Of Population Pyramids and Value Chains

It is by now well known that the main hope for developed societies subject to rapid population ageing who wish to maintain their relative standard of living lies in increasing their collective productivity more rapidly than they increase their dependency ratio via-a-vis the older age groups. Now in the comments thread on the recent ‘Reform is a Dirty Word‘ post I ventured to say that I found it obvious that at some stage we would reach a point where the rate of population ageing was going to outstrip the rate of productivity increase (in which case relative income per capita would inevitaby start to fall). David, unsurprisingly, asked me why I thought this to be the case. I was not happy with the response I offered (which was essentially some ‘rigmarole’ about the biology of ageing which is coming in a separate post), and since that time I have been scratching my head trying to find a simple way to get this point across. Perhaps I now have one.

All you need to get to grips with what follows is a basic understanding of geometry and a vague interest in football.
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No Answers Only Questions

One person who could rightly claim to know more about global ageing and its possible consequences than anyone else in the business is the German Director of the Manheim Research Institute for the Economics of Ageing Axel B?rsch-Supan. If there’s a conference being organised, he seems to be there. Actually his comments at both these meet-ups are well worth reading in and of themselves (here, and here).

In a sense B?rsch-Supan is almost uniquely qualified to express opinions on the topic since he has both devoted a large part of his professional career to studying the question, and he lives and works in a society which is already reeling under the impact. As he says:

“Today?s Germany has essentially the demographic structure that the United States will reach in a quarter of a century. The dependency ratio (the ratio of persons aged 65 and over to those aged from 20 to 59) is at 28 percent, and it will reach 75 percent in 2075, if we dare project that far. Almost one-fifth of the German population today are aged 65 and over. One quarter are aged 60 and over, which is relevant because the average retirement age in Germany is 59.5 years. Thus, in this sense the United States is not ?entering largely uncharted territory,? …. Rather, they can look to Europe?in particular to Germany and Italy?to see what will happen in the United States.”

I mention B?rsch-Supan because he serves as a good pretext for going over where we are to date with the issue. As he says himself. watching demography change is rather like watching a glacier melt, on a day-to-day basis it’s hard to see that anything is happening, but over time the impact is important.

One of his recent papers has the intriguing title: “Global Ageing: Issues, Answers, More Questions“. It is a good up-to-date review of the ‘state of the art’, and a quick examination of the points he makes probably serves as a good starting point, since I can’t help thinking, in the case of global ageing, it isn’t so much what we know that matters, it’s what we don’t know.

So here we go, a review of what we “know”, what we think we know, and what we don’t know:
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The Value of Learning a Second Language

What is the value of learning a second language aside from the obvious practical benefits : the fact that you can talk to people who don’t speak your first language, can read things which have not been translated, can politely talk to people who don’t find it easy to speak your first language and can read things in the original.

When I was in high school adults tried to convince me to try to learn a second language by claiming that it broadens the mind. They failed. Since then I have, more or less, learned Italian. What have I gained ?

My impression is that my mind reminds just about as narrow as it was before.

I asked Elisabetta Addis (the woman to whom I am married) what she gained from learning English. She said it was very useful, because by learning a second living language she learned that there is more than one way to structure concepts, that is that the structure of Italian is not the structure of truth, but is rather just one of many equally valid structures developed for historical reasons. I confessed that I have had the impression that Aristotle was not always totally clear on the distinction between his immense contributions to understanding Greek and to understanding thought and logic and would have confidently claimed that true though was only possible in Greek. I was as usual speaking from ignorance.

Trying to understand my different impression, she suggested that math is, for this purpose, like a second language (she learned English and math beyond a fairly elementary level simultaneously and imagine how fun that was).

I said that I suspect that part of the reason is that no one could possible mistake the structure of English for the structure of truth. Partly, of course, English spelling is totally arbitrary and makes no sense. Also English is not logical because it is part German and part French. For example to find if a claim is true one verifies it. Or steer meat is beef and sheep meat is mutton. That is, since English is a weird hybrid, English is its own second language.

If so, this is important, since the only people who have a choice about learning a second language or not are native English speakers.

My unassisted thoughts on the topic below the fold.
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