Friday, August 12, 2011

airy-fairy commentary


The news of continued rioting in England is as riveting as it is horrifying.
The membership of postcode gangs, carrying weapons and dealing drugs have been seen as normal behaviour by a large number of disaffected English youth for decades.
But could this happen, on this scale, in our own backyard?

One of the looters [in the clip above] tries to justify her actions with the line “just gettin’ our taxes back”. As incredibly stupid as this line is, it provides some assurance that most of the violence is purely opportunistic.

What our little tax collector also reveals is that many of these people feel no connection whatsoever with their community. This seems to be a proximal cause of much of the unrest. This disconnection can be attributed to poor discipline, or to racism, or to class warfare, or to income gaps, but should it? Labels are easy to apply, but they ignore the fact that there are both mixed race, and mixed gender memberships of these gangs. Most of their [usual] turf wars are directed at members of their own class.

Sadly, a lot of the commentary - in the tradition of news as entertainment – is polarising. The situation is being beat up as a class war, as racism, or both.
We are in danger of becoming victims of our own fears – fears that may become self-fulfilling - of multicultural conflict, or racial conflict, or even [for want of a better word] “class” conflict.

In my previous post I provided two examples of what Australian ‘haves’ believe is a problem: People are going soft because welfare is too easy or, worse still, people on welfare contribute nothing, are useless hangers-on, and should suffer.
What I suggested in turn is that some kind of welfare support is not only a moral good, but a sensible thing in the long run.

How do we decide which of those people on welfare contribute nothing?
For example, if we want to live in a society where all life is valued, then the people who provide long term care for the handicapped or disabled are doing us a service.

Example: A falling road toll is widely taken as evidence that people are behaving more sensibly on the roads. What is never included in reports of this toll is the number of people who become permanently disabled or acquire brain injuries as a result of accidents. Is someone who works 100 hours a week, pays taxes and then drink-drives a potential welfare cheat?
Yes, the question is contrived, but hopefully it shows that polarising, finger-pointing arguments about what’s wrong with the world are counter-productive. Nothing is ever so cut and dried or black and white.

Most days I am reminded, again and again, of the story of Groucho Marx. He was so careful with his money he even survived the market crash in 1929. He lived in an expensive house, but the ‘best’ golf club in his area did not accept Jews as members.
At some point, the club realised having him as a member would be a feather in their cap, and offered to make an exception in his case if he wanted to join.
His response to that [delivered with typical Groucho style] was “I wouldn’t want to join any club that would have me as a member!”
[Well, there are 5 million versions of this on the ‘net, but mine will do.]

Charges of racism or welfare bludging are alienating. If we want people to stop feeling disconnected then we need to stop telling them they don’t belong, or that they are defective. If we overdo it then when they have a chance to join us they won’t want to.
To be a little more airy-fairy in our approach to disaffected people would not necessarily be a complete mistake.

Long term, family-wide and transgenerational unemployment contributes to a feeling of disconnection with society at large.
We might think these people should just get off their bums and join the real world, but it is their perception [however ignorant] that is behind the rioting. It is their assessment of their own reality that we must work with if we want to prevent this from happening here.
No one will get out of bed early, dress for the day and go out in search of work if he cannot see himself succeeding. If we asked Sandra, interviewed above, to describe what it would be like to go out to work she wouldn’t even be able to imagine it. If she can’t imagine it, how could it be possible?

One journalist following up on recent rioting interviewed a woman whose son is a qualified electrician. She made sure her children studied and got qualifications, but they still can't find jobs.

How do we find the right balance between helping those who need or deserve help, and finding jobs for those who should be working?
What do we do if by some miracle we knew what the true levels of hidden unemployment and genuine work are, and the number of jobs didn’t match the number of unemployed?

Most governments are expected to achieve three main things financially;
  • not increase a country’s debt while in office;
  • keep the economy chugging along nicely so everyone can have jobs; and
  • keep a lid on inflation.

Economics is to Science as Christianity is to the Bible. Two experts can see the same thing and interpret it any number of ways. The way they interpret things will in some way reflect their values or priorities.

To oversimplify, during a depression people will lose jobs, or struggle to find jobs, and everyone will tighten their belts.
The economist John Maynard Keynes showed that when times are tough and individual families are quite sensibly trying to save more, the worst thing a government can do is try to save as well. What works at an individual level doesn’t work the same way at an aggregate level. He called this “The Savings Paradox”.

While Keynes was absolutely right, there is a downside to governments spending a lot of money to buy their country’s way out of a depression. Some short term intervention – like Kevin Rudd’s stimulus package – can be helpful, but in the long run governments can’t just keep handing over money. The money spent must be matched by improvements in the economy, generating growth and jobs.

Faced with the Global Financial Crisis, we might think of our welfare payments as ongoing stimulus packages that are not currently generating much growth or creating many jobs.

Faced with the riots in London, we might think our welfare payments are failing to make people feel valued, useful, productive, or connected to the rest of the community. Our price system is built on incentive, and cannot work properly unless people have hope.
We want some of our welfare payments to be temporary, to provide hope, real jobs, and to create something.
What are we doing now to help jobless people, and what could we do better?

1 comment:

  1. I am sure you know the type. Rough and with badly bleached blonde hair, smoking and with a couple of kids that get screamed at but never effectively disciplined. I get up at five o'clock in the morning to go to work to pay tax to support her! Of course I wonder why I should. But what is the alternative? You let her and her kids starve? There is a slight chance that her kids will turn out fine citizens in our country. In her quiet reflective moments, I am sure the mother sees hope for them, even if there is none for her.