Niall Ferguson, the inter-generational compact and environmentalism

British readers of earthblog21 who listen to BBC Radio 4 have probably heard about the Reith Lectures. The BBC lecture series, held since 1948 and named after the corporation’s first director-general John Reith, brings international thinkers to a wider British audience.

Financial historian Niall Ferguson is delivering the 2012 Reith lecture series

Last year, Aung San Suu Kyi and former director of MI5 Eliza Mannigham-Buller spoke about freedom. In 2012, Professor Niall Ferguson, the prolific financial historian who has reconciled popular interest with intellectual authority in his dozen books and numerous documentaries, is delivering a series of five lectures entitled ‘The Rule of Law and its Enemies’. The series can be listened to here: http://www.bbc.co.uk/programmes/b00729d9

Broadcast on Tuesday 19 June but recorded two weeks earlier, Prof Ferguson gave the first lecture, ‘The Human Hive’, at the LSE. Prof Ferguson starts by explaining the thread running through the series, an exploration of the role of institutions in the great divergence between the West and the ‘Rest’ over the last 500 years, but also the degradation of these institutions and the subsequent catch up of Tiger economies like China and Brazil. Then, Prof Ferguson jumps into his first topic: the links between contemporary economic management (or mismanagement depending on your geographical location at present) and representative government.

Summarised briefly, Prof Ferguson suggests that societies with the right institutions can flourish even if the people within them act badly. He suggests that, while critics of Western democracy currently cite huge government debt to GDP ratios as the explanation of failure (think 153% in Greece, 123% in Italy and 113 in Ireland), the real problem is that our system of representative democracy means that the public debt faced by today’s population has been created to pay for the costs of a previous generation. Today’s voters will not make sensible decisions for the long term prosperity of a society. This is particularly apparent in the outcry against cuts today.

The crux of Prof Ferguson’s thesis is that there needs to be an assertion of a social contract first proposed by Edmund Burke in 1790. In Reflections on the Revolution in France, Burke said:

“Society is indeed a contract. The state … is … a partnership not only between those who are living, but between those who are living, those who are dead, and those who are to be born.”

Prof Ferguson uses Edmund Burke’s notion of a social contract between generations

The practical solution in the economic sphere would be a restriction of a government’s ability to engage in deficit spending to a certain percentage. However, as Prof Ferguson points out, European states weren’t keen to follow the German example in our recent times of crisis, so diluted their restrictions. The Ferguson solution: “heroic leadership” must arrive in order to make the Western world face reality and sort out their public finances so that they create a sustainable legacy.

Prof Ferguson makes a strong and eloquent argument. The power of institutions in shaping history and, more specifically historical divergence, is a scintillating and convincing explanation.  What I am particularly drawn to is his concept of a social contract between generations. We desperately need a long term perspective in our political class, although the spectre of looming elections leads inevitably to short-termism. Perhaps some form of restriction of government power is the necessary solution, particularly when it comes to our balance sheets.

However, that’s not to say all Prof Ferguson’s views rung sweetly in my ears. He suggests rather than constructing this as some ideological notion of ‘tradition’ or ‘civic virtue’, institutions are needed to create this contract between generations. Yet, I feel that without some popular understanding of the role such restrictive laws might play, the public would be left bitterly aggrieved. If a government was to introduce such inter-generational laws then, ironically, the voting population of the day would have to give it full assent. Not giving their assent, is an example of what Prof Ferguson would call the people “misbehaving”.

Prof Ferguson is unashamedly conservative in his political and economic beliefs. As a “Scottish Enlightenment guy” in his own words, he believes that “man is not going to be made virtuous by any revolution or code of laws.” Thus, laws are necessary to prevent humans harming themselves. Despite liking the concept of inter-generational legal changes on first listening, the more I mulled it over, the less I found it appreciated the values of individuals. This discussion seems very abstract and drawn away from real human beings.

As an environmentalist I understand the need for drastic change to society that doesn’t seem to feature highly in the public consciousness. Trying to convince people on that issue is as difficult as it is to encourage those same people to embrace austerity measures. In fact, I was listening to the entire lecture waiting for the phrase “environmental degradation” to pop up. However, it took a question from former Australian Environment Minister Ros Kelly to make the link between the idea of an inter-generational economic contract and an environmental one. Carbon taxes, limits on deforestation or air travel caps are the environmental derivative from Ferguson’s formula.

Are we merely irrational worker bees that need to be restrained from short-termist democracy?

It’s a very tempting concept, trying to restore some kind of link between the effects of present day governance on the future. The principle is a good one. Rather, it is an excellent one. Long termism is essential, particularly when it comes to the environment. We might ruin our economy if change doesn’t happen, but if we show equal inertia when it comes to the environment, then earth civilisation will quite simply come to a catastrophic end.

However, this view of human beings as dangerous, troublesome individuals who must be constrained by laws, suggested by Prof Ferguson’s ‘worker bees in the hive’ model, removes any sense of human virtue. Even if it’s the hardest challenge of education that the world has ever faced, creating long-termist views amongst the population, either on the economy or on the environment, is the best solution for free individuals on this planet.

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