Our future at stake
There’s a law that overrules all others that permeate economic life – including what we call the free market, namely the law of population. The above law was first put forward by 19th century economist Thomas Malthus and analyzed by Karl Marx. It’s a law that our politicians tend to forget. And so do we. However, the evidence is out there: Our population is getting older and we insist on resisting the necessary changes. The ruling elites are turning their backs on the future of the country, the economy and the future of their own children for the sake of protecting their all-too-precious privileges. The size of the population among whom the national wealth is distributed determines the level of prosperity, even happiness. Notwithstanding the – justified – struggles for a fairer distribution of national income, what matters most on an individual level is ensuring one a decent economic status. And not in the old Greek way of accumulating property. Instead, one wants to establish a more dynamic status that can withstand an ever-changing and opportunity-laden economy. Most households nowadays try to increase their savings without missing out on a high-yield investment. It’s about being realistic about the risks. Pressure from aging populations is more acute a problem than what we previously thought – among other reasons, because the aging population means less savings and, in turn, a decrease in the real value of property. Because putting money in the social security fund is the basic way of saving money, we should be deeply concerned about its future. And yet we shy away from any serious debate on the issue. People do so because no one has ever bothered explaining to them what the situation is. For their part, politicians shun the issue because they are afraid of the political fallout. As a result, people in Western societies tend to save little money once they retire while the younger generations prefer to spend their money right away. A further reduction in saving levels will bring a decline in our real financial status while living standards will deteriorate. That concerns both wealthy societies as well as the poor; both the middle classes and those below them. Over the next 20 years, half of the population will be over 50 years old. A very large chunk will be pensioners with demands for ever-higher standards of medical care. We will soon realize that the wealth accumulated by the present generation is smaller than the one before it. There isn’t really much time to increase our savings. And there is only one way to do this, and that is to improve productivity. We know the recipe. We just need to follow it.
