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September 26, 2004

Will Hutton on Population.

Will Hutton in the Observer seems to stray a little from the party line on population and taxation:

For Italy is suffering a baby bust; in 2004, its population is starting to decline. Even if Italian men and women start to form more families earlier and have more babies in the immediate future, Italy's population is set to drop from today's 58 million to some 44 million by 2050. If there is no recovery in the birth rate, its population will fall even further.

OK, so far so true.
In Italy, there is an urgent debate about why the birth rate is so low. The Vatican's grip on the country's culture and mores remains fierce, even if attendance at church is in headlong decline; guilt-ridden Italians have children only when they marry. Just 10 per cent of births are outside marriage; in Britain, it is 41 per cent.

Beg pardon? The Catholic Church insists that the following things are sinful and not to be undertaken by any Catholic: abortion, contraception, any sexual act that does not lead to the possibility of conception. Now, certain of these may be honoured more in the breach but to blame a Church that teaches the above for underpopulation seems a bit rich.
While first-time buyers in Britain can expect to borrow as much 100 per cent of the price of their first house or flat, and pay less than 2 per cent in fees and tax, Italian first-time buyers are lucky if they can borrow two-thirds of the value of their first house - and pay an extraordinary 10 per cent in fees and tax. Young Italians have to live at home and save, because their banking system won't take risks.
The best route out of Italy's birth-rate crisis would be, say, Royal Bank of Scotland or HBOS buying a chunk of the Italian banking system and importing the British approach to mortgage lending, while the Italian government slashed taxes and lawyers' fees on house purchase.

I agree with the deregulation bit but aren't you straying a little off the reservation on the tax bit Mr Hutton? Want to go and have a little chat with Mr Brown about Stamp Tax perhaps?
Referring to Britain it becomes, of course, all the fault of those reactionaries who run small businesses:
When your very civilisation is under threat, small firms complaining about the cost of maternity and paternity leave so their staff can have children are given short shrift. It is blatantly obvious that business is part of the national community and has to contribute to the common good or else it goes down the pan with the rest of society.

A little word for Will's shell-like. Over the past decades when we have been discussing how to limit or curtail growth in population in Third World countries the mantra has been that we must both provide family planning services and empower women. OK, let us take that statement at face value. Now, apparently, we need to increase the fertility rate. If it works one way it should work the other: we need to restrict and limit access to birth control and reduce the empowerment of women.
No, I don't agree with that as a desirable road to go down either, I'm only applying the logic as we've been force-fed it.
A further small appeal to empiricism (something of a shock to intellectuals I know).
Italy does indeed have a very low fertility rate, 1.26 children per woman. The famously family friendly Sweden, with years of paid maternal and paternal leave, universal child-care and all the rest, has one of 1.54. So far, score one for Mr Hutton. The family unfriendly UK has one of 1.65. Perhaps that is, as he says, due to immigration. Yet Sweden has a higher non-native population (5.4% to 4.0%) than does the UK. Ah, not looking so good now is it? Then, of course, we come to the US, that horrible country where everyone works as an employee at will, where anything more than a couple of weeks to get over the stitches is regarded as malingering after birth, where people work longer and more family unfriendly hours than elsewhere, with shorter holidays and, in general, all the things that we are told militate against having children. Umm, that's why a fertility rate of 2.07 then eh?
Methinks this analysis needs a little more fact and a little less pontification Mr Hutton.

September 26, 2004 in Economics | Permalink


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