Earlier this year the Intergenerational Report was published.
Intergenerational equity needs to be set within a broader context than that of economic competition between individuals. Generally, it means accepting that the way in which we live in the world today should not impoverish future generations. Or positively, that the way we order our human relationships today, including the relationships that comprise the economy, should benefit future generations as well as our own.
This view assumes that human beings are not simply instruments of economic growth, but that the economy serves the good of all human beings. In all economic transactions we need to keep in mind both our own good and the good of society as a whole. The test of commitment to the common good will be our care for the needs of the most disadvantaged. So fairness is not simply about relationships between competing individuals and groups but about the ordering of society so that it serves the good of all.
The economy should not be seen as a series of unrelated transactions between individuals but as an organic framework of relationships between interdependent persons. It needs to be ordered so that it ensures fairness in the future as well as the present.
In accomplishing this task, a Government’s main challenge is to promote a mature ethical vision in its citizens, and especially among the powerful and wealthy, that looks to the common good, especially to those affected by its activities, as well as to individual and company benefit. Wealth does have a community dividend. That ethical framework should also guide such government regulation of the economy as is necessary to meet the challenges of the future.
Governments are also responsible for ensuring the building of infrastructure in communications, transport, education and health necessary for the flourishing and development of future generations. This inevitably means taking on debt which will be passed on to the next generation. The benefits conferred on the beneficiaries, of course, will far outweigh the burden of repayment. The claim that borrowing is intergenerational theft may be justified when levelled against debt frivolously incurred, but when generalised, the charge is a craven denial of our responsibility to future generations.
If we are concerned with intergenerational equity, we must reflect on the specific challenges that our descendants could reasonably expect us to address. One will certainly be the increasing concentration of wealth in the hands of the very few. This gives a public signal that individual privilege is valued over the good of the whole community, is a threat to public revenue, and inevitably concentrates political power outside of democratic processes. To ensure intergenerational equity, we must find equitable ways of taxing wealth as well as income.
Future generations will also want us to have addressed climate change. Nothing threatens their flourishing as much as the predicted change in weather patterns over the next century. And given the growing consensus among the responsible that human activity contributes to it, and so may mitigate it, it needs to be addressed seriously by governments and societies. To fail to do so inadequately will betray coming generations.
They will also want us to recognise the interdependence of societies and economies. The future flourishing of people in one nation is affected by what is done in other nations, whether by companies working internationally to avoid tax, by wars and military adventures, by the movement of peoples from danger and hunger. So concern for future generations means engaging with other nations for the common good of all. To look after narrow national interests ultimately impoverishes everyone.
This is the large framework within which the legitimate questions about winners and losers can be addressed. In Australia today, attention to intergenerational equity can indeed broaden the understanding of fairness, by including action on climate, action on the narrowing wealth and international cooperation. It will not be helped by seeing society as the playground of competing individuals, but needs a robust understanding of the common good and a commitment to the flourishing of each person within the flourishing of all.
Intergenerational fairness goes beyond economic competition (an edited version)
Andrew Hamilton | 04 March 2015 | Reproduced with permission from Eureka Street