Paul Gillespie: Inquality is the scourge of every generation

Its not as simple as the young and poor versus the rich and the old

Bernie Sanders achieved remarkable support in the Democratic primaries from young Americans convinced his social democratic message can help overcome the closing off of mobility in their society. (Josh Haner/The New York Times)

Intergenerational relations are a key aspect of politics in the developed world. As growth slows and inequalities widen, younger generations can no longer assume that they will live better or more secure lives than their parents did – a phenomenon referred to as the Great Gatsby curve by US analysts as social mobility there falters or stops.

Conflict between generations over resources and values arises from this. That can be seen in Spain, where Podemos mobilised young voters exposed to uncertain employment opportunities by recession and austerity; in Ireland during last year's referendum on gay marriage and in arguments about emigration, job casualisation and housing; or in the UK's Brexit referendum where younger and more educated people favouring the EU's mobility were outvoted by older citizens demanding stronger borders against immigration.

That this conflict is not only an intergenerational question is revealed in the remarkable support Bernie Sanders achieved in the Democratic primaries from young Americans convinced his social democratic message could help overcome the closing off of mobility in their society.

Millennials – those born in the 1980s and 1990s and reaching adulthood in this century – are often counterposed to babyboomers (those born in the affluent 1950s and 1960s) in many developed countries. However, attributing values to a whole generation is hazardous and overstretched, given the many divisions within each one and the continuities between them. Rather the contrast highlights the different historical and social experiences of these generations.

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Positive relationship

The Great Gatsby curve analogy highlights how the antihero of F Scott Fitzgerald’s novel rose from bootlegger to millionaire, whereas comparative studies now show a positive relationship between inequality and intergenerational social immobility in a number of countries. The rise of inequality from the 1980s now documented in many of these studies coincides with the millennials’ decades.

Capitalism financialised in those years, led by the US and the UK, creating many more opportunities for the comparatively rich to reproduce their wealth faster than economic growth. As Thomas Piketty shows in his book Capital in the Twenty-First Century, this is what they did. They were helped on by the liberalisation of policy and lifting of capital controls and propelled by the fall of the Soviet Union in 1989 which extended the geographical range of finance capital.

The globalised world they have fashioned over that generation is now under radical question, as recent political events demonstrate. Populist movements on the right and left reflect such trends, railing against elites and demanding that national welfare states be defended against newcomers.

It is going too far to say, with the Economist, that this new politics of openness and closure is replacing left and right, but that paper correctly emphasises how working- and middle-class incomes have stagnated and how polling evidence shows many such people think their lives are worse now than 30 years ago.

Globalisation

That is true for communities on the losing side of globalisation and it is arrogant to deny it. The Brexit referendum revealed how deep the chasm is between them, however cross-cut those divisions are by generational divides.

In the US Robert Putnam and other sociologists have documented what he calls the "split screen nightmare" whereby the most affluent third and the poorest third live totally different lives in mutual ignorance. The generational divide is hardly as stark.

Such social divisions are much more marked in the US than in Europe, even though the UK approximates them most dramatically, with its poorest fifth having 8 per cent of its total income compared to the top fifth's 40 per cent.

Welfare states are intended to create solidarity between rich and poor, generations, those in and out of work and those sick and well. The erosion of such resources and values as a result of austerity and inequality is reflected in current European politics.

Recreating solidarity will require much more attention to re-establishing the capacity to fund such expenditure, including at European and global levels through more effective taxation of the capital that has fled national controls over the last generation.

Piketty advocates regional and global wealth and financial transaction taxes to do that.

Alternatively, the closed borders and reduced mobility called for by populist movements will hardly restore the glorious post-war years if not accompanied by new sources of economic regeneration.

Intergenerational politics play into these conflicts but do not determine them. Younger generations need older allies to fight their corner effectively. pegillespie@gmail.com