In the history of China there has been perhaps no greater influence on society, no more customary standard of virtue, than a love and reverence for one’s parents and elders. Confucius is said to have told his students that “our bodies—to every hair and bit of skin—are received by us from our parents.” For this reason, if no other, dutiful children must attend to their parents’ wellbeing in old age.
As is the case in most countries, people are living longer in China. But momentous demographic changes are conspiring to make it more difficult for the Chinese to look after their seniors.
China has the world’s largest elderly population. Nearly 200 million Chinese are now over 60, or more than 14 percent of the overall population. Proportionately, that is a smaller than in the United States, which has nearly 20 percent in the same age bracket. But China’s population is aging faster, thanks to a declining birth rate precipitated by a “family planning” policy introduced in 1979 that restricts most couples to one child. The fertility rate now stands at 1.6, well below the 2.1 required to sustain a growing population. It is estimated that as many as one in four Chinese will be above 65 by 2050—probably more than the entire population of the United States.
China is facing similar demographic and socioeconomic pressures as North America. In the 1950s and 60s, following the Second Sino-Japanese War and the Chinese Civil War, which devastated the country in the 1930s and 40s, China experienced its own baby boom. It was encouraged by Mao Zedong, who felt that a large population would strengthen the nation and drive industrialization.
Mao proved right in thinking that human capital would become China’s greatest economic asset. China has exploited its huge working-age population—its so-called “demographic dividend”—to industrialize with astounding rapidity and transform itself into the world’s largest manufacturing center.
In the late 1970s, however, after Mao died and many of his policies had fallen into open disrepute, the Chinese government felt that unrestrained population growth would eventually become a liability, and it put in place its infamous one-child policy.
The tapering effect of the one-child policy over the past three decades has brought with it clear but unanticipated consequences. Although it has slowed the population’s growth rate, it has also helped to turn the population’s structure on its head. Graphically, that structure now resembles something like an inverted pyramid with an overabundance of elderly and too few younger people. The number of working-age Chinese, represented by the pyramid’s mid section, previously accounting for three quarters of the population, has begun to shrink for the first time in recent history.
Beijing is experimenting with loosening the family planning policy, allowing couples to have a second child if one of them has no siblings. If it repeals the one-child policy altogether, however, as many expect it will do eventually, it would have little effect on the immediate problem. In the near term it would only help to readjust a gender imbalance that has left China with roughly 120 females for every 100 males. By 2020 this imbalance is expected to translate into 24 million more men than women of marriageable age.
Migration patterns have compounded the eldercare problem. Over the past decade, China’s flourishing industrial centers on the eastern coast have drawn hundreds of millions of workers away from their aging parents in the poorer rural areas of western China. This mass migration, engineered in part by the government to speed up the process of urbanization in order to sustain industrialization, has eroded traditional practices of familial support. Two-thirds of China’s elderly remain in the countryside. While many receive money from their children in the cities, they increasingly need more than only financial help. As they grow older, they need assistance with basic daily activities as well as companionship, which for many is currently provided by fellow seniors.
In July, China introduced an amended national law requiring the children of parents over 60 to visit them “frequently” and attend to their financial and spiritual needs. The Law of Protection of Rights and Interests of the Aged is intended prevent patent neglect and abuse of the elderly. It is part of a national campaign to raise awareness of the plight of seniors, which includes the creation of an Elderly Day that will be celebrated each autumn. While the law does not stipulate the number of required visits or penalties for violators, Chinese courts this year have heard numerous cases of elderly parents suing their adult children for neglect.
The government at all levels remains ill-prepared to cope with the burgeoning number of senior citizens. It has not fully developed a comprehensive and robust national healthcare and insurance program, which in the United States accounts for more than 10 percent of GDP. More than 90 percent of China’s elderly are now covered by health insurance, but the quality of healthcare generally remains low and out-of-pocket expenses high. The burden of caring for the elderly still falls largely on family and friends.
Despite a three-decade long economic boom, China remains a relatively poor country on a per capita basis. More that 20 percent of the generation that helped to make that boom possible now live in poverty, drawing a basic government pension equivalent to less than US$10 a month. In China these people are said to be the ones who “got old before they got rich.” Many struggle with physical or mental disabilities, and those who have lost their only child have it hardest.
Simple mathematics suggests the magnitude of the crisis. Despite the proliferating number of private independent or assisted-living homes, China estimates that there are only 21.5 beds currently available for every 1,000 elderly in the nation’s nursing homes, most run by the government. China would like to increase this to 30 beds for every 1,000 by 2015. This modest increase will not be as easy to achieve as it might seem, for the national social security fund already faces a US$2.9 trillion deficit and is expect to balloon in coming years.
Lacking the experience needed to build a viable national eldercare system, and recognizing that the undertaking could outstrip public resources by 2020, policymakers are proposing that China tackle the problem in the same way it reformed and revitalized its economy after decades of self-imposed isolation—by opening it up to foreign investment. Direct foreign investment in the eldercare market (including nursing, geriatric and insurance services) will, they think, bring invaluable management expertise and technological know-how.
The government, for its part, would offer tax incentives and land to private foreign investors. It would concentrate its own spending on providing training for eldercare professionals, administrative support and free services to lower-income seniors, especially in underdeveloped rural areas.
Private investment, however, may not be enough. Western companies so far have been only cautiously testing the waters, establishing facilities in cities like Shanghai that target the high-end market and charging up to 15,000 yuan a month, far beyond the reach of what many seniors and their families can afford. Private investment in the sector from within China seems to gravitate to real-estate development aimed simply at turning a quick profit.
China will continue to feel the increasing weight of its aging population. The most innovative approaches to caring for its seniors may not be the most viable. The country may have to find a way back to more traditional practices of familial eldercare. These will necessarily have an impact on the economy, but what China loses in productivity and growth, it will no doubt regain in social coherence.
This article was originally published in the Diplomatic Courier's November/December 2013 print edition.
But it’s difficult to think about value when we have no buoy for understanding it outside our traditional lenses: for example, our time, our job, and what others tell us they are worth in cash. This, largely, is the world’s paradigm for value so far. But understanding what value really means changes everything—and will be at the center of the decentralized revolution in global coordination that will unfold over the next decade. So, where do we begin?
Let’s start with gold.
Gold is an inherent value. When backing a market, gold allows us to grow a balanced economy well into the trillions. But why does it allow for massive stable markets to form around it? It is gold's permanence that creates stability. We understand that gold will always have value, because it is inherent in all of us, not just in one part of the world, but everywhere, not just today, but tomorrow and for the long haul.
In the 1930s when the gold standard was removed, we learned that the U.S. dollar didn’t need gold to back its economy to flourish. We learned that it was just a symbol for U.S. citizens to decentralize their coordination around the United States economy.
It turns out, common agreement is a philosophy for building shared economy.
And so it seems inherent value is a marker for us to begin exploring what the future could look like—a future beyond gold and the existing realm of credit. And so what else has inherent value? Is education as valuable as gold? What about healthcare? What about a vote that can’t be tampered with? What about an ID that can’t be stolen or erased? What about access to nutrition or clean water? You will find value everywhere you look.
It turns out, we’ve already done the legwork necessary to uncover the most elemental inherent values: The Sustainable Development Goals are commitments grown out of the drive to bring to life basic tenets of the Universal Declaration of Human Rights—the closest possible social contract we have to a global, common agreement.
We’ve already agreed.
Our agreements are grounded in deep value centers that are globally shared, but undervalued and unfulfilled. The reason for this is our inability to quantify intangible value. All of these rich, inherent values are still nebulous and fragmented in implementation—largely existing as ideals and blueprints for deep, globally shared common agreement. That is, we all agree education, health, and equality have value, but we lack common units for understanding who and who is not contributing value—leaving us to fumble in our own, uncoordinated siloes as we chase the phantoms of impact. In essence, we lack common currencies for our common agreements.
Now we find ourselves at the nexus of the real paradigm of Blockchain, allowing us to fuse economics with inherent value by proving the participation of some great human effort, then quantifying the impact of that effort in unforgeable and decentralized ledgers. It allows us to build economic models for tomorrow, that create wholly new markets and economies for and around each of the richest of human endeavors.
In late 2017 at the height of the Bitcoin bubble, without individual coordination, planning, or the help of institutions, almost $1 trillion was infused into blockchain markets. This is remarkable, and the revolution has only just begun. When you realize that Blockchain is in a similar stage of development as the internet pre-AOL, you will see a glimpse of the global transformation to come.
Only twice in the information age have we had such a paradigm shift in global infrastructure reform—the computer and the internet. While the computer taught us how to store and process data, the Internet built off that ability and furthered the conversation by teaching us how to transfer that information. Blockchain takes another massive step forward—it builds off the internet, adding to the story of information storage and transfer—but, it teaches us a new, priceless and not yet understood skill: how to transfer value.
This third wave kicked off with a rough start—as happens with the birth of new technologies and their corresponding liberties. Blockchain has, thus far, been totally unregulated. Many, doubtless, have taken advantage. A young child, stretching their arms for the first couple times might knock over a cookie jar or two. Eventually, however, they learn to use their faculties—for evil or for good. As such, while it’s wise to be skeptical at this phase in blockchain’s evolution, it’s important not to be blind to its remarkable implications in a post-regulated world, so that we may wield its faculties like a surgeon’s scalpel—not for evil or snake-oil sales, but for the creation of more good, for the flourishing of commonwealth.
But what of the volatility in blockchain markets? People agree Bitcoin has value, but they don’t understand why they are in agreement, and so cryptomarkets fluctuate violently. Stable blockchain economies will require new symbolic gold standards that clearly articulate why someone would agree to support each market, to anchor common agreement with stability. The more globally shared these new value standards, the better.
Is education more valuable than gold? What about healthcare or nutrition or clean water?
We set out in 2018 to prove a hypothesis—we believe that if you back a cryptocurrency economy with a globally agreed upon inherent value like education, you can solve for volatility and stabilize a mature long lasting cryptomarket that awards everyone who adds value to that market in a decentralized way without the friction of individual partnerships.
What if education was a new gold standard?
And what if this new Learning Economy had protocols to award everyone who is helping to steward the growth of global education?
Education is a mountain. Everyone takes a different path to the top. Blockchain allows us to measure all of those unique learning pathways, online and in classrooms, into immutable blockchain Learning Ledgers.
By quantifying the true value of education, a whole economy can be built around it to pay students to learn, educators to create substantive courses, and stewards to help the Learning Economy grow. It was designed to provide a decentralized way for everyone adding value to global education to coordinate around the commonwealth without the friction of individual partnerships. Imagine the same for healthcare, nutrition, and our environment?
Imagine a world where we can pay refugees to learn languages as they find themselves in foreign lands, a world where we can pay those laid off by the tide of automation to retrain themselves for the new economy, a world where we can pay the next generation to prepare themselves for the unsolved problems of tomorrow.
Imagine new commonwealth economies that alleviate the global burdens of poverty, disease, hunger, inequality, ignorance, toxic water, and joblessness. Commonwealths that orbit inherent values, upheld by immutable blockchain protocols that reward anyone in the ecosystem stewarding the economy—whether that means feeding the hungry, providing aid for the global poor, delivering mosquito nets in malaria-ridden areas, or developing transformative technologies that can provide a Harvard-class education to anyone in the world willing to learn.
These worlds are not out of reach—we are only now opening our eyes to the horizons of blockchain, decentralized coordination, and new gold standards. Even though coordination is the last of the seventeen sustainable development goals, when solved, its tide will lift for the rest—a much-needed rocket fuel for global prosperity.
“Let us raise a standard to which the wise and the honest can repair.” —George Washington