Simon Duffy

Thoughts, Bemusements & Arguments

Tag: basic income

Equality – The Kind That Really Matters

or why status is not a zero-sum game

This essay jumps headfirst into a complex debate which deserves a more careful set of introductory comments. However, I am pressed for time, and so I merely want to offer a few philosophical thoughts in response to some of the practical work that I’ve been involved in over the past few months.

The limits of reasonable income inequality

One of the most important political philosophers at the end of the twentieth century was John Rawls. He asserts:

All social values – liberty and opportunity, income and wealth, and the bases of self-respect – are to be distributed equally unless an unequal distribution of any, or all, of these values is to everyone’s advantage. (A Theory of Justice p. 62)

In principle Rawls offers us what appears to be a highly egalitarian starting point for social justice. However, in practice, the publication of his A Theory of Justice, his ground-breaking work in political theory, coincided with the end of a moderately egalitarian period in the political development of English speaking countries. Since the 1970s income inequality has grown significantly in the UK, USA, Canada and Australia and governments of all colours have abandoned any serious effort to promote income equality as a social goal. I am not blaming John Rawls for the collapse of egalitarianism and the rise of neoliberalism – but it is a curious coincidence.

The principle that Rawls is most famous for advancing, a principle that arises logically from the assertion above, is the maximin principle: Social arrangements should be so organised that the position of the worst off (the min) should be as high as possible (the max) and that if a certain level of inequality makes such an improvement possible then – only to that limited extent – such inequalities would be justified.

As someone who studied Rawls in the 1980s I remember this as a convincing theoretical position. How could I as an egalitarian resist a level of inequality that improved the position of the worst off? However looking back today I wonder what real effort we made to distinguish Rawls’ position from the idea of trickle-down economics: Let the rich make as much money as possible in the hope that the poorest would benefit – for a ‘rising tide lifts all boats.’

It turns out, if we examine the data of the last 40 years – as I did recently – this is a forlorn hope. It is very clear that growing inequality has not improved the position of the poorest, nor even overall economic growth. In fact, in the UK at least, as inequality increased so have the incomes of the poorest fallen. What is worse, because it is clearly intentional, is that the political system further reduced the incomes of the poorest by policy changes that were highly regressive. In fact we’ve stolen from the poor three times: First by allowing greater economic inequality; second by redistributing money away from the poor by political policy; third by pouring scorn and stigma on the heads of the poor through shameful political rhetoric.

Rawls’ argument was equivalent to saying: Poison sometimes improves our health and so we should sometimes be willing take poison. For, in fact, all medicines are also poisons – what is critical is to take exactly the right amount of the poison if you want the beneficial impact. However instead of taking care to find the correct dose of inequality we’ve been swallowing inequality by the bottle and declaring our overdose success.

Meanwhile, if someone did identify the sweet spot for a legitimate level of inequality, then I guess I missed the news.

Instead of careful efforts to limit and control inequality in the interests of poor we’ve seen trickle-down economics rise unchallenged as the economic philosophy of our time. Instead of attempts to quantify the minimum level of inequality necessary to lift the incomes of the poorest we’ve seen a number of other more dangerous arguments and assumptions rush to fill the vacuum in Rawls’ argument.

For instance, some argue that the economy needs a free labour market to efficiently allocate resources to promote the skills necessary for the economy: If we need to pay an extra £10,000 to get the right doctor, an extra £100,000 to get the right CEO or an extra £1,000,000 to get the right football player, then we must do so.

This kind of free market argument seems quite persuasive, if we don’t think too hard. After all this seems precisely the kind of reason why Rawls might allow us to release the hounds of inequality from their leash: To incentivise better performance and recruit people for essential skills – whether they be medical, commercial or athletic. But a moment’s thought must make us wonder whether we’re confusing the good of the worst-off with the good of a particular community:

  • If we need more doctors, don’t recruit doctors from Africa or Asia (where they are needed even more) to come to Europe (where we have plenty already and could certainly train more).
  • If your company needs a better CEO then train one, don’t bribe someone to leave their current job by simply offering them more money than they get now.
  • If you are a fan then you may be happy that the wealth of your team allows you to poach the best players from other teams. But none of this adds to the quality of football.

Incentives may offer a different kind of argument: There is surely a case for rewarding people for good work and discouraging people from doing bad work. But very low levels of inequality leave plenty of room for incentives. Good work is surely what we want everyone to do as a norm and inequality makes it harder to reward good work when everyone is working well.

In fact I think the case could be made that what is more important than positive incentives is the possibility of failure. Failure is what makes all forms of progress possible. Systems that makes failure impossible or too expensive are systems that do not develop and improve. The failure of state socialism in Russia was not an excess of equality, it was an excess of security, where rigid economic structures didn’t adapt to changing circumstances. (One of the arguments for basic income, which I support, is that it would make economic failure, and therefore improvement, much less risky.)

Another weak argument for inequality, but one that is heavily relied upon by advocates of inequality, is that economic goods (let’s call this wealth) are not created in a zero-sum game. If you are not familiar with the idea of a zero-sum game let me try and explain what this means:

Chess is a zero-sum game. I can win and you lose, you can win and I lose or we can draw. We can’t both win. Some things in life are much more like chess: winners are matched by losers. Zero-sum games can only redistribute a finite (fixed) amount of resources. Land is finite and hence the distribution of land is a zero-sum game.

Not everything is a zero-sum game. For instance, education is not a zero-sum game (unless you’re doing it very badly). Everybody can learn, and if I develop some ability at Latin, I do not reduce your ability to understand Latin or anything else.

Whether economics is a zero-sum game is a critical question, but also quite complex. When we look at the economy from some perspectives then it can seem a zero-sum game. For instance, the UK’s recent Coalition Government increased VAT, increased income tax thresholds and cut benefits. The combined impact of these changes was to reduce the incomes of the poorest 10% (6.5 million people) by 9% and to increase the incomes of those on middle-incomes. Government redistribution like this is, in the short-term at least, a zero-sum game.

Not all economic change is like this. If people begin to find new ways to organise things then this may increase the overall amount of wealth. Better farming techniques can improve productivity overall. Industrialisation and technology can increase the availability of useful products. These changes are much more like educational changes, new ideas and technologies change how we do things to make more possible.

However, sadly, these transformational changes, that certainly do accelerate economic production, are also associated with the greater levels of social injustice, uprootedness and insecurity. Often they led to riots, rebellions and revolutions. So, while such economic growth can potentially benefit the many, it usually seems to benefit the few, especially in the short-run. We are discovering the same today as global businesses and technologies demolish old ways of working, accelerate inequality and reward socially irresponsible behaviour.

I think this means that economics is not quite a zero-sum game; but neither are most economic goods infinite. Distribution remains a critical issue, especially for obviously finite goods like land and access to basic resources (like water, food, clothing and healthcare). It is also clear that we should be constrained by our respect for the planet as well as the needs of each other.

The evidence that economic inequality is good for us and is justified by its impact on the poor is very poor. In fact we don’t seem in much of a hurry to gather evidence on this matter at all; perhaps we are simply in awe of the power of money and don’t know how to put the dogs of inequality back on the leash. When money can buy public policy and research, as it does today in the UK, there may be few incentives to be honest about the limitations of inequality. Perhaps also, the glaring failure of socialist states like the USSR, has rather blinded us to the obvious success of democratic welfare states, like Denmark, at finding a much better balance of equality and productivity.

The importance of status

One other thing that strikes me, looking back on Rawls, is that most of the discussion about equality has tended to be highly materialistic. Perhaps we should have looked rather harder at what Rawls called the “bases of self-respect” for surely the respect in which we are held, particularly our status as an equal, is of much more importance to an egalitarian than the particular bag of money we happen to be holding.

In fact neoliberals often deploy a version of this argument when they propose that egalitarians are simply promoting the vice of envy: There is nothing wrong with inequality; inequality is helpful and essential; you are simply envious of the better-off and your envy is wrong in itself and damaging in its impact. You’ll drag everyone and everything downwards in your quest for equality.

Now, I think it is rather easy to show that income inequality (perhaps beyond some modest level) is harmful. It is also possible to show that income inequality is controllable – if you want to control it. However I do think there is something to the argument that income is not everything and that there is something worrying about a society fixated on achieving income equality as if that were the most important goal.

True equality does not meant I have exactly the same amount of money in my bank account as my neighbour: It is to live with my neighbour as an equal – for us to value and respect each other as equals.

Moreover the reason that this kind of equality is important is not that my neighbour and I are equal: We are not the same and we do not want to be the same; we are different from each other, along an infinite array of dimensions.

What we seek is an equality of status, of respect; perhaps we could almost say that we seek spiritual, not material, equality. Moreover there is a name for this kind of equality and that name is citizenship. For at least two and half thousand years, and possibly longer, some humans have sought to live together in a community of equals.

One famed example is ancient Athens, the home of democracy, where Pericles once said:

We regard wealth as being something to be properly used, rather than as something to boast about. As for poverty, no one need be ashamed to admit it: the real shame is in not taking practical measures to escape from it. Here each individual is interested not only in his own affairs but in the affairs of the polis (community) as well: even those who are generally occupied with their own business are extremely well-informed on general politics (community life) – this is a peculiarity of ours: we do not say that a man who takes no interest in politics (the community) is a man who minds his own business; we say that he has no business here at all… (cited by Thucydides)

What mattered in Athens was to be a citizen, and as such you had equal status with other citizens. Of course, Athenian citizenship excluded slaves, women and foreigners, but it still offers an important example of a different approach to equality. Moreover, in many ways it was much more egalitarian in its actual organisation and spirit than is a modern democracy. Athenian citizens had much more influence over and involvement in the life of their community than we do today.

And is this kind of equality not a more fundamental kind of equality? We do not want people to be uniform; we do not want lives to be standardised; we should surely not care too much about differences in roles, resources or relationships. Surely, what we want is a world where everyone can flourish, in all their diversity, and where everyone is treated with respect – as an equal.

If you accept this argument then you might think that it gives some support to the neoliberal position: Stop worrying about inequality; stop envying the rich.

However, this is wrong. It is in fact precisely because status equality, not income equality, is the goal of a just society that we actually need to take income equality much more seriously.

At this point I’d like to quote an argument from C. S. Lewis. But we moved house last year and most of my books are still in the garage; so I will try and make his argument from memory. The reason we should take great care to limit the visible and obvious differences between us, like differences in wealth, is not that we are all equal, but that we are all different. It is because of our much deeper and wilder diversity that should ensure that we clothe ourselves as equals. The disciplines of equality exist to help diverse people live in a spirit of equality.

This may seem a paradox, but it is not. We are beings who are each unique and diverse, but who are also each of equal moral worth. In living together we must find a way to appreciate each other’s uniqueness and yet respect each other as equals. We can do this by choosing to live as citizens; that is we can choose to live in a society that honours our shared status as equal citizens. In so far as we discover that certain kinds of artificial differences (like income) can become excessive, that they can threaten our ability to treat each other as equals, then we should restrict or tame those differences. Excessive income inequality does threaten our ability to see each other equals, particularly by stoking the pride and greed of those with the most; but also by encouraging a sense of worthlessness in those with the least. Income inequality is corrosive of most of our virtues and it makes it much harder to live in a spirit of equality.

Status is certainly not a zero-sum game. Societies can exist with very low levels of status; in fact the twin concepts of meritocracy and aristocracy offer us a vision for society where the highest status goes to the ‘best’ and the lowest become the ‘worst’ – the scapegoat, scrounger or outcast. Meritocracies produce very low levels of status overall by using a narrow and highly rationed account of social value. Almost everyone’s a loser in a meritocracy.

Citizenship maximises the distribution of status by equalising that status – everyone can share in it. Moreover society can not only adopt equal citizenship as its goal; it can go further and also seek to welcome others into citizenship. If male Athenians had welcomed women as equals, allowed foreigners to become citizens or abandoned slavery then it would have advanced equal status for all. There would have been no loss of equal-status for male citizens. (I accept that this would have made the category of citizen less ‘special’ within Athens – but this kind of enhanced status is actually a form of meritocracy and is not essential to the kind of true and equal citizenship which I am arguing for). To feel you are an equal and to see others as equals is a real form of non-hierarchical status and it is the best form of self-respect – because it takes nothing away from anyone else.

It is this is inclusive account of citizenship what some of us have been exploring as we develop Citizen Network: How to build a world where everyone is a citizen, where everyone is equal and everyone is different.

How to find justice

So, if we return to Rawls, then I think my argument is that Rawls has made a fundamental error. He forgot that a just society does not start by redistributing resources in order to advance the bases of self-esteem. Instead it begins by commiting itself wholeheartedly to equality, and it does so by establishing equal and universal citizenship as the basic role which everyone can occupy.

Rawls tried to get to equality ‘by going round the houses’ – by focusing on economic goods first – and I think this is connected to another mistake that Rawls makes:

There is no reason to assume our sense of justice can be adequately characterised by familiar common sense precepts, or derived from the more obvious learning principles. A correct account of moral capacities will certainly involve principles and theoretical constructions which go much beyond the norms cited in everyday life; it may eventually require fairly sophisticated mathematics as well. (Rawls, A Theory of Justice, p. 47)

The fundamental problem here is that Rawls is seeking a formula for justice which must be applied to society from the outside. He is not offering us an attractive conception of justice, one towards which we can turn, around which we can rally and one which enables us to build a just society together. Instead Rawls is offering a complex and ambiguous template for ghostly civil servants or philosopher-kings to interpret on our behalf.

If we are not motivated towards justice by a shared conception of justice then no operating principle, however sophisticated will save us: For who is to interpret and implement such a principle? If we do not choose to live as citizens, and if we do not act to build a world for citizens, then we choose to live in a world where inequality is guaranteed.

If we are motivated towards justice then what matters is identifying it, living by it and disciplining ourselves according to its needs. Our fundamental principle must be that we are citizens, we are all equals and that we must welcome others into this world of citizenship.

The Liberal Fallacy or Yet Another Argument for Basic Income

Liberalism, or neoliberalism, has many flaws but we don’t always focus on its biggest flaw.

You can see this flaw most obviously once you accept one of the most important axiom’s of liberal economics: if prices are flexible then the market will clear.

But what does that mean?

Well let’s begin with a simple example:

Farmers come to the market in order to sell their harvest. Shoppers go to the market in order to buy their food. The price is whatever money is exchanged for the goods. Now, if prices are flexible, then we can expect all the goods to be sold – the market will be ‘cleared’. When shoppers compete to buy some rarer item then its price will rise. When sellers compete to offload a less popular item then its price will drop. Eventually everything, even the most unattractive item should be sold as the price approaches zero.

Now the most obvious flaw in this account is that real markets don’t work like this:

The day finishes, and some goods are left over, even when there has been heavy discounting at the end of the day. This might be for all sorts of practical reasons – perhaps fewer people came to the market that day etc. But also the seller does not always accept the logic of liberal economics. He might insist on holding to his notion of a fair price – whatever the market conditions. Like the grandfather in Halldór Laxness’ The Fish Can Sing, who always sells his fish at the same price: On a day when there is high demand for fish he does not increase his price – he simply sells his ‘bargain’ fish quickly. On a day when demand is low he may not even sell his fish at all.

So, real markets are not like the pure markets of economics, not just because of the complexities of reality, but also because some people simply refuse to bend to the idea that the market should set the price. For the liberal this is a kind of irrationality: how can the fish have a value outside of the market mechanism? If nobody will pay your ‘fair price’ how can you imagine that this is its true value?

The liberal is competing with an older view (certainly the medieval view) that things really do have a fair price. And this is probably linked to Aristotle’s way of looking at things. Within the Aristotelian tradition all things have their true essence – their meaning or their value – which the wise can discern. But too often we see only the accidental properties of a thing – their semblance or their price. Within this tradition the market can no more measure value than the fool can find truth.

It seems to me that this debate about value has been at the heart of politics and society for some centuries. Liberals are modernists. The notion of an essential value is, for them, a fiction. Only the social mechanism of the market gives things a price. This may be sad and unromantic, they argue, but, for example ‘Your house is only really worth what someone is willing to pay.’ And unattractive as this is in some respects, as an argument it does have a certain power.

Today we can see these two competing perspectives playing out in the debate between those want to see greater market flexibility in wages, versus those who want to see greater rigidity, for example by the application of minimum wages, living wages or stronger employment rights. The liberal argues that, whatever the apparent disadvantages of zero-hours contracts, self-employment or reduced employment rights, any increased flexibility will improve market efficiency and so does benefit society in the long-run.

Liberalism may be rational but it is certainly unrealistic. Real markets don’t clear and real people certainly don’t behave ‘rationally’. In fact we all turn out to be a strange mixture of the modern and the medieval. When house prices went up by 360% in 11 years we became liberals, enjoying (if we owned a house!) the ‘rising housing market.’ [Interestingly this kind of jargon reveals exactly our confusion, for markets don’t rise or fall – they are just spaces.] But now that bubble seems ready to burst we have all turned medieval. We want the Government to bail us out and defend the ‘value’ of our house and to ensure that we don’t lose out from our own bad investments. Our sense of the fair price for our own home seems wonderfully flexible as long as its direction is upwards.

We are liberals when it suits us. Bubbles make fools of us all.

But this debate between fair-value and market-value is a sideshow; it does not reveal the essential flaw in liberalism. It cannot lead to any helpful answers to the fundamental questions of social justice.

The essential flaw in liberalism is much simpler – there is nothing in the market that will ensure the seller will get enough – enough to live on, enough to thrive, enough to support their citizenship. Market’s don’t care, they are not moral, they are not fair and they don’t need to ensure the survival of those who ‘come to the market.’

A flexible labour market certainly benefits employers, especially if they need to compete on price with organisations in countries who have much lower labour costs. Investors certainly prefer the cost of labour to be controlled or reduced employment securities. This reduces their liabilities.

But whatever benefits a flexible labour market offers to employers or investors, it still does not ensure that people will have enough to live on. Like the canny shopper, waiting until the end of market day, to see what price the unsold bananas might fall to, the employer knows that, when the seller is desperate enough, they will be able to buy the labour they need, at almost any price.

The essential flaw in liberalism is that, by its very logic, it will never provide a decent and secure income for citizens. To do so would be to undermine the market itself.

Of course, those who campaign for increased minimum wages or a living wage know all this. But they are forced to deploy the medieval argument – which while is attractive in many ways – is also fraught with many problems. They have been drawn onto the enemy’s territory. Their motivation is good, but perhaps their strategy is wrong. They seek to mitigate the market’s inevitable injustices, but they thereby accept that the regulation of the price of labour is the proper means of reducing social injustice. This brings with it a host of problems.

By arguing about prices we are arguing on the liberal’s territory. Instead, we must, as the Chinese say, lure the tiger from the mountains. We must start with need and justice.

This is how we can strike at the heart of the liberal fallacy. For, if the market cannot deliver fair and secure incomes for all, then perhaps so we must abandon the market for that purpose. Instead we must secure our basic income or our citizen’s income socially and politically. We must agree together what is fair, and distribute to each other the necessary resources for our basic or citizen’s income.

This is not to abandon the market for all purposes. It is to put the market in its place (in a more humble place – a secondary place). The market cannot ensure that we each have enough. So let us stop trying to make it. Instead we must create real income security together – we set a basic income and ensure that each citizen gets it. We must fix what is fair together and then we can let the labour market help us distribute our gifts and our talents between each other – at prices we are free to set ourselves.

This strategy has two further advantages over the mitigation of the market strategy which is currently being deployed by our allies.

First, it just lets the market do what is does do well – connect people’s needs to other people’s gifts. Price flexibility (once our basic income is secured) is a boon, not just to employers, but to employees, not just to customers but also to producers. If I love to write poetry, but the going rate for poetry is low, then I can sell myself cheaply, while knowing that I am doing what I really value. If I choose to do something that few others seem to value, like cleaning toilets, I can demand a higher price for my labour. We are free to decide what is important to us – in both buying labour and selling labour. We are no longer at the mercy of the market.

Second, we start to breakdown the illusion that the market can value us. Today we are constantly being told that all sorts of people are worth more than the rest of us and so are deservedly entitled to whatever salaries they award themselves – be they bankers, politicians, footballers or whoever. The price we pay for this exploitation of markets by the powerful is not only economic, it is spiritual. We are only too likely to believe the nonsensical idea that some banker is ‘worth more’ than some other person – perhaps the toilet cleaner. Constantly we forget what a proper understanding of economics can always teach us – there is no real relationship between value and price: water is cheap; diamonds are expensive; but it is water that we need to live.

Perhaps it is time to put the market in perspective. It is not a demon, it is not a saviour. It is just a useful tool for any society that understands that we are each worth infinitely more than our price in the labour market and that markets don’t take care of us – they never will. Only we can take care of us.

Keeping Money Fresh – The Ideas of Malcolm Henry

Nothing that could be got from the heart of the earth could have been put to better purposes than the silver the king’s miners got for him. There were people in the country who, when it came into their hands, degraded it by locking it up in a chest, and then it grew diseased and was called mammon, and bred all sorts of quarrels; but when first it left the king’s hands it never made any but friends, and the air of the world kept it clean. 

From the Princess and the Goblin by George MacDonald

I’ve just watched a brilliant film my Malcolm Henry on the creation of money and the case it creates for a basic (or citizen’s) income.

http://youtu.be/gue9Q6wgdjQ

I won’t summarise the argument he makes, other than to say that – like MacDonald – he distinguishes two kinds of money (a) the money in circulation in the productive economy which the air of the world keeps clean and (b) the money in savings or gambling which has become diseased. Henry then argues that we are locked into a toxic relationship with the latter; while a system of taxation for savings plus citizen’s income restores a healthy pattern of productive recirculation.

I do not know exactly whether this is the perfect solution to our problems; but it sounds compelling and intriguing to me. I will think more on this – and buy his book.

But it does strike me that in order to shift our thinking about social justice and to achieve a saner and fairer world we will need a new kind of economics. Henry seems to be doing exactly the right thing – offering us a way of picturing our situation which is true to our real challenges:

We are wealthy, but income is distributed unfairly; we are productive, but locked in debt.

It is worth remembering that the welfare state was partly the child of Beveridge – who designed some of its basic institutions – but it was also partly the child of Keynes – whose economic theory provided government with the confidence to act as the agent of growth. Today, while Beveridge and Keynes both have much to teach us, we re also suffering from the some of the limitations implicit in their models. In particular the Keynes-Beveridge welfare state tried to offer security of income through security of employment – but this model looks out-dated today.

Security is necessary, but the security we need must come from each other and not be linked to working as an ’employee’. Eventually we will find that freedom and security can be reconciled in a new economic framework.

So a big thank you to Malcolm Henry – a great innovator in the new economics we need!

Fair Incomes and Welfare Reform

One of the simplest ways of understanding what is wrong with the current welfare system and why current efforts to reform it will continue to fail is to consider this question:

Do we want to ensure that nobody has to endure absolute poverty?

There may be a few extremists who will say no to this – they are happy to see their fellow citizens die in poverty, but their views should be discounted. Almost everybody from Right to Left actually agrees that we do not want to live in a society where anyone would be left without support.

So does that mean we have a guaranteed minimum income?

Well we do, and we don’t.

Our current benefit system – for all its craziness, complexity and poor design – does attempt to provide a minimum income – through the Income Support system. We will (almost) always get something if the system’s rules say that we are entitled, but these rules are designed so that this are right is conditional upon our poverty. This is how poverty traps work:

You can get x, but only if you are poor enough.

The current welfare system is an incoherent compromise and it reflects a point of indecision in the body politic. We don’t want poverty; but we don’t want to guarantee the end of poverty. We feel uneasy: Can we afford it? Do we trust each others to make the necessary contributions? Do we trust ourselves not to abuse the system? And so we continue with a crazy system that gives millions a pitiful income and at the price of robbing them of the natural incentives to contribute, earn, save and grow their own families. In a way we are all caught in a collective poverty trap – unwilling to trust each other, unable to move forward together – we guarantee social insecurity, fear and the waste of human talent.

But we can spring the poverty trap by moving away from conditional rights and towards universal rights. If instead of making a minimum income conditional upon poverty we make it unconditional – universal.

It is as if each citizen were to say to each other:

Let us each pay a fair amount in taxes, and guarantee to each other a fair minimum income; using this we can each of us build our own life and make the best use of our own talents.

In practice we could make this shift by (a) merging tax and benefits into one system and (b) creating a guaranteed minimum income for all which then acts as the threshold at which we begin to pay taxes.

I describe these ideas in more detail in a joint policy paper with The Centre for Welfare Reform and the University of Birmingham:

Fair Income Policy Paper

I am not the first to make these arguments. In fact societies have, from ancient times, constantly attempted to achieve the right balance between income security and personal freedom. The system of Jubilees, part of the Jewish tradition of social justice, had exactly this function. No one could be cast into the slavery of poverty for ever – there was always the potential for redemption and the chance to build afresh because land that was lost through differences in trade, luck or talent would be returned to the family every fifty years.

The current UK government has at least realised that the current benefit system does penalise the poor through high taxes (dressed up as benefit reduction rates) but unfortunately it is unwilling to take the next logical step and to create a universal system of income security. Instead it is attempting to devise a complex new tax regime for those on the edge of the benefit system – which will leave some people better off and some people worse off. Given that we already live in the third most unequal developed society it seems that increased poverty for some is a price we should not be willing to pay.

Ultimately there are only two ways to reduce poverty traps either (1) to push some people deeper into poverty or (2) to lift everyone out of poverty together. The government has quietly set about the first strategy. Surely it’s time to consider the second approach – the only sane and moral solution.

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