Should we be afraid of population decline? Many on both the left and right think so. From the right, we regularly hear from Elon Musk about how population decline is an existential risk to economic growth. Meanwhile, from the left, there are fears about the viability of support and welfare systems for the poor, sick, and vulnerable as the population ages and shrinks.

If population decline poses these dangers, then what follows is a need for immediate action. And, aside from a few pro-natalist policy proposals, what tends to follow is a call for migration.

Already we’ve been seeing the downstream effects of this rhetoric with the Boriswave. The left-wing call to shore up the welfare system was the reason Johnson laxened health and care worker visas, which in turn has quintupled new dependent visas from less than 50,000 in 2020 to over 250,000 in 2024. And the right-wing calls to stop economic disruption were also found in Johnson’s reasoning, with his claims that the Boriswave was an inflation-busting measure.

But does population decline pose such a major threat to our economy and institutions? Often, it’s presented to us as a self-evident problem. One of the best recent attempts to articulate the problem in the press was by the IEA’s Dr Steve Davies back in March 2024:

“If population is static or declining and older then there is much less dynamism and innovation. The profile of the population combined with fewer children means a smaller part of the population available for productive work and they will have to support a larger unproductive part. Fewer people means lower demand with this multiplied by the higher proportion of older people. The value of assets, particularly real estate, will decline and the incomes they generate will fall. This feeds through into a general decline in the return on investments of all kinds.”

We can break this down into two individual problems:

• A smaller population means lower total output of goods, services, and assets.
• An older population means that the ratio of workers to dependents becomes unviable.

So, the logic goes that a smaller and older population will produce significantly less whilst having to support significantly more dependents. But both these challenges assume something that’s not obvious at all: that output per person can’t significantly grow. This assumption is quite a stretch.

The fact is that output per person can significantly grow. That’s ultimately what productivity growth is: improvements in the amount a person can produce. And, despite stagnation over the past couple of decades, Britain and the world have posted a multi-century long boom in productivity growth.

On paper, there’s no initial reason to suppose we could achieve a level of productivity growth that would allow a smaller, older workforce to significantly out-produce a larger, younger one. So why do many of the population decline scenarios seem to assume this can’t happen? Ultimately, I think it comes down to a mindset that I’ve taken to calling Biomass Brain.

What’s ironic about Biomass Brain is that we have good evidence that it’s a wrong attitude

Biomass Brain isn’t a proposition, but more a set of attitudes that cluster together amongst decision-makers in the public and private sectors. It’s roughly a cluster of attitudes towards the two factors of production that come together to create economic output — capital and labour.

Capital is something Biomass Brain finds suspicious. Instead of paying or borrowing money for plant, property, or equipment — which both depreciates and represents a decision that will need defending to some stakeholder — it defaults to avoiding investment where possible. The result is an approach that emphasises labour as the main factor of production, with the focus on more flexible and affordable arrangements that boil down to throwing more bodies towards a problem.

Biomass Brain thus treats labour as a cost-minimisation exercise by default, and focuses on trying to improve output per worker on a quarterly or annual basis by finding ways to cut expenditure per worker. As a set of attitudes rather than a clear set of proposals, Biomass Brain takes root in decision-makers as “the way things are done” and capital investment for businesses becomes synonymous with unnecessary, disruptive risk. For government, this means that investment is often unmoored from discussions of growth — and is instead confined to showpiece political projects.

As an attitude, Biomass Brain closely tied up with Britain’s tendency towards becoming a low-wage, low-productivity economy over the past decades. But by also failing to envision significant productivity growth in the face of population decline, it’s also a major flashpoint in how a lack of imagination amongst our elites can have serious policy consequences. After all, as mentioned above, Biomass Brain is directly upstream from the rationale behind the Boriswave.

What’s ironic about Biomass Brain is that we have good evidence that it’s a wrong attitude because of historic restrictions on our population. Britain and Northern Europe’s incredible growth story following the horrors of the 1300s — which saw the Great Famine and Black Death decimate our population — was fuelled by a constant need to innovate in labour-saving technologies.

That raises an interesting parallel for our own time: if allowed to play out naturally, there’s every reason to suppose our own population decline could also encourage investment and productivity growth. And there’s many obvious areas where Britain could stand to improve investment — for example, we have the lowest industrial robotics adoption rate in the G7.

Rather than presenting economic decline and an existential challenge for our welfare system, we can reject Biomass Brain and instead see gentle population decline as an opportunity. Instead of being a limit to growth, population restrictions present an opportunity to innovate, invest, and make us all more productive. This requires a mindset change and an escape from the low-wage, low-productivity spiral we’ve trapped ourselves in — and instead an embrace of a richer, high-productivity, high-investment economy for us and our children.