In 1972, nearly 8 times as many children were born in China as in the U.S. In 2025, only 2.2 times as many. Consider also that China’s total fertility rate in 2025 was 0.93, while the U.S. rate was 1.58. If fertility rates remain at those levels, the U.S. will overtake China in births at some point in the 2060s (depending on immigration flows to the U.S.) and in total population by around 2100. A world where the U.S. has a larger population than China is very different from the world today. Of course, this is a big “if,” but it is a nice thought experiment to illustrate the importance of demographics in shaping Great Power competition. Among the great powers, the U.S. is the least demographically exposed.

Yesterday, I told you Mexico’s total fertility rate is at 1.2. Today, let me remind you that Argentina’s total fertility rate is at 1.05: screenshot from the Argentine statistical agency below. Yes, 1.05. Argentina, in 2014, was at 2.3: a drop of more than 50% in a decade. And before you tell me “it’s Milei’s/the Peronists’/Leo Messi’s fault,” remember the following: of the 236 countries and territories on the planet, 219 have a clear negative trend in fertility. Of the remaining 17, I’d say the trend is negative as well in probably 16, although statistical methods have a hard time picking it up for one reason or another. The remaining one? Israel. So, if you think fertility is going down in your country because of some country-specific reason X, well, you might want to think twice.

In 2028, the median person on Earth will live on more than $10 a day for the first time in history (figures adjusted for inflation and for differences in purchasing power across countries). In the last decade alone, the share of people above this threshold has risen from 41.3% in 2016 (3.11 billion) to 48.7% in 2026 (4.03 billion). Think about that for a second: we have pushed nearly 900 million people over this threshold in ten years, around 90 million people a year (slightly above the population of Turkey). At the very bottom, we have also seen progress, though slower. In 2016, 12.6% of the world lived below $3 a day (947 million people). In 2026, the figure fell to 10.0% (826 million). This fall is harder to achieve because the poorest countries also have fast population growth. As fertility falls there, and I think it is already falling, we will cut poverty much faster. You are probably thinking that $10 a day is not a demanding threshold. True. But in 1990, yesterday in historical terms, only 1.42 billion people lived above it. And this is not just China: 2.6 billion people have crossed the $10 line. On the other hand, in 1990, 2.20 billion people lived below $3 a day. I checked these figures today because I start teaching Global Economic History at Penn this Wednesday, and I wanted to update the numbers I use. As Joel Mokyr instructs us: “The responsibility of economic historians is to remind the world what things were like before 1800. Growth was imperceptibly slow, and the vast bulk of the population was so poor that a harvest failure would kill millions. Almost half the babies born died before reaching age 5, and those who made it to adulthood were often stunted, ill and illiterate.” (“What Today's Economic Gloomsayers Are Missing,” 2014.) This will be my first lesson to the students on Wednesday: we live in times of historically unprecedented prosperity, and, by and large, things are getting much better every year.

Many economists forget that the first-order problem of an aging society, one with high life expectancy and low fertility, is how to redistribute income from workers to retirees. How fast output grows is, surprisingly enough, the lesser question. If you have roughly as many retirees as workers, what each worker produces must be split in two, one part for the worker, one part for the retiree. At a basic level, it does not matter whether we do it through taxes, as in a pay-as-you-go social security system, or through capital income, as in a fully funded one. Workers will not be happy to see half of their income taken away, whatever the absolute level of that income. This redistribution will poison the political system and lead, with high probability, to dysfunctional policies. We are already seeing it across Europe in the fights over retirement benefits. And much of the American unhappiness about the profits of large corporations, largely owned by the old, is the same conflict, only in the fetishized form of equity ownership. Claims of the form “technological progress (e.g., advances in AI) will fix the problems brought by aging” miss the political economy of the situation. Aging is about politics, not TFP.

I rarely post on Europe because @lugaricano always has better takes than mine. It is hard to be the second act! His post this morning: on the two Europes is particularly striking. Figure 1, which I reproduce here, is something European policymakers should keep in mind every day. Beyond the raw, somewhat abstract figures for GDP per capita, there is a reality I see every time I travel to Western Europe. I moved to the U.S. in 1996, six weeks after graduating from college. Every time I visit, I can tell that Spain (especially outside Madrid) is further behind the U.S. today than it was the day I left. The malaise in countries such as France, Germany, Italy, and Spain is not just economic. The public conversation is also more insular and focused on distributional fights over a pie that grows much less than in the past, with many more claimants. While I can listen to dozens of incredibly exciting podcasts in the U.S. about deep learning and technology, most of what one hears in Europe (Luis excepted!) is second-rate. Of course, this is not to say that everything is perfect in the U.S. Far from it. One only needs to ride the subway in Seoul a couple of times to realize that New York City is, on many dimensions, a major underperformer. When I visit New York City, I am not amazed by its prosperity but wonder how much richer it could be with a half-decent government. And California’s policies are a textbook example of how to waste the immense resources of one of the luckiest places on Earth. And Europe still has centuries of beautiful architecture and culinary traditions going for it But, Western Europe, thou art weighed in the balances, and art found wanting.