What can people do to engage with this issue? What people can do is obviously buy my book.
Once they’ve done that they have to read it. And once they’ve read it then they have
to act on my clear instructions. Niall, you’re a renowned historian and your
latest work examines the great degeneration of institutions in the west. Can you explain
the underlying causes? I see it as part of a much bigger story, which
I’m going to call the breach of contract between the generations. This is an idea that
goes all the way back to the great theorist Edmund Burke who said that the real social
contract is between the dead, the living, and the unborn, between the generations. And
what we’ve seen in our time is a huge breach of that contract, on both sides of the Atlantic,
so that the middle aged and the elderly have set things up to live at the expense of the
young and, indeed, the unborn. And one manifestation of this great breach of contract is very high
youth unemployment. You have just graduated from high school or from college and you can’t
get a job. You do have a right to an answer to the question, why not? And most of the
answers that you’re getting are incredibly complex and go something like this: Well,
there was a problem of excess leverage on bank balance sheets and that required enormous
bailouts from governments, which created a problem of public insolvency, which led to
a crisis of competence in the markets, which caused bond spreads to blow out, etcetera,
etcetera, etcetera. And before I’ve got to sentence two, the average young person
has completely tuned out. We need to engage young people in the democratic process and
get them interested, because I do fear that the alternative could turn ugly very quickly.
There’s a lot of anger out there, there’s a lot of frustration. And one minute people
are bored and apathetic, the next minute they’re in the streets burning cars. We’re seeing
that already in some European cities. It’s really, really urgent that we change the conversation
in such a way that young people start to listen instead of just assuming, “Ah, this doesn’t
apply to me. This is all bullshit.” I think this is a matter of political leadership and
there’s been a huge failure of leadership in this respect, but we need to start talking
in language that young people understand. And starting to talk not all the time in this
financial mumbo jumbo, but in terms of fairness, in terms of opportunity, in terms of education
and the skills that you’re gonna need. Some of this unemployment that we’re seeing today
is not just the result of the financial crisis, it’s the result of fundamental structural
changes in the world economy. Hey, guess what? For every 19 year old in Europe, there are
about 100 19 year olds in East Asia working twice as hard, prepared to accept half the
pay for the same job. That’s the big difference between this generation of teenagers and my
generation. It’s tough out there and you cannot expect a job for life without serious
study and serious work. So we’ve got to start talking in that language. I think anybody
can understand that. Do not expect some miracle economic policy to suddenly create a job for
you. You are gonna have to find that opportunity for yourself, you’re gonna have to work
hard for it. But my message is also to politicians, and that is to get real and stop talking in
language that nobody can listen to or understands. It seems to me a lot of the public debate
that goes on in the media and in the parliaments misses the point. We’re debating the wrong
things. We’re actually debating the symptoms rather than the underlying problems that cause
them. Until we start talking about what’s really wrong in the Western world, we’re
never gonna fix it. Solution number one: let’s try and account for public finances honestly.
Let’s do away with bogus measures of debt to gross domestic product. Let’s have a
balance sheet for government and let’s work out whether we’re achieving intergenerational
equity, fairness. Number two: let’s strive for simplicity in regulation. Let’s make
the tax code simple to understand. Let’s make the forms shorter to fill out. Number
three: let’s apply a break to the lawyers to, particularly in the United States, have
become a second kind of bureaucracy, a kind of privatized bureaucracy collecting rents
from those of us who are trying to create wealth and jobs. Let’s start solving problems
the way we used to solve them, through voluntary associations, setting up our own organizations,
and let’s stop sitting around waiting for government to fix the problem because, as
I said, government often is the problem. The things that are causing us to grow less rapidly,
the things that are slowing us down, the things that are destroying employment in the west,
those are quite separate processes. I’m glad that Chinese people are getting better
off. I’m glad that millions of people are being pulled out of poverty. What worries
me is the way in which we in Europe and in North America are undermining our own societies
and economies, allowing our institutions to degenerate. Watching the economies and societies
of the western world deteriorate is something that makes me angry, and the idea of the great
degeneration is to try and do something about that. It’s a wake up call. Let’s realize
what’s going wrong and why our institutions are degenerating.