Voting out the far-right
Mike Ion thinks the Labour leadership should do more to combat the rise of the BNP:
Gordon Brown would send out a powerful message to his party’s core supporters if he were to personally throw his weight behind a call for a new “coalition of the willing” that will help to blunt the advance of the far-right in this country by addressing some of the genuine concerns of white working-class voters while at the same time openly challenging those concerns that have no factual or legitimate basis.
I fear Mike’s plea will go unheeded. The fact is that our electoral system gives Labour little incentive to fight the far-right, or listen to its core supporters.
Labour will not lose the next election because of the rise of the BNP in places like Stoke (Mike’s example).
It makes no difference if Labour’s 10,000 majorities in Stoke’s constituencies are cut by thousands because of the BNP or abstainers.
What will cost Labour the election is the loss of places like Worcester or Oxford West. And although abstentions or BNP votes by white working class voters in those areas could be a problem, they are less a danger than middle-income floating voters swinging to the Tories. It was his grasp of this fact that helped Blair win three elections.
So, could it be that ignoring its core support – and the rise in the BNP this threatens – is one of the prices we must pay for our first-past-the-post system?
Public sector workers are more productive
Workers in at least parts of the public sector are significantly more likely to do unpaid overtime than their private sector counterparts.
This new paper finds that people in the not-for-profit caring sector (education, healthcare, childcare and care homes) are 12 percentage points (40%) more likely to do unpaid overtime than comparable workers in the profit-making caring sector.
This suggests that what Julian Le Grand called “knightly motives” are significantly more common in the public sector – because people with a strong sense of vocation are likely to avoid working for someone else’s profit.
The TV detective motivated by a desire to nick villains rather than get on with the top brass is a cliche because it contains some truth.
This doesn’t just mean that the neoliberal idea that everyone is motivated by narrow self-interest is wrong. It also means that there are dangers in “reforming” the public services. Reforms that introduce profit motives, or alienate workers by introducing heavier-handed management, might add to costs by reducing donated labour.
In favour of class war
Danny Finkelstein bemoans Labour’s toff-bashing in Crewe. For me, though, the problem isn’t that Labour’s displaying its class hatred, but rather that it’s attacking the wrong class, and years too late.
As Danny says:
To be portrayed as a top-hatted toff actually represents an improvement in the Tory image. Being seen as pinstripe-suited bosses, estate agents and spivs was far more devastating.
And herein lies the failure of New Labour. It is the party of pinstriped bosses. And it’s in this that lie the origin of its current troubles. For example:
continue reading… »
New Labour and its insecurity
The post-mortems – the mot juste, I think – on New Labour have missed a point.
The party is paying the price for the fact that the New Labour project was based upon profound, and now crippling, intellectual insecurity.
Put yourself in the shoes of New Labour’s founders in the 80s and early 90s. You see that traditional social democratic arguments for redistribution don’t work. You see Labour’s traditional support base, the manual working class, declining in numbers (pdf). And you see a managerial class winning what you want – wealth and power.
What do you do? You abandon traditional Labourism, in favour of an appeal to Mondeo man and Worcester woman.
continue reading… »
Multiculturalism and ‘managed’ migration
The Spectator’s leader contains (at least) two silly claims.
First:
Nobody sane can be opposed to a managed migration system that functions well
Leave aside the fact that a well-functioning managed migration system is just impossible.
continue reading… »
Immigration and evidence for it
The Lords’ report on the economic impact of immigration is better than I’d feared. But I’ve still got two problems with it.
One is this:
We found no systematic empirical evidence to suggest that net immigration creates significant dynamic benefits for the resident population in the UK. This does not necessarily mean that such effects do not exist but that there is currently no systematic evidence for them. (par 69)
But absence of proof is not proof of absence.
continue reading… »
Taxing the rich
The people who are giving Alistair Darling stick for his U-turns on Capital Gains Tax and taxation of non-domiciles are missing an important point – that his problems should never have arisen.
Truth is, there is a very simple solutions here: don’t tax incomes or capital gains, but land values and consumption instead. If we had more of these taxes, non-doms and hedge funds managers would be taxed upon their Kensington mansions and dinners at the Mirabelle whilst incentives to work would be preserved, insofar motives for doing so were not to have lavish lifestyles. This would be, potentially, both more equitable and more efficient than current arrangements. If we had them, Darling would not be in the mess he is.
So why are neither more progressive consumption taxes nor land value taxation being even considered? Part of the answer, I suspect, lies in a peculiar pathology of politicians’ thinking – namely, that problems must have complex solutions.
But why? In our everyday lives, most problems are solved either easily or not at all. And yet politicians hardly ever believe this is true in politics. Their response to the endless “crises” that characterize managerialist politics is hardly ever either “there’s nothing we can do about this” or “this one’s easily solved in principle – just give us a few weeks to sort out the details.”
Why is this? Part of me thinks it’s the representative heuristic – people think that because problems have complicated causes, they must have complicated solutions. Another part, though, thinks it’s to do with politicians’ self-image. To believe that one is wrestling with complex issues – in an fast-changing modern globalized world of unprecedented challenges of course – is to cultivate a heroic self-image. No such image is projected by believing that solutions are easy or just unattainable. In this sense, Darling’s troubles are the result not (just) of personal individual failings, but of our political class in general.
* Cross-posted from Stumbling and Mumbling.
Should we subsidise the arts?
Should there really be tax breaks for donations to the arts, as Paul Myners and Nicholas Serota demand here? The Pigovian case for such tax breaks is well-known; without them, there’d be an under-supply of such public goods. However, the egalitarian case for such breaks is very shaky, as this recent paper discusses.
It argues that donations to the arts can actually increase inequalities of well-being in two ways – even leaving aside the possibility that such donations are really intended to boost the ego of the donor.
First, because the rich gain from donations by other rich people; if I donate to an art gallery, others’ donations will benefit me by improving the gallery, and by attracting attention towards my generosity. Second, because some of the non-rich go to art galleries more than others, inequalities between the non-rich might rise.
It’s possible, therefore, that such gifts actually increase inequalities. In such cases, philanthropy isn’t a substitute for redistribution, but actually strengthens the case for it. There are of course many arguments against redistributive taxes. However, the claim that they stop the rich giving to the arts is not one that should concince egalitarians.
This doesn’t mean there should be no tax breaks for charitable donations. What it means is that the case for such breaks lies in efficiency, not equality, and that there’s a big difference between the sort of philanthropy that benefits the poor directly and the sort, like art donations, that do not.
Konnie Huq and dodgy welfare claimants
Alice Miles deplores Gordon Brown’s message for Konnie Huq on her leaving Blue Peter. Ms Miles is right, but for the wrong reasons. Mr Brown shouldn’t be thanking Konnie. He should be decrying the adverse effect she’s had upon the British economy.
The reason for this is simple. Anything that makes being out of work more pleasant encourages people to linger on benefits. And the sight of Ms Huq on daytime TV has just this effect. Why bother going out to work when you can stay home and look at her? (Of course, you could record her whilst you work – but how will you find time to watch her amid all those episodes of CSI?)
In this sense, Ms Huq’s influence upon the economy has been massively pernicious. Let’s do some sums. There are 5.2 million people of working age claiming state benefits. Let’s assume that Konnie’s appearance on Blue Peter caused – at the margin – 5% of these to stay out of work. That’s 260,000 people. If we assume these would have earnt £15,000 a year, then the economy lost £3.9bn a year.
This means that, over the 10 years Konnie’s presented Blue Peter, we’ve lost the equivalent of a year’s spending on the defence budget. Her leaving the programme could therefore be a positive supply shock. It’ll encourage some people to find work, which in turn will raise output and reduce the inflationary pressures Mervyn King warned about last night. I suspect, however, that this effect will only partially offset the effect Carol Vorderman’s boob job has had in curtailing labour supply. Never mind the credit crunch – that’s been the biggest economic disaster of recent years.
The point: does this seem absurd? It shouldn’t. It’s merely the logical consequence of the assumption that people on benefits could work if they want to. Perhaps it’s this premise that’s wonky.
* Cross-posted from Stumbling and Mumbling
Cameron and the Chigley ideology
At the end of every episode of the children’s programme Chigley, workers and bosses from the biscuit factory would stop work and go to the 6 o’clock dance, where the local lord played the organ.
This seems to be David Cameron’s model economy – one in which all conflict can be eradicated simply by bosses and the rich being a bit nicer:
[Cameron] wants to see the banking industry reduce the risk of financial distress by giving advice to mortgage-holders and increasing repayments gradually rather than imposing a sudden hike.
“This is what I mean by social responsibility: companies operating in an enlightened way that is good for them, and good for society as a whole.”
What this misses is that the current the problems in the banking system – their reluctance to lend to each other – is the result of fears about future profits. A big reason why the Bank of England and the Fed have cut rates is precisely to raise banks’ profit expectations. Expecting banks to sacrifice profits by subsidizing borrowers is pie-in-the-sky at the best of times. It’s downright barking now.
This isn’t all that Cameron misses. He should be asking: why do ordinary borrowers have to take on interest rate risk? Why aren’t longer-term fixed rate mortgages more available? What can be done to improve competition between mortgage lenders to drive rates down? In the short-term, this would mean increasing price transparency; in the longer-term, perhaps. reducing barriers to entry. In short, Cameron could show signs of having read the Miles Review.
But he hasn’t. Either he’s just engaging in cheap grandstanding, or we’re getting an insight into his true ideology – a belief that the economy doesn’t need reforming, but merely needs the rich and powerful to pretend to care about the lower orders.
The Middle East: Should I care?
Scoop writes: “I have reached the stage where a mild urge to avoid discussing Middle
Eastern politics, with those I find otherwise intelligent and interesting, has arisen.”
What I find amazing is that the urge is only mild. I have few urges stronger than the desire not to discuss the middle east. I find it hard enough to work out what’s happening in British society, so how I can hope to understand middle eastern ones, especially as the media is vanishingly unlikely to enlighten me?
One reason for this is that that so much “discussion” seems to ignore the principles of methodological individualism in favour of talk about groups. And this just runs into the pronoun problem; when you talk about “Israelis” do you mean all, most, some, a few, what?
And then there’s the sampling problem. The question to ask about any event – in sport, finance, politics, whatever – is: what sample is that drawn from? Where does it lie on the probability distribution? What’s the shape of the distribution? So, does a suicide bombing, say, represent average Palestinian opinion or minority opinion? If so, how small a minority?
I suspect most discussion about the middle east is as fatuous as discussion about God. It’s an expression of tribal sympathies, without bringing any new evidence to the question. And, as Richard says, such dogmatism is simply illegitimate in the public sphere. So, please enlighten me. Could someone point me to a discussion of middle eastern politics which makes sense, which accords with the basic principles of rational analysis I’m used to in economics? If such analysis exists, what proportion does it represent of all discussion?
(cross-posted with Stumbling and Mumbling)
Labour’s real funding scandal
Charlie and Mick have been debating the bloggers’ role during the Abrahams affair. My take here is that the main task of bloggers is not to chip in snippets of Westminster gossip, but rather to ask: why does this matter?
And here, the MSM misses the wood for the trees. The real scandal is that this was never supposed to happen. The ideal of the Labour party is that it was supposed to be funded by a mass of tiny donations. And the funding was supposed to pay for party officials and organizers, not for advertising.
The job of campaigning for Labour ideals was meant to be done gradually and subtly by Labour supporters themselves, in everyday informal chats over teabreaks and in the pub, not by bill-boards and TV adverts.
As Dave says, the very fact of Labour relying upon kleptocrats’ money is a sign that the party has abandoned democratic left ideals.
Instead, the party has become, at best, just another consumer good provided by big business, and, at worst, a cabal of megalomaniacs clinging to office for its own sake. The Abrahams affair matters not because it shows that Labour politicians are petty, corrupt and incompetent – anyone who seeks advancement in any hierarchy is – but rather because it highlights the death of a noble ideal.
You might reply that all this is obvious. And isn’t this the biggest scandal of all – that we’ve taken the death of mass politics for granted? And this is where bloggers come in. Insofar as we have a role, it’s to resuscitate mass politics – to assert that politics is something the people do, not something that’s done to us.
Marriage tax myths
Remember policy – y’know, that stuff politicians are meant to do? Well, here’s something for the few of you who do – new research suggests that the Tories‘ proposals to encourage marriage through the tax system would be a wasteful bribe to median voters, rather than a way of improving the way children are brought up.
Granted, there’s evidence that the children of married couples do better – on average – than those from single-parent homes.
But correlation isn’t causality. It doesn’t follow that marriage causes children to do better. It might be that the sort of people who get married are just better parents (on average) than the sort that don’t get married. Economists call this a selection effect.
If this is the case, giving financial incentives to people to get married won’t improve children’s upbringing. It’ll just mean kids live with bad married parents rather than bad unmarried ones.
And evidence from Sweden suggests this is the case. In 1989 a change to rules on widow’s pensions increased financial incentives to marry. The upshot was that 64,000 couples got wed in December 1989, compared to an average of 3000 in normal Decembers.
And did the children of these additionally married couples do better than those from cohabiting couples? No:
We find little evidence that marriage has a causal effect on children’s grade point averages. The marriage by parents responding to financial incentives appears to provide no advantages to children…The positive association between marriage and children’s education is due to selection…rather than to causation.
If you want to ram this point home, remember another distinction – between the average and the marginal. The average married family is tolerably happy and a decent place to grow up in. But the sort of parents who only marry for a few quid are likely to be the marginally married couple – the sort that fight. And this older paper (pdf) by Thomas Piketty shows that children from such families do as badly at school as those from single parent homes. Evidence from Germany corroborates this.
The bottom line here is simple. As Unity said a few weeks ago, Cameron’s plans to give tax breaks to married couples are a scam. They’re illogical, and lacking a basis in hard evidence. Like his inheritance tax plans, they are primarily a bribe to people he likes.
The Left vs hierarchy
In a sense, HMRC’s loss of child benefit records highlights the weakness of the Left – it’s failure to challenge the assumption that organizations must be hierarchic.
For years, the Left seems to have believed, to quote Orwell, that Britain is a family with the wrong people in charge. All would be well, it has assumed, if only there were better people with better policies at the top. To listen to some calls for Sir Ian Blair to resign, you’d think that the only problem with the Met is that the wrong arse is in the Commissioner’s chair.
It’s time the Left got more radical. We should ask: is organizational failure a problem of personnel, or is it instead a failure of structure? In particular, why should hierarchical organizations be the only way to deliver state services?
HMRC’s failure perhaps demonstrates the inherent failings of hierarchy.
The problem is that top bosses simply cannot know everything that goes on. As Unity says:
If…all this has come about because HMRC staff have disregarded policy and operated outside specified data security procedures then one can no more hold Alistair Darling personally responsible for the loss of this information than one could reasonably hold the CEO of a private sector corporation to account on discovering that an office junior has been nicking paper-clips.
And it’s not enough to merely have the right procedures in place. The problem is to ensure that employees follow them. And hierarchy can obstruct this, in two ways:
1. Hierarchy demotivates workers. As Ken Cloke and Joan Goldsmith say:
Through years of experience, employers learn that it is safer to suppress their innate capacity to solve problems and wait instead for commands from above . They lose their initiative and ability to see how things can be improved. They learn not to care.
Isn’t this likely to be true of employee who put the CDs in the post? Because s/he had no say in HMRC, s/he felt alienated from its goals and values, and just didn’t care.
2. Hierarchy reduces the scrutiny of workers. Say you were a colleague of this worker, and knew what s/he was doing. Would you have pointed out that this was a lousy way of handling data? Or wouldn’t you have kept quiet, thinking “I have no say here, this is management’s job, I don’t want to rock the boat, it’s none of my business, I’ve nothing to gain from speaking out, and lots to lose.” Greater worker control is a way of policing workers, should motivation fail.
Now, I’m not arguing here for the demolition of all hierarchy and the institution of worker control. I’m merely saying that it should be part of the Left’s agenda to question whether rigid top-down hierarchy is always as necessary as the Boss Parties think.
This is especially true because hierarchy is inherently reactionary. Why should the Left – especially the liberal Left tolerate an ideology which says that working people cannot function without leadership and control from some self-appointed elite?
Unemployment: myth vs fact
For years, one of the great rhetorical tricks of the right has been to blame the victim. This is especially true of their attitude to the unemployed, as I’ve just seen.
I pointed out yesterday that immigration is high partly because of a mismatch between the skills the unemployed have and the skills employers want. I got this response from A Very British Dude:
The skill in question is the willingness to turn up for work, work for a full day, then turn up again the next day, sober…It is this “skill” that the British long-term unemployed and NEETs (or less euphemistically “Fucking bone idle chavs”) lack.
And Matthew Sinclair added that the problem is “social breakdown”: the unemployed “lack basic social and mental skills.”
Now, this is probably true in some cases – but then anything is true of some people. But it is only a very partial truth.
What it glosses over is that the bone idle and deeply unskilled are only a minority of the unemployed.
Shall we look at some numbers?
1. Of the 1.67 million officially unemployed, over 1 million have been out of work for less than six months and a further 269,000 for less than a year (table 9 of this pdf). These are not idle or unemployable; they can’t be, because they were (for the large part) in work recently.
2. Of the 178,000 unemployed for over two years, only 33,000 were under 25 – the age likely to be chavs or the product of social breakdown. Almost twice as many of the long-term unemployed are over 50.
3. Unemployment is not a “pool” but rather the difference between two quite fast-flowing rivers. In any one month, almost a quarter of the claimant count measure of unemployed leave or join the count (table 10). If they’re so idle, how come so many of the unemployed leave the register so quickly?
4. Of the 8 million economically inactive, over half are students or home-makers (table 13). Only 199,000 – one in 40 – are men under 25 (table 14). For every one young man who’s economically inactive, there are three people who took early retirement.
The facts, then, tell a different story from the right-wing talk. They show that the majority of the unemployed are not unemployable idle young people. Instead, they are victims of low demand (not necessarily low aggregate demand), genuine losers from the creative destruction that is inevitable in a market economy, and those who have been discarded by bosses after years of work.
Isn’t it about time the Left challenged the lies of the right, and faced the facts about unemployment?
And isn’t it disgusting that the Boss Party (I refuse to dignify Brownites with the name “Labour”) has for years collaborated with the right by perpetuating their mythology?
The boss illusion
Maybe I move in the wrong circles, but I get the impression that the Left doesn’t spend much time thinking about Jensen’s alpha. But it should, because this simple measure shatters the illusion of our age – that bosses deserve big salaries because they add value to a company.
The Left is, rightly, angry at the $30m pay-off Charles Prince got from Citigroup this week and the $159m raked in by Stan O’Neal for leaving Merrill Lynch.
What they miss is that such payments are not only unjust, but inefficient. Jensen’s alpha measures this. It shows the return company shareholders get which can’t be explained by the tendency for the share price to rise and fall as the general market rises and falls.
I estimate that whilst Charles Prince was CEO (from September 2002), Citigroup’s alpha was minus 0.2% a month. That meant Citigroup shareholders lost an average of $300m every month Prince was boss. And they paid him $2m a month for this. Merrill’s alpha under O’Neal was minus 0.8% a month – again, a loss to shareholders of $300m a month.
Now, one objection here is that share prices are volatile, and so these alphas are measured with uncertainty. But this uncertainty works both ways. There are prodigiously few bosses who can point to statistically significant alpha under their management – which is why you hear so little about it.
Which shows that the claim that bosses deserve big salaries because they add value to a company is just a myth. It’s an ideological illusion which functions to justify inequalities in income and power.
Instead, what bosses are good at is rent-seeking, extracting cash from workers and shareholders.
And this is where the right are wholly hypocritical. They whine (sometimes rightly) about rent-seeking in government, but are blase about it in companies, claiming that the market will solve the problem.
But it doesn’t. As the pay-offs to Prince and O’Neal show, the market doesn’t punish failure. It’s far better to be a rubbish boss than a great worker.
Against equality of opportunity
The left, if the word means anything at all, is about equality. But what type of equality? This is, of course, a huge question; for serious thinking on the subject, look at the Equality Exchange. I just want to make a quick point – that the left should give less priority to equality of opportunity.
Start from a fact. In 2006, pupils eligible for free school meals were roughly only half as likely to get five good GCSEs as richer pupils; 28.7% vs 56.2% for boys and 37.4% vs 66% for girls (table 7 here). Poverty, then, still leads to poor educational attainment even after nine years of New Labour government.
This is not for want of trying. Specialist schools, greater choice and the Excellence in Cities programme have helped (pdf) narrow the gap. It’s just that progress has been slow.
And there’s no reason to hope that greater spending on poorer pupils will eliminate the gap. The recent report (pdf) from the Primary Review showing that the £500m spent on the National Literary Strategy had “almost no impact” on standards highlights a worldwide finding (pdf) – that spending on education does little to improve standards. For this reason, US research suggests that it would require enormous differences in spending on pupils to achieve true Roemerian equality of opportunity.
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» Why don’t MPs pay back tuition fees instead of increasing ours?
» Obama is right to slam BP – and why capitalists should too
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» Blog Nation: what would you like to see discussed?
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» In defence of these fraternal nominations
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