In order to guarantee intergenerational justice to prevail, we as a society should “keep” a certain amount of accumulated debt and pass it on to future generations.
This sounds rather counter-intuitive, doesn’t it? In public debate debt of whatever kind, but public debt especially, is mostly seen as something bad and running counter the ideal of intergenerational justice. In a recent discussion I took part in, however, this counter-intuitive argument has been made by one of my colleagues (whom I esteem for his ethical and scientific intuitions). I initially had rejected it, but after thinking about it for a while, I came to the conclusion that he might be right. Let me explain why.
Intergenerational justice, though often set equal with the idea of intergenerational contract, is mostly perceived very unidirectionally: we should leave to our descendants a world at least as good in shape as what we had got from our antecessors. While this is an important aspect, this is not yet intergenerational justice. Justice, at least in Western cultures, is identified with some kind of (at least hypothetic) reciprocity. But if we leave to our descendants a world in good shape, what can they do for us? Let me make this more concrete: to fulfil our part of the intergenerational contract, we have to make investments in what you may broadly call infrastructure (ranging from physical infrastructure such as roads, to more intangible things such as knowledge, to intact ecosystems). These investments are costly. While it may be argued that many of them benefit ourselves, this does not change the fact that they benefit our grand-children, too, and in some cases we make sacrifices, as seen from a narrow self-interested perspective, to make the world better for them. Indeed, this has been one of the major drivers of human development for centuries–the wish to make some sacrifices which will benefit our descendants. As you might have noticed, however, this is still a unidirectional story: we are making sacrifices for our descendants. But what about reciprocity? What may they do for us? The idea of intergenerational contract has been most influential in debates on social security systems–traditionally, children took care of their elderly parents, “repaying” the debt of education (whether it be school education or just more informal aspects of what children learn from their parents). Today, in many countries social security systems are constructed in such a way that the retirees’ pensions are effectively paid by the generation of their children and grand-children. But what about the future generations that do not overlap with ours? We make investments for their benefit, too, for example when protecting nature or tackling climate change. How should they “pay us back”? One way might be that they pay back the debt we incured to invest in the infrastructure they benefit from. This would mean that a carried-along public debt burden is not necessarily something (entirely) bad.
Of course, this argumentation is only valid under some idealized conditions: that we really know which investments will benefit our descendants; that we as society carry along only as much debt as the value of the infrastructure is for our descendants minus the benefits we ourselves have enjoyed; that we make efficient investments and do not waste resources. In the end, the claim here is not that it is OK to live “on tick” as society and that we do not have the moral obligation to decrease debt burdens. Rather, the argument as presented here is that intergenerational justice does not mean that we are prohibited from incuring debt–indeed, the conclusion is the opposite, that intergenerational justice makes it necessary to accumulate (some) public debt.
I am looking forward to any dissenting voices, since I find the argument very counter-intuitive and despite my disability to find meaningful counter-arguments I don’t think that there are none.
[UPDATE] It has been pointed out to me that what we should count against the “intergenerationally just” debt burden, too, are the “disinvestments” we make by, e.g., degrading the quality of natural capital. This is, of course, an important point to be added.
Thanks to B.K. for inspiration.