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The Next Ages of Man

The Next Ages of Man was the final survey written by Macrae as deputy editor of The Economist, though of course he went on to write a number of further articles by invitation. The original was published in the Christmas & New Year edition of The Economist in 1988 and is here presented in five parts.

1 - Arrived, but haven't noticed
2 - Too Right
3 - The children's renaissance
4 - The future shape of business
5 - Old men don't regret.

Arrived, but haven't noticed

The 65-year-old Norman Macrae retires this week as deputy editor of The Economist. He will still be writing for the paper, but ends nearly 40 years of what has hitherto been his main job being partly responsible for what other people write, inside The Economist's college of opinion. His last survey as deputy editor contains his personal guesses about the main changes ahead, in ways that will be controversial. The first article discusses where the rich countries have got to, without most of them recognising it

Within a hundred years, guessed Maynard Keynes in 1928, the standard of living in Western Europe and America "will be between four and eight times as high as it is today". Since nobody could sensibly wish to consume four or eight times as much as he did in 1928, people would come to recognise the pursuit of money for “what it is, a somewhat disgusting morbidity, one of those semi-criminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease”. “For the first time since his creation”, enthused the Arts-Theatre-founding Keynes, “man will be faced with his real, his permanent problem - how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live agreeably and wisely and well”.

From his observation of the very rich, who already had four-to-eight times the normal person’s income in 1928, Keynes did not think man would be very good at this, and he went on to one of his homosexual-chauvinist diatribes that women in the well-to-do classes looked to him like being even worse.

Sixty years on, in 1988, the real GNPs of the United States, the EEC and Japan are between 31/2 and 18 times what they were in 1928, although with awkwardly more people to eat those GNPs up. The United States, like Britain, is a relative slowcoach. See chart.

United States 1928-1988
1988 as a multiple of 1928 level
Japan 1930 -1988
1988 as a multiple of 1930 level
West Germany 1928 -1988
1988 as a multiple of 1928 level
Britain 1928-1988
1988 as a multiple of 1928 level

America's real GNP in 1988 is six times its 1928 level, but its population has doubled. The average American’s real personal disposable income has multiplied 2.9 times since 1928, and his consump-tion has increased slightly more. There is no sign of bored affluent people deciding not to spend too heavily, as Keynes had expected. Instead, all the rich countries’ peoples are borrowing like crazy to make the purchases they could most easily postpone. Americans now buy annually over ten times as many consumer durables as they did in 1928.

Where Japan differed

However, as in Western Europe, the most voracious rise since 1928 is that real annual expenditure by America’s central government has multiplied more than 19 times over. One might therefore suppose there has been an especial rise in the satisfactions that are traditionally the aim of government: less fear that America’s sons might be killed in foreign wars, more effective crime prevention, greater social cohesion. Things have moved exactly the other way round.

In Japan the rise in real GNP has been over three times as huge as in America (having multiplied nearly 18 times since 1930), but central-government expenditure has gone much less (multiplied under six times). Despite this image as “an appallingly low public spender”, the satisfaction in things provided by government in Japan has gone up much more than in America or Europe.

The average Japanese has much less fear than in 1928 that her or his son might be killed in foreign wars. The poorest three-quarters of Japanese 17-year-olds are startlingly better educated than their equivalents in 1928 Japan or in 1988 America or Britain, at a lower taxpayers’ cost per head. Japan has moved from a high Asian infant-mortality rate into the lowest infant mortality ever attained by woman anywhere. It has carried through the first industrial revolution in world history during which crime rates initially went down. It does still have a sense of community and social cohesion (low rates of divorce, juvenile delinquency and drug abuse, the unvarying re-election of a rather boring conservative government all through the past 40 years). Although left-of-centre people will find this appalling, it is more than conceivable that Japan shows the way that successfully governed countries will go.

In Western Europe there has been one strange similarity to Japan, because the areas most knocked about during the 1939-45 war surged most quickly above their 1920s income levels during the 30 years immediately after it. But in Western Europe (and especially Britain) there has been a clear drop in the quality of life for one group: among the sort of European women who in 1928 were cosseted domestic servants not just the leisured ladies against whom Keynes railed, but most upper-middle-class mothers of small children. There has therefore been a drop in upper-middle-class small children.

In Europe the rise in standards has been fast lowest down, among the sorts of ordinary working Englishman or Frenchman who in 1928 owned only one pair of trousers. As in America, it has been fastest of all for working-class married women. It is therefore a pity that married women are virtually disappearing among the groups that have most need of a lot of them.

When granny sends bastards her bill

Last year three-quarters of the black babies born in the big inner cities of America were births to unwed mothers; of these, half were to teenagers. The fig-ures for some other poor ethnic communities, al-ways excluding the close-knit Asians, are not much better. Because America’s WASPS (white Anglo-Saxon Protestants) stopped having so many babies 24 years ago, and because that makes for fewer WASP mothers now, the present estimate is that 30-40% of young adults entering America’s workforce in 2007-27 will he black or Hispanics.

This will be happening just when the huge 75m-80m lump of nearly nine-tenths-white baby-boomers born in 1946-64 will be retiring to Florida, and expecting to live for an expanding 20-25 years on ever more fabulously expensive Medicare services financed by the payroll taxes which these new black and Hispanic workers and voters pay.

Europe is not facing a bind quite so fraught, but its import in the 1950s and 1960s of unskilled work-ers from its poorer south and east, to do the dirty jobs in its now dwindling factories and then over-manned public services, has created prospects some-thing like it. Japan did not import cheap labour for its fully employed industries from its even more

teeming poor south and west; it wisely automated its factories and kept its public services slim.

Meanwhile, in the WASP and European and some other white cultures, the working women who do stay married are rapidly deproletarianising their husbands and themselves. Because of the automation in the kitchen, the television in the living-room, the gain that more husbands do rather more household chores and fewer spend all evening in the pub, the astonishing sameness of Sainsbury’s sales per household as between income groups, the spread of house-ownership and of the motor car to go shopping in, the fact that it is three times as easy as in 1928 for a work-seeking mum to get a job, the living standard of many a British working man’s wife has risen above what Keynes thought in 1928 that Britons would very much wish to have.

A lot of the working women concerned cheerily recognise this, and thus act and vote slightly mean-spirited conservative. Progressive people a bit richer than they are very cross to be told it. The way to regard oneself as a socially caring person is to advocate that more of other taxpayers’ money be spent to build up public services (education, health care, housing, etc) for the poor. Unfortunately, as soon as something is turned into a public service instead of a market enterprise, it is nowadays produced with more bias against the poor.

Public disservices

From some London council estates today parents can be forced, by sanctions of the criminal law, to send their son to a state school which has a 20 times greater chance of making him a juvenile delinquent than another state school in the same catchment area. It is a peculiarity of the non-market system that these dreadful schools are not closed. If a candyfloss shop poisons 20 times as many children as that next door, truant officers do not whip children into it.

In some slumdoms of Britain and America, police protection has virtually broken down; old ladies do not go out at night. The whole British system of crime prevention lacks an enterprise culture, so British prisons have an actually negative gross production they create more recidivists than they cure criminals. Britain will eventually have to move to some profit incentive in prisons: rewarding those who run prisons with more money and kudos when and only when fewer of their inmates re-offend, thus concentrating their efforts on job-placing on release or whatever works.

Life expectancy in the British middle classes has-expanded faster than in the poorer ever since the foundation of the National Health Service in 1948; things were expected to happen the other way round. England’s poor north-east has seen some of the country’s best shopping centres and small businesses grow in the past decade, but the social workers in one poor part of it misread from a MORI poll that one in ten British fathers raped their small daughters (which they don’t, MORI had suggested nothing like it). When these sincere people thought they should be arresting one in ten of the dads they met, the case for not having local-authority monopoly organisations to run social services did seem rather strengthened.

In housing, the story has been worst. If graduate James bought a suburban London house in 1948 which a supposedly wicked “speculative builder” had erected for £200 in 1898 or for £2,000 in 1938, James grizzled furiously that council-house Jimmy was getting, for much lower weekly outgoings, a fine high-rise-view apartment “attractively” closer to the centre of the city which had cost the taxpayer much more to build. James was half-placated by getting tax dodges like mortgage-interest relief. Today James’s house is worth a fortune of up to £250,000 which he can pass on to his children. Because of the terrible inefficiency of council-estate management, Jimmy still lives amid graffiti and drugs and a smell of urine, without proper police protection in that same high-rise apartment, where his life has deteriorated into an old person’s hell.

Public ownership was a simple mistake

There are at least three reasons why state monopoly production fails, and they can now be seen to be endemic: i.e., if you care about helping the poorest, state production can’t work. First, as soon as nil price or subsidised price ensures that there is a standing excess of demand over supply, the best services (e.g., brightest teachers, most competent doctors, politest policemen) go to Surrey instead of Slaggers End. In the private sector, by contrast, a supermarket complex does open in Gateshead if there is demand there; the supermarket entrepreneur does not say he prefers to live in Guildford.

Second, only a competitive system will bring the quickly changing technology and methods most suitable for meeting each individual’s needs in a changing modern market like education or crime prevention or social services. It is fatal to leave them in protected producers’ hands. Third, a state-spending culture brings the pressure “such and such is doing badly, let’s pour money into it”. A market-enterprise culture says, “that’s doing badly, we’ll make money by throwing in competition and closing it down”.

These three points explain why state provision is now failing, not only in the free capitalist world, but also out in socialist Russia and China and all points east and south. This has at last brought the right nomenclature there. A conservative in communist countries is now somebody who believes in state ownership of the means of production, distribution and exchange. A progressive is an Adam Smithian.

In rich countries the sensible course for caring left-wing parties would also be to get on the free-market side of the conservatives. Unfortunately, they are getting on the protectionist side instead. Also, if a government calls itself lefter wing, it starts by saying it will spend more to cut unemployment, but its own name for itself then forces it to cut public spending even if at Spain’s unemployment of 19%. This is because frightened money markets unfairly allow a bigger budget deficit to a Reagan than a Rocard. During 1989 this will again hit Mr Mitterrands franc. For the next decade or so, the intellectual and political trend therefore seems likely to he generally to the right. The next article will discuss if it may go too far.

Part 2 - Too Right ->>