Is it time for a ceasefire in the intergenerational war?

From: https://archive.org/details/StrangeTelemetryPokerCards

Inter-generational warfare. Sounds like a new Marvel film doesn't it? To be honest I’d probably go and watch it. But actually it refers to an idea that the young and the elderly are in political and social conflict. The elderly, so the theory goes, are responsible for most of the problems that the younger generation are experiencing. One frequently cited example is that if the elderly were to be paid less in pensions, then more money could be paid for services that would benefit younger people. So how grounded in reality is this conflict and, assuming the war is real, is there any hope of a resolution?

According to statistics there are currently 480,000 people aged 16-24 who are unemployed . The Student Loans Company reports that in the current financial year over £15 billion was lent to students, against only £2.3 billion repaid.  According to the Institute of Fiscal Studies, around one-third of young buyers can not afford the 10% deposit on even the cheapest homes in their area. The conclusion here is that young people are having a harder time than their parents. Being young, it seems, is no longer a time to enjoy life to the full. 

Modern living is far from easy. According to an online survey by the Mental Health Foundation some 60% of people aged 18-24 are unable to cope with almost half feeling stressed over their body image. And, whilst suicide rates in the UK remain low, there has been a worrying increase in suicides rates among the 18-24 year old cohort with official statistics showing a rise from 3 in 100,100 to 5 in 100,000 in 2018.

Young people are stressed

If young people are unhappy, stressed and, in their opinion, poor it has become fashionable to blame older people. The older generation, it is claimed, ruined the economy, the environment and the life chances of their off-spring. The older generation had opportunities that the current generation did not. When they left school there were jobs a-plenty and for the academic minded a grant for higher education. Housing was relatively cheap and the right-to-buy scheme meant many were able to buy at bargain rates. Moreover, their jobs were more secure and came with gold-plated pensions meaning that today’s 70 and 80-year olds are living a life of subsidised luxury whilst the young struggle in part-time, insecure jobs to pay off up to £50,000 in student loans.

This so-called inter generational warfare is being conducted, inevitably, mainly through social media. Whilst my focus here is the UK the arguments are travelling across the Atlantic. Bruce Cannon Gibney wrote an influential book in which he unambiguously points the finger at older generations for all that is wrong with the World. You don’t have to look far on social media to find younger people glibly blaming their parents for having too much. It is easy to argue that if the older generation had less then the younger generation would have more. If only they were not in receipt of pensions then we would not be saddled with student loans. If they had not bought all the council houses then there would both be more affordable rented accommodation and homes for sale. These arguments, whilst tempting, are wrong.

By blaming past generations for societies ills we let the real culprits off the hook. It should be obvious that a “generation” is itself a reification, meaning that it is a convenient shorthand for something that really does not exist. Older generations are no more to blame for, let’s say, student loans than immigration is to blame for job shortages. Even if some relationship between the two could be shown it would not be causal.

For anybody with socialist leanings, here I put my hand up, the idea that an entire generation could be responsible for something is fundamentally mistaken and yet another example of the politics of the blame game which is used successfully to avoid scrutiny  of the rich and privileged. 

Generations are not homogenous. Whilst many people supported, and benefitted, from the right-to-buy scheme, many opposed it and the Tory Government that introduced it. Whilst many benefitted from a student grant (I was one of the last cohort), many of those same people campaigned against the Tory government that introduced them. I spent a good deal of my 3 years in university on marches, sit-ins and getting signatures on petitions so that future generations would not be saddled with massive debts.

Social housing in Vienna

That it is now difficult to get on the housing ladder is not a consequence of the sale of council houses. It was the lack of any planning to ensure that the housing market was not simply left to the vagaries of the free market. It’s not as if we have to look too far for inspiration. In Vienna, for example, the average per metre rent price in 2018 was €9.40, in Berlin it was €9.80 whilst in London it was €28.20. This is not just a market issue, and it has nothing to do with age, rather it is one of political philosophy. Wolfgang Muller, Deputy municipal director of Vienna is quoted in the Financial Times as saying “Our philosophy is the highest quality of living for everyone”. This is perhaps why 60% of the housing in Vienna is what is termed social housing.

Most countries in Europe make some direct charge to students for higher education, but it is a

peculiarity that the rates vary considerably between various countries. Nine EU member states have no fees at all, but amongst the other countries one country stands out for its high burden on students. You guessed it, the United Kingdom (though it’s worth noting that Scottish students pay no tuition fees and in Wales fees for Welsh students are capped at £3,000, sill more than the average European student would pay though). The point is that the move from grants to loans has nothing to with generations and everything to do with political philosophy. We should ask, younger people in particular should ask, why it is that successive Tory governments have not looked to Europe or Scandinavia for inspiration but to market-driven USA?

And, what of these gold-plated pensions that older people are enjoying. The attack on pensions is two-fold. First, it is asserted, that because people are living longer we can no longer afford the state pension. One way to reduce the cost has been to gradually increase the age of retirement. For women this jumped from 60 to 65 and is currently 67. Younger people can rightly argue that it is unfair that they will have to work longer than their parents. Though it could equally be pointed out that older generations left school earlier (at 14,15 or 16), that the numbers going to university were minimal and that the changes in pensionable age affect all generations, other than those already retired. But, the main thrust of the attack is that pensions are paid for by those in work to be enjoyed by those not working. This is patently not true. State pension is paid for by National Insurance contributions, of which the average pensioner will have paid for 30 or 40 years before retirement. The only reason why those currently in work have to “subsidise” pensioners is because of government profligacy. They spent the money on other things and hoped that enough people would die before the financial black hole appeared. I realise this is an over-simplification but the point is that the older generation have paid for their state pension and for younger people to imagine that if they lost those rights the money would somehow transfer to them is naive.

Nick, now Lord, Clegg with friend

The second tenet of the attack on pensioners is aimed at those with workplace pensions, the so-called gold plated pensions enjoyed by those particularly in the public sector. This term was coined (pardon the pun) by none other than Nick Clegg. Yes, the same Nick Clegg who promised to oppose further

increases in tuition fees and then voted for them as part of the Con-Dem coalition. This was the start of a wave of attacks on defined benefit pension schemes. 

It is worth pointing out that the average private pension is around £8.6k per annum, less for women. Does that seem like gold-plated? But what is missing in these debates is that people with workplace pensions will have taken a reduction in their take home pay in order to build up their pension pots. And, that if their pensions are over £12.2k a year, they have to pay tax. In other words, it is not taking from the young to give to the old. Whether it is state or workplace pensions it is simply giving back to people what they had saved for.

According to AgeUK research the number of pensioners living in poverty is around 2 million, the figure has hardly changed since 1945, although it is worth noting that it was falling slowly until 2010 when it began to rise again. 2010, lest we forget, was the year of the Con-Dem coalition. (Thanks Nick!)

So, let’s get back to the issue of inter generational warfare. The idea that the old are ruining the lives of the young is a wedge being used to divide those who should be united. The difference between the lifestyles of older and younger citizens are not consistent across different countries. Rather the UK has chosen to adopt a series of policies that have had the cumulative effect of creating a worse social environment, especially for younger people.

Trade unions defend young and old

It might be pertinent to note that in 1979 over 13 million people were members of trade unions, by 2016, despite population increases the number was 6.2 million. This, of course, does not explain all the differences that generations face, but pensions and wages are bread and butter issues for trade unions. The fact is that benefits of any kind are rarely given benignly, they are fought for and the only way to fight is to be organised and do so collectively. Whilst young people are more likely to vote Labour, they are also less likely to vote at all. Poverty, higher education fees, running down public services, the shift from the collective to the individual are not generational issues, they are class issues. Only Labour governments (and even then not all Labour governments) have a genuine concern for working class people and the conditions they live in. 

All the policies which younger people are blaming their parents for were Tory policies (even if some were kept by the last Labour Government). They made a political choice as Philip Alston, launching the UN’s report into poverty in the UK, noted. The government could have made other choices, but instead of seeking inspiration from Europe and Scandinavia, they have stayed in thrall to the economics of the free market. Such economics enrich only one group of people at the expense of the rest of us. For those younger readers who still feel that the older generation are to blame, I want to end with a plea for a ceasefire. You really are fighting the wrong enemy here.

Younger, rich people will not be without homes (they may well be renting them to you), will not want for a decent job (they’ll start at the bottom of the family business and work their way to the top, even if it takes them all week), will not worry about their pension in old age (they’ll just steal yours), and will continue to encourage us to fight amongst ourselves to divide their crumbs as they fall from on high.

If you are not rich, it is not your parents or grandparents who are holding you back it is a social system that continues to be tilted in favour of one class. That class owns not only the means of production but the means to spread discord and disharmony amongst the lower classes. Whilst we concentrate on each other, they are free to carry on consuming the fruits of our labour. The only way this is going to end is when we start to rethink our priorities, and that cannot happen until we begin to rethink our commitment to the free market.