Some thoughts on the social security stirring paper

This is an interesting paper that well-fulfills its mission to "stir": it seems to have a good diversity of points with which readers may disagree. Here are a few that stirred me:

1. It seems like a better idea to examine the connection between growth and revenues of social security (SS) programs critically than to take it for granted. In fact, there isn't any necessary connection. GDP is based in large part on income flows between private actors, or from the government to private actors, and private actors don't fund SS directly. What does fund SS is *contributions* to government-run programs. Contributions are a function of many things, including, among other things, (a) size of the working population, (b) wage levels, and (c) the statutory/regulatory table of contribution rates. It's an *assumption* that economic growth increases (b) and possibly (a) as well, but neither necessarily happens. For example, certain types of economic growth can preferentially increase income in the very wealthy, but in some countries there isn't any obligation to contribute to SS for income above a certain threshold ($117,000 in the US as of 2014); in other words, variable (c) is more important than many people recognize. There may be more variables at play than the three I've named -- but it's important to understand them in order to have more options for fashioning solutions compatible with de-growth.

2. The idea that financial profits and losses are closely related to economic growth seems a bit outdated. Financial profits and losses are based on psychology, and the volume of trade in physical goods and services is only one input of many into market psychology, like an election or a war. The annual volume of trading on equity markets alone has been nearly equal to or even in excess of global GDP for a number of years, even post-2008 (in dollar equivalents, it was 100.3% of global nominal GDP in 2013, based on stats from World Federation of Exchanges and Total Economy Database); in the US, NYSE and NASDAQ volumes combined are a several-times-multiple of USD GDP. On those markets, price movements aren't necessarily related to operating performance of an issuer; e.g. Apple, Microsoft and other companies can see their prices move downward despite billions of dollars in quarterly profits. More important is whether the reported results (using an arcane form of accounting specific to investor reports) conform to analysts' expectations: psychology again. And that's saying nothing about the gains made from other financial investments. None of the gains from such transactions are included in GDP. As inequality in capital distribution grows, finance will be even more and more distanced from growth, since wealthy investors will eventually be able to make gains (not just turnover) at scales comparable to GDP -- and they won't necessarily plow all of that back into consumption. Nor will they necessarily be interested into investing in public schools, hospitals, or other public goods.

3. "Institutionalizing non-commercial kinds of work" can easily be adapted to a neoliberal program of dismantling government and throwing people back onto their own resources. E.g., the phrase aptly captures the spirit of Japan's thoroughly neolib 1998 NPO Law. So one has to be quite careful how one uses this phrase as a rallying point for action. Also, isn't the notion of time-banking systems where contributors have a right to demand services in kind awfully reliant on there being adequate supply? By hypothesis, many of the clients of such non-commercial work will be children, elderly, sick or disabled. Most won't be able to contribute to a time-bank. How does one assure that a time bank wouldn't turn into a group of exhausted care-givers without recourse but to demand time and services from each other?

4. Finally, one perspective not stressed in the paper is that SS issues are interconnected to work, family, demographic and other issues, and that solutions to them might be synergistic -- and very local. For example, Japan has a declining birth rate, a declining working population, and a declining general population, together with long life expectancy. Culturally, many people want to work past official retirement age, and are often healthy enough to do so into their late 60s and even early 70s. Postponing retirement age (and onset of SS payment eligibility) could be combined with shorter working hours for men and women, improved daycare for children and other policies (even relating to urbanization and preservation of regional cities) that make it easier for families to be able to raise children. That could ultimately halt the decline in birth rate, and, within less than two decades after that, create a stable working population, leading ultimately to a more balanced age distribution throughout the population. Of course, countries like the US or France that have growing populations will need a different approach. In all cases, though, government policies could be tailored to encourage more directly-related results, instead of trying to encourage economic growth by any means and hoping some invisible hand will take care of the rest. But looking to fix SS by focusing only on investors, or costs of SS-related services, or economic incentives to promote health-related behaviors, or other very proximate items of revenue and expense, will distract one's view from more holistic opportunities.