When Kate Middleton marries next Friday, it will be as a jobless person. She used to work for her parents’ party supplies company, but quit this winter to plan her wedding. Of course, Ms Middleton doesn’t plan to work for a living anymore. And in that regard she is typical not just of her generation, but of our era. In this crisis, people have switched en masse from living off wages to living off capital.
It’s an obvious strategy. Jobs are scarce, especially if you are under 25 or over 55. On the other hand, the average middle-class family in a western country has far more wealth than a generation or two ago. Yes, we’ve had a three-year crisis, but for most western families it was preceded by 60 years of accumulating houses, savings and stuff. The middle classes have built up capital. The young are hurting, the British economist David Blanchflower told me, but “most of the other guys have done fine. They have big values in their houses, they have probably got pensions.” Even with zero interest rates and sagging house prices, it’s still easier to live off capital than off non-existent jobs.
It’s the young who have become most reliant on capital. The author Richard Gordon once joked that if you measured the sophistication of a species by how long its young were dependent on their parents, medical students were the most highly evolved form of life. The upper classes, too, were always expected to leech off their ancestors’ capital. “He bought his own furniture,” is a posh British sneer for anyone gauche enough to have earned his money.