I started my life as a Baby Boomer member of a working-class family in a mixed class neighborhood in a factory town in New England.  Through fortuitous circumstances, few of my own doing, I entered the white-collar class soon after graduating from college. I was the first in my family to graduate from high school and college. With that degree, I no longer worked factory and waitressing jobs that I held in high school and during college summers. I moved into low-level jobs in organizations where my brain was occasionally put to use. Through a series of positions in nonprofits, public service and the tech world, I was able to buy a house, a car and save for retirement. A late in life PhD. allowed me to earn a better salary as I neared retirement.  

Somewhere along the way, I had accumulated stocks and bonds into a portfolio, where my savings were invested by my financial advisor. I am putting these words in italics because they still seem so foreign to me. When I was in the seventh grade, my father advised me to start saving for a house as soon as I could and to never ever put any money into the stock market. “The stock market is a rich man’s game”, he argued. “It is no place for people like us.”  He also warned me against getting rich or wanting to. “Nothing good can come from that,” he cautioned.  I still think my father was right about the stock market and the desire for wealth but with an economic system that simply doesn’t reward savings in a bank account any longer, I opted for the tools available to me. Thankfully, every job I had that came with a retirement plan; there was no way to escape investing in the markets.

So now, over seventy years old, I am faced with figuring out what happens to my portfolio should I die before my modest fortune disappears. I have the chance to bequeath money to my heirs (I don’t have children of my own, but I do have relatives and beloved friends that could benefit from these funds, I am sure). If I pass along wealth to my family, those assets join whatever wealth they already have. Although neither of my siblings is wealthy, we are all comfortable. So maybe some of my fortune could go to nieces and nephews who in their thirties and forties could use an infusion of cash for a house or a car or their own retirement and college planning. 

Alternatively, I could donate money to worthwhile charities or create some fund to distribute those dollars after I pass away.  If I donate them carefully, maybe I could share the wealth with others who didn’t have the advantages I and my family enjoyed during our careers. As I have been thinking about all of this, I recognize that I am not the only one with this challenge. To understand just how important these decisions are we can look at some larger trends.

Research shows that the passing of the Baby Boomers will lead to the greatest intergenerational transfer of wealth we have ever seen. No generation has been wealthier than the Boomers. Between 2018 and 2042, members of this generation will transfer $70 trillion dollars of their wealth, approximately $61 trillion to their children and grandchildren and the rest to charity. That passing on this great wealth can’t help but contribute to growing inequality. We have never before seen more wealth concentration in this country than the present moment. Estate taxes are virtually zero for most Americans and those with sizable assets are usually armed with accountants and financial planners that work to preserve assets. Perhaps, this transfer of wealth will generate great innovation and entrepreneurship. However, we do have some data that shows that giving wealthy folks more money, like we do with tax cuts, doesn’t necessarily lead to creation of new jobs or social betterment. In fact, it may encourage more second homes, exclusive educations, cooler cars, expensive hobbies, moon shots, along with increased concentration of political and economic power, and other mischief.

As I consider this intergenerational passing on of wealth to our children, I am also thinking about the impact all of this wealth creation has had on the planet. I believe the term externality as used by economists can be helpful here. Externalities are impacts created by producing energy, for example, that is not reflected in price charged for that good.  Externalities are also borne by third parties.  In this case, it could be environmental degradation.  Neither the producer nor the consumer pays the price of this instead it is passed along to the local community, or maybe to the larger society in terms of unhealthy air and water. What externalities have been created by virtue of our accumulating wealth? 

 If accumulated wealth is what we have earned while on the planet, what unpaid debts can we incurred? What sorts of impact have we had living on the earth, making our living, enjoying ourselves, and raising our children? We can assume that this impact is great if we live in an advanced economy. Research shows the big economies, like the U.S, Europe, and Japan have contributed by far the greatest amount of greenhouses gases to degrading the environment, but those other economies, like India, China and Brazil are catching up. And while these nations are the chief contributors to climate change, it is highly likely that the poorest nations will bear the great burden from these changes. On a more personal level, we can also assume that if we are middle- to upper-income that our impact on the planet is greater than if we were lower income, because we are able to travel more, consume more, have larger houses, demand more products and services, and more.  

Oxfam estimates that the world’s richest 10 percent of people have carbon footprints that are 60 times higher as the poorest 10 percent. Any estimation that generalizes large populations is difficult to make, but researchers at Oxfam also estimate that the emissions of the world’s richest 1 percent create an even larger emissions gap: the 1 percent could emit 30 times more than the poorest 50 percent and 175 times more than the poorest 10 percent.

So, imagine as we near the end of our lives, we could calculate the debt we owe to the planet.  Suppose when we died, a report issued that measured our environmental impact over the course of our lives. That would include our lives as individuals on the planet, in our households, at our jobs, as we traveled and consumed. It would also take account of the waste we have generated and left behind in landfills, as well as the impact of our investments, and more. Imagine if we can all the water, gasoline, plastic, minerals, food, and other resources that we have consumed or that have been consumed on our behalf. 

What if there was a reckoning at the end of our lives based on a valid and reliable calculation of our environmental footprint?  Smart economists could determine a monetary value for this. This could be presented at the reading of your will by your executor. First, there would be a statement of your wealth at your death, a total count of your assets and obligations, all set forth and ready for distribution to your lucky heirs and a few selected charities. Second, there will be a fair accounting of your environmental footprint which your children will be obligated to pay off in terms of taxes and other assessments. If they don’t pay it off, it gets passed down to the next generation, just like accumulated wealth. Perhaps knowing that own descendants will be responsible for own environmental impact would lead some of us to care more about the environment than we do now. We would be incentivized to avoid passing down what would be onerous burdens to our children. Those families with parents who had the greatest impact on the environment would pass on their children the greatest burden of accounting for their parents’ impact. It would be likely that those with the largest inheritances would also be those with the largest environmental burdens. 

On the other hand, those who trod softly on the earth, who used less than their share, who lived in less resource-intensive economies would pass on credits to their children. Similarly, those who were the victims of environmental harms caused by others, would also receive credits. Those with debits and credits could settle up in some marketplace yet to be devised. 

This proposal is way too radical to work, I imagine, but it is a good exercise to begin to take account of the fact that those of us with “portfolios” haven’t earned them out of thin air. We do have an obligation to leave the world a better place than we found it. For the Baby Boomers, I think our time is running out.