Tag: Social Policy

The assault on the public services

Several entries on this blog refer to cuts, austerity measures and pressure to transfer public services to the private sector. The rationale for doing this is very weak.

  • Reducing public spending during a recession is a certain way to turn it into a slump. Everyone – including the private sector – depends on demand generated by public subvention. The main effect of cutting services across Europe is to ensure that there will be no-one to sell things to.
  • Public expenditure in a slump is counter-cyclical. Keynes argued that wars or building pyramids would be better than parsimoniousness in such circumstances. Deficit financing is not intrinsically a problem – most countries in the OECD incurred debts during the second world war, and it took a long time to pay them off. Like Keynes, I tend to think that neither is the best use of public money. Now is the time to build roads, railways, water treatment plants, housing and energy production facilities. There will never be a better time.
  • Cuts will cost jobs. I do not understand the argument that projects not undertaken or “natural wastage” do not imply the loss of jobs; of course they do. Often the loss will be felt most keenly in the wider economy.
  • The main source of the current deficit is not the public sector; it is the private sector. That does not mean that the public sector does not have to pay, but it does raise questions as to how far the cuts can legitimately be represented as the management of a structural deficit.

Ultimately, the only way out of a slump is through growth, not through retrenchment.

Population and resources

Thomas Malthus, at the end of the eighteenth century, argued that increasing population must inevitably lead to disaster. We were going to run out of food. Malthus was wrong, but that has not stopped generations of neo-Malthusians from claiming that it was going to be true next time. In the 1970s, The limits to growth claimed that the world was going to run out of energy. It isn’t. What happens in an economic market is that as an item grows scarce, it becomes more expensive. As some sources of energy will become more expensive, we will be forced to switch to other sources. There is no point at which the last drop of petrol will ever be poured into the last car, while other drivers look on in fury. This is just not the way that the economy works.

The other side of the Malthusian argument is about population. Population does not grow exponentially: the birth rate falls as the economy develops. The reasons are complex. Part of the explanation is the changing role of women, who delay childbearing when they have options for education and employment. Some reduction may be attributed to contraception; some, perhaps, to the effect of urbanisation on the costs of raising a child. But a significant element must be the fall that most countries have seen in infant mortality over the course of the last forty years. The association is clear and strong (try this link, which opens a new window): once parents see that children have a realistic chance of surviving to adulthood, the number of children they have drops markedly. As an Indian minister once commented, “The best contraceptive is development”.

The age of austerity

Now that cuts in public spending are on the agenda, a parade of experts has been in evidence, arguing for a new kind of welfare regime. However, what they are arguing for looks a great deal like the policies the same people have been pushing for over twenty years – a programme of privatisation, individualised services, diversity and a withdrawal of the state from direct provision.(1)

Precisely because these arguments have been running for more than twenty years, we can form a pretty clear picture of what happens when services are based on these principles. The policies may seem in principle take expenditure off the books of the public services, but that is largely illusory: the most expensive services are nearly always paid for ultimately by government, and the costs are still largely held within the accounts. The central argument is that the private sector is supposed to be more efficient than the public sector. That efficiency is largely achieved, however, by refusing to do things that the public services are bound to do; and the main way that private services have reduced cost is simply by reducing labour costs. Partial provision by the private sector still leaves the public services to provide residual services. The appropriate comparison to make is not between public and private services, but between the total cost of services where there are different patterns of service provision and delivery. Taken in the round, the combined effect of expenditure in the private sector, the development of regulatory mechanisms in the public sector and the maintenance of residual public services has been generally more expensive than services were when services were planned, delivered and strictly rationed by a sole provider.

Personalisation, diversity and consumer choice are not cheap options. There are no good grounds for believing that such policies save money.

(1) e.g. R Hewit, Public service reform is the only way to avoid cuts, Scotsman 1.3.2010

Rationing and road pricing

The Times tells us: “there are only two ways to ration the space on the roads: by queue or by price” (Editorial, 31st October 2009). Rationing is about how resources are allocated. There are many other ways to ration besides queues or pricing. The standard approaches include service restriction, dilution, filtering and reallocation. This might mean e.g. restricting the class of vehicles or drivers able to use certain roads; redefining the use of the road space through line markings; reserving space for certain purposes (e.g. breakdown lanes, bus lanes, car sharing lanes); changing traffic flows (in the US they use gates to open or close road sections at different times for traffic moving in different directions); changing the rules of the road (should there be fast and slow lanes, instead of all outside lanes being for overtaking?); and redefining the use of existing roads (freight-only roads, motorways and ring roads are examples). I’m a specialist in social administration rather than transport, and I cannot tell which of the options is better; that needs evidence. Pricing may or may not be better than the alternatives, but we should never assume it is the only option.

Why cut?

All the main political parties in the UK seem to have reached a consensus, that the economic situation must mean cuts in public spending. This is alarming. Governments must understand that they cannot cut their way out of an economic depression; they have to grow out of it. The way to bring in higher revenues is for people to earn more, not less. If they cut, the reduction in demand will lead to lower tax revenues, and increasing costs through higher unemployment.

The government finances are certainly bad. It is not because of high spending on public services; it is because the government has bailed out the banks. The main way to recover that money is going to be from the banks, as they repay their loans. The idea that this has to be paid from tax or public spending cuts is a false choice. Either might be true in time, but this is not the time.

Financial socialism

There may not be much to chuckle about in the current financial crisis, but complaints in the US about “financial socialism” (e.g. in Forbes magazine) offer Europeans some wry amusement. The US has never really understood what socialism is about; it seems to be some kind of infection, where exposure to a mild but toxic measure, like a publicly funded library or a school, turns people into brainwashed automata. Socialism, in most of Europe, refers to forms of social organisation for collective benefit. Socialists like Robert Owen, R H Tawney or Richard Titmuss stood for principled, moral intervention in social and economic organisation. (I have been puzzled by the number of commentators – like Matthew Paris in the Times – who seem to think that this has something to do with Marxism. Marxism had no time for principled idealism, or for collective groups working together to improve things, or for the idea that governments should intervene to make economies work better. The socialist parties in most European countries had very little to do with Marx – marxist parties in Europe were “communist”, not “socialist”.) The Parti Socialiste Europeen, the largest bloc in the European Parliament, is committed to “principles of freedom, equality, solidarity, democracy, respect of Human Rights and Fundamental Freedoms, and respect for the Rule of Law.” In respect of financial markets, equality, solidarity and social justice implies much more than regulation for greater stability. Whatever one makes of the Paulson plan, “socialist” is not a word that springs to mind.

There is a different word for pragmatic intervention intended to achieve order and stability: that word is “conservatism”. The standard view in conservative thought was powerfully expressed by Edmund Burke (incidentally, as much a supporter of the American revolution as he was a critic of the French one). “Government”, Burke wrote, “is a contrivance of human wisdom to provide for human wants.” The idea that government should take action as needed to regulate, balance and protect people is fundamentally conservative, and it has been a cornerstone of the “christian democracy” of central Europe for sixty years.

Private information?

Another day sees another panic about the loss of “private” data. Today’s problem comes from the sale of a second-hand laptop containing data for a million banking customers; yesterday’s concerned the details of 33,000 people in prison. The personal details of millions of people can be copied to a hand-held device in less than ten minutes. The usual response in these cases is to cluck concernedly and say, “we have to keep personal data much more secure.” Every attempt to make things more complex – requiring more data, drawing on a range of data – can be compromised by error, omission or duplication. For example, biometric data may be difficult to reproduce; but the digital information which is used to represent them is not. There are no procedures which can guarantee the privacy of the data or protect data from loss.

It seems obvious that we can’t stop this kind of data from escaping. What is less obvious is the argument that we shouldn’t. What is so private about our personal data? Identities are not private: they are public. That is part of what having an identity means. Our names, addresses and ages are generally speaking a matter of public record. Birthdates are hardly confidential information: they are publicly celebrated, people advertise major ceremonies, and celebrities have them posted in newspapers). Criminal records are public, in their very nature; no democratic regime conducts its justice in camera. Our identities announce who we are to the world; that is what they are there for.

Something rather strange has happened. Because, in a cashless society, some people are able to defraud the banks, the banks have been attempting to shift the responsibility to their customers – telling them that their identity has been stolen. And increasingly, it seems, people have come to accept that this is true – that somehow, if they admit publicly to their name, their birthday or the details of their bank account, the subsequent confusion of financial institutions are their fault. We have all been told, for example, not to share details of our bank account, because it can be used fraudulently. But anyone who has ever issued a cheque has given at least as much information – the name of the account holder, the number of the account, the bank’s sort code, a copy of the signature and in all probability, because it was common practice until about five years ago, a personal address. The banks routinely use the mother’s maiden name: in many communities, this is a matter of public knowledge, and many public announcements of births, marriages and deaths include them.

For members of the public, there is an argument for ending the presumption of confidentiality on many details. Telephone numbers, addresses and dates of birth are widely available; some details (like credit card numbers and bank details) have traditionally been fully accessible to traders, though that practice has recently been circumscribed with the introduction of chip and pin technology; and there is an argument for saying that some issues, like criminal convictions and tax records, should also be fully public (as they are in some countries). The question that remains is how far there should be a presumption of confidentiality relating to collective data – the compilations of millions of names on electoral registers, benefit and pensions records or lists of customers. The problems that arise here are not so much about the existence of the data, as the uses to which people put them – mass mailings, farming names for marketing, or fraud. Those are the issues that really upset people, and those are the issues we should really be trying to deal with.

Musical chairs

David Cameron, the leader of the Conservative party, is reported this week as saying: “We talk about people being at risk of poverty, or social exclusion: it’s as if these things — obesity, alcohol abuse, drug addiction — are purely external events like a plague or bad weather. Of course, circumstances — where you are born, your neighbourhood, your school and the choices your parents make — have a huge impact. But social problems are often the consequence of the choices people make.” In one sense, this has to be true. However, the sentiment Cameron is expressing invites condemnation of the poor, and for that reason it should be treated with great caution. Poor people do not have the choice of avoiding poverty; the nature of poverty is that it limits choices. Condemning people with very little choice for making the wrong decisions seems peculiarly callous.

I should explain the title of this comment, for the enlightenment of those who haven’t had the benefit of a merciless British education. “Musical chairs” is a children’s game. There are fewer chairs than children, the children run round the chairs in a circle, and when the music stops, they have to try to sit down. Those who do not sit down in time are out. Now of course it is true that those children who sit down tend to be those who are faster, bigger or quicker. The children who hesitate tend to have made the wrong choice, and they have probably reacted more slowly. But it would be ridiculous to blame the children who lose; the game has been designed that way. The same is true of poverty. People who lose out are often less well qualified, less connected, or slower. They may have flaws of character; they may not have responded to opportunities; they may have made the wrong choices. It does not follow that their poverty is their fault. It is more important to ask whether society shouldn’t provide a few more chairs for people to sit on.

Tackling poverty: a response to the Scottish "Government Economic Strategy"

I submitted a response to the Government Economic Strategy: a copy is available here, in PDF format.

Having made the effort to respond to the consultation, I was interested to see how the report on the consultation would represent the answers.  I was surprised to see the statement that everyone had approved the government’s priorities, when I had written that I did not; so I went back to the original submissions and compared the comments with the report on the consultation.

There were three significant differences.  First, the report claimed that everyone had approved the priorities; it was clear that many, like myself,  did not.  Second, the government had asked whether it had the balance of prevention and response right, and the report claimed that it did.  I had argued against the fashion for preventative work, but I was very much in a minority; the majority of other respondents took the opposite view, and felt the government had put too little emphasis on prevention.  Third, the report claimed that respondents favoured the government taking a leading role.  Most respondents argued against that, believing that change had to come from the bottom up.

The law of rape

The Scottish Government have announced legislative proposals to reform the law of rape. In particular, they intend to make it inadmissible in court to raise the issue of whether a women was drunk. The problem with rape trials is that they often become trials of the victims rather than of the perpetrators; this proposal is a small step to help with that problem.

It is only, however, a very small step. The central problem with the law of rape is that the definition of the offence depends on the issue of consent, and so on the state of mind of the victim, rather than the actions of the perpetrator. As long as that remains true, it is inevitable that the victims will be put on trial. And the recent proposals to investigate rape as if it was murder will only make things worse: a more extended, detailed, thoroughgoing investigation and legal process will bend most victims until they crack.

There is an alternative. Rape is only part of a general class of serious sexual assaults. Many are at least as bad as rape. (This comment is likely to surprise people who think that rape means “very bad”, but some of these other actions are much worse, even if they typically carry a lesser sentence than rape itself. Unfortunately, I cannot explain the comment fully in a public forum – they are so appalling that I am not prepared to describe them explicitly. I can only suggest that people consult a law book and see what sort of thing is classed as “indecent assault”.) If the nature of the offence was redefined in terms of the general class of assaults, the issue to be considered in court should be whether or not the actions of the perpetrator (male or female) fell into that class – and, regardless of consent, physical evidence of force would stand as evidence of such assault.