A couple of thoughts on entitlement

November 30, 2011 by
Filed under: Credit crunch, Politics, Public policy 

The British sociologist TH Marshall famously argued that the three centuries since the enlightenment had seen the respective advance of three levels of rights: civil, political and social. These levels roughly equate to the spread of the rule of law, the widening of suffrage and the creation of the welfare state. Until very recently it was the general assumption that growing entitlements were a good thing and that national progress is measured by a combination of rising disposable incomes, growing social entitlements and enhanced public goods (infrastructure, public spaces, environment).

From the beginning, and particularly since the 1970s, the free market right has opposed this view on grounds of affordability, economic efficiency and moral hazard. The cost of growing state entitlements is seen to be a drag on enterprise, to penalise wealth creation and to foster dependency among welfare recipients. The current crisis gives this critique an extra twist. As the cuts get deeper, the economy languishes and we look with envy at the growth rates and apparent entrepreneurial drive of many developing countries (with much more limited social entitlements), the sense grows that the problem is not that there are too few entitlements but that there are too many.     

One difficulty here is distinguishing arguments of expediency and principle. For example, is the reduction in public sector pension entitlements simply an unfortunate necessity to balance the books, or is it also objectionable that workers funded by tax payers should enjoy retirement benefits not available to most of those tax payers? Are cuts in benefits justified merely by austerity or also by the need to tackle dependency? Does pulling the state out of the provision of services like libraries represent a sad loss or a great opportunity for community self–help? The lazy answer in each case is ‘both’, but as I have argued before, different arguments for the same course of action must be independently valid or else the whole case gets damaged.   

It is easy to avoid all hard questions if one simply reverts to attacking the privileges of the rich and implying that if only we taxed them more we could pay for everything. But even as someone who personally supports the fifty pence tax rate and abhors the way some bankers and business leaders have exploited their position to create obscene wealth, I don’t think it is realistic or honest to argue that squeezing the rich will, any time soon, enable us to return to a path of rising entitlements.

I have no easy answers or startling new perspectives (which is a bit of a problem given that I am discussing these issues on Moral Maze in a couple of hours), but two half formed lines of thought have occurred to me.

The first might be called ‘the entitlement paradox’. Rising entitlements are a sign of social progress but their maintenance and growth depends on us not treating them merely as entitlements. In other words the sustainability and social value of welfare benefits depends on the existence of a strong work ethic and the sustainability and social value of public services depends on them being seen as collaborations which involve responsibilities for citizens and communities as well as the state. 

The second is the need for public debate to acknowledge the contested framing of notions of fairness. Take today’s strike: many critics on the right argue that it is both unfair and corrosive to national solidarity that many public sector workers get a better deal than most private sector workers. Fine; but once the issue of fairness is opened such critics have to answer the question: isn’t it equally unfair and socially corrosive for useless bankers to get paid a hundred times more than hard working care assistants? To which an economic liberal may reply that we should distinguish between things that happen because the state interferes (public sector pensions) and things which are the result of free choices in a free market (income differentials).

However, at the same time as the case for state entitlement has been eroded by changes in the world around us, so has the credibility of this kind of free market fundamentalism. To take one line of criticism: it might very reasonably be argued that every child – born free of sin and error – should have broadly the same life chances (indeed some measures of public opinion suggest this view is widely endorsed), yet the state uses the power of law to defend the right of the privileged to pass on their advantages to their offspring and thereby – in the context of limited absolute social mobility – generate a reduction in the comparative life chances of the offspring of the less privileged. Those who talk about fairness to try to win a specific argument are likely to find themselves embroiled in a much bigger debate.

Crises can easily become times of fear, anger and resentment but they can also act as an imperative for reflection and new ways of thinking. Yesterday’s Autumn Statement did point to a few rather random principles behind the Government’s management of these difficult times, but missing from the Coalition narrative (not to mention that of the Opposition) are deeper reflections on what austerity means for our idea of ourselves of a nation and our collective norms and aspirations. However hard, it is a debate we should choose to enter rather than avoid.

Share

No related posts.

Tags: , , ,

Comments

5 Comments on A couple of thoughts on entitlement

  1. Robert Burns on Wed, 30th Nov 2011 7:54 pm

    2. Hello Matthew,

    it is always fascinating how quickly the word ‘dependency’ slips into any discussion on ‘entitlement’.

    Equally, how the focus of discussion narrows down onto payments from state controlled funds to the ‘poor’ in this context and how problematic it is.

    I would argue that ‘problematic dependency’ on the receipt of state controlled funds is not limited to tabloid press stereotypes (i.e., glue sniffing single mothers, etc.).

    Further, the term ‘welfare spending’ has equally lopsided semantic content.

    For examples:

    I have yet to meet a ‘working class’ Dentist, Barrister, Consultant level medical practicioner or senior level Academic.

    Yet all of these are (in varying degees) dependant upon government ‘welfare spending’ through the Health, Education and Legal Aid budgets as the apocryphal ‘glue sniffing single mother’ or ‘work-shy dole scrounger’.

    Similarly, police officers despise criminals and what they do but I doubt many of them consider the paradox in this.

    Problem groups in society are a huge, rolling meal ticket for the middle class.

    In a society devoid of the socially dysfunctional what would we do with all those people whose living depends on servicing their problems?

    The answer is all about us:

    don’t eliminate causes, just keep treating the symptoms.

    There are no long term jobs and final salary pensions in doing otherwise.

    Mutual dependency is an indivisable property of any complex society.

    We live in a finite world and there is only so much of anything to go around.

    Moving up through the socio-economic heirarchy each level has what they have precisely because those on the levels below don’t.

    Addressing welfare dependency requires action to control the flow of society’s benefits up through the socio-economic pyramid.

  2. Tom Brookes on Wed, 30th Nov 2011 10:09 pm

    3. I like that you opening with a distinction between expediency and principle, but if the expedient thing is whats practical but immoral, easy but not right, then surely principle dictates the private sector requires the strongest culture shift.

    You mention that private sector pensions are much lower, so did they not ought to be brought into line with public sector pensions? Everyone’s a winner then. Well, perhaps not whoever gets the profits and expects them to grow, but then entitlements & dividing lines in economic matters are a question of perspective, and of the structure of society. Perhaps in closing your ‘social aspiration gap’ businesses must change from for profit to for people, considering employees as highly as stakeholders as shareholders – is it shareholdings and dividends stopping private sector benefits equaling public ones, or the profit motive and drive for growth pushing down the wage bill relative to inflation – which isn’t a malignant force, it’s people, putting up prices. I don’t know if the way the corporate sphere works can square with the world humanity ostensibly wants.

    On perspectives, it could be seen that really there is no free market, because the free market is populated by human agents who are anything but free. Poor private sector pension rates, to follow your example, are set by someone in every HR department, under someone’s direction, under the direction of someone else’s business plan. That isn’t a free market system, it’s rigged, like much of the free market – from energy to food prices. Of course you can pay into a private pension, but with the cost of living and inflation stats how many people won’t be, troubling themselves with putting food on the table, fuel in the car or paying for children at university? There isn’t a promotion for everyone, & a pay rise for fewer; I suppose that’s one of the biggest problems with capitalism, if you’re not that career minded you’ll loose out and have a poorer family life as a result.

    The cyclical nature of the current economic and social malaise surely calls for a serious assessment of living wages and consideration of the wonderful ideas of zero-growth economics: http://www.neweconomics.org/
    I can’t find any piece of writing or research which convinces me that the continued accumulation of profit and ‘growth’ will benefit the entirety of humanity and do so sustainably. Surely it’s just an oxymoron to suggest that everyone will do well out of a few getting rich, & if the free market can’t deliver the world people want, maybe democracy should.

  3. Robert Burns on Thu, 1st Dec 2011 10:12 am

    4. Can’t say I have much faith in ‘democracy’.

    There is a myth that democracy and successful capitalism go hand-in-hand.

    Looking at the present day world and history I don’t see such a connection.

    Capitalism, whether you dress it up as market economics or state collectivism, is fundamentally counter democratic.

    To underline this point consider how those people who controlled industries under ‘Communism’ in the Soviet Union still control it under ‘Democracy’ in the Russian Federation.

    Then there is the ‘Peoples Republic of China’ – a politically Stalinist state with a ‘market economy’ – a Frankenstein that should make our blood run cold.

    Capitalism and democracy only really live up to thier promises of freedom in small units.

    In those circumstances the institutions that they animate have to watch their manners, once they grow beyond a certain size (I’m not sure what that is) they become a problem.

  4. Ian Christie on Thu, 1st Dec 2011 4:15 pm

    5. Thanks for this thoughtful post. Quick observations:

    1) In the necessary public debate we now have on entitlements and the limits to welfare states in a new age if austerity, it is easy to focus just on the workless. But entitlement culture is rampant in the boardrooms of the West and is also embedded in corporate subsidies of many kinds, such as tax allowances and avoidance.
    2) The same goes for dependency culture. Some people are dependent and powerless – ie many on benefits. And some are dependent and very powerful – eg the balied-out banks who still seem to evade any kind of direct command from thos who bailed them out.
    3) Part of the problem – a real one – in welfare dependency is the lack of obligations hitherto placed on recipients. A crude way of bringing these back into the equation is the contract/workfare approach. But this is unimaginative, punitive and fails to recognise the real costs of getting into and staying in the present labour market. A better model would be to devise a flexible sector of transition between unemployment and full- or part-time work, and to tailor benefits to participation in this. The aim would be to generate livelihood, social skills and engagement in local society and economy (we could even call it the local Big Society) – and some people could stay in this zone to general benefit, while others would use it as a way into the formal work economy. I am arguing in essence for benefits in return for voluntary work and participation in new forms of livelihood such as local food systems.

  5. Christopher McCracken on Fri, 2nd Dec 2011 2:13 pm

    6. There are some technical fixes that could partially alleviate the problem of excessive pay. For example, senior executives are often rewarded by assessing a very narrow range of profitability ratios, none of which give a balanced picture of performance. One of the most common, return on equity, can be skewed simply by taking on more debt. As a result many executives have been rewarded handsomely for effectively bankrupting their companies. A broader range of measures is therefore required.
    The “stakeholder” assessment, articulated by Charles Handy in ‘The Empty Raincoat’, is incredibly perceptive – especially as he authored the book in 1993! (but then would we expect anything less from a former Chair of the RSA!). One interesting snippet is the anglo-saxon root for company is ‘fellowship’. A 21st century company should be a fellowship of everyone involved – employees, customers, suppliers, the community – and not just the owners of capital and their agents.
    I also feel we need to accompany economic reform with political reform. If we want an open and dynamic economy we need open and dynamic politics. Such was their determination to tackle entrenched privilege that the Athenians elected Council members by random ballot and even the king archon was randomly chosen for a one year term. I understand the numerous qualifications to the Athenian model and I am not trying to superimpose an ancient solution to the modern day, but as a way of opening up politics and levelling privilege it was incredibly imaginative and effective. We need a similar level of imagination for 21st politics, which has been heading in the opposite direction for many years.

Tell me what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!