I have just gone through a large section of Simon Newcomb’s Principles of Political Economy, published in 1886, just as I was reading The Economist and The Financial Times 2013 book of the year, When the Money Runs Out: The End of Western Affluence. The difference in substance and depth is so profound it leaves me in despair.
But I want to focus on one particular aspect of what really is a book of junk ideas and simplistic formulations. Lots of dross gets published but only one book per annum is rated the best of the year. If this is what economic journalism sees as the finest flowering of contemporary thought, there cannot be all that much economic thought in contemporary journalism.
The author is Stephen D. King who is chief economist for a bank, HSBC. He is therefore fixated on the monetary side of economics, with the actual productive side having a mere shadowy existence somewhere deep in the background. No evident consideration of value added and production, just shifts in aggregates, most of which are financial.
But let me leave all that to the side (along with King’s smugness and self-satisfaction). No admirer of contemporary economic thought myself, his bizarrely superficial economic recommendations, resting on his support for nominal GDP targeting, show him to be about as deep as anyone could be who never thinks in terms of the entrepreneur and value-adding activity. That is not, however, why I have bothered to bring up his book.
You see, King blames my poor generation, us Baby Boomers, for our economic problems today. And while I also think of my generation as the beginning of the rot, I don’t think of things in quite the same sort of way. If anything, where I feel we Boomers may be most at fault is producing the generations that have come after. So, with this in mind, let me take you to what he has to say (all quotes taken from page 243) about our current economic problems in relation to my generation:
“The Boomers’ preferences have dominated society’s choices since they first reached adulthood in the 1960s and 1970s. In their twenties and thirties they accepted higher inflation; their mortgages were, in effect, partially written off even as pensioners saw their savings destroyed.”
In 1970, as the Great Inflation was getting under way, even the oldest of the Boomers was no more than 25 and most were under 20. We didn’t cause the inflation and I would hardly say we had “accepted” the acceleration in prices, given that we did what we could to end it. If you want causes, you have to go back to the generation before. Who were the political leaders we voted for and put in office? In the US it was Ronald Reagan and in the UK, Margaret Thatcher. Where are our equivalents today? There is not a ghost of a chance that King’s generation would put either of those leaders into office. They were giants compared with the pygmies who have come since. King goes on about my generation, here in a continuation of the above quote:
“Now in their fifties, sixties and seventies, they insist on low inflation, fearing the erosion of their lifetime savings as they head into retirement. The Boomers have had their cake and made sure they could eat it.”
You really do have to help me out here, Stephen. We didn’t cause the inflation of the 1970s since we were not in political charge but have worked hard ever since to make sure inflation does not take off again. Was this the wrong call? Should we have had more inflation? Do we need more inflation now? What’s your point? Well here are his thoughts about how to deal with this baby boomer generation for whom he has a name of his own.
“One answer would simply be to wait for the selfish generation to expire. By that stage, however, the damage may have been done: their gains will have been the rest of society’s losses.” [author’s bolding]
Yes, he could wait for us all to die off, but that’s such a slow process. So what to do? In a continuation from the previous sentence and in the same paragraph he suggests this.
“Another [answer] would be to recognise the futile nature of the large amounts of medical expenditure for those approaching the final curtain, a use of resources for which the returns are, sadly, lacking [!!!]. It seems unlikely [!!!], however, that society is yet [!!!] willing to embrace voluntary euthanasia – let alone the involuntary kind – any time soon [!!!], or to become indifferent to death, whatever the age.”
This is not written as a joke in Jonathan Swift’s A Modest Proposal sort of way. You can quite clearly see that, even if King is not game to say it, his real answer is to leave us all to die off as quickly as possible. If we are no longer judged productive, we should no longer be allowed to absorb resources. This man is an absolute caricature, a Monty Python version of a merchant banker.
And while he has a chapter he titles, “Dystopia”, these answers are in the following chapter, the one he titles, “Avoiding Dystopia”, where he has put all of his suggested remedies. Writing in the UK’s Daily Telegraph, reviewer Charles Moore says “it is alarmingly difficult to disagree with Stephen King”, a quote reproduced on the book’s cover.
If Moore really believes that, I think he might have had the wrong Stephen King in mind.