The Great Degeneration

Ferguson 1.

Niall Ferguson’s recent publication, based on his 2012 Reith Lectures, is entitled “The Great Degeneration, How Institutions Decay and Economies Die.” It seems an appropriate topic for comment and discussion relevant to how present and future generations can assess their educational and occupational opportunities. What follows is a short summary of Ferguson’s argument, followed by some reactions to it. Following polite suggestions that my posts are too long, the comments will be posted separately in bite sizes and labeled Ferguson 1, 2 etc. As always, I invite your comments and input.

Summary

A number of more detailed reviews are available online. The essence of Ferguson’s argument is that the west is in decline, and starting about 25 years ago, countries such as China and India are closing the gap in terms of aggregate GDP, although less so in GDP per capita. Factors accounting for this phenomenon are the weakening of existing civil institutions, crony capitalism, inefficient bureaucracy and the rotting state of the legal system. The institutions and their operation which have grown up over the past four centuries have become sclerotic. Present and especially future generations can expect to bear the burden of these forces.

Any existing society is viewed as having what Edmund Burke called a “partnership between generations.” Today we are the recipients of the legacy of those who came before us, while we leave a legacy to future generations. Amongst the things we leave in many western countries is a massive public debt whether a measured in terms of gross or net debt (you can check the figures for specific countries on the web). Added to these published figures are contingent liabilities for things like future expenditure on healthcare and pensions which balloon the debt figures.

It is not a pretty picture for all current age groups, but especially for those under thirty. Niall Ferguson’s topic presents more clearly what I was interested in when initiating this project and soliciting your reactions. At the outset, I was on the defensive when faced with the argument that my generation had left the world in a hell of a mess, underlined by the recent global financial crisis and its likely aftermath. Today, I am less so, as there are many positive developments which have taken place in the post WW2 period, both technologically and with the absence of world wars, although other forms of violence have flourished.

Burke seems to provide the right focus. We inherit a legacy, both the good and the bad parts, and we bequeath a legacy to future generations. How to weigh the ‘goods’ and the ‘bads’ is a problem, but the historian’s approach, of course with the aid of economists (and others), is a useful one to adopt. In future postings, I will provide my reaction to some of these issues and look forward to your views.

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