Not Unmindful of the Future Address to the Ninth Annual Institute for Honor Symposium, April 29, 2010
Several years ago in the early 1990's when I was serving as faculty member in our Politics Department we welcomed a visitor to our campus, the recently retired Minnesota congressman Bill Frenzel. Politicians on both sides of the aisle respected and admired Frenzel, a fiscally conservative Republican who saw the world in shades of gray rather than black and white. During his visit, we had a conversation I will never forget. Discussing the paralysis that even then seemed to afflict our political system he revealed this closely held secret: "If you could get any representative behind closed doors and promise never to reveal what was said, almost to a person each would agree that the single most effective and desirable public policy in this day and age would be a 50 cent a gallon gasoline tax."
But of course, he confessed, the policy would never pass, despite what he and others knew would be the enormous beneficial impacts, ranging from deficit reduction, to reduced pollution, to less reliance on Middle Eastern authoritarian and terrorist-supporting states, to the incentives it would create for technological innovation-not to mention the fundamental argument from economists that so-called "externalities" need correction to achieve overall efficiency in the allocation of goods and services.
The reason it would never pass is that the benefits of such a policy would be almost entirely in the future while the costs would be concentrated among those now living. Our political system was incapable of dealing with problems if it meant sacrifice today and benefits later on, even when those future benefits greatly exceeded the present costs. What was entirely rational from an economic and policy standpoint was entirely nonrational from a political standpoint.
I mention the Frenzel conversation not to make a case for the 50-cent gasoline tax. The case I want to make is more general, more difficult, more worrisome, and certainly more controversial since it calls into question some of our assumptions about our political system and its institutions. I truly believe we are in the midst of a growing challenge to the capacity of our political system to address the most significant policy challenges of our day. Through technological advances and through the growing sophistication of our financial instruments, those of us living today can have a much greater impact, for better or worse, on the future than our ancestors did. The consequences of our actions have longer time horizons; the stakes are higher. But alongside this change is unchanging human nature, which drives us to capture benefits for ourselves and transfer the costs to others. Future generations are easy targets. And our political structures, far from being a corrective, feed the tendency.
The only way out, or at least the way I want to outline this afternoon, is to confront head on the topic of this symposium: What do we owe to future generations? The verb is important. "Owe" implies an obligation, a duty, which further implies an ethical question, which further implies an ethical answer or at least an ethical analysis. The puzzle of what we owe to future generations is not new, and I will later call upon some writers who have provided a foundation for us. But what was once a question on the margins of political, ethical, and moral thought is now moving to the center. I want to give it a hard push.
One last introductory comment. A few years ago, I stumbled across a book on the history of the Renaissance. It's not my field, and John Hale, the author, although richly famous among scholars of European history, was unknown to me. But his book was a goldmine. One of the lessons I tucked away was an understanding of how civility arose as a virtue in modern society. As commerce and trade increased across the continent of Europe and beyond, citizens of one nation-state came into contact with citizens of other nation-states. There were no laws to govern the transactions and no institutions to facilitate them. The relationships were personal and required instead a level of trust, and that trust was engendered by a heightened sense of civility. The more civil you were, the easier to do business with others and gain their trust.
In other words, alongside the development of social and political institutions was the development of a particular virtue. This afternoon I want to argue for thinking of our present circumstances in a similar way. As our political and economic institutions evolve, how do we also develop a heightened sensitivity to the idea of intergenerational justice?
Chapter One: Our Standard Theory
I hope all of you will forgive me for beginning with a story from the Ruscio family annals. I hope my wife will forgive me for this particular story.
Back when Kim and I could still be considered a young married couple, we decided it was time to buy our first car together. Of course, this was also a chance to prove to my wife she had married a shrewd and crafty husband who could handle the challenges of the economic marketplace. I still remember the sticker price on this brand new car--$8,800-which is an indication of how far we have come from being a young married couple. On the way to the dealership, to calm her financial worries about such a staggering commitment, I assured her we could afford $8,400, and that's what we would get the car for.
So it comes down to the moment we all know, when she and I sit at the desk across from the salesman for the hard negotiation, this in the pre-internet day of far less information on invoices and MSRP's. To pre-empt him, I declared he "could put me in this car today for $8000," and I had a check in my pocket for that amount. My wife turned to me and said, "No, you said $8400."
In the end, perhaps out of pity, the salesman, after the usual back room pretend haggling with the sales manager, let us have it for $8400, along with floor mats at no charge.
The moral of the story of this. Apart from the mild blow to my ego, we left the dealership happy with our purchase, and the dealer, I am quite sure, was happy with the sale. (So happy he may still be laughing.) This was a mutually beneficial transaction with everyone acting out of self-interest-well at least two out of three--and with no trust or altruism or virtue involved in any direct way. In other words, many good things happen in society when individuals pursue their self-interest.
Such a depiction of how things get done in society-how micro decisions based on self-interest lead to desirable macro outcomes in the distribution of goods and services-has a lot of interesting theory behind it. None has proven more entertaining than Mandeville's 1705 Fable of the Bees, a classic of the Enlightenment period. In verse, he wrote metaphorically of a hive of bees, each individual playing its own selfish role, blissfully unaware that it came together in a perfectly functioning large system. Indeed the existence of the system depended upon the aggressiveness of individuals. In his words:
Thus every part was full of vice
Yet the whole mass a paradise...
The root of evil Avarice
That damn'd ill-natur'd baneful Vice
Was a slave to prodigality
That noble sin; whilst luxury
Emply'd a million of the poor
And odious pride a million more
Envy it self, and Vanity
Were Ministers of Industry....
Then leave complaints: Fools only strive
To make a great an honest hive
T' enjoy the worlds' conveniences
Be famed in war, yet live in ease
Without great vices, is a vain
Eutopia seated in the brain.
Fraud, Luxury, and Pride must live
Whilst we the benefits receive.
The key point for Mandeville is that private vice - - selfishness, fraud, luxury, pride, vanity - - creates public virtue, or as Adam Smith later famously put it:
Give me that which I want, and you shall have this which you want...It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-love. We address ourselves not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.
The beauty of this logic, for it truly is elegant, crept into social and political thinking well beyond that of commerce and economics. Consider James Madison's writings in The Federalist Papers about the newly proposed constitutional system in what was then the not-so-United States. To make the case for a political system that could actually accomplish something, as opposed to the chaos created by the Articles of Confederation, but at the same time to also make the case that the new system would not leave power unchecked, Madison argued that "ambition must be made to counteract ambition."
The problem that government had to solve was the problem of faction. You couldn't destroy factions, unless you wanted to forsake liberty. But neither could you let one of them gain control of government. So the solution was to let factions, evil though they may be and as opposed to the public interest though they may be, thrive and flourish. Fight fire with fire. Or to mix my metaphors, establish a bee hive of interest groups.
The single-minded pursuit of one interest could be checked by other factions equally powerful. We'd engineer our way out of the problem by designing a system of government that turned private vice into public virtue.
But for the moment note the risk of equating the skills of citizenship and politics with the skills of negotiating a car purchase. And note the risk of elevating the pursuit of political self-interest into something not merely accepted but invited. I will come back and rescue Madison and Smith from the box I have too simplistically put them in. Still, there is no denying that our assumptions about our political process rest heavily on a belief that individuals seek in politics what they also seek in the economic marketplace, and that is simply to show a net plus on the scale of personal satisfaction.
James Q. Wilson, a brilliant political scientist of modern times, puts it in these terms. You can handicap any political controversy by analyzing who thinks they are going to gain and who thinks they might lose. The incentive for any elected official is to highlight the benefits for his constituents while hiding or transferring the costs to those he does not represent. In a perfectly functioning system that works just fine because those who might bear the costs will have their own representative to fight the same fight on their behalf. Presumably the public interest will emerge.
But what if the costs can be passed on to those without representatives? Those, for example, who will live in the future?
When the costs and benefits are separated by time, how can our system fairly make the decisions?
Chapter II: The Problems
Tomorrow you will hear from the experts on two problems facing society, so it would be presumptuous and unnecessary for me to delve into the details this afternoon. But it is worth noting that different though they may be in so many ways, the problems of public finance and global climate change share a few key characteristics.
Each involves long time horizons. Each has elements of uncertainty and risk. Each carries the potential for a catastrophic scenario, though the probability of the catastrophic scenario is the subject of much debate. And each has a critically important ethical question lurking in the midst of any analysis of possible solutions: namely, how much risk do we wish to transfer to citizens in the future?
On the public finance problem, the complexities are daunting. There is a spider web of interconnected factors, including the relationship between fiscal and monetary policy, changing demographics, the growing inequality in our country, the structure of a tax code that taxes earnings rather than consumption, and of course the entire debate over the appropriate roles of the market and the state.
But in other ways, the fundamental problem is not hard to grasp. I have two touchstones.
One is the set point for taxes and expenditures. Over the last forty years, through Democratic and Republican control, there has been a remarkably consistent level of taxation and government spending when measured as a percentage of Gross Domestic Product. For taxes, it has hovered around 18%. For spending it has hovered around 21%. The result has been a running annual deficit of around 2.5-3% of GDP, which accumulates each year into a growing national debt.
Troublesome as that is, many experts believe that those set-points are poised for changes, as spending accelerates to meet the entitlements of an aging population and as we work our way out of a serious economic crisis through government intervention.
At the same time, the tax set point seems drifting downward, in part because of the declining revenues resulting from the economic downturn and in part because "temporary" tax breaks have a way of becoming permanent. Although the economic dynamics of the credit bubble that burst upon so many individual consumers recently is different than the dynamics of government borrowing, the psychology of debt is not that much different. We look wistfully back upon a time when the notion of deferred gratification meant something, when we saved rather than borrowed to make our purchases.
A less obvious marker is not the level of spending but the profile of spending. As entitlements and defense spending soak up more and more of government spending the proportion of discretionary spending in other areas declines. Those other areas are ones better thought of as "investments" in the future-areas such as education, transportation, health, research and development. Not only are we saddling future generations with debt. We are spending less on those areas that have payoffs down the road.
On the environmental front, there are again a host of complexities. Unfortunately, the mix of politics and science has not made for a helpful context in which to sort out the complexity. The general tenets of global climate science and the impact of greenhouse gases are not, to be honest, much in question. No pun intended, there is way too much hot air being expelled on questions that matter little for the hard questions that have to be confronted. The magnitude of the impact and the prediction of the consequences are indeed uncertain, which means that policy options should be the subject of legitimate public debate. No public policy question will ever be settled by scientific certainty, or to put it another way, science alone can never provide the answer for public policy. Instead, we must make policy choices on the basis of risk, costs, benefits, and ethics, as well as scientific evidence.
In any case, the problem of climate change has potentially far more consequences for the future than it does for us. In scale, it dwarfs any other set of actions in the history of the planet, with the exception of the threat posed by the use of nuclear weapons. That does not mean that we abandon completely our own present well-being. It does mean, though, that we should not ignore the effects our own actions will visit upon the future.
Before moving to the next chapter in my story, I will note one other characteristic shared by problems with long time horizons, such as global climate change and public finance. And that is the temptation in the midst of uncertainty to find comfort in whatever evidence there may be for the easy way out. On the public finance side, David Stockman, Ronald Reagan's Director of Office of Management and Budget, brought by his own admission a shady character to Washington. Her name was Rosy Scenario, and she has been employed by every administration since then. It's her job to construct a plausible story about the future that doesn't sound so bad, and she has proven very good at it. On the global climate front, she is matched by the doubters who look out the window, see record-breaking snowfalls, and conclude that "warming" is a myth perpetuated by alarmist scientists who want to destroy the American way of life. Neither is helpful to robust public debate and deciding among the difficult options confronting us.
Chapter III: Alternative ways of thinking through the ethics of intergenerational justice.
I mentioned before that the question of how to think about our obligations to the future is not new. We have a foundation to build upon. Some of the names will be familiar to you: James Madison, Thomas Jefferson, Edmund Burke. Others will be less familiar.
In 1789 Thomas Jefferson wrote one of his many classic letters to Madison from the comfortable quarters in Paris where he was serving as ambassador. Jefferson was in a typically ruminative mood, no doubt fostered by distance from the immediate problems back in the States. He posed a question for his fellow Virginian. Should we consider the proposition that the earth belongs to the living, and that it is given to them in trust with the stipulation that they pass it on to future generations free of obligations and debt? If the living used up the land or indulged in activity that would require payment later, then the earth would belong to the dead who have, in effect, taken it with them to their graves.
In his letter back to Jefferson, Madison, the more practical politician, accepted the principle but cautioned against applying it too rigidly. After all, to fight the Revolution the colonies took on significant debt, but surely Jefferson could see the advantages the War for Independence brought for those now living. And surely Jefferson was not arguing that every generation could reject, if they wished, the laws and constitutions that others had so painstakingly provided for them. Madison revised the Jeffersonian proposition. He said there was a tacit intergenerational compact based on intergenerational trust. Those now living must acknowledge their own debt to those who came before and accept an obligation to those who will come afterwards.
Though Madison didn't reference Edmund Burke, a Member of the British Parliament also writing around this time, he could have. "Society is a partnership," Burke wrote, "not only between those who are living, but between those who are living, those who are dead, and those who are to be born." The idea of an intergenerational compact flows from Jefferson, the classic liberal, to Burke, the classic conservative. Jefferson erred on the side of letting the current generation decide too much on its own; Burke erred on the side of constraining them too much. Madison, in typical fashion, helped square the circle. The earth belongs to the living, to be sure, but the privilege carries with it a deep understanding of what others have sacrificed in the past and the commensurate obligation among the living to sacrifice in equal proportions for those in the future.
We jump now from the time of the American Founding to recent times. And I will ask you to indulge me as we commit here in public together as consenting adults an act of political philosophy.
John Rawls, recently deceased, may be the most influential political philosopher of modern times. From the wealth of material he left us, I want to pick up one small piece-a thought exercise that is not without criticism but challenges us nonetheless.
Imagine a society before any of the rules or laws have been written and before any of our political or economic institutions have been created. Imagine now that we ask the future members of that society to come together and fashion on a blank slate the rules and institutions that will govern this society. Rawls refers to this as the "original position."
But Rawls went a step further. Imagine, he said, that all of these individuals have no idea what their status will be in the new society once they form it. They may be smart or not-so-smart; tall or short; male or female; black or white; artistic or athletic or none of the above. Rawls calls this the "veil of ignorance." So, in this original position and under the constraint of the veil of ignorance, what would the laws look like? His conclusion, again not without its critics, is that the rules, laws and institutions would be designed to ensure, first and foremost, a system of justice as fairness.
So let us imagine even further, as Rawls also did in his later writings, that one of the veils of ignorance is not knowing which generation you would be in when the society is formed. You might be in the current generation; you might be in a much later generation. How then would you write the rules of intergenerational fairness? Rawls' answer is something he called a "just savings" principle. But he fell back into the safe confines of theory, recognizing that the principle made sense but its enactment and its specifications were much harder to define.
For our purposes today, however, let's consider intergenerational fairness another arrow in our quiver; and let's thank Rawls for helping us find a way to consider this question not as if we were immersed in the current debate with our own particular interests to defend but as detached observers seeking principles of fairness without respect to our immediate self-interest.
One more arrow for our quiver. This is the concept of "moral constituents." Amy Gutmann and Dennis Thompson, two other contemporary political theorists, are my sources. They begin with some truisms for living a democratic life. One is that disagreement is inevitable. It is inevitable because free people do not always agree on values and do not always agree on how to translate values into public policy decisions.
Another is that in the midst of this disagreement we have to rely on elected representatives to help us resolve those differences. Practically, we have to grant them some latitude to maneuver in the crucible of politics to deliberate, bargain, persuade, compromise, and decide. In the end, though, we hold them accountable. We legitimately insist upon explanations for why they have voted a certain way.
But one problem with all this is when the actions of one set of constituents-and the decisions of elected representatives-affect others not part of the jurisdiction. Must representatives also explain their decisions to people who do not have the ability to hold them accountable but who are directly affected by their decisions? On the intergenerational question, when the policies of today have future impacts, one test for a representative is to imagine how he would justify a decision to the descendants of his current constituents. They become "moral constituents" entitled to some consideration in our decisions.
My purpose in introducing these ways of thinking about intergenerational policy was not to create a unifying theory. Rather, I want first and foremost to give you food for thought-ways of thinking about intergenerational trust and obligations. But I will draw one preliminary conclusion.
The usual political calculus cannot resolve the problems of policy questions with long time horizons, where the benefits and costs are separated by time. Private vice and public virtue have a different relationship for these kinds of problems.
And less we think this a completely far-fetched or even radical notion, let me fulfill my promise of rescuing Madison and Adam Smith from the unfair caricature I imposed upon them earlier. In the same set of Federalist Papers where Madison argued that ambition must be made to counteract ambition, he also wrote a few pages later, "As there is a degree of depravity in mankind which requires a certain degree of circumspection and distrust, so there are other qualities in human nature which justify a certain portion of esteem and confidence. Republican government presupposes the existence of these qualities in a higher degree than any other form."
And Adam Smith of "invisible hand" fame, later wrote, "To feel much for others and little for ourselves; to restrain our selfishness and exercise our benevolent affections, constitute the perfection of human nature."
Far from despairing over the human prospect, Madison and Smith were well aware of the better angels of our nature, and optimistic that we, as individuals, had the capacity to understand the meaning of a public interest as well as a private interest. The ethics of duty, the principle of self-sacrifice, and the language of obligation will have to intrude upon our decision-making more forcefully than before. Just as the rise of civility helped us through the social, political, and economic transformations of an earlier age, so too will we have to craft an ethic of intergenerational justice to get us through this one, unless the legacy we wish to leave is that the earth belongs to the dead.
Chapter Four: Washington and Lee
To this point, I have yet to mention Washington and Lee--the University--or Washington and Lee--the individuals; nor have I ventured to make the case why we, more so than any other institution of higher education, are best positioned to lead this discussion.
In our society today, we don't spend enough time thinking where or how we acquire the values that will guide our lives. But as my fellow political scientists like to say, institutions matter; and the institutions that matter the most are the ones that boldly stand for something. So I conclude this afternoon by bringing us back to our home, this University, and speaking with pride about our past and with hope for our own future.
We are and have always been "not unmindful of the future." Indeed we are engaged at the moment in a beautifully symbolic representation of that institutional ethic. Last year at this time we embarked upon a six-year project to restore and renovate our Colonnade, a national historic landmark. But more than simply a national historic landmark, it is the physical expression of this institution's personality, its architectural features of grace and strength perfectly reflective of our University's character and temperament. It has fallen to us, this generation, to ensure that we pass it on to future generations, preserving its timeless qualities, even as we make it a building equipped and strong for a very different time well beyond our own years.
At Washington and Lee, we have an implicit intergenerational contract. Not a single day goes by that I am not reminded in some profound way of the sacrifice that others have made on our behalf. Washington's own integrity led him to conclude that he could not profit from public service but instead had to turn over his gift of James River Canal stock to the remote and financially strapped Liberty Hall Academy. Inscribed today in the entry of the Lenfest Center are his words, "To promote literature in this rising empire and to encourage the arts, have ever been amongst the warmest wishes of my heart."
Lee's sense of duty that compelled him to accept the presidency of a nearly bankrupt college in lieu of far more lucrative options, driven as he was by the conviction that the future of this country depended upon educated individuals of exceptional character.
Only an institution with a past as rich and complex as ours can truly appreciate what we owe to the future, for we experience daily the inheritance we have been blessed with.
And so I conclude with a call for embracing the obligation that arises from this institution's ethos, history and traditions. Of all people, those of us here at Washington and Lee should be among those who rise up to proclaim this ethical principle: if we benefit from the sacrifice of those who came before us, as we surely do, we must sacrifice equally on behalf of those yet to come. True for us, but true also for the society in which we live and will bequeath who follow in our footsteps.