The young liberal

Churchill is purported (wrongly) to have said, “If you are not a liberal when you are 20, you have no heart; if you are still a liberal when you are 40, you have no head.”

It’s true. Nearly all of my friends have strong liberal tendencies, on matters as wide-ranging as social security nets, healthcare, foreign policy, acceptance of racial and sexual diversity, gender equality, and crime. Whether this is an indication that the world is becoming more liberal, or whether it is simply a consequence of the Churchill statement, I do not know. However, the background of this post is an editorial I read about 2 months back in a newspaper in the Hyderabad airport (possibly the Deccan Chronicle) which argued very persuasively that at least in economic policy, to be liberal is to be anti-youth.

The author’s arguments were made in the context of the Healthcare reform bill in the US and the ongoing economic meltdown in Europe. There were three threads of argument which I found quite interesting.

Public spending on healthcare, for instance. Here is the canonical research paper on how healthcare spending is distributed by age. based on this data, I created the following graph:

People in the age group 19-44 account for 5% of healthcare spending in the US; the age group 75+ accounts for 59%. In a federally funded healthcare system (such as the NHS of the UK and Medicare in the US), this is a very clear case of the young subsidizing the healthcare of the old. And yet, the young liberals  – the 25-year-olds – are disproportionally in favour of universal healthcare, which is clearly not in their economic interest.

Likewise Government bailouts for failing firms (for example the largesse that the US Government bestowed on Ford, GM and Chrysler in December 2008) was supported by many young liberals as a necessary means to save jobs. While it is true that hundreds of thousands of jobs would have been lost if these firms had gone bust, the question is: who would have been affected?

I think it is reasonable to assume that the burden of unemployment would have fallen, for the most part, on more senior employees, particularly the poorly-skilled ones. Just from a demographic perspective, the percentage of younger workers is likely to be smaller; besides, those workers between the ages of 19-30 who do get laid off would find it easier to get new training or new jobs.

If, instead of spending the roughly $40 billion on saving the jobs of the (relatively) elderly, the Government had invested in stimulating hi-tech entrepreneurship, the beneficiaries would have been primarily people in the age-group of 20-29. (I did not find as authoritative a source on age distribution of entrepreneurs, but this is the most detailed demographic profiling I could find.) Here is another example of an economic policy that most benefits people in the age group 40-70, at the expense of those in the age group 20-39. And yet this is something that young liberals supported in disproportionate numbers.

The third point I remember from the article was related to the debt crisis – both the sub-prime mortgage problem and the problem of sovereign debt default (like Greece). In both of these cases, the problem was caused by over-spending; investments and expenditures that were of dubious financial merit. In both kinds of debt, the age profile of defaulters – those who enjoyed the benefit of the debt but were unable to afford repayment – falls squarely in the 40+ age group. (Only 16% of individuals under the age of 25 have their own homes.) And yet, most liberals approve of Government support for debt defaulters.

The high percentage of young people who have liberal political views is surprising, given these kinds of statistics. It is one thing to be socially liberal; in the absence of family responsibilities, and in the flush of youth optimism, it is understandable that the vast majority of young people are socially liberal. However, to be young and fiscally liberal is self-neglecting.

(Unfortunately, I cannot seem to find the original article that triggered this line of thought. I fleetingly thought it may have been a Krugman article, but given his philosophies, it seems unlikely. If anyone could throw more light on this, please let me know.)

 

 

 

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