Hacker Newsnew | past | comments | ask | show | jobs | submitlogin

The old people in America now own the majority of the assets. If they transfer those assets to the young in exchange for work, things will get better. If the old are split into those that have a huge amount of money and spend a little percent of it in retirement, passing the rest onto their heirs, and a large number of old people that need to keep working just to survive, locking out the young people from moving up, there will be trouble. Unfortunately it seems like the latter is happening at the moment.


At a global scale, ownership of assets isn't really savings.

Imagine an island society, with a bunch of 40 year old workers. You own the company that gets all the profit from their labour. So, you have a real resource, which you could trade with other places.

Now of course this island has no children. How do you feel about your investment once the workers reach age 80. It wouldn't produce very much. In fact you'd need to put resources in just to keep your island ex-employees alive.

But that's an extreme example. Let's suppose that 20% of the population is only 20 instead of 40. When the current 40 year olds hit 65 and retire, the younger generation will be 35 and can support them. What happens to your profits?

They will probably still either collapse or near collapse. You had 100% of people in the labour force, now you have 20%. This poor 20% not only has to support themselves, they must support the 80% idle old. And that's before any surplus is generated for your profit as owner.

So, your savings in the form of ownership of the island weren't very useful. It just dies out.

Could you saved otherwise? Not really. To a limited extent you could store the outputs of the island. We do this currently with grain reserves, oil stockpiles, etc.

But most of the stuff we consume are produced in the same year. You can't save real goods, only ownership of entities.

So if the entities all have a shrinking labour force, they aren't worth as much. The old people in the us won't have meaningful assets with which to pay for their care.

(The one exception is a small old country that owns rights to part of the output of other countries which are younger. There's also an exception for automation, if the companies owned by the old are massively more productive per worker by the time the demographic bulge retires)

You're making the mistake of those who think that money itself as wealth, as opposed to a medium to exchange for wealth. Money is mostly fungible, but in edge cases it just can't buy certain things.


Savings are invested into creation of long-lasting capital goods that are just as real as grain reserves or oil stockpiles, and that yield a positive return over the original investment - companies being "massively more productive per worker" isn't the exception, it's (hopefully) the rule. Yes there is risk involved and some investments won't work out, but that's why you diversify and make conservative assumptions. (Now if the economy was projected to stagnate in the future, you might have a bit of a point. But since our economy is growing, even "paper" wealth like government bonds can easily yield a positive return.)


Wouldn't all of that be true for my island society too, as long as the population was stable?

Such a society would nonetheless face much difficult if the worker/retiree ratio changed from 100:0 to 20:80. That's true regardless of individual productivity level: case two is harder than case 1. Regardless of capital stock such as ports, rail lines, buildings, etc




Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: