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Posts Tagged ‘society’

Government Isn’t Us

Tagged: democracy, government, markets, Mob Rule, Obama, society

President Obama recently spoke at the University of Michigan. In his speech, he criticised those who attack government as inherently bad. He stated that such people fail to comprehend that “in a democracy, Government is us.”

Why Obama Is Wrong – 1. Democracy?!?

At some level, democratic governments are supposed to be the collective will of the people. But let’s think about that for a second.

In the 2008 election, approximately 63 million votes for Obama were cast. That’s about a fifth of the people. You can’t claim that every policy you want is justified by the fact that a fifth of Americans voted for you, even if fewer voted for the alternative. At the very least, Obama should be saying that Government should be us.

Moreover, this is a rather disturbing example of the belief that 50%+1 should be able to set the rules for everyone. If you’re in the majority, you can get whatever you want; in the land of “we”, people have to give and take. Perhaps for students at the University of Michigan, in a town which voted 70% for Obama, the President meant “We, the majority” rather than “We, the People.”

Why Obama Is Wrong – 2. If Government Is Us, Why Does the State have Special Powers?

Is it right if I lock you up? Can I take thousands of pounds with the threat of force if you do not comply? Can I order a drone to blow you to smithereens? No. No. No.

If we agree with Mr. Obama, then it is morally OK for a large group of people to do things which would be wrong if individuals did them. Indeed, as noted above in the Democracy section, Obama would seem to believe that a sufficiently large mob becomes moral by virtue of its size alone.

There are reasons why the State has some special powers – some theorists might consider it a Social Contract whereby individuals trade some liberty for security. It remains the case, however, that Government is an entity that is supposed to work on our behalf, rather than “us”.

If Government is Not “Us”, What Is?

What can be termed “us” accurately? It would have to be the sum of everyone’s interactions with everyone else. There are two words we could use for this – Society, or the Market. The former implies non-financial interactions and the latter the opposite, but in reality, they are interchangeable. Why? If one stops looking at the Market narrowly as exchange of money and looks at it more broadly as the exchange of our wants and needs, one can include the way we choose to spend our time and amuse ourselves as well.

There is such a thing as Society. It’s not the same as Government, but it is the same as the Market.

Radically reforming welfare, part 1

Tagged: equality, society, statism, welfare state

In this article I consider a “madcap scheme”.

The “Poverty Trap” (also known as the “unemployment trap” or the “welfare trap”) means any situation where the costs of moving into work are greater than the increase in income, caused by means-tested benefits.

A very simplistic example would be where the government gave £5,000 to everyone with a salary below £10,000. Someone with a salary of £9,999 would receive an additional £5,000 from the government, bringing their total income to £14,999. Imagine such a person was offered a better job or position, requiring slightly longer hours, more of their skills, or more responsibility, with a salary increase of £1000. Performing such a job would increase the wealth of society. But the person would not take it. For with a salary of £10,999, they would no longer receive benefits, so their total income would be £10,999. By working more, they would decrease their income by £4,000. So of course, while in an undistorted market they could better themselves by working more, with government distortions they would have no incentive to learn new skills or get a better job.

In practice, welfare payments are distributed by the government according to a much more complicated system. Usually they are not cut off suddenly, but phased out. But means-tested welfare, i.e. welfare that depends on your circumstances, will always mean that the pay increase from working better or longer will be less than it would be in a free market. There will be less incentive to work better or longer. The poverty trap discourages people from getting off welfare and bettering themselves with their own efforts.

In extreme real cases, working can indeed reduce income in absolute terms. Chris Dillow points out:

Our existing system already subsidizes idleness. Some people prefer to stay on benefits because they’d lose these if they went out to work. Take a married couple, both out of work. One’s offered a 16-hour week job at the minimum wage. How much better off are they if they take the job? Not at all – they are about 5% worse off. Table 1.4a of this massive pdf shows.

Sure, I’ve taken an extreme example. But it’s easy to find replacement ratios for part-time jobs of over 70%. For many, then, the financial gains from working are so small that the hassle’s not worth it.

As one commenter on Peter Hitchens’ blog said,

“A safety net is exactly what social security should be – not a way of life. I would suggest, however, that with 5.4 million people languishing on out-of-work benefits, Britain’s welfare system is more ‘comfort blanket’ than ‘safety net.’”

The solution is to make benefits non-means-tested. This means giving the same welfare payments to everyone, regardless of their income. Obviously there would be exceptions for the disabled, but for ordinary people, welfare payments should be the same, whether you are unemployed or a millionaire.

That way, working an hour at a job which pays £5/hour, increases your income by £5, instead of by some amount less than £5.

What we should do is replace all social security by giving every adult in the country £5,000, cash, with no conditions. My economics teacher at school suggested this briefly as a “madcap scheme”, but this idea is actually not as mad as it seems. I believe it should gain wide acceptance. It should be acceptable to both the left and the right. For those on the left who really want to help the poor, rather than just increase their dependence on the rulers, it maintains their income but massively simplifies how they get it. It frees them having to spend a lot of time dealing with the state, and allows them to pursue a more fulfilling life doing what they want, without discouraging them from working. For those on the right, it is certainly an improvement, because it removes the disincentive to work that goes with the current welfare system.

This is a Basic Income system, which could be implemented either as a “Citizen’s dividend” or the negative income tax advocated by Milton Friedman.

I was reminded of the Basic Income idea by Charles Murray’s book “In Our Hands”.

Another commenter on Hitchens’ blog described the book thus:

“For anyone who is interested in welfare reform, can I commend the works of Charles Murray. His thesis: the state [despite its good intentions] is inevitably wasteful and inefficient. As well as morally neutral, spawning vast bureaucracies etc.etc. The solution: end all redistributive welfare INCLUDING THE NHS. Cut out government and give the money straight to the people. To receive a monthly sum, people must be: over 21, have a bank account, have a British passport, to get a monthly sum (£10,000 pa) for life. Two rules only: they MUST buy health insurance, and they must invest in a pension plan. After that, they can do whatever they like.

The human urge to do what is best for the self (denied by the left) then comes into play. Because not getting a job, getting married and having babies too young hurts, and the counterpoint pays, people will behave in ways that are constructive, not destructive.”

Chris Dillow surveys some arguments here.

James Bartholomew describes it here:

“His idea, briefly, is this: that the government should give every person US$10,000 a year in place of all welfare benefits, retirement payments and healthcare. Of this, US$3,000 would have to be used to buy health insurance.
…
He said he was not primarily concerned that the welfare state costs too much “though it does”, nor that it tends to make things worse “though it does” but that it “drains” the life out of people – particularly the spiritual life and sense of meaning.
…
He said that if his plan were introduced, behaviour would be affected. There would be ‘feedback loops’. I think he implied that a girl would be less inclined to get pregnant out of wedlock if she knew she would get no extra money from the government. She would also be able to get money from the father because his regular money from the government would be paid to a known bank account and money could be taken from it. This would, Murray suggested, affect his behaviour, too. He would be more cautious about making women pregnant.
…
I am struck first of all by how he admitted that this was a compromise. He said he was making an offer to the Left. They would be allowed to keep big spending – since his plan would continue big state spending. But it would be in a different form that would curtail many of the bad effects of state welfare.

Many times I have been asked, when giving talks about my book, ‘so what is the answer?’ I have always felt it is impossible to give a satisfactory answer. The ideal solution – minimal state welfare – would probably not be politically acceptable in a democracy. But reforms that would be politically acceptable would probably not be radical enough to make a ‘good society’.”

As Sean Gabb says,

“Something we should leave substantially alone is the welfare state. The main assumption behind which the present ruling class justifies its looting of the taxpayers is that any cuts in public spending must fall on the welfare budget.

Of course, it is a false assumption, but it does not help that libertarians have always made a great noise about the corrupting effects of state welfare, and that libertarian schemes of improvement always give prominence to privatising or abolishing it. This shows a failure of political understanding.

All else aside, it would be madness to give the now displaced ruling class an issue on which it might claw its way back from oblivion. It may be regrettable, but most people in England like welfare. They like the thought that if they lose their jobs, they will receive some basic support, and that if they fall ill, they will receive treatment free at the point of use. That is what is wanted, and that is what a government of reaction must continue providing.”

I disagree with Murray about health insurance. Instead I would pay some of the money into Personal Health Accounts, as described by Hannan and Carswell in “The Plan”, because these also increase the incentive to use the money wisely.

All other social security would be ended, including the minimum wage, council housing and the NHS. Hannan and Carswell explain how the transition could be made from the NHS to private healthcare. There would be no difference in income for those living in places like London where living costs are higher. As one commenter on Chris Dillow’s blog said, “If I live in an expensive area and lose my job, and can’t find a new one, I will have to move somewhere cheap. Why is it beyond the pale for an unemployed CBI-only person living in London to consider moving himself to a cheaper town or city?” Another replied sarcastically, “it is universally recognised as an affront to civilisation and all we hold dear to suggest that someone who isn’t inclined to should leave London.”

There would be no child benefit. This would remove the incentive to have children, and indeed would give an incentive not to have children. Removing child benefit normally seems harsh because it penalises the child for the decision of the parent – a child does not choose to be born. But in this case it would be okay because the family would still be guaranteed enough income to live on.

The commenter on Hitchens’ blog said,

“I asked George Osbourne about the theories of Murray. His reply: I had lunch with him last week! But there are things I don’t believe in. Translation [to me]: I don’t possess the necessary size of testicles to do it.”

Tomorrow, I’ll be considering “tradable citizenship”.

On the Moral Necessity of Liberty

Tagged: libertarianism, morality, society, sovereignty, statism

The following was originally intended as a reply to Mr Gavin Rice’s post ‘On the Inadequacy of Liberty’ but I realised it had become quite long before I had said my peace.

Libertarianism does not have to be about defending individual rights, or freedoms, or paycheques. Rather, it is rendered best to me as a weapon against the might of government. Since we cannot defeat the police force or the Army without creating a chaos out of which a new and mighty government would rise to take their place, we must reign in such governments with limits that take advantage of the legalistic structure with which they deploy their might.

I do not believe, any more, that apologists for modern Liberalism really believe in relativism. Rights-speak often serves as buttery dressing for bitter hedonic calculation, usually made necessary because that calculation is in error. Take, for example, the notion that elective abortions must be legal and state-funded because a woman has a ‘right to choose’. This argument is often given even in reply to the claim that foetuses are humans, whereupon it collapses because we do not entitle anyone else the right to kill in any other situation. Rights-speak here disguises the hedonic calculation that abortion policy makes women happier and spare potential unhappiness to children born into poverty. It is necessary because the claim is in the first instance demonstrably false and in the second uncalculable (happiness units do not average out where they were never gained or lost).

My point there was that the ‘liberalism’ that apologises for modern society and statism is founded in moral intention (the desire to maximise happiness units) and formed in its wonky shape by intuition and cowardice that rail against such an intention (happiness units would be maximised by injecting people with certain hormones for a few years until they die, not by allowing them to live full lives – few but Peter Singer himself would have the balls to bite that bullet). The fact that moral intention can, when misguided or misapplied, lead to destructive policies is why people are so reluctant to use the language of morality when talking politics or economics. Not only do they fear abusing the language. They also, for the most part, share the same ‘moral vision’ and so think it unnecessary.

Benthamite Utilitarianism is not a theory which has won humanity over in the last century or so. It could not. There is no good literature in its defense. Rather, utilitarianism in its most basic form – the belief that the feeling of happiness is what we are supposed to seek with our lives – is a constant temptation offered to human civilisation. Currently, in the vacuum created by the failure of atheism to come up with a coherent account of universal morality, we in secular European countries have reverted to selfish default. We egg our governments on to ‘make’ us feel happy. The men who tend to fill the chambers of these governments have in the most part been produced by the same philosophical, cultural circumstances as ourselves and embrace the task with baton-wielding, needle-jabbing relish.

Mr Rice has below implied that inviting governments to participate in, rather than get out of the way of, helping to create a better society is more effective. I do not agree with him and here is why. He proposes the recapture of virtues to reform and improve our situation. Virtues must, by their nature, be taught by exhortation, encouragement and example. This is the way that Aristotle taught them, that medieval priests taught them and Victorian gentlemen (the few real ones) taught them to the societies in which they lived. Governments have a very different way of enacting their ‘moral visions’. This is not because of which vision it may be, who is in them, or who elected them but because of what governments essentially are: monopolies of force. If you beat a man for ignoring a beggar, you will teach him violence, not charity.

Everything governments do stems from what they are. Taxation is carried out by the threat of force and so every action that governments carry out with the revenue raised is carried out by force. Laws are merely a means of teaching morals to people in the way that parents slap their childrens’ wrists when they try to steal. They impose by force the moral beliefs of a governing minority (or at best the original beliefs of electors filtered through that minority) onto their subjects, often remaking subjects’ beliefs in the minority’s ideological image. This problem is extended in proportion to how far the government extends. The messages given to the taxpayer by institutions like the NHS or the National Curriculum include “plastic surgery must be a human right because if I do not pay for someone else’s I will be imprisoned” and “global warming must be true because if I do not pay for it to be taught I will be imprisoned”. I did my best here to think of the least reprehensible of examples I could.

This is one reason why Libertarianism, primarily legal and secondarily fiscal, because money is power, is necessary if we wish to morally reform society. The alternative, where the power of government is utilised to teach people how to be better, is much easier in less democratic and stable societies – one needs only catch the young king’s ear, or have get together some fesity paramilitaries.

In modern Britain, however, it would require still the uphill struggle of moral education required by the civil method of reform, in order to get sufficient candidates and voters to be better than Utilitarians. The large influence of large government on people’s minds would, however, raise the gradient of that uphill struggle tenfold. Even if this mission were completed, I am sure that those very virtues we had wanted the government to inculcate in the populace would be rendered meaningless or destructive as it beat, cajoled and hollered them at Britain.

The key to all of this may be the term ‘moral reform’. It is a double-entendre. I believe that extortion, threat and violence are immoral. These are the tools government uses to bring about reform, the first made possible by the second and finally the third if necessary. How then can a government bring about moral reform? On the contrary, in order to prevent immoral reform we must restrict its ability to use these tools. The goal of Libertarianism is a muzzle on Leviathan.

Religion and Politics?

Tagged: economics, property, religion, society, wealth

It is a modern assumption that Religion and Politics don’t mix. The American Christian Right are synonymous in secular Europe with a regressive social agenda and intolerance of minorities. Closer to home, reactions to the Archbishop of Canterbury’s recent incursions into politics with his comments on accommodating Sharia law come firmly from the Henry II school.

This is an assumption I share. I may go to church, and I may go to CUCA events, but never the twain shall meet. However I was rather taken aback last Sunday having hauled my caucus to church early in the morning that the day’s sermon was overtly political. More manifesto than Mark.

The speaker was one Dr. Michael Schluter, founder and chairman of the Jubilee Centre, a Christian research group based in Cambridge. In his paper ‘How to create a relational society: Foundations for a new social order’ (published in the Cambridge Papers), he advocates a complete rethinking of our economy and society along biblical lines. This rethinking takes as its inspiration the Jubilee legislation (from which the organization takes its name) as laid down in the book of Leviticus. As he laid out this vision in his sermon, I sat incredulous that our 21st century, post-industrialised, multicultural land should seek to model itself on that of a 5000 year old agrarian society. But as the sermon went on I realized that what Dr. Schulter was talking about was of great relevance today, particularly for Conservatives.

The legislation is designed to maintain the division of land between the tribes of Israel as decreed when they first came out of the desert and settled in the land of Canaan. It requires that every 50th year, the Jubilee year, all Israelis return to their place of birth, and the compulsory selling of property back to the original owner or their heirs. The point of this is twofold. Firstly it ensures that all property is shared equitably and universally. Secondly it discourages geographic mobility, encouraging families to stay together where they have deep roots. This is the relational society, placing the strength of relationships with family and community alongside economic growth and greater equality as the main political aims.

The universal ownership of property is a very old Tory idea. Margaret Thatcher may have re-popularised the phrase “a property-owning democracy” with her council house sales in the 1980s, but it has been a key plank of Conservative thinking since the Second World War, when in 1950 Anthony Eden pledging to build 300,000 new homes a year, and the concept can be found in Conservative thinking at earlier dates. An Englishman’s home is, after all, his castle. The idea is that when a citizen owns an asset in their society, they have a stake in the success of that society and see it as part of their responsibility to further that success. Property is also a wealth-generator- many families have more wealth stored in their pile of bricks than they do in their bank accounts, and more wealth can be created with rising house prices than through the 9 to 5 slog. Homes also are a necessity in creating stable families.

As for the second point: encouraging strong ties to family and place, I believe there is a tension in Conservative thinking. The tension comes from the two largest strands in modern Conservatism, that between economic liberalization and social conservatism. For example, conservative politicians all over the globe preach the benefits of two parent families bringing up their kids with love and devotion but those same politicians want both parents out working every available hour in the pursuit of profit and economic growth. Every hour at the grindstone is one less with the sprogs nurturing them into responsible adults.

Norman Tebbit famously exhorted the jobless to ‘get on yer bike’ and look for work. But for many finding work may mean uprooting and leaving town for distant places where their line of work is more available. This geographical mobility of labour (free movement of labour being one of the key planks of economic liberalism) surely disrupts stable family and community life. I myself remember my childhood where my Dad worked in such disparate locations as Plymouth, Manchester and Dublin to get the work he was qualified to do. The poor man not only got on his bike, but cycled it within an inch of its life. While it was necessary to put money on the table, it obviously made bringing up a young family much harder; and not all families would survive under this strain.

Conservatives are only just beginning to think through this tension. The work of Ian Duncan Smith’s Centre for Social Justice and David Cameron’s leadership has finally begun to think how to redress the balance in conservatism away from Margaret Thatcher’s ‘There is no such a thing as society’ economic liberalism without undoing the great and necessary gains that her premiership had. As the sermon came to an end, I realized that take out the references to God, and Schulter’s manifesto differs little from Cameron’s crusade to mend our broken society, or George W. Bush’s ‘compassionate conservatism’.

What does this mean in policy terms. David Cameron has already talked of restoring tax breaks for married couples and those with children. Dr. Schulter goes further and points to some policies from Singapore. Tax breaks for homes shared with elderly parents, and lesser breaks for those who live within 5km of their elderly parents. With an ageing population set to put greater pressure on elderly care and the health service, encouraging families to act as a welfare unit for the old as well as young is surely sensible. He also points to the John Lewis partnership which will relocate its employees to any store in the country if they wish to be near their families.

No doubt there are many other policy implications which could have great benefits to our society. In future I hope to look past turbulent priests and anti-abortion, anti-gay bible-bashers to see that religion and its adherents have much to give in ideas, time and compassion to build stronger families, safer and more stable communities and a more humane society.

Individual Social Responsibility

Tagged: society, statism, welfare state

One of the most disconcerting aspects of modern British society is the lack of social responsibility. It is a pervasive trait that can be traced back to the creation of the Welfare State after World War Two, and the authoritarian rule that is associated with many aspects of socialist thinking.

The Welfare State effectively took away individual people’s responsibility for the society in which they were members, and placed it in the hands of the State. To pay for this, and to continue to pay for this Welfare State, it is necessary to maintain high taxation.

It is, perhaps useful to digress briefly to discuss the issue of taxation in more detail. The government has taken the rather patronising position that it can spend people’s own money more wisely. As a result of this, people want to feel the effect of the government spending their money wisely (such as on health-care and education). The problem is, this means that issues, such as ending famine in the Third World, are side-lined. In general, the government, by appropriating responsibility to itself, is expected to be responsible for all the woes that afflict society and the world. However, some charity (such as ending poverty) can only be undertaken effectively by individuals and not by the State; too many people slip through the cracks.

Paradoxically, this is an example of excessive individualism. The State, by removing individual responsibility for the woes of society, ensures that ordinary people are free from guilt; people can then concentrate on themselves, and themselves alone.

This brings me to my main point: the government, by appropriating social responsibility for itself has eroded the idea that individuals have to take an active role within this society. We have a society based on rights, but without the responsibility to complement them. This means that there is now a destructive ideology that all the problems of society have to be, and should be solved by government. The effect of this is ever increasing authoritarianism. It is only in this way that the State can solve everything that it is now expected to be responsible for (by its own actions through the foundation of the Welfare State).

What we need to do is to return to the idea of social responsibility. However, this cannot be achieved unless the government is willing to accept that it has to dismantle its spider-web of bureaucracy and interference in everyday and ordinary life.

If people keep hold of their own money, and are made aware of the fact that they are part of a society to which they owe something, people are more likely to take responsibility of their own for the problems that are prevalent all around us. This was the case in the nineteenth century when groups of people organised themselves into Friendly Societies in order to make everyone’s life better. Notably, these and similar organisation provided an almost national, but independent health-care and educational network.

It is time that we realised that ordinary people have the power to do good in the world as individuals in society; governments merely complicate this fact.

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