Above: World GDP/capita versus percentage of the 'Saturation level' (point at which consumption per capita does not increase with income levels). Cement points estimated by Global Cement. Graph courtesy Rio Tinto.
I recently saw a news item that suggested that we will all be able to live until we are 150 years old (but most likely this will only apply to rich people, as usual). I shuddered. Imagine - living to 75 and then living another 75 years as a very old person. Imagine living 75 years as a very old poor person - since low industrial growth rates around the world will almost certainly translate into lower returns on pensions. In the future you will have to have an enormous pension pot to live off it alone - most people will also have to work, albeit part-time - deep into what is now considered their retirement ages. Perhaps it would be best to go out with a bang at an earlier age, as soon as the money runs out. As has been noted before, 'There are no pleasures in life worth denying yourself for an extra two years in an old-folks home in Weston-super-Mare [a older seaside town in the west of England].'
The increasing longevity of those in the developed world (which is mirrored by that in the developing world as well) will lead to many changes in the global economy; State pensions will increasingly have to become funded (rather than unfunded - where your pension payments are being paid for by today's workers, rather than by what you have put away for yourself) since there will be fewer workers per retired person; Pensions will become less valuable in real spending terms; Diseases of old age will come to predominate medical spending (and research). Imagine producing more of the products that older people use, rather than those used by the young: more zimmer frames and fewer skateboards (and concrete skate-parks).
The overall picture will no doubt be complicated by the coming revolution in artificial intelligence and roboticisation. Robots will increasingly take over from humans in manual work (and in progressively more intricate work as well), while intelligent systems will make many of today's white collar workers (the so-called 'meat-puppets') redundant. It has been said that if your job can be broken down into a work flow and a series of algorithms (such as financial advice, some medicine, estate agents and legal advisors), then you can be replaced by a computer. The number of workers being paid a wage as a proportion will decrease - and, there's no getting around it, we will have more under-employed people, with a lower economic output. However, we can usefully ask ourselves, 'Is that such a bad thing?'
The graph at the top shows how consumption of a number of commodities changes as people become richer. For example, as soon as a society has a GDP per capita of more than US$10,000, it will already be using a lot of steel and copper (and cement) - and that will continue to increase, but only until the GDP per capita is around US$25,000 - when it levels off and even starts to decrease (as was shown to be the case for the cement industry by Emma Davidson in Global Cement Magazine, in June 2014). Consumption of diamonds, however, requires a society to be far richer before the saturation point comes. My point here is that many western countries have already passed the US$25,000/capita GDP point, and consumption of cement has ready levelled off or started to decrease (as we'll have seen throughout Europe, notwithstanding the 2008-201? financial crisis). Plenty of other countries are approaching the same GDP level, at which point their cement industries will go into long-term decline. China may already have passed the point, even with a GDP of US$7000/capita.
So, I ask again, 'Is this such a bad thing?' The cement industry is busy abandoning its traditional origins in Europe and is now seeking growth in developing markets (just see LafargeHolcim). However, for each of us, it probably means a less economically-active life, with less likelihood of an affluent old age. An old joke goes like this: The poverty-stricken fisherman asks the visiting CEO of his dream and the CEO replies, 'To stop working so hard, to stop having to worry about everything all the time, and just to sit on the beach, to drink a beer, to strum my ukelele and to have not a care.' And the fisherman says to him, 'Welcome to my world.'
Perhaps just dialling down our expectations is the best preparation for tomorrow's world, after all.
