In 2009 the academic Alan Finlayson wrote an article called ‘The broken society versus the social recession’. His purpose was to show how different was the former idea of David Cameron’s and the latter propagated by the left campaign group Compass (in fact, the term ‘social recession’ has long been more widely used to describe a set of social pathologies ranging from criminality to teen pregnancy).
Finlayson’s piece rests on a cast iron assumption that there is a set of social problems which are getting worse, the important question therefore is ‘why?’. He quotes a 2007 Joseph Rowntree Foundation project in which the RSA and I were involved called ‘social evils’ which explored the way society was deteriorating even while the economy was thriving. Finlayson concludes that with the economic collapse the debate over what lies behind social deterioration will intensify.
The posssibility the article didn’t consider, and is rarely discussed, is that in certain important respects the social recession might be coming to an end. In this post I don’t have time to gather all the references but, take my word for it, there is reasonable evidence for significant improvements in all the following areas:
Violent crime rates
Binge drinking and drug consumption among young people
Levels of volunteering and feelings of neighbourliness
Children’s overall wellbeing
Why aren’t we discussing this more? The idea that society is improving because we are choosing to behave more wisely and responsibly is uncomfortable for parts of both the left and the right. For the former it shouldn’t be happening in an unequal society still dominated by individualistic values. For the conservative right it shouldn’t be taking place in a society coarsened by moral relativism and weakened by diversity and multiculturalism.
It is possible to counter the improving data by saying it is short term, inconclusive or outweighed by things going in the wrong direction. But if we were to accept that society is getting less broken, what explanations might be on offer?
There was recently a spate of articles based on epidemiological research speculating that falling levels of lead in the atmosphere are the best explanation for plummeting crime rates. A factor endogenous to social trends may indeed be implicated. But I am more drawn to a more structural explanation.
In policy, economic and social analysis the single ability of greatest value is to be able to distinguish a cycle from a trend. It is hard analytically and challenging psychologically. Not only are human beings inherently short-termist in their outlook but we are drawn to things that are more visible. Cycles are like the second hand on a clock – we can see them moving which gives us a sense of time passing, while trends are like the hour hand.
Here is a bold thesis. Since the dawn of the enlightenment in the late mediaeval period – what Kant described as man entering into adulthood – human progress has accelerated guided by the core principles of that revolution – universalism (justice), autonomy (freedom) and humanism (progress itself). These principles underlie the long trend of human advance which makes citizens in the developed world richer, healthier, more intelligent, more tolerant and more peaceful than ever before. But within that trend the misapplication of those same principles has also led to terrible cycles, most obviously the cycle of colonial exploitation which culminated in the nightmare of the First World War and the cycle of totalitarian ideology which led to the horror of Nazi Germany, Maoist China and Stalinist Soviet Union. At the heart of these terrible events was a hubristic perversion of the idea of progress.
The recent cycle, which began in the sixties and may now be startng to end, also involved a misapplication of an enlightenment principle – this time freedom – and was much milder in comparison. But the idea that society can flourish relying on no more than individuals pursuing a policy of possessive individualism is at last starting to lose favour. Is this what lies behind the evidence of a receding social recession?
If, in the end, society learns and improves should we focus less on cycles of deterioration and more on long trends of progress? If so, it shifts the debate in a subtle but, to my mind, crucial way.
Instead of asking what we have to do to make progress possible we should instead ask what the barriers are to allowing the further natural development of the human spirit into a higher, healthier, more fulfilled and rounded form. The answers might be similar but the framing of the question has the scope to increase significantly our sense of possibility and agency.
The obvious charges against this thesis are that it is determinist and complacent. But I don’t think society improves automatically. It happens through struggle and debate. And the other key domains of our lives – economics and politics – sometimes accelerate social progress and sometimes delay or reverse it. Right now I feel more confident about society than about economics and very worried about politics – for reasons I will explore in a future post if this one doesn’t get ripped to shreds.
High end salaries have been back in the news recently. Yesterday there was the overwhelming endorsement by the Swiss – of all people – of a tough package to crack down on unmerited rewards at the top . This contrasts with two votes for the super-rich given by our own Government. First, Downing Street made it clear that it is very relaxed with RBS handing over £600 million in bonuses despite the bank being publicly owned and massively loss making. Second, ministers and the London Mayor have been venting their fury at EU proposals to limit any single banker’s bonus to the value of their – presumably generous – full year salary.
These debates should be placed in context. It seems that the respite after the credit crunch both in the rate of increase in rewards to the highest paid and the consequent growth in the gap between them and the rest of us was very short lived. Once again, highest salaries are rising fastest. Meanwhile, average wages are falling faster and for longer than at any time in living memory. As no one seems able to justify this state of affairs in terms of just rewards, the argument made against the EU’s proposals was a kind of resigned utilitarianism: ‘if these people insist on being paid these salaries we better do it too or the best of them will emigrate to Singapore’.
A few weeks ago, together with Patricia Kaszynska FRSA, I posted a series of pieces critiquing the idea of social mobility as it is unthinkingly advocated by many politicians and most media commentators. Lifting a few talented people out of disadvantaged communities (even if we knew how to do it) makes the communities left behind even less able to turn themselves round. Furthermore, this form of meritocracy does nothing to address underlying levels of inequality and it provides cover for the existing elite who are able to conflate the society they advocate (in which the best get to the top) with the one we have (where most at the top, and their offspring, are there as much because of privilege as merit).
If we truly want meritocracy the best route is greater equality as this reduces the gaps between the rungs of the ladder going up and makes it less terrifying for some people to come down (necessary to achieve greater relative social mobility).
The debate over top people’s pay is a kind of mirror image of that on social mobility. Just as we can be dismayed that it is so hard for poor children to get ahead, so we are encouraged to be angry when it is shown that a rich person doesn’t deserve their reward. What much less often gets discussed is whether anyone at all should be paid a salary beyond the wildest dreams or ordinary folk.
I am well paid; probably in the top 1 or 2% of earners in what is still, in international terms, a rich country (although rapidly becoming less so). I am not in a position to be pious. Not do I see myself as a class warrior. But I find it hard to understand why anyone thinks they are worth more than, say, £500,000 a year. Even this figure means the person’s remuneration is equivalent to five inner city GPs, twenty class room teachers or thirty care assistants.
Some would argue that such rewards are deserved by entrepreneurs who have built their own business. I am tempted to ask how committed an owner is to business growth if they are willing to take more than half a million a year out of the company to pay for a second yacht. Some people pocket £500,000 a year due to ‘unearned income’ but it is the first word of that phrase that should be focussed upon.
We are in the midst of economic stagnation and public sector cuts, real wages are falling for most workers and the financial services sector continues, in many important regards, not to provide a service. That in these circumstances it still falls to those critical of inflated top wages to prove they are not deserved rather than falling to the rich to show they are worth it (as will now be more often the case in Switzerland) shows how very little assumptions in our country have changed in the last five years.
Economics, to me, is like art; I can appreciate it, I can discuss it, even argue about it but I can’t really do it; as the following paragraphs will probably go to show.
I attended a conference at the end of last week which contained a number of presentations and conversations about the economy. It changed how I think about things quite substantially.
On the one hand, while we face huge fiscal challenges and the austerity programme is already causing pain, I concluded that the straight jacket we are in may not be at tight as is usually presented. For a start, the scale of the fiscal challenge depends a great deal on the estimate of how much of the deficit is structural – the more scope we judge there is for the economy to grow without inflation the less we should be worried about the medium term sustainability of public debt. A speaker at the conference said he had heard convincing estimates for the size of the output gap ranging from zero to six per cent of GDP. Second, adding a year or two to the timeframe for cutting the deficit (as George Osborne has already done) can make quite a difference to the speed at which cuts need to be made. Third, as the muted market reaction to the decision of the heavily indebted Japanese Government to inject yet more cash into the economy suggests, international financial markets seem right now more concerned about growth – or the lack of it – than debt.
When economic debate isn’t focussed on the deficit it tends to focus on growth. The implication is that if only we could have a few years of two or three per cent growth – perhaps spurred by a temporary tax cut or some infrastructure spending – then we would be well on the way to recovery. But this belies the deeper nature of our economic problems.
For example, we continue to be the most privately indebted of the OECD countries, a debt concentrated disproportionately in the lowest income groups. There is simply no way for the poorest to get out of debt, because even if the economy did grow a rise in interest rates would plunge over the edge millions who are only just managing to meet interest charges. As ministers desperately scan the sky for rays of sunshine the clouds are continuing to gather over these families with welfare cuts and rising transport and utility charges (water becomes the latest today).
Back out in the economy at large, there is the huge decline in productivity which has occurred in the last few years, from the already modest base line at which we started when the credit crunch hit. This may in turn help to explain why after a twenty per cent devaluation in the pound in the last few years we are still experiencing a huge balance of payments deficit, one which would be substantially worse were it not for the contribution of the publicly-reviled financial services sector.
At this point we might add to the list the continuing hollowing out of the labour force leaving an ever bigger gulf separating the low productivity low pay service sector from the professional and managerial classes, and the latter from the global plutocracy who now use central London property as a massive piggy bank. And even at the scientific top end of the economy on which so many ministers seem to rest their hopes, there is both a decline in research and development investment by big firms and problems with translating Government intentions and funding for innovation into anything like the scale of new invention and enterprise needed.
There are three ways of looking at this (there always are). The basically complacent one I have described; with a bit of pushing and shoving growth will return. Then there is the gloomy one suggesting we have entered an era of low growth, stagnant living standards and a declining public sphere. The third is that in the face of all of this we need not only to think much more profoundly and talk much more openly about our economic challenges, but also to be willing to do some genuinely innovative things in relation to policy on tax (maybe a ‘use it or lose it’ tax on corporate balance sheets), spending (making tough decision on less productive public spending so more can go to those things which boost employment and skills), employment (an urgent national crusade to end long term youth unemployment), training (by 2020 every job should be a learning job), investing assets (using social housing receipts and public sector pension for productive investment) devolving to cities (implementing the Heseltine report and strengthening city regions).
To be honest, I don’t know all the pros and cons for these six ideas, and even if I did I might not understand them. But desperate times require desperate measures and, be in no doubt, for the UK economy these ARE desperate times.
Four years ago, as the scale of economic downturn and the probable depth and longevity of austerity hit home, there was much speculation about whether this would have a profound impact on key aspects of society: expectations, values, forms of organisation and provision.
There was a widespread view that after the excesses of the nineties and early noughties, a harsher environment might be good for us. Some on the left hoped for a turn against consumerism and the excesses of the wealthy, some on the right for a more active civil society taking the initiative from a shrinking state. There was much talk of a new economy. Peter Mandelson spoke of ‘less financial engineering more real engineering’, business gurus opined that recession is the midwife of innovation. Everyone’s favourite quote was Rahm Emanuel’s ‘never let a crisis go to waste’.
How do things look now as the economy splutters like smouldering wet twigs and austerity is trudging uphill through mud with the mountain peak lost in dark clouds? Here are the key points:
As a society we seem to have become harsher towards each other, we are less sympathetic to the poor, we continue to be obsessed by, and negative towards, immigration. It is true that we have also become intolerant of excess at the top but this is driven more by self-righteous rage than a commitment to greater social fairness.
In terms of austerity, the economic downturn means the state isn’t actually getting significantly smaller as a proportion of the economy. Even now, we are only in the early stages of the full impact of cuts in funding for services and it looks as though many public agencies have been able to preserve most services by being more focussed and efficient. Also, important parts of provision – especially schools and the NHS – are still being protected. But despite all this there are two significant and accelerating shifts. First, forms of public provision deemed to be non-essential are starting to decline and – in some areas – disappear, this includes the youth service, arts provision, libraries and leisure services and various forms of community provision. Second, significant parts of public sector provision – from employment services to health care – are being transferred to the private (and to a much lesser extent) third sector; the announcement today about probation is another important step in this process. So, while large scale examples of civil society stepping up to fill the gaps left by a retreating state or of bold innovations in service configuration (the hopes that some people had three years ago) are few and far between, more conventional expectations of cuts and contracting out are being fulfilled. Given the paucity of evidence that contacting out leads to service improvement or innovation, the public sector is getting leaner but will it be fitter?
In relation to alternative values I can see little or no sign of a shift. Indeed, opinion polls suggest concern about the environment (climate change in particular), which is often seen as the alternative pole to consumerism, has declined in the face of economic concerns. Consumer debt may be shrinking and growth in the consumption of ‘stuff’ may have stalled but this is the consequence of economic necessity not post-materialism.
As for a new economy, it is encouraging that more people want to set up their own business (although probably more are doing so as a last resort), and in a large economy there are always success stories to celebrate. But, as the Government’s frantic search for growth and its gradual reversion to a strategy of restoring state-financed or underwritten capital investment shows, there is little sign of a new ‘real ‘ economy butterfly emerging from the rotting chrysalis of the old debt-fuelled, finance dominated model.
So, two questions: first, am I missing something? Is there a pattern of change out there but I am failing to join up the dots? Second, if there isn’t any change, or any positive change, why not? Is it just too soon to see the adaptation we need?
Were the hopes that our self-inflicted misfortunes would prompt soul searching and a collective stepping up to the plate always misplaced? Would we all just love to go back to the good old days of buying piles of junk, maxing out on credit cards, being made rich by house inflation and reading assiduously (but not resentfully) about the excesses of billionaires and celebrities?
Or has the possibility of new ways of living and thinking been stymied by a lack of leadership; a Tory Party obsessed by its eccentric enemies to the right, a Labour party happy to appeal to its core and rely on negative voting and Lib Dems plesed just to survive?
The core of the RSA’s modern mission (echoing a theme running through its history) is the belief that we need, and that we can achieve, a step change in human capability. This distinguishes us from a paternalistic left which tends to think the problem is not people but the structures in which they live and an economically liberal right which is agnostic about human development, relying on the hidden hand of the market to drive innovation and turn random individual preferences into progress.
I still think the Society’s modern mission is particularly suited to these challenging times, but sometimes, on the bad days, I wonder whether it is a triumph of hope over expectation.
Filed under: Credit crunch, Politics, Public policy
The phrase ‘jumping the shark’ describes the moment when a popular TV show overstretches its founding concept and begins the process of decline. I am starting to wonder whether George Osborne jumped the shark last week.
As I wrote in my last post, it has become commonplace in political communication to distinguish between the worthy (working) and unworthy (unemployed) poor. It was this that lay behind a skirmish last week between the Chancellor and Shadow Chancellor, with Ed Balls claiming that the Coalition’s cuts in the real value of benefits would predominantly fall on working households.
The backdrop to this debate is opinion polls which show a steady hardening of opinion against welfare recipients, especially the unemployed. But the world is complicated; public opinion is both reflexive and subject to substantial shifts in mood. I suspect that three things may be coinciding to produce just such a shift.
First, there have always been ebbs and flows in public opinion when it comes to a general spectrum of values relating to social justice and collective provision. While the swing against state help for the poor (which is to simplify the issue) has been long and deep, there is no reason to believe the pendulum won’t in time swing back.
Second, the longer economic problems and accompanying austerity continue, the more people there are who will be directly or indirectly affected by some combination of poverty, benefits cuts and unemployment. The number who find the striver/ shirker distinction uncomfortable may be increasing.
Thirdly – and this is where political analysts may have committed the classic error of linear thinking a complex world – it may be that the gradual build-up of social concern about the poor was just waiting for a catalyst. By seeming to be making a point of moralising the cut in welfare, rather than simply saying it was necessary for reasons of austerity, Government ministers may have inadvertently provided just that catalyst.
I have this afternoon been chairing an event on child poverty in London, being hosted by the Peabody Trust and held at John Adam Street. A question I posed the audience concerned how the poverty lobby might take advantage if there is a shift in public opinion. I can’t say the ideas were flowing thick and fast. Probably, the London Living Wage and universal free school meals for primary children – a measure already implemented by Southwark and some other London councils – were the most popular ‘transitional demands’.
My own thought centred on connection. I was very taken by a story told to me by a friend who had spent time on websites for parents of new born children. Amidst the normal lively conversation about illnesses, sleep patterns, diet, equipment and child care, some parents let slip how hard they found life on benefits. The better off parents started asking questions and pretty soon the chat rooms were full of people saying things like ‘until I had a child I never really thought about how hard life must be if you are poor’. Subsequently a great deal of charitable giving started flowing through the site – so much so that it had to be regulated by the site’s moderators.
Regardless of anyone’s political leanings and economic analysis, it is surely a good thing if more people who are fortunate in their circumstances understand more fully the lives of those who rely on state help, whether in or out of work. My hunch is that some clever way of providing such insight and of connecting people across the social divide could go viral at this moment of inflection in public opinion, especially with Christmas almost upon us.
The Autumn Statement and the unappealing politics around it may have marked the beginning of the end of one long running narrative;the opportunity may now be there for some campaigning brilliance to provoke a very different and more unifying public discourse.