Intergenerational equity

Based on Wikipedia: Intergenerational equity

The Debt We Leave to Children We'll Never Meet

In ancient Sumeria, around 1796 BC, something remarkable happened: humans invented written debt. And almost immediately, they invented a terrible consequence for those who couldn't pay it back—debt bondage. If you defaulted on a loan, you might work it off with your own labor. But here's where it gets dark: sometimes your children could be enslaved too, condemning entire family lines to perpetual servitude for debts they never agreed to take on.

This is perhaps the oldest example of intergenerational inequity in recorded history.

About a thousand years later, two civilizations independently arrived at the same moral realization: maybe children shouldn't be punished for their parents' decisions. The ancient Hebrews introduced the concept of Jubilee, described in Leviticus, a periodic debt forgiveness that specifically freed children from slavery caused by their parents' financial failures. Around the same time, the Greek lawmaker Solon introduced Seisachtheia—literally "shaking off of burdens"—which accomplished something similar.

These ancient peoples understood something we sometimes forget: the choices of one generation ripple forward in time, landing on the shoulders of people who had no voice in making them.

What Intergenerational Equity Actually Means

At its core, intergenerational equity is simply the idea of fairness between generations. It sounds straightforward, but the implications are vast and tangled.

Think about it in three dimensions.

First, there's fairness between people alive today at different life stages—children, young adults, the middle-aged, and the elderly. Should a twenty-five-year-old and a seventy-five-year-old have access to the same opportunities? Should they pay the same proportion of their income in taxes? Should they have equal political influence?

Second, there's fairness between different generations that have lived through different historical moments. Someone born in 1935 experienced the Great Depression as a child, World War II as a young adult, and the post-war economic boom in their prime working years. Someone born in 1995 grew up after the Cold War, came of age during the Great Recession, and entered adulthood during a pandemic. Are their starting points equivalent? Are their opportunities?

Third—and this is where things get philosophically interesting—there's fairness toward people who don't exist yet. Future generations will inherit whatever world we leave them: our infrastructure, our institutions, our debt, and our depleted or preserved natural resources. They'll never be able to vote on what we decide. They can't negotiate. They can't protest. They're completely at our mercy.

The Seven Generation Principle

The Haudenosaunee Confederacy, often called the Iroquois, had a governing philosophy that addressed this problem directly. Their leaders were instructed to consider the impact of major decisions on the next seven generations. Not the next election cycle. Not the next fiscal quarter. Seven generations—roughly 140 to 175 years into the future.

Imagine making policy with that time horizon. Would you approve a coal plant that provides cheap electricity for forty years but leaves contaminated groundwater for centuries? Would you run up government debt to fund current consumption if you had to picture your great-great-great-great-great-grandchildren dealing with the consequences?

Pope Francis echoed this ancient wisdom in his 2015 encyclical Laudato si', writing that intergenerational solidarity is "not optional, but rather a basic question of justice." He argued that once we start thinking about the world we're leaving to future generations, we see everything differently—the world becomes a gift we received freely and must share with others.

This framing transforms policy debates. Suddenly questions about government spending, environmental regulation, and resource extraction aren't just technical matters for economists. They're moral questions about our obligations to people we'll never meet.

The Case of Social Security

Consider the United States Social Security system, established in 1935. It's what economists call an "unfunded" system—meaning that current workers pay taxes that directly fund current retirees, rather than saving for their own future benefits.

This created an extraordinary windfall for the first generation of recipients. People who retired shortly after the system launched had paid little or nothing into it during their working years, but received full benefits. They got something for almost nothing.

Every subsequent generation has received a worse deal. Professor Michael Doran estimates that Americans born before 1938 receive more in benefits than they paid in taxes, while those born after 1938 get back less than they put in. The math only works if each generation is larger and more prosperous than the last—a demographic assumption that no longer holds in an era of declining birth rates and slowing wage growth.

The long-term insolvency of Social Security, which actuaries have been warning about for decades, essentially means that today's young workers are paying into a system that may not fully pay them back. They're honoring a social contract that earlier generations broke.

Government Debt as Generational Transfer

The growing national debt in many developed countries raises similar questions. When a government borrows money today to fund current spending, future taxpayers must eventually pay it back—through higher taxes, reduced benefits, or the silent tax of inflation.

Economist Stanley Druckenmiller and education reformer Geoffrey Canada have called the large increase in government debt being accumulated by the Baby Boomer generation—those born roughly between 1946 and 1964—"Generational Theft." They argue that current policies systematically transfer wealth from younger people to older people, from the politically weak to the politically powerful.

But not everyone agrees this is straightforwardly unfair.

Nobel laureate Paul Krugman argues that the real intergenerational sin isn't borrowing too much—it's investing too little. If borrowed funds go toward infrastructure, education, and research that make the economy more productive, future generations inherit a stronger foundation along with the debt. What harms them isn't the debt itself but the neglected bridges, underfunded schools, and foregone innovation that we failed to invest in.

This framing flips the conventional wisdom. The question isn't "how much debt are we leaving?" but "what are we getting for it?" A generation that borrows heavily to build useful things may be more responsible than one that borrows nothing but lets infrastructure crumble.

Climate Change: The Ultimate Intergenerational Problem

If government debt is contested territory, climate change is where intergenerational equity becomes impossible to ignore.

The numbers are stark. Research suggests that children born in 2020—sometimes called Generation Alpha—will experience up to seven times as many extreme weather events over their lifetimes as people born in 1960, even under current climate policy pledges. Seven times as many floods, droughts, wildfires, and heat waves. And those pledges may not be kept.

Meanwhile, voters over sixty-five have been identified as "a leading role in driving up greenhouse gas emissions in the past decade." They use more carbon-intensive products like heating and private transportation, express less concern about climate change in surveys, and—crucially—vote at higher rates than younger people. The demographic most insulated from climate consequences has the most political power to shape climate policy.

In 2015, a group of young environmental activists tried to challenge this through the courts in a case called Juliana versus United States. They argued that the federal government had violated their constitutional rights by failing to protect against climate change. Their statement was explicit about the generational dimension: "Youth Plaintiffs represent the youngest living generation, beneficiaries of the public trust."

U.S. District Court Judge Ann Aiken allowed the case to proceed, writing in her opinion: "I have no doubt that the right to a climate system capable of sustaining human life is fundamental to a free and ordered society."

The case has faced years of procedural obstacles, but it raised a profound question: do future generations have rights that current generations can violate? And if so, who enforces them?

Weak Sustainability versus Strong Sustainability

Environmentalists and economists often divide into two camps on these questions.

The "weak sustainability" perspective says that intergenerational equity is achieved if future generations are at least as well off as we are, even if they inherit a degraded environment. Under this view, depleting a forest is fine if we invest the profits in technology or infrastructure that provides equivalent value. We can trade natural resources for human-made capital, as long as the total stock of valuable stuff remains constant or grows.

Some adherents of this view go further, applying what economists call a "discount rate" to future generations' wellbeing. This is the same logic used in finance: a dollar today is worth more than a dollar next year because you can invest today's dollar and earn interest. Applied to people, this means that harms to future generations count for less in our moral calculations than harms to people alive today.

The "strong sustainability" perspective rejects this entirely. Some things—biodiversity, climate stability, uncontaminated aquifers—cannot be substituted. No amount of economic progress can compensate for leaving future generations on an uninhabitable planet. These resources are intrinsically valuable, and we have no right to trade them away.

Environmental scientist Sharon Beder points out a fundamental problem with the weak view: we don't actually know which resources will be irreplaceable. Our ancestors couldn't have predicted that we'd need rare earth elements for smartphones or lithium for electric car batteries. We have no idea what resources future generations will consider essential that we're currently treating as worthless or destroying entirely.

Living Standards Across Generations

Stepping back from debt and environment, there's a simpler question: are people better off than their parents were at the same age?

Researchers distinguish two ways to think about this. The "cross-sectional" view compares people of different ages at the same moment in time. Right now, in this year, how do twenty-year-olds compare to sixty-year-olds in income, wealth, and consumption?

The "cohort" view compares people of different generations at the same point in their lives. How does a thirty-year-old in 2024 compare to a thirty-year-old in 1984?

These perspectives can give opposite answers. Right now, older people might have more wealth than younger people—that's the cross-sectional view. But younger people today might still be better off than older people were at the same age, because the whole society has gotten richer—that's the cohort view.

Australian data illustrates this vividly. Researchers found that people born in 1935 didn't achieve an annual consumption level of 30,000 Australian dollars (in 2009-2010 values) until they were roughly fifty years old. Millennials born in 1995 had achieved that same consumption level by age ten.

This suggests an important complication in intergenerational equity debates. If each generation starts from a higher baseline than the last, maybe it's acceptable for older generations to consume some of that surplus? Maybe the current elderly "earned" their Social Security benefits by building the prosperity that makes young people's starting point so much higher?

But this argument has limits. It assumes continued progress, which isn't guaranteed. And it doesn't address the distribution of gains within generations—some young people today are doing far worse than their parents' generation despite the average improvement.

The Housing Crisis as Generational Conflict

Housing has become ground zero for intergenerational tension in the twenty-first century. In cities across the developed world, young people face housing costs that consume vast portions of their income, while older homeowners sit on assets that have appreciated enormously.

The dynamics are straightforward but politically explosive. Existing homeowners benefit from restrictions on new construction—zoning laws, height limits, historic preservation rules—that constrain supply and drive up the value of existing homes. Young people trying to enter the market face prices inflated by decades of policy decisions they had no voice in.

The housing shortage at the root of the affordability crisis took years to create and would take years to reverse by building enough housing. This has led to measurable pessimism about the future among younger generations, and growing cynicism about politics and even democracy itself. Why participate in a system that seems designed to extract from you for the benefit of people who already have more?

Who Speaks for Future Generations?

If future generations have interests, and those interests can conflict with our own, who advocates for them?

Some countries have experimented with institutional solutions. Wales has a Future Generations Commissioner, a government official specifically tasked with considering the long-term impact of policy decisions. Hungary's constitution includes provisions requiring consideration of future generations in lawmaking. Various philosophers have proposed creating ombudsmen or other representatives for people not yet born.

There's also the question of children's political rights. Legal scholar Adam Benforado argues—provocatively—that giving children more political power than adults might make everyone better off by increasing the salience of long-term issues. Adults think in election cycles and career timelines; children will live with the consequences for decades longer.

Some advocates push for "child impact assessments" of major policies, similar to environmental impact assessments. Before passing a law or approving a project, governments would be required to evaluate how it affects not just current children but the generation they'll raise.

The Endowment Model

Universities and charitable foundations face intergenerational equity questions in miniature. Harvard's endowment, for example, was built over centuries of donations from alumni. The current administration controls billions of dollars accumulated by previous generations for the benefit of future ones.

Economist James Tobin articulated the principle governing such institutions in 1974: "The trustees of endowed institutions are the guardians of the future against the claims of the present. Their task in managing the endowment is to preserve equity among generations."

In practice, this means spending rules. An endowment shouldn't spend more each year than its inflation-adjusted investment returns. Spend too much, and future beneficiaries get less. Spend too little, and current beneficiaries are needlessly deprived. The goal is intergenerational neutrality—treating students in 2024 and 2124 as equally deserving of the endowment's benefits.

Could this model scale to society at large? Could we treat natural resources, public infrastructure, and government finances as a kind of endowment held in trust for all generations? Some economists think so. Others point out that there's no board of trustees for civilization, and democratic governments face relentless pressure to favor present voters over absent future ones.

The Caring Generation

There's one final dimension to intergenerational equity that receives less attention than debt or climate: caregiving.

Professor Steven Wisensale describes the burden on current working-age adults in developed economies, who increasingly must care for more elderly relatives for longer periods. Life expectancy has increased faster than healthy years, meaning more people spend more time requiring assistance. Meanwhile, fertility rates have dropped, meaning fewer children to share that burden.

Women have traditionally provided most family caregiving, but their increased participation in the workforce means that the old model—Mom stays home and tends to Grandma—no longer works for most families. The result is either expensive professional care, inadequate amateur care, or crushing stress on the "sandwich generation" caught between raising children and supporting aging parents.

In countries with weak social safety nets, this also harms the elderly themselves, who may have fewer caretakers than they need. The generations are locked in a kind of mutual dependency that strains everyone when demographic shifts upset the balance.

Justice Across Time

Intergenerational equity forces us to think about justice in ways that are profoundly uncomfortable. We're used to conflicts where both parties can negotiate, where the harmed can protest, where courts can adjudicate. But future generations can do none of these things. They're entirely dependent on our good will.

Perhaps that's why the ancient Hebrews and Greeks independently invented debt forgiveness for children. They recognized that fairness across time requires active effort—that without deliberate intervention, the past will always tyrannize the future.

The Haudenosaunee leaders sitting in council, imagining their descendants seven generations hence, understood this too. They knew that making good decisions for people you'll never meet requires a special kind of moral imagination.

Today, with climate change accelerating, government debt accumulating, housing costs soaring, and demographic shifts straining care systems, we face intergenerational choices more consequential than any in history. The decisions made in the next few decades will shape life on Earth for centuries.

The question isn't whether we'll affect future generations. We will. The question is whether we'll think about them at all—whether we'll exercise the moral imagination to consider their interests alongside our own, or whether we'll take what we want and leave them with whatever remains.