In Time Economics

Many praise the new movie In Time for its intriguing premise:

Time is money: Everyone is genetically engineered to stop aging at 25; … after that, people will live for only one more year unless they can gain access to more hours, days, weeks, etc. (more)

In its tone, the movie comes across as shrill class hatred, like They Live. Lazy snobbish aristocrats with inherited wealth live forever young, and conspire to “manipulate” prices so the poor die fast, to keep them motivated to work. Boo mean rich folks, rah poor rebels. Though some think it didn’t hit hard enough:

For a real dose of revolutionary fervor, you’d do better to head down to Occupy Wall Street. (more)

But if you study the movie a little closer, its moral looks rather different.

First, the “time is money” angle can be misleading, leading folks to think in nominal price terms. In real prices, the scenario is equivalent to:

  1. Physical immortality, with no body/mind aging, has been achieved.
  2. Everyone must periodically pay a head tax to the government. Each person pays their tax into a personal tax account, which the government continually drains.
  3. Everyone has a built-in bomb, which automatically kills them if their personal tax account ever gets empty. Most people die either from tax bombs or from murder by thieves, which authorities tolerate.
  4. If a situation arises where most people can reliably pay their taxes, authorities raise prices on widely-needed commodities until enough people die from tax bombs. In the movie, commodity prices are raised via “manipulation,” but that can’t work reliably unless authorities in effect raise taxes on those commodities.
  5. [Added 1p:] The government gives the tax revenue, and more, to favorites.

Now first of all it is extremely expensive to kill off most of your working class, just to motivate them to work. Surely they’d be motivated plenty just to eat and pay rent.

More important, this society’s main problem is being over-taxed, via a severely regressive tax system, with poor law enforcement aside from very well enforced and extreme penalties for failure to pay taxes. How can the outcome of such a terrible tax system be a critique of wealth inequality in our society, where the rich work hard, taxes are progressive, the poor pay few taxes, and penalties for non-payment of taxes are mild?

Yes, once physical immortality is possible, then how long any one person actually lives must depend on their ability to afford rent, food, etc. But this would be true no matter what the tax or economic system.

Added 10a: The main event that drives the plot is when a government detective, apparently without due process, takes all but a few hours from our hero’s tax account. Again, government, and those who profit from it, are the villains in this movie.

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  • Robert Koslover

    You ask “How can the outcome of such a terrible tax system be a critique of wealth inequality in our society, where the rich work hard, taxes are progressive, the poor pay few taxes, and penalties for non-payment of taxes are mild?”
    That’s really, really easy to answer. Most people on the political left (note: not necessarily typical of leftist commenters to your rather atypical blog!) literally refuse to believe any of what you just said, i.e., that: (1) the rich work hard, (2) taxes are progressive, (3) the poor pay few taxes, or (4) that the penalties for non-payment of taxes are mild. Instead, they believe: (1) most rich people stole or inherited their wealth, and live lives of utter leisure, (2) that taxes are intensely regressive, and that most among the rich avoid taxation almost entirely, (3) that the majority of all taxation is upon the poorest of the poor, and (4) that non-payment of taxes (well, if done by the poor, anyway!) will get you jailed for life. So good luck, Robin, persuading them otherwise!

    • http://daedalus2u.blogspot.com/ daedalus2u

      Way to demonstrate you have not a clue as to what liberals think.

      I guess the wealthy don’t think of Social Security taxes as “real” taxes because the wealthy don’t pay them, only people who earn wages pay social security taxes, about 15% of wages.

      The “poorest of the poor” who have any income would be those on minimum wage. 2000 hours a year at $7.25 is $14,500 per year. How much tax should people making $14,500 a year pay?

      There is an editorial that discusses Rawls

      http://opinionator.blogs.nytimes.com/2011/10/21/rawls-on-wall-street/?src=me&ref=opinion/

      which seems to be just a variant of Pareto efficiency

      http://en.wikipedia.org/wiki/Pareto_efficiency

      That perhaps might help you to understand what real liberals think.

      When Warren Buffet says he pays a lower tax rate than his secretary, and says that is a bad thing, are you calling Warren Buffet a liar?

      • Robert Koslover

        Well, I confess to not having too much of a clue about what you think, since I am not even sure which one(s) of my points you disagree with. That said, based on your comments about Social Security, you seem to be arguing in contrast to Robin that taxes are indeed regressive, rather than progressive. But the “wealthy” who work for a living (and the vast majority of them do, if you call “wealthy” anyone who earns over ~$200k per year, like Obama does) very definitely pay plenty into Social Security. In fact, they max-out on it, paying more than anyone who doesn’t earn enough to max-out. Oh, and regarding your question of “How much tax should people making $14,500 a year pay?” Well, I don’t really know… how about 10% of it? That would still be less than the percentages (not to even mention the absolute $) paid by people who earn, say, $75,000 per year, right? Yet in most cases, 10% would be more income tax than they pay now, right?

      • Jason Graff

        10% tax to someone earning $14,500 per year means something entirely different in terms of well-being than it does for whomever you would classify as wealthy.

      • Robert Koslover

        Yes Jason, it does. No argument there.

      • http://daedalus2u.blogspot.com/ daedalus2u

        The person earning minimum wage is already paying 15.3% in Social Security and Medicare taxes. There is also unemployment tax FUTA, of 6.2% of the first $7,000 of income. The person making $14,500 pays $434 in FUTA, $2218.5 in FICA and Medicare for a tax rate of 18.3%.

        Then there are sales taxes, but since they are on after tax income, putting them on a before tax basis decreases the rate. In Kansas the sales tax is 7.3% and it covers everything, groceries, prepared food, prescription medicines, non-prescription medicines and clothing, that would be another $865.

        That is $3,517.5 tax out of an income of $14,500, a tax rate of 24.6%,

        But this person earning minimum wage hasn’t paid any income tax, so they are freeloading off those that do pay income tax. If we add the fair income tax of 10% (just slightly higher than Cain’s 9%), then that is another $1,450 for a total of $4967.5 for a total tax rate of 34.3%.

        If someone earning minimum wage can afford to pay 34.3% in tax, why can’t someone who is considered wealthy?

  • http://lorenzo-thinkingoutaloud.blogspot.com/ Lorenzo from Oz

    When I am teaching students about medieval crime and punishment, I usually ask them, having set out the incentives facing the local knight paying to impose law and order on the village of peasants who provide his income, what, given those circumstances, would be the most common medieval punishment? Often, hanging is offered: I then ask can a dead peasant work for him? The students immediately change their mind.

    The correct answer, btw, is a fine.

    How removing the longevity constraint changes incentives in tax and enforcement regimes is an excellent question. The consequent increase in the return on training seems hardly likely to make people less valuable, however. Only if the ratio of people-to-stuff fell dramatically in favour of stuff would people become less valuable. Given people would have far longer to have children, but less incentive to do so, that also seems unlikely.

  • http://entitledtoanopinion.wordpress.com TGGP

    I haven’t seen the movie, but it seems to go wrong with the assumption that you need to kill ageless people to keep population down. If there’s no real resource constraint then why bother keeping population down. And if there is a constraint, Malthus will keep down the poor.

    • Anonymous

      By making them die against their will. And this is better than making the rich not rich because they worked so hard?

  • Steve M

    I’ve not seen it either, but presumably the wicked rich people dislike the resource-constrained equilibrium population, so they try to keep the population lower than that, while not being too obvious in their culls.

  • John

    Why am I not surprised this move was made the the Gattaca director?

    • Ari T

      How am I not surprised that everytime someone does a movie about an abstraction leak in terms of ethics of a political ideology, they can’t handle it just like they can’t handle efficiency.

      I found Gattaca a good movie. Soon we’ll be able to measure a lot of stuff from genes, and it’ll have both economic and political consequences. Especially health care market can get very ugly if efficiency is not regarded more highly than liberty.

  • http://fearfulfortress.blogspot.com/ fructose

    There is some precedent for rich people to be interested in managing population growth. Historically one of the big expenditures of foundations founded by the hyper-wealthy is population control.

    For example, the Ford Foundation has a close relationship with Planned Parenthood, donating millions to their programs and bringing PP personnel onto their board of directors. The Rockefeller Foundation gave huge amounts for women’s contraception programs and the Packard foundation also has focused on 3rd world contraception for population management.

  • Anonymous

    Yes, once physical immortality is possible, then how long any one person actually lives must depend on their ability to afford rent, food, etc. But this would be true no matter what the tax or economic system.

    Why? We could make availability of immortality dependent on the individual’s willingness to voluntarily forfeit reproduction. This could solve the problem of exponential growth vs. limited resources, i.e. potentially enable sustainability. And of course, the whole point of a welfare state is that people don’t die if they can’t afford food, rent etc.

    With all due respect, you are constantly mistaken about other people’s priorities. Just because you think it’s better do force people to die than to redistribute wealth doesn’t mean the majority of people relevant for this decision will agree with you.

    • anon

      “Why? We could make availability of immortality dependent on the individual’s willingness to voluntarily forfeit reproduction.”

      We don’t know how reproduction works in this movie, though. Most likely, parents do have to pay some time to compensate for their kid’s “default” adult life up to 26; thereafter, everyone pays rent for themselves.

      “Just because you think it’s better do force people to die than to redistribute wealth”

      Currently, aging does force people to die, albeit in a rather egalitarian way. But if aging were conquered and overcrowding were to be seen as a severe problem, making lifespan negotiable would make a lot of sense. Folks would then be allowed to trade lifespan off vs. other concerns e.g. leisure or resource use. Such a world need not be grossly unequal; it depends on how the right to lifespan is allocated and/or how the government rent from lifespan is spent, which is not addressed at all in this movie except indirectly. In your world, folks are awarded a perpetuity in lifespan terms, as long as they don’t reproduce–OK, this makes a lot of sense and is egalitarian. But what if they want to trade their lifespan to someone else in exchange for resources?

      • Anonymous

        I would not object to such a voluntary trade-off. My main problem is that sapient persons are made to die against their will if their abilities can’t keep up with the demand.

        Frankly, that’s me in 40 years.

    • http://hanson.gmu.edu Robin Hanson

      No matter what the redistribution or reproduction policies, if you can’t afford food, you die.

      • Anonymous

        Sure, that’s correct. If wealth redistribution is part of your definition of “ability to afford rent, food, etc.”, then yes. I read that part as meaning “on the free labour market”, which would lead to the involuntary death of anyone who can’t compete.

        I would think this is actually better than forcing people to remain alive against their will, which we unfortunately tend to do now, but it seems worse than redistribution. I’d personally rather have a world without millionaires (and restricted reproduction) than a world in which the poor must die.

  • Pingback: *In Time* (spoilers about the macroeconomic model) — Marginal Revolution

  • Robert Easton

    “a day’s labor in a factory will earn a worker a little over 24 hours.” Wikipedia tells me. How did worker productivity get so low in the future? I can easily earn enough resources to live off for several days from one day’s labor. Probably even a full week if I lived in a sufficiently subsistence way.

    A lot of dystopian science fiction seems to rely on this unexplained fall in productivity to make the poor look hard done by.

    • anon

      Perhaps productivity is not low in absolute terms, but it _is_ low in terms of lifespan because the price of a person-year is so high. The economy has in fact reached a Malthusian equilibrium where folks can barely pay for their subsistence. We would see overpopulation, were it not for authorities keeping population low.

    • http://danweber.blogspot.com/ Dan Weber

      If they earn a little over 24 hours from a day’s labor, they will very quickly die because they still have to pay for their food and housing.

  • anon

    I think 4. is wrong. The total amount of person-years is fixed by the authorities in order to avoid overcrowding, and person-years are the unit of account. Perhaps times when “folks can easily pay their taxes” (i.e. buy time) is when spending is higher overall, so commodity prices must increase shortly thereafter to clear the commodity market. But, on average, folks are killed due to time scarcity at roughly the same rate.

    Of course the real question is how property rights in person-years are awarded, and/or how the rent the government gets for person-years is spent. Most likely, the government is far from transparent, and “time-rich” folks managed to grab most of that rent/property for themselves. So, in a way, this is as much a critique of government as one of wealth inequality.

  • Raphfrk

    Isn’t the point that the whole system forces it to be subsistence?

    Unless they changed it since I read the last review. at 25, you get 1 year. The average life expectancy must by definition be 26, since anyone who lives longer than that is compensated by someone who lives less than that (technically people who die before hitting 25 and would pull it down slightly).

    If the pay per day was 23 hours, then on the average workers would die. At slightly over 24 hours, your workers can pay to survive for the day they worked, and also pay for other things like food and accommodation.

    OTOH, if you managed to earn 18 hours per day, then you can extend your 1 year by 4, so maybe even 24 hours pay per day is massive over payment.

    Also, that wouldn’t apply to paying people who aren’t 25 yet. In the film, can people use the money system before they hit 25, i.e. do they have a clock set to 1 year that doesn’t count down? They could hit 25 with a year of time already earned, and then get their 1 year allocation.

    In fact, it looks like at birth everyone simply gets 26 years of life with the last year transferable.

    The fundamental problem is that despite the medial marvel of immortality, they managed to do it in such a way as to drop life expectancy. One moment, life expectancy is 75+ years and the next it is 26. Things like education would be much less valuable. If people spend 1/3 of their life in education, people would leave school at 8 or 9.

    A more reasonable mechanism would be to maintain life expectancy at 75 and keep the trading. You hit 25, then you have 50 years on your clock. Also, they need some system to stop theft, like say a functioning banking system.

    A person would walk down the street with only a week or so of time on their person. Ideally, the extra time could be “locked”, but kept on the person. This would mean that it could be used to keep the person alive, but not for trading, and hidden from view.

    Even if all time must be held biologically, you could have a person physically locked in a vault to act as store. They might have millennia or more of time stored.

    • http://hanson.gmu.edu Robin Hanson

      Since the average age of folks in the movie is clearly above 26, there must be some other source of years. Clearly the government gives to some as it takes away from others.

  • Lord

    And who would control the government in such a situation? Isn’t it obvious by rules they have established?

    • Lord

      BTW, Isn’t it obvious everyone is washed up by age 25?

      • Raphfrk

        In the film, is there anything like a central bank. Would it be possible to change the allocation of life at 25 to 50 years?

        What could easily have happened is that with the collapse knowledge of genetic engineering could have been lost. This would prevent any further tweaking with the system.

  • Dave

    The premise of the movie is incoherent. The movie is based on the idea that there is a fixed amount of wealth that only needs to be fairly distributed. Actually if aging and sickness were eliminated the economy would collapse as 18% of the GNP would disappear. Also the funeral business, anti-aging products, cosmetics, exercise and dieting products, healthcare gurus, environmental scare mongers, vitamin peddlers and cryonics centers would go out of business. Likewise life and health insurance companies and many other industries which prosper by promising to stave off or ameliorate health decline and death would disappear.

    The economy could rebuild, but there would be few profits for the greedy rich unless they allowed the masses to proliferate and consume. The premise of the movie is that the rich already hold all the wealth and would simply hoard it.

    If all people were busy saving for their future short future, would they be willing to spend the half million dollars it takes to raise a child? The world would progressively depopulate leaving the wealthy to clean their own toilets, even plant and harvest their own crops.

    Nature would reclaim the land and wolves would other wild animals would stalk the forests. Maybe this not a bad idea in the eyes of some Hollywood types.

    The Wall Street Journal, an obvious tool of the plutocracy, regularly editorializes that increased population is good for business. Many liberal organizations support birth control as good public policy.

    • http://daedalus2u.blogspot.com/ daedalus2u

      Who said there is a limited amount of wealth? Or that it would be distributed fairly?

      Why does a society collapse when one sector of it is simply no longer needed? The society has greater resources if resources do not need to be wasted on funerals or life extension stuff that doesn’t work. How does a society with greater resources collapse? Only if those resources are misallocated.

      Lets suppose that people no longer needed food. Would society collapse because farmers and the whole supply chain from field to table was no longer needed? No, it would not collapse. Those people could start doing other things and what ever they did would be pure surplus because the new economy doesn’t need their labor to produce food.

      However, if the people who formerly did consume food, and now found that they didn’t need to spend resources on food decided that they would hoard resources and not allow the former farmers to have clothing or shelter, then yes there would be difficulties as the former farmers would (very likely) refuse to meekly die of exposure, they would likely resort to violence.

      This is sort of what is happening now. There is surplus capacity in the economy to make a lot of stuff, but people can’t buy it because they don’t have any money (because it got dissipated in a speculative bubble). People who do have money are just sitting on it because there are no productive investments they can make because the economy already has surplus capacity.

      The government could put those unemployed people to work rebuilding infrastructure, roads, bridges, railroads, the kind of stuff that has a long useful life and happens to be run down right now. Interest rates are at record lows. Borrowing money to invest in infrastructure has never been cheaper and the need to do so has never been greater. Why isn’t it being done? Because the GOP would rather see people starve in the gutter rather than pay them to rebuild roads and bridges.

      • Dave

        Not that I think useless industry should be supported to maintain employment,but that the rich have no monetary incentive to reduce the population. Reduction in human population is the agenda of the environmentalist and social engineer. Why don’t they make a movie about that?

    • Doug S.

      Actually if aging and sickness were eliminated the economy would collapse as 18% of the GNP would disappear. Also the funeral business, anti-aging products, cosmetics, exercise and dieting products, healthcare gurus, environmental scare mongers, vitamin peddlers and cryonics centers would go out of business. Likewise life and health insurance companies and many other industries which prosper by promising to stave off or ameliorate health decline and death would disappear.

      Good. That way we could do things with our resources other than fixing broken windows.

    • PrometheeFeu

      “Actually if aging and sickness were eliminated the economy would collapse as 18% of the GNP would disappear.”

      Please Google “Bastiat Broken Window Fallacy”

  • thomas murcko

    A few thoughts on time vs money:
    http://www.howtolive.com/value-time-over-money/

  • http://entitledtoanopinion.wordpress.com TGGP

    daedalus2u, Pareto efficiency is very different from Rawls. There’s nothing egalitarian about Pareto efficiency, it just shows how one result can be obviously be superior to another, with no interpersonal utility comparisons coming up.

    Anonymous who responded to me above, I didn’t say anything about “better” or worse. I’m saying there wouldn’t really be any point in the Logan’s Run lifespan limitation. I guess it makes for entertaining cinema, but an actual government would have no motive to implement it.

    Speaking of Gattaca, Arpit Gupta had an interesting point on how the protagonist deserves our moral condemnation because he is risking the lives of his fellow astronauts by going up with hidden health risks.

  • http://hopefullyanonymous.blogspot.com Hopefully Anonymous

    “… shrill class hatred… ”

    er- what?

    I hope it didn’t make you weepy.

  • mjgeddes

    Hackers Maxim #2

    ‘Knowledge is power, but he who controls time, controls the universe’