Re: NEWS: Ageing recession warning

From: Charlie Stross (
Date: Thu Aug 30 2001 - 10:05:21 MDT

On Thu, Aug 30, 2001 at 10:09:24AM -0500, Randy Smith wrote:
> The term "recession" measures the health of a country when it is treated as
> a business. But what has that to do with the wellbeing of the *citizens* of
> the country? Let's look at what should be the perfectly obvious example:
> suppose all citizens of Japan were retired, having saved enough money to be
> financially independent. No one at all would be working: the GDP would
> approach ZERO...the media would be screaming about it. But the *owners* of
> the country, its retired citizens, are doing just great. I really hope this
> example brought home for you just how very disconnected from reality media
> economic reporting really is.
There's a big logical fallacy in your argument, though: which is the idea
that a country can operate with nobody working. At least, it's a fallacy
today -- I really hope Hans Moravec's vision of robots everywhere has
something to it.

The thing is, an individual good does not necessarily scale to being a
public good if you give it out to everyone. If the entire population of
Japan retired, who the hell would be running the nursing homes? Wiping
bottoms and cooking dinner? Keeping the power stations running? In
practice, what an ageing recession means is that there are fewer warm
bodies available to look after the old folks. (That leads, among other
things, to wage inflation without corresponding GPD growth -- Not Good
if you're one of the pensioners living off your investments.)

Now, we can pick holes in this argument until the cows come home; for
example, if all the Japanese pensioners move to Manilla they'll have lots
of alienated labour to spend their dividends on. Or they could import
labour via, let's say, waldos teleoperated by minimum-wage workers in
Slovakia. (Thus neatly avoiding the "guest worker" problem and maintaining
a Japan that is 100% pensioned off but nevertheless functional.) But still,
there's a problem to argue over.

I figure the core problem is: what context do economic events occur
within? Some people maintain that the market is Everything. An orthdox
communist will probably maintain that the market is Nothing, and class
is everything. Being a wishy-washy old-fashioned British liberal, I
maintain that the market is a very large object that does useful things
most of the time, but it's not the be-all and end-all of human society,
and there are higher goods than greasing the wheels of the machine at
every opportunity.

> And yes, I want to live forever, too, but I have come to the conclusion that
> the conventional wisdom that a "healthy economy" has little bearing on the
> chances of developing long life medicine. WHy should the two be connected?

Well, that issue is entirely orthogonal to the previous one under
discussion. (And I agree with your conclusion, incidentally.) But if you
want to discuss it, I suggest we change the subject line ...

-- Charlie

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