Borrowing from the Future

A Faith-Based Approach to Intergenerational Equity

Ann Morisy

• Publisher: Continuum
• Year: 2011
• Print ISBN: 9781441125361
• eBook ISBN: 9781441110480
• Edition: 1
• Topic: Theology & Religion
• Subtopic: Christianity

A faith-based exploration of how can we adapt our lifestyles and redirect resources to take account of the challenges that result from increasing longevity.

CHAPTER ONE

Uniquely favoured? Uniquely selfish? Uniquely fearful?

For Londoners one of the most celebrated possessions is the free travel pass that comes when you reach your sixties. Such liberation and such generosity: free, unrestricted travel on buses, tubes and trains across the capital. However, not everyone sees it like this. In contrast to the rejoicing of the Third-Agers, a friend’s daughter of nineteen splutters with fury as she pays full fare while noting well-heeled working professionals flaunting their orange ‘pensioner’ pass. ‘It’s not fair’, she protests and takes umbrage at fortunate older travellers. With such visible advantage accruing to older people, the reluctance of some younger people to offer their seat to older travellers becomes more understandable.

Even for the wealthy?

The majority of FTSE 100 chairmen are over 60, and therefore receive the £200 fuel allowance and free bus passes, or more likely the generous London Freedom pass.

Those born in 1948 will now be well-practised in the art of free travel. In fact the word ‘free’ is a characteristic of that post-war age group. The year 1948 has been singled out as the most fortunate year in which to have been born. So says Caroline Davies, as she lists free healthcare, free education, free love and the scope for retirement relatively free of financial worries that have accrued to the 1948ers. ‘Nourished and nurtured by a “cradle-to-grave” welfare state and protected by final salary, the holy grail of pension schemes, the 1948ers would appear to have had it all.’1 As well as financial and material security these early baby boomers have enjoyed the gifts brought by technology – before the gridlocks and malfunctions came into view. Delight came repeatedly to the 1948ers:

The magic was that whenever us 48ers got to a certain age, the world delivered just what we were looking for. We wanted sex? Suddenly there was the Pill! We wanted to rebel, take lots of drugs and do the things our parents never did? Blow me down, along came flower power. It’s as if we had ordered things from a celestial menu. No – we didn’t even have to order them – they were delivered to our door.2

The achievement of such prodigious and long lasting pleasure-seeking suggests that the parable of the prodigal son may, over the last sixty years, have morphed into the story of prodigal mum and dad.

While I am not one of the ‘have it all’ 1948ers, I do have to own up to being part of the generation that Harold Macmillan suggested ‘had never had it so good’. As part of the post-war baby boom (roughly those born between 1945 and 1965) I can boast of having been issued with my own ration book and I can remember the bomb sites that marked the neighbourhood. However, rather than the hardship, just like the 1948ers the story that has run through my life has been that of ever-increasing benefits and affluence. While the parents of the baby boom generation may have faced fear, deprivation and the loss of loved ones through warfare, the post-war, boom generation benefited from the war-traumatized generation’s determination to make the world a better place.

They say that we resemble our times more than we resemble our parents. While we are not prisoners of the subtle and not so subtle cultural messages of our era, they trickle down with great effect and forge generational styles that earn labels such as Generation X, Y or Z (the Net generation) or simply ‘The Boomers’. As a result, we all have much in common with the fellow members of our age cohort. My perception is that my age cohort was shaped by a culture characterized by optimism and a suggestion of superiority. I have a memory of my junior school, with class sizes of forty or more children, crowded into classrooms made of high, glazed brick walls. However, in each of those classrooms would be a map of the world that was mostly coloured pink – the British Empire not yet transformed into the Commonwealth. I remember my father, who like so many others of his age cohort had spent a formative part of his life fighting for his country, being keen to encourage pride in being British: ‘This is the best country in the world to be born in’ he would proudly insist. He also coached me to recite the features that made my home city of Liverpool one of the greatest places in the world, concluding the recitation with reference to the ‘Mammoth’ – the largest floating crane in the world, taken from Germany as a ‘spoil of war’3.

For those of us born after the Second World War, the baby boomers, while sugar might have been in short supply, we became the beneficiaries of a continual unfurling of welfare provision: in modest ways such as National Health orange juice, or more major breakthroughs such as polio vaccination or commitment to free education, the world became a more and more benign place for the children of those who survived World War II. Macmillan was right; no generation had had it so good. And more than this, we baby boomers absorbed the idea that such advances and benefits would flow seamlessly into the future. However, this message of optimism and pride and the sense of being part of a favoured nation at a favoured time could easily drift towards narcissism and a naïve assumption that personal wellbeing was assured. What else was one to conclude when the National Health Service had plied us with rosehip syrup and vaccinated us for diphtheria, polio and scarlet fever, and in school the morning ‘playtime’ for infants and juniors began with the ‘gill’ bottle of milk?

The state, and increasingly financially secure parents, invested in this baby boom generation in a way that no previous generation had done. As a result, the toddlers of the 50s absorbed with their mother’s milk, and Cow and Gate, a sense that the world revolved around them. Not only did this generation bulge, it also had a sense of being ‘special’: new little princes and princesses for whom the world had waited for so long – and fought for with such passion. The ever-alert media also picked up on this idea of children being precious and privileged. I recall each Saturday spending pocket money on the ‘Princess’, a pretty and glittery confection that avoided describing itself as a comic for girls like ‘Bunty’ and ‘Judy’. This junior magazine was a precursor of what was to follow. The message was beginning to flow that, rather than determination and commitment and being nice to people, and venerating the school badge,4 image, style and fashion were now the things to aim for in life.

More than enough to go round

It might be thought that being part of a big and bulky generation, bigger than what had gone before and bigger than the following generations, would be a disadvantage. One might anticipate that, with large numbers, competition for resources would increase. The fact that this did not happen was due to the coinciding of technological and social innovation, as well as upbeat markets for goods and services. In the decade following World War II, although rationing of food and clothing was still in place, high levels of employment brought steady tax revenues to underpin and encourage new welfare benefits and entitlements. This high level of employment was due in part to post-war reconstruction, but it was also supported by the growth of manufacturing as the market for consumer goods began to develop. The combination of increasing tax revenues and the hard-won determination to make the world a better place energized social policy: opening up education, extending health care, introducing national insurance to provide support through the hazards of long-term sickness and old age, and even ‘state benefit’ to assist while unemployed.

Three jobs in a day

I recall an older friend of mine reminiscing about his early experience of employment. He had been ‘called-up’ for military service towards the end of World War II and had been sent to fight in Korea. He survived to tell the tale, but he can also tell the tale of how there were lots of good jobs in the 1950s and 60s. He tells of how he was (yet again!) late for work and was sacked. He walked along the road to another factory and presented himself to the manager who immediately set him to work. But he didn’t like the job, so at lunchtime he left and walked a bit further down the road and presented himself to another employer – who immediately gave him a job, a job which suited him just fine. Not only were jobs plentiful, men’s work was often financially rewarding. Unskilled and semi-skilled work was plentiful, and with strong trade unions it was relatively well paid. And it was not just jobs for men that were available; for young women especially, new ‘caring’ professions were emerging that offered job satisfaction, scope for promotion and pensionable service.

Although schooling was plagued by the hazard of the ‘11 plus’, success in the exam opened up exceptional opportunities. Success at secondary level education brought the possibility of free higher education in new polytechnics and universities – all supported by a student grant. This brought about unprecedented social mobility as ‘delaying gratification’ (i.e. staying on at school and going to college!) brought obvious rewards as aristocracy gave way to meritocracy. Investing in education, for those of the post-war baby boom, bore evident fruits as qualifications opened doors to the new phenomenon of ‘career’, both for young men and young women from the Grammar schools despite having regional accents rather than ‘received pronunciation’5.

The growth of the economy in the 1950s through to the early 1970s brought, even to working-class households, the necessary disposable income to match the increasing availability of consumer goods. For those who were employed, whether in unskilled or semi-skilled jobs, the chances were that after the bills had been paid there would still be money left over, and the desires of newly affluent working-class households for a holiday abroad and a car and … house ownership became undistinguishable from the desires and expectations of middle-class households. Affluence was no longer confined to the middle class; it had become the experience and expectation of the majority. And in addition to all this, there was another advantageous dynamic, as well as a vibrant job market, that would also serve to blur the boundaries between the social classes: it was the housing market.

Investing in your own house was, without question, the thing to do. The returns on the investment in property were indisputable, and Building Societies were happy to aid and abet, as wages became salaries and the ideal of a property-owning democracy was the ultimate achievement for the ‘You have never had it so good’ generation. Mortgages and bijou living became the symbols of freedom and one of the ‘soft power’ weapons of the Cold War, aimed at delivering a knock-out blow to communist-styled ideologies fostered by the USSR, the feared opponent behind an ‘iron curtain’.

Forgive my reminiscing, but I, like others, find it hard to resist the property owning riff – that compulsive beat that runs through the lives of baby boomers. I think I was 24, a single woman, when I bought my first house. I mustered £400 as five per cent deposit on a modest terraced house. Ten years later I sold it for £35,000. On the back of this effortless largess I took myself to London and risked what then seemed like a gargantuan mortgage, only to be again rewarded for that risky wager. This feel-good factor of an increasingly valuable house has buoyed the baby boomer generation in a way that was unknown in the past, and is likely to be unknown in the future. (See box ‘The crowning advantage’ for a blow by blow account of how this came about).

The crowning advantage: Owning your own house

The advantage that accrues from house ownership is a complex generational phenomenon. It is based on the distinctive economic and political circumstances through which the baby boom generation has lived. For example, house owners (including many of those with mortgages) benefit from inflation. The impact of inflation in the 1970s and 80s brought a rise in earnings, thus making the price paid for a house an ever-lessening proportion of one’s income. And note: the fact that wages kept in step or even ahead of inflation was a product of the strength of trade union power at that time.

In addition to the impact of inflation, legislation significantly benefited home owners. For most of the 1960s and 70s there were significant tax advantages and financial incentives available to owner-occupiers, making home ownership by far the best deal for ordinary people. And the converse of this: the fact that mortgage payments could be offset against tax significantly disadvantaged those who continued to rent their homes.

Today, the advantage that exists for house owners is due to the changing shape of households. The fact that there are now more single-person households than ever before has added to the competition for property, and this has continued to drive up prices.

These advantages for a generation of house owners understandably get judged as unfair, because these gains in wealth have not come from personal effort or prudent decisions made during one’s life. The advantages are due to a particular, and probably unrepeatable, pattern of political and economic circumstances. Most people refer to this as luck.

Those who, like myself, were born in the 1950s, as well as being the generation that has become ensconced in high-value property, have also traversed the globe in the pursuit of pleasure. We have consumed the resources of the globe to fill our houses with possessions and trinkets, as well as discovering the convenience of disposability. All this, as well as benefiting from exponential improvements in health care and associated longevity. And now, in the sprint to retirement, there is the anticipation of financial security for a long old age…

Yikes! A hiccup!

Abruptly, the best laid plans have been up-ended and expectations are to be disappointed. We know that financial institutions have gone into melt down and few dare to speak honestly of the extent of the disarray that has followed. We have been confronted with how, in a globalized, market economy, everything is connected, and that includes our pensions. A frisson of anxiety has run through once confident sovereign states as they watch their neighbours being assaulted by market speculation and jittery markets.

Moody’s Corporation and Standard and Poor’s are the major global ratings agencies. They assess the credit-worthiness not just of commercial companies, but also of nations. This gives immense power as these ratings provide guidance to investors. The highest rating: AAA is prized by governments and commercial companies because a lower rating prompts the lender to charge a higher interest rate.

While some would dispute the accuracy and even the integrity6 of these companies, the analysis they offer of the world’s major market economies is stark. They do not mince their words, warning that austerity measures must be implemented if nations are to continue to receive the highest credit ratings and thus be in a position to attract potential investors, especially pension funds. Moody’s have cautioned that ‘Growth alone will not resolve an increasingly complicated debt equation. Preserving debt affordability at levels consistent with AAA ratings will invariably require fiscal adjustments of a magnitude that, in some cases, will test social cohesion.’7 This code is easy to crack: in trying to pay back what they owe, or just keeping debt in check, many western nations will have to cut back on public services and benefits to such an extent that it may cause unrest in the population. This is something which we all know about first hand.

It is not just economic think tanks and ratings agencies that sense fraughtness in the future. A poll across western nations revealed that ‘A solid majority of people in the major western democracies expect a rise in political extremism in their countries as a result of the economic crisis.’ Of those surveyed, 53 per cent in Italy and the United States said they expected extremism is ‘certain to happen’ or ‘probable’ in the next three years. This percentage increases to 65 per cent in Britain and Germany, and is at 60 per cent in France and Spain.8 When ‘political extremism’ is mentioned the quick assumption is that this means racial tension, as extremists seek to reclaim a country for the longstanding population. However, the riots in France over the raising of the retirement age in October 2010 highlighted how extremism can focus on generational issues. Young French students were quick to distinguish themselves from other, older demonstrators: students were on the streets because their futures were in jeopardy because of greedy baby boomers.

For those who have grown up with the i...

Table of contents

• Contents
• Acknowledgements
• Introduction
• CHAPTER ONE
• CHAPTER TWO
• CHAPTER THREE
• CHAPTER FOUR
• CHAPTER FIVE
• CHAPTER SIX
• CHAPTER SEVEN
• CHAPTER EIGHT
• CHAPTER NINE
• CHAPTER TEN
• CHAPTER ELEVEN
• Questions for Discussion