Addressed by graeme as "build infrastructure and tools while young."
If you look at the generations who were working between 1980 and 2000 (spanning 20 years), they delivered mind-blowing innovations: personal computers, graphics cards, databases, the internet, countless vaccines... It's impossible to list everything. What did the newer generations do in the last 20 years? Facebook, Twitter, Snap, Youtube, Netflix, Uber, Bitcoin... The only genuinely impressive thing that we achieved was the successful commercialization of the electric car. Our generation sucks. We are stupid and unwise. We can't allocate capital.
See the various options under :
https://en.wikipedia.org/wiki/Secular_stagnation
and
https://en.wikipedia.org/wiki/Energy_returned_on_energy_inve...
the world is not infinite, and economic growth can not be infinite.
I have no proof if we are effectivelly at "the limits to growth" or not. It sure starts to feel like it.
5. Automate more, and make sure the production value from the automation benefits those that need it.
This is the basic idea behind Universal Basic Income.
If you have a coconut harvesting robot, none of the two islanders need to work -- assuming there isn't a third person charging them for the coconuts.
In your analogy, both people can redeem their coconut voucher if they've built a robot that gathers the cononuts.
A more appropriate example is not an island that constrains population, but a population where new people are born and make investments into new businesses and new ideas. You can certainly have people transition more towards savings over time as they enter their prime career earning potential, without it impacting the rest. This is because there will always be other people who are willing to start businesses.
However, this has limits. A country with a 8:1 worker:retiree ratio is currently much more productive than a country with a 2:1 or a 1:2 ratio.
Maybe savings could change this for the future, by really making something that hardly needs labour. But presently we have a real labour barrier to this kind of saving.
I agree it would be better if we saved more though, as this does indeed translate to invest. I hadn't explicitly spelled this out, so thanks.
The islanders are indeed better off if they defer. But, they cannot make themselves so well off as when their society was young, and they still need some labour.
Youth is always more productive because they use tools and strategies worked out by the older.
>2. Make more youth
In some wealthier, western countries many people in their 20s and 30s can't afford to have a dog.
>3. Take a greater percent of youth's income
That's how you divide a nation, young will hate the old, riots will start. Check out "2030: The Real Story of What Happens to America"
>4. Have old people live on less or not retire so early
That's how politicians lose support, Brexit happened because more old people voted than young people, now opinions of old people are being listened to, young are ignored, because they have less voting power.
How can anyone not afford a dog? They are free and don’t eat that much
"Free" after veterinary costs and a bit of equipment. Plus the food. Let's say that's N dollars per month.
That's the N dollars some people don't have.
Or, if they have them, it can be seen as a failure of the current embodiment of capitalism: obviously someone is not extracting enough rents.
> You need actual future goods production.
That's the real key to "world savings", and in your terms you can think of it as "making youth more productive" (or making the elderly productive enough).
In the desert island, You seem to imagine that labor is a zero-sum game (the desert island is the same tomorrow as today) rather than a positive-sum, where I improve the world by my labor, in addition to providing for today's consumption.
Imagine an isolated homesteading family with no community. How would this person/family save for old age? By building up the farm, building tools, planting orchards, building irrigation systems, managing forests, so that today's labor can reduce the amount of labor required for the future.
Agafia Lykova is such a person - https://www.businessinsider.com/72-year-old-hermit-lives-in-... - she lives alone, using tools saved from an earlier time, in a home her family built in previous decades. Life with this infrastructure, including maintenance, requires less effort than initial construction, which was done when there was surplus labor available.
Similarly for a country or a world - the net savings exists in acquired infrastructure (capital) that enables future production (& consumption).
Trees are a good example - by planting fruit trees (capital investment), I enable future fruit harvests. Managed timber forests provide future lumber (or fuel) production decades later.
Similar investments in infrastructure (water systems, equipment, buildings, etc.) all represent net saved value today that enhances future production in subsequent years.
Yes, labor is required in future years, both for production and maintenance (unless/until we can fully automate), but the ratio of consumption today to future consumption is not constant, even in global sum (e.g., the years 1940-1945 may have been a world-wide net loss of acquired capital, certainly for Europe). That net improvement in infrastructure is global savings (or loss).
Yes they can. Assuming there are enough resources to sustain both their entire lives (let's say 75 years); each can work enough to accumulate those resources in 50 years so they don't have to work the final 25 years.
Do you believe you can store coconuts for twenty-five years?
Imagine a desert island of two people. They have a system of savings. You can bank away a voucher that makes the other person gather coconuts for you, and do other necessary work.
One of the two people could conceivably work harder in their youth and then work less later using the vouchers. But:
1. They can't both do it 2. If the other person loses capacity to work hard in their later years, your savings voucher loses value.
How can they both save? To a limited extent, they can store resources like extra coconuts, build infrastructure and tools while young, etc. But this only goes so far: food rots, infrastructure depreciates.
On a global scale the world is no different. A savings shortfall means that global youth productivity won't be high enough to support global elderly retirement. We will need to either:
1. Get youth more productive 2. Make more youth 3. Take a greater percent of youth's income 4. Have old people live on less or not retire so early
Notice that none of these are about saving now? That's because moving 1's and 0's in a ledger isn't a provisioning of future goods. You need actual future goods production.