In defending benefit cuts, George Osborne said yesterday:
Where is the fairness, we ask, for the shift-worker, leaving home in the dark hours of the early morning, who looks up at the closed blinds of their next door neighbour sleeping off a life on benefits?
It’s a fair question. I’ll try and answer it.
First, let’s note that in any welfare system there’s a trade-off between risk-bearing and incentives. A system which gives a low income to those out of work increases work incentives, but it does so at the cost of imposing large falls in income upon those who lose their jobs.And many people do so; in Q2, for example, 750,000 people moved out (pdf) of employment. We can therefore turn Osborne’s question around: where is the fairness in imposing big losses upon those unfortunate enough to lose their jobs?
The choice here is not between fairness and unfairness, but between different types of fairness.
And Osborne’s choice is questionable. He’s appealing to the norm of reciprocity, the idea that it’s wrong for some people to get something for nothing. This made sense for the 90%+ of human history in which men lived near subsistence and work needed to be done . Freeloaders then were a threat to the survival of the community.
But this is no longer the world we live in. Our instictive aversion to freeloaders was an evolutionary response to pre-industrial times. But it is a maladaption in our present environment, an atavistic anachronism. There is now – and there is likely to remain – a shortage of jobs. In this world, the fact that some (few?) people don’t want to work should be welcomed, as it increases the chances of getting work for those who want it. This is a good thing because involuntary unemployment is a big source of unhappiness.
What’s more, many of the few low-wage jobs that are available are of private benefit but little or even negative social value. Incentivizing people to work in call centres cold-calling people to sell them PPI compensation is not an obviously Pareto-efficient policy.
In this context, we can think of the tax and benefit system as being like an auction (pdf) in which people bid for the scarce right to work; taxes are the price we pay to buy that right.
Sure, some people have a greater taste for work than others. And it’s natural to complain when others don’t share out tastes: I think it deplorable that folk support Spurs and don’t love Jolie Holland. But it is often a category error to think differences in tastes are a matter of morality.
Indeed, we should remember that there’s a long tradition in European thought – dating back at least as far as ancient Greece but evident in Smith and Mill – which sees work as dehumanizing as leisure as necessary for culture. As Bertrand Russell wrote:
A great deal of harm is being done in the modern world by belief in the virtuousness of work.
Another thing: Marxists will point out that the desire for big incentives to work has nothing to do with morality and fairness and everything to do with the need to ensure that capitalists have a big supply of cheap and pliable labour. They are, of course, correct.
