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Debt is not just a financial indicator. It reflects the depletion of social as well as financial resources. Borrowing creates political and social as well as financial obligations. The crisis has greatly increased the degree of indebtedness of most of the governments of the leading economies; but there is a dual debt burden, and the more onerous part is the hidden part created by government promises to pay pensions and health care and other benefits to their aging and declining populations. The promises can’t be kept. The only question is how they will be broken, given the enormous political strains involved in fundamentally changing what people will get from their governments. The role of the government has been to raise the living standards of their current aging populations by borrowing the money rather than paying for it from current tax revenues. Demographic change makes that impossible to continue.

So far this book has identified two dimensions of unsustainability—the depletion of environmental resources, and the vast borrowing from posterity implied by current and prospective levels of debt. Both imply that current and recent generations in the rich economies have been living beyond their means and will need to correct that by saving more and consuming less. A lack of due attention to the future, the failure to exercise proper husbandry, is the other side of the coin to excessive consumption. The Economics of Enough require that the future should get more attention now. The following chapters will explore two further ways in which the way we live now has damaged prospects for the future, namely, the collapse of trust and the increase in inequality in at least some societies.

FOUR Fairness

Do people have an innate sense of fairness? Or are we intrinsically selfish and bound to come into conflict with each other? In the past philosophers have disagreed. Thomas Hobbes was famously pessimistic, holding that our self-interest was bound to lead to a “war of all against all” in the absence of a strong state to enforce peace. Jean-Jacques Rousseau disagreed with this dark vision, set out a few decades earlier by Hobbes in Leviathan. Rousseau agreed that humans have a drive to self-preservation but also held (in Discourse on the Origin and Basis of Inequality among Men) that a sense of compassion, an aversion to causing pain, is in our nature.1

The philosophical debate continues, but there is now an accumulation of scientific evidence bearing on human nature. In this chapter I’ll describe some of it. On the whole, it indicates (among other things) that a strong and rooted sense of fair play is innate, and important for the way we organize society and the economy. A society that offends its members’ sense of fairness is, in important ways, unsustainable.

One of the main questions I will examine in this chapter is economic inequality and the extent to which the inequality we observe now is compatible with that fundamental sense of fairness. I will also look at the evidence on the sustainability, both political and economic, of current levels of inequality. Perceived unfairness can create a political backlash, which can take various forms. It can also potentially undermine the strength of the economy, both the aggregate growth rate and the prosperity of citizens. There is indeed evidence that in some countries inequality has increased to an unsustainable degree and is corroding society and indeed the economy; these countries include the United States and United Kingdom. The disgust widely felt in these countries about bankers’ bonuses, self-awarded out of tax dollars or pounds, has brought this into sharp focus.

Already some readers might be bristling at these last words. Inequality is a fraught topic. It arouses strong ideological beliefs—it is an issue distinguishing political parties. In the international context, it arouses the passions of antiglobalization campaigners. And because the question is one that does arouse philosophical and political passions,