The clash of generations
“The history of all hitherto existing society is the history of class struggles,” Marx and Engels famously declared in their Communist Manifesto. A century and a half later, with communism seemingly buried under the rubble of the Soviet Union, Samuel Huntington predicted a clash of civilizations.
But what if the great struggle of our time turns out to be between the generations?
Just consider the contest between Hillary Clinton and Bernie Sanders for the Democratic presidential nomination. On the latest figures, the under-30s prefer Sanders by a 71-29 margin. A quarter of Sanders’ total votes so far have come from young voters, compared with just 10 percent of Hillary’s. This time eight years ago, Barack Obama — then aged 46 — seemed to be a veritable Pied Paper to young voters. But 74-year-old Sanders has outdone him.
Generational conflict is a global phenomenon (think Arab Spring). It is also as old as the hills: Just read Ivan Turgenev’s “Fathers and Sons’’ (1862) if you don’t feel like hearing the Who’s “My Generation” (1965) for the umpteenth time. Yet Marx was right in arguing that class mattered more than age. For over half a century that was true. From 1848 to 1968, youthful frustration was relatively easy to channel to the side of the proletariat.
That is essentially what Sanders is about. His pollster, Ben Tulchin, said millennials support Sanders because their generation is “(expletive) unless they see dramatic change. What’s their experience been with capitalism? They have had two recessions, one really bad one. They have a mountain of student-loan debt. They’ve got really high health care costs, and their job prospects are mediocre at best. So that’s capitalism for you.”
There’s just one small problem with this argument. It’s not really capitalism that has screwed the young. It’s socialism.
Communism failed, but social democracy — Marxism Lite — was very successful in the 20th century. It entrenched the position of trade unions. It created jobs for the boys (and, later, the girls too) in the public sector. It established generous pensions and other benefits for older workers, and subsidized or free health care. And when tax revenues did not cover the costs of all this, social democrats borrowed, claiming (seldom truthfully) that they were engaged in Keynesian demand management.
As we all know, the ultimate consequence of these policies was the great inflation of the 1970s. What to do? For the generation known as the baby boomers — conventionally, those people born between 1946 and 1964 — the best protection against inflation was to buy property. The next best protection was to abandon social democracy, which was what many of them did in the 1980s. However, their new-found conservatism was always qualified in a crucial way. In theory, they favored reform of the welfare state. In practice, they shrank from real reform. There were cuts, to be sure. Deficits and debts were reduced for a time. But health care? Public sector pensions? By the beginning of the new century it was painfully obvious that the job had been left half-finished.
Half-reformed welfare states, plus lengthening lifespans, proved a toxic combination for the fiscal systems of most developed countries. Already in the late 1990s, my friend Laurence Kotlikoff had spotted that the true liabilities of the US federal government vastly exceeded the stated government debt. It was he who first drew my attention to the system of generational accounting, which makes explicit the gap between the government’s future outgoings and its future revenues — and therefore the difference between this generation’s fiscal burden and that of future generations. To close today’s fiscal gap, he estimates, would require that every federal tax immediately be increased by 53 percent, or every federal expenditure cut by 34 percent.
Kotlikoff’s point is, of course, that no such thing will happen – which means that (in his words) “we put future generations on the hook.” Young and as yet unborn Americans will either pay much higher taxes than their parents and grandparents or receive much less in terms of Social Security and Medicare, or some combination of the two. And something very similar can be said of most developed countries today. They have all, to varying degrees, broken what Edmund Burke called the “contract . . . between those who are living, those who are dead, and those who are to be born.”
Far from signing up for Bernie Sanders’ superannuated socialism, young Americans should be looking for candidates who would reform the country’s bloated and inefficient entitlement system and reduce the power of public sector unions. Far from leaning leftwards, those millennials saddled with student debt and unable to find affordable homes in cities such as San Francisco should be asking themselves: Who runs universities? Who limits new house-building? Clue: not conservatives.
The term “false consciousness” was first used by Engels in 1893, long after the publication of the Communist Manifesto. It applies rather well to the state of mind of many young people today.
Niall Ferguson is professor of history at Harvard and a senior fellow of the Hoover Institution at Stanford.