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]


as

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

Jim

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.

Mike B

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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Robin

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.

Gregory

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.

Juan

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.

Clotario

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.

Nick

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.

Shane

I presume technology will continue to advance in coming decades. Today I take for granted that I have no major threat of death from TB, small pox, influenza, cholera and so on. As medical technology advances, even poorer people can benefit.

So without any growth in income, one's security from disease may improve with time.

Drill-Baby-Drill Drill Team

We all want social mobility but we mean an escalator moving up in wealth and progress.

But Social Mobility cuts both ways; it also means your kids are as likely to be BETTER OFF as well as WORSE OFF.

I think since the Emergence of the American Century we have had the escalator of wealth and privilege where dreams become reality. Now we are on the decline, and life will be harder, dollars will have to be earned, and we will have to make difficult financial choices and sacrifices.

Welcome to the Chinese Century. And we can battle fate, ignore it, or cooperate at our peril. Go west Young American, keep on going past California.

We will downsize the American Dream. And shrink our Carbon Footprint. Learn Mandarin.

Eric M. Jones

This is a loaded question. What does better off mean?: To have two horses where we only had one?

Can waddle our fat butts in to buy more McDonalds French fries?

To understand more about the Universe? About the world? About other people and cultures?

To have twice as many children or half as many?

To not have to fight meaningless wars for the enrichment of Plutocrats?

Can magically be transported so we NEVER have to life a finger.

Can live in even more luxurious digs?

Can own an IPod which will hold 10,000,000 songs instead of the 14,000 now?

Can own twice as many cars...that go twice as fast?

It's a tough call. I know lots of people of modest incomes whose living standards are much higher than people who make a lot more money.

Bhutan has their Gross National Happiness policy. Maybe we should look into it.

Chris

It's not that we need economic growth. What we need is a revived sense of community, where people care about each other instead of plugging in their i-Pods to ignore what's going on around them, doing Facebook instead of reading, and being allowed to get away with being uncaring, selfish brats. Few people now can be assured they will be taken care of by their own families -- we've farmed that out to the government and immigrant nurses. Do I want my kids to be richer than I? Hell no. I want my kids to know that whatever happens, someone will be there for them. But they also need to know that for this to happen, they have to be there for other people. Money can't buy that. Only integrity -- and in the current political climate, with sniping and idiots and grandstanding, my advice to my kids is to move to a village in Europe, Latin America, or Polynesia as soon as they can. America is on a death spiral that will match the former Soviet Union in 15 years.

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Drill-Baby-Drill Drill Team

Solution to your Kids being Worse off than You:

1. Don't have kids.
2. Exist in the Bowels of Poverty, Hardscrabble Life and Depravity, that ANY step your children would venture is Forward Progress. Start so low that the only way is up for the next generation. I am talking a piece of rope for a belt, barefoot walk to school in blizzards, and that road kill IS supper. Read The Jungle by Upton Sinclair.
3. Put your baby in a basket and leave on Bill Gate's Front Porch.
4. Teach them to be GLOBAL COMPETITORS, with an Engineering / Science/ Computer Background and Trilingual English/ Mandarin/ and a European Language and a Black Belt in Six Sigma. They should be at home in the World, not just Appalachia. An English Major with an art interest in Tuscany just won't cut it.

Mantonat

I used to think that Americans as a whole were getting dumber, but now I realize that it's only that I meet more people every day.

Science can keep us alive longer, but we start getting sick earlier. Money can buy us more and more things, but schools keep getting poorer and poorer. We are safer now than we ever have been, thanks to regulation and government oversight, but we live like toddlers in a play pen without realizing that the sides are becoming too high for us to crawl out of.

As a society we are better off, but as individuals we are not. Our children's generation doesn't stand the chance of producing an Emerson, Einstein, or Edison if we can't collectively throw them off the pier and allow them to learn to swim on their own.

cowichan

If you assume that technology can continue to improve daily life then our children will live a better , healthier, longer life than we are.
If you remove the influence of technology and restrict the question to the US, then the answer is that decreasing social mobility means that more and more Americans will not live better lives than their parents.

Andrew

"as" asks if any generation is worse off then its predecessor. I would guess "of course." How about those who suffered through the Depression rather than the 20s. Or those who lived through the Great Plague. Or how about the generation of the Civil War?

Andrew

Mr. Bluesky

I suggest you all read the book titled Deep Economy by Bill McKibben it is a great read!

Drill-Baby-Drill Drill Team

This is what is meant by a better life:

Will your children own their own home. Will it be a larger mansion in an exclusive neighbor hood or will they continue sleeping in their childhood bedroom until well into their 40s and move to a studio apt rental for the next 20 years.

Will your children have a professional career and a long stable job where they are productive and happy? Will they be a step above you in mmg or will they have a series of fast food/ barrista jobs and 20 employers in a decade.

Will your children have more of the finer things in life, like a recent BMW or will they have have a 20 year old clunker Mercedes with a transmission on the fritz that they can't afford to fuel.

Will your children be less educated than you?
Will they go to a less prestigous university?
Will they be more obese and inactive watching more TV and consuming twice as much junk food?
Will they have a shorter life span?
Will they have more mental illness and chronic illness making their life less pleasant?
Will they fail to mature and be codependents for decades after the umbilical cord should have been cut?

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Joshua Northey

I think it is entirely possible that some of the poor measures economists use might lead one to think there will be a decline in the standard of living. There almost certainly will not be.

In the early 90s when I was mowing lawns like crazy I would have paid $5,000 for an Ipod, maybe more? Now it is basically free from my perspective given what it can do. Likewise my desktop computer, and the laptop my work gave me. Internet access which I pay $60 a month for would have been priceless.

My overall income adjusted for inflation is significantly below what say my grandfather's was in 1958 (when he was my age), hell my wife's and mine combined is barely above his.

But at the same time:

Our house is larger.
We have two cars from the 1990s, instead of 1 from the 1940s.
It is cheaper & easier to contact friends and relatives.
Computers, the internet!
The food is way better.
My appliances and furniture is better.
The entertainment is more diverse and better.
The list could go on and on.

The price of equivalent services has deflated massively. So real^2 incomes will continue to rise until the next major discontinuity (most likely the collapse of the US in 50-75 years).

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mfw13

I think it depends what part of the world you are talking about. In the developing world where the lion's share of worldwide economic growth is taking place, the answer will almost certainly be yes for most people. In a country like the US that it being crippled by a broken political system, a failing public education system, and a huge national debt, probably not.