The Hidden Cost of Fake Money: Why Birth Rates Are Collapsing
What if birth rates are collapsing not because we're too rich, but because our monetary system is telling us we're poor?
Living organisms expand when resources are abundant and contract when they are scarce. Humanity is a living organism, money is an information system it uses to gather information about available resources.
Consider Type 2 Diabetes as a parallel: it occurs when the body's insulin signaling system breaks down, causing cells to believe they're starving even while swimming in glucose. Our monetary system may be creating a similar dysfunction at a societal level – false signals of scarcity amid apparent abundance.
Correlation alone doesn't prove causation, but the persistence of this pattern across different cultures and eras suggests a deeper link.
As currency loses its reliability, essential goods like housing and education become disproportionately expensive relative to wages. Families respond by delaying or reducing childbirth, mirroring cells that misread insulin levels and behave as if scarce resources must be conserved.
The usual explanation never made sense to me: societies supposedly have fewer kids as they get richer. Yet history shows the opposite pattern. The Roman aristocrats maintained large families despite their immense wealth. America's post-war generation - our wealthiest ever - achieved record fertility rates. Today's wealthy have even fewer children than average, which this framework explains: wealthy individuals are more exposed to monetary signals through their greater engagement with financial markets.
"Women's education and careers reduce fertility," goes another theory. Yet the Soviet Union combined high female education and workforce participation with strong fertility rates. Saudi Arabia saw massive increases in women's education while maintaining high birth rates until the late 1990s.
"It's urbanization and modern living," others claim. Yet historical London and Paris maintained high fertility throughout their urban growth. Today's megacities in developing nations often have higher birth rates than wealthy countries - the opposite of what the urbanization theory predicts.
A real explanation must work across time and place. These theories don't - but monetary systems might.
The Evidence
Let's look at the evidence. I compared Federal Reserve data on the monetary base to UN fertility statistics from 1959-2020, and the pattern was striking.
The Fed's monetary base (M0) and fertility rates show a strong negative correlation (-0.899, p < 0.001) – the kind of relationship you rarely see in social systems.
As the monetary base expanded, fertility declined with remarkable precision, falling from 3.7 to 1.6 children per woman. Meanwhile, the Fed's measurement of bureaucratic complexity – pages in the Federal Register – grew substantially, showing strong correlations with both monetary expansion (0.807) and fertility decline (-0.899).
The Diabetic Society
In diabetes, repeated insulin spikes create a cycle of inflammation that blunts cells' ability to sense glucose. Likewise, monetary inflation and subsequent bureaucratic policies—rent controls, subsidies—further distort economic signals, compounding the false scarcity message and exacerbating fertility decline.
This isn't just metaphorical.
Look at housing: money printing inflates asset prices, making homes "unaffordable." The bureaucratic response? Rent control, zoning laws, and housing subsidies. Home prices have risen dramatically compared to incomes – not because houses got better, but because the measurement system got corrupted. These bureaucratic interventions, like inflammation in diabetes, are defensive reactions that worsen the underlying problem.
Historical Parallels
The Late Roman Empire shows a remarkably similar pattern.
As Rome debased its silver coinage, fertility rates among elite families dropped from 4-5 children in the Republican era to 2-3 children in the Late Empire. The bureaucratic response mirrors our own – historical records from the Digest of Justinian show increasing administrative complexity over this period, from simple Senatus Consultum to a proliferation of specialized roles and legal mechanisms.
Identifying any society that underwent prolonged monetary debasement without a concurrent fertility decline would challenge this framework. I have not yet found such a case, and I invite others to explore new data sources that could confirm or contradict these findings.
Modern Acceleration
The main difference between Rome and our era is speed - both the monetary changes and their effects. While Rome's cycle played out over centuries, we're speedrunning it in decades. And unlike Rome's localized debasement, today's fiat monetary system means this experiment is happening across all major economies simultaneously.
Not only is the monetary expansion more aggressive, but modern financial markets and information systems allow these signals to propagate much faster than they could through Rome's physical economy.
Today, all major currencies are being debased - dollars, euros, yen, and others. The correlation between monetary expansion and fertility decline we see in US data suggests a broader pattern: as nations moved away from sound money backed by precious metals toward pure fiat currencies, birth rates fell across the world.
A Potential Solution
Thankfully, this time around we have new tech. Bitcoin can provide a better foundation for money than precious metals ever could. It's perfectly verifiable, highly liquid, and extremely difficult to confiscate. This means that once Bitcoin is adopted as the foundation of money, the State won't be able to easily force people off it. The question is whether we will adopt it in time, or if the system needs to reset once more before the patch is installed.
A final note: I'm not a professional researcher or economist – I may have made some mistakes here. While I focused on US and Roman data for feasibility, the pattern is so striking that it warrants investigation across other economies and time periods. I'm sharing all data sources and encouraging others to build their own models, particularly to examine this relationship in other countries.
Data Sources
United States Data
Federal Reserve Bank of St. Louis (FRED) - Monetary Base (M0) data
United Nations World Population Prospects (2024) - US Fertility Rates
Office of the Federal Register - Annual Pages Published
Roman Empire Data
Butcher, Kevin, and Matthew Ponting. (2014). "The Metallurgy of Roman Silver Coinage: From the Reform of Nero to the Reform of Trajan" - Silver content of denarii
Hug, Angela G. (2014). "Fecunditas, Sterilitas, and the Politics of Reproduction at Rome" - Roman fertility data
The Digest of Justinian, Alan Watson (1984) - Administrative complexity data
Interesting theory! But wouldn't the steady growth in productivity negate much of the effect of inflation? In real terms, families have been getting richer over the 20th and 21st century.
Still, there's something to your thesis. Seems like bureaucratic overreach and regulation have led to e.g. the housing shortage, but also plausibly a cultural change in values that could behind the birth rate collapse. I think studying more societies like Korea, which has had a massive fertility collapse, could be instructive.
"The Fed's monetary base (M0) and fertility rates show a strong negative correlation (-0.899, p < 0.001) – the kind of relationship you rarely see in social systems." - this is confounded by "point in time". When you have any two time-dependent variables (e.g. stork population and number of babies over time), and the first one goes down and the second one goes up monotonically over a period of time, you get a correlation of -1^C^C a strong negative correlation, and -1 in case they are both linear -- and get "strong evidence" for the theory that storks bring babies.
For more meaningful evidence, one needs to get data over multiple places at the same time. For a start, do countries in East Asia, with particularly low birth rate, print particularly large amounts of money?