lpm wrote: ↑Tue Aug 23, 2022 1:20 pm
As a society, for years we've been over-spending on consumer stuff. And under-saving on our pensions, elderly care, NHS investment, education investment, and of course renewables and future-climate infrastructure.
And I've also always bored you about the Age of Brittle and how we're not building resilience into our systems. By now we could have had self sufficient and decentralised energy production.
Ultimately, most people in the UK ran things too thin in terms of personal saving and personal redundancy. If people today can't cope with a nasty economic crisis, how the hell are they going to cope with the worsening climate breakdown coinciding with ageing populations needing far higher healthcare?
I'm pissed off that the instinctive response from the progressive/left is so childish. The LibDem and Labour proposals are even worse than Truss's. The idea that government should provide for us, down to paying our bills because we failed to save and invest, is pretty repulsive. If we as a society aren't going to get personally resilient, then govt should take money off us and use it to invest in the future. Not hand it back so we can carry on our lifestyles.
The answer is to give people respectable pay (and benefits for those not working), then leave them to it. Not constantly bail them out when they've not protected themselves.
You are rehearsing that common belief in the value of self-sufficiency that results in many lower income people voting Republican in the US. And personally I live that ethic. I don't want to rely on the government. I do worry about the government's ability to give out such good pensions as the population ages, and so don't trust them to be paying good money when maybe I'll hopefully still be needing it in 25 years' time. So I saved a lot from quite an early age, although initially in the form of paying down mortgage.
The fallacy is to translate that ethic into "income redistribution is bad". Another fallacy is to forget that high inequality is itself inherently bad for society. It leads to social exclusion and layered societies, and a whole bunch of social ills. Yet another fallacy is to think that the apparent improvidence of the poor is some stupidity they just need to fix.
Income inequality
before tax and transfers is not unusually high in this country by the standards of NW Europe. Germany, for example, is similar. What is unusual in this country, for NW Europe, is our high inequality after tax and transfers are taken into account. Some countries do have rather lower pre-tax inequality, like the Nordic countries, and NL, and so don't have to redistribute so very much to achieve relatively good post-tax inequality. But it's very difficult to reshape society to achieve that, and I don't think anyone knows how to do that, starting with a country like Britain, Germany, Italy, Spain or France.
One thing to improve incomes at the bottom is clearly minimum wages. We have pushed up minimum wages quite a lot already, and there's only so far you can go before it starts to create its own problems, but maybe that hasn't gone far enough yet. But an important part of getting people to have respectable income, and reduce social inequality, is inevitably going to be redistribution. And relatively civilised places like Germany that have high pre-tax inequality like us, do more redistribution. Lots of places in Europe do more redistribution. Are they nations of cosseted improvident bums? I really doubt it. Redistribution is not bad.
As for the improvident poor, often it's really not their fault or stupidity. Sometimes such people would like to save, even very small amounts to avoid micro-borrowing for example. But they can't, because they are expected to support other less well-off members of their extended family. Worth reading that great book Poor Economics by Duflo and Banerjee to remember why the apparently self-defeating behaviour of the poor is often entirely explicable and not their fault.
