ROME – A willingness to embrace change represents one of the main differences between affluent but aging societies and poor, younger ones. The former increasingly tend toward both social and policy immobility; the latter are more inclined to sudden reversals. If this sounds audacious, compare what has happened in Europe and North Africa over the last several months.

In the Middle East, a generation of near-hopeless youth took to the streets in order to transform their societies. In many European countries, by contrast, marginalized young people protest to preserve a crumbling social order threatened by fiscal austerity. Last autumn, for example, many French students joined protests against President Nicolas Sarkozy’s proposal to raise the retirement age ever so slightly. The paradox here is that their actions actually ran counter to their own interests, for, in aging societies, high pension benefits today will invariably mean lower benefits tomorrow.

Young people in rich countries fight to protect a social order that benefits their elders at their expense for two reasons. First, they dream of enjoying the same systemic generosity now bestowed on the old. Second, and more importantly, today’s social contract in Europe and many other rich countries incorporates a Machiavellian financial device that keeps young people loyal to the system.

This intergenerational altruism is an essential pillar of modern societies. In the past, adult children were obliged to care for old and sick parents. After the creation of the welfare state, government-funded pensions and medical assistance replaced this obligation, even if younger workers’ taxes financed such schemes. But, in most rich industrial countries nowadays, the role of family in the transmission of economic resources is reviving, with huge flows of wealth from old to young, primarily in the form of high-priced houses.

According to some studies, intra-family transfer patterns are correlated to welfare regimes. Generous welfare states, such as those in Scandinavia, minimize the risk of old age, enabling parents to transfer resources to their adult children more easily and frequently. In continental Europe, especially in the South, where family ties are stronger, parents support their adult children mostly by co-residence until they reach economic independence. Either way, the system provides the elderly with extra resources to support their offspring through financial transfers or housing.

But are societies made up of such “altruistic” old people actually altruistic? Since people under the age of 18 do not vote, the elderly come to represent a majority, whose members then seek to benefit themselves through generous pensions, lifetime jobs, or medical assistance.

This elderly cohort holds what the economists Daron Acemoglu and James Robinson call de jure political power, that is, decision-making power allocated by constitutions or electoral systems. This power is counterbalanced by the de facto political power that emerges from the ability to engage in collective action, or from brute force. Here, youth, being the most dynamic and forceful component of the population, holds sway.

When economic growth languishes, as in the rich world today, lavish policies for the elderly reduce the slice of the economic pie available for the young. This may trigger a reaction that could threaten the stability of the system. Being the minority, they can gain de jure political power only by introducing a non-democratic system.

To avoid such a scenario, the majority could implement tough reforms, such as raising the retirement age, or appease young people by redistributing resources through greater inter-vivos transfers (downward altruism). Since the former solution is against the majority’s interest, the ruling class opts for the latter.

This explains the paradox of the French students. Reliance on this pattern of wealth transfer makes even young people adverse to radical changes and faithful to the system. One could even argue that young Parisians were individually fighting for their parents’ well-being, but collectively to preserve the downward flows of resources.

Of course, on an individual basis, the transfer of resources from older people to their adult children may well be motivated purely by parental love. But, from the perspective of their group interests, these inter-vivos transfers represent a concession aimed at preserving from collapse a system that is skewed in their favor. So, for society as a whole, downward altruism is anything but altruistic.

Nevertheless, this social inertia is doomed to shatter. Rich countries – save for a few, like the United States – are growing older. Without massive immigration, workforces will shrink dramatically, dragging down aggregate output and thus the amount of money available for social transfers.

Moreover, inter-vivos transfers have a direct negative impact on GDP, distorting the incentives for young workers that receive part of their resources from redistribution, and not as compensation for productive work. The resulting shortfall of available resources will generate tensions between old and young.

To avoid an intergenerational clash, rich countries’ citizens should alter their social contract by increasing the influence of young people in society. More resources must be redirected to the productive part of the population. Altruism would then, quite naturally, move from the stronger to the weaker, from the young to the old, rather than vice versa.

Otherwise, rich countries everywhere will have no choice but to cut social transfers – the safety valve of the system. In that case, the young would most likely take to the streets once again, but this time inspired by the same revolutionary aims as their North African counterparts.