Tuesday, July 28, 2009

The politics of austerity

It is now well entrenched in the public debate that the state needs to cut its spending as soon as the economy recovers. Well, that gives us a bit of time to think about how to do it... No sign of recovery yet. But what is interesting is the notion that it is now beyond question that the solution to the failures of finance is to slim down the state. Heads I win, tails you lose.

The alternative - accepting a stably higher level of tax revenue for the state - is clearly an idea so ridiculous as to be ignored completely. But why? After all, we are told that excessive consumption is at the root of our economy's imbalances, and we need to save more. How does cutting state spending (much of which, especially if channeled through state pensions, is effectively saving) in order to keep taxes low achieve that?

Here's another way of looking at it. The British have decided they want better health and education, and have decided to provide it collectively. But it's turned out more expensive than we anticipated. So, either we decide to go with cheaper and poorer quality provision, or we stump up the extra cash. Both options are completely feasible, but only the first is being talked about at present. I think we know which the future Conservative government is likely to go for.

Thursday, July 23, 2009

Mobility without equality?

Back again after a long Summer School-induced blogging break.

Just in time for the publication of the parliamentary report on 'Fair Access to the Professions' (click here). Lots of interesting stuff in there, especially the contortions the report goes through to avoid addressing the obvious connection between social mobility and equality. The document is therefore a great starting point for examining the contradictions of the 'Third Way' followed by New Labour, and indeed the confusion in British politics as a whole on the issue. As a liberal society, we demand equality of basic rights, and discrimination on the grounds of race, gender, and disability is roundly condemned. Everyone, even the Conservatives, espouses social mobility as a policy objective. But we also reject collectivist responses to class inequality, since they undermine individual freedom (or maybe for less noble reasons...). The problem with this is that empirically social mobility seems to be a function of inequality. So, how do you address one without addressing the other?

This tension comes out clearly in the cross-party report on fair access. The panel seems somehow surprised that young people from wealthy backgrounds are no more likely to access the top professions or the best universities than they were decades ago. But why would we expect such progress when income inequality in Britain has increased so much over the past thirty years (from a Gini coefficient of .27, equivalent to West Germany, to a Gini of .35, almost as high as the United States)? Does the panel seriously expect vast and increasing disparities of income and wealth to coexist with increasing mobility between social classes?

For a start, it is simply arithmetically more difficult to move between income groups if the gaps between those groups are wider. Moreover, the report wrongly concludes that there is declining mobility because professionals born in 1970 typically grew up in a family with an income 27% above the national average, while for those born in 1958 the figure was 17%. But of course, in a context of increasing income inequality you need to control for the relative positions in the income hierarchy implied by those income levels.

Second, in an unequal society, the advantaged will tend to use their greater resources for the things that are most important to them, and any parent knows that your child's future is as important as it gets. Hence the vast middle class investment in higher education (albeit heavily subsidized), both financial and emotional.

Finally, there is an assumption that middle class children achieve more because they are privileged, and that measures need to be adopted to allowed 'talented' children from less privileged backgrounds to compete. This is fair enough, but the main problem is not that talented children from working class backgrounds are obstructed, although they may well be. The big deal is that children of mediocre ability from working class backgrounds stand no chance in a competition with the middle class mediocre, simply because the social, cultural and educational context the latter grow up in prepare them for professional jobs much more effectively.

There is very little to be gained from measures to bully the professions into opening their door to a wider pool of 'talent' (how many genuinely talented people are there, anyway), or spying on middle class parents who try to muscle their way in the 'best schools' (which will be the schools those kids go to almost by definition, whatever else happens). What needs to be done is to even out the life chances of all children, full stop. And without addressing the disadvantage which stems from growing up poor, such measures will be largely pointless.

So, instead of giving parents with children in failing schools a voucher to allow them to move to another state school (how many good state schools with free places are there in neighbourhoods with 'failing' schools?), I propose a rather crude solution.

Tax the rich, invest in the poor. Halve class sizes in poor areas, and tax the rich and their private schools to pay for it. And if there is anything left over, give it to the poor in cash so they can get closer to average living standards and start to perceive that they are citizens of equal rank to everyone else.

I think they call this kind of thing 'the politics of envy'. I prefer to call it redistribution, or social justice if I'm feeling light-headed. Of course, unlike the Third Way, it isn't just a positive sum game. The wealthy need to contribute more, and their kids should have to compete with everyone for the best jobs, not just with each other.