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Will There Be a War
Between Generations?
Two
years ago last month, my daughter Tove brought the Chairman of the Nobel
Peace Prize Committee to our home for dinner. His name is Ole Danbolt
Mjös, and he is a thoughtful and engaging professor of medicine. During
the dinner, I asked, “Can you think of any war that was not initiated
for economic or religious reasons?” By the end of the dessert, none of
us had been able to come up with even one example.
It is
often easier to capture bounty than to produce it, although it is the
producing skill that is conquers in the long run. Spain and Portugal did
not truly prosper until they had given up their colonies, and the most
successful colony of all, the U.S., eventually outperformed its colonial
English masters.
Since
people are willing to die for their beliefs, religion is a potent force
in mobilizing armies and insurgents.
Now
let us look at where the power is in a democracy. Seventy-seven million
baby-boomers are beginning to retire in the U.S. They will have money,
and they vote. What we can count on is that they will vote their own
self-interest. The third rail in American politics is the entitlements
of age: Social Security, with its under-funded pension, Medicare and
Medicaid programs. If Uwe Reinhardt is right that government-funded
health care and Social Security eventually will consume more than half
of the GDP, the most powerful voting block in U.S. history will have
captured half the economy — with only 26% of the population.
Will
the younger generations stand for this?
Anthropologists have plenty of examples of how the elderly are expected
to leave the tribe to die when they can no longer create value. Aztec
priests calculated the amount of food available, divided it by the
annual consumption of an average Aztec, and then sacrificed the
remainder. This gruesome ritual is made frighteningly real in its
reenactment at Tenochtitlan, where actors show how Aztec priests at the
top of the Pyramid of the Sun used razor sharp obsidian knives to
swiftly cut out the human heart, which was then thrown, still beating,
into the maw of the leaning god Chac-Mol.
But
wait a minute! It was not a question of if a certain number of Aztecs
would die or not. It was only a question of who should die, so that
others would live. Aztec priests apparently wanted to have a say in that
decision, and we can only hope they made the best possible choices.
The
elderly make up a particularly defenseless group in a society. They are
physically weak and exposed, inviting crimes against them by burglars
and thugs. If there is a breakdown of law and order, they are more
likely to suffer as a result. They have the voting power to create
protection for themselves. Is a police state possible in a democracy?
The
World Confederation of Productivity Science has a motto: Peace and
Prosperity through Productivity. This is the science of creating wealth
— it takes away the need to capture bounty. I believe that we can become
extraordinarily more productive than we are, and if that happens, the
share of the GDP for entitlement programs will stay the same or shrink
because of the continuously expanding pie. This will certainly happen if
we double out GDP every seven years — at the same rate as China — and we
actually know how this can be made to happen.
Are
we likely to be a burden to our grandchildren? |
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For
one thing, the “under funding” of Social Security is based
on the assumption that US GDP will rise at only 1.3% per
year after 2007, and for 75 years. That’s a slower growth
rate than during the great depression. If we project a far
more reasonable, and likely, growth rate of 2.2% per year,
the Social Security Trust Fund would carry a positive
balance of $9 trillion on 2030. And if American health
sector workers become as productive as the average American
worker, Medicare and Medicaid will be in surplus.
We would be
handing our grandchildren private wealth in the amount of
$67 trillion if the wealth transfer took place today. Over
their lifetime, they will likely earn four times as much as
we earned. In addition, they will receive an infrastructure
unparalleled in world history, and at a worth that, frankly,
no economist has been able to put a value on, except maybe
through some very tentative estimates of replacement costs.
But the largest inheritance of all is a working democracy,
free trade, and an incalculable amount of knowledge that now
doubles every three years.
The generation
before us may have been the greatest of all. They fought,
and won, costly world wars. They financed the reconstruction
of Europe through the Marshall Plan. They paid off an
extraordinary war debt, and they built the Interstate
Highway System.
But what was
the greatest contribution of all? It was a gift they gave
themselves: The G.I. Bill, educating millions of veterans,
laying the foundation for the Knowledge Economy that was to
come.
Baby-boomers
have built upon that gift, adding the Internet, the personal
computer, the decoding of the human genome, and the iPod.
What is there
to fight about between generations? We are all winners!
An aspect of
the Knowledge Economy is that its currency is ideas, and
there is no ceiling on its potential performance.
Contribution is no longer limited to age — the elderly now
communicate at the speed of light, they choose to do
wonderful and productive work, contributing to society in
their advanced years, and now represent a resource of
extraordinary value.
The
baby-boomers will make aging a hip and in process, putting
their unique stamp on it, and coming up with innovations in
living that we’ve never before seen. That is to be expected.
But their
greatest joy will still be the one that always characterized
the retirement generations of the past: To ensure that we
leave this world a better place for those who follow us.
In our
grandchildren, we see the meaning of life. They are our
contribution to immortality. That’s why we don’t mind
stepping aside when the time comes, and letting our world be
theirs.
All of it.
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