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Jul 21, 2021
To boost the economy, treat the cause of aging By slowing down aging, we could reap trillions of dollars in economic benefits. People want to live longer, but only if those years are healthy. A new study argues that targeting the underlying cause of aging could yield trillions of dollars of economic benefits. This could be, by far, the best way to "stimulate" the economy in the long-term. With greater age comes greater wisdom and (often) happiness. But biologically speaking, everything else pretty much sucks. Age is a risk factor for a number of conditions such as dementia, diabetes, and cancer. As our cells slowly deteriorate, our bodies stop working as intended. Our joints hurt, our bones are fragile, and we develop wrinkles. Biomedical science has largely been concerned with extending our lifespans. But people do not want to live a long life if that means being in pain or a burden to others. Therefore, at the present time, it is probably better for researchers to focus on improving our quality of life in old age rather than on extending our life expectancies even further. To that end, a new study published in Nature Aging argues that targeting the underlying cause of aging could provide an enormous boost to the economy. Quality of life and longevity Over the past few decades, there have been marvelous improvements in life expectancy for people around the world. The mortality rate for those already in old age has also continued to decline. However, the number of years of good health a person can expect to live in proportion to their overall life expectancy has remained stubbornly constant. This means that more people are living in poor health for longer periods of time. This is a big deal. One recent study in Norway demonstrated that aging Norwegians would like to live to a ripe old age, but not if they could expect to get dementia or suffer from chronic pain. There are financial considerations as well. A person about to turn 65 in the U.S. can expect to spend anywhere from $142,000 to $176,000 on standard long-term care once they start needing help with things like eating or bathing. Multiply this by a few million people, and the economic implications become staggering. Models of aging: Dorian Gray, Peter Pan, Wolverine, Struldbrugg To crunch their numbers, the authors of the study used a method called value of a statistical life (VSL). This method allows researchers to determine how much people would pay to reduce the risk of death. While it is discomforting to reckon the value of an improved human life in terms of money, it is very easy to do (and economists seem to love doing it). It also allows for easy comparisons between choices. This particular method is also widely used and provides interesting insights into how the estimated benefits of a particular policy or program evolve over time that methods with less tangible units of measure cannot provide. The authors used VSL to create four models of life expectancy improvement. Each was named for a character from literature that lives in the manner described: in the "Dorian Gray" model, a person lives a normal lifespan but has more years of healthy life; in the "Peter Pan" model, people live longer and healthier lives; in the "Wolverine" model, a person's biological clock is set back to a younger time; and in the "Struldbrugg" model, people live longer lives but in increasingly poorer health. By applying the VSL method, the researchers were able to determine how willing people were to pay for an extra year of life under each model. It turns out the highest values are placed on methods that target aging directly and thereby increase both lifespan and years of good health. By doing so, a virtuous cycle is created where people are healthier longer, meaning that there are more people to benefit from further interventions directly targeting aging. In financial terms, the calculated value of a one-year increase in life expectancy from this method would be $37.6 trillion, with the value rising further as more healthy years of life are added on. For comparison, that value is higher than the total benefit of eradicating a number of age-related diseases by themselves, including cancer, dementia, and depression. Aging is the real boogeyman that biomedical science should target. From Your Site Articles Credit : BerryBlue_BlueBerry, reproduced with kind permission Strange Maps That makes it easy to compare the GDP of regions and nations across the globe. There are versions for nominal GDP and GDP adjusted for purchasing power. Shanghai's skyline at night. According to the GDP (PPP) map, China is the world's largest economy. But that oft-cited statistic says more about the problems of PPP as a yardstick than about the economic prominence of China per se. If you want to rank the regions and countries of the world, area and population are but crude predictors of their importance. A better yardstick is GDP, or gross domestic product, defined as the economic value produced in a given region or country over a year. Who's hot and who's not And these two maps are possibly the best instruments to show who's hot and who's not, economically speaking. They are in fact cartograms, meaning they abandon geographic accuracy in order to represent the values of another dataset, in this case GDP: the larger a region or country is shown relative to its actual size, the greater its GDP, and vice versa. So far, so familiar. What's unique about these maps is how this is done. Both are composed of hexagons, exactly 1,000 each. And each of those hexagons represents 0.1 percent of global GDP. That makes it fascinatingly easy to assess and compare the economic weight of various regions and countries throughout the world. Did we say easy? Scratch that. GDP comes in two main flavors: nominal and PPP-adjusted, with each map showing one. Nominal GDP does not take into account differences in standard of living. It simply converts local GDP values into U.S. dollars based on foreign exchange rates. GDP adjusted for purchasing power parity (PPP) takes into account living standards. $100 buys more stuff in poor countries than it does in rich countries. If you get more bang for your buck in country A, its PPP-adjusted GDP will be relatively higher than in country B. Nominal GDP is a good way of comparing the crude economic size of various countries and regions, while GDP (PPP) is an attempt to measure the relative living standards between countries and regions. But this is also just an approximation, since it does not measure the distribution of personal income. For that, we have the Gini index , which measures the relative (in)equality of income distribution. In other words, PPP factors in the high cost of living in mature markets as an economic disadvantage, while giving slightly more room to low-cost economies elsewhere. Think of it as the Peters projection of GDP models. Who's number one: the U.S. or China? The economy of the world, divided into a thousand hexagons. Credit : BerryBlue_BlueBerry, reproduced with kind permission The difference is important, though, since the versions produce significantly different outcomes. The most salient one: on the nominal GDP map, the United States remains the world's largest economy. But on the PPP-adjusted GDP map, China takes the top spot. However, it is wrong to assume on this basis that China is the world's biggest economy. As this article explains in some detail , PPP-adjusted GDP is not a good yardstick for comparing the size of economies – nominal GPD is the obvious measure for that. GDP (PPP) is an attempt to compare living standards; but even in that respect, it has its limitations. For example, $100 might buy you more in country B, but you might not be able to buy the stuff you can get in country A. Both maps, shown below, are based on data from the IMF published in the first quarter of 2021. For the sake of brevity, we will have a closer look at the nominal GDP map and leave comparisons with the PPP map to you. For the nominal map, global GDP is just over U.S. $93.86 trillion. That means each of the hexagons represents about U.S. $93.86 billion. The worldwide overview clearly shows which three regions are the world's economic powerhouses. Despite the rise of East Asia (265 hexagons), North America (282) is still number one, with Europe (250) placing a close third. Added up, that's just three hexagons shy of 80 percent of the world's GDP. The remaining one-fifth of the world's economy is spread — rather thinly, by necessity — across Southeast Asia & Oceania (56), South Asia (41), the Middle East (38), South America (32), Africa (27), and North & Central Asia (9). California über alles Credit : BerryBlue_BlueBerry, reproduced with kind permission Thanks to the hexagons, the maps get more interesting the closer you zoom in on them. In North America, the United States (242) overshadows Canada (20) and Mexico (13); and within the U.S., California (37) outperforms not just all other states, but also most other countries — and a few continents — worldwide. To be fair, Texas (21), New York (20), Florida (13), and Illinois (10) also do better than many individual nations. Interestingly, states that look the same on a "regular" map are way out of each others' leagues on this one. Missouri is four hexagons but Nebraska only one. Alabama has three but Mississippi only one. The granularity of the map goes beyond the state level, showing (in red) the economic heft of certain Metropolitan Statistical Areas (MSAs), within or across state lines. The New York City-Newark-Jersey City one is 20 hexagons, that is, 2 percent of the world's GDP. The Greater Toronto Area is five hexagons, a quarter of all of Canada. And Greater Mexico City is three hexagons. That's the same as the entire state of Oregon. By comparison, South America (32) and Africa (27) are small fry on the GDP world map. But each little pond has its own big fish. In the former, it's Brazil (16), in particular, the state of São Paulo (5), which on its own is bigger than any other country in South America. In Africa, there is one regional leader each in the north, center, and south: Egypt (4), Nigeria (5), and South Africa (3), respectively. Economically, Italy is bigger than Russia Europe's "Big Five" represent three-fifths of the continent's GDP. The Asian part of the former Soviet Union is an economic afterthought. Credit : BerryBlue_BlueBerry, reproduced with kind permission Europe is bewilderingly diverse, so it helps to focus on the "Big Five" economies: Germany (46), UK (33), France (31), Italy (22), and Spain (16). They comprise three-fifths of Europe's GDP. Each of these five has one or more regional economic engines. In Germany, it's the state of North Rhine-Westphalia, and in France, it's Île de France (both 10). In the UK, it's obviously London (8), in Italy Lombardy (5), and in Spain, it's a photo-finish between Madrid and Catalonia (both 3). Interesting about Europe's economies are the small countries that punch well above their geographic and/or demographic weight, such as the Netherlands (11) and Switzerland (9). Slide across to Eastern Europe and things get pretty mono-hexagonal. Poland (7) stands out positively and Russia (18) negatively. The former superpower, spread out over two continents, has an economy smaller than Italy's. Three individual German states have a GDP larger than that of the Moscow Metropolitan Area (5), the seat and bulk of Russia's economic power. China, the biggest fish in a big pond Australia and South Korea's GDPs are about equal, and each is about a third of Japan's. But even put together, these three add up to barely half of China's economic weight. Credit : BerryBlue_BlueBerry, reproduced with kind permission In the 1980s, the United States was wary of Japan's rise to global prominence. But as this map shows, that fear was misguided — or rather, slightly misdirected. It's China (177) that now dominates the region economically, putting even the land of the Rising Sun (57) in the shade. South Korea (19) and Taiwan (8) look a lot larger than on a "regular" map, but it's clear who rules the roost here. Interestingly, China's hubs are mainly but not exclusively coastal. Yes, there's Guangdong (19), Jiangsu (18), and Shandong (13), plus a few other provinces with access to the sea. But the inland provinces of Henan (10), Sichuan (9), and Hubei (8) are economically as important as any mid-sized European country. Tibet (1) and Xinjiang (2), huge on the "regular" map, are almost invisible here. In the ASEAN countries (36), Thailand (6), Singapore (4), and the Indonesian island of Java (7) stand out. Economically, Oceania is virtually synonymous with Australia (17) — sorry, New Zealand (3). As for South Asia and the Middle East, India (32) is clearly the dominant player, outperforming near neighbors Bangladesh (4) and Pakistan (3), as well as more distant ones like Saudi Arabia (9), Turkey (8), and Iran (7). But that's cold comfort for a country that sees itself as a challenger to China's dominance. The PPP-adjusted GDP world map looks slightly different from the nominal GDP one. China is the #1 country and East Asia the #1 region. Credit : BerryBlue_BlueBerry, reproduced with kind permission Maps created by Reddit user BerryBlue_BlueBerry, reproduced with kind permission. For a closer look and for detailed rankings of the regions, check out both maps here at the MapPorn subreddit . Strange Maps #1089 Stock market bubbles, or asset bubbles, refer to a situation where stocks are valued far above what they're fundamentally worth. Unique factors contribute to each stock market bubble, but all play out in a generally similar series of stages. Research on the human social brain network offers insight into why investors participate in asset bubbles. In retrospect, there were clear signs that the stock market bubble was about to burst in 2000. The mid 1990s was a time of rapid technological growth and, consequently, wild speculation. Internet companies promised to transform the world. Dotcom stocks soared to incredible highs, with many multiplying in value shortly after initial public offerings, like Priceline, whose shares rose 1,000% just one month after going public. But there were problems in 2000, ranging from a recession in Japan to the inevitability of the Federal Reserve raising interest rates. There was also the simple fact that most dotcom companies weren't profitable. In fact, many were in debt . Some investors realized this but bought into the story that huge profits were just around the corner. They weren't. By 2001, most dotcom stocks had dropped at least 75 percent from their 52-week high, wiping about $1.75 trillion off the market . But the dotcom bubble wasn't the first asset bubble to inflate and burst, and it wasn't the last. Unique factors contribute to each asset bubble, but all feature broad phases that are remarkably similar. And that's largely because of the strong psychological pulls of herd mentality. The science of 'herd mentality' | Your Brain on Money | Big Think What is a stock market bubble? A stock market bubble — or more broadly, an asset bubble — occurs when the price of an asset inflates far above what it's fundamentally worth. Like soap bubbles, asset bubbles inevitably pop, causing a sharp drop in price. Asset bubbles can occur in any market — including stocks, real estate, and commodities — and they've existed ever since people have been trading in markets. One of the earliest and most famous examples is the tulip mania that occurred in 17th century Europe during the Dutch Golden Age. Tulip bulbs became so fashionable that prices rapidly soared, with some rare bulbs reaching prices that far exceeded the average annual income of Dutch workers. Then the market suddenly crashed in 1637. Popping a bubble To get a conceptual grasp on how bubbles form, imagine a high school party that gets out of hand. The party starts with a few people, maybe hanging out at a kid's house whose parents are out of town. A handful of other kids hear about the party and show up. Then word spreads among the whole class. Afraid of missing out, carfulls of kids start showing up. Soon the house is packed with people. By midnight, a few wiser kids leave because it's getting out of hand. The party keeps raging. But inevitably, the cops arrive and bust the party. Some of the kids who stayed too late suffer the consequences. In retrospect, it was clear that the party was going to get busted. So why did people stay? One reason is that, like stock market bubbles, it's impossible to predict exactly when the cops are going to show up — or, in other words, when collective emotions are going to shift from euphoria to panic. In his 1986 book Stabilizing an Unstable Economy, the American economist Hyman Minsky gave a more technical description of how asset bubbles play out: Displacement: This phase occurs when some external force, such as a new technology, captures investors' attention. The dawn of internet companies is a good example: A handful of investors think the internet will be a game-changing technology, so they decide to invest early. Prices start rising. Boom: As more investors enter the market, prices rise at a quicker pace. The media starts covering the boom, which attracts even more investors, who fear that they will miss out on a great opportunity. Euphoria: Prices skyrocket to wild highs as investors throw caution to the wind. Although there are some pessimists (known as bears) criticizing the market, the optimistic investors (bulls) and analysts try to justify the inflated prices by touting questionable metrics and arguments. Some bulls say prices will never crash because the asset or asset class represents a "new paradigm" or because there will always be buyers waiting to gobble up any price drops, an idea called the " greater fool theory ." Profit-taking: To lock in profit, a handful of "smart money" investors sell some or all of their asset holdings while prices are still high. Panic: Due to some kind of event, prices suddenly begin to crash. Euphoric buying turns to panic selling, which causes many former optimists to sell their holdings at any price, even at a loss. With essentially no new buyers showing up, prices drop even further because supply far exceeds demand. Remember this old stock market bubble chart with all the stages explained? Well, I pasted the Bitcoin price chart o… https://t.co/mnBAvZnvF8 — Peter Hamza (@Peter Hamza) 1517510900.0 You can see these boom-and-bust cycles play out in markets throughout history, from tulips to Bitcoin. But what causes investors to keep inflating and popping stock market bubbles over and over again? Conformity and the social brain network Like other primates, humans are highly social creatures who model their behavior on what others are thinking, feeling, and doing. Over millions of years, the human brain has evolved to perceive social cues and use that information to strategically regulate our behavior. Social information is processed in multiple regions of the brain, which together make up the social brain network. This network often helps us navigate social dilemmas. For example, if you're visiting a foreign country for the first time, and you're unsure of how to behave at, say, a religious site, you might copy the locals' behavior so you don't offend anybody and your visit goes smoothly. But our tendency to copy others isn't always adaptive; sometimes the herd is wrong. What's strange, however, is that people tend to have a hard time recognizing when the herd is wrong, even when it's obviously wrong. No other psychological test illustrates this more clearly than the Asch conformity experiments . In the 1950s, the psychologist Solomon Asch conducted a series of experiments designed to test how often individuals went along with a majority opinion that was clearly wrong. The original experiment went like this: Eight participants were asked to complete a perceptual task in which they had to look at a "reference" line on a card. Another card had three lines on it, one of which was clearly the same length as the reference line. The participants were asked to say which of the three lines matched the reference line. In reality, all but one of the participants were actors. The actors were instructed to sometimes uniformly give the right answer but other times uniformly give the wrong answer. Over a series of rounds, the results showed that the non-actor individuals tended to agree with the obviously incorrect majority opinion, at least some of the time. Interestingly, the psychological pull of conformity can even affect people who are familiar with the design of the Asch experiment, as Freethink's video shows. "That intelligent, well-meaning, young people are willing to call white black is a matter of concern," Asch wrote. One of the pairs of cards used in the experiment. The card on the left has the reference line, and the one on the right shows the three comparison lines. Monkey money The members of Reddit's WallStreetBets community often call themselves "apes," a joke that refers to how they often "ape into" investments without giving it much thought or just because others are also doing it. It's a pretty accurate term when you consider how non-human primates make decisions. To gain insights into the evolutionary roots of our own decision-making behaviors, researchers have trained primates like capuchin monkeys to trade coins for food and then studied how they spend the coins under various conditions. The results suggest that some primates seem to share several biases with humans, including: Known primarily as a Congregational minister, Mather was also a scientist with a special interest in biology. He paid attention when Onesimus told him “he had undergone an operation, which had given him something of the smallpox and would forever preserve him from it; adding that it was often used" in West Africa, where he was from. Inspired by this information from Onesimus, Mather teamed up with a Boston physician, Zabdiel Boylston , to conduct a scientific study of inoculation's effectiveness worthy of 21st-century praise. They found that of the approximately 300 people Boylston had inoculated, 2% had died , compared with almost 15% of those who contracted smallpox from nature. The findings seemed clear: Inoculation could help in the fight against smallpox. Science won out in this clergyman's mind. But others were not convinced. Stirring up controversy A local newspaper editor named James Franklin had his own affliction – namely an insatiable hunger for controversy. Franklin, who was no fan of Mather, set about attacking inoculation in his newspaper, The New-England Courant. One article from August 1721 tried to guilt readers into resisting inoculation. If someone gets inoculated and then spreads the disease to someone else, who in turn dies of it, the article asked , “at whose hands shall their Blood be required?" The same article went on to say that “Epidemeal Distempers" such as smallpox come “as Judgments from an angry and displeased God." In contrast to Mather and Boylston's research, the Courant's articles were designed not to discover, but to sow doubt and distrust. The argument that inoculation might help to spread the disease posits something that was theoretically possible – at least if simple precautions were not taken – but it seems beside the point. If inoculation worked, wouldn't it be worth this small risk, especially since widespread inoculations would dramatically decrease the likelihood that one person would infect another? Franklin, the Courant's editor, had a kid brother apprenticed to him at the time – a teenager by the name of Benjamin. Historians don't know which side the younger Franklin took in 1721 – or whether he took a side at all – but his subsequent approach to inoculation years later has lessons for the world's current encounter with a deadly virus and a divided response to a vaccine. Independent thought You might expect that James' little brother would have been inclined to oppose inoculation as well. After all, thinking like family members and others you identify with is a common human tendency. That he was capable of overcoming this inclination shows Benjamin Franklin's capacity for independent thought , an asset that would serve him well throughout his life as a writer, scientist and statesman. While sticking with social expectations confers certain advantages in certain settings, being able to shake off these norms when they are dangerous is also valuable. We believe the most successful people are the ones who, like Franklin, have the intellectual flexibility to choose between adherence and independence. Truth, not victory What happened next shows that Franklin, unlike his brother – and plenty of pundits and politicians in the 21st century – was more interested in discovering the truth than in proving he was right . Perhaps the inoculation controversy of 1721 had helped him to understand an unfortunate phenomenon that continues to plague the U.S. in 2021: When people take sides, progress suffers. Tribes , whether long-standing or newly formed around an issue, can devote their energies to demonizing the other side and rallying their own. Instead of attacking the problem, they attack each other. Franklin, in fact, became convinced that inoculation was a sound approach to preventing smallpox. Years later he intended to have his son Francis inoculated after recovering from a case of diarrhea. But before inoculation took place, the 4-year-old boy contracted smallpox and died in 1736. Citing a rumor that Francis had died because of inoculation and noting that such a rumor might deter parents from exposing their children to this procedure, Franklin made a point of setting the record straight, explaining that the child had “ receiv'd the Distemper in the common Way of Infection ." Writing his autobiography in 1771, Franklin reflected on the tragedy and used it to advocate for inoculation. He explained that he “ regretted bitterly and still regret " not inoculating the boy, adding, “This I mention for the sake of parents who omit that operation, on the supposition that they should never forgive themselves if a child died under it; my example showing that the regret may be the same either way, and that, therefore, the safer should be chosen." A scientific perspective A final lesson from 1721 has to do with the importance of a truly scientific perspective, one that embraces science, facts and objectivity. Inoculation was a relatively new procedure for Bostonians in 1721, and this lifesaving method was not without deadly risks. To address this paradox, several physicians meticulously collected data and compared the number of those who died because of natural smallpox with deaths after smallpox inoculation. Boylston essentially carried out what today's researchers would call a clinical study on the efficacy of inoculation. Knowing he needed to demonstrate the usefulness of inoculation in a diverse population, he reported in a short book how he inoculated nearly 300 individuals and carefully noted their symptoms and conditions over days and weeks. The recent emergency-use authorization of mRNA-based and viral-vector vaccines for COVID-19 has produced a vast array of hoaxes, false claims and conspiracy theories , especially in various social media. Like 18th-century inoculations, these vaccines represent new scientific approaches to vaccination, but ones that are based on decades of scientific research and clinical studies. We suspect that if he were alive today, Benjamin Franklin would want his example to guide modern scientists, politicians, journalists and everyone else making personal health decisions. Like Mather and Boylston, Franklin was a scientist with a respect for evidence and ultimately for truth. When it comes to a deadly virus and a divided response to a preventive treatment, Franklin was clear what he would do. It doesn't take a visionary like Franklin to accept the evidence of medical science today.