Life Extension and the Economy

One of Robin’s most brilliant posts concludes:

The standard views of techies about what techs will be feasible mightbe 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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