Saving Capitalism before young people roll out the guillotines...

This article was originally published on 11/12/2020 for my informal email list. I’m re-posting some of my earlier newsletters here as a gradual process to shift to Substack. 

Many have been suggesting that in order to save capitalism, we have to start redistributing to the young, who are now being left behind in a much worse situation compared to young people back in the old days. The necessity to enact substantial change now is somewhat driven by the fact that this current generation of young people mostly support progressive policies, so that when they become the majority of the constituency in 20 years, they will enact redistribution policies in even more radical ways.

In the words of one my very Left-leaning friends: “when they roll out the guillotines, the upper class would be wishing that they had elected Bernie Sanders and paid that 80% wealth tax…” Haha.

So what would be the solution? I see a few parallel trends and issues here: 

Should we redistribute more to young people? I don’t think this idea is either a particularly liberal or conservative idea. If you’re an economist on the Right, you’d likely fiercely advocate for policies like better childcare, payments to young couples to incentivize having more children… If you’re on the Left, you’d be vouching for lower student debt, more redistribution to young people in general… 

It’s mind-boggling why we’re not seeing more progress made on this front. One explanation is that both sides cannot settle on a set of ideas that seem to be both fiscally responsible and politically appealing enough. 

Another explanation is the cultural stigma (or virtue) that “young people should be independent." One could say that the Western culture has always respected individual liberty and encouraged young people to detach from their families as early as possible.

In today’s China, it’s extremely common that couples in their 20s would have their parents pay for their first apartment (or at least contribute significantly to cover the downpayment). The one-child policy has certainly made it worse, but one could say that it’s a society where the older generation is really doing everything they can to redistribute to their only children so that they can have a leg up in the endless competition of life… The American culture is quite the opposite, with the stereotype being you move out of your parents’ house at 18 and then that’s it. 

American intellectuals like Eric Weinstein has gone in far length criticizing the “selfishness of the older generation” that they wouldn’t lend financial support to couples in their early 20s; whereas you’d see Chinese scholars citing Americans’ “ruthlessness” as the source of American flourishment in intellectual activity, entrepreneurship, and strong economic growth that is largely purported by young people. 

Last but not least, we talk about all this under the greater backdrop of climate change and over-population. My philosophy seminar with Peter Singer had a big debate on this. Developed countries like Japan and Europe are facing an ever older society, so they feel the urge to have more children, or else their welfare systems would crash. On the other hand, if we don’t curb the potential population boom in developing nations in Southeast Asia and sub-Saharan Africa (like Indonesia, Nigeria, etc.), the Earth could crash… 

Should we have more young people in developed nations? Should we limit population growth in developing countries? These have dramatic ethical implications and are not clear-cut science questions. 

Should we redistribute more to young people for a more equitable future? Or would that possibly discourage entrepreneurship and independence of a generation? I don't have good answers...