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Sep. 28th, 2011 11:53 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
danieldwilliamThree interesting comments from the Labour party in recent days have had me considering if I’d be prepared to lend them my vote at the next election and thinking I probably wouldn’t so far.
The first was Ed Miliband talking about excluding the undeserving from council housing and benefits.
I’m not a lover of the concept of the deserving and undeserving poor.
Firstly, there are real practical difficulties in sorting the deserving poor from the undeserving poor. There are real problems limiting the impact of your punitive actions to only those undeserving poor and not those dependent on them or even those just those whose lives are interwoven with them.
Secondly, the evidence suggests that a focus on the deserving poor does little to address the causes of poverty.
Thirdly, no one thinks they are the undeserving poor. When you are not poor that is a result of your own hard work and intrinsic quality. When you fall from being not poor into poverty then it was bad luck or The System what did you down. When other people fall into poverty though, that could be a result of their own fecklessness. This is populist rhetoric designed to appeal to everyone who doesn’t already think of themselves as the scum of the earth.
Finally , I think talk of the deserving poor, as determined by the state, is a move to the right and cedes a huge philosophical area to the Conservative Right. If you divide the poor into the deserving and undeserving you concede that if you are poor it might be your fault. That the causes of your poverty are not the result of global capital movements beyond the control of the individual or that the market system is inherently unstable viz the individual in the short term or that there are significant long term systemic and structural issues with our economic base. You lose the left wing critic of the economic system that gives a moral underpinning to redistributive financial policies and large scale state involvement in the economy.
My view on the deserving and undeserving poor is this. Society has a choice about how it organises production and exchange. If you decide to have a capitalist market based economic system you get the gains in personal freedom and material wealth. This is a conscious decision to prioritise those things for most people over systems that yield different results. Society also have to accept that some people are going to struggle with or within their chosen system and society is obliged to make sure those people can meet the minimum basic levels of material wealth to live a dignified life and to ensure that those dependent on them are not permanently excluded from participating in society.
The second was Yvette Cooper trying to reposition the Labour Party on immigration by “admitting” a mistake in not having transitional arrangements for Poland ascension to the EU, not bringing in a points based system for non-EU immigration earlier and in not addressing the legitimate concerns of ordinary (non-racist) people about the effect immigration has had on the jobs market or on local services.
Any talk of immigration in this country is tinged with the lump of labour fallacy. There is more often than not a whiff of racism in there. I find the populist pandering to badly thought out economics a long way from the best intellectual rigour of the Labour Party.
The third comment was from Ed Miliband on his determination to punish predatory business practise and support productive business practise. Put another way to support deserving business and punish undeserving business.
The practical difficulties of this policy are
Predatory in whose view? Over what timescale? How can you tell in advance?
How much credence do you give to Schumpeter and the rest of the Austrian school or to Modigliani and Miller on financial distress? How worried should we be about the Japanese model and their two lost decades?
Is it predatory to buy a failing business cheaply and close its factory to build housing? Does it become predatory when that business’s under valued asset is a patent? Or a trademark that I can use when I move production to another EU country to sell cheaper goods to British consumers?
If I look at the UK electricity market and decide that there is a shortage of generation capacity and I am going to build a power station and charge high prices for a scarce product should I be lauded as productive because I have built a useful asset, employed the deserving poor in constructing it and provided much need electricity to hard working families and business or should I be condemned as a predator for my gouging pricing practise by not charging the lower price I would have achieved if government and my competitors had done their job properly in the last 25 years?
This is before we get into the issue of the state’s role in the economy.
Also missing from this discussion is the role (and culpability) of the British people as customers, shareholders and lenders to companies who have behaved badly.
The practical difficulties are so, well, difficult that I don’t see how Ed Miliband could conceivably enact a policy of preventing large scale, long term predatory business practise in a coherent way. So, he is proposing something that he knows he can’t do and knows he won’t try, or he is proposing something that he doesn’t understand (which given his education is unlikely) or he does he intend to meddle in the business affairs of private companies on a case by case basis.
For anyone interested in the difficulty caused to an economy by the meddling of a corporatist state I recommend Adam Twoze book on the Nazi economy between 1933 and 1945.
Taken altogether I fear that the Labour Party’s narrative over the coming years is going to be economically incoherent, populist and undeliverable..
The first was Ed Miliband talking about excluding the undeserving from council housing and benefits.
I’m not a lover of the concept of the deserving and undeserving poor.
Firstly, there are real practical difficulties in sorting the deserving poor from the undeserving poor. There are real problems limiting the impact of your punitive actions to only those undeserving poor and not those dependent on them or even those just those whose lives are interwoven with them.
Secondly, the evidence suggests that a focus on the deserving poor does little to address the causes of poverty.
Thirdly, no one thinks they are the undeserving poor. When you are not poor that is a result of your own hard work and intrinsic quality. When you fall from being not poor into poverty then it was bad luck or The System what did you down. When other people fall into poverty though, that could be a result of their own fecklessness. This is populist rhetoric designed to appeal to everyone who doesn’t already think of themselves as the scum of the earth.
Finally , I think talk of the deserving poor, as determined by the state, is a move to the right and cedes a huge philosophical area to the Conservative Right. If you divide the poor into the deserving and undeserving you concede that if you are poor it might be your fault. That the causes of your poverty are not the result of global capital movements beyond the control of the individual or that the market system is inherently unstable viz the individual in the short term or that there are significant long term systemic and structural issues with our economic base. You lose the left wing critic of the economic system that gives a moral underpinning to redistributive financial policies and large scale state involvement in the economy.
My view on the deserving and undeserving poor is this. Society has a choice about how it organises production and exchange. If you decide to have a capitalist market based economic system you get the gains in personal freedom and material wealth. This is a conscious decision to prioritise those things for most people over systems that yield different results. Society also have to accept that some people are going to struggle with or within their chosen system and society is obliged to make sure those people can meet the minimum basic levels of material wealth to live a dignified life and to ensure that those dependent on them are not permanently excluded from participating in society.
The second was Yvette Cooper trying to reposition the Labour Party on immigration by “admitting” a mistake in not having transitional arrangements for Poland ascension to the EU, not bringing in a points based system for non-EU immigration earlier and in not addressing the legitimate concerns of ordinary (non-racist) people about the effect immigration has had on the jobs market or on local services.
Any talk of immigration in this country is tinged with the lump of labour fallacy. There is more often than not a whiff of racism in there. I find the populist pandering to badly thought out economics a long way from the best intellectual rigour of the Labour Party.
The third comment was from Ed Miliband on his determination to punish predatory business practise and support productive business practise. Put another way to support deserving business and punish undeserving business.
The practical difficulties of this policy are
Predatory in whose view? Over what timescale? How can you tell in advance?
How much credence do you give to Schumpeter and the rest of the Austrian school or to Modigliani and Miller on financial distress? How worried should we be about the Japanese model and their two lost decades?
Is it predatory to buy a failing business cheaply and close its factory to build housing? Does it become predatory when that business’s under valued asset is a patent? Or a trademark that I can use when I move production to another EU country to sell cheaper goods to British consumers?
If I look at the UK electricity market and decide that there is a shortage of generation capacity and I am going to build a power station and charge high prices for a scarce product should I be lauded as productive because I have built a useful asset, employed the deserving poor in constructing it and provided much need electricity to hard working families and business or should I be condemned as a predator for my gouging pricing practise by not charging the lower price I would have achieved if government and my competitors had done their job properly in the last 25 years?
This is before we get into the issue of the state’s role in the economy.
Also missing from this discussion is the role (and culpability) of the British people as customers, shareholders and lenders to companies who have behaved badly.
The practical difficulties are so, well, difficult that I don’t see how Ed Miliband could conceivably enact a policy of preventing large scale, long term predatory business practise in a coherent way. So, he is proposing something that he knows he can’t do and knows he won’t try, or he is proposing something that he doesn’t understand (which given his education is unlikely) or he does he intend to meddle in the business affairs of private companies on a case by case basis.
For anyone interested in the difficulty caused to an economy by the meddling of a corporatist state I recommend Adam Twoze book on the Nazi economy between 1933 and 1945.
Taken altogether I fear that the Labour Party’s narrative over the coming years is going to be economically incoherent, populist and undeliverable..
