Will There Be A Millennial Revolution?

this is a tale of three revolutions revolutions past twin revolutions that served as lessons the next was a counter-revolution a result of not learning those lessons and the third well it begins in 2030 but stirrings of it are already being felt the twin revolutions were a century apart and while they had different outcomes they had similar causes they were the english and the french revolutions the second was slower a gradual dismantling of the common good a counter revolution instigated by the most heavily invested in generation in history the baby boomers the third the new jacobins the jacobin millennials the young round heads maybe for now they pay taxes to service the elderly king and his elderly elite circles debts are locked out of the housing market and wages that have been stagnant since the 70s are surrounded by under-investment and crumbling infrastructure and are gradually getting angrier you remember [Music] you held your tongue till december but i saw you coming you took her for granted you said she was just some woman [Music] at first glance the english civil war and the glorious revolution of the 17th century don't have much in common with the french revolution at the end of the following century their goals and outcomes were very different but they were both instigated by a general crisis the crisis as most crises do had its roots in money and more specifically in debt but to understand the millennial revolution of the future we have to first go back even further [Music] around 1500 the plague ceased in europe for the first time in hundreds of years mortality declined people lived longer and the population across europe increased in fact throughout this period the population doubled across the world from 1540 to 1640 just before the war england's population rose by 175 percent from just over 2 million to 5 million in a century the population more than doubled london grew from a city of fifty thousand and fifteen hundred to four hundred thousand in sixteen fifty parliamentarian humphrey gilbert complained that england was pestered with people rapid population growth meant two things competition and inflation inflation because the increase in demand for food and resources meant the prices were being driven up and because inheritance traditionally went to the eldest son larger populations meant more children without inheritance competing to hold on to their status one aristocrat in england complained that i have a brother who together with his wife and six small children are supported almost entirely by myself and whose callings and livelihood i must inevitably provide for population growth can under the right conditions be good for society especially if the economy grows with it but in 17th century england food production did not keep pace with the growth in population wages decreased as there was more competition for work while prices continued to rise the king charles the first was in trouble [Music] at the beginning of the 1600s as civil war approached the king was broke the royal finances were in critical shape he'd fought a disastrous war with scottish rebels in which the army was underpaid under-disciplined and unenthusiastic the scots were even welcomed with celebration in some places in northern england the english aristocracy was refusing to pay or underpaying their taxes and some of those taxes like the ship tax were deemed illegal and paid or more often avoided with irritation inflation was having a devastating effect on the royal purse too soldiers became more expensive to feed and equip between 1530 and 1630 the price of paying and supplying each soldier increased by a factor of five charles was desperate he sold land took loans and tried to increase taxes on the aristocracy but the elites found ways to avoid their tax mainly by undervaluing their own land so walter rally said at the time that the incomes recorded were not a hundredth part of our wealth and while many in the country were struggling others were getting richer in 1530 there were 6 300 gentry families in england by 1640 there were over 18 000 one commentator observed that the number of nobility and gentry is greatly overgrown now there is increased a very great number more especially since the beginning of king james whereas in queen elizabeth's time there was but two or three nights in the shire now there is 60. besides many pretended esquires and gentlemen the elites competed for favor for position for business for land but it was a time when fortunes were lost as quickly as they were made many became unhappy that they weren't getting the positions they thought they deserved increased competition meant that rivalries and quarrels were more common all the while inflation continued and the crown's finances deteriorated further the king tried to debase the coinage so that it contained less silver and gold he sold honours and ranks and royal monopolies and more and more he continued to borrow in the 1640s charles was told by his financiers that his loan requests had been rejected forcing him to call parliament the rest is history civil war a king losing his head a brief dictatorship and a lasting parliamentary democracy and constitutional monarchy let's fast forward a bit [Music] [Music] dishing out the devil's wages it's 1946 america is the richest most powerful country on earth the great depression has passed the war is over the economy is booming and the birth rate skyrockets across america and europe between 1946 and 1965 75 million are born increasing the population by half at the same time the gi bill helped soldiers returning from the war to purchase houses and start businesses or take the case of a man like albert falk who goes into his own business after he's discharged if things are a little slow and getting started and he's earning less than a hundred dollars a month then through the gi bill of rights he receives a check each month making up the difference in the fifties eisenhower impressed with the autobahn in germany set about building 50 000 miles of interstate highway only finished in 1991 in 57 in response to the soviets sputnik nasa and what is now darpa were formed the government quadrupled funding for the national science foundation and in 1958 the national defense education act invested money in schools to produce more scientists and engineers college education rose from nine percent to 32 percent in the early 70s lyndon b johnson launched medicare in 1966 as part of his great society the same year that investment in research and development peaked at around six percent of gdp in short a generation was born that became the most heavily invested in in history the economy and the population boomed richard nixon a republican was more left-wing than bill clinton and barack obama noam chomsky called him the last liberal president so in the post-war period we see a population boom similar to 17th century england but what about that inflation and state debts that led to the english civil war [Music] each day as thousands of persons visit the chain stores in their neighborhoods their journey carries them past powerful messages advantageously placed on nearby poster panels as western economies faltered through the 70s baby boomers began to demand cuts ronald reagan and margaret thatcher argued that the tax cuts would pay for themselves as individuals and businesses had more to invest they argued the economy would grow and tax receipts with it so taxes including inheritance and capital gains were slashed banks were deregulated then further deregulated by presidents right up to clinton in the 90s neo-liberalism was the order of the day the idea that tax cuts and deregulation would pay for themselves was explained to dick cheney and donald rumsfeld by economist art lefer over lunch when he scribbled it on a napkin the so-called laffer curve was mocked as being voodoo economics by some the problem was simple to cut taxes in half and collect the same amount the entire economy would have to double in size and while these cuts continued throughout the 80s the 90s and the naughties baby boomers had medicare medicaid retirement education police and social security in general to pay for and the baby boomers were slowly getting older and government debt inevitably continued to rise [Music] every president on coming into office knew this was a problem bush senior even tried to raise taxes after telling the public read my lips no new taxes and was punished by being kicked out of office after one term and still debt continued to grow [Music] but let's rewind in 1600 the plague returned in europe population increases across the continent slowed by 1650 conditions unless you were dead improved food was cheaper around 1700 the plague ceased again and inflation returned in the 18th century france was the richest and most populous country in europe and it continued to grow across the 1700s the economy and the population boomed the populace grew by 30 percent in the 18th century and the economy aided by manufacturing industry and colonialism was strong but while the new capitalist class was doing well the older agricultural sector was struggling with poor harvests grain production was not growing in line with the population inflation meant bread was getting more expensive the peasants were hungry and france had been fighting expensive wars against england in both the american war of independence and the seven years war before that the crown king louis xvi was in desperate need for cash he borrowed sold offices and levied more taxes but bankruptcy was looming a recession in the 70s and 80s was the final straw and in 1789 louis called representatives from around the country the estate general to decide what to do they drew up a list of grievances while hungry peasants continued to get angry in the countryside and the streets of paris finally the third estate the group of merchants businessmen and lawyers rebelled against louis drew up a constitution sided with the parisian mob and soon after like charles the first before him louis lost his head [Music] in both the english and the french revolutions population growth inflation and debt led to a fiscal crisis while the lower classes were hungry the elites were competing for status both periods saw an increase in university enrolments without an increase in elite offices and positions intra-elite conflict resulted from some trying to claw onto their positions while others try to scramble up the social ladder in moments like this ideologies of transformation become more appealing and embittered elites those with new money or education but less likely to find positions in the old hierarchy people like robs pierre and oliver cromwell are likely to find support for their calls from the frustrated and the hungry but let's fast forward back to today in fact let's go a bit further [Music] welcome to 2050. things aren't looking too good every single person on earth has been cancelled baron trump his president this emerging sars covert 58 virus is apparently nothing to get too worried about and a 95 year old jordan peterson has just published his 30th book another 12 rules for life with the another underlined that's 360 rules but there's an even bigger problem demographics in 1960 the proportion of the population in retirement in the us not of working age was around nine percent in 2020 it was up to 20 and now in 2050 it's around 30 europe has lost a quarter of its working age population in 1950 the us had 16.5 workers for every one person not working that's down to 4.6 in 2017 and is on course to drop to 1.9 by the end of the century that means two people working have to support one person not working compared to 16 doing that job in the 1950s the west's aging population means there's more people to look after higher social security bills and rising medical costs all round and no one saved any money for this over 65s could expect to spend around a quarter of a million plus on healthcare throughout the remainder of their lives only 33 percent have this the savings rate has been decreasing for decades between 1950 and 1985 it was around 10 percent in 2020 it's halved it's dropped to 5 so baby boomers in retirement on average are expected to take much more from the social security pot than they ever put in one study has shown that a couple born in 1950 might on average expect around one million dollars from the government in retirement having only paid in about seven hundred thousand dollars in taxes over their working lives in the us in 2017 there were 51 million claiming social security pensions by just 20 35 that's expected to increase to 57 million and while older generations will need more in social security younger families are earning less let's rewind to today median income and wages have been flat for decades since 1970 middle class wages have increased by just six percent low wage workers take home is actually down five percent yet the top earners the 95th percentile has seen a 41 increase in their income in 1966 average weekly take-home pay adjusted for inflation was 770 today it's 720 and millennials in particular are paying for this the unemployment rate at the peak of the recession in 2009 was 10 but for millennials it was 16 in 2017 almost one in five under 34s across europe were in the category that's not in education employment or training older workers with more skills and experience are often kept on at the expense of younger workers and of course this has only been exasperated by the pandemic in 2014 adults aged 18 to 34 were most likely to be living with their parents for the first time in 130 years manufacturing jobs continue to leave the west businesses are investing more in automation than in training new employees and the labor share that's the percent of gdp paid to workers is down from 64 in the 60s to 56 percent today so population is up the economy has been struggling but more and more people are needing financial support in their older age and governments are turning to two experts for advice charles the first and louis xvi financial crisis like the 2008 crash tend to happen when an economy has become too reliant on debt and unable to pay an economic downturn leads to mortgages not being paid which leads to banks not giving out loans which then leads to less mortgages being paid until eventually all the dominoes topple every english monarch from 1500 to 1640 amassed larger and larger debts and eventually simply could not pay for their wars thomas jefferson wrote that no generation can contract debts larger than maybe paid during the course of its own existence and alexander hamilton wrote that the creation of debt should always be accompanied by the means of extinguishment now here's what the u.s government accounting office said in 2015 increasing numbers of baby boom generation members are becoming eligible for social security retirement benefits and for medicare the ageing of the population and rising health care costs will continue to put upward pressure on spending and absent action to address the growing imbalance between spending and revenue the federal government faces an unstable growth in debt right throughout history the us has run a small surplus on the budget that would only go into deficit to pay for big wars and was quickly paid back after through increased taxation since world war ii in the us government debt slowly came down to its lowest point in the 70s but then is neo-liberal thatcherite and reaganite tax cuts became the norm governments had to borrow to keep their heads above water it increased throughout the 90s dipping a bit in the 2000s and then the 2008 crash happened the debt balance sheet has expanded from 5 trillion in 2000 to 28 trillion today when asked about starving the beast of government in 1985 a white house reagan official admitted that we didn't starve the beast it's still eating quite well by feeding off future generations and here's the rub if that wasn't enough governments hide how much this is a problem they account for actual debt but not for generational debt not debt that's going to be owed down the line in payments as people get older if you include social security medicare highway repairs and other payments like this economist lawrence kotlikov argues that the true fiscal gap is 206 trillion dollars 10 times larger than the official figures he says our government is dead broke the governmental ponzi scheme he writes works like this the politicians take money eg social security contributions from young people give it to old people in cash or health care benefits but keep the young happy by promising them large benefits when they're old historian and sociologist of revolutions jack goldstone has remarked that it's quite astonishing the degree to which the united states today in respect of its state finances and its elites attitudes is following the path that led early modern states to crises the parallels between u.s fiscal policy in the 1980s and french fiscal policy in the 1770s are startling [Music] ideologies of revolutionary transformation become more likely to be theorized and adopted in contexts like this and it's naive to think that revolutions only occur under conditions of absolute poverty the american revolution for example was not motivated by poverty of course it's difficult and contentious working out what form transformation could take for the simple reason that we don't know what works and what doesn't work until something is tried the french revolution was very bloody in part because no one knew what they were doing any problem has more radical solutions and more pragmatic solutions and personally i believe that if you don't know what's going to work you should keep an open mind and have an experimental attitude but for the sake of not making this video about everything let's look briefly at some more practical solutions that seem to be relevant to the problem at hand we'll look at investment housing and taxation the french army was accused of police brutality the godless revolutionaries were depicted as liberators the insurrection was described as a popular and spontaneous uprising of the people nice house isn't it sure it's nice if i'm lucky after i get out in five or ten years i'll have one pretty much like well george tobin just driving in didn't have to wait any five or ten years as soon as he got out of the navy he applied to the director of finance veterans administration in washington they were able to help him get a loan by guaranteeing it up to two thousand dollars [Music] first what made the baby boomers so wealthy today millennials hold only around five percent of wealth in the us baby boomers hold over 44 and when baby boomers were millennials average age now in 1989 they held 21 as we've seen the baby boomer generation was the most heavily invested in in history but they benefited from that investment as a generation and closed the gates behind them let's look at a few investments infrastructure business and children investment in infrastructure has fallen from around four percent in the 1960s to 2.5 percent today although economist larry summers has warned that in both the us and europe that number is functionally zero adjusting for money spent on wear and tear american infrastructure has been rated d plus over all and the last report in 2013 stated that it was in poor to fair condition and mostly below standard america has no high-speed trains airports and mass transit are both rated d2 in the uk the story is roughly the same infrastructure investment remains at a historic low consistent investment in roads railways internet and airports etc is key the thing that gets in the way is not the economics but the political will similarly businesses are investing in capital technology and automation but not in workers or training investment was central to the productivity boom of the 50s and 60s gross investment grew on average from 3.6 in the 50s to 6.5 in the 60s it lost steam again in the 70s and has decreased since then political policy should be designed to incentivize investment in workers labor and training as much as automation another thing we might invest in more children which would grow up to help pay for the growing cohort of retirees this could take the form of things like increased child care support or longer leave for new parents but i hear you ask what about that debt the biggest problem doesn't this cost well while social security the biggest fiscal problem is costly investments as long as they're smart yield tax returns in the long term unlike lower taxes surprise surprise the academic literature and research on this is quite clear a one dollar investment in infrastructure generates between 1.40 and 1.80 over time and when it comes to social security many economists now advocate for generational accounting so that one cohort doesn't have to pay disproportionately for another this would mean benefits for retirees are linked to how much money their generation or year group paid in and if people are healthier and living longer and younger people are having to pay without any increase in their own salaries then the retirement age might have to creep up a bit too and this isn't a moral issue necessarily it's not a we shouldn't have to pay for you i think there would be an argument for that if the economy was improving but it's about simple accounting a lack of funds and debt and there's another area where millennials are disadvantaged housing at the beginning of the 20th century home ownership was around 47 in the u.s that number grew to 55 in 1950 and up to 63 percent in 1970. the 1946 gi bill subsidized mortgages for the baby boomers parents with no down payment but by the 70s ownership started declining again so by the 90s governments throughout the west were loosening fiscal rules to try and get more people on the property ladder but this led to the rise of risky subprime loans and the 2008 crash in the aftermath governments were focused on saving homes already owned the amount of new mortgages mostly to millennials declined the value of already existing homes increased and millennials have been priced out of the market here in the uk scarcity is a real problem driving prices up further the population is increasing faster than homes are being built and prices are rising while wages are stagnating green belts stop people building in and around cities and nimbys not in my backyard which are usually baby boomers are people who protest and put a halt to new development because they don't want building around their houses of course this benefits pre-existing homeowners whose property values have skyrocketed and the irony is that even more wealth is flowing from the skinned millennials to baby boomers in rents increasing housing stock at the same rate as the growth in population is clearly essential to generational fairness but while the ability to afford a mortgage is affected by the supply side the demand for housing is just as affected by the wider economy those stagnant incomes and investment which leads us to the elephant in the room taxes it's pretty simple more older people needing care means higher taxes investment means higher taxes but it is a complicated topic further than that and one that needs an entire video increasing the higher tax rate and implementing wealth taxes have their problems admittedly capital flights being won where companies and individuals relocate to other countries to avoid paying taxes but there are plenty of solutions when you look one influential paper by nobel laureate peter diamond has argued that the top rate should be around 73 percent and french economist thomas piketty and many others insist a wealth tax of two percent is needed on wealth held in value of over 10 million dollars that's houses cars stocks boats planes whatever but what's more crucial than the economics is the political will it has to be argued for effectively supported by a coalition of political groups and accepted culturally but the tide is turning a wealth tax is a policy that has bipartisan support in america 53 percent of republicans now support one as well as 77 of democrats and over the years with the census and other types of data therefore we get a picture of how the american natives how that living changes and in a word really how the american dream some evolved argued that revolutions are unpredictable but as we've seen there are some factors that serve as warning signs goldstone study doesn't just look at the english and french cases but state crises in the ottoman empire china and japan too he says the warning signs are quite clear population bombs state reliance on debt and potential new elites graduates for example without positions for them to fill to many including goldstone we're alarmingly close to situations that have preceded state breakdown in the past but the difference is we know more about ourselves now we have the potential to change course before things deteriorate further there's a growing consensus on both sides of the political isle neoliberalism has failed [Music] and as we've seen history teaches us that if peaceful social solutions designed to mitigate against excess and injustice aren't implemented then more chaotic violent and revolutionary solutions will inevitably follow you remember you held your tongue till december but i saw you coming you took her for granted you said she was just some woman you met in a club [Music] instead it was loud [Music] who's in your heart and now you're sleeping

Channel: Then & Now

Views: 98,419

Keywords: revolutions, baby boomers, millennials, generational debt, jack goldstone, neoliberalism, investment, infrastructure, crises

Id: t58sAOmqZAk

Length: 39min 6sec (2346 seconds)

Published: Fri May 28 2021