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Nov 5th, 2015, 10:14 PM
#1
Economic Thought Experiment
This may seem like it is related to the health care thread and some postings I made in there, but it has nothing to do with that. In fact, it has nothing to do with reality. I'm just looking for some thoughts on a subject in economics.
We have a life span of about 70-100 years. Of this, we spend around 20 years growing/educating, about 50 years of productive working life, and then some time in retirement. If you are reasonably lucky and do things right, the 50 years of productive life are enough to accumulate sufficient wealth to last you through retirement.
Suppose that our lifespans were actually 500 years, with the same rate of growth and a lengthy time spent in robust good health, and perhaps the same brief senecence prior to death. What would the economy look like?
My first thought is that everybody would be able to accumulate sufficient wealth that they would be able to retire by at least 200, and likely less, but I'm not sure that would work. Right now, we put wealth into income-producing vessels such as bonds, rent-producing properties, and so forth. But things like bonds are means to socialize debt, which fuels growth. If the bulk of the population could retire after only 20% of their useful lives, would there even exist enough debt to result in a sizeable bond pool? Would there be investments that would allow retirement, or would our current form of investing end up totally different?
Another point is that we need people filling various jobs to have a robust economy. If people could retire 20% into their useful lives, would there be a pool of workers? If there wasn't, then retirement wouldn't even be an option. It seems like everybody might end up working a LOT less, but working throughout their lives. On the other hand, there comes a time when you just don't need more stuff. I already buy fairly little because I have pretty much everything I need aside from perishables and occasional hardware upgrades. That seems like it would perpetuate if I were to live longer, so would consumption screech to a halt because the population simply wouldn't consume anywhere near as much as it currently is per person? Would that flatten the economy?
So, it seems like the problem is chaotic in nature because there would be numerous feedback loops both positive and negative. What do you think?
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Nov 6th, 2015, 05:00 AM
#2
Re: Economic Thought Experiment
Another point is that we need people filling various jobs to have a robust economy. If people could retire 20% into their useful lives, would there be a pool of workers?
In theory, if we lived five times longer - our reproduction cycle would be five times longer.
Kids wouldn't leave home till they turned 90 to 100.
My first thought is that everybody would be able to accumulate sufficient wealth that they would be able to retire by at least 200, and likely less, but I'm not sure that would work.
Unlikely. Very few people can retire now at 30 or so years old. When I retire in eight years at age 68, my SS benefits will be about 60% less than my currently salary and I won't have as good medical benefits. In theory, I could keep making the same mortgage payments but can't afford to step outside the house and or afford to get sick. Heaven forbid I need 20 grand for a new roof...
Just 20 grand for a new roof every 20 or so years for another 400 years....No can do.
Wi-fi went down for five minutes, so I had to talk to my family....They seem like nice people.
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Nov 6th, 2015, 07:18 AM
#3
Re: Economic Thought Experiment
Lots of variables, and some like entry and exit rates (births surviving into productive years, deaths coming after retirement, immigration, emigration, deaths during productive years, and so on) can be tough for a society to "engineer" to fit available resources and needs.
So we can set some factors aside as we examine them invidually or in smaller groups. Of course their context within the whole is necessary to make predictions or even to choose where and how we tweak things, but you can't just bite off the entire thing at once.
One model involves balancing the system by increasing arrival rates and extracting more from the labor pool. Often the most tweakable factor there is to encourage immigration when you have external labor pools to exploit, and basically another version of this is exporting jobs into those external labor pools. This is often used when the parasite population of capital holders holds sway in decision making processes. We've seen it during Feudal eras, colonial expansion periods, slavery, the Gilded Age, and we're living it now under Sino-Reagan-Thatcherism.
But another way this is managed in more "civil" eras involves sharing technological productivity gains with the labor force. We most recently saw this engineered after the Great Depression. It involved the suppression of child labor, setting base wage levels, reducing the hours in a work week, restricting immigration, enacting protective import tariffs, and permitting collective worker bargaining to offset the power of concentrated capital. This only worked because in the wake of the Industrial Revolution and early in the Green Revolution there were productivity gains that could be shared with working classes.
Since then we've had even greater productivity gains, but they haven't been shared out equitably at all under the curernt social model. And in fact we've regressed again, reversing almost all of the last century's progress.
This is why stresses are building in the system. Extending life spans are only exaggerating the problem as we've seen in the forms of postponed retirement and increasing rates of underemployment punctuated by bursts of high unemployment as the system shudders to adjust. Monetary policies are being tweaked to discourage savings in order to encourage consumption by a population lacking other resources to fund it. One might even suspect that the recent recession was engineered to extract more wealth from the working classes in the form of accumulations within their homestead real estate holdings - a form of savings previously encouraged during the New Deal/Great Society period. Now we are even seeing negative interest rates on "cash savings" being seriously considered (and even in action in desperate places like Sweden, where banks are refusing cash deposits). Previously protected pension systems are being taxed, when they aren't dismantled entirely.
So we know where the "levers" are and we even have well documented history of adjusting them to know with some confidence what results from different settings. But history also tells us that entrenched concentrated capital doesn't relinquish power without a fight. Thus the effort being put into psyops campaigns to convince working populations that being poor is the product of progress and that working harder for less is somehow a path out of misery.
But when we go back and look at increasing lifespans as a new factor there are only so many possibilities. They probably all involve much longer productive periods, i.e. later retirement or more semi-retirement where the "work week" (work year?) is reduced. But the benefits of just working part time at unskilled teenager jobs (fast food, retail, personal services?) are fairly limited, competes with its natural labor pool, and also squanders lifetimes of accumulated wisdom.
Sadly the last few decades undermined the ability of our current retirement-age population to acquire many valuable skills they can turn to now. They were just plugging away as wage-slaves while trying to raise families for far too many years under our current economic model to explore art, writing, science, technology, philosophy, and other creative realms that they might otherwise turn to now.
A 500 year lifespan? Not viable at all under our current economic model.
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Nov 6th, 2015, 03:20 PM
#4
Re: Economic Thought Experiment
Originally Posted by Steve R Jones
In theory, if we lived five times longer - our reproduction cycle would be five times longer.
Kids wouldn't leave home till they turned 90 to 100.
That doesn't really follow, but then again, we don't have a lot of examples to go by. Only plants and fungi seem to get to that age. We would certainly have to have a fairly short fertile window in life, and that could occur at any time, or be long-period cyclic, or else we'd overpopulate badly, but we could mature and be fertile for the same period without dying afterwards.
In any case, since I'm only talking hypothetical, I guess we can make the rules whatever we want on that. If we matured very slowly over 100 years, we may go through a variety of jobs as our bodies matured. It's hard to believe that our learning would be stretched out that much, though, so we would likely be mentally capable before we were physically capable.
Unlikely. Very few people can retire now at 30 or so years old. When I retire in eight years at age 68, my SS benefits will be about 60% less than my currently salary and I won't have as good medical benefits. In theory, I could keep making the same mortgage payments but can't afford to step outside the house and or afford to get sick. Heaven forbid I need 20 grand for a new roof...
Just 20 grand for a new roof every 20 or so years for another 400 years....No can do.
That's an interesting point. You may have revealed more than you intended. After all, I will have my mortgage paid off next year, so I was kind of assuming that such was standard, in which case that major expense will be off the books. Furthermore, I just replaced my roof...for 4 grand. You must have a HELLUVA roof...though, to be fair, my roof is as simple as a roof can be.
I will retire with SS and a pension, but both SS AND the pension assume that we'd be dead fairly soon after retirement. The social secuirty system makes all kinds of sense for the life expectancy that was in place at the time. People generally worked until they began to break down, at which point SS only had to pick up a few years and then they'd be dead. The pension works the same way. In theory, we'd be able to invest enough money (given a hundred years of employment rather than 40, or so) that the interest on that money would pay the same amount as our current salary, annually. But that wouldn't be the case if the result of us working for only a tiny portion of our lives meant that the economy was changed so much that there weren't any interest bearing vessels.
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Nov 6th, 2015, 03:33 PM
#5
Re: Economic Thought Experiment
Thanks Dil, that's kind of what I was thinking, too.
Let me explain a bit of where this is coming from. The idea of human populations with very short lifespans has been explored in a variety of sci-fi stories. If our lifespans were radically shortened, people generally assume that technology wouldn't arise. For example, if our average lifespan was 25 years, we'd likely still be in the trees.
Another example would be the octopus. Octopi may have the most brain power on the planet, but they only live a few years (and taste good on rice with a little wasabi). The problems they have been able to solve suggests that the only thing really holding them back is the fact that they live only four or five years before meeting their end, or their wasabi, whichever comes first.
Some stories talk about fantastically long-lived races, but they aren't discussed in the same detail. It's usually assumed that they just become super wise. I'm not sure that would be the case. They may take forever to form an economy because the economic principles we rely on would be so utterly different.
As a case in point, just think of football (American version). A quarterback may last 10-15 years in the league before age takes its toll. If we remained at a fit level for hundreds of years, that could change everything. The Colts would still have Unitas, the 49ers would still have Montana, Brady may or may not have replaced the Grogan/Bledsoe rotation, and the Browns would STILL have no quarterback (cause them missing on all cylinders is kind of ageless).
The more I think about it, the more I think that our society is a result of our lifespans, which has some interesting implications.
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Nov 7th, 2015, 03:36 PM
#6
Re: Economic Thought Experiment
I follow that and can see it to some extent. I'm not entirely convinced that 25 year lifespans would leave us "still in the trees" but the point is well taken.
Whether we look at very long or very short lifetimes we might need to consider how much the "pace of life" alters to fit.
One thing we're already seeing as lifetimes extend is a delay in maturity at the young end of the cycle. It is now far from rare for people to defer marriage and children far into their 30s. And then looking at education we see high school diluted to a point where a BS/BA degree produces the same level of general literacy that not long ago a high school diploma signified. Remember that it wasn't much longer ago than that when public high school graduation required a certain level of proficiency in one or two classical languages! Now it is hard to find one that even offers Latin, let alone Greek and Hebrew.
Along with this we are also seeing Social Security style retirement assistance programs worldwide adjusting the age of full benefits upward and upward. The intended effect being to retain solvency by keeping people in the active work force longer.
These kinds of thinking can be interesting. Not to venture too far off topic, I've wondered why there isn't more science fiction dealing with alien races that differ from us in subtle but significant ways. For example "dolphin-like" minds might comunicate well with us in general but be so alien that we'd never truly understand each other. Or something as basic as the process of vision might be different enough that an alien race might not be able to "see" our video displays as images comfortably or at all, and vice versa. An alien video display might look weird to us, maybe like one of those Magic Eye® thingies that were popular a while back.
We might find ourselves with an alien immigrant community that can't help but outstrip our every effort to compete in our own economy. Something akin to this was explored a little in the old Alien Nation franchise, where they tended to suppress this in order to fit in and gain acceptance since they had no choice - basically being stranded here.
Examples exist, but in general we tend to find a presumption of... "equality?" This seems even more the case in popular-consumption scifi than in formal science fiction: early Star Trek granted Vulcans strength and wit that were later downplayed. I assume the old literary problem of having heros or villians too powerful reared its head. For example Tholians probably were downplayed in the canon because they were too different and powerful.
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Nov 7th, 2015, 04:08 PM
#7
Re: Economic Thought Experiment
Originally Posted by dilettante
I follow that and can see it to some extent. I'm not entirely convinced that 25 year lifespans would leave us "still in the trees" but the point is well taken.
You may well be right about that. The short stories that hypothesize a shorter human life span generally speculate MUCH shorter, such as 4-10 years, but that requires a much different maturity path. Plenty of inventions could be produced in 25 years, but reproduction wouldn't be delayed at all, so the whole society might turn differently.
One thing we're already seeing as lifetimes extend is a delay in maturity at the young end of the cycle.
Ummm, that's completely backwards. I have seen plenty of articles talking about the unusually early onset of physical maturation in kids these days, but never one on the delay of maturity. People are putting off having children and getting married (if they do it at all), but that doesn't mean that they aren't physically capable of doing so. That's nothing more than a choice.
And then looking at education we see high school diluted to a point where a BS/BA degree produces the same level of general literacy that not long ago a high school diploma signified. Remember that it wasn't much longer ago than that when public high school graduation required a certain level of proficiency in one or two classical languages! Now it is hard to find one that even offers Latin, let alone Greek and Hebrew.
Sure, and if we lived FAR longer we could have an expectation of education that would make us all polymaths or dropouts. The expectation could be that to be an educated person you'd have to be very accomplished in several different areas. That would be a pretty interesting idea. Ten years of applied math, multiple language proficiency, a reasonable grasp of most schools of philosophy, and a fair understanding of all of human history...and that might just be considered secondary education. That might mean that technological advances would go faster...sort of, except I guess that it might actually go slower because of all the time spent studying.
Along with this we are also seeing Social Security style retirement assistance programs worldwide adjusting the age of full benefits upward and upward. The intended effect being to retain solvency by keeping people in the active work force longer.
It's partly that, but also that things like social security assumed that you'd only live X years beyond retirement age, on average. As X increases, the assumptions fail, so either the retirement age has to increase to bring X back down, or payments into the system have to increase to make up the difference. That's tangentially related to what I'm talking about, because no current social security type of system takes in enough money to pay out for four hundred years. You'd need investments such that the returns on them would provide the full amount, and I'm not sure there would be an economy that could provide those vessels if 80% of the population was not in the work force.
These kinds of thinking can be interesting. Not to venture too far off topic, I've wondered why there isn't more science fiction dealing with alien races that differ from us in subtle but significant ways. For example "dolphin-like" minds might comunicate well with us in general but be so alien that we'd never truly understand each other. Or something as basic as the process of vision might be different enough that an alien race might not be able to "see" our video displays as images comfortably or at all, and vice versa. An alien video display might look weird to us, maybe like one of those Magic Eye® thingies that were popular a while back.
Or birds that have a type of cone in their eyes that we lack, or bees that see into wavelengths that we don't see? What does the world look like to them. Some aliens are close at hand.
Examples exist, but in general we tend to find a presumption of... "equality?" This seems even more the case in popular-consumption scifi than in formal science fiction: early Star Trek granted Vulcans strength and wit that were later downplayed. I assume the old literary problem of having heros or villians too powerful reared its head. For example Tholians probably were downplayed in the canon because they were too different and powerful.
There is a greater problem with creating alien characters that have vastly greater intelligence than us: Whose going to write the dialog? Humans can't say what a being smarter than any human would say, except by occasional chance.
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Nov 7th, 2015, 04:36 PM
#8
Re: Economic Thought Experiment
Originally Posted by Shaggy Hiker
Ummm, that's completely backwards. I have seen plenty of articles talking about the unusually early onset of physical maturation in kids these days, but never one on the delay of maturity. People are putting off having children and getting married (if they do it at all), but that doesn't mean that they aren't physically capable of doing so. That's nothing more than a choice.
Apples and oranges I think. True enough physical reproductive ability seems to be arriving younger but that might also be an artifact of environmental changes - hormones added to the food supply, etc. I was thinking of the extension of childhood and parental dependency into and through the 20s that we see now, with full responsibility only arriving and accepted once into the 30s. This seems new in human history and might be an artifact of increasing general population longevity.
As far as education and "achievement" go I suspect we are going to be seeing the spectrum widen over time, sort of a regression to earlier times. I just watched a State Senator on TV last night proposing that all public education be eliminated and replaced by private for-profit schools... in complete seriousness. While the discussion quickly moved on I suspect that he intends that the working poor masses would instead be channeled into narrow vocational programs more suited to producing unquestioning wage slaves. This worries me on several fronts because it seems intended both to limit opportunity and also casts a pall over vocational education which shouldn't be a "last resort for the disadvantaged."
But there are strong political trends that seem hell bent on creating a neo-feudal economy before the mid-21st century. Widening class divisions by controlling education is probably essential to these plans.
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Nov 7th, 2015, 04:41 PM
#9
Re: Economic Thought Experiment
We could be on the verge of "living in science fiction times."
Maybe a mix of some classic predictions: If This Goes On— and The Marching Morons both spring to mind.
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Nov 7th, 2015, 07:20 PM
#10
Re: Economic Thought Experiment
Originally Posted by dilettante
Apples and oranges I think. True enough physical reproductive ability seems to be arriving younger but that might also be an artifact of environmental changes - hormones added to the food supply, etc. I was thinking of the extension of childhood and parental dependency into and through the 20s that we see now, with full responsibility only arriving and accepted once into the 30s. This seems new in human history and might be an artifact of increasing general population longevity.
Ok, I see what you mean, and what I said was apple v orange. What you are describing may be an artifact of increasing longevity, or at least increased confidence in our longevity. However, the best explanation I have heard, and one that seems to be universally true is that it is women. Specifically, once women have more opportunities for education and careers, they put off starting families, which means both marriage and childbirth. After all, China is now rolling back their one-child policy because, as opportunity is rising for their women, their birth rate has dropped well below replacement rates and is still dropping. Nobody expects that even the complete abandonment of the one child policy would get their birth rate up to replacement rate, at this point.
I've long held that there is one, certain, solution to population growth: Educate and empower women.
As far as education and "achievement" go I suspect we are going to be seeing the spectrum widen over time, sort of a regression to earlier times. I just watched a State Senator on TV last night proposing that all public education be eliminated and replaced by private for-profit schools... in complete seriousness. While the discussion quickly moved on I suspect that he intends that the working poor masses would instead be channeled into narrow vocational programs more suited to producing unquestioning wage slaves. This worries me on several fronts because it seems intended both to limit opportunity and also casts a pall over vocational education which shouldn't be a "last resort for the disadvantaged."
But there are strong political trends that seem hell bent on creating a neo-feudal economy before the mid-21st century. Widening class divisions by controlling education is probably essential to these plans.[/QUOTE]
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Nov 8th, 2015, 08:44 AM
#11
Re: Economic Thought Experiment
Originally Posted by Shaggy Hiker
However, the best explanation I have heard, and one that seems to be universally true is that it is women. Specifically, once women have more opportunities for education and careers, they put off starting families, which means both marriage and childbirth. After all, China is now rolling back their one-child policy because, as opportunity is rising for their women, their birth rate has dropped well below replacement rates and is still dropping. Nobody expects that even the complete abandonment of the one child policy would get their birth rate up to replacement rate, at this point.
I've long held that there is one, certain, solution to population growth: Educate and empower women.
Well that suggests something scary.
Perhaps there is alarm among the chessmasters that this has gone too far, leaving a shrinking "base of the pyramid" of workers to fund retirement assistance programs. That might help explain the motivation for undermining education and engineering the mass migrations we see in Europe and North America right now. Both of those are in trouble because the existing populations haven't been properly conditioned to accept these changes yet. Watch for mass media trends glorifying trade schools and immigration.
Perhaps the "Walking Dead Plague" for thinning out the senior citizens isn't ready yet?
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Nov 8th, 2015, 12:35 PM
#12
Re: Economic Thought Experiment
I don't believe in the chessmasters, but there is certainly alarm. Several countries have tried various ways to encourage families to have more children. Many developed countries, and many in the developing world, have birth rates below the replacement rate of about 2.1 children per woman/family (though only the women really matter for that). One of the South American countries has tried straight up bribery, Japan is a bit frantic, and now China is getting nervous about it. The thing is that no solution has been found.
Fundamentalism might work. Fundamentalist teachings in western religions all favor less educated, less empowered, women.
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Nov 8th, 2015, 08:35 PM
#13
Re: Economic Thought Experiment
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Nov 9th, 2015, 01:30 PM
#14
Re: Economic Thought Experiment
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