In the countries of the old

Germany is exporting people.

Well, Eurozone countries exporting people is hardly news. But Germany isn't exporting the same sort of people as other Eurozone countries. Other countries are exporting their young and their skilled. Germany is exporting its old.

Economically this makes complete sense. Germany has a lot of old people and a relative shortage of the young & skilled. So it imports young & skilled people and exports old ones. After all, exporting old people is surely better than killing them.

There's nothing new about this, of course. Britain has been exporting old people for years. Relatively well-off pensioners like to retire to the sun after years of tolerating British weather. The southern countries of Europe contain substantial populations of expatriate Brits, many of them retired and living on savings. The economic collapse of the southern European states has taken its toll on them, of course: many British retirees in Cyprus lost substantial amounts of money in the recent bank restructuring, and owners of Spanish properties have seen the value of their villas and apartments drop as property prices have collapsed. But most of the sun-seeking pensioners are still there and enjoying a comfortable - and increasingly cheap - retirement.

Christina Odone recently bewailed the end of her "dream" of a Mediterranean retirement. She was talking rubbish. Property prices around the Med have never been so low, and for British pensioners expecting to live on savings, moving to a country that is undergoing internal devaluation has to be a good bet. Savings go much further when prices are falling (though admittedly they haven't much, yet). And sunshine is still free and plentiful: the southern European economies might be depressed and miserable, but the weather is as cheerful as ever. A renewed inflow of well-off pensioners from Northern European countries could do wonders for the Southern European states. I foresee the growth of new industries dedicated to serving the needs of the elderly, and perhaps new retirement homes with sea views and golf courses could revitalise the construction industry. And as our expatriate pensioners get older, of course they will need care homes and personal care. The healthcare industry, too, could be revitalised - though expatriate pensioners would have to pay, of course. Health insurance would be essential.

Germany's pensioners don't seem to be quite so keen on sun as British ones, since they seem to be going to Eastern Europe more than Club Med. Perhaps that's because Eastern European countries are closer, or perhaps it's because of historic ties, or perhaps it's just that retirement homes and care workers are cheaper in Eastern European countries than in Greece. The way things are going, that will soon change.

Interestingly, some of the countries to which Britain and Germany export their old already have a demographic problem. They are exporting their young and skilled, leaving a residual population of old and sick - who are being joined by old and sick from elsewhere. They are becoming the countries of the old.

What will life be like in the countries of the old? I asked this question on twitter and was told "look at Devon". Or anywhere along the South Coast of England, really. Visit any English seaside town in  Kent or Sussex and the population looks distinctly grey. The landscape is peppered with bungalows (retired people like bungalows because there are no stairs) and retirement homes. There are lots of little shops, tea rooms and golf courses. There might even be the occasional art gallery. But not much in the way of industry. You see, elderly people don't want to start businesses, and they don't want to work long hours: if they work, they want it to be a little part-time job that is not too strenuous. And once the majority of your population is old, the motivation to create new industries, grow existing ones, create employment and revitalise the economy just isn't there any more. It is young people who have the urge to take over the world and reshape it to their liking. Most old people just want a quiet life.

So "quiet" is exactly what these places are like. Which is fine for a coastal town. And Devon has always been a pretty quiet place anyway apart from the occasional bout of smuggling.  But a whole country that is happy simply to potter along, providing a comfortable life for its elderly citizens but not aspiring to anything more vibrant? Whatever happened to "restoring competitiveness"? Surely a whole country should be looking for growth?

There seems to be no logical basis for this assumption. What is wrong with a country becoming a sleepy backwater, if its population is happy? And what is wrong with a country deciding that what it really does well is look after the old - and providing exactly the right calm, undemanding environment for people in their sunset years? Why shouldn't some countries simply opt to become enormous retirement homes?*

There is a snag, of course. Although there would, as I have mentioned already, be new industries popping up dedicated to serving the needs of the elderly, the elderly themselves wouldn't be working in those industries, generally. And these countries have a growing shortage of working-age people: after all, the reason why care homes are being built in these countries is that care workers are cheaper....if they can find better-paid work elsewhere they will of course migrate. And not just care workers. The bigger risk is to the more skilled services required by the elderly, particularly in healthcare. These countries might have to pay doctors and specialist nurses rather highly to get them to stay. Would the elderly population be wealthy enough to pay them?

Well, perhaps. The fact is that most wealth is held by the retired and those approaching retirement. The trouble is that the elderly have come to expect to hang on to their wealth and be supported by younger people through their taxes. But in countries where the majority of the population is elderly, clearly this is not possible. An alternative means of providing universal services such as healthcare would have to be found. I've mentioned health insurance already: but even the US, the world leader in insurance-dominated healthcare provision, recognises that geriatric services are the most expensive and difficult to insure. And not all elderly can afford health insurance anyway. So some form of taxation is going to be required to maintain universal healthcare and social support. As the majority of people would not be earning significantly, realistically this is going to involve taxing property and financial assets rather than earned income: indeed it might be necessary to give workers tax incentives to stop them leaving. So in the countries of the old, perhaps wealth taxation rather than income taxation will become the norm.

But supposing that despite tax incentives, there still aren't enough working-age people to look after all those elderly? After all, these countries don't just have a migration problem. They aren't breeding enough people to maintain their working-age population anyway. And as their population ages, the birth rate is bound to fall even more. In the countries of the old there will be few children.....

There is a solution, of course. Technology. "Telecare" and "telehealth" schemes are already being promoted in Britain as a solution to the shortage of carers: if robots can replace human carers, and computers can constantly monitor health and provide early warning of problems, there could be far less need for real people to work in the elderly care business, and costs could be much lower. The usual response to such a suggestion is "But the elderly need human interaction!". For me this confuses two things. Personal care and health care currently involve human beings, and have therefore for some elderly people become a substitute for real human contact. But they are not fundamentally about real human interaction at all. For me it seems entirely reasonable that personal care, particularly for the frail elderly who need 24-hour support, could be better done by robots than by humans who can be tired, distracted, embarrassed or grumpy. I have seen how tired my 80-year-old father has become now he is my mother's full-time carer: it seems to me that a few robots monitoring her and helping her would be a very good thing, not only for her but for him. The same applies to a good many routine healthcare functions: we are used to nurses monitoring long-term health problems, but there is no particular reason why this could not also be done by robots, though I think some human intervention would still be sensible (since robots would lack the intuitive skills that the best healthcare professionals have, which pick up problems that otherwise might have gone unnoticed).

Of course, a world of elderly care done entirely by robots, with elderly leading isolated lives and lacking human interaction could be horrible. I have no desire to see Romanian orphanages re-created in retirement homes. Realistically, human nature being what it is, there will be some horror stories.....but I hope that the majority of technological elder care will be better than that. And in the countries of the old, of course, the elderly don't have to be alone. One of the things that retired people have in abundance, unlike younger working people, is time. Yes, they may be busy - but they are busy with things they want to do, rather than with things that they have to do in order to earn a living and care for children. I would hope that one of the things that retired people would want to do is meet each other and support each other.  In the countries of the old, perhaps elderly isolation could become a thing of the past.

There are losses, of course. Migration of the old to other countries breaks the ties with their families and prevents them spending time with their grandchildren. Many will regret this. But then the same happens when the young migrate in search of work....after all, many never return. The fact is that our family ties are becoming progressively more attenuated. Even in my own family, all four of my parents' children left the place where we grew up, and we are now scattered all over the UK. And our children may end up scattered all over the world.

Yet the attenuation of family ties is mitigated by technology. Worldwide web applications allow people in different countries to communicate with each other by video link, send each other messages and share photographs instantaneously. International voice communications are still expensive but becoming cheaper, while data communication is cheap and abundant. And technology is improving - and becoming cheaper - all the time. In the countries of the old, the desire to keep in contact with distant families may encourage the elderly to start using the communications technology that they fear. And of course, as time goes on the elderly will not fear that technology anyway....after all, the currently middle-aged invented much of it.....

Technology both expands and shrinks our world, enabling people to live and work at considerable distances from each other while still remaining in close contact. And technology both depersonalises   and personalises: things that are now done by humans may be better done by robots, freeing up humans to do what we do much better than robots - interact with each other at a personal level through conversation and shared activity.

The countries of the old could, of course, be terrible. But they could also be wonderful places. Places that the working people of the world love to visit....quiet havens, where humans, technology and nature are in balance.

And if it doesn't work....for example, if we decide we would rather keep our old people with us, in pods in the back garden.....well, there is always another future for countries that no-one wants to live in. For where humans no longer want to be, the wild things find homes. Kipling called it "letting in the jungle". It is no shame for us to abandon a place. Nature has plans for our ruins.


Related links:

Germany "exporting" old and sick to foreign care homes - Guardian
The movement of people (and its consequences) - Coppola Comment
The creeping desert - Coppola Comment
The zero-sum trade in people - Coppola Comment
Kill the old - FT Alphaville (and the other editions of Kill the Old, too)
And so the sun goes down on my villa by the Mediterranean - Cristina Odone (Telegraph) (paywall)
Can technology fill the elderly care gap? - Telegraph (paywall)
High-tech devices to meet housing and care needs of old people - FT (paywall)
The Second Jungle Book - Kipling

* Yes, I know this is the theory of comparative advantage. And yes, I know it supposedly doesn't work where capital and labour are fully mobile. But in this case, I think it might. Time for a fresh look at Ricardo, perhaps!


Comments

  1. Hmm. All I could think of towards the end of this was a dystopic Japanese anime called 'Ryojin Z' where old people are looked after almost exclusively by robots tended by the odd human nurse/mechanic, one of whom rebels by empathizing with an old man. Eventually the human spirit 'triumphs' when she helps him meld with his machine and yes, destroy Tokyo in his effort to get back to Kamakura where he met his wife, who turns out to have been reincarnated in the nurse.

    Then there is the famous 'Billows Feeding Machine' as demonstrated in 'Modern Times'...

    I'm shocked, Frances, are you really arguing for this kind of alienation between generations as a potential good thing? Or not something to be opposed because of its seeming inevitability? That in places where 'care is cheaper' those younger people providing it be condemned to only be able to get jobs doing that, while the young in other places can get on with aspiring to things more 'vibrant'?

    Until a robot can change an incontinence pad, dress a sore, or even just cook a meal, the replacement of human care - even if 'desirable' in some abstract economic sense - is impossible. Even when less intimate care is needed, human intervention will have to be somewhere, whether its at the other end of a Skype line or checking on the stream of stats and acting on any danger signals.

    Yes care standards are falling in the UK and Germany, but how could you blame 'understaffing' without acknowledging the ridiculous contracts care workers are now asked to work under? Then there is the dispersal from most neighbourhoods the armies of local care workers securely employed by councils, in favour of agency-employed, constantly changing strangers on zero-hour contracts. Can't we try to do better?

    I work mainly with older people who have become alienated from their families, some by choice, others not, in a neighbourhood rapidly changing around them. I don't have numbers but it feels like dementia has skyrocketed in just the last couple years. Of course I'd make a correlation to cuts in home care services, outside activities which bring local elders together, lack of appropriate housing which supports independent living, closure of nursing/respite homes - ie lack of consistent human contact, not just care.

    In an earlier post you argued for a much more humane (and and to my mind sane) solution to this conundrum, unconditional basic income, perhaps paid for by the taxes on unearned income you've also argued for. This would allow families the financial security to look after their elderly in dignity, and afford more professional home care when needed. It would also allow the young to pursue their ideas without being forced to move elsewhere to make a living.

    Otherwise I really don't want to end up as isolated as are most of the people I work with. Even if that's on a beach somewhere, even if a robot can wipe my bum when needed.

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    Replies
    1. I suggest you read this post in conjunction with the three previous ones I have cited in the links at the end. There is a serious demographic problem which you completely ignore. And because of it, there is every likelihood that whether you like it or not, some countries will indeed end up as the countries of the old - as indeed some towns, counties and even (in the US) states are already. I don't particularly like that trend, but I can see it happening.

      You seem very sentimental about traditional communities made up of mixed generations. I would challenge you to consider whether a community which is a ghost town during the day because everyone except the elderly is at work is really any better? When the only human interaction that our elderly have is the daily contact with their carers, are we really caring for them? I don't think so. Personal care is no substitute for social interaction, friendship and shared activity - which exist in abundance inside gated communities of retired people, as my mother-in-law found when she moved into one. It transformed her life and her last years were the happiest of her life, because she was surrounded by friends that she saw constantly - even though she rarely saw her son or grandchildren. Do you think that is a bad thing?

      I am not as negative as you about technology and I can see that there is a role for robots in the care of the elderly and the sick. The challenge is to identify what is best done by humans and what can be done - or is perhaps even better done - by robots. In confusing human contact with care, and assuming that care can only be done by humans, you are closing your mind to the possibility that we may actually be able to care for our elderly better through sensible use of advanced technology.

      I don't think what I have discussed here really has anything to do with my suggestion that there should be a citizen's basic income. Nor has it anything to do with the systematic demolition of social support in the UK, which is what I think you are talking about. This post simply is not about those at all.

      Your decision about how and where you spend your retirement is your personal choice. I have not in any way suggested that the decision to move to a retirement home in the sun staffed largely by robots should be forced. And I did suggest, at the end of the post, that we may choose a different path that keeps families together. In which case the countries of the old will simply decline and die, and nature will cover the ruins. That too would be no bad outcome.

      Delete
  2. I agree with the previous comment, a rather shocking article.

    The young are migrating because economic policies have been designed in such a way that they've little choice. It doesn't have to be that way.

    And it is perhaps unsurprising that an English blogger can write on this issue with absolutely no discussion of the devastating effect of these English migrants on local cultures.

    It is even less surprising that you fail to mention what is being done to Wales by English geriatrics and druggies.

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  3. Frances,

    I once ran a quick analysis of how spending would change in Greece as the population ages - it's in the second half of this post: http://lolgreece.blogspot.co.uk/2011/05/kill-grandma.html

    That said, I was working on the assumption that the indigenous population will age gradually, not that we would actively import old people. In fact, I doubt that mass migration of the old is behaviourally a posibility. But then perhaps I should offer another post on that.

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  4. "So in the countries of the old, perhaps wealth taxation rather than income taxation will become the norm"

    A few problems with that.

    First, the old will tend to vote against wealth taxes.

    That will depend on the country, as the migrant elderly might not qualify for a vote, and their level of engagement. But if elderly migration is as strong as you suggest, a powerful migrant elderly party blocking wealth taxation is not impossible.

    Second, since the elderly have migrated, their wealth is likely to be largely back in the country where they used to work, so might be difficult for the new country to tax it.

    Third, a lot of that wealth will be in pensions, which are traditionally not taxed and often quite difficult to tax (e.g. employer schemes without allocated investments).

    So for various reasons the shift to wealth taxation is likely to be delayed - probably beyond the point where the host country starts having huge problems with its government finances.

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  5. On the other hand, if the host countries do shift to wealth taxation, that will make them less attractive to the elderly migrants and so the migration will self-correct.

    So I'm not convinced that your countries full of old people will ever happen - either their government finances will collapse, or they will adopt wealth taxes and so self-correct by being less attractive to the old and more to the young.

    Unless of course there are huge intergovernmental cash transfers. Devon survives as a place full of old people only because other counties within the UK are taxed to pay for them.

    (government spending in the south west is roughly the UK average, but income tax receipts in Devon are only half the UK average).

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  6. You seem to assume that the old are frail and possibly dim.
    This is not so in people who were brought up to work all their life - e.g. farmers and even old time doctors.
    If the family exists and keeps together there is mutual benefit all round. Especially when women would rather work than rear their chilren. (if they have any).
    Also old people have been taxed , lived through recessions and generally exploited in their younger lives.
    Maybe you remember postwar 'Austerity'.

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  7. Sorry that I am a bit late to this interesting post.
    I have a question: if a country becomes "old"(as having more retired people and also receiving new older immigrants) wouldn't that mean that the cost of living should go down a lot? Older people have less income to spend than the working population and if there are more older people that should force prices down (something similar is happening in Japan). As there are less people left of working age, shouldn't there be less competition among themselves for jobs? If so, then shouldn't the standard of living of the working population be higher? Maybe even their wages would be higher? Wouldn't that mean higher contributions to the pension fund for the already old?
    Thank you for your wonderful blog!I enjoy reading it and I learn a lot from it as I am not a finance/economics professional.

    ReplyDelete

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