There is a gigantic structural weakness in most Western economies. Ageing populations with an exaggerated sense of entitlement have failed to make proper provision for retirement.

Countries where people have been brought up to rely on generous state pensions are in the greatest danger. Although voters are led to believe that they have invested in funds with names like “national insurance” or “social security”, those funds are accountancy fictions, not proper trusts. No viable investments have been made. Instead, existing retirees are paid out of current income from contributions being paid by those now working. If a private sector pension salesman did that, he would be jailed.

In fact, he was – Bernie Madoff.

Actuaries have been warning for a long time that an ageing population makes this unsustainable.

Yet the latest proposals of the new British government, in an otherwise sensible Budget, will actually make things worse. They propose linking state pension payments to average earnings.

So if those in work increase their earnings, through their own hard work, enterprise, self-sacrifice, and intelligent investment, they will have to hand over a portion so that people who have contributed nothing to that increase, and who failed to make proper provision for their own pensions, can enjoy the same percentage increase.

These proposals are the lowest sort of politics, trying to buy short-term popularity with someone else’s money – our children’s. It has nothing to do with providing for a decent old age; it is providing an unearned bonus for those who did not provide for themselves. To argue that it is right that children should pay for their parents’ old age ignores increased mobility of population – it is, in effect, expecting someone else’s children to pick up the bill.

It also ignores increased mobility of capital. The high taxes required to service these pensions will be a major disincentive in those countries that impose them. They will undermine their national economies completely.

All this matters to the individual entrepreneur because it underlines the importance of mobility in the global economy, and of choosing the right base. It also reminds us that, if we want comfortable retirements, we are obliged to make the money to provide for them ourselves, and not rely on the Madoffs, or their state sector equivalents.