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Pol/Econ Government
Pol/Econ: The Pensioners tell France to get back to Work
Friday, 25 May 2007 Written by Henry Midgley
At a conference today at the Royal Society of Arts, Matthew Taylor a former Blair aide and also President of the Society quipped that the French election had seen retired people vote that their compatriots should work harder. It was an amusing joke at the time- but of course Taylor is right- the group of people that supported Sarkozy more than any other by large margins were pensioners.

Take a look at the poll breakdown by demographics, published on the European Tribune site- we can see that for all the age groups save the retired (18-24, 25-34, 35-49 and 50-64) Royal the defeated candidate got over 50% of the vote, amongst those aged over 65 Sarkozy got 75% of the vote and therefore the victory. Matthew Taylor joked that this was because those over 65 wanted the French to work harder to support their retirement villas- but there is something more than a joke to his observation and its an issue that aging democracies are going to have to face sooner rather than later.

An aging population implies a population who will in large percentages be over the age of retirement- over the next thirty years the European Commission has estimated that the retired as a group will go from 20% of the UK's population to 37%. Similar movements are expected in many other European countries- indeed the UK might be one of the younger of those- and to a lesser degree in other developed countries like the United States and even in the one child economy of China. Such developments most economists and political scientists agree will bring on massive changes- we all expect the rates of pensions to fall and other things to rise in response to this with people living longer.

But will that be true? You see as a greater proportion of the population becomes retired and non-earning but still voting the incentives for politicians to actually carry out reform diminish. We can already see this- which politician in the US is brave enough to deal with Medicare. In the UK council tax (the only British tax on property not income- hence it hits hardest those who are capital rich but income poor- ie unemployed pensioners who own large houses) has met vociferous and effective opposition with the Liberal Democrats arguing that it should be replaced with local income tax and the possibility in Scotland of that policy being introduced. Hence in the UK it looks likely that more of the burden of taxation is being shifted from those that don't work to those that do.

There is a further problem here. Pensioners wield political power disproportionately greater than their numbers. There are a couple of reasons for this- people tend to vote more as they get older. Also Pensioners came from generations who were into the habit of voting- in 1951 the turnout in the Uk was above 70% by now its at 60%. This means that their priorities are reflected in a much greater way in terms of policy.

Why should this matter? Ultimately it matters for two reasons- firstly there is an issue about equality There is a disbalance in the way that wealth is transferred between generations- in terms of house prices or in terms of taxation the old are gaining from the young and in that sense there is a long term problem because more and more of a burden is being placed on the smaller and smaller segment of the population in work. There is a further political problem as well- and that is this- one of the oldest justifications for democracy was that as Edmund Burke put it there should be no taxation without representation- if the majority of an electorate voting during an election don't contribute but draw out of taxation- the justice of the overall system of government can be called into question by those working within the economy.

Obviously this all rests on a series of assumptions about demography and democracy that may be untrue- but its worth being aware of the problem- anger from the young to the old and anger about the political system supporting the old may errupt at some point. Furthermore the wealth transfers between generations are inherently unfair if the mechanisms regulating them are designed as in most western countries they are for exceptionally old and infirm people and not people in the full vigour of a modern middle age.

We shall see where this goes- but I doubt that M. Sarkozy will be the first leader reliant on pensioner votes to propell him to power.