Saturday, June 09, 2007

Inequality is good.

McDowell was a total idiot of a politician really was. Politics is not about vision as so many people try to suggest. It is about not saying stupid things that can be taken out of context and used against you. Honesty is derided in this country we want to hear great happy Irish Times (they are to blame for everything aren’t they J ) friendly things. McDowell alas didn’t do this he made idiotic statements which despite the fact they were right should never had been made. The most famous of which is below.

"A dynamic liberal economy like ours," the Minister said, "demands flexibility and inequality in some respects to function." It was such inequality "which provides incentives".

Correct but stupid.

Now this was read by many people as McDowell saying that people should be poor and downtrodden, saying he was the minister for equality how could he say that etc etc. Thing is he is right and mis -read.

He was not talking about equality of opportunity here. He is not saying that a kid in Ballymun should not have as much a chance of going to Trinity as a D4 head. He wasn’t saying that poverty is a good thing. In fact he was not talking about poverty at all. It was inequality of want not need he was talking about.

You would not think it living in Ireland but poverty and inequality are not actually the same thing. Poverty is about not having enough money to live on. No one is disputing that this is wrong and that the state should help. Inequality is about not having the same amount of money as someone else. They are two separate things.

You hear a lot in this country about relative poverty being so high. Yet relative poverty has got nothing to do with poverty it is a measure of inequality. D4 as an area might have quiet high local relative poverty does not mean that anyone there is actually poor. It is a terrible way of measuring poverty. It is 60% of the median income not 59% not 61%. Why not is of course never explained because it is a truly arbitrary number not based on any real life experience. It is general. Being at 60% of the median income in Donegal probably goes a lot further then 70% of the median wage in Dublin yet the person in Donegal is worse off then the Dublin person?. It does not take local costs of living or individual needs into account. It generalises where many factors like location of work, childern’s needs, local costs location of family all play a factor in the income needed to survive. A random statistical number does little to tell you this. What it does tell you is about inequality and hence its use.

What drive’s capitalism or as McDowell said. “A dynamic liberal economy” is greed. People want to the big car the big house the big pay packet primarily because of greed. It is not a bad thing greed is good. Greed can be selfless wanting the best for your family. That is greed because it is your family over every other family. You pay for your kids to have grinds because you want them to do better then the rest of the kids you want to give them more then the state giver everyone. You want to give them an advantage. Or indeed greed can be simply be wanting to buy crap because people have better crap then you. And that is fine too. That is what drives our economy whether we like to admit it or not.

So what drives greed? Inequality. Why do people buy new cars every few years. When a 1997 Toyota Corolla still goes (and is more environmentally friendly then buying even a new prius due to manufacturing emissions). It is due to the fact that no one else is driving around in a Corolla they are driving a new BMW. Hence the incentive to go out and buy a new car is the fact that not all drivers are equal.

Look back to Soviet Union they had more or less equality in cars. Everyone had the same thing and what they got was Ladas. The West had inequality of cars and even a Fiat was better then a Lada. The thing is inequality drives (wish I had intended that pun) people to succeed in every field. From the economy to sports (what athlete does not want a gold medal.) it works, it is natural it is why the West won.

So why the political distain for it? Look at the shit storm that brewed when McDowell said it. Which I think if most people thought about it would actually agree with.

One of the problems was the way inequality is now a by-word for poverty. It is not, the left has done a magnificent job of doublespeak with the word in recent years and have won that war. In every day vocabulary inequality no longer means not equal it now means poverty. The fact that McDowell didn’t realise this are is to stubborn to not use the word unequal is why he is stupid.

Tuathal had a good post over on the dosing times a while back called Better off on the dole! Basically it was about how a married man with children could be €7,300 per annum better off on the dole if he also qualifies for rent supplement then taking a minimum wage job. Families relying on rent supplement would need to have an income of €30,000, or the average industrial wage, just to equal what they would receive by staying on welfare. So basically a person has no incentive to work because of that, they have no incentive to work. How is that right? The state should always try to insure you are better off working then not working. This does not mean dropping the benefits and making him worse off on the dole. But insure that he is better off working. Offer an incentive. Because with out an incentive to work, to strive for something better this country would be fucked. The left may hate to admit it. They strive for a land where everyone was equal wealth through income redistribution but if that happened we would be worse off. We would have more then a few of those cases where it is better to be on the dole then working we would have thousands and our economy would be in more trouble then it is today. The role of the state should be to make sure everyone has an equal shot at life. Not an equal bank balance. Inequality of want is what drives this income and we should realise it not get so angry when someone points it out.


seanachie said...

I agree with the general run of what you said there but to be honest, equality of opportunity has been the main focus of the (non-extreme) left for many years. There have been few attempts to redistribute wealth evenly, and I don't know anybody on the left that seriously believes we should all be learning more or less the same wages.

The success of various countries in ensuring this equality of opportunity is mixed and rarely dependent on a certain politico-economic ideology. For instance, a country like France - which has been erroneously dismissed as 'socialist' by many of its detractors - has been lead into a dead end of real inequality because of its blind insistence on a meritocratic education/work relationship that ignores the real imbalance of opportunity across racial lines. In other words, affirmative action is needed.

Sweden would be an example of a country where an almost perfect equality of opportunity has been achieved, while the US is one that falls somewhere between those it and France. Ireland does well enough on equality of opportunity but small prosperous countries with relatively strong democratic institutions generally do.

Why the stink over McDowell? I think it was probably less his policy but his hubris, and arrogance. Many people remain quite queasy about an overbearing fetishisation of economic success, even those that themselves are doing quite well. Dividing society into winners and losers, which neo-liberals such as the PDs and Nicolas Sarkozy in France have done sits badly with some people because everyone knows that to have winners, you must have losers.

Braying then, is considered by many to be indecent. It might not be, objectively, a rigorous political interpretation but it means a lot come elections. Even Bertie recognised this a couple of years back by making a timely claim to be the last living socialist in Ireland. He might have been ironic but he also knew that the idea of socialism does not have as bad a name among the Irish as one would imagine.

seanachie said...

Dividing society into winners and losers, which neo-liberals such as the PDs and Nicolas Sarkozy in France have done sits badly with some people because everyone knows that to have winners, you must have losers.

Oops, tautologous attack! My sense was rather that many people feel that a valorisation of this 'winners and losers' dichotomy takes on a moral tone in neo-liberal rhetoric, which usually translates into the poor being responsible for their own mess.

Godwhacker said...

Great post Simon,
we are facing a lot of the same issues here in the states. In healthcare for instance, the poor have it far better then the middle class. But our standards of poverty are a joke. You have to be really poor to meet them. So it's the middle class that really gets the shaft, and they make up the bulk of the uninsured.

An important point to make is that not everyone has to buy into the same economic Faustian bargain. I want to make a lot of money, but I have no desire to indulge myself in any extravagances. I want to be secure, but beyond that, I want to provide security for the people and causes that I care about. That is what economic freedom is about for me. People can be generous without the state doing it for them. Egalitarians like to leave that possibility out of their arguments.

Still driving my 1994 Honda Civic... by choice.