Will Your Kids Be Better Off Than You?

Gary Becker and Richard Posner debate a timeless question: Will the next generation be better off than their parents’ generation? Becker’s take: “America has always been optimistic about its future. The decline in such optimism during the past couple of decades is understandable, but highly regrettable. The best way to restore this optimism is to promote faster economic growth. That is feasible with the right policies, but will not happen automatically. Even America has no destiny to be optimistic about the future without important redirection of various public priorities.” Posner, meanwhile, offers a slightly different take: “[B]ut I do not think people who are well off do, or at least should, want their children to have higher incomes than they. Parental altruism implies concern for children’s welfare, rather than for children’s incomes per se; and the higher a family’s standard of living, the less likely an increase in that standard in the next generation is to increase happiness.” [%comments]

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  1. as says:

    Has there ever been a generation that is worse off than their parents? I can’t think of one.

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  2. Jim says:

    I am certainly better off than my parents, due to better education mostly. I would be content to have my children reach the same level our family is at now (colledge degree, decent job own a home etc), but as long as they are happy with whatever they do its fine with me. I remember when I was in colledge during Bush 41’s recession everyone was saying how my generation (X’ers) would be the first to be worse off. It’s a story that gets repeated every generation I think during times of crisis. I see the road ahead of my kids being tougher in some ways than mine, but they will figure it out.

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  3. Mike B says:

    Hmm, faster economic growth can make up for the pessimism from growing income inequality eh? It’s disappointing that a worthwhile topic of investigation is hijacked to promote a platform of lowering marginal income tax rates. I have always believed that a person’s happiness is not linked to absolute well being, but relative well being. I am not happy because I make such and such a year or can afford some basket of goods, I am happy because I am in a certain percentile and I can afford MORE than the next guy. If everybody had a luxury car they wouldn’t be called luxury cars they would be called socialist crap boxes because luxury is a RELATIVE term.

    People are generally happier in Europe because decades of social democracy has plopped everyone into the optimal band between forced equality and unbridled freedom. Everybody gets their basic needs covered and the stock broker having a slightly better model hatchback than the burger flipper doesn’t tend to breed resentment.

    When entire classes of people are locked out of opportunity due to race or wealth it breeds resentment and unhappiness. The natural state of human existence is inequality and rigid social hierarchy. With out strong government efforts to provide opportunities for the underprivileged, financed by the overprivillaged the disparities will become so great that chronic social instability will result.

    China doesn’t maintain stability through economic growth alone, it requires authoritarian social controls to keep the peasants from noticing the corrupt, lavish lifestyles of the elite. Take away the iron first and the ordinary people would gladly hang the elite up from a bridge, even if it meant reduced economic opportunities.

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  4. Robin says:

    It depends how you define worse off. Economic well-being certainly wouldn’t be the only factor I’d consider when determining if my children are better off that I. I’m sure even the rich have some areas of their life they feel they could make better for their children.

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  5. Gregory says:

    In cases of wholesale civilizational collapse (think Roman empire), there definitely was a decline in standard of living from one generation to another. But overall, I’d be hard pressed to think of a recent example, because the overall pace of progress overrides any local decline in living standards.

    That being said, it may “feel” like the standards of living decline – if they do not increase at the rate you are used to.

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  6. Juan says:

    One can have the risk of building on a premise similar to the one that led to the housing bubble “Houses will always increase value” -> “Future Generations will always be better off”. It is true, until it stops being true.

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  7. Clotario says:

    If only. I have long surrendered the feasibility of living at the same standards as my parents, despite far more education. It hardly needs to be said that this is because I do not work in finance, which seems to be the sole way to guarantee a prosperous life – and yes, this does speak poorly for our present and future economy.

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  8. Nick says:

    Gregory, most people who study Roman history don’t think that there was a “wholesale civilizational collapse.” The Roman Empire morphed into the Byzantine Empire, which lasted another 1000 +/- years, and the Italian Peninsula itself came under the rule of various groups at different times. The “Dark Ages” never really existed; it is a construct used to cloak intellectual laziness. So I wouldn’t use the “collapse” of the Roman Empire as an example of anything. It’s a cliche, to be honest.

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