WEBVTT

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Prof: You remember,
when I was talking about

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Europe, we discussed the fact
that during marriage Europeans

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just had babies,
in a sense willy-nilly,

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but we also said it was nowhere
near the maximum that humans are

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capable of,
but we thought it was sort of

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cultural constraints,
late marriage,

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and stuff like that.

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Now we come to China in which
the birth rate within marriage

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was quite a bit lower and I
introduced the question of

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whether this was voluntary in
the sense of individually

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decided,
an individual decides what they

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want and acts on it,
or was this low birth rate due

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to cultural constraints in a
crowded household with maybe the

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grandmother sleeping beneath
you.

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There's no opportunity,
if the cultural rules say you

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can't be friends with your wife,
there may be a reduction in

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passion,
and the conclusion that I gave

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you was that this didn't seem to
be an individual decision kind

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of thing but a cultural kind of
thing.

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It's a little bit out of place
but I just can't--

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I love this data so much,
it's so very striking as an

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example of people that are not
individually voluntarily

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controlling their fertility.

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How would you tell if someone
is?

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--You have a big huge
population, you can't interview

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all of them,
maybe it's a dead population,

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old, how do you tell whether
they're making individual

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decisions?

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Well you have--one of the ways
of doing it is to consider

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individual events in their lives
that you think,

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under any reasonable idea of
what it is to be a human,

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would affect their fertility.

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One of those events is the
death of a child.

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There's many--I mean I think
you all would naturally say,

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if you want a certain number of
children you're going to control

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consciously--
if your children die,

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you're going to try harder to
have more,

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you're going to try longer.

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Here is a Chinese population
from 1982, so we're talking

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about just at the time when the
one child policy is starting.

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These are women who have
finished their childbearing by

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1982, so it's the generation
exactly prior to the one-child

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policy.

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It gives you a lot of data but
look over here,

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it says what happened to the
first four children,

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and it gives you two cases:
all the children died or all

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survived.

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There's a lot of intermediate
cases which are not shown in

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this particular graph and it's
spread out by age to seeing if

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there some sort of age effect.

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Here is the mother's age at
last birth, so if all of them

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survived--if all of them died
you would think the mother would

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really want to have more.

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She stops giving birth at age
38.7.

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If they all survived,
1/10th of a year,

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she stops giving birth 1/10th
of a year earlier,

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one month earlier.

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Same, a little bit older group
you have 0.4 year,

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maybe four months later,
and here's 0.1 months again for

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women who are 20--their age at
first birth.

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I'm sorry; the age at which
they stop depends on the age at

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which they start to a large
degree.

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The numbers of this way are
different because they started

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at different ages,
but there's no difference

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within an age group depending on
whether all four children died

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or all four children survived.

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That's just--to me that's an
amazing set of statistics that

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apparently the continuation,
the attempt to have as many

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children as possible just does
not depend on that event.

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Here's another example of this,
this is--

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as was discussed in most of
Asia, a lot of the world,

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and especially China,
they need males,

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sons are much preferred over
daughters.

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Here's a very nicely displayed
set of data saying how many sons

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have you had,
how many daughters?

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Here's--that have had no son or
no daughter, and the question is

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how many of them proceed?

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These numbers show the fraction
that proceeds to have the first

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birth.

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When they get married and they
have no children,

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neither a son nor a daughter
0.958--I'm sorry they have a son

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first;
they have one son or one

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daughter.

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Those that have a son 95.8% of
them proceed to have a second

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child and that can be either a
boy or a girl.

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If their first child is a
daughter 96.8% proceed,

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so you don't have to look up
here and the details aren't

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important,
but look at for instance those

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that have seven sons in a row,
and 72%, 72.5% of them proceed

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to get pregnant again.

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Here's seven daughters in a
row, they want the sons,

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and they may not want
daughters, 76%,

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a 3.5% difference,
almost no difference in their

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life.

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Again, how many of them,
after having seven sons,

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you presume that's enough sons,
whereas seven daughters they

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would be desperate to have more
but there's a very small--

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a 3% difference between the
fraction of them that proceed.

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You can also see the numbers
are very high;

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those that have had seven
children already,

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76% proceed to have another
birth.

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They just keep going,
and whether they have all

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daughters in a row,
or all sons in a row,

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makes very little difference.

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Finally at eight there is--it
is a 10%--

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less than, yes,
a 10% difference,

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but whether that's--
that doesn't fit with the rest

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of the graph but it's still very
small difference.

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Here's the last graph of this
nature.

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This is again the age at the
mother's last birth,

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and again, it's the same kind
of graph.

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Those that have had eight
daughters in a row versus those

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that have eight sons in a row,
and you think,

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in a son desiring culture,
if they were controlling their

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fertility in any individualistic
way,

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that the ones with a lot of
sons would say,

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okay enough and the ones with a
lot of daughters would be

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desperate to finally have a son.

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Look at the difference,
the age of 41.4,

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if they have eight sons in a
row and the age 41.7,

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again 3/10ths of a year.

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They try just a little bit
longer, three months longer.

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Basically I think what this
data is telling you is that

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people are,
for sure, not responding to the

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most important fertility events
in their life,

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either the sex composition of
their children or the death of

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the children;
they're just having children.

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Not at an enormous rate because
of the cultural things that

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everybody is behaving under,
not with respect to their

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individual experiences and
desires.

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This is the context into which
the one-child--

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first the Wan,
Xi, Shao, the later,

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longer, fewer policy drops in
and then ten years later the

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one-child policy,
so it gives you an

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amazing--here's a population
that's just finished

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childbearing when the policy
starts and there's apparently no

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thought whatsoever of
individually controlling

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fertility.

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All of a sudden the government
tells you,

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hey you got to have fewer
children,

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and I showed you the rate of
fall, the rate of fall during

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the 1970s was just fantastic.

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Then after that fall,
again as I told you last time,

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to control momentum,
they instituted the one-child

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policy and the number of births
levels off.

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Why does the number of births
level off?

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This is again the fertility
drop, this is the longer,

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later, fewer policy in the
1970s and that's where you get

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the big drop;
1980 the one-child policy,

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you don't get any further
drops.

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That was a sign of--well,
an incompetent government,

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an incompetently carried out
fertility policy.

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It turns out that one arm of
the government was doing

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something to the opposite effect
of another arm of the

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government.

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Here the Chinese were--for
women's rights issues and to

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control--
somewhat control the

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population--they were
encouraging later marriage,

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they didn't want girls married
at 13,

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14,15 and so forth.

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It had been very successful,
the revolution is out here,

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and the age of marriage is
already up to 19.5 or so by 1965

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and they're being very
successful and the age of

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marriage keeps going up until it
reaches a quite respectable 23,

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that's older than basically all
of you are--

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most of you, not all of you.

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It reaches a peak there.

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Then what does the government
do?

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It says well we're doing great,
we're now very worried,

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this is the year where they
introduced the one-child policy,

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we want this to continue on up.

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They don't have good
demographic statistics and they

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don't know this data,
they don't actually know what

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age people are actually marrying
at,

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so they have an official age
which was actually above this

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and they--
I'm sorry, they raised that age

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to prevent more marriages but
since people were below that

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what happened was--
let's see I'm getting this

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backwards.

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They--anyway the result of a
policy they had an opposite

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result,
that the result of instituting

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a new policy intending to raise
marriage age reduced marriage

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age instead.

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Then you see when they
introduce the one-child policy

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the mean age of marriage goes
down and it goes down quite

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significantly.

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The one-child policy saying you
should have fewer children is

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working oppositely to a new
policy that actually reduces the

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age at marriage and increases
the .

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The result is,
this is the number of new

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marriages,
first marriages,

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and there's a rise here,
then there's kind of dipsy

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doodles,
and then, just at the time of

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the one-child policy,
the number of new marriages

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goes crazy.

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This big rise in the number of
marriages,

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and remember 98% of Chinese
women, when the get married,

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get pregnant right away,
so the next year they had

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babies,
this counteracts basically all

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of the effect of the one-child
policy.

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That's one branch of government
making one set of laws,

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not having the data and not
being in accord with what

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another set of government is
doing.

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In fact the one-child policy--I
don't want to leave you with

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impression that the one-child
policy had no effect but you

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have to do different statistics.

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Remember the total fertility
rate takes all the women that

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are in an age group,
whether they're married or not,

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and ask how many children
they're having.

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Well when you have a big change
in the fraction of women married

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then you have to use a different
statistic.

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When the age of marriage
changes, as it did in China at

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that time,
you have to now look at a new

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statistic called the parity
progression ratio which is very

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much like those triangle graphs
that I showed you.

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This says--this black line is
how many proceed from having no

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children to having one child,
so the fraction of women--and

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this is in the 95% range or
something.

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Basically all the Chinese
women, at this time when they

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get married, give birth to their
first child.

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Now the next number is those
that already have one child,

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what fraction of them proceed
to have two children?

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The answer is,
before this policy,

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even more than the one,
98% of women that already have

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one child proceed to have a
second child and that may be

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that in this group are fairly--
are sterile women or sterile

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men and so that may be the
difference between here,

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but we don't have that data.

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Again, this is very,
very high and then the other

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numbers, those that have two
children how many go to three?

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Those that have three children
how many go to four or more and

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so forth and we don't have data
before this.

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You can see that the first
child is uninterrupted;

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the Wan, Xi,
Shao, the later,

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longer, fewer policy and the
one-child policy does not

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interrupt the first birth.

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That goes on as normal which is
what is expected,

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but going to a second child now
at the time of the introduction

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of the one-child policy,
this crashes as does later

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births.

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The one-child policy did have
an effect if you look at those

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already married,
but the two different policies,

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one lowering the age of
marriage counteracts the effect

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and for a number of years the
fertility rate stays constant.

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We've just had some visitors,
let me show what I was talking

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about.

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This is the birthrate in China,
what's called the total

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fertility rate,
and here is 1970 when the

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later, longer,
fewer policy was introduced and

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it was the decade of the 1970s
where the fertility rate in

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China fell.

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In 1979/1980 the one-child
policy is introduced and for

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about a decade or so the
birthrate does not decrease

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under that.

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We have some guests apparently.

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What was happening was that in
the cities,

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as I mentioned,
there was a very significant

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birth drop in the 1960s,
even before the government

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was--then in the 1970s,
during Wan, Xi,

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Shao, the city populations went
down to below fertility level.

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In the countryside's,
even though there was a big

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drop in the 1970s,
it wasn't anything like it was

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in the cities.

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As you heard from Qing who
talked about her family's

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experience,
in the cities there were many

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people that worked for the
government,

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and so were under tight
government control.

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Many of them worked in
government owned factories so

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were under tight government
control,

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and in general,
in cities there is much more

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ability to control the people.

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However, at that time,
80% of Chinese people lived in

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villages.

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It was still a very rural
country and there the story is

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different.

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Among other things,
in many villages,

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all the people are related,
they're all relatives.

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So, the professor who's got the
next lab to mine is named Zhong

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and in his village everybody is
a Zhong, and they're all

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related.

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If people don't believe in a
policy,

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they don't want to obey the
government and everybody is

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related,
your uncle second removed can't

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really enforce a policy on you
if you're a relative,

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especially in a culture where
kinship means so much and the

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relationship between relatives
means so much.

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The one-child policy was much,
much less successful in the

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countryside.

15:54.620 --> 15:58.020
Similarly, the cities were
beginning to have excess jobs

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and people were streaming out of
the countryside,

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also because of the population
growth there was no land left,

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so they were streaming out of
the countryside going into the

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cities,
they didn't have legal living

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permits.

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They have a system where you
document where you live and you

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have to stay there and they were
not allowed officially to come

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into the cities,
but of course they did,

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and so the government didn't
know where they were and

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basically had no control over
them and so they were very hard

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to control.

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Even though among--Then another
thing that happens,

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again just at this time,
is that previously everybody--

16:40.298 --> 16:42.768
the peasants had been in
communes and I talked about them

16:42.774 --> 16:45.424
last time,
several thousand families in

16:45.419 --> 16:47.479
one big farm,
and under again,

16:47.482 --> 16:49.512
strict control of the
government.

16:49.509 --> 16:52.659
Then with the Great Leap
Forward they realized the

16:52.663 --> 16:56.143
commune system has failed and
the land goes back to the

16:56.136 --> 16:58.836
people,
they break up the communes and

16:58.839 --> 17:01.089
people get their own plot of
land.

17:01.090 --> 17:04.340
They don't own it in our sense
but they have the rights to work

17:04.343 --> 17:05.553
on that plot of land.

17:05.548 --> 17:08.898
Well they started growing their
own food, private markets for

17:08.902 --> 17:11.312
food grow up,
and the people are not getting

17:11.305 --> 17:13.815
everything they need from the
government.

17:13.818 --> 17:16.778
If they really oppose some
government policy then they can

17:16.777 --> 17:20.147
tell the government 'bye-bye,' I
don't need anything from you,

17:20.150 --> 17:24.820
I'm now an independent farmer
and I'll do what I want.

17:24.818 --> 17:29.688
The change to a market economy,
that changed to more economic

17:29.692 --> 17:34.142
freedom for the individuals,
led to all kinds of personal

17:34.141 --> 17:38.281
freedom and led to the ability
to say no to the government.

17:38.279 --> 17:43.359


17:43.358 --> 17:44.688
At the time,
in the press,

17:44.694 --> 17:47.744
there were all kinds of
examples of what was going on,

17:47.740 --> 17:52.910
and for instance here's one
article from 1980 again--

17:52.910 --> 17:55.580
I'm sorry this is 2000.

17:55.578 --> 17:58.828
The one-child policy has been
in effect for 20 years,

17:58.832 --> 18:02.272
"No one can accuse Huo
Suifa of not knowing what he

18:02.271 --> 18:02.961
wanted.

18:02.960 --> 18:06.260
The 47-year-old farmer dreamed
of having a son.

18:06.259 --> 18:11.629
After seven daughters he
finally got a male heir in 1989.

18:11.630 --> 18:15.460
Ho named him Gaifeng,
or 'change-in-the-weather,' and

18:15.463 --> 18:18.193
then he stopped having
children,"

18:18.192 --> 18:22.062
so seven daughters and a son,
so this person--most--almost

18:22.055 --> 18:24.955
all of that time must have been
under the one-child policy;

18:24.960 --> 18:27.130
eight children.

18:27.130 --> 18:30.510
He says, "It wasn't easy
to have all these children,

18:30.505 --> 18:32.365
but it wasn't hard
either,"

18:32.374 --> 18:33.584
the farmer said.

18:33.578 --> 18:35.368
"If things became tough in
our village,

18:35.368 --> 18:38.398
if there was a campaign to
enforce the rule in their

18:38.403 --> 18:40.903
village"
and China has these political

18:40.902 --> 18:44.062
campaigns to get people to
change their behavior quite

18:44.055 --> 18:47.205
routinely at this time,
"Well my wife just went to

18:47.211 --> 18:49.071
another township to have the
child."

18:49.068 --> 18:53.328
What's the other side of the
coin is this Huo now has a wife

18:53.334 --> 18:57.964
and eight children to support,
and how much land does he have?

18:57.960 --> 19:03.600
One-third of an acre for eight,
nine, ten people;

19:03.598 --> 19:08.338
this is not a good economic
system, exactly why the

19:08.344 --> 19:11.574
one-child policy was instituted.

19:11.568 --> 19:14.138
An American misconception,
fed by our press,

19:14.140 --> 19:17.010
is that China's government is
very monolithic.

19:17.009 --> 19:20.899
The chairman in Peking or some
bureaucrat says this is the

19:20.903 --> 19:23.093
rule, this is law,
spells it out,

19:23.088 --> 19:25.478
everybody has to obey this law.

19:25.480 --> 19:30.060
Isn't the case;
there's whole books now on how

19:30.056 --> 19:33.396
China is actually ruled,
and the story is that the

19:33.403 --> 19:35.343
government almost gives a
slogan,

19:35.338 --> 19:37.918
it's a one-child policy,
or they sometimes call it the

19:37.924 --> 19:41.484
only child policy,
is not a set of rules it's kind

19:41.483 --> 19:43.123
of almost a slogan.

19:43.118 --> 19:46.408
Then it goes down to the
provinces, and each province has

19:46.413 --> 19:49.893
to determine in accord with
local conditions as which is the

19:49.885 --> 19:51.705
official way of stating it.

19:51.710 --> 19:53.990
Then each province gives it
down to the prefectures and the

19:53.989 --> 19:55.829
same thing,
it's interpreted by

19:55.834 --> 19:59.724
local--under local conditions
and then it goes down to the

19:59.718 --> 20:02.578
villages where it's completely
changed.

20:02.578 --> 20:06.998
There's no--absolutely no
uniformity from village to

20:07.001 --> 20:07.871
village.

20:07.868 --> 20:12.808
What that resulted in was the
policy was never able to be

20:12.808 --> 20:15.718
consistently put into practice.

20:15.720 --> 20:19.690
The statistics give you the
answer to that.

20:19.690 --> 20:23.230
The total fertility rate during
this initial period of

20:23.226 --> 20:27.226
enforcement of the one-child
policy never fell below two,

20:27.230 --> 20:31.290
so the policy was one child,
but it never fell below two

20:31.288 --> 20:32.098
children.

20:32.098 --> 20:37.048
In the rural areas it never
fell below 2.5.

20:37.048 --> 20:39.928
As you saw a couple of lectures
ago,

20:39.930 --> 20:44.270
Qing showed you the one child
certificate where the couple

20:44.266 --> 20:45.926
promises,
it's just a promise,

20:45.929 --> 20:47.839
this doesn't say you've done it
and this is just--

20:47.838 --> 20:49.988
even to promise that you're
only going to have one child,

20:49.990 --> 20:55.500
and less than 20% of married
couples ever signed onto even

20:55.500 --> 20:58.980
that promise of having one
child,

20:58.980 --> 21:01.830
which was telling the
government, no we're not going

21:01.828 --> 21:03.448
to comply with this policy.

21:03.450 --> 21:07.150
Throughout the 1980s,
which again was when the policy

21:07.150 --> 21:11.090
was strictly enforced,
nearly half of all the births

21:11.087 --> 21:15.087
were second,
third, or higher order births.

21:15.088 --> 21:17.908
Eighty percent of China's
children had brothers or

21:17.914 --> 21:22.254
sisters,
or both, many had both and only

21:22.247 --> 21:28.807
1/5th of the 300 million
children under age 14 were from

21:28.807 --> 21:31.787
single child families.

21:31.788 --> 21:39.938
In 1986, again after the
first--Question?

21:39.940 --> 21:43.210
Student:  Would you say
this is a result of inconsistent

21:43.208 --> 21:46.268
applications of the one-child
policy or a reflection of the

21:46.265 --> 21:49.475
fact that the one-child policy
was never (inaudible) one child

21:49.480 --> 21:51.220
and not in that urban area?

21:51.220 --> 21:53.700
Prof: Both,
at this time initially it was

21:53.698 --> 21:56.808
supposed to be one child for all
except minority people,

21:56.808 --> 21:59.608
so a very small part of the
population.

21:59.608 --> 22:02.008
I'll tell you in a minute
that--because of popular

22:02.008 --> 22:04.258
resistance they immediately
loosened it up,

22:04.259 --> 22:09.289
so the main thing which you're
probably referring to is that

22:09.289 --> 22:14.059
rather soon they said peasants--
the city people had already had

22:14.055 --> 22:15.375
their fertility drop.

22:15.380 --> 22:17.880
Many of them were not very
interested in having more than

22:17.883 --> 22:18.423
one child.

22:18.420 --> 22:22.940
It was not a huge issue for you;
one of your readings discusses

22:22.940 --> 22:23.410
that.

22:23.410 --> 22:25.590
In the countryside the peasants
still wanted,

22:25.588 --> 22:27.688
certainly a son,
more children,

22:27.692 --> 22:31.832
so the policy was changed
rather rapidly so that if you--

22:31.828 --> 22:35.298
if your first child is a
daughter you can have another

22:35.295 --> 22:38.395
one and try for a boy,
but two is the limit and of

22:38.403 --> 22:44.553
course two was not--
even that was not always

22:44.547 --> 22:46.627
observed.

22:46.630 --> 22:52.100
Remember I told you last time
that the goal when the Chinese

22:52.095 --> 22:56.665
population crossed a billion,
or looked like it was very

22:56.671 --> 23:00.241
close to crossing a billion,
and the government sort of

23:00.242 --> 23:04.272
desperately wanted to keep the
population below 1.2 billion in

23:04.265 --> 23:06.765
the year 2000 they didn't make
it,

23:06.769 --> 23:09.149
the population was 1.3 billion.

23:09.150 --> 23:13.700
They missed by a 100 million
and now it's considerably over

23:13.702 --> 23:17.082
that and the population is still
growing.

23:17.078 --> 23:21.268
Because of population momentum,
again the age structure of

23:21.268 --> 23:24.668
China,
China's population is expected

23:24.672 --> 23:29.062
to grow by another 150 million
people by 2025,

23:29.058 --> 23:32.338
so even though they've worked
so hard and suffered so much

23:32.336 --> 23:35.436
under these various policies to
restrict fertility,

23:35.440 --> 23:37.320
they're still going to increase
from now,

23:37.318 --> 23:42.398
from 2008 to 2025 by half the
total population of the United

23:42.404 --> 23:43.184
States.

23:43.180 --> 23:47.360
Again, comparable to a
calculation I gave earlier,

23:47.358 --> 23:53.488
Hu Jintao, who was president of
China recently says,

23:53.490 --> 23:58.060
the party plans to quadruple
economic output per capita in

23:58.057 --> 23:59.017
that time.

23:59.019 --> 24:01.439
This was before the economic
crash that has just happened.

24:01.440 --> 24:04.810
He wanted to quadruple the per
capita income,

24:04.807 --> 24:09.397
which would still bring China
up only to a low European level

24:09.401 --> 24:10.321
perhaps.

24:10.318 --> 24:16.498
With a 1.3 billion population,
and you're quadrupling it,

24:16.500 --> 24:20.410
that's equal to 5.2 billion and
the whole population of the

24:20.413 --> 24:24.533
earth is only 6.3,
so you're talking about China's

24:24.534 --> 24:29.334
economic and population growth
alone almost doubling the

24:29.333 --> 24:33.963
world's economic activity and
therefore something like

24:33.957 --> 24:37.357
doubling the economic drain on
it.

24:37.358 --> 24:41.618
China's TFR now,
after this period of stability

24:41.622 --> 24:47.092
and after the marriage thing got
settled it has drifted down

24:47.087 --> 24:50.977
slowly as almost all of the
world has.

24:50.980 --> 24:54.670
It's now 1.6,
it's still nowhere near one

24:54.673 --> 24:57.503
child per family,
its 1.6 now,

24:57.498 --> 25:01.898
but that will eventually reduce
the size of the Chinese

25:01.897 --> 25:04.667
population if it is maintained.

25:04.670 --> 25:11.080
What you should keep in mind
is, this was the Chinese route

25:11.077 --> 25:13.507
to lower population.

25:13.509 --> 25:16.969
I described to you the
population that they started

25:16.971 --> 25:21.061
with that was not paying any
attention to individual desires

25:21.055 --> 25:24.995
in fertility and they brought it
down by strong government

25:25.000 --> 25:27.740
policy,
good amount of coercion and so

25:27.744 --> 25:28.164
forth.

25:28.160 --> 25:31.750
The Chinese populations around
other parts of East Asia have

25:31.749 --> 25:35.099
lowered their birth rate even
more, or I should say they

25:35.095 --> 25:37.495
started lower;
they reached an even lower

25:37.497 --> 25:37.847
level.

25:37.849 --> 25:41.919
China is 1.6 as I told you;
the Chinese population of

25:41.920 --> 25:44.570
Singapore is 1.4 children per
women.

25:44.568 --> 25:47.618
The Japanese,
who are not Chinese obviously,

25:47.623 --> 25:50.433
1.3;
Taiwan 1.1;

25:50.430 --> 25:52.940
South Korea,
again not Chinese,

25:52.938 --> 25:57.748
1.3;
Hong Kong 1.0 and Macau 1.0.

25:57.750 --> 26:00.160
None of these places were under
the one-child policy.

26:00.160 --> 26:02.140
Actually I'm not sure about
Macau, but all the others are

26:02.137 --> 26:05.717
not under the one child policy,
and they have a lower birth

26:05.722 --> 26:10.902
rate than the Chinese policy,
and we'll have to discuss in a

26:10.903 --> 26:13.923
later lecture why this should be
so.

26:13.920 --> 26:18.050
I'm going to finish up talking
specifically about China to

26:18.053 --> 26:21.973
mention a little bit about
economic globalization which

26:21.969 --> 26:23.709
you're all aware of.

26:23.710 --> 26:25.790
Because of globalization the
U.S.

26:25.794 --> 26:28.014
and China are joined at the
hip.

26:28.009 --> 26:32.819
For both our economies to
succeed, we have to buy a lot of

26:32.816 --> 26:35.706
Chinese stuff,
they have to buy our bonds,

26:35.714 --> 26:38.704
they keep their people employed
by shipping us stuff,

26:38.700 --> 26:41.200
and we send them green paper
back.

26:41.200 --> 26:45.000
The economics of this is quite
crazy altogether because they

26:45.002 --> 26:47.242
can never use--
what's interesting is they

26:47.241 --> 26:49.571
basically can never use the
money that we send them.

26:49.568 --> 26:52.628
That if--they have a trillion
dollars or so in U.S.

26:52.628 --> 26:55.988
bonds and if they ever try to
sell them the value of the

26:55.993 --> 26:59.853
dollar goes to zero and they
have to sell them for nothing.

26:59.848 --> 27:02.028
That's a separate story,
it's crazy.

27:02.028 --> 27:05.028
Lot of causes--reasons for
globalization.

27:05.028 --> 27:07.998
Number one is shipping costs,
the whole idea of the shipping

27:07.999 --> 27:11.619
when it went to containers,
the cost of shipping something

27:11.623 --> 27:15.923
from China to the West Coast of
America dropped drastically.

27:15.920 --> 27:18.530
Ships carry an awful lot,
the water floats them across,

27:18.528 --> 27:21.778
and they just have to--the only
energy that's used is to get

27:21.777 --> 27:24.747
over the friction of the water
that they go through.

27:24.750 --> 27:28.920
Even many years ago I was in
Bolivia discussing with an AID

27:28.921 --> 27:32.231
guy, Bolivia is very poor,
what can they do?

27:32.230 --> 27:34.690
Well they have the mountains
but then they have a jungle

27:34.694 --> 27:37.254
sloping down to the Amazon where
they could grow rice,

27:37.250 --> 27:44.120
very good agricultural land,
and why can't they give that to

27:44.123 --> 27:48.623
Lima or to La Paz,
Lima and Peru where they're

27:48.615 --> 27:49.825
importing rice.

27:49.828 --> 27:52.678
The problem was that the
Chinese can grow it in the

27:52.682 --> 27:55.402
Yangtze Valley,
float it down the river to

27:55.395 --> 27:57.045
Shanghai,
put it on a boat,

27:57.050 --> 27:59.210
and ship it and deliver it to
Callao,

27:59.210 --> 28:01.680
Lima's port,
cheaper than the Bolivians who

28:01.683 --> 28:04.633
are right next door to Peru can
truck it over --

28:04.630 --> 28:07.720
the Andes sort of go up and
down and up again--

28:07.720 --> 28:10.800
and down again and they have to
ship it--

28:10.798 --> 28:12.908
to get to the coast they have
to ship it over two peaks of

28:12.912 --> 28:15.542
mountains on lousy roads,
and trucking is just very

28:15.535 --> 28:16.355
inefficient.

28:16.358 --> 28:20.438
It's cheaper to get the thing
from 15,000 miles away up in

28:20.439 --> 28:24.519
Sichuan than to get it next door
from the Amazon slopes of

28:24.519 --> 28:26.579
Bolivia,
so shipping costs is very

28:26.575 --> 28:27.065
important.

28:27.068 --> 28:29.808
For white collar jobs it's
telecommunication.

28:29.808 --> 28:33.018
Now--we used to say let's let
the low,

28:33.019 --> 28:37.819
the cheap labor manufacturing
jobs go to China but now China

28:37.819 --> 28:41.199
and India we're in--
its immediate contact by

28:41.195 --> 28:45.225
telecommunications so the white
collar jobs are going there.

28:45.230 --> 28:49.020
The engineering is going to
India, the accounting is going

28:49.019 --> 28:52.009
to India, the call centers are
going to India,

28:52.011 --> 28:54.541
and other jobs are going to
China.

28:54.538 --> 29:01.028
This--what happens to
population I think,

29:01.028 --> 29:04.268
in the long term view,
and long terms means 25 or 50

29:04.268 --> 29:06.388
years,
I'm not talking 1000 years,

29:06.393 --> 29:09.903
probably the one most important
thing which will determine the

29:09.903 --> 29:10.943
future of the U.S.

29:10.938 --> 29:14.158
economy is what happens to
population in China and India,

29:14.160 --> 29:17.440
and you can include Indonesia
and the rest of Asia.

29:17.440 --> 29:21.550
As long as they have an
incredible number of people

29:21.547 --> 29:25.747
willing to work for incredibly--
needing to work for incredibly

29:25.753 --> 29:27.893
low wages,
we can't compete with them.

29:27.890 --> 29:31.730
There is no economic reason why
an American should earn $40 a

29:31.729 --> 29:34.349
day or something like that,
plus benefits,

29:34.352 --> 29:37.042
and that's a low wage for an
American.

29:37.038 --> 29:41.738
Whereas, a third of China the
per capita income is about $1 a

29:41.742 --> 29:46.292
day for the lowest third of
China and that means the worker

29:46.289 --> 29:48.249
makes $2 or $3 a day.

29:48.250 --> 29:50.900
There's no way that we can
earn, without benefits,

29:50.900 --> 29:54.260
that we can earn $40 or $80
depending on what you calculate

29:54.259 --> 29:57.389
and other people in the other
world are earning $3,

29:57.390 --> 29:59.740
so jobs are going to continue
to go to China;

29:59.740 --> 30:00.410
not only from the United States.

30:00.410 --> 30:01.680
They are leaving Mexico.

30:01.680 --> 30:05.110
I told you the story in
Thailand, the jewelry business

30:05.112 --> 30:09.732
in Thailand that moved to China,
that there's just this vast,

30:09.729 --> 30:14.509
vast sea of people who are
desperate to work for basically

30:14.511 --> 30:15.521
$2 a day.

30:15.519 --> 30:18.479
A further thing happening,
there are now a few 100 million

30:18.484 --> 30:20.414
people floating around the
cities,

30:20.410 --> 30:22.280
migrant laborers trying to get
jobs,

30:22.278 --> 30:24.498
and now with the current
economic climate,

30:24.500 --> 30:28.120
being thrown out of jobs,
but Chinese agriculture is

30:28.115 --> 30:29.885
incredibly inefficient.

30:29.890 --> 30:35.030
As I told you,
the average farm size there is

30:35.029 --> 30:42.389
0.1 acre in China and that's
just economically unsustainable.

30:42.390 --> 30:46.480
The average farm size in the
world is--in Japan is 400 acres

30:46.484 --> 30:47.184
I think.

30:47.180 --> 30:49.450
No, I'm sorry in the world 400,
in the U.S.,

30:49.445 --> 30:50.285
an economic U.S.

30:50.288 --> 30:52.818
farm is like thousands of acres
of big farms.

30:52.818 --> 30:55.308
We're talking about that,
eventually China is going to

30:55.310 --> 30:57.710
have to compete in the
agricultural world on an even

30:57.709 --> 30:59.589
footing with the rest of the
world,

30:59.588 --> 31:01.878
which means their farms are
going to have to combine.

31:01.880 --> 31:03.770
That's already happening.

31:03.769 --> 31:06.479
People are voluntarily sort of
pooling their land,

31:06.480 --> 31:09.670
having big things--enough of
the land to be--

31:09.670 --> 31:11.710
to make it worth them to buy a
tractor and so forth,

31:11.710 --> 31:14.930
so this economic
rationalization of agriculture

31:14.930 --> 31:15.980
is happening.

31:15.980 --> 31:21.810
Think of the numbers there,
you have 800 million peasants

31:21.805 --> 31:23.985
with 0.1 acre each.

31:23.990 --> 31:27.860
When you combine it even to 100
acre farm, which is still a

31:27.855 --> 31:31.785
small farm worldwide that means
you combined 1000 farms into

31:31.786 --> 31:32.316
one.

31:32.318 --> 31:37.708
In the modern world 100 acres
is probably farmed by one or two

31:37.714 --> 31:41.174
people,
so you go from 1000 families

31:41.173 --> 31:47.063
living on 0.1 acre each to maybe
two families living on 100 acres

31:47.057 --> 31:49.077
of a combined farm.

31:49.078 --> 31:52.978
That means that something like
99% of the population of the

31:52.976 --> 31:55.996
countryside has to get jobs
somewhere else.

31:56.000 --> 32:00.270
If you have 800 million
peasants, almost 800 million new

32:00.265 --> 32:04.685
people are waiting for these
economic changes to come onto

32:04.685 --> 32:10.455
the modern job market,
and so there are a vast number

32:10.458 --> 32:14.758
of people waiting,
that are now competing with us

32:14.757 --> 32:17.587
and every other industrial
advanced country,

32:17.588 --> 32:20.548
and who will continue to
compete with us.

32:20.548 --> 32:23.528
The Chinese government is well
aware, of course,

32:23.530 --> 32:24.800
of all this stuff.

32:24.798 --> 32:28.338
In October last year,
previously I--

32:28.338 --> 32:31.358
they don't really own their
land and they still don't,

32:31.358 --> 32:34.878
but they what they call a land
reform and the plan allows

32:34.878 --> 32:38.708
farmers for the first time to
lease or transfer their land use

32:38.712 --> 32:40.412
rights to someone else.

32:40.410 --> 32:43.320
Basically the Chinese are now
allowed to sell their farm,

32:43.318 --> 32:45.668
which will ease--now they have
to have very complicated

32:45.673 --> 32:48.073
collective arrangements where
everybody is sort of still

32:48.069 --> 32:50.659
there,
but once you can basically sell

32:50.659 --> 32:53.109
or alienate your land in some
way,

32:53.108 --> 32:57.888
than you can totally leave the
land and go into the cities.

32:57.890 --> 33:02.160
The government has started
encouraging this kind of push.

33:02.160 --> 33:07.260
What they'll do now,
with the economic collapse,

33:07.260 --> 33:08.890
I don't know.

33:08.890 --> 33:14.040
It's--we have a long way to go
before the population issue in

33:14.036 --> 33:19.096
China is settled and our fate
and all of the developed world

33:19.097 --> 33:23.127
depends very much on what
happens in China.

33:23.130 --> 33:26.950
Just to finish,
the Chinese have--the

33:26.952 --> 33:31.732
achievement of China is just
mind boggling.

33:31.730 --> 33:35.730
that In a half a century they
took people from an extremely

33:35.734 --> 33:39.604
poor country,
devastated by over 100 years of

33:39.596 --> 33:41.976
war,
and now it's becoming one of

33:41.976 --> 33:44.676
the first ranked countries in
the world.

33:44.680 --> 33:47.490
Before this all started,
no one would have thought this

33:47.489 --> 33:48.269
was possible.

33:48.269 --> 33:51.019
If you can read the literature
of that time,

33:51.017 --> 33:52.357
China was hopeless.

33:52.358 --> 33:55.398
With respect to fertility,
which you'll see is a very

33:55.397 --> 33:58.727
important part of the whole
story of economic success,

33:58.730 --> 34:01.890
their decline,
the rapidity of their decline

34:01.891 --> 34:06.381
to get a country like China to
drop its fertility in ten years

34:06.375 --> 34:13.405
is just an amazing achievement;
just incredible.

34:13.409 --> 34:23.189
Now, we want to get onto this
next question that a student

34:23.190 --> 34:26.280
asked last time.

34:26.280 --> 34:29.310
When I was saying the
Chinese--remember the Chinese

34:29.313 --> 34:32.533
started this population thing
for economic reasons.

34:32.530 --> 34:38.040
They said--our economy is going
along,

34:38.039 --> 34:39.459
we're increasing,
like I said,

34:39.456 --> 34:41.946
agricultural production what
was it 2.5% a year,

34:41.949 --> 34:44.699
which was very good -- but
population is growing 2.3% a

34:44.702 --> 34:46.512
year,
so we're not helping the people.

34:46.510 --> 34:52.280
It was very overtly stated that
the one-child policy was to

34:52.275 --> 34:54.855
improve China's economy.

34:54.860 --> 34:57.660
They wanted to improve the
standard of living of the

34:57.655 --> 34:58.145
people.

34:58.150 --> 35:00.490
At the time,
when they started this policy,

35:00.489 --> 35:02.939
the standard of living in China
was very low,

35:02.942 --> 35:05.062
and I don't have to tell you
that.

35:05.059 --> 35:08.779
Healthcare was very--was
certainly better than it had

35:08.784 --> 35:11.224
been but still a very low level.

35:11.219 --> 35:15.629
Education was not widely
available below the very early

35:15.634 --> 35:17.764
primary grades in China.

35:17.760 --> 35:20.760
Basically, as the Chinese
perceived it themselves,

35:20.759 --> 35:24.369
and as they talked about it
quite a bit, their children were

35:24.371 --> 35:26.821
growing up unhealthy and
uneducated.

35:26.820 --> 35:31.250
When the Chinese talk about
economic development,

35:31.250 --> 35:34.130
it's not only manufacturing
more stuff which they basically

35:34.130 --> 35:36.800
are not too interested in,
they ship it to America.

35:36.800 --> 35:39.140
They were primarily interested
in what they called the quality

35:39.143 --> 35:39.763
of the people.

35:39.760 --> 35:43.460
They thought their population
was not of the quality that they

35:43.458 --> 35:46.428
wanted, and quality means health
and education.

35:46.429 --> 35:50.739
They wanted--their children
were growing up not healthy and

35:50.739 --> 35:53.139
not educated,
and they like everyone in the

35:53.143 --> 35:55.153
world,
realizes that uneducated,

35:55.150 --> 35:58.900
sick children,
and sick adults don't--are not

35:58.900 --> 36:00.420
very productive.

36:00.420 --> 36:03.070
Western economists,
for a long time,

36:03.070 --> 36:06.920
considered capitalist--physical
capital your factories and

36:06.916 --> 36:11.026
machines that you have and the
idea of human-capital is fairly

36:11.032 --> 36:14.412
recent and has now come
massively into vogue in the

36:14.407 --> 36:15.147
West.

36:15.150 --> 36:17.660
That one of the most important
determinants of the wealth of a

36:17.657 --> 36:19.617
country,
why is one country rich and one

36:19.619 --> 36:23.149
country poor is not resources,
is not your physical capital

36:23.148 --> 36:25.608
base, but your human capital
base.

36:25.610 --> 36:28.600
Partly we've learned that from
the Chinese.

36:28.599 --> 36:32.499
I mean we learned it ourselves
but also the Chinese examples

36:32.498 --> 36:34.678
were very good example of this.

36:34.679 --> 36:39.309
Just to give you an example of
what happens when people don't

36:39.309 --> 36:41.869
have education,
in this particular case

36:41.869 --> 36:45.799
biological education,
is a story from again the year

36:45.804 --> 36:48.934
2000--
again not that many years back.

36:48.929 --> 36:53.959
This is from Du who was a local
official in a small village.

36:53.960 --> 36:57.470
He said, "One day there
were hundreds of people lined up

36:57.469 --> 37:01.029
at the entrance of our village,
I thought it must be a

37:01.027 --> 37:03.807
vegetable market or a movie
coming in.

37:03.809 --> 37:05.949
It turned out to be blood
selling.

37:05.949 --> 37:09.239
I felt so terrified because
there was no sterilization

37:09.244 --> 37:10.804
equipment at all."

37:10.800 --> 37:14.520
This village official had some
education, he understood about

37:14.519 --> 37:18.119
sterilization and he had seen
these blood campaigns before,

37:18.117 --> 37:19.417
no sterilization.

37:19.420 --> 37:23.350
"Villagers just tell the
traffickers their blood type,

37:23.351 --> 37:26.201
if they know it,
if not they make it up.

37:26.199 --> 37:29.249
The villagers just tell the
traffickers their blood type and

37:29.246 --> 37:31.826
then lie die on the ground to
offer blood."

37:31.829 --> 37:34.109
What is the result of this?

37:34.110 --> 37:37.690
A vast AIDS epidemic in these
rural villages that were doing

37:37.693 --> 37:39.573
this,
because they use the same

37:39.572 --> 37:42.862
needle to repeatedly take blood
from person after person,

37:42.860 --> 37:44.770
they line up on the ground and
they stick one needle,

37:44.766 --> 37:45.386
take the blood.

37:45.389 --> 37:48.459
Needles are so expensive,
the apparatus for collecting it

37:48.458 --> 37:50.598
is expensive,
and so they reuse the same

37:50.597 --> 37:51.197
needle.

37:51.199 --> 37:56.009
Of course when you use the same
needle from person to person the

37:56.012 --> 38:00.602
odds are if one person gets it
the next ones are going to get

38:00.597 --> 38:02.747
it,
but actually the transmission

38:02.748 --> 38:05.988
rate by blood to blood contact
by a needle is something like 1

38:05.985 --> 38:08.325
in 200,
it's not terribly efficient.

38:08.329 --> 38:11.059
What do they do with the blood?

38:11.059 --> 38:12.959
They collect blood from
everybody, then instead of

38:12.960 --> 38:14.990
keeping it individually,
which is expensive,

38:14.990 --> 38:17.240
they dump it into a big vat,
they pool it,

38:17.235 --> 38:19.905
they take it to the city,
they extract the components

38:19.909 --> 38:21.959
that they want which is the
gamma globulin,

38:21.960 --> 38:24.510
the clotting factor,
and a few other components and

38:24.505 --> 38:26.385
then they have a lot of blood
left.

38:26.389 --> 38:27.239
What do they do?

38:27.239 --> 38:30.279
They go back to the village and
re-inject the blood,

38:30.277 --> 38:32.537
the remaining blood into the
people.

38:32.539 --> 38:34.309
Now you don't just have a
needle stick,

38:34.309 --> 38:37.779
you've got a pint of someone
else--of a mixed blood of

38:37.775 --> 38:40.975
everyone in the village going
into your veins,

38:40.980 --> 38:44.630
and now for sure if anyone in
the village has AIDS you're

38:44.628 --> 38:46.648
going to be infected with it.

38:46.650 --> 38:49.110
Du continued,
"The villagers become

38:49.110 --> 38:52.460
crazy about selling blood
because they are so poor and

38:52.456 --> 38:53.716
life is so hard.

38:53.719 --> 38:57.389
Many had built their houses by
selling blood.

38:57.389 --> 39:00.339
Some will even bribe
traffickers to be able to sell

39:00.338 --> 39:02.048
more than once a day."

39:02.050 --> 39:04.160
The traffickers are interested
in giving them back blood

39:04.157 --> 39:05.687
because then they'll make more
blood,

39:05.690 --> 39:09.470
they can sell more blood again,
but the people want to sell

39:09.472 --> 39:13.222
more than a pint in each day,
so they kind of lie and fake

39:13.224 --> 39:14.714
because they're so poor.

39:14.710 --> 39:17.750


39:17.750 --> 39:21.640
The officials estimate
something like 600,000 HIV

39:21.641 --> 39:25.371
cases, that's probably nowhere
near correct.

39:25.369 --> 39:29.169
The blood collections,
starting in the 1990s,

39:29.168 --> 39:32.448
were protected by corrupt
officials.

39:32.449 --> 39:34.769
This was of course against
public policy,

39:34.768 --> 39:38.358
but it may have infected a
million people,

39:38.360 --> 39:41.220
this blood selling in Henan
Province,

39:41.219 --> 39:45.599
especially and virtually all of
them poor peasants who sold the

39:45.596 --> 39:47.146
blood to make money.

39:47.150 --> 39:54.140
That gives you an idea again of
the status of education of the

39:54.143 --> 40:00.683
population and why human capital
is so very important,

40:00.679 --> 40:03.689
because you're collecting blood
to sell to hospitals,

40:03.690 --> 40:06.080
which will improve the health
of presumably of some people who

40:06.077 --> 40:08.457
receive the blood,
but not if they get AIDS.

40:08.460 --> 40:14.620
While you're helping a few
people with transfusions you're

40:14.615 --> 40:20.445
infecting millions of people
with AIDS so you're making

40:20.449 --> 40:23.149
things totally worse.

40:23.150 --> 40:27.160
Does cutting your
population--so China had the

40:27.155 --> 40:30.795
idea, not alone,
that if they reduce their

40:30.804 --> 40:35.614
population growth rate their
economy will improve.

40:35.610 --> 40:39.200
Is this true?

40:39.199 --> 40:43.049
Most economists,
at the time,

40:43.047 --> 40:47.307
would certainly have said no.

40:47.309 --> 40:52.449
That's a Malthusian idea that
population--

40:52.449 --> 40:56.879
that economic development is
limited by population growth and

40:56.880 --> 41:00.790
people thought that the
industrial revolution had sort

41:00.793 --> 41:04.133
of gotten rid of Malthus,
Malthus was irrelevant.

41:04.130 --> 41:06.590
Marx, as I mentioned last time,
hated Malthus.

41:06.590 --> 41:11.090
Marx was totally opposed and so
a lot of the world's opinion was

41:11.088 --> 41:15.658
that no, population growth was
not detrimental to the economy.

41:15.659 --> 41:20.089
In fact, they believed that
population growth was good for

41:20.092 --> 41:23.672
an economy because it increased
the market,

41:23.670 --> 41:25.180
and everybody wants to increase
the market,

41:25.179 --> 41:30.339
and you can get efficiencies of
scale for all kinds of reasons,

41:30.340 --> 41:33.100
a growing population was
considered to be a wonderful

41:33.103 --> 41:33.533
thing.

41:33.530 --> 41:35.820
Businessmen,
especially in the capitalist

41:35.824 --> 41:38.424
economies,
love population growth because

41:38.418 --> 41:40.758
the population of the United
States,

41:40.760 --> 41:43.120
for instance,
is now growing at 1% a year,

41:43.119 --> 41:46.869
which is less than it had been,
it had been 1.5% or so.

41:46.869 --> 41:51.359
The economic growth rate is
about 3%, at best in a very good

41:51.360 --> 41:53.720
year, in a good year it's 3%.

41:53.719 --> 41:59.449
Population growth at 1% or
1.5%, if your total economy is

41:59.454 --> 42:03.574
growing at 2% or 3%,
population growth is half the

42:03.570 --> 42:07.090
increase in gross national
product and that means it's half

42:07.092 --> 42:08.432
of company profits.

42:08.429 --> 42:11.959
When you have General Motors,
it was counting every year on

42:11.963 --> 42:15.683
population growing and being
able to sell more automobiles.

42:15.679 --> 42:21.519
That was basically the idea
that population growth was not a

42:21.521 --> 42:22.711
bad thing.

42:22.710 --> 42:29.460
In 1958 two American
demographer economists had a

42:29.458 --> 42:31.848
different idea.

42:31.849 --> 42:35.909
They looked at the developing
countries, which had enormous

42:35.914 --> 42:40.264
population and very high growth
rates and they weren't doing so

42:40.259 --> 42:40.889
well.

42:40.889 --> 42:42.759
What's with this theory?

42:42.760 --> 42:46.260
They should be doing
wonderfully, they should be

42:46.255 --> 42:49.275
improving tremendously,
and they came up with a

42:49.280 --> 42:52.170
different understanding of the
relationship between population

42:52.172 --> 42:52.982
and economics.

42:52.980 --> 42:55.940
This is based on some very
simply economics.

42:55.940 --> 43:00.090
That economic development
requires investment.

43:00.090 --> 43:01.990
If you want to produce
something you've got to build a

43:01.994 --> 43:03.114
factory and that takes money.

43:03.110 --> 43:04.390
Where does that money come from?

43:04.389 --> 43:06.379
That comes from someone else
saving.

43:06.380 --> 43:09.820
Someone earns some money,
by his labor or by whatever,

43:09.824 --> 43:12.594
earns some money;
he can either spend that right

43:12.585 --> 43:15.375
away or he can put it in the
bank and then the bank will

43:15.380 --> 43:18.380
invest it for him,
or he can put it into stocks or

43:18.382 --> 43:19.662
something like that.

43:19.659 --> 43:23.799
Investment in a country,
within some kind of economy,

43:23.800 --> 43:26.190
investment requires savings.

43:26.190 --> 43:30.570
One person has to save so
another can spend it as an

43:30.568 --> 43:33.228
investment, they borrow that.

43:33.230 --> 43:38.570


43:38.570 --> 43:42.920
That's the key idea in
everything that follows.

43:42.920 --> 43:47.060
What Coale and Hoover realized
is that if you have--

43:47.059 --> 43:49.699
if a family has a lot of
children, if all the workers are

43:49.704 --> 43:51.504
married and have a lot of
children,

43:51.500 --> 43:54.800
all of their income goes for
food, clothing,

43:54.800 --> 43:57.220
and shelter to support the
children.

43:57.219 --> 43:58.809
They can't save any money.

43:58.809 --> 44:02.409
If a country has no savings,
they don't have any money to

44:02.405 --> 44:05.485
invest, they don't make any
economic progress.

44:05.489 --> 44:09.659
This had a big political
effect, this theory.

44:09.659 --> 44:12.639
It seems so simple and so
obvious but it--

44:12.639 --> 44:15.289
apparently they had good
empirical support,

44:15.289 --> 44:17.859
they studied Mexico and a
couple of other countries,

44:17.860 --> 44:21.810
and showed that this really
seemed to be the case.

44:21.809 --> 44:25.409
Well at that time the third
world was--the population

44:25.407 --> 44:28.937
explosion was happening,
they were desperately poor,

44:28.936 --> 44:31.216
and so there were two groups.

44:31.219 --> 44:35.529
One, conservatives were at that
time worried about the Cold War.

44:35.530 --> 44:39.930
America was locked in the Cold
War with communists and China,

44:39.931 --> 44:44.481
Russia, but especially Russia
was our big enemy at the time.

44:44.480 --> 44:46.900
We saw that all these
desperately poor countries,

44:46.900 --> 44:49.590
the governments were not--their
current economic and political

44:49.585 --> 44:51.605
systems were not giving them
what they want.

44:51.610 --> 44:54.750
They were poor and getting
poorer as they perceived it,

44:54.750 --> 44:57.090
and they were trying out all
kinds of different political

44:57.086 --> 44:59.156
solutions,
some of which were leftist.

44:59.159 --> 45:02.739
In America, there was a big
push by conservatives,

45:02.739 --> 45:06.679
by the anti-communists,
to do something about the third

45:06.684 --> 45:09.464
world to save them from
communism.

45:09.460 --> 45:13.830
Meanwhile, the liberals were
less involved in this us versus

45:13.827 --> 45:16.777
them kind of controversy,
but they saw all these poor

45:16.782 --> 45:18.782
people in the world and wanted
to help all the poor people,

45:18.780 --> 45:21.320
so they thought we should do
something about all these poor

45:21.320 --> 45:22.980
people,
and the answer was economic

45:22.981 --> 45:23.571
development.

45:23.570 --> 45:28.230
Economic development was
universally approved in America

45:28.228 --> 45:31.308
by everyone,
as either benevolent act by

45:31.311 --> 45:34.531
someone who considered
themselves liberal or by a

45:34.532 --> 45:38.292
self-serving anti-communist act
by someone who considered

45:38.291 --> 45:40.171
himself a conservative.

45:40.170 --> 45:45.720
Well, once the Coale/Hoover
paper came out and people

45:45.721 --> 45:50.121
started realizing the--
what was considered to be the

45:50.117 --> 45:53.547
obvious at that time,
it was very clear that family

45:53.545 --> 45:57.795
planning programs had to be a
part of economic development.

45:57.800 --> 46:00.840
That these countries just--with
these booming populations and

46:00.842 --> 46:03.432
there were televisions full of
stories of India,

46:03.429 --> 46:05.449
and how it was starving people
in India.

46:05.449 --> 46:08.159
China was kind of closed to us
at that time,

46:08.159 --> 46:10.989
but India was open,
but a desperate situation that

46:10.990 --> 46:14.400
was in India and India had quite
leftist governments and was

46:14.400 --> 46:16.540
India going to go communist,
etc.

46:16.539 --> 46:20.799
Both sides of the--the whole
political spectrum believed in

46:20.800 --> 46:25.430
economic aid to the developing
world and family planning aid.

46:25.429 --> 46:28.639
It turns out that George Bush,
the senior,

46:28.639 --> 46:31.019
the first George Bush
President, when he was a

46:31.021 --> 46:33.771
congressman was one of the
sponsors of the very first

46:33.773 --> 46:36.893
family planning bill,
not only for domestic family

46:36.889 --> 46:39.929
planning but also the
international aid for family

46:39.934 --> 46:40.684
planning.

46:40.679 --> 46:44.179
This was not a debatable issue,
everybody agreed with it,

46:44.179 --> 46:47.739
and it was really due to this
economic thesis by Coale and

46:47.742 --> 46:48.432
Hoover.

46:48.429 --> 46:51.459
You've read some of Ansley
Coale's stuff already.

46:51.460 --> 46:54.710
Now, however,
the economists keep working,

46:54.710 --> 47:18.010
the scholars keep going--what
they did is they looked cross

47:18.005 --> 47:33.265
nationally and tried to figure
out,

47:33.268 --> 47:39.138
is it really true that
population growth rate would

47:39.137 --> 47:42.657
affect GDP,
the growth of gross domestic

47:42.664 --> 47:45.334
product per capita,
it's basically per capita

47:45.329 --> 47:45.729
income.

47:45.730 --> 47:48.320
What did they find when they
got all the countries they could

47:48.317 --> 47:49.177
find in the world?

47:49.179 --> 47:52.629
Here's the growth rate and
here's per capita economic

47:52.632 --> 47:53.232
growth.

47:53.230 --> 47:56.450
What's the pattern?

47:56.449 --> 48:01.649
Zero, there is no pattern here,
so it looks like that this--it

48:01.646 --> 48:03.176
was meaningless.

48:03.179 --> 48:07.329
That in fact the Coale/Hoover
hypothesis was wrong,

48:07.327 --> 48:11.967
and however nice the theory
seemed, you just couldn't get

48:11.971 --> 48:14.461
empirical evidence for it.

48:14.460 --> 48:18.100
That was terribly important,
again a reversal,

48:18.099 --> 48:21.779
now the Reagan Administration
comes in and on the basis of

48:21.782 --> 48:26.802
information like that says,
economic population control is

48:26.797 --> 48:30.487
no benefit to an economy's
growth,

48:30.489 --> 48:33.089
and we, as conservatives,
are opposed to government

48:33.092 --> 48:35.542
intervention in the private
lives of people,

48:35.539 --> 48:39.339
so we're opposed to--we're not
going to give out the--

48:39.340 --> 48:43.140
anywhere near the level of
family planning aid that we used

48:43.141 --> 48:43.471
to.

48:43.469 --> 48:46.469
The United States went from a
big leader in funding family

48:46.474 --> 48:49.324
planning programs in the rest of
the world to trying to

48:49.320 --> 48:50.270
discourage it.

48:50.268 --> 48:53.428
We didn't drop to zero,
there were still programs that

48:53.427 --> 48:56.047
we funded and they were very
good by AID,

48:56.050 --> 48:58.800
but we were the main
discourager in the world,

48:58.800 --> 49:00.910
we didn't like this whole idea.

49:00.909 --> 49:06.429
What came up as--in opposition
to this,

49:06.429 --> 49:09.429
and there was a big World
Congress about population and

49:09.431 --> 49:13.361
development in Bucharest,
Romania at the time,

49:13.364 --> 49:20.494
and the kind of data that came
out in this period is they--

49:20.489 --> 49:25.069
they came out with the idea
that the way to get--

49:25.070 --> 49:27.980
that it is good to have
fertility down for a lot of

49:27.983 --> 49:31.013
reasons but the way to do it,
that the causality,

49:31.014 --> 49:34.764
the Coale/Hoover causality is a
reduction in population growth

49:34.757 --> 49:37.087
will lead to economic
development,

49:37.090 --> 49:42.570
that the idea of the reverse
causality that an increase in

49:42.570 --> 49:48.340
economic development will lead
to a decrease in fertility.

49:48.340 --> 49:53.610
The slogan that came out of
this Bucharest meeting of all

49:53.612 --> 49:57.092
the world leaders,
is that development was the

49:57.090 --> 49:59.550
best contraceptive,
that if you wanted to lower

49:59.550 --> 50:02.980
birth rates,
what you had to focus on was

50:02.980 --> 50:05.150
economic development.

50:05.150 --> 50:09.020
And that became the mantra for
the world and the developing

50:09.016 --> 50:10.946
countries bought into that.

50:10.949 --> 50:14.459
It was very interesting because
just at that time Romania,

50:14.460 --> 50:17.710
the host of this meeting,
was having the most extreme

50:17.710 --> 50:21.220
family planning program ever,
but in the opposite direction.

50:21.219 --> 50:24.639
They, at that time,
it was a Soviet block country

50:24.635 --> 50:27.335
that was doing poorly
economically,

50:27.340 --> 50:30.980
their birth rate was very low,
their mechanism of birth

50:30.978 --> 50:34.968
control was abortion;
4 out of 5 pregnancies were

50:34.972 --> 50:38.232
terminated by abortions in
Romania.

50:38.230 --> 50:42.000
For every one child-birth,
there were four abortions.

50:42.000 --> 50:45.240
Romania, not for economic
reasons, but for nationalist

50:45.237 --> 50:48.967
reasons, they wanted a bigger
stronger Romania so they clamped

50:48.965 --> 50:50.305
down tremendously.

50:50.309 --> 50:51.989
Abortion completely
de-legalized,

50:51.990 --> 50:54.250
you couldn't get contraceptives
anymore,

50:54.250 --> 50:59.800
and the end result was that the
birth rate temporarily fell but

50:59.797 --> 51:04.987
then the women established
networks of illegal abortion and

51:04.985 --> 51:10.085
gradually the birth rate rose
because they didn't have any

51:10.085 --> 51:12.915
means,
but very rapidly within a year

51:12.918 --> 51:15.918
or a two they established
illegal abortion networks and

51:15.922 --> 51:17.482
the birth rate came down.

51:17.480 --> 51:20.210
It never came down to its
original level and there's

51:20.210 --> 51:23.050
actually a fairly big total
effect of their policy.

51:23.050 --> 51:29.590
It was just the political
chicanery going on that here,

51:29.590 --> 51:32.630
Ceausescu, who was running
Romania as a very strong

51:32.630 --> 51:35.830
communist dictator,
was doing a very strong

51:35.827 --> 51:39.147
pronatalist family policy,
but saying no,

51:39.152 --> 51:42.542
the opposite won't work;
you have to go through economic

51:42.536 --> 51:43.156
development.

51:43.159 --> 51:49.729
Then people went to work on
that theory and here's the data,

51:49.730 --> 51:53.730
that in this period of time,
these are the countries with

51:53.731 --> 51:58.161
slow economic growth and their
population growth rate was about

51:58.164 --> 52:02.314
2.7% and here's the ones with
fast economic growth rate and

52:02.309 --> 52:04.969
their--
fast economic growth and

52:04.965 --> 52:08.415
they're the same in terms of
population growth.

52:08.420 --> 52:11.320
Here's your look some years
later and you have the same

52:11.317 --> 52:13.297
story,
those with slow economic

52:13.304 --> 52:17.254
growth, those with fast economic
growth have the same population

52:17.253 --> 52:17.883
growth.

52:17.880 --> 52:23.160
It is not true that development
itself acts as a contraceptive.

52:23.159 --> 52:26.059
You look at it,
you spin the data,

52:26.059 --> 52:30.849
the same data but differently,
you look at those countries

52:30.847 --> 52:35.297
which have slow population
growth which are these,

52:35.300 --> 52:37.520
and while it wasn't--or fast
population growth--

52:37.518 --> 52:40.688
and you ask,
is that affecting GDP?

52:40.690 --> 52:44.760
And you're not seeing a big
effect here in this time frame.

52:44.760 --> 52:49.470
But you are seeing a big time
effect in this time frame.

52:49.469 --> 52:51.599
Now something different is
going on,

52:51.599 --> 52:55.329
here those countries with slow
population growth are increasing

52:55.327 --> 52:57.767
economically,
those countries with fast

52:57.768 --> 53:00.548
population growth are decreasing
economically.

53:00.550 --> 53:02.670
The funny thing about this
graph, you say well it's the

53:02.670 --> 53:04.790
same data, how can you come to
opposite conclusions?

53:04.789 --> 53:07.099
It's not, the same data spun
differently.

53:07.099 --> 53:12.769
This is the population growth
rate in 1965 to 1980 and then

53:12.773 --> 53:18.843
the economic situation 25 years
later, 15 to 25 years later.

53:18.840 --> 53:22.700
So something it looks like
from--This is not wildly

53:22.695 --> 53:25.835
conclusive data,
but something about population

53:25.835 --> 53:29.125
growth,
much later, has an effect on

53:29.134 --> 53:31.334
your economic growth.

53:31.329 --> 53:35.589
That's what has now been
figured out to be exactly the

53:35.585 --> 53:40.235
really important relationship
between population growth and

53:40.242 --> 53:42.252
economic development.

53:42.250 --> 53:44.640
You've seen this graph many,
many times.

53:44.639 --> 53:47.799
This is the standard
demographic transition where the

53:47.797 --> 53:50.797
mortality rate,
the death rate falls first,

53:50.800 --> 53:55.120
then after some delay the birth
rate falls and your population

53:55.117 --> 53:59.507
growth rate is this period when
the birth rate is way above the

53:59.507 --> 54:00.637
death rate.

54:00.639 --> 54:05.089
Another aspect of that,
here's the same graph again up

54:05.090 --> 54:09.790
here, is that if you ask what
does the share working look

54:09.793 --> 54:10.553
like?

54:10.550 --> 54:12.430
How many of these people are
working?

54:12.429 --> 54:16.449
You have an idea called the
'dependency ratio' which is your

54:16.445 --> 54:19.365
number of workers,
divided by your number of

54:19.371 --> 54:22.231
children and your number of old
folks.

54:22.230 --> 54:25.480
Well in developing countries
the medical care is bad so you

54:25.476 --> 54:28.446
don't have--
you can almost ignore the old

54:28.447 --> 54:31.087
folks for quite a period of
time,

54:31.090 --> 54:33.230
so basically the workers
divided by the number of

54:33.228 --> 54:33.718
children.

54:33.719 --> 54:42.909
What happens during this period
is that as the fertility rate

54:42.905 --> 54:50.095
falls what happens is you have a
population--

54:50.099 --> 54:52.939
we've seen the population
pyramid for that with a number

54:52.938 --> 54:55.828
of workers in the middle and
then many more children than

54:55.829 --> 54:58.479
workers,
half again as many children as

54:58.480 --> 55:00.660
workers,
so each worker has to

55:00.659 --> 55:04.859
support--each person in working
age has to support 1.5 or 2

55:04.858 --> 55:07.028
children of children's age.

55:07.030 --> 55:10.140
Then you get this fantastic
fertility drop,

55:10.144 --> 55:13.934
as we saw in places like China,
where, in ten years,

55:13.929 --> 55:17.489
the fertility comes down,
and what happened?

55:17.489 --> 55:20.999
This is the big population of
people at that age,

55:20.998 --> 55:24.288
and there's no children coming
behind them.

55:24.289 --> 55:27.549
Kids are born,
you have a very high

55:27.547 --> 55:29.827
population,
kids are born,

55:29.833 --> 55:33.613
then all of a sudden the
population stops having children

55:33.606 --> 55:35.676
basically,
it drops tremendously,

55:35.679 --> 55:37.939
but you still have all these
children born.

55:37.940 --> 55:41.510
It takes 15,20 years for them
to get into working age,

55:41.510 --> 55:46.040
so once you drop your fertility
you see no effect then because

55:46.041 --> 55:50.201
you still have to support all
those children for the next

55:50.201 --> 55:51.391
15,20 years.

55:51.389 --> 55:55.149
It's only after delay of 15 to
20 years that you have this huge

55:55.146 --> 55:57.326
number of people in working
ages,

55:57.329 --> 56:02.129
very few children behind them,
and the ratio of workers to

56:02.128 --> 56:04.738
dependents becomes very good.

56:04.739 --> 56:07.909
This is the--the people inside
the snake.

56:07.909 --> 56:10.789
That's a takeoff on another
'you are here' graph that I

56:10.788 --> 56:13.878
showed you of the population
growth, anyway forget that.

56:13.880 --> 56:18.610
Here is--you've seen this for
China but here's for all of East

56:18.606 --> 56:22.946
Asia, this is the death rate and
the death rate is really

56:22.947 --> 56:25.037
basically down by 1970.

56:25.039 --> 56:28.519
I've showed you that for Egypt
and all around the world that

56:28.521 --> 56:31.951
the mortality rate comes down
fast and then doesn't make an

56:31.945 --> 56:34.125
awful lot of progress since
then.

56:34.130 --> 56:36.450
This is people aging,
so this is where we are now,

56:36.449 --> 56:39.889
about 2009, so this stuff is
all guessing about the future

56:39.887 --> 56:43.147
but basically since 1970 the
death rate has been pretty

56:43.146 --> 56:45.736
constant but the birth rate
comes down.

56:45.739 --> 56:48.909
This big drop in 1970s,
again this is all of East Asia

56:48.914 --> 56:52.754
but primarily what you're seeing
is China's big drop in the death

56:52.750 --> 56:55.010
rate,
and so population growth

56:55.010 --> 56:57.850
narrows, narrows down to almost
nothing.

56:57.849 --> 57:02.629
Presumably in the near future
the death rate will climb above

57:02.634 --> 57:03.994
the birth rate.

57:03.989 --> 57:07.709
In looking at age structure,
this is kind of a complicated

57:07.706 --> 57:09.726
graph, but they're very cute.

57:09.730 --> 57:13.330
This is Sub-Saharan Africa as a
comparison, this is an opposite

57:13.331 --> 57:14.031
situation.

57:14.030 --> 57:16.070
Here this is like a piece of a
pyramid;

57:16.070 --> 57:17.350
this is your age group.

57:17.349 --> 57:21.499
Here you have very few old
people, here you have--

57:21.500 --> 57:26.060
in 1950 this stripe is for the
year 1950 very few oldsters,

57:26.059 --> 57:29.809
this is your working age
population in here say from 20

57:29.806 --> 57:32.926
to 60 or whatever numbers you
want to put,

57:32.929 --> 57:35.869
and there's more children in
any age group than any of them.

57:35.869 --> 57:38.239
You've seen the population
pyramid like that.

57:38.239 --> 57:41.539
Now as time goes on,
in a place like Sub-Saharan

57:41.538 --> 57:45.678
Africa that does not go through
fertility transition is that

57:45.677 --> 57:50.377
this shape of more children than
oldsters just continues 1975,

57:50.380 --> 57:52.290
2000,2025.

57:52.289 --> 57:56.639
You begin to see the--they hope
again--This is where we are now;

57:56.639 --> 57:58.359
this is all guessing about the
future.

57:58.360 --> 58:04.300
Up to now that shape of more
children down here--stays

58:04.300 --> 58:10.020
unchanged and just the whole
population gets bigger,

58:10.016 --> 58:12.366
you've seen that.

58:12.369 --> 58:18.899
Now contrast that to East Asia,
which in 1950 had what looked

58:18.898 --> 58:24.768
like Sub-Saharan Africa:
many more children than people

58:24.773 --> 58:29.383
in working ages,
and again very few real old

58:29.382 --> 58:29.902
folk.

58:29.900 --> 58:34.750
Then time goes on but then you
start seeing funny things happen

58:34.746 --> 58:37.276
where--
anyway up there follow

58:37.275 --> 58:42.505
the--anywhere from 1975 and 2000
to the left and you see now the

58:42.507 --> 58:45.577
number of children starts
dipping.

58:45.579 --> 58:52.069
Up at the top it dips a lot and
the bulge of children becomes a

58:52.065 --> 58:56.585
bulge in the working ages,
so you may have a lot of people

58:56.585 --> 58:59.795
in working ages,
very few children,

58:59.804 --> 59:05.474
no oldsters yet,
so you don't have anybody that

59:05.465 --> 59:07.775
you have to support.

59:07.780 --> 59:11.450
What happens is,
you calculate this dependency

59:11.447 --> 59:13.957
ratio;
this is the number of working

59:13.958 --> 59:17.678
age people to non-working age
and look what happens in East

59:17.677 --> 59:18.187
Asia.

59:18.190 --> 59:23.550
Here's the fertility decline,
as soon as ten years have

59:23.554 --> 59:27.834
passed boom, boom,
boom the ratio gets to be

59:27.827 --> 59:29.217
wonderful.

59:29.219 --> 59:32.679
Again we are--at this level
we're somewhere near the peak,

59:32.682 --> 59:36.452
the rest of this is guesswork
off to the right of that line.

59:36.449 --> 59:40.339
The dependency ratio just gets
better and better for East Asia

59:40.335 --> 59:44.155
and this has tremendous--this is
what has tremendous economic

59:44.157 --> 59:45.237
consequences.

59:45.239 --> 59:49.629
Here is the difference in the
economic growth per year

59:49.634 --> 59:54.694
over--now this is a 25 year time
period we're not looking at a

59:54.693 --> 59:56.023
single year.

59:56.018 --> 1:00:00.488
It's tremendously bigger than a
place like Africa which has not

1:00:00.489 --> 1:00:02.219
reduced its fertility.

1:00:02.219 --> 1:00:05.529
We say this is based a lot on
savings and you'll have a

1:00:05.532 --> 1:00:09.152
reading about this that you
won't like because it's somewhat

1:00:09.152 --> 1:00:14.072
complicated economics,
but look at the savings rate in

1:00:14.065 --> 1:00:15.215
East Asia.

1:00:15.219 --> 1:00:18.949
It goes from 1955,
way before any of this,

1:00:18.945 --> 1:00:23.485
14% to 35%, it goes up like a
factor of 2.5% or 3%;

1:00:23.489 --> 1:00:25.489
tremendous saving.

1:00:25.489 --> 1:00:28.129
Investment then,
since you're saving,

1:00:28.130 --> 1:00:32.090
you can have an incredible
increase in investment which

1:00:32.094 --> 1:00:35.034
builds up your country
economically.

1:00:35.030 --> 1:00:37.840
Now the catch in this,
that savings equals investment,

1:00:37.840 --> 1:00:41.000
you can also borrow money from
abroad and so that's what they

1:00:41.001 --> 1:00:42.901
call the current account
balance,

1:00:42.900 --> 1:00:48.020
how much money you can attract
from abroad to get developed.

1:00:48.018 --> 1:00:50.828
We, in the West,
believe that it was Western

1:00:50.829 --> 1:00:54.559
capital that went into China,
allowed them to build up and

1:00:54.556 --> 1:00:56.186
did wonderful things.

1:00:56.190 --> 1:00:59.340
But no, it was never huge,
this was a 4.8--

1:00:59.340 --> 1:01:03.560
less than 5% was the
current--now that's a minus sign

1:01:03.559 --> 1:01:07.219
in front of it,
that's what they're importing,

1:01:07.222 --> 1:01:11.192
but very rapidly by 1980 they
start to be a net capital

1:01:11.188 --> 1:01:12.068
exporter.

1:01:12.070 --> 1:01:15.910
That these poor countries have
an excess of capital and they

1:01:15.907 --> 1:01:19.247
now export to us,
so the development of China in

1:01:19.246 --> 1:01:21.646
particular,
East Asia in general,

1:01:21.650 --> 1:01:24.910
is not as you would think a
result of West--

1:01:24.909 --> 1:01:26.449
infusion of Western capital.

1:01:26.449 --> 1:01:29.549
I mean some of the early
special cases Hong Kong and so

1:01:29.554 --> 1:01:32.854
forth clearly were,
but the main part of China,

1:01:32.851 --> 1:01:36.911
they produced their own capital
because the sequence of

1:01:36.914 --> 1:01:41.754
causality is fertility decline,
you wait 15,20 years all those

1:01:41.750 --> 1:01:43.670
kids grow up,
there's none behind them,

1:01:43.672 --> 1:01:45.492
they all become workers,
you start--you don't have

1:01:45.487 --> 1:01:47.297
children to support,
you start saving,

1:01:47.295 --> 1:01:50.135
those savings become
investments and you become one

1:01:50.137 --> 1:01:53.657
of the economic miracles or one
of the tigers of the world.

1:01:53.659 --> 1:01:59.009
Now until recently,
this theory is about 10 or 15

1:01:59.010 --> 1:02:01.840
years old,
we're gradually coming to

1:02:01.842 --> 1:02:04.222
understand this idea about the
economics,

1:02:04.219 --> 1:02:06.479
and we start seeing something
special about Asia.

1:02:06.480 --> 1:02:10.040
That, yes, this was important,
but also the culture of Asia,

1:02:10.039 --> 1:02:20.319
the propensity to saving--the
savings--

1:02:20.320 --> 1:02:23.060
when China was poor the savings
were not fabulous,

1:02:23.059 --> 1:02:25.699
they are fabulous now,
but they weren't then,

1:02:25.699 --> 1:02:27.489
that's a result of being rich.

1:02:27.489 --> 1:02:31.039
It was thought there was
something special about East

1:02:31.039 --> 1:02:33.619
Asia and China,
in particular,

1:02:33.623 --> 1:02:37.883
something cultural,
and that when you did the

1:02:37.876 --> 1:02:42.126
econometrics you had to have one
set of--

1:02:42.130 --> 1:02:45.150
you could use the same amount,
you have one set of parameters

1:02:45.150 --> 1:02:47.870
for Asia and a completely
different set for Africa,

1:02:47.869 --> 1:02:51.289
and another set for Europe when
you don't consider the

1:02:51.289 --> 1:02:52.839
demographic situation.

1:02:52.840 --> 1:02:56.290
Once you put in the demographic
situation we now know that the

1:02:56.291 --> 1:02:58.331
same model fits around the
world,

1:02:58.329 --> 1:03:01.329
and it looks like that this
dependency burden is the key

1:03:01.333 --> 1:03:01.773
thing.

1:03:01.768 --> 1:03:04.698
One of the things that first
clued us into this was Ireland.

1:03:04.699 --> 1:03:08.739
Ireland, which is a totally
different culture than China,

1:03:08.739 --> 1:03:11.889
had this--it was totally
Catholic and they really

1:03:11.891 --> 1:03:15.241
believed that they used
Catholicism as fighting--

1:03:15.239 --> 1:03:18.219
as a mode of fighting the
British and so they had a very

1:03:18.215 --> 1:03:21.405
high birth rate and they didn't
have legal contraception.

1:03:21.409 --> 1:03:24.869
In 1980 the government
legalized contraception.

1:03:24.869 --> 1:03:28.079
Here's the birth rate,
just takes a drive and then

1:03:28.083 --> 1:03:30.843
after a little blip,
continues downward.

1:03:30.840 --> 1:03:33.440
Again, it's the government
action of legalizing

1:03:33.440 --> 1:03:36.100
contraception and the Irish
birth rate drops.

1:03:36.099 --> 1:03:38.729
The death rate,
again, is slowly going down and

1:03:38.726 --> 1:03:42.096
then sort of not really going
anywhere in this period and so

1:03:42.097 --> 1:03:44.437
the population growth rate
decreases.

1:03:44.440 --> 1:03:48.210
Again, this is the same thing,
you get the same effect that

1:03:48.211 --> 1:03:50.881
Ireland's population looks like
China,

1:03:50.880 --> 1:03:52.340
on a smaller scale,
it's not anywhere near as big

1:03:52.344 --> 1:03:53.774
as China,
but again, you have an

1:03:53.766 --> 1:03:55.586
underdeveloped country looking
thing.

1:03:55.590 --> 1:03:59.160
There was a lot more children
than middle--than workers or old

1:03:59.161 --> 1:04:02.791
people and then this continues
going up until you start getting

1:04:02.793 --> 1:04:03.793
this decline.

1:04:03.789 --> 1:04:07.019
Now in this modern period
currently there's a lot more

1:04:07.023 --> 1:04:10.563
workers than there are either
children or old people so the

1:04:10.561 --> 1:04:12.881
dependency burden looks real
good.

1:04:12.880 --> 1:04:16.180
This is the graph of that.

1:04:16.179 --> 1:04:19.439
The purple curve on the bottom
is Sub-Saharan Africa which

1:04:19.438 --> 1:04:22.408
again up--just consider what's
up to the line because

1:04:22.411 --> 1:04:24.301
everything else is guesswork.

1:04:24.300 --> 1:04:28.630
Look, here the black is East
Asia and the green is Ireland,

1:04:28.626 --> 1:04:30.636
looks very, very similar.

1:04:30.639 --> 1:04:35.759
Guess what the result is,
here's where they legalized

1:04:35.755 --> 1:04:39.985
birth control,
boom the economic growth rate

1:04:39.985 --> 1:04:44.505
just booms right up ten or so
years later.

1:04:44.510 --> 1:04:50.910
Now comparing--starting to
compare this to India,

1:04:50.914 --> 1:04:55.724
here is China's growth per
capita.

1:04:55.719 --> 1:05:00.159
In 1960, China was poorer than
India by a good bit,

1:05:00.159 --> 1:05:02.449
this is per capita income,
the red is China,

1:05:02.449 --> 1:05:04.639
the blue is India,
1960 they're poorer,

1:05:04.639 --> 1:05:06.569
1970 they're poorer,
and 1980 they're poorer.

1:05:06.570 --> 1:05:09.560
Wan, Xi, Shao,
the later, longer,

1:05:09.557 --> 1:05:15.347
fewer, the fertility drop is in
this period and it starts going

1:05:15.349 --> 1:05:19.739
and then China takes off and
exceeds India.

1:05:19.739 --> 1:05:23.329
It's not due to the communist
government or a good government

1:05:23.331 --> 1:05:27.051
because the communist revolution
is way out here and for a long

1:05:27.045 --> 1:05:29.975
time it was not doing any better
than India,

1:05:29.980 --> 1:05:33.740
but the main event that
happened then is the drop in

1:05:33.744 --> 1:05:34.634
fertility.

1:05:34.630 --> 1:05:38.120
This shows you the difference
in China's fertility and India's

1:05:38.115 --> 1:05:41.505
fertility,
but here's this Chinese drop

1:05:41.512 --> 1:05:46.632
starting in 1970s and India
slowly catching up but it's

1:05:46.626 --> 1:05:49.276
taking its time about it.

1:05:49.280 --> 1:05:54.540
This is the dependency burden,
here again, the ratio of

1:05:54.541 --> 1:05:59.221
workers to non-workers really
improving in China,

1:05:59.219 --> 1:06:03.409
not going anywhere particular
in India.

1:06:03.409 --> 1:06:07.019
\When you compare it to
Sub-Saharan Africa--again so

1:06:07.018 --> 1:06:11.188
we're comparing different parts
of the world to show you the

1:06:11.192 --> 1:06:12.822
story--is the same.

1:06:12.820 --> 1:06:16.180
This is the birth rate,
the black, and the death rate

1:06:16.175 --> 1:06:18.625
so a huge and continuing
population;

1:06:18.630 --> 1:06:24.410
growth rate again up to the
line, this is guesswork out here

1:06:24.409 --> 1:06:27.799
and here is--
again you've seen this before,

1:06:27.804 --> 1:06:32.684
this is China's--
East Asia's dependent ratio

1:06:32.677 --> 1:06:35.567
workers to children.

1:06:35.570 --> 1:06:38.730
This is Africa,
there is a huge difference

1:06:38.731 --> 1:06:39.581
going on.

1:06:39.579 --> 1:06:46.049
This is the situation--in
Sub-Saharan Africa the working

1:06:46.050 --> 1:06:50.050
age population has gone up 2.6%.

1:06:50.050 --> 1:06:53.420
Even if you can keep all those
people employed when the

1:06:53.422 --> 1:06:56.802
dependent population goes up
2.7% you're not making any

1:06:56.797 --> 1:06:57.607
progress.

1:06:57.610 --> 1:07:00.590
Whereas in East Asia,
still a significant dependent

1:07:00.594 --> 1:07:02.574
population,
they haven't stopped having

1:07:02.565 --> 1:07:05.325
children altogether,
but the working age population

1:07:05.333 --> 1:07:09.023
is growing half again as fast as
the dependent population,

1:07:09.018 --> 1:07:12.678
that difference is what one,
makes you rich and two,

1:07:12.679 --> 1:07:17.049
makes you be rich enough to
save and invest and develop your

1:07:17.048 --> 1:07:17.788
country.

1:07:17.789 --> 1:07:22.779
You've again seen this graph,
the difference between East

1:07:22.784 --> 1:07:24.394
Asia and Africa.

1:07:24.389 --> 1:07:33.009
That is the main idea that I
wanted to get for you.

1:07:33.010 --> 1:07:36.020
I have to--by the way on your
schedule this lecture was

1:07:36.023 --> 1:07:38.203
supposed to be given by David
Bloom,

1:07:38.199 --> 1:07:40.259
who's a professor at Harvard,
and one of the guys who did a

1:07:40.262 --> 1:07:40.942
lot of this work.

1:07:40.940 --> 1:07:44.300
He wasn't able to come so I
used this--he came in the last

1:07:44.300 --> 1:07:47.660
time I gave this class and I
used a lot of the slides that

1:07:47.659 --> 1:07:49.369
are David Bloom's slides.

1:07:49.369 --> 1:07:56.039
He's responsible for a fair
chunk of this work.

1:07:56.039 --> 1:08:05.299
The end of this story is that,
again,

1:08:05.300 --> 1:08:08.800
we talked about when--a long
time ago when I describe

1:08:08.804 --> 1:08:11.424
Algeria's--
how much Algeria has gotten

1:08:11.416 --> 1:08:15.336
their fertility down but their
population is still growing and

1:08:15.338 --> 1:08:19.008
they haven't been able to take
advantage of a reduction in

1:08:19.005 --> 1:08:19.965
fertility.

1:08:19.970 --> 1:08:23.490
The same thing happens with
these dependency burden issues,

1:08:23.488 --> 1:08:27.408
because you first have a lot
more children than workers,

1:08:27.408 --> 1:08:31.518
than you stop having children,
and that bulge grows and you

1:08:31.516 --> 1:08:34.276
get a lot more workers than
children.

1:08:34.279 --> 1:08:38.049
Then those workers start to age
as the population decreases and

1:08:38.047 --> 1:08:40.497
levels out,
so now you have the reverse

1:08:40.497 --> 1:08:43.987
situation of a small number of
workers and a large number of

1:08:43.990 --> 1:08:44.820
old people.

1:08:44.819 --> 1:08:50.589
Always in dependency burden you
should add and old people and as

1:08:50.586 --> 1:08:54.326
your fertility goes does,
your number of children goes

1:08:54.327 --> 1:08:56.007
down, your number of oldsters
goes up,

1:08:56.010 --> 1:09:00.380
so it's not as bad--it's not as
extreme a change as possible.

1:09:00.380 --> 1:09:03.950
This would seem to be
called--this is called the

1:09:03.952 --> 1:09:07.452
demographic dividend,
or the demographic bonus,

1:09:07.448 --> 1:09:08.968
this phenomenon.

1:09:08.970 --> 1:09:13.170
There's a time period when you
can make great economic progress

1:09:13.172 --> 1:09:17.242
and then your people get old and
a lot of people believe that

1:09:17.239 --> 1:09:20.019
Japan is in that situation right
now.

1:09:20.020 --> 1:09:23.780
They have a very low birth rate
and the number of old people is

1:09:23.783 --> 1:09:25.793
rising,
and whereas in the past,

1:09:25.789 --> 1:09:29.169
old people cost almost nothing
because just a little bit of

1:09:29.173 --> 1:09:30.933
food,
they didn't eat much,

1:09:30.930 --> 1:09:34.360
but now with medical costs,
old people require lots of

1:09:34.364 --> 1:09:37.574
money and in the past children
were expensive,

1:09:37.569 --> 1:09:40.289
old people were cheap,
now its reversed.

1:09:40.288 --> 1:09:43.178
The things that children use,
clothing comes from China,

1:09:43.177 --> 1:09:45.437
it's very cheap,
food is comparatively cheap

1:09:45.436 --> 1:09:46.536
around the world.

1:09:46.538 --> 1:09:48.648
I mean forget the last half
year or something.

1:09:48.649 --> 1:09:53.479
Children used to be
cheap--children used to be

1:09:53.480 --> 1:09:56.190
expensive;
they're now getting cheaper,

1:09:56.189 --> 1:09:58.169
old people are getting very
expensive.

1:09:58.170 --> 1:10:02.290
Now the worry is that any
country that goes through a slow

1:10:02.287 --> 1:10:06.547
demographic change and doesn't
arrange its economics and its

1:10:06.551 --> 1:10:10.511
politics to employ the people,
because it doesn't do you any

1:10:10.514 --> 1:10:13.234
good if you have a lot of
workers if they don't have any

1:10:13.234 --> 1:10:13.634
jobs.

1:10:13.630 --> 1:10:15.710
Latin America,
for instance,

1:10:15.712 --> 1:10:19.492
which is kind of an in between
situation--was very

1:10:19.490 --> 1:10:21.800
protectionist,
and nationalist,

1:10:21.804 --> 1:10:24.354
and I can tell you a story.

1:10:24.350 --> 1:10:27.490
Bolivia, next door to Peru,
and had so much conflict with

1:10:27.493 --> 1:10:30.813
Peru that they didn't want to
form a common market with Peru

1:10:30.805 --> 1:10:34.115
and they'd rather buy plastic
buckets from Brooklyn and rice

1:10:34.118 --> 1:10:37.198
from China than they would to
trade with their next door

1:10:37.204 --> 1:10:38.164
neighbor.

1:10:38.158 --> 1:10:41.488
The story is that the
demographic situation seems to

1:10:41.490 --> 1:10:45.480
be one of the major initiators
of these economic miracles that

1:10:45.475 --> 1:10:49.325
have been happening around the
world but they can't do it by

1:10:49.328 --> 1:10:50.438
themselves.

1:10:50.439 --> 1:10:54.279
There has to be the economic
and political substructure to

1:10:54.279 --> 1:10:56.929
employ these people,
to set them to work,

1:10:56.926 --> 1:10:59.556
and then a country gets rich
and when it gets--

1:10:59.560 --> 1:11:02.260
once it gets rich it gets the
capital that it can keep it

1:11:02.262 --> 1:11:02.652
going.

1:11:02.649 --> 1:11:05.179
That you now have enough money
to invest and keep going even

1:11:05.175 --> 1:11:07.525
though you may have to spend a
lot on the old folks,

1:11:07.529 --> 1:11:11.439
you may be rich enough to
generate the excess wealth to do

1:11:11.439 --> 1:11:11.919
that.

1:11:11.920 --> 1:11:18.830
Next time we'll talk about
economics and the family,

1:11:18.828 --> 1:11:22.638
this has been macro economics,
how economics works on a whole

1:11:22.644 --> 1:11:25.524
region wide thing,
but what its effect is on a

1:11:25.521 --> 1:11:25.981
family.

1:11:25.979 --> 1:11:31.999