One of the latest ruses by those who want the state to do more, spend more and interfere more, is to encourage a battle of the generations. Mr Milburn was at it this week. The young can only do better if we spend more public money on them, so we need to take more money away from the old.
I have never bought into the theory that the Baby bulgers are a lucky generation who have sucked up too much of the country’s wealth. The amount of a country’s wealth is not limited or static. Many of the baby boomers made their own luck. They worked hard to advance their own and the nation’s wealth. Their children should be able to go further and faster, as they after all will benefit from the huge sums spent on their health, welfare and schooling (far more than was spent on the baby boomers), and will come to inherit the wealth their parents have built up.
The baby bulgers with wealth are fairly generous to their children. They are already giving them money for deposits on homes, assisting their family budgets and giving money to grandchildren where they have a surplus. Those who don’t have a surplus are often working hard for no reward as child minders and family assistants to their children.
The true battle should be over policy to help to ensure that the next generation can be wealthier and more successful than the baby bulgers. We should not settle for nasty fights over distributing what has already been made or created. We should be more active in debating how to create conditions in which the next generations can be more successful. They too must add to the stock of the nation’s wealth, and earn the higher incomes they naturally seek.
That is why on this site I try to spend more time describing the policies that would liberate enterprise, attract more capital, create more jobs and drive forward higher productivity. Such policies will mean higher average real living standards. Robbing richer Peter to pay poorer Paul will not create higher living standards and may simply alienate, demotivate or lose us Peter. Paul needs a job. Once he has a job he needs help to make a success of it, to move on to a better paid job.
Too many are fatalistic about low wages and no wages. They think people have to stay trapped by them all their lives. They think it unrealistic to suggest people can help themselves to a better life by working hard, undertaking training, venturing in a business of their own and many other ways. Fortunately, in practice, many still do walk from poverty to success, and many more walk from modest beginnings to a more comfortable middle age. Of course state policies should help, and should take care of those who cannot, but the state needs to say more people can succeed.
If we spend all our time arguing over how to distribute what we have, we will put off the entrepreneurs, innovators and grafters who would otherwise stay here and create more wealth, employment and income here. That is the challenge. To do that requires lower tax rates and less government interference with those who are energetic and hard working, not more.
As for the elderly, it is true they have benefitted from recent Coalition improvements to state pensions, and from tripartisan policies of free services and income top ups. They too would benefit more from an improved climate for savings and investment, so they can enjoy a better return on their pension investments, and have a better deal from annuities.