exceptionally quickly. Between 2007 and 2017 it dropped from three to two, pulling down the national average. William Frey, a demographer at the Brookings Institution, a think-tank, points out that the recession hit them hard. Many Hispanics worked in the construction business, which collapsed, and lost their own homes to foreclosure. Hispanics are also increasingly American. Two-thirds were born in the country, and the proportion is rising because immigration from Latin America has slumped. They have probably adopted American small-family norms. The fertility rate has fallen more sharply in large cities than in smaller cities or rural areas (see chart 2). Rents and prices have soared, making it harder to afford an extra bedroom. Lots of properties are being built in city centers—but many of these are tiny flats in towers. In 2006 only 27% of newly completed apartments had fewer than two bedrooms. In 2017 fully 48% did.

    It is possible that cities like Miami are not only accommodating the growing ranks of single and childless people, but are actually creating more of them. Hill Kulu, a demographer at the University of St Andrews in Scotland, has found that in England and Finland suburbanites and small-town-dwellers have more children than you would expect from looking at other aspects of their lives. It is almost as though extra bedrooms and child-friendly neighborhoods make children. Perhaps the American family is becoming more European because its cities are looking a little denser and a little less suburban—that is, a little more European.

  • Source - Economist, November 17, 2018: "Land of the rising bills"     

    Statistics on Japan's aging population. The problems demography causes for Japan will be a preview of what the Western democracies can expect as their population ages. Increasing retirement ages and rethinking pension and medical benefits may be necessary to avoid running out of funds. Increased immigration to replace missing workers will also be needed.

    Every year, Japan has 400,000 more deaths than births. This is exacerbating a worker shortage - the Japanese workforce syands at 67 million today but is expected to fall to 58 million by 2030. Increased immigration has not helped as immigrants only make up 2% of the Japanese workforce (compared to 17% in the United States). Overall, there are 1.6 jobs for every Japanese worker.

    28% of the Japanese population is over 65, compared to 15% for the US and only 6% for India. Retirement programs, which begins at 60 in Japan, have placed a burden on the economy. Public debt is now 250% of GDP. The Japanese Prime Minister Shinzo Abe is considering mild reforms such as raising the retirement age to 65. Reforming the pension and medical system will be difficult and unpopular.