Earlier quoted context omitted.
The peak has been moved up by decades in the last year. The 2080 figure is from Nov 2023 [1], before Trump administration cuts in immigration. The Jan 2026 CBO report predicted a peak of 2056 [2]; a similar Institute for Family Studies report from July 2026 [3] predicts a peak in 2054. The delta is entirely because of immigration. If you count only natural fertility (births - deaths), population growth nearly went ne…
Fair point, although I think it’s pretty hard to predict what immigration will look like over the next few decades. But yes, the peak could come in a couple decades, not a half century, so stipulated. Does that meaningfully change whether capitalism today is facing a shrinking market? Any thoughts on the second part of my comment?
It is theoretically possible to grow per-capita GDP without growing population, and this would normally be seen as better from a consumer perspective. There are big questions about what that would actually mean, though, and the game theory is all screwed up.
Per-capita GDP is, literally speaking, the value of all the economic transactions needed to support a person. In general higher per-capita GDP is seen as better, because if those transactions weren't beneficial, why would you make them?
But this is not always the case when you look at society in aggregate and then compare to individual welfare. To see why, consider a small society [1] where everybody owns their own plot of land, farms it, generates enough food to feed their family, and only trades occasionally because most of what they need day-to-day can be produced with their own labor. Such a society would have an extremely low GDP, because most of the work done consists of internal transactions that aren't counted. We pay rent to our landlord, who pays 10% of that to their property manager, who periodically lays out a few thousand to contractors to fix things, all of which is counted in GDP; but somebody who just owns their house outright and fixes it themselves pays zero, and zero gets counted as GDP. We pay a few hundred bucks at the grocery store, who then pays the distributor, who pays the farmers, who distributes wages to their laborers and rents their tractor from John Deere and pays Monsanto for genetically-modified seeds that can't reproduce because you gotta have them coming back for more; but the person who grows or gathers their own food pays nothing, and nothing is counted in GDP. Apparently it didn't take a whole lot of labor either; contemporary hunter-gatherer tribes spend about 12-19 hours/week laboring to obtain food and shelter [2], while I'd bet that most of today's urban poor spend significantly more than that.
The normal counterpoint [3] to this is that today's urban poor (let alone wealthy) aren't working just for food and shelter, there's a whole lot of technological development thrown in that just wouldn't have happened without capitalism. So take the family on Medicaid that's working 2 jobs just to survive in a tiny beaten-down rented apartment. They also have clean water, and access to vaccines, and antibiotics when their kid gets sick, and a car that lets them go to the beach on weekends, and they can store food for the winter in a refrigerator, and they sit on a toilet to poop instead of burying it in a hole, and many other things we take for granted. They might even have a TV and a cell-phone and access to millions of hours of entertainment, since those have gotten so cheap relative to rent. It's just not directly comparable to a hunter-gatherer lifestyle.
But the counter to the counterpoint is that most of those technological innovations have depended upon an increasing population together with capitalism. The actual mechanism here is that capitalism commoditizes goods where there is an oversupply, making it unprofitable to continue producing them. That means that young people entering the workforce for the first time are strongly disincentivized from being say a farmer or a paperboy or a domestic servant, and instead are incentivized to move up-market to innovation industries like software engineering or biotech. Capitalism is the ratchet that keeps people inventing new things, but the inventing (and even the maintenance of these new technologies) is done by actual people. If there are not enough people, than folks who would otherwise go into technological industries will have to work instead at the basic tasks of keeping society running, like how Matthew McConaughey's character in Interstellar [4] was a trained NASA pilot who is growing food on a farm because that is what society needs.
This has actually happened in several occasions in history, eg. during the fall of the Roman Empire we saw increasing de-specialization as the urban elite class fled Rome and ended up working the fields during the Dark Ages, while during Crisis of the Late Middle Ages, you had the younger sons of the nobility returning to productive work as guild artisans (and ushering in the Rennaissance) as the peasantry was largely killed off by Black Death and the Hundred Years War and the Wars of the Roses.
The second part of my response is about game theory, and specifically about the actual decision to invest that financiers and entrepreneurs make when they hear a new idea. When the market is rapidly expanding, this is usually a no-brainer: capture it or somebody else will. But when the market is contracting, you usually do not see further investment. Going back to the meaning of per-capita GDP expanding without population growing, it implies that some new and dramatically better way of doing something will come out, compete with the existing alternatives, and convince consumers to spend significantly more.
This is a hard battle! Typically tech startups win when there is no alternative at all for the desired activity, or at least when they are orders of magnitude better than the alternative. A few percentage points better doesn't cut it; its not noticeable enough for consumers to switch.
And investors know this, which is why it's essentially impossible to get a startup funded by pitching "I'm going to be like Comcast but cheaper." Everybody knows that ISPs in America are overpriced, but a price war means a contracting market instead of an expanding one, and battles over contracting markets are vicious. Much better to fund "I'm going to make an AI that runs businesses automatically", which is probably bullshit but it's bullshit that has very little competition and a huge total addressable market.
The incentive in a contracting market isn't to invest heavily to prove yourself better than the competition. It's to milk whatever assets you have for as much cash as possible before they wink out of existence, and then take the money and run. A lot of the prosocial behavior that capitalism has resulted in was heavily conditioned on expanding markets, expanding population, and expanding payoffs for innovation. When population collapses, those incentives reverse.
[1] like the Parable of the Mexican Fisherman: https://aliabdaal.com/newsletter/the-parable-of-the-mexican-...
[2] https://web.cs.ucdavis.edu/~rogaway/classes/188/materials/di...
[3] https://francismead.com/2015/06/06/agriculture-humanitys-wor...