Anti-aging researcher Aubrey de Grey”> told me, during a shared taxi ride, that in five years animal experiments have a good chance of establishing the feasibility of “longevity escape velocity”. A rocket reaches escape velocity when it’s traveling fast enough to break free of earth’s gravitational pull. Longevity escape velocity has been defined as “a time at which life expectancy increases faster than one year per one year of research.”
De Grey explained that politicians could use the expected transition period to medical immortality by amping up their influence. After finding out I was an economist, de Grey effectively challenged me to work out what we should want politicians to do with their increased powers.
With over 150,000 people dying every day, I hope governments would respond to the animal experiments by accelerating our journey to escape velocity through massively increasing funding for longevity medical research, because the cost of dying this year goes way up if it causes you to just miss out on the chance to live long enough to live forever. But since a rational world would already make abolishing death a top priority, we can’t count on politicians automatically doing this. Still (as I will explain at the end of this article) people will likely be made aware of any inevitable approach to escape velocity which should cause at least some voters to reward politicians who increase taxpayer support for medical research.
Governments should also put in place incentives for private companies to increase development of anti-aging treatments. A pharmaceutical company that discovered a cure for baldness could greatly profit by charging high prices to Americans for the next fifteen years. But the U.S. government would likely cap the price of an effective anti-aging treatment.
Once we actually reach escape velocity, U.S. politicians would face enormous political pressure to make the necessary medical treatments available to all Americans, regardless of income. The U.S. government might well do this by limiting how much companies could charge for the needed medicines. Predicting this, pharmaceutical companies would have fewer incentives to develop the cures in the first place.
True, politicians could promise to not impose future price controls, but this promise wouldn’t be binding or believable. To overcome the credibility problem the U.S. government should offer lump sum prizes for private sector advances. A company would consider it much more likely that it would get, say, a $1 billion prize than that it would maintain the ability to charge high prices for a fifteen-year period.
Pharmaceutical companies acquire most of their profits from selling their products in the United States do to other countries impose harsh price limits on drugs. Because expectations of future profits drive pharmaceutical research, the rest of the world basically free rides off of American drug consumers.
The smaller a political unit is, the less incentive it has to fund basic medical research either explicitly or through letting drug companies earn high profits within its borders. Please forgive me, but to explain this I’m going to act like an economist and develop a simple hypothetical using a bit of math. (Skip to the next paragraph if this displeases you.) Let’s say that for every dollar spent on medical research the world gets an $8 research benefit, but this benefit is divided equally among people rich enough to buy high-tech medicines. If, for example, your country represents 10% of the world’s drug buyers then for every extra dollar you spend your nation captures eighty cents of benefit (ten percent of $8), a bad deal for your country. In contrast, a country representing 20% of the world gets $1.60 (twenty percent of $8) of benefit for each dollar paid and so now finds it in its self-interest to spend heavily on basic medical research. An actionable implication of all of this is that we should want the European Union to behave as a single unit when deciding on how much to support anti-aging research because, for example, a rational, self-interested voter in Belgium might well oppose Belgium funding anti-aging research while he would simultaneously support the entire European Union doing so.
Even if they had the desire, will governments have the monies to greatly increase medical research? As Sonia Arrison points out in her book 100 Plus (reviewed here in h+), effective anti-aging treatments could bestow a huge longevity dividend upon us. But, I fear, politicians might mess up and bring about, at least in the short term, a negative dividend by increasing the dependency ratio.
The dependency ratio is the number people too young or old to work divided by the number of working age citizens. Aging demographics currently makes this ratio the leading long run economic problem for the developed world.
One might hope that reaching escape velocity would lower the dependency ratio by making most senior citizens medically fit for work. But in rich countries governments effectively bribe the elderly into leisure by offering generous retirement benefits. A politically naive person might think that of course politicians would respond to escape velocity by eliminating pensions for all healthy citizens regardless of their age. But senior citizens have enormous political clout, which they use to transfer resources from younger adults to themselves. In the U.S. the increase in average lifespan has outstripped increases in the age at which you can receive Social Security and Medicare benefits. Convincing senior citizens to accept diminished welfare payments will play a key role in the health of a post-escape velocity economy. If investors fear that retirement benefits combined with indefinite life spans will eventually decimate economic growth, they will invest less in pharmaceutical companies, giving these firms fewer resources to devote to medical research.
Imagine that some pharmaceutical company realizes that if it spends $100 billion it could develop a cure for aging. But, the company concludes, if it actually developed the cure then the resulting demographic change would cripple the U.S. government’s financial position, putting enormous pressure on politicians to appropriate the pharmaceutical company’s intellectual property. This company, therefore, decides that it could never profit from developing the drug and even if it nevertheless tried to incur the enormous cost of development its stock price would fall so much that the firm could never raise the required funds from financial markets. To prevent a scenario such as this from unfolding, we should hope that soon after reaching escape velocity seems feasible U.S. politicians agree to gradually eliminate retirement benefits.
The dependency ratio might also increase because of a new baby boom. I predict that many leaders would respond to expected escape velocity by discussing a supposed need to restrict population growth. Anticipating future restrictions or penalties on reproduction, many adults would probably respond by having children before politicians had time to enact laws restricting or penalizing large families. Consequently, to prevent a short term jump in pregnancies politicians should avoid calls for population controls.
Life insurance rates will loudly signal when reaching longevity escape velocity becomes likely. Life insurance companies set prices based on expected (not pre-existing) death rates. Obviously, there is a low expected cost to selling a life insurance policy to someone who probably won’t die.
For reasons not worth going into here, lowering the marginal cost of providing a product almost always lowers the provider’s profit maximizing price even if the provider is a monopolist. Competition within the life insurance industry would almost certainly lower prices further. At the very least, I would expect self-made billionaire and hedge fund operator Peter Thiel, who is a major financial supporter of de Grey, to back new life insurance companies if the existing industry doesn’t recognize or refuses to act on evidence that we will soon achieve escape velocity. Such activity by Thiel would lower life insurance rates.
Lots of people would become aware of a plunge in the price of life insurance policies. Most policies give you the right but not the obligation to maintain your policy at a constant price. Once the cost of selling policies fell, many consumers would gain by dropping their old policies to get new, cheaper ones. Life insurance firms would advertise their newly lowered prices to steal customers from rival firms. I would expect that to preempt this from happening life insurance companies to unilaterally lower rates for their existing customers, thus signaling to many of us that the longevity escape velocity is near.
Aubrey de Grey is an English author and theoretician in the field of gerontology, and the Chief Science Officer of the SENS Foundation. He is editor-in-chief of the academic journal Rejuvenation Research, author of The Mitochondrial Free Radical Theory of Aging and co-author of Ending Aging. He is perhaps best known for his view that human beings could, in theory, live to lifespans far in excess of that which any authenticated cases have lived to today.
James D. Miller is an associate professor of Economics at Smith College. His book Singularity Rising: Surviving and Thriving in a Smarter, Richer and More Dangerous World is scheduled to be published this October.