Longevity economics

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By JORGE FELIX*

Author's introduction to the book on population aging

The public debate on population aging in Brazil is intentionally confined to the question of the need for solvency of the social security system accounts. My interpretation has always been that this purely fiscal bias would condemn the issue to an image of a deterministic catastrophe with perverse results for all social security and, consequently, for Brazilian society. Unfortunately, this is still the hegemonic meaning in the public sphere, especially among economists. This exclusivism erases the entire historical context of the demographic dynamics that differentiate poor countries from rich countries, using here a definition, I agree, that is quite simplistic to designate the stage of economic development of nations.

Other nomenclatures, widely adopted, such as developed, underdeveloped, emerging, middle-income countries, etc., only increased the fog about what this book intends to bring to light. The purely fiscalist debate hides the character acquired by the demographic dynamics in the global competition of the 4st century. Alongside climate change and technological advances (the so-called XNUMXth Industrial Revolution, with the rise of artificial intelligence in production systems), global population aging, although at different rates from one nation to another, is the determining factor in our century of possibilities for economic development. The world is experiencing a “population race”. Those countries with the best abilities to solve this challenge will be able to maintain or reach a satisfactory stage of development. The losers will be left behind.

Another aspect of population aging is its potential source of wealth. In two respects. The first concerns the possibility of financial and insurance companies in one country exploring the retirement savings market in foreign countries and this explains a lot the interest of players global impact on reducing reforms of social security systems, especially pay-as-you-go pensions (pay-as-you-go) from poor countries such as Brazil. In global competition, savings made elsewhere are seen as a source of profit for the solvency of a Welfare State under threat in rich countries.

The second aspect is the potential of population aging to be the driver of a new segment of highly sophisticated industrialization. It is what I called the “longevity economy”, in 2007, in a translation of the term “silvereconomy” (or “longevity economy”). Still in its infancy in Brazil, the economics of longevity is based on changing the structure of family consumption (with more elderly people and fewer children) to bring about an economic vision full of possibilities for countries in the industrial area – following a Schumpterian and Marxian vision. defense of industrialization as an indispensable condition for economic development.

In summary, aging could never be seen only as a cost, as a “ticking time bomb”, as it has been by public policies in the field of Social Security, but as a source of resources if a more productive and less financialist strategy is adopted in the economy. Rich countries are aware of this economy and, in recent years, especially after the 2008 crisis, have begun to allocate mountains of resources to research and development with the aim of taking the lead in this “population race” and being the global leaders in countless aging products and services, almost all high-tech.

These aspects are practically ignored in the public debate about population aging in Brazil, either by policy makers either by the press or even a good part of the academic environment. This contempt has an economic cost, on the one hand, and on the other, evidently – or at least for those who have white hair and have stopped believing in coincidences – a far from nationalist economic interest. From my perspective, after many years of research, it is clear that the global demographic dynamics, for the above reasons, acts as a vector of a new colonization with channels in the financial industry, in the technology and health industry and in the immigration processes.

The latter with the condition that they are for the supply of cheap labor, mainly women, for the long-term care of the elderly. As North American sociologist Arlie Russel Hochschild states, female hands for care are a kind of new natural resources, as were gold, rubber, oil, which the rich world plundered from the poor world in past centuries. In this “emotional imperialism”, the product is love and affection for child and elderly care jobs in rich countries. It is difficult for economists, even the most mathematically inclined, to quantify in the aggregate the quantum of hours freed up for work family members of elderly people in rich countries puncture of immigrant caregivers.

More than this asymmetry between the stages of development of countries as they age, notably the poor and the rich, or the “West” and the non-West, this book intends to rescue another aspect that I consider important in the debate specifically on social security. It's your social sense. In conversations with many economists at events, audiences or students from various undergraduate and graduate courses, I realized, over the years, how the “meaning” of a social security system was completely lost in the tangle of numbers and tables of speech inspector. Most economists, I venture to say, deal with the social security issue by aligning it with other ordinary expenses. Its original character, of enormous political and social burden, is erased.

Pension systems never emerged out of solidarity, pity for the elderly, or concern for social inequality, although they played that role. It arose out of fear of war, out of the certainty that, without a minimum of social cohesion provided by reducing the risk of old age, capitalism results in bombs and destruction. Although the first social security systems date back to the XNUMXth century, it is important to remember that it was after the two world wars that the world reached a consensus around their necessity and their state character. This book intends, therefore, to rescue this meaning, this meaning for the current debate.

Unfortunately, my point of view is somewhat pessimistic. Not about the particular possibilities of old age for each one, since aging is heterogeneous in all societies. Poor countries, as will be seen, have little chance of catching up with rich countries in the XNUMXst century to run that race with any chance. Time has never been kind to them. Not in the past. Not now. Population aging is surprisingly fast.

As we know, populations age due to a great victory for capitalism, the increase in life expectancy, concomitant with a defeat, in my point of view, the reduction in the fertility rate. I always insist on the question: if we are aging more and better, why did the man of the XNUMXst century decide to bequeath this fortune to fewer and fewer descendants? Perhaps poverty and growing social inequality explain this phenomenon. That is why the time has come to think about population aging far beyond social security.

*Jorge Felix PhD in Social Sciences (PUC-SP) and Professor of Economics in the Bachelor's Degree in Gerontology at the School of Arts, Science and Humanities of the University of São Paulo (USP).

 

Reference


Jorge Felix. Economics of longevity: population aging far beyond pensions. São Paulo, Editora 106 Ideias, 2019, 190 pages.

 

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