The other big unknown is what happens to prices when population starts growing.
Much of investing common wisdom is based on the assumption of a steadily growing population. The reason land prices generally rise is because there is a growing number of property buyers chasing a fixed amount of land; this means that the higher-income buyers buy up the land and the overall price rises. The reason stock prices rise is that there are a fixed number of oligopolist markets in the economy (competitive markets like restaurants & hairdressers rarely take investment), and an ever-increasing number of savers looking to earn a return on their money. If you start shrinking the working-age population, the price of land falls dramatically (most people end up inheriting a house from their parents; if they don't, there are several people that inherited multiple houses that they have no use for and are looking to convert into cash). The bargaining power of labor increases dramatically, pushing down corporate profits, but it also means fewer buyers for capital stock and more people trying to sell it to meet their daily existence needs.
The last time this happened (in the wake of Black Death, where 30% of the world's population died), the social system that had been in existence for a millenia collapsed. Serfs were able to demand better wages and working conditions for their labor. Increased bargaining power led to the guild system of the early Rennaissance. Increased saving power led to systems to manage pooled capital (like fractional-reserve banking and the corporation) and to the rise of the mercantile and capitalist classes. The big losers were the landed aristocracy, who found that the land they owned just wasn't worth as much in this new world.
Much of investing common wisdom is based on the assumption of a steadily growing population. The reason land prices generally rise is because there is a growing number of property buyers chasing a fixed amount of land; this means that the higher-income buyers buy up the land and the overall price rises. The reason stock prices rise is that there are a fixed number of oligopolist markets in the economy (competitive markets like restaurants & hairdressers rarely take investment), and an ever-increasing number of savers looking to earn a return on their money. If you start shrinking the working-age population, the price of land falls dramatically (most people end up inheriting a house from their parents; if they don't, there are several people that inherited multiple houses that they have no use for and are looking to convert into cash). The bargaining power of labor increases dramatically, pushing down corporate profits, but it also means fewer buyers for capital stock and more people trying to sell it to meet their daily existence needs.
The last time this happened (in the wake of Black Death, where 30% of the world's population died), the social system that had been in existence for a millenia collapsed. Serfs were able to demand better wages and working conditions for their labor. Increased bargaining power led to the guild system of the early Rennaissance. Increased saving power led to systems to manage pooled capital (like fractional-reserve banking and the corporation) and to the rise of the mercantile and capitalist classes. The big losers were the landed aristocracy, who found that the land they owned just wasn't worth as much in this new world.