The Crashing System
Unfortunately, the decision at National Review to cease providing access to the online issues of the magazine to print subscribers has left me unable to copy and paste interesting passages from its pages, and inasmuch as I’m not going to pay for two subscriptions and like the portability and markability of actual paper pages, I’m not willing to switch media. But some thoughts from an essay by Anthony Daniels are worth typing. (The article’s here, if you can access it.)
The angry young people [of Europe], not unnaturally, want the same privileges that their parents awarded themselves in the high-minded name of social justice, on the live-now-pay-later principle. Why should they, the younger generation, have to live harder, more arduous, less secure lives than their elders lived? If their parents enjoyed free education, secure employment with guaranteed holidays and sick pay, and early retirement with generous unfunded pensions linked to the rate of inflation — what the french call les acquis — why should not they? Is not an ever-rising standard of living, with more and more entitlements and holiday destinations within the reach of al, the fundamental law of the universe, to say nothing of the meaning of life?
There are moral and philosophical aspects of the topic, of course, but the economics are full of lessons (emphasis added):
That the scheme of the welfare state was in essence improvident if not outright criminal was known from the very first. The British Labour politician for long revered in some quarters of Britain as the founder of the National Health Service, Aneurin Bevan, famously or infamously boasted that the great thing about the National Insurance Fund (from which various benefits were to be paid the sick, the unemployed, and the retired) was that “there ain’t no fund.” Payments were thus to be met from current tax receipts, which, if insufficient, were to be augmented by borrowing. Bevan gloried in the improvidence because he knew that it would change once and for all the relationship between the citizen and the state, increasing enormously the power of the political class and its bureaucratic clientele. It would destroy saving for a rainy day as the personal source of security, replacing it with dependence on the government. A strong government needed a feckless population, and — certainly in the case of Britain — got it.
To some extent, this system provides an economic boost by transporting wealth from the future to the present, via borrowing. Moving more of that inclination from private debt to government debt helped to obscure the economic fact that the future might need that money.