Prolonged economic growth in rapidly developing countries such as China, which has lifted hundreds of millions of people out of poverty, has led people in such countries to believe overwhelmingly that the future will be better than the present.
Their faith that the next generation will fare better than the current one inspires 'future preference' behavior – a high savings rate, a strong work ethic, rising productivity and sacrifices to educate their children – that effectively ensure that the next generation will have a better future. This contrasts with the troubling evidence of a loss of faith in the future in both the US and Europe since the Great Recession. This could prove a passing phenomenon that is a product of a particularly deep economic slump. But if it proves more long lasting, it could have profound implications for the willingness of both Europeans and Americans to engage in 'future preference': to save, to invest and to generally pursue those economic and social activities that could eventually help raise the West out of its torpor.
A belief that the Golden Age is some time in the future, not the past, has long been one of the defining characteristics of modern European and American civilization. This certainty distinguished the West from its Greek and Roman predecessors and from other past civilizations. Faith that future generations will, or can, be better off than the present had long inspired the 'future preference' among people in the West. It led to, as historian Carroll Quigley has written, a 'gospel of saving, of work, and of postponed enjoyment, consumption, and leisure'.
The migration of optimism
Europeans and Americans generally believe that today's children will be worse off than their parents. According to a 2013 survey by the Pew Research Center, the vast majority of the French (90%), British (74%), Italians (73%), Spanish (65%), and Germans (64%) are pessimistic about prospects for the next generation.
This year 62% of Americans polled were found to be similarly downbeat about what the future holds for their children. Recent economic studies suggest they may be right. The Horatio Alger story that Americans tell themselves that young people can rise from rags to riches is becoming a myth. The majority of Americans have an income that exceeds that of their parents’ family incomes, according to a 2012 study by the Pew Charitable Trusts. But that achievement is not always enough to move them up the economic ladder. 'Only 4% of those raised in the bottom quintile make it all the way to the top as adults,' the study concluded.
In contrast, 82% of Chinese think that children in their society will be better off than parents today. And it is an optimism shared by people in many other emerging markets: 79% of Brazilians, 76% of Chileans, 72% of Malaysians.
Overall, nearly two-thirds (median of 64%) of those surveyed in 14 advanced economies think that children will be worse off when they grow up than their parents. Meanwhile, 58% of publics in 11 emerging markets believe they will be better off.
The contrast could not be starker between this faith in the future and the current pessimism of Europeans and Americans.
Looking to the future
It is too soon to tell if the demise of 'future preference' in the West is permanent or what might be the broader repercussions. But the possible long-term psychological consequences of the Great Recession should not be underestimated. If people do not believe that the future will and can be better, then they may not invest, innovate, work hard and demand the best from and for their children to make it happen.
And, more broadly, the economic challenges posed by aging societies, slowing productivity, rising inequality, climate change and increased competition from China and other emerging market economies may not be met without some revival of 'future preference' behavior in both Europe and the United States. There could also be foreign policy implications with regards to international perceptions of growth and power among states; not to America’s, or the West's, advantage.
This challenge has been evident for some time. In 1991, in a speech outlining his vision for the United States as he launched his first presidential campaign, Bill Clinton said: 'the defining idea of our culture…is 'future preference,' the idea that the future can be better than the present, and that each of us has a personal, moral responsibility to make it so…I don’t think we can save America without it.'
Recent polling suggests that challenge may be even more acute today.