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By Root 1527 0

the population still working is declining in many countries. Regardless of the specific financial structure, and whether or not pensions and health care are privately or publicly funded, all the people not working at any one time need to be supported by the efforts of those who are working. In every OECD country the aging of the population will inexorably increase government spending because state support of the elderly through one route or another is universal, whether it takes the form of pensions, subsidized health care, or other forms of social care. The generation of people who fought in the Second World War were rightly rewarded for their sacrifices, and these rewards included many publicly provided services. Their children, the baby boom generation, extended those pension and health schemes and are benefiting on a huge scale from them now, as they pass through the age structure of the population like a mouse through a snake. The benefits they are enjoying are being paid for by mounting government debt, some of it acknowledged, but much of it simply implicit in the promises of what services the government will pay for. Those promises will almost certainly be broken.

In some countries, particularly the United States and United Kingdom, the political friction that will undoubtedly be caused by these fiscal pressures will overlay the fractures caused by great and growing inequalities of income and wealth. In both those countries, inequality during the past twenty-five years has increased to levels not seen since the early twentieth century, although the pattern differs in details between the two countries. Some other rich economies have not experienced such a rapid increase in recent decades and yet also have high levels of inequality. There are subtle and complicated differences between countries. But overall, there is a contrast between the postwar era of convergence in incomes due to an emphasis on more equal social and economic outcomes and the early twenty-first-century pattern of more extreme inequality. This has led to a loss of social identification between different groups of people and a weakening of the social ties that make for a healthy society and a dynamic economy.

Whether related to greater inequality or not, there has been a dramatic erosion of trust, or cohesion, “social capital” as it’s sometimes known, in many of the rich countries. The evidence for this takes many forms, which points to it being quite a widespread phenomenon. There is evidence from politics, the downward trend in turnout at elections, or what people say in opinion polls about their view of political institutions. There is evidence from opinion surveys showing declines over time in the status of formerly esteemed institutions, ranging from journalists to the police, local authorities to big businesses. There is also a similar downward trend in the proportion of survey respondents in almost all the rich countries who say that generally speaking they think people can be trusted. Although the picture in terms of actual social outcomes varies greatly between countries—say in crime rates, teen pregnancies, or social mobility—it is a fair generalization to say that people in the West broadly speaking feel decreasingly inclined to trust their fellow citizens.

And then, of course, there’s the small matter of climate change and the debate about the extent to which every economy needs to adapt to avert catastrophic changes in the weather and environment. In this book I can only touch on some aspects of the debate about climate change, which is growing increasingly ill-tempered and controversial. Some people, growing in numbers, organization, and confidence, deny that man-made climate change is occurring at all. Others debate the extent to which the threat of climate change means we should curtail our lifestyles or invest in new energy technologies. This isn’t a book about the environment and climate so I try to avoid specific conclusions about environmental controversies. Different readers will bring their own opinions, but I think all would