Equality of opportunity may not be fair (Ha-Joon Chang’s Thing 20)

23-things-they-don-t-tell-you-about-capitalism“Equality of opportunity is the starting point for a fair society. But it’s not enough. Of course, individuals should be rewarded for better performance, but the question is whether they are actually competing under the same conditions as their competitors. If a child does not perform well in school because he is hungry and cannot concentrate in class, it cannot be said that the child does not do well because he is inherently less capable. Fair competition can be achieved only when the child is given enough food – at home through family income support and at school through a free school meals programme. Unless there is some equality of outcome (ie., the incomes of all the parents are above a certain minimum threshold, allowing their children not to go hungry), equal opportunities (ie., free schooling) are not truly meaningful.

…We cannot, and should not, explain someone’s performance only by the environment in which he has grown up. Individuals do have responsibilities for what they have made out of their lives.

However, while correct, this argument is only part of the story. Individuals are not born into a vacuum. The socio-economic environment they operate in put serious restrictions on what they can do. Or even on what they want to do. Your environment can make you give up certain things even without trying. For example, many academically talented British working-class children do not even try to go to universities because universities are ‘not for them’.  This attitude is slowly changing, but I still remember seeing a BBC documentary in the late 1980s in which an old miner and his wife were criticizing one of their sons, who had gone to a university and become a teacher, as a ‘class traitor’.

While it is silly to blame everything on the socio-economic environment, it is equally unacceptable to believe that people can achieve anything if they only ‘believe in themselves’ and try hard enough, as Hollywood movies love to tell you. Equality of opportunity is meaningless for those who do not have the capabilities to take advantage of it.”

Ha-Joon Chang (2010), 23 Things They Don’t Tell You About Capitalism, p.210-211, 217.

Unions need a reinvention

workersThe Observer’s Will Hutton calls for the reinvention of trade unions in the UK (article link below). The labour market continues to change, and workers need effective representation. The balance of power between capital and labour is a key relationship in a capitalist economy, and the dramatic rise of self-employment and the gig economy demand that unions respond.

If unions are to stay relevant in the new workplace, they must change

Thoughts on welfare-ism and nationalism

rawRobert Anton Wilson’s Prometheus Rising is a book which tries to make sense of how the human mind works, how to make it work better, and the implications for human development, from the past through the present to the future. It is in part a work of social philosophy, and is truly enlightening about humanity, containing plenty of thought-provoking insights. Here is one which I think is relevant to this blog:

“Welfare-ism, socialism, totalitarianism, etc. represent attempts, in varying degrees of rationality and hysteria, to re-create the tribal bond by making the State stand-in for the gene pool. Conservatives who claim that no form of Welfare is tolerable to them are asking that people live with total bio-survival anxiety and anomie combined with terror. The conservatives, of course, vaguely recognize this and ask for “local charity” to replace State Welfare – ie.,, they ask for the gene-pool to be restored by magic, among people (denizens of a typical city) who are not genetically related at all.”

This is surely right, but for me there is no alternative to some form of welfare state under capitalism, if some of its worst aspects are to be mitigated. Some sort of middle way is preferable to political extremes which have historically been associated with repression and a widespread disregard for human life in the pursuit of ideological purity. Continue reading

Benefits of the new higher minimum wage

social care hands imageA piece here from today’s Guardian newspaper about the benefits to thousands of low paid workers in the social care sector of the recent rise in the national minimum wage. It is now called the ‘Living Wage’, which typically reflects the highly political nature of the policies of former UK finance minister George Osborne. His policy was simply a decent rise in the minimum wage, but of course he had to rename it. The name was stolen from those campaigning for an even higher minimum wage which would ensure that its recipients had enough income to live on.

There were fears that the level of the new Living Wage would damage the care sector in particular, which employs a huge number of low paid workers. But the new research suggests this has not come to pass. The pay bill has apparently risen by nearly 7%, and there has been some compression of wages at the bottom of the pay scale in the sector.

It should be noted that the majority of local councils commissioning social care have raised the fees they pay to providers so that the overall impact on society is partly redistributive, away from taxpayers and towards the low paid. But overall it represents a significant positive change.

Time to work smarter: the UK’s continuing productivity problem

workersHere is an interesting take on the UK’s poor recent productivity record, and possible solutions to it. According to the article, low wages, inflexible work practices and job insecurity are to blame. If this is right, then there are some win-win policies which could reverse the trend and also improve working conditions across the country.

Productivity growth is essential to the prosperity of the economy. If it does not grow, then there is no room for wages and profits, as the two main categories of income, to grow together, so as to improve the material conditions of the majority. Of course, growth needs to create jobs as well, since those without employment cannot share in rising incomes, other than through out-of-work benefits which represent incomes redistributed from those in work. Employment in the UK has grown strongly since the recession, but wages have not, so that the economic ‘pain’ due to sluggish growth has been shared more fairly, with more people in work alongside stagnant wages. Continue reading

Ha-Joon Chang on austerity and corporate vs social welfare

ha-joon-changHere is a useful five minute interview on the Guardian website with Cambridge economist Ha-Joon Chang, bestselling author of 23 Things They Don’t Tell You About Capitalism, which is very readable and full of interesting and iconoclastic ideas. I have discussed some of Chang’s ideas on this blog in the past. Here he punctures a few myths about the recent direction of economic policy in the UK.

Political turmoil and a new Prime Minister. Time for One Nation?

Theresa_May

Theresa May. Image from ukhomeoffice via Wikimedia Commons

A new Prime Minister is on her way, starting tomorrow. This is the latest chapter in the political turmoil that has engulfed the UK since the vote for Brexit a few weeks ago. Theresa May, formerly the Home Secretary, is to become the UK’s second female PM. Now I am not a great supporter of things Tory, at least from the perspective of economic policy, but I was interested to read some excerpts from May’s speech which formally launched her campaign to become the next leader of her party. Of course, this was before the dramatic withdrawal of her only remaining opponent in the contest, Andrea Leadsom.

Some of the details of the speech can be found here. I know that skilled politicians are good at making the right noises to attract voters and ultimately win power. Her bid was to unite her party and the country in the aftermath of Brexit, which will be hard going. But some of the quotes from her speech could have been taken from speeches by Ed Miliband, the former Labour leader. Miliband championed a ‘One Nation’ Labour party, and policies which would aim to promote his centre left, social democratic vision of Britain. Continue reading