Monday, July 20, 2009

Are Vampires Good for the Economy?

Michael Ian Black seems to think so. In his book, My Custon Van, he argues that cape manufacturers, garlic farmers, coffin makers, and angry villagers (by this he means suppliers of tools such as torches, spikes and crosses) would see net growth. Furthermore, he discusses the notion of a "vampire tax" or the idea that vampires would be more likely to attack individuals of lower socioeconomic backgrounds, who have less adequate means of protecting against an attack. This, he argues, would serve to reduce spending on social welfare programs, such as Medicaid, since more lower-income individuals enroll in these programs.

Although he predicts net losses to the makers of fake plastic and wax vampire teeth as well as the travel and tourism industries, he concludes that a small to moderate vampire army would be beneficial for the economy in the long-run and offset any potential short-run losses.

I would like to add a few things to this argument.

First, there are other industries that have the potential to grow. One is, of course, the insurance industry. Much like with supernatural disaster insurance, people will want compensation in the event of vampires destroying their homes, their cars, and most of all, their pets. And what about insurance against actually becoming a vampire? Vampires have things to buy. They still live in homes, which means they have mortgages to pay, utilities bills, car insurance payments, etc. Unlike zombies, vampires do not just walk around lusting for brains and losing body parts. They are actually capable of blending in with humans, holding intelligent conversation, and engaging in rational thought. They are also capable of deriving enjoyment from television, music, books, clothing, and others. Therefore they are likely to make some purchases for entertainment and luxury in addition to necessity.

However, turning into a vampire greatly limits your potential to make such purchases. First of all, if you had a day job as a human being, you can forget going to work. You need to find a night job, which is likely to be in a field in which you have no particular training or interest. And you would have to spend more money to acquire that training. Furthermore, even if you do secure a job that you enjoy, you would have to hide the fact that you are a vampire, for there would likely be some social stigma attached to that particular "life"-style. It would therefore be much harder to actually get a job.

All of this is to say that, assuming a predominantly private insurance market, the industry would thrive with the existence of vampires. Of course, there would be the potential for insurance fraud (people turning into vampires on purpose).

Secondly, I highly doubt that the makers of fake plastic and wax vampire teeth would suffer. In fact, I think they would dramatically expand. The thing is that, much like with many minority segments of the population, vampires would be the subject of a perpetual societal prejudice. However, there would also be a significant boost in the civil rights movement, which might eventually lead to surges in the entertainment industry. This is precisely what happened in Buffy the Vampire Slayer: Season 8. Harmony, an evil vampire in the Buffyverse, signed a contract with MTV to star in a reality show about vampires. Once the show became a hit, people became more accepting of vampires and more critical of vampire slayers, who were likened to fascists.

Thus, movies about vampire underdogs and toy vampires would gross lots of money. Imagine Rocky taking on Apollo Creed, only if Apollo was an evil slayer and Rocky was an innocent vampire.

Buffy the Vampire Slayer: Season 8 #21 by Jane Espenson and Georges Jeanty (2009)

Finally, I am skeptical of the "vampire tax" argument. The costs of acquiring the means of killing a vampire are relatively low. All it really requires is a piece of wood. I think that any socioeconomic death bias would be marginal at best. Also, wouldn't there be increased spending on social programs for vampires? I imagine if there will be private vampire insurance, there might also be public vampire insurance for the low-income vamps.

And how exactly would Medicare and social security work? Vampires are immortal and most are hundreds of years old. After 65, would they just collect on social security for hundreds of years? That would certainly affect public spending. Or would vampires be completely cut out of the system (which would raise civil rights concerns)?

It turns out that the question of whether vampires are good for the economy is more complicated than we think and riddled with questions. Should vampires be integrated into the system? What would be the effect on the labor force? Will the benefits in the aforementioned industries offset the losses to the labor force?

What do you think?


E said...

Dont forget about the boon to artificial blood/blood substitutes market, and biotechs trying to develop better synthetic blood.

Although we might start seeing shortages at hospitals, etc. In fact, I'd be very wary of any blood drive organized by a vampire.

Another David said...

About the night shifts...

If the vampire population were substantial enough, it's possible that they'd start doing normal daytime work. Sitting in a cubicle infront of a computer, doing the same thing normal humans do, just at night. So maybe they wouldn't be forced to take menial security and janitorial jobs after all.

Joshua Macy said...

Isn't this just the broken windows fallacy with fangs? Trade is diverted from one purpose to another, whether that's from the ordinary peaceful business of the citizens to protection from vampires or the vampire's own pre-undead needs for things like food and housing to capes and coffins, but just because the gains are visible and the losses invisible doesn't mean there's a net benefit.

Greg Sanders said...

Assuming integration, the biggest impact may well be on the labor market. Blood production is essentially a labor intensive activity and a low skill one at that. Unclear whether vamps getting their blood via contracts would base themselves out of poorer countries or perhaps hire immigrant day laborer types. Again assuming integration into the economy, aside from just causing a rethinking of retirement, they may also greatly weaken the relationship between age and salary. Increases with age are based to some extent on productivity, but I suspect that they would prove uneconomical if senior people no longer retired on a regular basis.

I think my favorite treatment of vampires in economics was in an episode of Angel that dealt with the question of "why don't vamps just take over?"

A vamp was essentially running a Ponzi scheme. He'd turn a few people, have each of them turn a few, etc. As a result, he was able to create a theater full of vamps in relatively short order. However in this case the power gain seemed to be fairly diluted. The large number of vamps were explicitly fairly weak on their own. I don't recall whether that was a matter of their inexperience or if they somehow diluted the 'blood line' through over production.

Klaus said...

On the assumption that Vampires might become a viable part of the population, travel would have to see a lot of changes. The legal limit to car tenting would change. Plane flights might offer a "Sunless section."

Security and surveillance equipment that relied on mirrors to any degree would need updating.

Doc_Loki said...

Not really sure about the socio-economic bias - historically, most vampires have tended to prey primarily on the same socio-economic class they were members of in life.

Tom said...

You are all assuming that the addition of vampires would be a change from the current state of the economy.

You may need to revisit the premise.

Anonymous said...

I've not read the entire post nor any other comments, but I have read a paper titled "Macroeconomic Policy and the Optimal Destruction of Vampires." Definitely worth a read.

Anonymous said...

Vampires would be a asset to Medicare and Social Security: all payments end when the person dies, but taxes can go on for ever.

As for voting, well, Chicago and Milwaukee, and other one-party cities have proven that letting the dead vote is not a problem for a well-regulated democracy.

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