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Shades of Gray

It takes a very close look at the results of the recent elections in the German state of North-Rhine-Westphalia to find among the list of “Others” the tally for “The Greys”: they got 0.1% of the vote. In other words, one in a thousand voted for them, although they claimed to speak for that state’s retired and elderly people – over 30% of the population. “Generation consciousness,” unlike the “class consciousness” of old, is obviously not a defining factor in people’s political preferences. Many more “Greys” voted for the Greens than for their “own” party.

This is an important fact. Most Europeans – and many in other parts of the world – live in rapidly aging societies. Nurseries and schools are closed while retirement homes and hospices spring up everywhere. Rising life expectancy coupled with low birth rates shape the demography of almost all prosperous countries. By the middle of the century – unless there is a dramatic turnaround – about half the population will be economically inactive for reasons of age.

This trend will have many consequences, most obviously for the welfare state, notably pensions and healthcare. While expenditure for both is rising rapidly, the offsetting revenues are coming from ever fewer people in employment.

As a result, the “generational contract” looks less and less viable, because we can no longer rely on today’s workers to pay for today’s pensioners. Insurance-based systems of entitlements created by personal contributions are increasingly taking the place of national health and pension services. This is a profound change that creates much friction in the transitional phase.