In the day job, I point out that it is impossible for young people to save optimally for their retirement. This isn't just because of the well-known problems of weakness of will or low incomes, but also because of unavoidable uncertainties about how future tastes and working conditions will change.
This, though, is not the only big but impossible decision we expect young people to make. It is also impossible for them to make the right career choices. This isn't just because their characters and preferences are not yet fixed and so they cannot know what jobs they are best suited for. It's also because of uncertainties about technical progress. Will robots take our jobs (pdf)? Or will they instead hurt capitalists more than labour? Or will they accelerate job polarization? Or create more opportunities for service jobs? Or are we just exaggerating their impact?
We just cannot know. We are therefore asking youngsters to make the biggest investment decision of their lives under conditions of immense uncertainty. And, worse still, we are asking many of them to do so when they lack the experience and maturity to take big decisions.
You might reply that this has always been the case. To some extent, yes. But I suspect the problem is greater now. Back in the mid-80s - when my generation was making its career choices - we did not worry that technical change might utterly transform the labour market, possibly for the worse, as intelligent judges worry today.
In this sense, one aspect of intergenerational injustice is overlooked: youngsters face more uncertainty than we oldies did in our day.
Surprisingly, though, this problem doesn't get much attention. But it should. There's cross-party agreement that inadequate education causes a waste of human potential. Nobody, however, seems worried that uncertainty about the future of the labour market will also cause a waste of potential because people will choose careers that turn out to dead ends. As Alan Bennett said, the British are good at hypocrisy.
The question is: what to do about this?
I've advised young people to make as much money as they can as soon as they can: short-termism can be a rational response to uncertainty.
Another thing to do is to have a high state pension: the government's "triple lock" on pensions will benefit youngsters more than oldsters simply because 40 years of a rising pension is better than ten years. A decent pension, in effect, reduces uncertainty about the future by ensuring a decent income at the end of our lives.
There is, though, a third possibility - macro markets. Robert Shiller has proposed markets in livilihood insurance. We can, in principle, he said, construct indices of occupational earnings. Such indices could then be traded which would allow occupational risk to be traded:
An individual could buy an insurance policy against an erosion of income of people in his or her occupation, against erosion of income of people with his or her characteristics (in terms of job history or education), or against erosion of incomes of currently high-income, middle-income or low-income people as a group. (The New Financial Order, p 113-4)
The benefits of such markets might not stop there. If you believe prediction markets are efficientish, they will help people to make career choices: a high price for some occupational indices would be a sign of good careers, and a low price of bad careers. These would be better signals than current wages, which only tell us about present market conditions, not those in 10 or 20 years' time.
Herein lies the question. Why don't such markets exist? One answer might be that people haven't worried about occupational risk. If this is the case, then we should see them emerge as these risks become more salient.
Another possibility is that markets are themselves a form of public good; because the gains to having such markets accrue to many people, they cannot be appropriated by single individuals and so markets will be under-supplied.
There is, though, a third possibility. It could be that the very idea of a market economy has become bastardized to mean simply a set of institutions which further enrich the wealthy - so much so that the possibility that markets could benefit everyone has simply been forgotten.