At http://www.sun-sentinel.com/business/local/sfl-zpilots26may26,0,7204642.story?coll=sfla-business-headlines
there is a story headlined:

"Airline pilots want retirement age raised from 60 to 65"

We are still willing to impose retirement age limits when the cost (human or bureaucratic) of poor performance are both high and visible.

Chuck Jackson

We already have natural solutions to the problem posed. In the case of dictators, well, we respond the same way as with young dictators--chuck them out. Popes are well supervised, I presume, by a higher authority and supreme court justices should be removed from the bench by the legislature when their decisions become incompetent (as Blackmun should have been removed immediately after Roe).

Perhaps we all need to do our jobs better. So what is the problem? I see none. Work as long as you wish and be employed as long as you provide good value to others.

While you are right to point out that (probably for political or social reasons) discussions of this topic do not acknowledge the potential benefits from a mandatory retirement age or ability test it seems you make a similar mistake. Namely you overlook some of the drawbacks the acuity tests you propose would create.

First of all usually political or social sensitivity exists for a reason. In this case the reason is likely the fear old people have of being pushed out by the young and rendered useless. Whether or not this fear is justified or appropriate it is real and a cognitive test after age 70 would cause many people anxiety and perhaps even feel socially ostracized. Thus while the act might slightly improve efficency or quality of work it would generate a fairly significant negative psychological impact.

Besides, the people who keep working past the time they should retire generally do so because they gain significant enjoyment from their work. Forcing even the incompetent ones to retire will significantly reduce the quality of their life in addition to the worry it inflicts on them before being forced to retire. Is it really true that the gain in efficency will produce as much happiness as the lack of mandatory retirement gives those who like to keep working. Consider it a retirement package with slightly boosted income and benefits for people who really like their work. Is this unfair to those who choose to retire? I think not as those people who love their job this much likely contributed more during their career.

All the above concerns occur even if the system is implemented perfectly. As you mention designing a test is likely to be quite complicated (though I don't understand why it is bad to let experience substitute for IQ. what we are interested in is ability to perform wherever it is from). A test which isn't very finely callibrated is going to be of little benefit and much harm. How do you tell people what is a too low score and what isn't? Or do you leave it for them to figure out for their own and bring all their own biases to the table about the individual.

Even worse clearly we can't have one universal test. The sort of acuity you need as an english professor may be quite different than that you need as a research chemist, mathematician or judge. An english professor may primarily need to retain memory of various works but need not remain particularly quick on the draw or even very creative. A math professor needs to retain his creativity and reasoning ability but can work perfectly fine even with a somewhat fuzzy memory (some of the best math profs I know have never been able to remember who did what or which theorem says what but can reprove anything they need on the fly). A research chemist needs to retain hand-eye coordination and the ability to work preciscely and consistantly for long periods of time. you probably know what a judge needs to be able to do better than me but I presume it includes digesting long amounts of material and keeping it in memory as well as being able to evaluate material on your feet and keep order in the courtroom.

So we need a different test for every discipline who makes these tests. Do you really think they will all be correctly callibrated? How much time and expense will be wasted in the elder test industry? Does the government regulate the tests in each are with a huge new buerocracy or do universities and institutions get to choose the tests without oversight?

If the buisnesses get to choose the tests on their own you have effectively repealed the anti-discrimination law against the elderly. Any company or group wishing to fire people over 70 need only make their test particularly difficult. Even though it may not be grounds for firing making the test report back most old people were incompetent they could bias them toward retiring. Would they be allowed to sue for libel if they thought the test was biased against them?

Most importantly I worry that the test would be used as a political tool in departmental politics. Those people everyone liked would be allowed to slide by without comment but use a year when the person was sick when the test was administered to spread negative rumors about them.

Moreover, I expect most people stay on past the time they are mentally incompetant becausee they have incredible powers of self-delusion or a great psychological need. Usually someone's peers know quite quickly if someone is no longer competent so taking the test won't change what others actually know. If people are able to convince themselves they can still work even though they observe themselves not able to ramin compotent do you really think a test number will convince them?

Finally, I just don't think that a volountary test like you mention would catch on. I suspect that many people would react (incorrectly or not) very violently against such a proposal. Thus many people will likely refuse to take the tests on matters of principle and anyone who wants to avoid embarasment could simply hide in this contingent. Even if the test was mandatory I expect many people would 'protest' and refuse to read or open the scores.

Some years back, as part of an ongoing quality contro program for the surgical community in Boise Idaho, I proposed that afer age 55, each surgeon should be reviewed every 5 years, by examining his or her last 100 consecutive operations. We had already established the mechanism for doing this, when problems arose around a particular surgeon. Needless to say, my fellow surgeons didn't think this was good idea and refused to consider it. I subsequently moved to the University of Washington, where I had the better sense not to even try to accomplish this.

My reason for proposing this is that most surgeons as they grow older, find the demands of long, difficult cases beyond their capabilities in terms mainly of stamina and fatigue. This leads to attempting shortcuts which often lead to bad results. I was willing to put myself forth as the first subject as I was 55 at the time. I retired at 62 primarily because of health reasons and the loss of stamina and fatigue that I noticed in long cases.

Surgery is a profession where an appropriate mix of intelligence, experience, technical skils, and physical fitness all play a role. Only by analyzing performance can you sort out the failing. Sadly this is not being done.

David G. Ashbaugh, MD, Professor Emeritus, University of Washington.

What would the difference be between acuity tests as you discuss for advanced age, on one hand, and tests to determine that a person is no longer a minor?

The law already draws bright but arbitrary lines for a person to vote, drink alcohol, own real property, marry, and own arms. These laws seem not to be challenged or questioned, and the logic behind their application seems to me to work equally well for the end of one's years as for the beginning.

Provocative post. I have expressed my disagreement here in a post over at PrawfsBlawg.

The critical failure in your thinking, Posner and Becker, is that you are not taking into consideration social and government considerations and causes.

Quite frankly, before I go any further, reading your blog I think, as highly educated and highly experienced men, the views of people here and yours differ not so much due to that experience or education. I think it's due to a lack of information on both ends and is one of the reasons I enjoy reading your blog; I get an insight into how your minds work.



You two both take more of a conservative (meaning, a fundemental belief in property rights as a solution which is expected from a Judge and especially an Economist), mainstream view on the world. Although much of your thinking is riddiled with logical fallacies the golden nuggets so to speak is the personal experience you have and how you relate it to that mainstream thought. A number of the people who reply, while they may know a great deal more information about the situation than you do or can point out the logical fallacies, do not have a very good understanding of what logical fallacies exist.



I highly reccomend you contrast the information you get on a daily basis with some Noam Chomsky books and speeches. I'm not trying to advertise for the man but he picks his words and research better than anyone I've ever read or heard speak. The best way to describe the mans views is that he's probably THE number 1 conspiracy nutcase on the planet and not because he's like Alex Jones, but because he's well studied, researched, and knows what's going on. He's a MIT professor and the worlds most prominant intellectual and that's the opinion of just about every university and media organization the world round, accept in America.



Now, as for those social causes.



Americans tend to stow their old people away in Florida, or shelve them in old folks homes; American culture, weither or not you'd like to believe so, is very much "engineered" towards consumerist values and consumer culture by those who consider it an investment. Consumer culture is a culture distracted from reality by making and consuming widgets; nobody is supposed to sit back and spend time with their grandparents. Old people have a wealth of information in them; the human race is eternally youthful and the words of dead men (books) and old men are the only chance it has to correct it's mistakes.



My grandmother has taught me to; how sacrafice interacts with love, sew, how to use a computer and she even baught me one when I was younger, a great deal about politics and the past, how to fish, how to camp, proper nutrition, proper exercise, and a million other things I probably am missing. Old people are extremly knowledgable, even though many can barely move, they can talk, and they can teach. My Grandma has had more influence over my life and education than anyone. My Grandpa has had some influence but he's mostly kept out of my life accept when the washer broke or the furnace stopped blowing air and he'd step in and help out.



Socially, old people are a huge asset to our society and they have always been. Both of you, Posner and Becker, may be paper pushers but our country would not run without you two and people like you. You two are perfect examples why I love wiring old people upto the internet and showing them how to use it. It doesn't matter weither or not you draw a salary, it matters how you help people out.



Economically, The conseption that when you retire you stop working is a complete farce for much of the world. It means you are no longer physically capable of doing certain things and you switch job roles. In the business world it's assbackwards as well. Young college graduates shouldn't be in management positions, they should be on the tow line working their buts off. Old people should be managing and doing the paper pushing. A smart person who's worked at a factory for 30 years and has been activly engauged in decisions at the plant and with management, as well as educated by the plant and how it operates, is, with a little bit of extra college education, a far better manager than some 20-something college grad. Time and time again I'v seen old people give young people direction and confidence in their lives and that is the most important gift you can give a person who's 16 or 17 years old.



If you've got a guy who's been engineering for 50 years, then you don't fire him; you give him decent pay, 3 months a year vacation, and 2-4 hour work days where he's at a desk pushing papers, giving speeches, answering questions, telling stories and in general educating the youngin' engineers and you keep him on call if something breaks.



That is how it should be and how nature has set it up to work. However, it seems more profitable to a few people to setup the system in the current fashon and throw old engineers into a position of pushing carts at the local wal-mart. When the world is more profitable for a few people, they are able to exhert more control over people in general. That's where the money points on paper, but while it may make sense on paper, logically it is less profitable because, as in the old engineer example, if shit hits the fan nobody's on-call to fix it. What's more profitable in the long run; a product that's 500% more efficient and 300% more durable or more money? Which makes more sense to an investor who wants profit and which makes more sense to society who wants a better dishwasher?



As far as the question of senility goes, the question you shouldn't be asking is weither or not old people can work past their 60's and 70's. Quite frankly, the dream of retirement isn't the dream of sitting on your ass and doing nothing day in and day out; it's a dream of traveling, of seeing the world, of self-educating, of achieving your dreams. Old people stay active until they're 70 or 80 years old even. The question you should be asking is why are old people having so many health problems? I know old people who can outrun me and they're in their 80's and I know old people who die in their 50's.



The question you should be asking is what social phuenomina causes these physical and mental problems? I can name a few; milk pastuerisation, nuerotoxins in food, artifical coloring which is mostly industrial fossile fuel based waste, feedlots, dioxin poisoning, pesticides, western medicine (no money in curing the disease, the money is in treatment), and I can go on from there. The youth in our generation, invigorated by the internet, have chosen lifestyles much to the dismay of conservatives who've invested so heavily in what amounts to mass genocide in order to make profit. I am one of them; I see how my grandma and mother live and I know they will die by the time they're 90. I plan on leading a healthy, productive life well into my hundreds and I'v got research and determination to back that goal up.



And I'm not alone. A lot of parents consider these new vegan, vegitarian, or self-proclaimed nutritionalist and professor-kids who eat extremly clean and healthy diets wierd. Consider this view; when you were raised on a steady diet of pop tarts and dorito's, TV and videogames and you feel like absolute shit all the time, the healthy diet and self-education is the only thing that makes sense to get out of that position.



Economically, as for "artifically induced retirement"; that is hogwash. I have a challenge for you Becker which I think will illistrate why this is hogwash. I want you to calculate taxes out to truely what they are.



Take into account;
Federal, Munincipal, and State income taxes,
Property taxes,
Inflation tax (because inflation is a tax),
Taxes and Excises on necissary goods; do not include luxury taxes because my point is about survival not living standards.



Take my scenario; we are a family of 3. The income of this household is about $35,000. First you adjust the income in reference to itself by factoring in inflation. The income we have reduces in value by about 3% per year, or roughly $1050 in value. Income taxes take roughly 34% of that; $12000. Property taxes are $3000 a year. We spend $500 a month on food with a 2% tax which comes out to $120 a year. We use about 30 gallons of fuel a month; 360 gallons of fuel a year at $2.10= $672, 8% tax (6% sales, 2% storage and gas tax) comes to $54 a year in gas taxes. Munincipal gas, electric, and water taxes come to somewhere in the viscinity of $200 or so a year. Lisence plate stickers are $50 every 6 or so months; $100. I know I'm missing a few there but that's how it is. As a note, social security is a tax becuase congress spent all the money in it.



The grand total is $16524; 47% tax. I don't know of any country with higher taxes in the world for the people.



My calculations come out to somewhere around 45-55% of the total income of an individual going to the government for the average household income of $35,000 a year. For those of lower income it increases to somewhere in the viscinity 60% of their income, and for higher income somewhere in the viscinity of 40% of their income (as some taxes are fixed and some taxes are not). A lot of the taxation is hidden.



The reality of the situation is that this government is spending massive amounts of money on private organizations and payouts to corporations and that is a huge tax on the American public who are largely unaware of it as that was how it was meant. If it weren't for that corruption, everyone would have a higher standard of living than we do now. Do we really need 300 billion in military expenditures? Do we really need to bail out major corporations or let banks print money for loans and steal peoples property via the federal reserve system? Does Metra really need Seattle to build their railways for them? No, we don't, but that's how it is right now. I don't mean to come off as a conspiracy theorist, I know the fine line between crackpots and journalism, but in reality, the majority of the economy is based off of lies manipulated by very rich investors and bankers who have a megalomanic attitude towards the world. This is why the market seems to be doing a lot of "magic" things as of late and won't crash hard like it predictions show it should. This is namely because ye who hath the gold makes the rules and right now those mega-rich investors and bankers get together annually at a meeting called the Bilderburger meetings to conspire about engineering the right rules that make them richer.



In any case, weither or not you choose to believe my statements about how the magic market works, it is absolutely undenyable the government doesn't have it's priorities straight when it's taking money out of schools to build prisons or and gives payouts to major corporations like HalliBurton for failing. From an investor standpoint, the best way to engineer a good society is to put money into education.

I mostly agree with B & P on retirement. Our present system needs improvement. I’m a 67 year old University neurologist and professor. I see many people who are not demented at all but emotionally wedded to the ideas of the 50s and 60s, doing more harm than good in their professional capacity. I wouldn’t can them, but they should be working part time, encouraged to mentor younger people and paid for their time. That’s the rub. Let me plagiarize from Mish’s global economic trend analysis:
1) Enormous and increasing consumer debt
2) Falling wages
3) Global wage arbitrage
4) Credit expansion that can not be maintained
5) Bad and often speculative investments
6) Over capacity
7) A world-wide housing bubble
8) A briefly re-inflated stock market and hedge fund bubble

He envisions:
Wages continue to fall due to outsourcing, mergers, and global wage arbitrage
Home prices level off then fall sharply
Home equity loans stagnate as result of stagnating home prices
Home building stalls when affordability starts to matter
Banks fail when foreclosures go through the roof; universities must lay off faculty, etc.

Not just corporations but universities and political agencies are afraid to increase their wage expenses these days - keeping on a significant number of people at 30-50% time while hiring full time replacements seems foolhardly. People deserve payment or some special recognition for their time, but our institutions haven’t even thought about these problems- they are too busy fund-raising and ducking lawsuits.

I disagree with Tyrr and his Chomsky comments. First, the concept of the world’s number one intellectual is bogus, even if it appeals to advertisers and TV anchors. Second, Chomsky shares many things with Bertrand Russell. Both were brilliant thinkers who couldn’t monitor their own utterances and delighted in making others angry. Chomsky made historic contributions to linguistics in the 50s and 60s. He deserved a Nobel Prize. I hope that B & P realize that the prix doesn’t anyone’s self-critical faculties. Chomsky’s ideas on linguistics and cognitive science are no longer first rate and his political rants, like Russell’s haven’t done anybody any good. I sympathize with most of his goals to the extent I understand them. How do you change human social and political behavior? I haven’t accomplished much in that regard, but I can see what doesn’t work, and Chomsky is an example.

Let's look at the other end of the age spectrum for balance. The Supreme Court recently ruled that a 17-year-old could not be executed for murder. Only adults (18+) can expect that fate.

We allow many arbitrary distinctions in managing our society. Rather than test all of the elderly to see if they meet a "retirability standard", we arbitrarily pick an age for benefit eligibility. The same applies for driver's licenses. 12 credit hours denotes full-time student status. The age for consensual sex is generally 16 but has been 14 in earlier times. The list goes on.

Bureaucrats and actuaries can grade the answers to a multiple choice exam. Bureaucrats and actuaries cannot grade essays or themes. Hence, we're stuck with arbitrary age limits for each and every kind of license we seek.

Repealing the ADEA seems to be premised on the Coase Theorem. Equilibrium will be reached whether the government sanctions private parties or private parties interact voluntarily (e.g., trade). Once the government regulation is void, voluntary obligation will take its place (i.e., employers and employees will contract for what were previously state-granted benefits) and a social norm will develop around the new voluntary associations to gap-fill. Interesting, but very free-marketeer. (It also doesn't seem to account for federal intervention that has raised the bar; using federal power to diminish racial discrimination and sex discrimination has drastically grown the size of our economy and created opportunities for social interaction and new social norms that did not exist prior to civil rights legislation.)

Given Posner's (apparent) reliance on the Coase Theorem, I don't see why Posner would oppose getting rid of the FDA to let pharamceutical companies contract directly with state governments and the public, or getting rid of the EPA to let industry directly respond to demand and state enforcement authorities. But then why stop there? I don't mean to sound controversial, but I hadn't realized that Posner was one of those federal judges who supported the so-called Constitution-in-Exile. The logical extension of his argument here is of a piece with Clarence Thomas' dissent in Ashcroft v. Raich.

Odd.

What do you think of the "tests" facing new, young teachers today in the City of Chicago?

http://www.suntimes.com/output/education/cst-nws-skul15.html

The Coase Theorem says that absent transaction costs, the efficient outcome will occur regardless of which party has the property rights to choose the outcome. It is a stretch to say that the Coase Theorem is the rationale for removing government regulation since (1) efficiency is not the goal of government regulation and (2) government regulation is not the focus of the Coase Theorem. The argument that free markets lead to efficiency and that efficiency should be the goal of an economy so that there should not be government regulation like the ADEA, FDA, or EPA is the libertarian argument but it is not the Coase Theorem.

Coase theorem or not it is a slap in the face to older Americans to propose getting rid of the ADEA. It shows how out of touch Federal Judges can get with the working world. The ADEA does real work in preventing mass layoffs of older workers as they approach the age where health and retirement benefits begin to cost more.

I've watched many of my parents' generation work 30+ years only to be forced out as they approach retirement. What is needed is a stronger ADEA with more enforcement not less.

Yes a younger worker can likely work more efficiently, where an older worker can usually make up the difference with experience. The preference for younger workers comes simply from the fact that new college grads are cheaper, both in salary and in benefits. (Sometimes, depending on the hiring manager, new grads are preferenced because they are prettier.)

Getting rid of the ADEA would put thousands of older workers out on the street. Young workers would find more jobs but also more burdens as they end up supporting their now unemployable parents.

People who think the free market will pay higher costs for "experience" over cheap youth need to spend more time looking at the market rather than theorizing about it from their couch or from tenured ivory towers. I've never seen any evidence to support such a proposition.

And no, people will not "contract" for the benefits provided by the ADEA. The regulation was passed in the first place because the market failed to secure the welfare of older workers. Older workers ARE more expensive and as such have no bargaining power against large corporate budget powerpoint.

In fact, even younger cheap workers have been largely unsuccessful at "bargaining" for the type of job security that government regulation can provide. The only profession with widespread job security right now is teaching. Interesting that it is also the only profession with a functioning, non-corrupt union... but that's another topic.

Corey, companies fire people if/when (a) the companies are being irrational, or (b) the performance of those employees doesn't justify the costs of employing them.

If the former, why would you want to work for such a company? If the latter, then the ADEA seems like a pretty bad idea.

If some older people are "unemployable," then which is more likely: that EVERYONE is being irrational, or that their performances don't justify paying them?

-------

If the buisnesses get to choose the tests on their own you have effectively repealed the anti-discrimination law against the elderly. Any company or group wishing to fire people over 70 need only make their test particularly difficult.

This wouldn't be relevant. Companies can already fire people over 70 for incompetence, so they don't need to resort to these tests. Judge Posner's proposal here is only needed for jobs involving life tenure -- jobs such as federal judge, where even lousy performance doesn't generally constitute grounds for removal.

Most importantly I worry that the test would be used as a political tool in departmental politics.

So what? In virtually every job in the U.S., people can be fired for reasons of "office politics." Why are 80 year old professors so special that they should be insulated from this phenomemon?

ARGUMENT 1: The Coase Theorem says that absent transaction costs, the efficient outcome will occur regardless of which party has the property rights to choose the outcome. It is a stretch to say that the Coase Theorem is the rationale for removing government regulation since (1) efficiency is not the goal of government regulation and (2) government regulation is not the focus of the Coase Theorem.

ARGUMENT 2: And no, people will not "contract" for the benefits provided by the ADEA. The regulation was passed in the first place because the market failed to secure the welfare of older workers.

REPLY:
It is true that the Coase Theorem posits that equilibrium will be acheived regardless of how a particular set of rights are distributed. Where there are high transaction costs, a sanction/right can be imposed/granted on/to either party; where transaction costs are low, bargaining should be allowed to proceed unobstructed. It is not the case, however, that a party is given the right "to choose the outcome" -- the "outcome" will be the same either way. One thing the Coase Theorem makes clear is that a penalty can be converted in a bonus and a right can be converted into a duty(i.e., a right to pollute or a duty to clean up are the same thing).

If we think of government regulation as a mandatory penalty -- the granting to old people the right to sue their employers and the duty on employers to keep old workers they don't want -- we could just as easily think of it as a voluntary right of employers to discriminate and old people not to work for discriminatory companies. Assuming that the transaction costs are low, there is no reason why bargaining ("contract"-ing, Corey) would not take place: if a company discriminated against old people too much, old and near old people would leave their company in droves to be picked up by their competitors. The way for competitors to distinguish between useful old people and old people who deserve the boot would probably be something akin to Posner's competency tests. If transaction costs were high, the government could step in and impose a regulation one way or the other -- but there is no reason to believe that the government would be better at imposing a sanction than society-at-large. Social norms of human behavior are often as efficient as law (such as extended family members in primitive cultures apportioning seasonal use of a well), and there is no reason that over time a norm with regard to old people and work would not be created and become a tradition. Indeed, the fact that we are having a heated discussion about AGEISM suggests that the ADEA has had a significant impact on creating social norms with regard to geriatric workers in the nation since 1975.

(1) Government regulation is law. A premise of the law and economic school is that law is efficient. This is the Becker-Posner website. If you would like to challenge that basic premise of the law and economics school of thought, go post on the Anti-Becker-Posner website.
(2) Whether the Coase Theorem "focuses" on government regulation is irrelevant. It is a theorem that can be applied to a variety of contexts. Think of it like surgical skill. It may be true that my surgeon did not specialize in "fixing Winfield's knee," but he can apply his surgical skills to fixing Winfield's knee.

I would finally like to reply to Corey's observation that "The [ADEA] was passed in the first place because the market failed to secure the welfare of older workers." I have two comments.

1. I noted this already, so it poses no hurdle to my argument. Indeed, I said: "[Posner's solution] also doesn't seem to account for federal intervention that has raised the bar; using federal power to diminish racial discrimination and sex discrimination has drastically grown the size of our economy and created opportunities for social interaction and new social norms that did not exist prior to civil rights legislation." I explicitly made the criticism that government regulation can impel positive societal change and improve overall social welfare. In that narrow respect, we are consistent. However, I find your (apparent) inability to see the parallel between age discrimination, sex discrimination, and racial discrimination to be mind-boggling.

2. The problem with Corey's characterization of this argument is that it is myopic. Why the ADEA "was originally passed," is irrelevant to this discussion, because, unless the ADEA was enitrely ineffective, the social context that gave rise to the passage of the ADEA no longer exists. Likewise, it may be true that sex discrimination was rampant in 1973, but it is certainly not rampant now. You can read any feminist text from the 50s or 60s and see how outrageously antiquated and obsolete it is. Old legislation written to combat bygone problems cannot be justified in the future by what it was meant to tackle in the past. Corey's argument is as off-kilter as arguing that repeal of the 13th Amendment would lead to the mass enslavement of every African-American citizen. I simply do not agree that the social context exists for that. If you want a sound-byte to reply to, try this:

[That a given market was dysfunctional in 1975 is not proof that the market will be dysfunctional in 2005, especially AFTER a comprehensive solution has positively changed the society's values, behavior, and organization with regard to that market. To presume otherwise would be to beg the question: it would be as fallacious as presuming that an opponent's inability to prove a proposition necessarily meant it was false.

COREY: I've never seen any evidence to support such a proposition.

That does not disprove the proposition, it merely renders its truth value indeterminate for the time being.]

"If some older people are "unemployable," then which is more likely: that EVERYONE is being irrational, or that their performances don't justify paying them?"

That's the whole point, their performance may NOT justify paying them in efficiency terms, especially when a younger person can do the job faster and cheaper. It may be "rational" to age discriminate in employment if your only goal is efficiency of corporate output and there is a surplus of trained workers as in the US.

You all need to ask yourselves what you think the purpose of corporate employment is. I say companies exist to give people jobs so they can work and not die. Many of you argue for some greater purpose (efficiency) and treat human actors as simply resources or cogs in the machine to be cost optimized or replaced when they grow old. Unbridled meritocracy is an ugly, cold master.

If you take a humanist view of the world, it is easy to see the reason to continue to employ people even if you can find a person who is stronger, younger, or cheaper. There is moral and political value in job security. There are undervalued qualities (experience) that are not easily measured in cost/benefit balance terms. There have been times in our memory when such was the majority view, and things like ADEA got passed. Now we are in the era of "human resources".

"However, I find your (apparent) inability to see the parallel between age discrimination, sex discrimination, and racial discrimination to be mind-boggling."

If I told you that you were assuming a more careful reading of your lengthy posts than I routinely give them, would that make it easier to understand?

We seem to agree that the ADEA has had some positive effect. However, I have witnessed many companies that disregard it entirely or discriminate right up to the edge of starting lawsuits.

"If you would like to challenge that basic premise of the law and economics school of thought, go post on the Anti-Becker-Posner website."

What, are you trying to exile dissent into an obscure discussion forum? Objections to the basic premises of L&E are topical and relevant to this discussion.

In fact, the very nature of L&E, Social Darwinism, and similar schools practically demands that opposition argument be about basic assumptions. The "method" of L&E is logical progression, and assuming the argument comes from a competent source, it will be difficult to find logical errors. If one agrees with the basic assumptions, then all you are really doing here is fact checking Posner.

I sign all of my posts with the same name, making it very easy for someone to avoid reading them. I will not depart for a forum with a smaller audience simply because the debate has been sub-categorized. Over-specialization of political debate leads to group-polarization and extremism. It is vital for dissent to locate itself as close to the source as possible.

Judge Posner's post begs the question: why would we give life tenure to anyone in the first place?

I will start with Judge Posner's three examples. Dictators take "life tenure" by force, at the barrel of a gun. That is precisely how they should be removed, better sooner than later.

As to Popes - not being Catholic, I have no opinion or comment. But from a societal perspective, we should care no more than we care whether the president of the local yachting club is past his prime. It's a matter for the members.

Supreme Court justices: I believe we had this question a few posts ago. I advocate a term of years (non-renewable) rather than life tenure. But if we leave the Constitution as is, I would not support a "mental acuity" test. There is too much potential for abuse in the name of politics.

Finally, to professors. I don't see this as a pressing concern: absent-minded professors are mostly harmless. :-) Of course, the institution might want to deny prime teaching assignments, raises, corner offices, etc. to an unproductive prof. I see no problem with re-evaluating a professor's contribution, in terms of both teaching and publications, after a certain age or term of years to decide whether his tenure should be continued. Why shouldn't tenure automatically expire at age 65 or 70? That seems a more elegant solution than repealing the ADEA, which was meant to address very real and substantial abuses by many private employers.

The point of the test here is not to be definitive, but to indicate to the social/peer group of those failing to do their jobs that they should give way to the younger and more competent. Usually, however, the difficulty isn't in telling when someone's a little slow - the social/peer group is well aware of this. The problem is that friends don't tell friends they aren't quite good enough. This social "nicety" extends beyond old age... there are incompetents in every field and age isn't the only source of incompetence, but it takes extreme provocation (a needless death for a surgeon, for example) to call people on it. I know, because I'm never called on it... I'm not sure how the test helps.
The real problem I believe is that we view our careers in terms of ever increasing growth, responsibility, income. It is this model that needs to change in response to the demographic changes we're likely to see.
All this discussion is somewhat confusing though... shouldn't you be proposing more economic /freemarket solutions? Why are we not talking about buying out the lifetime employment of these people? Maybe instead of the having the peers of old people gently nudge them into retirement, they can instead vote to increase the payment to them if they retire. At least, I'd hope for some creative solutions in that direction.

COREY STATEMENT #1: "If I told you that you were assuming a more careful reading of your lengthy posts than I routinely give them, would that make it easier to understand?"

COREY STATEMENT # 2: "What, are you trying to exile dissent into an obscure discussion forum? Objections to the basic premises of L&E are topical and relevant to this discussion."

If you contest the basic premise of arguments without actually reading them or reading them carefully enough to understand them, yes, Corey, I would suggest you make your admittedly ignorant comments on an unreflective protest site.

COREY: "However, I have witnessed many companies that disregard it entirely or discriminate right up to the edge of starting lawsuits."

Which only proves the point that getting rid of the ADEA would result in the same equilibrium. Employers already view the ADEA as a limited right to discriminate. Get rid of the limit and a private solution will take its place in the form of a worker's bribe or a collective worker's sanction (i.e., a union).

"The point of the test here is not to be definitive, but to indicate to the social/peer group of those failing to do their jobs that they should give way to the younger and more competent."

That depends on what gap you think the social norm is filling. If this is a reply to me, I actually already covered this. If it's a reply to Posner, he covered this also.

"Maybe instead of the having the peers of old people gently nudge them into retirement, they can instead vote to increase the payment to them if they retire."

Your suggestion is what is done in public school systems to get rid of old union employees who no longer perform up to par, but who cannot be fired.

The problem is that it also clears out qualified older employees who take the buyout instead of waiting, e.g., 3 or 4 years until what would have been their retirement age (to receive full pension).

The result is understaffed schools and unions whose active membership is dedicated to the preservation of pension benefits and no rollback of buyouts and a younger union contingent that has little bargaining power within the union when contracts with the state are made. In other words, the state contracts are heavily weighted toward older union members' interests.

That makes it much easier to retain or retire old staff than it is to attract and hire new staff (i.e., new, young teachers). This is especially true because a teachers' union can always portray a politician as cruel and heartless for depriving kids of an education if the demands of the union are not met by election time.

I don't mean to promote vouchers, or talk about them, but there's a John Tierney column that tangentially touches upon this subject in the New York Times today.

http://www.nytimes.com/2005/06/07/opinion/07tierney.html?hp

You all need to ask yourselves what you think the purpose of corporate employment is. I say companies exist to give people jobs so they can work and not die.

Well, that's your problem. That's completely wrong. Companies are not jobs programs. Companies exist because people create them. People create them to fulfill their own desires, not someone else's. They thrive, of course, if they fulfill the desires of their customers. Workers are merely means to an end.

Of course, it works both ways; from the point of view of the worker, the company is the means to an end. If the company isn't doing for him what another company is willing to do, he should be free to move on, don't you think?

If you take a humanist view of the world, it is easy to see the reason to continue to employ people even if you can find a person who is stronger, younger, or cheaper.

Do you suppose your ability to "see the reason" might be a little different if you were the person who was "stronger, younger, or cheaper"? Or is there some societal reason we would prefer the employment of older, less competent people and the unemployment of younger, more competent ones to the reverse?

There are undervalued qualities (experience) that are not easily measured in cost/benefit balance terms.

I'm always amused/skeptical when someone tells me how much to value something which he admits can't actually be measured. If it's "not easily measured," how do you know it's "undervalued"? Maybe it's valued quite accurately.

"Workers are merely means to an end."

Hail Lord Capital!

I am stronger, younger and cheaper. I simply don't want the price of my success to be the taking of someone else's career. I think I'm pretty squarely in the mainstream on that, I don't know anyone outside law school that regularly thinks of human beings as means to an end.

"If the company isn't doing for him what another company is willing to do, he should be free to move on, don't you think?"

Well see, now you are going and positing the existance of a better company. Life sure is easy when we can assume a dream job around every corner! Yay! Economics makes me feel so good and happy. . . But wait! What happens when there is 10% real unemployment and the best job you've ever had decides to fire you to cover for a deficit in the pension fund... no problem, just go work for HeavenCo! I hear they give people lollipops! In fact, I'm suprised EVERYONE doesn't work for HeavenCo! Its neat.

And while I am at it, I will assume a lawyer to help me contract for no-age-discrimination now that Posner and Winfield have decided that the best thing to do when employers are trying to push a discrimination limit is to remove the limit and pray to the god Phreemahkut.

http://www.doubledoor.com/important.php

On a note not related the blog this week but related to timely law, economics, Chicago and activities: have any of you been to the Double Door? I guess Double Door is going to court this week and may not be around in the future. There is an on-line petition. It is kind of interesting.

That's cute: Government regulation of the economy is law, law is efficient, therefore government regulation of the economy is efficient. If I don't believe that I should post on anti-Becker-Posner. Do you really think that Profs. Becker and Posner agree that government regulation of the economy is generally efficient??!!

As far as the property right holder getting to choose the outcome in the Coase Theorem, this will become a semantics argument but I stand by it. Coase Theorem predicts that economic forces will lead to the CHOICE of the efficient outcome but doesn't deny free will of choice.

I do agree that Posner's opinion is that the market is best left to decide how many older employees get hired but I think he is appealing more towards Walrasian Equilibrium rather than Coase.

Anyway, I guess this is all beside the point of whether old people should be protected against workplace discrimination.

A couple of brief comments.First,I was taught in history 101 the 65 year retirement age was established by Otto Von Bismarck to force a Prussian army chief of staff into retirement.Anyone know if this is true?
Secondly.I don't know enough about this to know if the law protects people from discimination based on a superior's evaluation of a lesser job performance or not.I certainly don't have the stamina I did 20 years ago,and couldn't work the hours I did.

The Constitutional amendment may not be as politically difficult as you suppose. Australian voters have only passed 8/44 proposed referrenda, but the 1977 amendment setting a mandatory retiring age of 70 for justices on our highest court was passed with 80% in favor. US state legislatures might well take a similar view.

First, the points on which I agree.

I agree with Becker that increased career length, for those capable and productive after traditional retirement, is something which should be encouraged.

I also agree with Posner that there is a particular problem in judges and professors, but I am puzzled why a post titled "Refusing to Retire: What Can Be Done When People Overstay Their Welcome?" only discusses a fraction of the population. I understand this is the population Posner finds himself most familiar, as he is both an academic and a judge, but why does the good judge recommend the "superior" system, that is a system with no age discrimination protection, when his examination of what the ADEA does is so inadequate? Does Posner mean that the ADEA should be repealed for professors only or for everybody based on his experience with professors and judges?

Posner wrote:

"Repealing the Age Discrimination in Employment Act would be a superior alternative to requiring tests of elderly professors, but is politically infeasible. And it would not deal with the problem of the elderly federal judges, because imposing a mandatory retirement age on them would require a constitutional amendment."

Becker wrote:

"The flexibility shown by the previous system is why I believe it is best to leave the determination of retirement ages to market forces rather than to the blunt instrument of legislation. Competition would create pressure for organizations to extend the employment of valuable employees who reached their "normal" retirement age. Actual ages of retirement did vary even among companies and other employers in the same industry, and certainly between industries and occupations. The system prior to the federal legislation on mandatory retirement was working well, and was adapting to the growing health and mental capacities of older persons. Posner agrees that it would be far better to eliminate this law than to introduce a competency test to evaluate whether professors and many others are capable of performing at a sufficiently high level."

There are two kinds of age discrimination which deserve distinction--discrimination post retirement age and discrimination pre retirement age. Both Becker and Posner seem most concerned with the ADEA when it comes to age discrimination post retirement (retirement being when eligible for SS benefits). I agree with their focus, but I am deeply troubled by the apparent endorsement of repealing the ADEA because of the problems associated with this particular group, those who continue to work past normal retirement age.

I believe the greater social concern rests with those who require employment even to subsist, but who are vulnerable in their 50s and 60s because of reduced productivity, increased medical coverage cost, etc. There is also the case of firing an individual to avoid the realization of pension benefits. Even though a firm's interests may be served by ridding their workforce of older workers, replacing them with cheaper, more efficient workers who are also cheaper to insure, there may be considerable governmental and social costs incurred as a result. It's entirely the total social cost is minimized, even though the firm's costs are not. It's also important to note that even assuming EQUAL productivity, it is in a firm's interest to discard their older workers because of the increased cost of insuring them. Do Becker and Posner suggest older workers who are equally productive have no protection because they cause a firm to incur increased costs?

The imperative of protecting the vulnerable, those workers who are without a social security "safety net," is of course not present in those workers who are eligible for social security benefits (currently those 62 or older, if I am correct). And in the case of the elite, the judges and the professors, I would not have a problem with mandatory retirement, even though some good professors and judges may be forced into retirement and society will not benefit from their considerable skill. But as Becker pointed out, for the exceptional case universities had found ways to keep productive faculty employed.

I realize the posts were addressing retirement, but both Becker and Posner (Posner more than Becker) seem to suggest that the whole of the ADEA should be repealed, not just mandatory retirement ages, so we could return to the "superior" system of old.

Corey: I read several of your comments, and I sympathesize with some of your sentiments. But I think you are wrong in your criticism that those here are advocating humans as "just a means to an end." The end is not something abstract, outside of human concern, as you imply. The end is the betterment of man through increased wealth and affluence. There is no better system in accomplishing that end than the capitalist system you so consistently rail against. I do agree, however, that in general on this blog, and in this discussion in particular, there has been a disturbing absence of concern for abstract human costs, though there is no reason those costs need be excluded from economic analysis or neglected on this forum.

As a college dean, I'm astonished that the discussion of combining life tenure with the repeal of mandatory retirement never mentions salaries. In most of academia, esp. below the 'top' universities, salaries are determined mostly by seniority. My college has more full-time faculty over 65 than under 40, with backbreaking implications for our budget. I don't deny that many senior faculty are still perfectly competent at what they do; institutionally, though, if tenure were to expire at, say, 70 (like it did until 1994!), and we could replace people at the top of the salary scale with equally-capable entry-level folk, we could save a great deal of money. (Not to mention bring in new perspectives, help address the academic job shortage, etc.)

From two prominent scholars of law and economics, the absence of discussion of costs is simply inexplicable.

Hey anciano, thanks for the Bernard Russel name, I found some good books and listening material on him. W00t. :) I love listening to heady stuff.

DANKE DANKE DANKE!

The Anti-Becker-Posner Blog has, naturally, commented on this proposal here.

However, a few words in defense of Corey are in order (Despite his characterization of the ABPB as an obscure discussion forum.):

David said:
"Corey, companies fire people if/when (a) the companies are being irrational, or (b) the performance of those employees doesn't justify the costs of employing them."

I suggest a third possibility: the employers profit from the older employees, but less so than they profit from younger employees. The employer may still earn more revenue from the older employee than it expends in salary.

In that case, your objection (that ADEA props up the employment of older workers inefficiently, because the work they do doesn't justify their salaries) is moot, the efficient result is still to employ the older worker, and all that's left is a distributive question. Then we ask: should we distribute the wealth to the older person to enable them to subsist, and the answer is clearly yes.

For controlling retirement and quality of work; why not use a couple of purely market based techniques? Such as, salary and benefit arbitrage and annual zero based budgeting. This might also apply to the Fed. as well. At least the taxpayer might get a balanced budget for a change. ;)

I can hear the howls in Government and Academia now.

I don't see why the issue of competence and age needs to be linked and the solution imposed be an external test. As you noted, jobs that are not "light" don't have this problem, because incompetence is naturally weeded out through rigorous evaluations or transparency in performance.

In an era of increased elderly populations, which will be a burden on society, it seems to make sense to generally push the average working age up, not down. I dispute the concept that capable people in jobs are blocking progress for younger employees. Any employee that is creating economic value increases the net quantity of economic opportunity.

I think the solution is better performance evaluation processes for all age groups and systems that push the incompetent out regardless of age. Tenure and jobs for life are dated concepts and should be reconsidered in any case.

Antiblog:

I don't think the distributive issue is anything like that clear. We don't want the worker starving in the streets or sleeping in a cardboard box, but there's no obvious reason he has to keep his current job and salary if he's not as productive as he used to be or as someone else would be, right? If a cardiac surgeon has to retire from surgery because he's just not as good at it now as the younger crop of doctors, we probably ought not to leave him eating his meals at a soup kitchen, but there's no inherent reason to keep him on a $300K/year salary, either.

Corey: I think you're in the mainstream in expressing the idea that workers aren't just means to an end. But not in the mainstream of behavior. Most people happily buy a cheaper product manufactured in China or Mexico rather than an equivalent-quality, more expensive one made in the US or Germany. That's treating the whole process of producing that product as a means to an end.

One concern I have about this discussion is that most of us discussing it are presumably pretty high-value employees. I assume that if I'm still able to be productive at 70, I'll still be able to find work. But things may look very different from the other end of the bell curve of ability or education or productivity. It's easy for most of us to just miss that, because we seldom come into direct contact with it.

--John

Why not use a couple of the market techniques currently in vogue, the use of salary and benefits arbitrage and zero based budgeting techniques. If applied rigorously and effectivley on an annual basis;it weeds out the weak, sloppy, and those who are not capable of maximum effort and in the end leaves a leaner, meaner and more competitive organization. Retirement requirements, age, experience, making room for youth, etc. etc. Has nothing to do with it. Simply effort and benefit.

Ahhh..., Social and Economic Darwinism, the solution to all our problems. Using these two techniques might even get the taxpayer a balanced budget and would certainly reduce the costs of education.

JONATHAN: "That's cute: Government regulation of the economy is law, law is efficient, therefore government regulation of the economy is efficient."

It's also not what I said. I did not say "government regulation of the economy," which is an expansive and capacious defintion that implies a centrally planned economy and includes any and all government regulations in existence in the nation at a given point in time. I said "Government regulation is law," meaning that when an agency passes a rule under the proper procedural authority, that rule is validly enacted and has the positivistic status of law -- referring to a given rule. The difference between the two statements is the difference between one rule enacted by one agency to regulate one segment of one sector of the economy and THE ENTIRE CODE OF FEDERAL REGULATIONS.

A better reconstruction of my argument is not a syllogism, because aside from the obvious facts that I did not use those words or put them into syllogistic form, as a syllogism that transliteration would contain a fallacy -- applying the properties of the whole to each and every part (e.g., assuming a steering wheel weighs two tons because the car weighs two tons).
Here is a better reconstruction:

The law as a general body yields efficient outcomes;
a given agency rule is a law;
if, and only if, each and every law shares all the properties of law as a whole, then a given agency rule should be efficient

While you are free to contest that a given agency rule is efficient (i.e., that it shares all the properties of law as a whole), my point was that contesting that "law as a whole is efficient" is not engaging with Posner's argument (that "the ADEA is inefficient"). Indeed, it would be irrelevant.

JONATHAN: "As far as the property right holder getting to choose the outcome in the Coase Theorem, this will become a semantics argument but I stand by it. Coase Theorem predicts that economic forces will lead to the CHOICE of the efficient outcome but doesn't deny free will of choice."

This, of course, is totally different from what you said before. NOW you say "the choice of the efficient outcome," meaning that whatever is chosen will be efficient. Before you said "choose the outcome," which means Person X could choose an inefficient outcome. I never stated that the Coase Theorem and free will were mutually exlcusive, I simply noted that your description of it was false; thus your critique of my position was founded on a falsehood.

As to your "Walrasian" comment: The Coase Theorem suggests that voluntary contracts can solve externality problems where transaction costs are low. Once a Walrasian Equuilibrium is reached no one can be made better off. Well, gee, if you remove the ADEA because transaction costs are low and voluntary contracting will take its place (Coase Theorem), then once an equilibrium is reached where no one can be made better off, the equilibrium one reaches could be called Walrasian. That is not a critique or a rebuttal of the point I made: it is applying nomenclature to the point I made. You have only proved my point.

Nice post, Palooka.

Your test, if I read the article correctly, makes no mention of experience and wisdom that comes with age. Sure the younger maybe faster, have a higher IQ and more endurance but there is something to be said for experience.

I agree having a mandatory retirement age is stupid but if you are going to subject people to a test, you better make sure it is a well thought out test.

I like the idea of requiring a judge or professor with life tenure to take a test. But why release the results only to his colleagues? They already know he is getting senile. It is the public who (a) are in a position to do something about it (via impeachment or tenure-stripping proceedings) or to provide a new source of embarassment.

The test could be made standard and very simple, something similar to one of the drunk driving tests which require you to touch your nose or to walk in a straight line. Better yet, why not use the normal written part of the driving test? If a judge can no longer pass it, he shouldn't be judging. We could also make the judge take it annually, so progressive deterioration could be observed.