On Japan, private equity, nuclear power, vertical farming, morals, Social Security, mating behaviour, the euro
SIR – You talked about the significance of the elderly voting-age population in Japan as a factor in determining government transfers, such as pensions and health care (special report on Japan, November 20th). The median age of voters in Japan will reach 65 within the next 15 years. We should seriously consider giving children a vote and having their parents use it on their behalf. Parents with children under 18 would then control 37% of the vote.
Why should we give children a right to vote? Because intergenerational income distribution became a contentious public-policy issue with the establishment of public-pension systems. It may seem outrageous to extend the vote to children, but the extension of the franchise to women was also opposed. That historic change was achieved through the democratic process and resulted in a dilution of the voting power of the male-only electorate. Greying populations require such a fundamental democratic change.
* SIR – Your special report decried Japan's ageing population and shrinking workforce, though this misconstrues the problem. A country with a shrinking population has diminished needs for construction, agriculture, and raw materials. A country with an ageing population has a diminished need for a criminal justice system. A country with a shrinking workforce has a diminished need for a commuter transport system. A country with fewer school-age children has a diminished need for schools, teachers and an education industry. Above all, economic growth, the mantra that you invoke time after time, is of negligible importance in such a country, especially if it is already rich.
What Japan will need in the coming decades is a way of reorganising its society and shifting the workers it has away from jobs that are unneeded and into health care, home maintenance and other jobs in the service sector. India's economy will eventually surpass Japan's, as will Brazil's, Indonesia's, and others; they have larger populations, and since many of their people are poor, more room and more incentive to grow. India's success is not Japan's failure.
Earth cannot hold an ever-increasing number of people. As population growth slows around the globe, populations will age everywhere.
SIR – With apologies to Mark Twain, to say that Europe is “The lost continent” (December 11th) in terms of private equity is an exaggeration. Your article drew together a compendium of facts to support an erroneous notion that European private equity is on its last legs. Buy-out activity has indeed diminished. Yet with leverage all but disappearing, firms have worked hard to reposition themselves in the post-crisis world, which is no bad thing. It is also a misconception to see secondary deals as some form of desperate investment strategy. There are certainly many secondary buy-outs in Europe, but this brings positive benefits because private-equity funds are welcome shareholders and help management to develop companies. Our discussions with international investors tell us that they still have an appetite for quality opportunities that arise from those European private-equity firms that adopt a disciplined and long-term investment philosophy.
Twain suffered the ignominy of having to explain away his death. I trust this won't be the case for European private equity.
AXA Private Equity
SIR – Coming just before the conclusion of the UN climate-change summit in Cancún, your article on mini nuclear reactors could not have been more timely (“Thinking small”, December 11th). As you pointed out, Russia has developed small floating reactors to deliver energy to the Arctic regions, primarily to overcome the problem of building power plants and grids on unstable permafrost. The simplicity and scalability of small reactors makes them an ideal energy source where future demand is uncertain and investment in larger plants and grids is simply not viable.
But you passed over the one big area where small reactors can perhaps make the greatest contribution: the developing world. Harnessing this technology can promote clean and affordable economic and social development in countries that are held back by energy shortages. Indeed, small reactors should figure prominently when it comes to implementing Cancún's pledges on technology transfer to developing economies.
For nuclear power to live up to this promise, the international community must be ready to share technology and expertise to help reduce costs and ensure the highest safety standards. So as well as representing a significant step in “resetting” American-Russian relations, the recent approval by the American Congress of an agreement with Russia opens the way for unprecedented commercial co-operation on new reactor designs that are small, proliferation-resistant and more cost-effective.
Such an increase in international co-operation coupled with continuing improvements in technology will allow nuclear energy at last to live up to the hopes of its pioneers from more than 50 years ago.
Better then to grow the vegetables where the sunshine is plentiful and land is cheap, rather than where it is dark and land costs are at a premium. The Seawater Greenhouse is designed for coastal arid climates, such as northern Africa, and uses sunshine to convert seawater to fresh water. The process also cools and humidifies the greenhouse to create a perfect growing environment, all using land which is otherwise economically unproductive. The first commercial installation is just now producing its first harvest in Port Augusta, South Australia.
SIR – The link between material circumstance and lawless behaviour is not a new topic, but at least Bagehot attempted to shine a light on the British government's research efforts (December 11th). However, the conclusion that the government needs somehow to forcefully “prod” poorer parents deeply disturbed me for one reason: why is moral character only worth examining in poor families? This implies that rich parents automatically instil moral fortitude. After a year of unethical bankers, swindling MPs and the defacement of war memorials by students, I am starting to think that the government is looking in the wrong place for Britain's “character”.
* SIR – A letter to the editor stated that “because of the upper limit on payroll taxes, Social Security is regressive and redistributes wealth to the rich” (December 4th). Nothing could be further from the truth.
The applicable individual payroll tax rate is currently a flat 6.2% on earnings up to the taxable wage base, currently $106,800. Thus, everyone contributes the same percentage of their taxable earnings.
However, the benefit formula, which is applied only to taxable earnings, is heavily progressive. For example, an employee not retiring early with taxable earnings at the cost-of-living adjusted rate ending at $10,000, $30,000 or $106,800 upon retirement will receive a benefit that replaces approximately 84%, 50% or 28% of their final taxable earnings level, respectively.
Clearly, wealth redistribution occurs, but by no means in favour of the rich.
Society of Actuaries
SIR – By having volunteers pair up pictures of people's faces (“Hunkier than thou”, December 11th) scientists trying to understand the causes of human mate selection are not doing much better than internet dating. Facial features are poor indicators to the quality of a mate. Sexuality, authority, self-confidence, inner strength and good physical health are far more reliably conveyed by the blend of poise, deportment, body language and manner of speaking.
That combination can confer a kind of subtle aura which is sometimes exemplified when a man or woman unobtrusively entering a room mysteriously attracts attention, or spontaneously takes charge of an emergency situation without being challenged. It does not necessarily help to be “hunky” or gorgeous or loaded with degrees. Women are attracted to power and leadership. Men are often misled by female sexuality, but this dangerous quality has little to do with a pretty face or jaw-dropping contours.
SIR – After reading how women in disease-free countries prefer more effeminate men (“Face off”, March 20th), I dropped the protein powder and gym sessions and instead became more sensitive (Letters, April 10th). Now you run an article asserting that a woman's sexual preference for manliness may correlate to a country's ranking by Gini coefficients. What should I do?
Do I fly my now bony and unmanly self to Sweden, which has the lowest income inequality, to find a mate? That would put a dent in my wallet in addition to the emotional pain I already experience from looking at my weak frame in the mirror each day. I guess I could just exercise again.
SIR – You managed to find a picture of the European Central Bank's neon sculpture in Frankfurt of the euro with one of its bright yellow stars broken (The world this year, December 18th). This is a rare photo opportunity. Usually the Germans are quick to repair it.