Population control, medical science, political blindness, and an actuarial disaster
Let me get this out of the way right now: all the stuff about world population eventually levelling off because people have smaller families once they get wealthier is bunk, and there is one excellent reason for this: wealth attracts an active professional medical sector to the economy….and these folks go on to save far more lives than are lost to contraception.
What’s more, as long as this life-saving increased longevity lark continues, the decoupling of institutional shareholders from the bourse/investment banker/25% net growth per annum insanity will become increasingly difficult – and eventually, impossible. Because those institutions provide survival money for retirees. And every year on every continent, there are more people surviving to retirement….thanks to medical ‘advance’.
All things remaining equal, there is no getting away from any of that. The very first successful State pensions appeared during the reign of Frederick II in Prussia. The success was based on a starting age of pension withdrawal set at 70….when the average age at death was 58. In 1947, UK Government actuaries set the State pension age at 65 based on median death at 72. Today it is far higher than that…thanks to medical ‘advance’.
Until around 1956, very few pension and assurance companies invested in the stock markets. With almost no exceptions, the yield on Gilts, T-bills and so forth was enough to ensure a wide margin for the supplier, and a healthy annuity rate for the saver. But at this point, almost every economic commentator foresaw a golden age of never-ending economic growth sufficient to do two things: allow a beneficent State to provide grand-scale welfare, and provide an opportunity for provider margins to be even better by investing a manageable proportion of its pot each year in slightly riskier equities with potentially higher returns.
The problems, however, began when the better stock market returns in the private sector began to look vital – in the light of poorer and poorer sovereign bond yields – as more and more States started playing with deficit economics. It was the beginning of a series of vicious concentric circles that eventually led to today.
2012 is the Double Whammy that nobody wanted, and we of the vocal minority foresaw: the collision between hopelessly indebted Sovereign public finances on the one hand, and a worldwide recession created by globalist mercantilism on the other. The collision is taking place, of course, because the consumer society took a leaf out of government’s book by borrowing, and the multinational/banker nexus began to get used to the crazy idea of growth based almost entirely on citizen debt. So when, after the point of no return came and went in 2004 – and no politician or central banker anywhere in the West wanted to place his or her power in the hands of a deadly (but vital) credit squeeze – then the destination was set at Double Whammy. And the longer the reckoning was delayed, the more painful the Whammy was always going to be.
But the whole has been exacerbated by the medical profession. Because it and it alone took the sort of decision it nearly always takes: one at complete variance with the commercial, social and species realities of life in the material world. It chose to press on regardless with the sort of research that (i) no Sovereign could afford and (ii) would absolutely guarantee an unaffordable outcome for private wealth preservation.
Had the NHS, for example, chosen by (say) 1971 to cut its suit based on the cloth available, the result would’ve been a public health service dedicated to improving quality of life while we’re here on Earth – not making the experience last as long as possible regardless of quality. But no, the superiority God-complex of the hospital consultant chose to opt for quantitative increase over qualitative improvement.
Here are some bald facts. At the creation of the UK State pension scheme, no politician thought it would be a good idea to invest the money citizens were putting into the Treasury coffers in their NI contributions. In the promotion of research and costing of curative hardware in the NHS, not a single manager has thought to question the social consequences of prolonging the life of the average Briton. As the life expectancy figures crept ever upwards, no Minister of State at any point suggested making some personal pension provision obligatory in the PAYE system. As the H&SE ploughed on with its export cost-increasing measures over the last 15 years, not one Sir Humphrey ever considered the idea of just accepting some death risk as part of life.
What we’ve been watching for several decades now is a dysfunctional mix of optimism, can-kicking and myopic lack of foresight make the current impasse inevitable. Neocons, globalists, derivative slicers, sovereign credit salespeople, greedy institutions, money-mad bankers and hubris-fuelled medics have exacerbated the problem. But the core responsibility lies with those we have paid handsomely to guide and discipline these people: Whitehall civil servants and Westminster politicians.
The buck for all that responsibility comes with the territory. But we, the citizens, have failed to make them genuinely accountable. And that. ladies and gentleman, is why we are all where we are tonight.
Enjoy the weekend.