12 Aug 2010, 9:46pm
economy reflections:
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  • The Pinch – David Willetts says it’s the Baby Boomers Who are Wrecking the Economy

    David Willetts book The PinchDavid Willetts is clearly a very clever chap, and I learned a heck of a lot about the sociology and history of Britain from this book.

    I’m part of the Enemy cited by Willetts as the source of a lot of the financial ills present and upcoming, though I am not yet part of the 50+ set he defines as possessing most of the wealth in Britain.

    Reading the book was curiously frustrating and rewarding – Willetts is very intellectual, and his writing can be turgid.

    His book was fabulous at detail and insight, and yet poor at the helicopter overview of the situation, and he laboured his points. I came to understand how high house prices in London favoured the Polish immigrants labourers against Liverpool labourers (the Poles are ready to sleep many to a room reducing their costs because they will use the money to set themselves up in lower-cost Poland later, whereas the Liverpudlians haven’t got that advantage).

    It’s always going to be hard for me to accept that I am part of a sociopathic menace destroying the fabric of British society, but I just don’t feel Willetts carries his case well. For sure, the baby boomers have caused enough problems, however, I think he eggs his case far too much.

    Take the classic bugbear, housing. I bought my first house at 29, and it really wasn’t a good move at all. Look at my age – older than many Gen Yers are trying to get a house nowadays, it took me longer in my career to get there.  People now don’t seem to be prepared to live in crummy rented accommodation shared with others in their young adulthood – I shared rooms, then flats, then houses for the early part of my working life. It wasn’t until that first house that I had exclusive use of a toilet and bathroom, whereas now even student accommodation is ensuite.

    Some things have changed not for the better. I wish university were at the same penetration level as when I went there. Send only 7% of our young people to uni and we can afford to give the poorer ones grants. Send 50% to uni and we just can’t manage that. Are today’s students prepared to take the downside though – tougher exams that weed out the majority of applicants? It’s easy to point out the things that the boomers had going for them in their youth that people that same age don’t have now, but if you’re going to do that you have to also allow for the fact that some of these good things were nowhere near as widely spread as they are now!

    The world of work has got worse, because of globalization and technical advances, both of which favour capital over labour. It is possible that the baby boomers can be charged with not seizing the moment, and directing our societies towards using the increased wealth to shorten the working week and give us increased leisure. Other than that, I don’t feel that the change itself was a result or creation of the boomers, it was a result of accumulated knowledge, better communications and capitalism red in tooth and claw. It’s not as if other political systems weren’t tried in the 1960s onwards, but market capitalism seemed to give the least worst result.

    Other things, however, have changed and are better. The world is richer now, the anticipated loss of disposable income as we unwind the debt-fuelled party of 1997 to 2007 will still leave us with far more money, consumer trinkets and baubles than we had in 1987.

    Yes, the boomers should have saved more in their middle age rather than pumping up house prices on cheap debt then blowing it all on consumer goods without paying the capital down. This hopefully should unwind in the coming years, and those boomers that believed prices would always rise will get to eat the crow; they have less time to earn the difference needed to fill the hole.

    The boomer generation now holds most of the wealth in Britain because, well, after 40 years of working people get to accumulate some wealth. When I started work as a youth I also observed how it was always greybeards who owned everything – my landlords were greybeards, the bosses were, in those days bankers were. It didn’t seem fair to me then, either. Such is the human condition 🙂

    Willetts book is a fascinating though difficult read, but more for a take on the unusual sociology and history of Britain. He certainly does come up with a litany of the boomers’ failures, but doesn’t quite carry the argument that it is a premeditated land grab in my opinion.

    I do think there is some serious crap coming down the line, as a combined storm of resource crunch, growing population and energy shortages. Would it have happened if we had an even size of generations? Most likely.

    Our problem, Mr Willetts, isn’t the size of one particular generation relative to the others. It is the increasing size of humanity’s population in total compared to the rest of the biosphere, and its impact upon that. We can address some of the resulting issues, but it isn’t going to be easy.

    There’s an entertaining riposte to Willetts’ book from Boris Johnson on his blog, together with a response from Willetts and a comment that summarises Two-Brains Willetts writing style

    Perhaps you talk better than you write, otherwise quite why Boris Johnson would want you at a dinner party is unclear – perhaps your cooking skills are more advanced than your light-bulb changing abilities? The article drags on and on in the most soulless fashion when the same points could have been made in a quarter of the wordage.

     
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