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Economics of immortality?

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Fri, 2012-11-30 14:49
#1
Extrasolar Angel Extrasolar Angel's picture
Economics of immortality?
Does anyone ever read or stumbled upon on papers concerning the effect of immortality on economics? Obviously it would effect pensions, but what about other effects, how would it influence consumer market and borrowing. Would people with perspective of immortality bother to pursue risky or highly careers? By immortality I understand of course a situation in which you can foresee to live forever barring death by physical means such for example being shot in the head. So basically something close to Eclipse Phase. Would economy turn a drastic turn due to such event? It would be interesting to see if any scientist ever thought about the effects on investments, service market or pensions if any potential longevity treatments are discovered.
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[I]Raise your hands to the sky and break the chains. With transhumanism we can smash the matriarchy together.[/i]
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Sat, 2012-12-01 17:09
jackgraham jackgraham's picture
My favorite SF novel on this
My favorite SF novel on this subject is Sterling's [i]Holy Fire,[/i] set in a near-Utopian life extension nanny state. A hyper-aged elite is beginning to emerge. They don't have immortality just yet, but they've set their sights on it. The economy is transitioning into post-scarcity. The one thing still scarce is healthcare, so most of the economy -- which has been tuned for stability -- revolves around small moves in the healthcare system. The conflict in the core plot has to do with a woman -- part of the gerontocrat elite herself -- upsetting that stability. It's also an interesting book if you want to understand the Titanian economy in EP better.
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J A C K   G R A H A M :: Hooray for Earth!   http://eclipsephase.com :: twitter @jackgraham @faketsr :: Google+Jack Graham
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Sun, 2012-12-02 04:50
Arenamontanus Arenamontanus's picture
Generally there has not been
Generally there has not been much good research on this - the topic tends to scare off academics for some reason. Most analysis of the economics of longevity is about far less radical life extension, like https://www.imf.org/external/pubs/ft/gfsr/2012/01/pdf/4sum.pdf In the small, there is "longevity risk" as the paper expresses it: if people live longer than expected, then pension systems will be in trouble. This is usually where most economists stop, since they fear making too dramatic claims. In the large, economists think that more long-lived people are a boon since they have more human capital and can work more, while less human capital is wasted into the grave at an early age. Estimates suggest that the longevity gains over the past century can be measured in trillions per year: http://www.nber.org/papers/w11405 So immortality would mean a huge boost to the economy: lots more wealth produced since there would be super-experienced people around. If you expect to live long you tend to have a lower discount rate: you can afford to invest and wait, so you will want to save rather than spend your money here and now (this is one of the things in Holy Fire, and earlier in Simak's "All Flesh is Grass"). Might make a somewhat risk aversive society, but there is going to be a lot of capital around. The long perspective might also make people greener in outlook: http://ftp.iza.org/dp4564.pdf There have not been that many proper demographic studies. One of the most fun is http://www.ourcommonfuture.de/fileadmin/user_upload/dateien/Reden/Gavril... https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3192186/ which demonstrates that is Sweden got radical life extension it would not mean a population explosion: it is fertility that matters more than longevity for population growth. Of course, the adoption of life extension will depend on cost. This all depends on what form it takes (gadgets, drugs = becomes cheap, services = remains expensive). I found one paper that tries to look at this, http://arxiv.org/abs/0806.2964v1 but it is a fairly crude model. It predicts that if life extension is really expensive forever it leads to an unequal society of mortals and immortals, while if it is affordable enough society eventually becomes totally immortal. Duh. But no doubt it can be tweaked into more interesting and realistic scenarios with some work.
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Extropian
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Fri, 2012-12-07 12:52
nezumi.hebereke nezumi.hebereke's picture
Sweden has low a birthrate
Sweden has low a birthrate due also to other factors, such as cost of living, education, low infant mortality, and economic opportunities for women. We've seen in several countries that the best predictor of birth rate is women's education. Immortality will naturally suppress birth rate to some degree, as it raises the cost of living and raising children, but the rate of feedback for that is rather long, so you may still get a baby boom before it stabilizes. Another issue is that older people are more likely to be politically involved, and more likely to vote conservatively. However, it would be difficult to posit if this is because of the amount of time the person has been alive, or because of physiological changes that come with age. Holy Fire clearly supports the latter. Economic theory may support the former. If you have a population made up of immortal sixty-year-olds, expect a very different political environment than one of immortal twenty-year-olds.
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Sat, 2012-12-08 00:10
Erenthia Erenthia's picture
What affect would there be on
What affect would there be on credit, I wonder? Since you can take out a loan with a term of 100 years instead of 30, people would be able to reach even further beyond their means, though I imagine there would be some sort of limiting factor here. 30 years is plenty of time for some sort of tragedy to happen to make you be unable to pay your debts. 100 years would seem to increase that chance (dependent, of course, on other available technologies). What affect would being able to reach for large sums through borrowing have on the economy?
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The end really is coming. What comes after that is anyone's guess.
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Sat, 2012-12-08 05:24
Arenamontanus Arenamontanus's picture
Erenthia wrote:What affect
Erenthia wrote:
What affect would there be on credit, I wonder? Since you can take out a loan with a term of 100 years instead of 30, people would be able to reach even further beyond their means, though I imagine there would be some sort of limiting factor here. 30 years is plenty of time for some sort of tragedy to happen to make you be unable to pay your debts. 100 years would seem to increase that chance (dependent, of course, on other available technologies). What affect would being able to reach for large sums through borrowing have on the economy?
If you can borrow a lot, you can use it to leverage wild projects. It is the opposite to the financial crunch right now: startups can try things, finance companies can borrow to invest, people get long-term mortgages, and so on. Back to the good old 1990s! However, banks would be foolish to lend a lot just because people will be around decades ahead - they still will not get their money back if people or companies go bankrupt. The real horizon is based on uncertainty: will society be around, will the laws be the same, how long can people be trusted? I think the real effect of longevity will indeed be that there will be money for long term lending, since there will be long-term people around. But the interest rates will be low.
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Mon, 2012-12-10 10:25
nezumi.hebereke nezumi.hebereke's picture
The other issue with credit
The other issue with credit is that $1 in 30 years is worth a tiny fraction of $1 now. This loss of value increases exponentially. Eventually the result is either no loans beyond a particular time horizon (because your $2,000 payment in the year 2090 is effectively worthless), or the interest completely overwhelming the payments on principal, effectively creating an interest-only loan.
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Mon, 2012-12-10 20:55
Erenthia Erenthia's picture
Another interesting thought:
Another interesting thought: if one can work at one's prime for 100 years, then getting together a retirement fund seems trivial. If I could work for 100 more years then I could easily pay off all my debts and put together enough low risk investments that I could live (modestly) without having to work indefinitely. That seems problematic in the long term. If hardly anyone is working except the extremely young (under 100) how can society continue to function? Is it possible for a capitalist society to work when 90+% of people make an income through their investments rather than their labor? Also what does this do to inflation? If the majority of most people's income is discretionary rather than necessary for survival (and further, most people don't need to do much saving) then there's a lot more spending, meaning the young have an increasingly difficult time getting to retirement horizon. (reminds me a tad of Vampire the Masquerade. It sucks to be young) Of course this picture changes a bit when you add Family into the mix. A 500 year old should be quite capable of supporting his great-great-grandchildren (and everyone in between). Especially when you consider how much of a slowdown in fertility rates we're likely to see. This compounds itself when you consider how trivial it should be for an Elder to essentially be the bank for his much younger descendants. This means interest is paid back to the Elder (and kept in the family) furthering the divide between young and old. Hmm...perhaps I wasn't born 100 years to early....
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The end really is coming. What comes after that is anyone's guess.
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Tue, 2012-12-11 16:13
nezumi.hebereke nezumi.hebereke's picture
That is an issue, and almost
That is an issue, and almost the reverse of the first one about interest rates. If everyone qualifies, the bank raises interest rates to meet demand. If everyone can work (or has been working) for 100 years, the value of fixed goods like land and houses explodes. (And just imagine the cost of college! The ROI of a college education over 100-200 years is incredible.) The end result is everyone *has* to work for 100 years to afford basic things. The people best off are those just at the cusp. They buy when people are living 'til 80, and then continue to work and save indefinitely.
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Mon, 2013-01-14 09:13
Revinor Revinor's picture
Houses have half-life time.
Houses have half-life time. Bad things happen - fires, tornadoes, technologies become obsolete/illegal, earthquakes, floods, riots/wars. It is not like you buy a nice house, pay a loan after 50 years and live happily ever after. It is more like having to buy a new house each 70-150 years - or even just spend same amount of money in repairs/technology replacement costs. I think that with effective immortality, you may as well observe reverse trend - increase in lease/rental, because you expect to outlive the house. Given wars, government changes, society changes etc, you may as well find your beatiful mansion repossesed by 'the masses' in 80 years when communism makes it's big comeback. Better to rent it (which is like 100-years loan, just without principal) with possibility to get rid of it at the whim, if you need to move or environment changes. Obviously prices would reach equilibrium at the level where rental+food+basic recreation is consuming all your income, so you can be tied into infinite slavery. And rich would become even more rich.
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Mon, 2013-01-14 15:15
nezumi.hebereke nezumi.hebereke's picture
To a degree, you're right.
To a degree, you're right. But even in a modern metropolitan area, the amount I pay to buy the house is far less than the cost of maintenance or even building it new. And things like land DO have a near-infinite lifespan. Ultimately, that's most of what I'm buying with a house.
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