Defend Truth


We can’t just keep getting older


Mark has spent some 35 years in positions of leadership in finance, banking, private equity and, more recently, in government, since he graduated from University of Cape Town in Actuarial Science. Mark’s understanding of capital markets and his ability to distil the essence of business models have enabled him to effectively engage with all related stakeholders to bring about change. He is a devout South African and an ordinary man.

We’re getting older, obviously. Every day we’re warned about the approach of the end of the world, of civilisation as we know it. We may die from such a threat, but we’re not going to die of old age anymore, and that’s a problem. Three score years and ten just isn’t the number.

It is already being claimed that the first human to live to the age of 200 has already been born. I doubt it, but we are going there. The Queen will need computer-generated notes to replace her hand-written personal centenarian letters of congratulations, soon enough, in her lifetime.

The causes of ageing are obvious: fertility rates are declining and life expectancy is increasing. The social and economic consequences of this are dire.

The world average of live births to a mother has declined from just under five to just over two, over just the past two generations. At the other end of the spectrum, the old and geriatric population is expected to exceed two billion within just the next generation.

The percentage of the population over 65 varies considerably across countries, climates, stages of development and access to life-extending healthcare. In SA, only some 7% of our population is over 65 and life expectancy is about 62 for males and 68 for females. The comparison with Japan, for instance, is stark, where roughly 30% of the population is over 65 and life expectancy is 20 years longer than ours.

There are both social causes and consequences of this trend. Beyond access to primary healthcare, longevity also increases with prevention and better management of chronic diseases and enabling, caring old-age environments — the social contract.

The social impacts can get quite personal. It’s one thing having your mom around to baby-sit, its quite another abiding four generations living under the same roof (at least only one or two of them will be using the Wi-Fi bandwidth, for now).

Over a space of 120 years, everything changes. Nothing that was normal then is normal now. Imagine the dinner table scraps. “In my day” becomes “In my century”. In any case, I’m convinced our kids aren’t supposed to live at home after 21 (or even younger, depending on what they’re getting up to). We’re not supposed to get on socially at that level of intensity. Sunday lunch is enough, and then send them back to their grubby, scarcely furnished apartments, and keep subsidising the rent.

The angst of inter-generational co-habitation surely takes its toll on the happy and productive indices of the population, but the truth is we can’t all afford to live apart. One of the biggest issues is who gets to determine whose future? It seems ridiculous that baby boomers and generation X should have roughly the same say, while the swing vote could either be the geriatrics or the millennials, depending on the issue.

The middle-aged majority may well not in fact rule (even though it is them alone who furiously debate these outcomes in Parliament). Brexit was surely a triumph of the insecure youth and the establishment old over the sensible middle? Perhaps there should be a higher entry age and upper limit to voting rights, but you go tell your kids and grandparents that, good luck.

What about dementia? What about early-onset grumpiness, that us men suffer from as our testosterone count diminishes? Should there be health checks in voting rights? Or when is someone disqualified simply for being out of date? Whose future is it anyway?

The real debates are, however, rooted in economics. Even though people are working longer and longer (they have to), productivity isn’t linear and fewer and fewer of the people are supporting more and more of the population (particularly if you cut this one level deeper into a taxpayer analysis). But that’s just the obvious stuff.

The cost of the social net will eventually become unaffordable and we will simply have to spend more on (early stage) social development to avoid the burgeoning cost of (late-stage) social rescue.

The actuarial liabilities of pension funds grow at very different rates to the growth in the value of assets that members’ contributions are invested in, affected as the former are by such factors as life expectancy, changing benefit structures, medical aid funding, and demographics generally, and not by the performance of the equity and bond markets. More contributions will be required, earlier, to fund longer-than-expected post-retirement lives, and that will impact on disposable income and economic growth. It doesn’t look good.

We love them, but our elders are going to cause economic dis-equilibrium, if not dysfunction. The hard part of all this is that there isn’t really a palatable solution. In fact, the conundrum is that the more we spend and the more successful we are in finding solutions to extending life, the more it will cost us to do so.

We can’t stop doing that, it is against our very instinct. But at some point, there will be more people on this planet than the resources required to support them. We’ve already interfered with the natural course of things, and there is always a price for that.

Hell, I don’t know what to suggest? BM


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