In a comment on an earlier post Chris Wales confesses that he's not too keen on the state trying to preserve a measure of equality in society. Rather,if I've understood him correctively, he is in favour of unfettered (and not necessarily equal?) opportunity.
This is an interesting question and deserves a full post (and perhaps several) rather than an additional comment.
Most modern states, as Chris acknowledges, accept that there should be some sort of welfare safety net to prevent too severe destitution, and we have had such as system, with varying degrees of generosity, in this country since the Elizabethan Poor Law. It was Jo Grimond, in an article, I think in the Observer the early 1960s, who alerted my to the concept that the democratic state also had a duty to prevent some people becoming too rich, because, as I recall, they endangered democracy. Lord Aschcroft, Rupert Murdoch and Silvio Berlusconi are prime examples of how right he was (as in so many other things.)
A few rich individuals perhaps add a bit of glamour to society (the Dockers provided it in the 1950s, though, as far as I know, they paid their taxes, and at a pretty high rate) but a substantial section of society who become so rich that they are detached from the rest of us, live in gated communities and cease to be affected by our common concerns endanger the cohesiveness of our society, just as does the detachment of the bottom 20% into their separate Toynbee "caravan." We would be so much happier as a society if we really were "all in this together." This explains so many people's nostalgia for the war years, when the rich as well as the poor had a chance of being bombed out of their homes or called up for service.
It is a sad reflection on the current spirit of the Labour Party that, although Ed Milliband seems keen to retain the 50% higher tax rate as a matter of principle other senior members aren't so sure. When Neil Kinnock was their leader his book choice on Desert Island Discs was R H Tawney's "Equality", which contains this wonderful passage:
"It is possible that intelligent tadpoles reconcile themselves to the inconvenience of their position by reflecting that, though most of them will live and die as tadpoles, and nothing more, the more fortunate of the species will one day shed their tales , distend their mouths and stomachs, hop nimbly on to dry land, and croak addresses to their former friends on the virtues by means of which tadpoles of character and capacity can rise to be frogs" (Allen and Unwin edition,1931, page 142)
As Tawney clearly saw, equality of opportunity is merely equality of opportunity to become unequal. To become unequal and not pay your dues to the society that enabled you to do so is even less acceptable.
Tuesday, 30 November 2010
Monday, 29 November 2010
At-Home Days
The British winter no longer comes as an annual surprise, but we are still not sufficiently certain that it will be so regular and prolonged as to make it worthwhile to invest heavily in snow-clearing equipment on the scale of, say, the Alps.
So when there is heavy snow, as today, the the intermediate solution for avoiding chaos is for local authorities to have the powers to declare an "At-Home Day." This would mean that all non-essential workers - most shop and office workers, teachers and students, etc. - would be instructed to stay at home, leaving the roads clear for essential workers - power suppliers, police and security workers, medical workers, firefighters and rescuers, and of course, the snow ploughs, - to go about their business.
This idea was put to me by the deputy head of a school at which I worked in Bradford in the early 80s. He was called Wally, which as far as I know was his full first name and not a diminutive. It was not regarded as either pejorative or funny at the time
So when there is heavy snow, as today, the the intermediate solution for avoiding chaos is for local authorities to have the powers to declare an "At-Home Day." This would mean that all non-essential workers - most shop and office workers, teachers and students, etc. - would be instructed to stay at home, leaving the roads clear for essential workers - power suppliers, police and security workers, medical workers, firefighters and rescuers, and of course, the snow ploughs, - to go about their business.
This idea was put to me by the deputy head of a school at which I worked in Bradford in the early 80s. He was called Wally, which as far as I know was his full first name and not a diminutive. It was not regarded as either pejorative or funny at the time
Sunday, 28 November 2010
An Airy-Fairy Measure
Having been enthusiastic about David Cameron's proposal to measure Gross National Wellbeing, it is rather disappointing to find that he is proposing to do it in such an airy-fairy manner. Both he and the statistician in charge at the ONS talk vaguely about asking people how happy they feel. While as a social scientist I cannot decry the value of trying to measure subjunctive feelings it is disappointing that solid facts such as hours worked, a measure of equality, suicide rates, the stability of marriages and partnerships, etc (see earlier post) are not to be taken into account. Perhaps Cameron is frightened of what objective data might reveal.
Friday, 26 November 2010
An Assenting Voice
On the 28th October the coalition produced a White Paper “Local growth: realising every place’s potential”
My friend John Cole, like me a retired teacher of economics and also a lifelong Liberal/Liberal Democrat has written a detailed critique for his colleagues which begins with the following paragraphs:
General Comments:
I approached reading this white paper in the hope that it would give me confidence that the coalition had a sound and credible route map towards economic recovery and sustainable growth. Whilst there are many good ideas in the paper, I remain unconvinced that the coalition is going to have the UK economy in a far better place in five years time. In short, it is a curate’s egg of a white paper – good in parts but with, in my view, some woeful deficiencies.
The main shortcoming is the total reliance on “supply side” measures. There is much talk of incentives to invest and to build. Inward investment will be attracted. The planning system will be totally reformed, streamlined and barriers to development reduced. The workforce will be up-skilled and those on benefits will be incentivised to work. In the North East and other non-metropolitan regions public sector jobs will be cut but new jobs, created by the private sector, will more than take up the slack and the economy will be re-balanced. All will be hunky-dory.
What is totally absent is any reference to the “demand side”. Firms will only invest and produce if they confidently expect there to be a demand for the final product, be it a good or service. “Confidence” is the key word. At present business confidence is low, as is consumer confidence. After the binge spending of most of this decade individuals and corporations are now retrenching. If firms are disinclined to expand because of thin order books, the new jobs will not emerge. In a wiser age governments would step in with counter-cyclical policies, in this case to boost demand by increasing government spending – pump-priming expenditure which could be reduced as the economy moved into a private-sector sustained growth. Such counter-intuitive thinking would appear to be beyond not only “The Daily Mail” but George Osborne. It should not be beyond the grasp of Liberal Democrats with our Keyenesian lineage.
And so say all of us.
My friend John Cole, like me a retired teacher of economics and also a lifelong Liberal/Liberal Democrat has written a detailed critique for his colleagues which begins with the following paragraphs:
General Comments:
I approached reading this white paper in the hope that it would give me confidence that the coalition had a sound and credible route map towards economic recovery and sustainable growth. Whilst there are many good ideas in the paper, I remain unconvinced that the coalition is going to have the UK economy in a far better place in five years time. In short, it is a curate’s egg of a white paper – good in parts but with, in my view, some woeful deficiencies.
The main shortcoming is the total reliance on “supply side” measures. There is much talk of incentives to invest and to build. Inward investment will be attracted. The planning system will be totally reformed, streamlined and barriers to development reduced. The workforce will be up-skilled and those on benefits will be incentivised to work. In the North East and other non-metropolitan regions public sector jobs will be cut but new jobs, created by the private sector, will more than take up the slack and the economy will be re-balanced. All will be hunky-dory.
What is totally absent is any reference to the “demand side”. Firms will only invest and produce if they confidently expect there to be a demand for the final product, be it a good or service. “Confidence” is the key word. At present business confidence is low, as is consumer confidence. After the binge spending of most of this decade individuals and corporations are now retrenching. If firms are disinclined to expand because of thin order books, the new jobs will not emerge. In a wiser age governments would step in with counter-cyclical policies, in this case to boost demand by increasing government spending – pump-priming expenditure which could be reduced as the economy moved into a private-sector sustained growth. Such counter-intuitive thinking would appear to be beyond not only “The Daily Mail” but George Osborne. It should not be beyond the grasp of Liberal Democrats with our Keyenesian lineage.
And so say all of us.
Tuesday, 23 November 2010
Our Friend in Need
George Osborne is quite right to offer £7 billion to help bail out the Irish economy, though one is disposed to wonder how a country of only 4 million people can build up such a massive crisis and, indeed, buy more British exports than India, China , Brazil and a fourth country the name of which escapes me, combined.
However, what most people will be wondering is how it is that a month ago it was absolutely essential to slice £7 billion from public expenditure since we couldn't possibly afford to maintain public services at the present level, and now, out of the blue £7 billion is available for another, albeit important, purpose.
The truth is that the £7 billion will be borrowed as, unlike Greece, or Ireland, the British government has no difficultly in borrowing at competitive rates. "The markets" are not breathing down out necks.The rates are, I suspect, not quite as competitive as the BBC1 news suggested last night - that Britain would borrow at 1.5% and the Irish would repay with 5% interest. If today's Guardian (page 13)is to be trusted the interest the governments have to pay on 10 year bonds is 3.5% for the UK and 8.1% for Ireland, so we shall still make a tidy profit.
The message of our contribution to the Irish bailout is that when the government wants, it can find the money at competitive rates. The curtailment of public expenditure is therefore not of necessity, but ideologically driven.
Although "the markets" are not yet at the throats of Britain, the signs are that they will now turn their attacks on to Portugal and Spain. It is high time the international community put a stop to this nonsense by agreeing to a Tobin-type tax on monetary transactions. Policy in democracies should be determined by the people, not financiers' greed.
However, what most people will be wondering is how it is that a month ago it was absolutely essential to slice £7 billion from public expenditure since we couldn't possibly afford to maintain public services at the present level, and now, out of the blue £7 billion is available for another, albeit important, purpose.
The truth is that the £7 billion will be borrowed as, unlike Greece, or Ireland, the British government has no difficultly in borrowing at competitive rates. "The markets" are not breathing down out necks.The rates are, I suspect, not quite as competitive as the BBC1 news suggested last night - that Britain would borrow at 1.5% and the Irish would repay with 5% interest. If today's Guardian (page 13)is to be trusted the interest the governments have to pay on 10 year bonds is 3.5% for the UK and 8.1% for Ireland, so we shall still make a tidy profit.
The message of our contribution to the Irish bailout is that when the government wants, it can find the money at competitive rates. The curtailment of public expenditure is therefore not of necessity, but ideologically driven.
Although "the markets" are not yet at the throats of Britain, the signs are that they will now turn their attacks on to Portugal and Spain. It is high time the international community put a stop to this nonsense by agreeing to a Tobin-type tax on monetary transactions. Policy in democracies should be determined by the people, not financiers' greed.
Monday, 22 November 2010
Students and the Immigration Cap.
There are forecasts that the proposed cap on immigration is likely to reduce vastly the number of foreign student in our universities. This seems to me to be totally dotty. Higher education is one of the few "products" that we offer which is "World Class": why on earth stop people buying it? As anyone studying "A" level economics will tell you, a foreign student coming here to buy one of our courses is the equivalent of an export (that's without taking into account the additional money they will spend in living expenses and entertainment while they are here.) Stopping then buying the product is the equivalent of refusing to sell Rolls Royce engines to the Australian. By pandering to the prejudices of the tabloids and Tory right the government is about to score a devastating own goal.
It is also a devastating comment on the values of our society that whereas top class footballers are to be excluded from the cap, top class scientists are not. If our universities are to maintain their "World Class" status then they need to be able to employ the best of international talent.
We get the impression that Vince Cable is trying to resist this nonsense: all power to his elbow.
It is also a devastating comment on the values of our society that whereas top class footballers are to be excluded from the cap, top class scientists are not. If our universities are to maintain their "World Class" status then they need to be able to employ the best of international talent.
We get the impression that Vince Cable is trying to resist this nonsense: all power to his elbow.
Saturday, 20 November 2010
Out of the mouths of...Lord Young
Lord Young's forced resignation seems to be to be part of a conspiracy by the political classes - by the Conservatives to justify their ideological attack on the welfare state (to "prove" we can no longer afford it) and by Labour as a convenient stick with which to tag the Tories as unfeeling and unaware of what "real life" is like in the UK.
But there is a great deal of truth in what Lord Young claimed.
First, on a technical point, he spoke of this "alleged" recession, and he has some justification, in that a recession is defined as two consecutive quarters of negative growth , and we are now in positive growth, albeit not exactly racing ahead.
But his point that "(t)he vast majority of people in the country today...have never had it so good." has real validity. I'm not so sure that "vast" is entirely justified, but very many of us are very comfortable and doing very nicely indeed. Those with mortgages who retain their jobs are having a bonanza, since as a result of low interest rates they can be receiving a tax-free bonus of up to six hundred pounds a month. We don't hear too much about them. For the rest of us, in work, or with secure pensions, life is good: food prices are still low and form a relatively small part of our expenditure, clothing is absurdly cheap and many other commodities are being heavily discounted in order to promote sales. Soon after Christmas we shall be seeing estimates that the "average" child has received some £300-worth or more of presents.
Quite frankly, even for the vast majority, indeed the overwhelming majority, austerity this is not.
The period of the Second World War and the ten years or so afterward can perhaps more accurately be described as "austerity", though I cannot remember ever being seriously hungry or cold (except that in those days convention dictated that little boys should wear short trousers, even in the depths of winter, so our knees and inner thighs became "chapped" and red-raw. Some stuff, "Snofire" I think it was called, which we were given to relieve pain, was not very effective. Today's boys, in long trousers as toddlers, don't realise how lucky they are.) Even this war and post-war austerity was the lap of luxury compared with average life in the Third World. I once asked one of my Malawian colleagues, a senior educationalists, if he gave his children Christmas presents. "Yes", he replied proudly, "I buy each of my children a bottle of Coke." Puts things in perspective.
The problem is, of course, that in spite of government claims, we are not "all in his together. The main pain of the premature and misguided corrective economic measures will be felt by the bottom 20%, that part of Polly Toynbee's caravan which is now in danger of being detached from the main body and becoming a separate entity, and who didn't get their fair share of the 1990s prosperity either. In addition are those who lose their jobs and, no longer able to pay their mortgages, may lose their homes.
As a nation we are some four times richer that we were in the 1940s (when we could afford to establish the NHS, introduce family allowances and other new aspects of the welfare state.) With the political will and a modicum of generosity we can easily afford to make the lot of the bottom 20% more tolerable and re-incorporate them into society, and provide "tidying-over" measures for those temporarily without adequate incomes as a result society's failure to control the banking system. A courageous government would call upon Lord Young's "never had it so good" cohort do our bit.
But there is a great deal of truth in what Lord Young claimed.
First, on a technical point, he spoke of this "alleged" recession, and he has some justification, in that a recession is defined as two consecutive quarters of negative growth , and we are now in positive growth, albeit not exactly racing ahead.
But his point that "(t)he vast majority of people in the country today...have never had it so good." has real validity. I'm not so sure that "vast" is entirely justified, but very many of us are very comfortable and doing very nicely indeed. Those with mortgages who retain their jobs are having a bonanza, since as a result of low interest rates they can be receiving a tax-free bonus of up to six hundred pounds a month. We don't hear too much about them. For the rest of us, in work, or with secure pensions, life is good: food prices are still low and form a relatively small part of our expenditure, clothing is absurdly cheap and many other commodities are being heavily discounted in order to promote sales. Soon after Christmas we shall be seeing estimates that the "average" child has received some £300-worth or more of presents.
Quite frankly, even for the vast majority, indeed the overwhelming majority, austerity this is not.
The period of the Second World War and the ten years or so afterward can perhaps more accurately be described as "austerity", though I cannot remember ever being seriously hungry or cold (except that in those days convention dictated that little boys should wear short trousers, even in the depths of winter, so our knees and inner thighs became "chapped" and red-raw. Some stuff, "Snofire" I think it was called, which we were given to relieve pain, was not very effective. Today's boys, in long trousers as toddlers, don't realise how lucky they are.) Even this war and post-war austerity was the lap of luxury compared with average life in the Third World. I once asked one of my Malawian colleagues, a senior educationalists, if he gave his children Christmas presents. "Yes", he replied proudly, "I buy each of my children a bottle of Coke." Puts things in perspective.
The problem is, of course, that in spite of government claims, we are not "all in his together. The main pain of the premature and misguided corrective economic measures will be felt by the bottom 20%, that part of Polly Toynbee's caravan which is now in danger of being detached from the main body and becoming a separate entity, and who didn't get their fair share of the 1990s prosperity either. In addition are those who lose their jobs and, no longer able to pay their mortgages, may lose their homes.
As a nation we are some four times richer that we were in the 1940s (when we could afford to establish the NHS, introduce family allowances and other new aspects of the welfare state.) With the political will and a modicum of generosity we can easily afford to make the lot of the bottom 20% more tolerable and re-incorporate them into society, and provide "tidying-over" measures for those temporarily without adequate incomes as a result society's failure to control the banking system. A courageous government would call upon Lord Young's "never had it so good" cohort do our bit.
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