Interrogating the Political Economy of Age

A thought-provoking recent essay in the Political Quarterly argues that ageing populations imply deeper structural problems in the political economy, and potentially challenge democracies’ ability to make the right economic choices. It suggests that when older citizens are the largest cohort, politics risks becoming a 'gerontocracy’in which older citizens dominate the democratic process. It then argues that older people, having retired, have few incentives to care about policies that seek to generate future productivity. If an electorally dominant older cohort votes its interest, economic policy will then be tilted in favour of their short-run preferences. The author calls this ‘gerontonomia’: an economy run for the old, at the expense of younger generations and future prosperity.

This is certainly an alarming proposition, but we should be cautious about accepting it too quickly. In the UK at least, the evidence for gerontonomia is rather mixed.

Evidence for a ‘gerontocracy’?

First, it is important to note that both aging populations and the relative prosperity of today’s pensioners are significant political achievements. After all, welfare states do not exist solely to promote economic efficiency, but also to mobilise a society’s collective willingness to support vulnerable citizens. We should beware framing the existence of a large cohort of older people as inherently problematic. Nonetheless it is reasonable to ask what the shifting age profile of a country means for its political economy.

In the UK, the 2016 Brexit referendum focused renewed attention on the question of gerontocracy. Six out of ten over-65s voted to leave, whilst a greater proportion of the 18-24 age group voted to remain. The media portrayed the older generation as having enjoyed the benefits of EU membership only to withdraw them from the young, while younger voters felt that their long-term interests had been overridden by a generation that would not have to live with the consequences. Some research has suggested that property wealth, in particular, may have worked to insulated older voters from the potential economic downsides of leaving the EU, allowing them to vote on non-economic preferences for sovereignty and national self-determination. So far, so gerontonomic.

Besides Brexit, there is also some evidence that older citizens in the UK can be a constituency capable of voting for their interests, particularly where these can be narrowed down to a single issue. For example, the prospect of a property wealth tax to pay for social care contributed to the loss of Theresa May’s parliamentary majority in the 2017 general election. For the UK Conservatives, at least, gerontocracy may impose real constraints on policy.

Understanding older voters’ preferences

But while age may play into voting on specific issues like these, it is less clear that retirees have inalienable preferences for a certain kind of economic policy model. The politics of economic policy are not simply projections of demographic trends. Even if voters are motivated primarily by self-interest, we shouldn’t assume that older people are uniform in their views or that they can vote consistently enough to secure policies in their interest.

For example, the essay suggests that there is a connection between ageing populations and the generalised trend, over the last thirty years, towards hawkish inflation-control by independent central banks. Yet the emergence of this policy model against a backdrop of aging populations does not prove a causal chain, being as much the product of global economic conditions as it is proof of the electoral power of European pensioners. A low-inflation environment did not benefit all pensioners or only pensioners; it was above all favourable to certain kinds of business and capital. Viewed as such, the politics of inflation are not easily reducible to age dynamics.

The case for gerontonomia is ultimately based on an assumption that older generations share materially-given economic preferences that are likely to be a barrier to growth. This is empirically questionable: in the UK, 60 percent of over-65s see the economy as an important problems facing the country, showing voters do not suddenly become disinterested in its performance when they retire. But it is also theoretically debatable. There is a tradition of scholarship that questions such materially-determined models of policy preferences, suggesting that in fact our economic preferences are filtered through normative and affective considerations. Voters’ sense of their own interest is not only based on an individual cost-benefit analysis, but also perceptions of what is fair, morally supportable, or beneficial to other people who matter to them. Bonds of intergenerational solidarity can then generate support for policies where the direct benefit to one's own cohort may be limited, but the wider benefit to society or to other age groups is a motivating factor. For example, four in ten UK pensioners believe education spending should be higher; only three in ten say pension spending should be higher. Naked self-interest cannot explain this support for spending from which pensioners themselves cannot benefit, except indirectly through cross-generational family ties.

Shaping political beliefs

A weaker version of the argument for gerontonomia is that, rather than actively driving economically damaging policy, the old are simply more tolerant of a weak economy. Here, there is some evidence that older people are more open to persuasion that the present economic conditions are not so bad. In the UK, government approval ratings have begun to improve in the over-65 group, but not among younger cohorts, supporting the argument that a degree of economic insulation has increased older people’s tolerance of economic difficulties. But this may also reflect the susceptibility of older generations to the UK’s right-leaning press, being more distractible with social issues and more willing to tolerate a weak economy in order to prioritise their social concerns. The values which guide their political beliefs may be significantly shaped by messaging by political parties and their intermediaries. In this case, the preferences of different groups are not inevitabilities, but contingent political outcomes. Demography is not destiny and rational interests do not speak for themselves. The politics of age are just that: political.