‘Facing ‘gerontonomia’, the West’s young opt for political extremes’

Tim Vlandas is Professor of Comparative Political Economy and Social Policy at Oxford University. As Europe faces recurring protests, Vlandas spoke with Srijana Mitra Das in ET Evoke about how its elderly are impacting policy — and how its young face an economic and politic

Q. What is the core of your research?

A. It is about understanding the relationship between advanced capitalism and democracy — in that context, a big part is looking at the political economy consequences of aging. I’ve also researched the electoral politics of radical right populism, labour market policies and inequality.


Q. You’ve coined the idea of ‘gerontonomia’ shaping advanced capitalist democracies — can you elaborate?

A. The main idea here is to think of aging in terms of its consequences on political economy — I focus on how aging changes the electoral composition and therefore impacts which age groups become more or less important in the electorates of advanced capitalist democracies. That then affects the policies and economic priorities which governments pursue.

In Europe, North America and, to some extent, Australia, Japan and South Korea, we have a really large and growing group of people who are out of the labour market and whose livelihoods are sustained by pensions. Many tend to be over 65 years in age but, in Europe, many people are also above 55 and out of the labour market or drawing public pensions. The share of people over 65 is growing — in India, this is around 7% while in Italy, it’s 25%, in France, 22% and Germany, around 23%.

Meanwhile, you’ve got people under 18 years of age who cannot vote and a large number of people between 18 to 30 who are much less likely to vote than people above 65. Thus, you have a really large segment that’s drawing public pensions and is also a majority of the electorate. It’s very difficult to have a sustainable electoral coalition that goes up against this group.

Q. How does ‘gerontonomia’ shape policy in advanced capitalist nations like France and England?

A. National surveys show us this group has different policy preferences — they tend to favour pensions more while younger people tend to seek family, education and labour market policies. The older group also cares a lot more about low inflation and less about growth and unemployment than younger or middleaged people who are still in the labour market. Now, both these groups vote differently and governments that get elected in aging democracies often start spending more on public pensions. It then becomes very difficult to reform pensions — that leaves fewer budgetary abilities to pursue public investments in education, infrastructure, family policy or research and development. You start seeing more of a budget allocated to policies that are not the best to promote growth. Also, when governments don’t do a good job, ideally, they are voted out. One dimension of doing a good job is for the economy to do well — but when a lot of people don’t depend directly on economic performance, they are less likely to punish incumbents for doing a bad job. So, you find governments that are not the most efficient sometimes linger longer.

Q. Retirees spend part of their pensions on commodities and services. Their pensions also benefit from growth via higher returns on investments — so, why assume older groups would be a drag on growth rather than adding to it?

A. I think the core question is, what is the most efficient allocation of scarce resources and what happens when fewer and fewer resources are available for public and social investments, which, I believe, have higher rates of returns on growth than pension spending. If you are in a system where your public pension is basically a percentage of your former salary, like defined benefit schemes such as France has, and when you retire and a large percentage of your former salary gets replaced by a pension, this pension is completely unaffected by recessions. As long as the government doesn’t cut it, you have no downwards risk — you cannot lose your job because you’re not in the labour market and your pension cannot stagnate in the way wages can. As an example, the United Kingdom has had the triple lock policy which said, if you receive a state pension, your pension every year has to increase either by 2.5%, inflation or average earnings, whichever of the three is the highest. So, whatever happens, your pension is going up if you have a funded system. Then, a lot of it gets invested and you have a little more upside — but this is primarily about how the stock market is doing. Now, in some cases, you could have, say, wage stagnation or persistent unemployment but the stock market’s doing very well. Here, the United States is telling because stock market indices have been doing quite well but there is also a cost-ofliving crisis, workers are struggling and there’s considerable insecurity. So, you can get a disjunction between stock market performance and the wider economy.

Q. Data suggests an economy geared towards aging populations has lower inflation — but we see protests against a higher cost of living in aging economies. How should we understand that?

A. Under certain conditions, aging leads to lower inflation in the things governments can manage, like unemployment, which heavily impacts the working-age population. However, a lot of inflation experienced now is the result of several years of multiple shocks that have led to an increase in the price level — we’ve had Covid and big supply-side disruptions, the Russian invasion of Ukraine and now, the US war with Iran. Through these three shocks, we’ve had quite a massive increase in the cost of living. A lot of protests seen now are around these themes. What unites these different concerns is what I call the cost of a ‘transition to adulthood’ — a young person in Europe now faces a very difficult labour market, really expensive housing and very insecure situations. As not many policies are made around them, they are especially exposed to this cost of transition because of the rising cost of living. Other people could also be exposed — but if you already own your home, you already have a secure job or if you’ve already retired, it doesn’t affect you as much. The shock is not as significant.

Q. So, are these young people then shifting to the right in Europe?

A. It really depends on specific countries but focusing more on the over-time dimension, it used to be the case that older male voters tended to be relatively more likely to vote for the far right, especially if they had less education. Now, it’s really widened to other groups, including different income and education categories and many more younger voters. More young people, certainly in Spain but also other Southern European countries, are getting attracted to these parties. That makes sense in the context of gerontonomia because if you’re a younger voter, you’re a very small part of the voting electorate and governments tend to neglect your policy preferences and economic priorities. So, you have three choices. You can either stop voting and cultivate political apathy, disengaging from the democratic process — hence, in many places, youth turnout is quite low and falling. Second, you can protest but not through the ballot box, more by demonstrating, sometimes taking extreme forms, maybe even looting, although that’s a minority. The third option is, radicalise — you become disaffected from mainstream political parties which seem to represent more older voters and you go to the far right or far left. There is also a gender difference here, with younger men going, for instance, to Vox in Spain and younger women going more to the far left. However, both far left and far right have made inroads in the younger voter profile now.

Q. Why can’t higher taxation of the ultra-rich be a solution rather than cutting social spending on either the aging or the young?

A. You must allocate the spending you have, which is a function of two things. One is taxation, the other is public debt. Now, on average, both public debt and taxation by historical standards are relatively high. Should we introduce a wealth tax? If we look at the concentration of income and wealth plus growing inequality over the last 30 years, that could be something to try. The question is, how to do this effectively and efficiently?

However, I don’t think it would be sufficient. The numbers we’re talking about for the cost of just public pensions are extremely high, to which we need to add healthcare, social care, etc., with many more people going above 80 years now. That will hike costs. Raising wealth taxes, provided it’s done efficiently and doesn’t discourage investments, will have to be part of the mix. But it won’t be enough — we must have more public and social investments to spur growth. Apart from aging, we have other shocks in terms of energy costs and the climate transition which will cost a lot to do. So, we must create more growth to put both the debt and tax base on a sustainable footing.

Q. Which are some areas in advanced capitalist democracies that have the highest growth returns?

A. In the long run, early childhood policies, childcare and family policies are very important for long-term human capital accumulation, provided that you follow through with high-quality primary, secondary and tertiary education. We also need more resources in research and development which spur innovation and growth.

All these cost money but they bring significant long-term returns — they will also become more important with the AI transformation underway. We need more human capital to harness this and new infrastructure to manage it. I worry that in Europe, we’re falling behind on this when we should be at the forefront.

Views expressed are personal