Coming back from an extended conference on gross national happiness in Bhutan, which is one of the first carbon negative countries in the world, I became aware that intergenerational justice may be one of the most important moral questions we face today. The world is drowning in debt. According to the IMF, global debt amounted to US$ 250 trillion in 2023, or 237 percent of GDP, with global private debt at more than US$ 150 trillion or 143 per cent of GDP. If global private wealth is now estimated at over $450 trillion, is debt of $250 trillion seriously a problem? It is, if net wealth is distributed unevenly. Worldwide net private wealth stood at $454.4 trillion in 2022. The highest wealth rung or 1.1% of the world adult population controlled $208.3 trillion in wealth, or 45.8% of the global total. Wealth is not only concentrated – it is concentrating as the rich get richer. So when GDP is rising and markets are hitting record highs, most people are not happy because of perceived income and wealth inequity. Of Course, wealth is passed from generation to generation. But with the gradual dismantling of death duties in many countries, and tax cuts for the rich, such as in America, wealth has been retained in wealthy hands. The UBS Global Wealth Report 2025 forecasted that “a total global wealth transfer of over USD 83 trillion within the next 20 – 25 years. Some USD 9 trillion of this will be horizontal and over USD 74 trillion will be vertical, between generations, i.e. roughly 12%”. In other words, wealth is less distributed widely, but more down to successors and heirs. At the household level, the bottom half of society not only do not have much wealth, but they are also in debt. The IMF, however, is more concerned with the rise in public debt, which is the burden of all citizens, including future generations. After all, the future generations inherit not just assets but also liabilities. The poor are also subject to higher interest rate on their debt due to higher credit risks. Thus, when incomes are insufficient to pay both interest and principal, the poor, including many developing markets, get further into debt distress. Intergenerational justice refers to the ethical principle that present generations should not compromise the well-being or opportunities of future generations. Simply, future generations should have fairness in the distribution of resources, benefits, and burdens over time. When the existing generation is worsening social capital (through great conflicts between class, country and along religious and racial lines) or through damaging natural capital (by cutting down forests, emitting pollution and carbon dioxide), we are leaving social capital and planetary resources in worse shape for our children and grandchildren. There are two types of injustices staring us in the face. The first is human injustices against other people and the other is planetary injustice where we abuse Mother Nature. The baby boomer generation to which I belong, born after the […]
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