Jul 2, 2019

Axios Future

By Bryan Walsh
Bryan Walsh

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Today's Smart Brevity count: 1,018 words, a <4 minute read.

What else should we write about this summer? Hit reply to this email or message me at steve@axios.com, Kaveh Waddell at kaveh@axios.com and Erica Pandey at erica@axios.com.

Okay, let's start with ...

1 big thing: The U.S.-China long game

Illustration: Aïda Amer/Axios

While embroiled in the most vivid display of great power rivalry since the Cold War, the U.S. and China are both also battling a largely invisible force — relentlessly unfavorable demographics that are sapping their long-term economic vitality.

  • Driving the news: As we have reported, the global population as a whole is aging and shrinking, but the trend is striking China especially hard just as it challenges the U.S. for long-term global primacy, according to experts and a number of recent reports.

The big picture: For four decades, China has carried out one of the longest, fastest and biggest economic transformations in history. Integral to China's miracle has been its 1-child policy, which has constrained the size of its bulging population. But demographic experts say that even though 2 children per family are now permitted, the policy has baked in a dire midcentury future for China.

So dramatic are the unfolding trends that they will swamp geopolitics and make China's rise much less certain, argues Nicholas Eberstadt, a demographic expert at the American Enterprise Institute.

  • China's working-age population has been shrinking since 2014, and it will lose at least 100 million people by 2040, Eberstadt says.
  • At the same time, the elderly population is exploding in size. By 2050, more than one-third of the population — 487 million people — will be over 60 years old and in need of public support.

The U.S. faces similar demographic problems, including a fertility rate of just 1.7. But they are not as grave as China's since, historically speaking, the U.S. is much more open to immigration. The American working age population is forecast to grow about 10% by 2040.

  • Conversely, China is neither willing to absorb foreigners in large numbers nor having enough children: Fertility has been below the 2.1-per-couple replacement rate since the 1990s.
  • Chinese fertility averaged just 1.18 between 2010 and 2018, according to a paper earlier this year by Yi Fuxian, a professor at the University of Wisconsin-Madison.
  • In another paper, Yi and a co-author argued that the Chinese population actually contracted last year, much earlier than the 2027–2029 inflection point forecast by most experts.

Put together, the trends the shrinking, aging and low fertility of the population — will overwhelm the Chinese economy, Eberstadt said. "The age of heroic economic growth is over."

There are steps the Chinese can take: Beijing is already investing in industrial robots at a dizzying pace, and Brad Setser, an economist with the Council on Foreign Relations, said China can raise the retirement age and allow more internal migration by workers from rural areas. "With per capita GDP still only a fraction of U.S. levels, China also still has scope for catch up growth."

But Wang Feng, a professor at the University of California at Irvine, said the demographics ultimately threaten the government's political hold because it will no longer be able to afford social payments to the public.

  • "By our estimates, public spending on basic social welfare provisions, education, health care and pensions, will eat up the entire government fiscal revenue, as its current share of GDP, in the coming decades," Feng tells Axios.

Go deeper: Why population will drive geopolitics

2. Sign of the times

On Oberlin's campus. Photo: Getty

A high-profile dispute between Oberlin College and a local bakery over accusations of racial profiling and libel is emerging as a microcosm of a larger national debate over how political polarization is upending the country, writes Erica.

Background: In 2016, a black student was caught shoplifting from Gibson's Bakery, after which the bakery owner's son, who is white, reportedly put the student in a chokehold. That sparked protests in the small town.

  • Students gathered outside the shop to demonstrate against what they called a history of racism and racial profiling at Gibson's.
  • Then Gibson's sued Oberlin, claiming that the college defamed the shopkeepers and disrupted business.
  • As a result, the jury ruled that Oberlin owes Gibson's $44 million in damages. On Friday, a judge lowered it to $25 million.

Why it matters: Oberlin College president Carmen Ambar said the bakery would likely suffer a couple million dollars of damage over a few decades, and she questioned whether the steep penalty was reasonable.

  • But the issues at stake are much deeper.
  • This small-town conflict between students and local residents is a crystallization of national debates around race relations and the limits of free speech.
  • Those on the right are viewing the court's decision as "everything that's right with the country," and those on the left see it as "everything that's wrong with the country," Ambar said.

Ambar said a decision whether to appeal has not been made.

Neither the Gibsons nor Lee Plakas, their lawyer, returned calls seeking comment.

3. The new pirate haven

Piracy exercise off Nigeria's coast, March 2019. Photo: Pius Utomi Ekpei/AFP/Getty

Until a few years ago, piracy was such a menace in East Africa that Hollywood cast Tom Hanks in a movie about it. No longer: Now Somalia — the former epicenter of such trouble — is among the safest coastlines around (albeit with most of the world's major navies on patrol).

Driving the news: In its place, pirates are now striking West Africa, the new oasis for oceangoing theft, the Economist reports.

  • 30 pirate attacks have been reported this year so far off of West Africa, more than the whole of 2014, according to the International Maritime Bureau, per the Economist. That's a slower pace than 2018 (when there were 72 for the year as a whole), but the year isn't quite over yet.
  • There were an average of just 3 per year from 2014 to 2018 off of Somalia.
4. Worthy of your time

Illustration: Aïda Amer/Axios

About that Iran standoff (Megan Rose, Robert Faturechi, T. Christian Miller — ProPublica)

Paying ransom (Joe Uchill — Axios)

A very nice generation (Kevin Drum — Mother Jones) (h/t Azeem Azhar)

Education deserts (Adam Harris — The Atlantic)

Little Mars, in Utah (David Kelly — LA Times)

5. 1 lost thing: Deciphering ancient languages
Linear A. Photo: CM Dixon/Print Collector/Getty

One of the great enduring mysteries is what is said in "Linear A," a bit of writing scratched into a stone discovered on Crete in 1886 by British archaeologist Arthur Evans (see above).

What's happening: It's been 66 years since Michael Ventris, an English architect relying on amateur wits, deciphered "Linear B," the other ancient script scratched into Evans' stone. But until today, no one has cracked Linear A.

Now, a joint team from MIT and the Google AI Lab may be in a position to take a new stab at it, reports MIT Technology Review. Already, the MIT-Google team has used a machine learning system to independently decipher Linear B.

Given that AI never tires, the Tech Review usefully suggests how the indefatigable MIT-Google system might succeed: "simply attempt to decipher it into every language for which machine translation already operates."

Bryan Walsh