Bryan Caplan  

Life Extension and the Economy

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One of Robin's most brilliant posts concludes:
The standard views of techies about what techs will be feasible might be wrong, and the standard views of economists of how to forecast tech consequences might be wrong.  And it is fine for contrarians to try to persuade specialists they are in error, though contrarians would be wise to at least understand the standard view before trying to overturn it.  But surely what the world needs first and foremost is to see and take seriously the simple combination of the standard views on such important topics.
This is exactly what came to my mind when I read Leon Kass' ominous speculations about how life extension would affect the economy in his famous essay, "The Case for Mortality":
How will the large numbers of seventy- and eighty- and ninety-year-olds occupy themselves?  Less infirm, more vigorous, they will be less likely to accept being cut off from power, work, money, and a place in society...  New opportunities and patterns for work would appear to be needed.  Mandatory retirement could be delayed, permitting the old to remain active and permitting society to gain from the continued use of their accumulated skills.  But what about numerous tedious, unrewarding, or degrading jobs?  Would delaying retirement be desirable or attractive?  Also, would not delayed retirement clog the promotional ladders and block opportunities for young people just starting out...?
But that's not all:
Retardation of aging could really mean prolongation of functional immaturity.  Consider the young: isolated not only from the top of the ladders of power but also from some of their lower rungs, supported by or even living with parents into their thirties or beyond, kept in a protracted sexually mature "adolescence," frustrated, disaffected, rebellious or apathetic...
Kass concludes:
Clearly, to avoid such strains and disasters, great changes in social patterns and institutions would probably be needed, changes unlikely to occur except through strong centralized planning.  The coming of such centralized planning will have consequences of its own, not all of them attractive or desirable, to say the least.
Since he's writing in 1983, I have to take the last paragraph as a thinly-veiled warning that, "Immortality will end in communism."  I've heard of "Better dead than Red," but this is ridiculous!

What's wrong with Kass' analysis?  Well, it might make sense in a rigid caste society where sons follow in their fathers' occupational footsteps, and promotions are based on seniority.  It might even be a good description of mediocre academic departments.  But it's irrelevant for advanced capitalist economies.  In a passably free labor market, talented young people don't have to wait for retirements to get promoted.  If their current employer won't pay them their marginal productivity, somebody else will. 

Furthermore, even if ossified hierarchies ruled existing firms, the end result wouldn't be economy-wide stagnation and "functional immaturity."  It would be new entry by firms run by young people on meritocratic lines.  The creative destruction of the economy does not require the physical demise of any of its participants.

What makes Kass' analysis so silly is that he crossed disciplinary lines without doing his homework.  As a result, he never learned that in the first two weeks of graduate macroeconomics, students learn all about the infinitely-lived agent model.  Economies with immortal agents are not virgin territory for mainstream economics.  They are the benchmark case, and their efficiency is easy to prove.  The harder question, it turns out, is whether an economy with finitely-lived agents can mimic its efficiency.

Of course, as Robin suggests, Kass might reply that the standard model ignores something important.  Maybe it does.  But it's hard to take an inter-disciplinary thinker seriously when he can't even explain what the standard view is - much less tell us what's wrong with it.


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COMMENTS (9 to date)
Eric Johnson writes:

Though it probably doesnt cover as much as you covered, a really simple way to point out his fallacy is just to see that a greater number of (productive) people simply expands the economy. The ladder wont get clogged up, because it will get wider. Even an relative economic know-nothing like myself can see this immediately.

On the other hand, while his statement is false simpliciter, it could be quite true for the longer term if economic life winds up being limited by scarcity of some natural resource, as opposed to their now being limited mainly by human capital. Things could plausibly wind up limited by energy, if those who claim there is limited recoverable fuel for nuclear energy are correct. Others say there is plenty of nuclear fuel; since they are the less PC side, I'm guessing 66 to 33 that theyre right.

R Richard Schweitzer writes:

As a corollary: consideration should also be given to the current trend of the extending immaturity, or delayed maturity of the younger levels of "Western" populations, especially in the U.S.

George writes:

Re "new entry by firms run by young people":
Everywhere I look I see many and increasing barriers to entry to every market (licensing, complex regulations, land zoning, ridiculous patents, etc). As the old people age, they will decline in productivity, and the more they will demand protection from the young. They'll also have more votes.

Curtd59 writes:

RE: " As the old people age, they will decline in productivity, and the more they will demand protection from the young"

You mean, that we will return to normalcy? Because you're describing the normative condition in human history, from oligarchies, to guilds, to licensing schemes to unions.

The one strategy that changes this is for the old to save to lend to the young. But we have built our entire western civilization to do just the opposite.

Doc Merlin writes:

"Furthermore, even if ossified hierarchies ruled existing firms, the end result wouldn't be economy-wide stagnation and "functional immaturity." It would be new entry by firms run by young people on meritocratic lines."

That last sentence is exactly what the legal and academic systems were designed to prevent. /snark

Anonymous writes:

"You mean, that we will return to normalcy? Because you're describing the normative condition in human history, from oligarchies, to guilds, to licensing schemes to unions."

add on "to governments."

You forget that social security and medicare are on average a net movement of money from the poorer age brackets of the population to the richest age bracket.

E. Barandiaran writes:

Bryan, you're assuming stability but the Kass' speculations you mention appear to be arguments for a society that may not be stable.

Matthew C. writes:

George, Curt and Doc nailed it. . .

Ryan Vann writes:

Wouldn't a world of immortality imply a world beyond scarcity though? In other words, wouldn't conventional Econ be irrelevant at that point?

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