Employment and Inter-generational Equity

There has been a great deal of controversy as to the degree to which one should look after the interest of future generations in relation to that of the present generation. I would describe the two opposing viewpoints as those of the Economic Futurists and the Economic Existentialists. The former, relying upon some formulation of pay-off between inflation and employment, would be willing to decrease the real wage rate of the present generation’s workers in order that capital might be built for future generations, justifying it with the incorrect statement that a little bit of real inflation is unavoidable for development. The latter would, equally incorrectly, like to ‘take no thought of the morrow’, would forget the continuity of the body politic over generations to come, and would wish to allocate all resources to improvement of the present generation’s living conditions alone. The purpose of this paper is to present a picture of inter-generational equity in such economic benefits as standard of living, capacity to increase it further, provision of full employment, lower disparities of consumption among wage-earners, drastic reduction of consumption, especially by the entrepreneurs, landowners and rentiers, higher investment of the surplus, allocation of investments in a more balanced way between long-term and short-term projects, elimination of luxuries from the production spectrum.