Call off the intergenerational wars
Blaming baby boomers for our economic woes diverts attention from the gross inequalities that have plagued us for decades
o George Irvin
o guardian.co.uk, Wednesday 25 August 2010 14.30 BST
David Willetts David Willetts argues that the baby boomers took the money and ran, leaving the younger generation with nothing. Photograph: Anna Gordon
These days, intergenerational war seems to be all the rage. "It's all the fault of the baby boomers" is the new conservative rallying cry. David Willetts, in his book The Pinch, argues that the baby boomers took the money and ran, leaving the younger generation with nothing. Other new books try a similar pitch, such as Ed Howker and Shiv Malik's Jilted Generation and Francis Beckett's What Did The Baby Boomers Ever Do For Us? Will Hutton seems to agree.
Not that the cry is new. In France, Nicolas Sarkozy won the presidency by blaming our troubled times on the lax moral standards and antipatriotic slogans of "les soixante huitards". Before the German elections in 2008, the finance minister, Peer Steinbrück, railed against raising Keynesian-style public borrowing on the grounds that it would saddle future generations with a mountain of debt for which they would never forgive us, a cry parroted only last June by Nick Clegg.
Hutton puts it as follows: "Having enjoyed a life of free love, free school meals, free universities, defined benefit pensions, mainly full employment and a 40-year-long housing boom, they [the boomers] are bequeathing their children sky-high house prices, debts and shrivelled pensions." Melanie Phillips has gone even further: "It is a general source of bewilderment that so many socially destructive, even nihilistic attitudes … have been promoted by judges, police officers, civil servants and others at the heart of the establishment. The reason is simply that the baby boomers are now in control."
If Phillips can be dismissed as a ranting rightwinger, Hutton cannot. What is true, of course, is that many of the old certainties and solidarities have vanished. The baby boomers' kids are having a bad time and things are unlikely to improve much in the next few years. But is the real argument about intergenerational equity? Clearly not.
The right peddles intergenerational conflict as a way of diverting attention from the gross inequalities that have plagued Anglo-Saxon countries – and to a lesser extent other advanced economies – over the past 30 years.
If boomers in Britain went to university in the 1960s at taxpayers' expense, it was because only 4% of the cohort attended university; today's figure is 40%. If houses could be bought relatively cheaply, it was because local councils once provided "social housing". Council houses were sold off by Margaret Thatcher – leaving housing entirely to the market, plus the deregulation of the banking system helped fuel a massive house-price boom, which gave us sky-high prices.
Final salary-linked pensions have virtually disappeared in the UK because occupational pension savings were handed to City fund managers who made millions from investing them in stocks and shares. Some companies even took "pension holidays" to boost their share prices. When the market collapsed, so did "funded pensions". Yes, of course there is a demographic problem, but most other EU countries have made reasonable provision for topping up their pay-as-you-go schemes.
Despite much boasting to the contrary, the Anglo-Saxon countries (ie Britain and the US) provide a poor development model, a model of unregulated wild-west capitalism with the least equal distribution of income and wealth in the OECD. Much of Britain's welfare state has been dismantled and privatised. Britain's over-reliance on its large financial services sector has made it particularly vulnerable to the current recession.
A privileged minority of boomers may have lived high-on-the-hog, owned nice houses and even flirted with hippy hedonism in the 1970s, but most workers experienced years of stagnating real wages and growing job insecurity. With real wages lagging behind labour productivity growth, much of Britain's increased national income over this same period was absorbed by the top decile of income earners. Even today, the median yearly income is £22,000 – half the population lives on less than this, including most pensioners of the boomer generation.
Governments throughout the EU are calling for spending cuts in order to maintain budget balance. In truth, cutting public spending at this stage in the downturn will make things worse and Europe's rich – whether individuals or member states – will ensure that the burden of these cuts falls on those who can least afford lower wages.
We really must stop playing this silly game of intergenerational finger-pointing. Most boomers have never belonged to the class of rich and privileged.
Call off the intergenerational wars | George Irvin | Comment is free | guardian.co.uk
Call off the intergenerational wars
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