Much has been written about the various uprisings which have been gaining strength and momentum since 2008. Usually it takes the tack of focusing on the abuses of the particular regime in question, because the press tends to see things through the eyes of the official underdog in any story based around conflict.
Supply side economists like me have pointed to the ways in which monetary debasement by the United States helped set off a wave of food price spikes and launched an Inflation Intifada.
But very little has appeared in the public discussion about the demographic component of this wave of destabilization. That’s a shame because although there are real economic risks in a country which gets out of balance and skews too old, there are also severe consequences to a country which gets out of balance in the opposite direction, at least when that occurs in conjunction with other risk factors.
Skew too young and you get a revolution: an analysis of all the countries which have gone through a revolution, coup attempt or civil war in the recent ‘Arab Spring’ shows that every single one of them had a median age of 24 or younger. The story of political revolutions is more often than not the story of starting with a nation which has low life expectancy and high birth rates (hence a young median age) and adding high youth unemployment, one or another radical ideology, and a food price spike.
Skew too old and you get a regime of ‘get off my lawn’ types: perfectly groomed, no change, frozen in time, slow death. A Japan which dreams only of its former glories; thinks any possible future lies with robots; is obsessed with horror movies about the vengeful ghosts of discarded children, and sells more adult diapers per year than it does baby diapers paints a sad but accurate picture of the future of that nation.
Interestingly, the Nordic types seem more cinematically captivated by lurid crime films about murdered children who are avenged by girls with dragon tattoos than they are by waterlogged girl ghosts.
The traditional remedies prescribed by global elite opinion don’t seem to help much. For example, higher education is not a reliable social stabilizer. The old cliché about universities as schools of revolution seems to match the history better than the newer cliché about how sending them to college keeps them off the streets.
In terms of the Arab Spring, Egypt, for example, had perhaps the highest proportion of college grads in the Muslim Middle East.
But if a country has a large youth cohort and a high college matriculation rate and at the same time has high unemployment, then higher education seems to function as an unrest accelerant. It raises expectations, but fails to deliver on a higher standard of living. It exposes young people to revolutionary ideologies, and instills attitudes of condescension and even contempt for the more cautious politics of their elders. And it connects people with these ideas and attitudes and frustrations with other people who share them.
This is a recipe for violence and bloodshed. All of this is rendered even more heartbreaking when one realizes that the pattern is that young people are typically the vanguard of the revolution, not its eventual rulers. Self-sacrificing idealists start revolutions, but self-seeking realists consolidate them. And if you don’t believe me, then just ask the Egyptian military.
As my friend Reuven Brenner has taught me, capital markets and revolutions are not opposites. They are alternatives, alternative answers to the question which all young people ask, “How can I create the future that I want?” If the peaceful world of markets as a road to the future is cut off, as it has been for decades in the countries under question, than the violent world of revolution becomes the answer by default.