One of the main draws of the Austrian School of economics, at least for me, is that all its insights are grounded in real happenings; the school’s entire body of economic literature is meant to explain tangible things that actually happen. Whereas other schools of economics focus on some ethereal monolith known as “the economy”—a mystical being whose forces and wiles can only be divined through Cartesian coordinate planes—the Austrians study the discrete actions taken by living people that form the economy.
Many academics, policymakers, and commentators find the Austrian focus on mundane real-world events to be confusing at best and useless at worst, but they are mistaken. Many non-Austrians—having detached themselves from real-world events—often do not comprehend why man acts the way he does. This is illustrated most clearly by the increasingly popular pronatalist movement. Many pronatalists struggle with questions regarding the purpose of production and economic activity, and this is most clearly exemplified in the writings of the prominent pronatalist Lyman Stone, the “senior fellow and director of the Pronatalism Initiative at the Institute of Family Studies.”
The Pronatalist Economic Argument and its Flaws
While there are many different factions of pronatalists, there are only a few prominent arguments, and for the purposes of this article, only the economic arguments matter. Lyman Stone summarizes the pronatalist economic argument well: if there are fewer people in the future, then there will be less demand for goods, causing asset prices—and everyone’s savings—to decline. In the wider economy, this downward spiral would be bad for firms, government revenues, social services, and economic growth. As the population and economy decline, markets will shrink, leading to increased monopoly power and increasing importance of intergenerational inheritance. The increasing inter-generational primacy of inheritance is bad—according to Lyman Stone—since it leads to decreased social mobility. To cap off Lyman Stone’s apocalyptic prognostications, even immigration cannot be relied upon to supply the number of bodies needed to sustain the economy. These arguments are not unique to Lyman Stone and are generally representative of utilitarian pronatalist economic arguments, as seen in a 2023 article by “former” CIA analyst Martin Gurri.
Before getting to the deeper issue, there are a few basic economic fallacies which must be refuted here. Specifically, is it necessary for the wellbeing of everyone in the economy that prices and demand be constantly increasing?
We can think about this using a hypothetical free market economy that is also experiencing a declining population due to birth rates below replacement level. Rather than seeing a downward spiral of price deflation leading to an economic shutdown, what we would see is that entrepreneurs and consumers would adjust to the declining population through normal market activity. Entrepreneurs would still act to provide for the future demands of consumers. Innovators would still try to commercialize new ideas and inventions, leading to industry disruptions and spurring economic development. Consumers would still accept or reject the products offered to them by entrepreneurs, meaning that some entrepreneurs would succeed while others would fail and go out of business. The production of goods for consumers would still occur.
The only changes brought about by a falling population are that the amount of people producing, demanding, and forecasting the future is decreasing and that entrepreneurs will attempt to take this into account. Notably, this does not necessarily entail a decline in material production, though it could also happen. After all, there is no reason to conclude that just because the population has decreased necessarily means that humans are now unable to prosper by procuring more means to satisfy their ends.
In fact, prosperity is indicated by a decreasing price level of goods that people desire due to increased procurement. The real prices of agricultural products and electricity—two widely-demanded types of goods—have plummeted over the last century. The industrial revolution—largely brought about by deregulating industry to a degree never before seen in history—led to the production of so much food and electricity that the average American now has more to fear from overeating and electrical accidents than from starvation and environmental hostility.
If, in our real-world, regulated economy, the price of a good perpetually increased, one would be justified in suspecting that something was wrong. If continual abundance is evidenced by more affordable (declining) prices, then perpetually increasing prices of wanted goods demonstrates that economic development is being hindered and undone.
We can see now that Lyman Stone’s understanding of economic development is flawed, if not backwards. Perpetually increasing home prices are not natural and do not indicate positive economic development. The economy is not naturally based around the assumption that one’s property will perpetually increase in price, allowing the property-holder to rest assured that their future is secure. One also cannot say that everyone is worse off because there are fewer people to demand goods, nor that monopolization—more of a legal phenomenon than economic—is caused by declining populations; uncertainty is still present in entrepreneurial action regardless of the population’s increase or decrease. Finally, if government social schemes are arranged in such a way as to require a constantly increasing population to avoid failure, then these schemes are grossly detective and should be revised or (ideally) abolished.
The Purpose of the Economy
So far, we have managed to refute common economic arguments in favor of interventionism and price inflationism by thinking through a hypothetical free market economy with a declining population. The focus on action has allowed us to unveil several fallacies about wellbeing and economic growth. But, if we investigate the purpose of actions, and therefore the economy, we can see the greatest point of divergence between Lyman Stone’s pronatalism and economic science.
Man acts to satisfy felt unease, and more specifically, man consumes to satisfy felt unease. This should not be confused with the modern pejorative of “consumerism.” Instead, there is no way to satisfy felt unease—be it in the present or future—without consuming some resource or by devoting scarce energy to leisure. In order to consume, man produces goods. To produce more goods or to spend more time in leisure, man saves his resources to create capital, which is meant to produce more goods for consumption. Man also employs more labor and divides the tasks of production, specializing according to ability. If there was no satisfaction of felt unease through the consumption of goods or enjoyment of leisure in the present or the future, there would be no reason to produce, employ labor, specialize, or save to begin with.
By contrast, Lyman Stone’s view of the economy seems to be one in which production is the end and not the means. According to Lyman Stone, the fact that people value their “interior lives” and “idle hobbies” has caused people to have fewer children, making such valuations economically suboptimal. Rather, they should be foregoing needless activities such as hobbies, working out, sleeping, and showering daily to produce “things of value such as companies or children.” While Lyman Stone’s antipathy towards interior life springs from his radically empiricist beliefs (since the existence of an interior life confounds his own observations), he has rhetorically cornered himself and is unable to explain why people produce “things of value” in the first place. He attempts to solve this by declaring that producing things of “genuine value” for other people is licit. However, hobbies of “purely private enjoyment” are bad, “the optimal number of which is zero.” Carrying this line of thought to its conclusion, leisure should not exist, and the GDP should be maximized (by production and rarely, if ever, consumption). But why? What is the purpose of production if there should not be consumption? What is the purpose of the economy?
With these elaborations, we can finally understand why technocrats like Lyman Stone support pronatalism. Beyond the appeals to personal happiness—which appear to be mere rhetorical facades rather than genuine concern—the draw to pronatalism is clearly born out of faulty economic reasoning. To draw from the beginning of this article, Lyman Stone’s pronatalism understands “the economy” to be some creature that needs a growing supply of people to grow and bestow benefits upon us, lest the statistics start to trend downward. There is no consideration for why man produces. There is no concept of discrete actions, no idea that the economy is the result of actions. There are only trend lines and aggregate statistics.
Beyond faulty economic reasoning, I cannot think of a colder, grosser argument for people to have children. This is not a movement that really loves families and children; rather, it is a movement of regime-friendly technocrats who want more cogs for their machine. They may be “pronatal,” but they are most certainly not pro-human.
