John Maynard Keynes. (David M. Brinley for The Washington Post)
Here’s an argument I didn’t expect to be making today: Yes, gay people care about the future. In fact, judging by their economic behavior, they are unusually future-focused.
Confused? Then perhaps you’ve been spending your Saturday somewhere other than the economics blogosphere, where the topic du jour is some off-color comments Harvard historian and Daily Beast contributor Niall Ferguson made about John Maynard Keynes’s famed observation that “In the long run we are all dead.” The initial report on Ferguson’s talk came from Tom Kostigen, so I’ll let him explain:
Speaking at the Tenth Annual Altegris Conference in Carlsbad, Calif., in front of a group of more than 500 financial advisors and investors, Ferguson responded to a question about Keynes’ famous philosophy of self-interest versus the economic philosophy of Edmund Burke, who believed there was a social contract among the living, as well as the dead. Ferguson asked the audience how many children Keynes had. He explained that Keynes had none because he was a homosexual and was married to a ballerina, with whom he likely talked of “poetry” rather than procreated. The audience went quiet at the remark. Some attendees later said they found the remarks offensive.
It gets worse.
Ferguson, who is the Laurence A. Tisch Professor of History at Harvard University, and author of The Great Degeneration: How Institutions Decay and Economies Die, says it’s only logical that Keynes would take this selfish worldview because he was an “effete” member of society.
Ferguson has apologized, fully and unreservedly. The remarks, he says, “were as stupid as they were insensitive.” And good on him for apologizing. We all say stupid things sometimes. The point he was trying to make, he writes, “was that in the long run our children, grandchildren and great-grandchildren are alive, and will have to deal with the consequences of our economic actions.”
Ferguson’s remarks, even with the apology, play into a broader stereotype that holds that gay couples, because they don’t have children, are unusually present-focused, while heterosexual couples, because they have to think about their children and their futures, think on a longer time-horizon. That’s not what the numbers show. In fact, gay couples are about the least spendthrift members of society.
Quite a few studies and surveys have found that gay couples save much more than straight couples. Brighita Negrusa and Sonia Oreffice, for instance, analyzed census data and found that even after controlling for age, education and other socioeconomic factors, “gay and lesbian couples own significantly more retirement income than heterosexuals.” Part of the difference, of course, is that gay couples are much less likely to have children than straight couples, which means they have more household income left over to save.
But the fact remains: Ferguson’s view is that the problem with Keynesian economics is that it leads governments into spending and investing too much in the present rather than saving for the future, and the build-up of debt is eventually passed on to future generations. The same dynamic, of course, is present in many families, where parents go into debt spending on themselves and their children now, and the children need to support the parents later. “Debts do not simply disappear by magic,” Ferguson likes to say.
The fact is that Ferguson would like our government to act a bit more like the nation’s gay couples than its straight couples and stop doing so much spending and investing now and begin doing more saving for later. And the broader point is that, yes, gay couples, even without children, are in fact excellent at soberly saving for their futures.
One reason, in fact, for their high-savings rates is that they often have less of a social safety net than straight couples. “Among their top financial concerns, respondents cited a lack of Social Security or pension survivor benefits, legislation that negatively affects LGBT finances and unfair tax treatment.” Somewhat ironically, the financial lives of gay couples fit right-wing economic theories pretty well.
Meanwhile, it’s also worth noting that Keynes’s remark had nothing to do with how families or governments should act in the present or in the future. It was about economists who comfort themselves with the assumption that economies self-correct over time rather than figuring out how to make those corrections shorter and less painful:
In the long run we are all dead. Economists set themselves too easy, too useless a task if, in tempestuous seasons, they can only tell us that when the storm is long past the ocean is flat again.
