Comment by nostrademons | Hacker News Reader

Comment by nostrademons | Hacker News Reader

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When it comes to funding retirement on a societal level, the only two numbers that matter are dependency ratios (the number of working people per non-working person) and productivity (the amount of useful work able to be done by one laborer). If either of those falls, living standards necessarily have to fall - you have fewer people doing the work of supporting everyone, potentially less efficiently. If you can get productivity to go up faster than the dependency ratio is falling, you have a chance of offsetting the fall.

Every government policy or financial product is just redistributing the pain of falling living standards. You can dictate that retirees receive transfer payments from working people, as per social security - but it means that they have less money to spend on themselves and their kids. You can transfer earnings within a corporation from current workers and shareholders to retirees, as per pensions - but it means the company will be a less attractive place for new hires, and risks the financial solvency of the whole company. 401(k)s have their own problems - the price of stocks, at any given instance, is set by the ratio of dollars entering the market to dollars leaving the market, so if all retirees try to pull their money out to fund retirement at once, they'll find the stock prices they were counting on crash.

Well, when the global food chain collapses with the environment, I think 'working people' will be overshadowed by 'starving' people.

Depends if political stability can be maintained. The Earth produces enough food now to feed about 10B people, a roughly 50% increase over total world population. We still have famine because of distribution problems: the food doesn't get to people who need it, and instead gets hoarded by those with power.

Global warming isn't likely to cut total arable land or food production (if anything, it'll likely increase it), but it definitely changes the distribution of arable land. Current breadbaskets like Southern Europe, South Asia, and Brazil might see frequent droughts; currently desolate areas like the Sahara or Canadian Shield may become fertile again. If countries can work out trade deals so that food gets to where it needs to, things can work out. If they start closing borders and saying "fuck you I got mine", there will be widespread starvation and war in many regions.

Food isn't hoarded, it's wasted, because no one pays for deliver it where it's needed.

I'd lean towards a view that those are long-term outcomes that might take thousands of years to materialize. But things like ocean acidification and permafrost methane release are currently looking unstoppable.

Canada and Russia becoming new bread baskets is a possible near-term future, but you'll have a lower total amount of incident input energy at those latitudes, meaning that even greater arable land areas will produce significantly less food.

If you’re going full Malthusian, why be so pessimistic?

Those are “positive checks” on population.

Because of 'overshoot'

Does that refer to the World3 model? I wish I could remember the details, but I remember getting really into that for a few months. I found some other simulations of the model, including one in javascript. But I also found that some of the initial parameters/assumptions were kind of arbitrary, including one that had a really sensitive impact on the overall modeling outcome. It made me think that it wasn't really indicating what it was purporting to indicate.

Wealth and income inequality matter too. It doesn't matter if dependency ratios are going down and productivity is going up if all of the productivity gains are being siphoned off (which they are).

That's partly what's so toxic about the meme that social security is, or will be, unaffordable. It embeds within in an implicit endorsement of current and future increasing levels of wealth and income inequality.

Over retirement-level timescales that shouldn't matter either. Either rich people spend their money on luxury goods & services, in which case it gets returned to the economy through the laborers who provide those goods. Or they bid up the prices of assets to the point where nobody outside of a small clique of people can afford them, start trading amongst themselves, and eventually get a financial crisis that destroys all that "wealth" when there are no more buyers.

I would strongly bet on the latter, as that is how every other major period of rising inequality has ended (along with a war). Prices are just an information-carrying vehicle that reflects what people are willing to pay. No buyers = no price.

> start trading amongst themselves, and eventually get a financial crisis that destroys all that "wealth" when there are no more buyers

> how every other major period of rising inequality has ended

This is an interesting idea. Can you offer an authoritive source, or any canonical examples that are broadly regarded as such by economists (and say which ones think so)?

The idea that every technological revolution (and associated period of rising income inequality) is associated with a financial crisis comes from Carlota Perez, Technological Revolutions and Financial Capital. Her thesis is that a technological revolution results in an order-of-magnitude increase in productivity over existing industries; the resultant productivity gains let entrepreneurs (and associated parties: financiers, skilled laborers, landlords, etc.) dramatically undercut entrenched competition while still reaping large profits for themselves, eviscerating the incumbent industry. You get a phenomena of "two monies", where people & prices connected to the new industry deal with dollar values that may be an order of magnitude higher than those connected to the old industry. Eventually the new industry sucks all the money out of the economy and leaves people still attached to the old industry (which may be a majority of the population but a minority of dollars) unable to afford any of the new products. At that point all the expectations of future financial returns collapse, and you get a financial crisis that destroys much of the paper gains of the newly-wealthy. Very frequently you get a war, too, if the new technologies give a significant military advantage over the old economy. Eventually the horrors of depression and war convince the newly rich & powerful that regulation and redistribution is in their best interests, and the technology spreads across the general population (all of whom eventually end up working in the "new economy"), and the promised prosperity happens.

The canonical example is the Great Depression (precipitated by the series of rolling bubbles in the 1920s, which themselves were fed by the prosperity generated by the new meatpacking/radio/electricity/automobile/airline industries, and which ended with WW2.) Other examples include the Panic of 1893 (overbuilding of the steel & shipbuilding industries and decline of agriculture), which led to the Progressive Era in the U.S, and the Panic of 1857 (overbuilding of railroads, ended in the Civil War).

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