Wednesday, March 28, 2012

John Kay: did the lucky generation make its own luck?

John Kay is admirably self-critical of his baby-boomer generation in today's FT (My generation should repay its good luck). He grew up in an age of growth where the state took care of his education, the job market provided opportunities, and housing was cheaper (and mortgages quickly devalued by inflation). His generation now enjoys a comfortable retirement (notwithstanding griping about the 'granny tax'). The luckless younger generations face tuition fees, a competitive and polarized job market, higher taxes, unaffordable housing, and poor pension prospects.

All of this is well known to those who care to think about it, although remarkably absent from the political debate. But there is a reason politicians choose to ignore it: baby-boomers are, and have been, far more politicized than their children. Not only are they more likely to vote now, they are more likely to have been politically mobilized in the past: remember that today's retirees could easily have been on the barricades in 1968, on the picket lines in the 1970s, or indeed marching with CND in the 1980s. The anti-globalization movement of a decade ago is a pale imitation.

So Kay is right when he claims that:

"Most parents want to give their children opportunities to live a life better than their own. But when we act together, we aggressively pursue our own interests at the expense of our children and grandchildren: a bizarre paradox of perverse collective action."

Maybe it is more pragmatic than perverse. Baby-boomers' surest way of giving their own children opportunities is to increase their own private wealth, rather than campaigning for social democracy. This ensures that opportunities will be unequally distributed, unlike in the post-war period. For each individual family, it makes perfect sense: if you hang on to your privileges, you can hand them over to your children, without the risk that your losses could be redistributed to the children of others. Think about it: if your kids can afford to go to university, why subsidize others to compete with them for the best jobs?

Democracy is not old enough for us to have had much experience of differential mobilization amongst generations. Although collective action may come in waves, as Albert Hirschman claimed, we don't know this for sure. It may have been a unique and irrepeatable phase of our historical development, which provided the active generation with institutions that would protect them through their own lifetime. If that is the case, the young will suffer badly for their failure to stand up for their peers in the way their grandparents did.