Germany is Doomed Both Geographically and Demographically
Germany’s most habitable lands are near its borders and enjoy few natural defenses against invasion. As a consequence, Germany is mostly indefensible. This is why it was among the last Western European areas to unify under a central government, and why it has so often sought to extend its borders outward (e.g., WWI and WWII).
Since WWII Germany fell under US protection. And so for the first time in its history, its borders were secure. As a result, it has almost completely demilitarized. It has no army or navy worth mentioning, and remedying that at any scale that matters would take 20 to 30 years more than Germany has.
To make Germany’s strategic position worse, it has no direct control over any energy sources worth mentioning, and it obtains half of its energy imports from distant countries outside of the EU which use shipping routes that Germany is entirely incapable of policing. Germany must import essentially all the energy it needs to produce surplus goods for export, and it must export lots of surplus goods to survive since it has no remaining consumer class of its own worth mentioning.
But what about renewable energy sources?
The sad fact is that Germany just isn’t geographically well-suited to benefit from the green revolution, at least with present levels of technology. Its attempts to improve energy independence by “going green” have been utter failures to date, succeeding only in doubling local energy prices since 2000 while making Germany more dependent on Russian imports than ever before. Germany has been quite open in stating over the last two weeks that it cannot survive without Russian energy imports. That’s not just hyperbole.
For the foreseeable future, Germany’s only chance at approximating some level of energy independence is coal and nuclear, both of which have major drawbacks, and neither of which will be arguably tenable until things become truly desperate. They soon will.
We can think of each generation of people as a “savings account” of sorts. Maintaining large amounts of savings (large and plentiful younger generations) comes at great cost. Savings (young people) are not all that productive, after all, and they divert funds from potentially more productive or more fun uses in the short term. But very importantly, savings ensures our future by making us less fragile. Without savings, it’s only a matter of time before we go toes up.
We can, of course, forget about the future and stop replacing our savings as we spend it—that is, (extending the analogy), we can stop having babies at a rate sufficient to replace our workforce. And for a time, and as long as no black swans visit us, such an approach will make it appear like we are performing exceedingly well versus any peer who is instead bearing the cost of replenishing his/her savings (having children).
Because a society comprised of more older and experienced workers, like Germany today, can be highly productive. Plus, older populations consume way less than they produce.
High productivity combined with lower consumption means surplus production which can be exported for massive profits that then generate sufficient tax revenues to fund the welfare state. This has been Germany’s economic model for some time now. Its entirely dependent upon demographics that as of this year no longer exist.
Note that this model also produces lots of leisure time, at least compared to rivals who are replenishing savings, and at least for a while. Unlike its rivals, Germany need not spend huge amounts of time and money raising children. So neither must it work as hard to feed all those young, unproductive, hungry mouths.
So…high productivity, lots of profits and lots of leisure time? What’s not to like, right?!
Well, it’s all fun and games until the savings account eventually runs way too low. As older things (the older, productive generation) begin to wear out and retire, there’s insufficient savings left to replace them.
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And that’s where Germany (and China, Russia and much of the world) is now.
Though Germany was disunited politically for far longer than many of its European rivals, it was among the earliest to industrialize, which means it was among the earliest to urbanize, which means it was among the earliest to stop having babies (birth rates always drop in the presence of large scale urbanization), which means that it was among the earliest to enjoy living on borrowed time (savings), which means that it will be among the earliest to…die.
As of today, the only generation large enough to have enough babies to replenish Germany’s savings account has aged past its child-bearing years. There is no possibility of pulling up on the yoke. Demographics are destiny, and Germany is destined to crash.
Massive immigration could forestall Germany’s inevitable impact with the ground for a short while, but at the cost of much social unrest and a resulting Germany that is decidedly not…German.
Unlike the US but like most of its European rivals, Germany had no Millennial Generation of consequence. And its Boomer generation begins to retire en masse starting…now. By 2030, just eight short years from now, younger workers will be entering Germany’s workforce at half the rate that older ones are exiting.
This already much smaller and much less productive younger generation of Germans (all younger generations are less productive, so that’s no knock on this German one) will be burdened with not only funding its own lifestyle and eventual retirement, but also with generating sufficient profits and tax revenues to support the much larger older generations soon retiring or dying, all while (despite their comparative lack of productively) also generating enough surplus goods to continue Germany’s export-based economy. Remember its the younger generations that are the primary consumers, and Germany has far too few among its younger generations.
The tax burden and production expectations put upon this younger and less productive generation will be enormous. The young will feel like slaves to the retiring boomers, because to a large degree they will be. Democracy is two wolves and a sheep voting on what’s for dinner, after all, and the younger generation is the sheep.
Generational strife will become a major issue. Many young may migrate out of Germany if given the chance, compounding the problem. Those who remain will have little extra money to support making more babies of their own (not that it would matter much to the outcome if they did since the point of no return has past).
And even if this younger generation is productive enough to produce major surpluses that can continue to be exported in quantities sufficient to support the older generations, who exactly will they export to? The majority of its present exports go to its European rivals, but most of those rivals (Portugal, Ireland, Greece, Spain, Italy, UK, etc.) are in more or less the same bucket as Germany, meaning they too have terminal demographics (though because some of them urbanized later and have more defensible geographies, their life expectancy still exceeds that of Germany by a little). This year, 2022, is the tipping point at which the great population bulges in Europe on average age past their primary consumption and child bearing years en masse.
So, what about Asia? Might it absorb whatever surpluses Germany’s much smaller and less productive generations can eek out? Unfortunately, much of it, or at least the developed parts with populations large enough to matter much, looks more or less like Europe. China is the fastest aging country on the planet and has the world’s worst demographics thanks to its one child policy. Japan’s (which at least has defensible borders) and South Korea’s demographics are likewise horrible.
Southeast Asia and a few other places in the East have decidedly better demographics than China, Japan and South Korea, but they alone are not large enough to absorb the levels of excess production that Germany needs to sustain itself. Even if they were, shipping exports across the world from Germany to SE Asia will be very costly and challenging when the US no longer guarantees safe passage of all ships. Germany has no blue water navy of its own, and it couldn’t build one of sufficient size and influence within any amount of time that matters.
That leaves the US, Mexico, and a few parts of South America. These few areas have much, much better demographics and will no doubt continue to absorb some of Germany’s exports, but nearly all of Germany’s European and Asian rivals will likewise be competing for access to those few markets. This means that Germany will not be able to export enough to save itself even if it remains by some miracle (automation?) capable of manufacturing large surpluses even despite its demographic challenges.
Shipping exports West (towards US protection) will be much safer and less costly than shipping them East towards Asia, so we can expect that will be the trend. But even those shipping lanes can be easily cut off it Germany sufficiently alienates even one of its major European rivals (especially the UK or France). Plus by that time the US and other countries with more favorable demographics will have reshored much of their own manufacturing (reducing the need for imports of all types, including German ones).
What cannot persist won’t. And Germany cannot persist. Within a generation (and perhaps within a decade if something goes wrong), its productivity and exports will collapse, its few remaining youngsters will be overly burdened and angry, the US will no longer protect it, and it will otherwise be incapable of defending itself from ancient rivals. To the extent that Germany has something that any of its age-old European rivals (except for Russia) want, such as maybe access to or control over its incredible river systems, it will be easily enough taken. That is, unless Germany goes nuclear.