I recently wrote about the board game Descent, saying that I wouldn't buy it, because it is too expensive for me. But I predicted that the game is important, because it tests the market acceptability of a $175 board game outside of crowdfunding. Since then, I have seen several videos on YouTube from board game channels discussing the high price of Descent and some Kickstarter games. And in one of them, Alex of BoardGameCo mentions that 78% of Americans live paycheck to paycheck (and that was from data before the pandemic).

In the context of my work, and with me being part of the Boomer generation, I have also been reading up and watching videos on generational conflict. Millenials think that they have it much worse than Boomers, and they believe that the Boomer generation deliberately went out of their way to screw them. Looking at various economic data, it is obvious that in many respects Millenials *do* have it economically much worse than Boomers. But while Boomers might occasionally give well-meant but not very relevant comments to Millenials about success being a consequence of life choices and values, the idea of a generational conspiracy against the younger generation is pretty absurd. If you study human behavior, one recurring psychological trait of humans is that they go out of their way to make life better for their children. Not that they always do a very good job, see for example climate change. But it is extremely unlikely to the point of ridicule that a whole generation joined in a conspiracy to make life for their children economically worse.

On an individual level, I believe that your economic success comes from a mixture of luck, economic circumstances, and life choices. If you take a whole population, the influence of luck and life choices becomes statistical noise, and only the economic circumstances remain. If 78% of Americans live paycheck to paycheck, it basically means that the whole economic system is rigged against what Marx would have called the proletariat, the social class of wage-earners. A large part of the inequality comes from the different tax treatment of wages and capital gains, heavily favoring people living from capital income. Thus the famous story that Warren Buffet pays a lower tax rate than his secretary. Or, as he says: "There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.".

Now obviously there is some correlation between age and wealth, older people are richer than younger people, and increasingly so. But there are a lot of older people that are poor. And as easy it is to make fun of the hippy generation 50 years later, at least they would have correctly identified the problem as one of class warfare. The identity politics, including generational identity politics, of the last decades are mostly a distraction from that. Basically the economic circumstances that were kicked off in the 80's by the Reagan/Thatcher power couple, with less regulation and more globalisation, created winners and losers. And the so-called "knowledge workers" ended up on the side of the winners. Which was a bit of a moral problem for them, because they were leftist intellectuals. So the left abandoned class warfare, and replaced the struggle for better economic conditions for wage-earners by identity politics. You don't protest to "tax the rich" if you *are* comparatively rich.

I think that the old school left politics are superior: If we taxed capital gains as much as wages, and gave workers a fairer share of the wealth they help create, a lot of of the identity-based social problems would be solved at the same time. Better economic conditions for low-income wage-earners would help black families far more than some well-off white intellectual carrying a "Black Lives Matter" placard. That isn't communism (which obviously didn't work). Nobody should want to turn the USA into communist Russia. But we should want to turn the USA (and everywhere else) into a Scandinavian country. Because it has been shown that their economic system works, and makes people much happier.

- posted by Tobold @ 9:11 AM Permanent Link