The failure of the statist left

Here are four related items:
1. Universities minister John Denham wants universities to do more to recruit talented students from poorer backgrounds.  Which only raises the question: why aren’t state schools doing more to bring out the talents of the poor?
2. The TUC wants an old-fashioned fiscal stimulus to forestall recession, even though any announced policy - in the Pre-Budget report - could well come after the recession has already started.
3. Centre Left says:

The left must also engage in a sustained defence of the state.  Illustrating how an active and engaged state can provide for a fairer Britain, can intervene to remove inequality.

Which raises the question: if the state can provide for a fairer Britain, why hasn’t it already done so?
4. Bryan Gould wants politicians to have more control over interest rates, even though this was tried for 25 years - between the collapse of Bretton Woods and 1997 - with poor results.
There’s a common theme here. There’s a refusal to acknowledge that the state has failed. Denham refuses to face up to the failure of state education, preferring to hector universities into compensating for these failures; the TUC fails to see that overt fiscal policy has rarely played a stabilizing role in the past; and Centre Left doesn’t see that an active state has for years tried to achieve fairness, with paltry results; and Gould doesn’t see that direct control of interest rates failed to deliver low inflation or economic stability.
They all seem to think that the solution to past failures of the state is simply to try harder. What they don’t see is that there are alternatives. In order:
1. We should ask: how might schools improve the education and life chances of the poor? This requires thinking of ways of stopping the rich from grabbing the best state school places. One possibility here might for the state to issue school vouchers, with vastly more given to the poor.
2. Forget about using the state to protect  people from macroeconomic fluctuations. Instead, encourage the development of markets in GDP, industry and occupational derivatives, which allow individuals to buy insurance against shocks to their own livelihood.
3. What we need for equality is not a more active state, but a smaller, more passive one. Scrapping the complex and bureaucratic tax credit system - and abolishing corporate welfare - and replacing it with a basic income - would make the state more passive, but a greater force for equality.
4. If Gould really wants more democratic control over economic institutions, we should start by increasing workers’ control over their workplaces, as it‘s here - rather than in monetary policy - where people’s powerlessness leaves them most vulnerable. 
In other words, it’s possible that leftist goals can be better achieved with a smaller state. I say “possible” because this thesis has not yet been tested. But the contrary thesis - that the state is an appropriate tool for the left - has been tested, with poor results.
Why do so many on the left fail to see this? Why are they making a fetish of the state, when so much evidence speaks against such a belief?

Comments

[dearieme]

One of your problems is that, if I may say so, you often don't think like an economist. "stopping the rich from grabbing the best state school places" may be less of a worry if a system can be arrived at that makes school places better absolutely, whatever their relative merits. The schools are not a 'given'. Moreover, it's an painfully limited view of the world that views all school places along a single dimension so that there is an unambiguous "best". My cousin wot went to a Secondary Modern swears by it - it was excellent at the job required. The problem is to devise a system so that experimentation and exploration results in schools that fit better the needs of the varied youngsters who go through them.

[The Admiral]

Very good. I am unlikely to ever fundamentally agree with you on most things and indeed find a lot in your post to disagree with. However, this is one of the first posts I have ever seen from someone on the Left that does not try to argue that black is white, that does not try to force 1940s solutions on a 21st century Britain and is mature enough to slaughter a few sacred cows while still trying to achieve your overall goals. Bravo.

BTW - I think the reason the Left is wedded to having an enormous State infrastructure is not ideological but deeply cynical. If you were a public sector worker, would you vote for the party who would continue to fund your job (regardless of its value to society) or would you vote for the party who would not? Quite.

[Bob B]

"why aren’t state schools doing more to bring out the talents of the poor?"

The undeniable problem of unrecognised and under-development talent may not be due to the failings of state schools but due to peer-group pressures in neighbourhood cultures - in the words of George Orwell in: The Road to Wigan Pier (1937): "To the working class, the notion of staying at school till you are nearly grown-up seems merely contemptible and unmanly."

What chance is there for school students who live in local education authorities where around half or more of the maintained secondary schools are failing by the government's benchmark of less than 30% of 16 year-olds are unable to achieve 5 passes at *A-C grades in the GCSE, including maths and English?
http://news.bbc.co.uk/1/hi/education/7444822.stm

A high drop-out rate of 16 year-olds from education and training is almost uniquely among developed economies a British disease:

"Last year [2004], a report from the Organisation for Economic Cooperation and Development (OECD) revealed that Britain came seventh from bottom in a league table of staying-on rates [in education and training] for 19 countries. Only Mexico and Turkey had significantly lower rates of participation for this age group. Italy, New Zealand, Portugal and Slovakia have marginally lower rates."
http://education.guardian.co.uk/gcses/story/0,16086,1555547,00.html

[anotherplanet]

Maybe we'd be more responsive to the small state approach if there was any evidence that nations with a low tax/small government approach provide their citizens with better infrastructure, education and healthcare?

[Dipper]

good post.

I'd be interested in your thoughts Chris about Gordon Brown's commitment to fairness.

Surely there is a distinction between the equalities of status and opportunity, which effectively act to free the individual, and "fairness" which implies some equalisation of outcomes by the state according to the state's concept of who should get what.

Gordon Brown's constant banging on about fairness implies he does not have a political philosphy of freedom and has no concept of how government can act except as some kind of annoying infant school teacher-like figure saying johnny has to give some to joe because johnny has more than joe.

[reason]

1... This requires thinking of ways of stopping the rich from grabbing the best state school places....

Wait a minute - why do you assume the supply of the "best" state school places is fixed?

2 - Why do you think this would be possible. If the markets have not spontaneously arisen - why do you think they can be "encouraged" into existance. Isn't this the lesson from Fanny and Freddie?

3. You are probably right, but unfortunately it is a hard sell. The very people who might be thought to push an idea championed by Friedman, are the very people who will fight ferociously against it.

4. Agreed - but I think here part of the problem is that the importance of monetary policy is overrated. A lot of our current problems come from the belief that indebtedness can be increased indefinitely without any long run concequences.

But you should restate what you want - you want a more efficient and more effective state, not necessarily a smaller one. (After all redistribution is often counted as reflecting the size of the state irrespective of the amount of resources employed in doing so!)

[reason]

The Admiral...
an interesting post coming from someone who calls himself "The Admiral" - a public sector if ever there was one! What proportion of the voting public do you think work for the government - and what proportion of those vote Left?

[reason]

dipper
I didn't think any politician (let alone Gordon Brown) was required to have a "philosophy of freedom". Nor do I necessarily think that different goods cannot be balanced against one another. You are of course entitled to another opinion.
So your post amounts to - I think differently from Gordon Brown. So what?

[ajay]

3. Centre Left says:
The left must also engage in a sustained defence of the state. Illustrating how an active and engaged state can provide for a fairer Britain, can intervene to remove inequality.
Which raises the question: if the state can provide for a fairer Britain, why hasn’t it already done so?

Er... over the course of the last century, it has. Perhaps not a completely fair Britain, but certainly a much fairer one, in terms of income equality, health outcomes, class mobility...

3. What we need for equality is not a more active state, but a smaller, more passive one. Scrapping the complex and bureaucratic tax credit system - and abolishing corporate welfare - and replacing it with a basic income - would make the state more passive, but a greater force for equality

Not a lot of people know that, while the existing tax and tax credit systems are administered by HUGE HORRIBLE BUREAUCRACIES entirely staffed by VOGONS, a basic income would require no bureaucracy at all to administer, as it would be paid out (passively, whatever that means) by a small group of SPARKLY ELVES.

[reason]

"... except as some kind of annoying infant school teacher-like figure saying johnny has to give some to joe because johnny has more than joe."

Annoying I guess for johnny but not for joe. It is all a question of perspective.

[Matthew]

I understand - although don't accept - the argument that vouchers would lead to better schools through competition. But how would vouchers enable parents to grab the top school places? If the vouchers are given to poorer families and withdrawn much like normal benefits then richer families will still be able to outbid poorer ones. If there is a cut-off point after which no voucher is given doesn't this worsen the incentives to work which you often criticise?

[redpesto]

1. Universities minister John Denham wants universities to do more to recruit talented students from poorer backgrounds. Which only raises the question: why aren’t state schools doing more to bring out the talents of the poor?

Fair point, re. staying on rates and academic grades...but the problem for universities is this: is 'widening participation', 'aiming higher' and all that jazz: (a) a way of raising aspiration amongst working-class/poor children; (b) an act of altruism regarding the communities in which universities are located; (c) a means of getting more students in a marketised system, since students=money regardless of social background (or ability)? Universities could 'do more' to raise aspiration, only to find the students all go to the uni down the road (towns and cities with a ex-poly/'old' uni rivalry would be very prone to this). Also, the dirty little secret is that you only need two A level passes to be able to take a undergraduate course, and if Clearing is anything to go by, there are plenty of places available. In other words, it's a failure to progress, not just a failure of academic achievement.

As for vouchers, gah, could you imagine the level of means-tested bureaucr-- sorry, administration that would be required to run them? Also, weighting the size of the voucher more towards the poor might put them on a par with the better off - but only if it was set at the 'going rate' for private education...or if private education was abolished.

PS: Is it a question of the 'size' of the state, or the level of intervention? I suspect the two are not the same; if I'm right, your suggestion of a smaller state could work for the left re. the level of intervention (whereas the right just see a smaller state as shorthand for 'kill 'em all and let God - or the market - sort 'em out')

[Phil]

"why aren’t state schools doing more to bring out the talents of the poor?"

That's a huge non sequitur. As well as relatively massive resources, private schools have an intake consisting of bright kids who are already confident in their own abilities and motivated to succeed in conventional terms, most of whom will have been brought up by parents who are bright, self-confident and conventionally successful. It's an impossible target for non-selective schools to match.

[Phil]

Having calmed down and read the whole post...

...naah. You're describing a market failure in an area where the price mechanism doesn't even operate directly, so how monetising it further would help matters I don't know. The answer is selective state education, I think - but selection without any class connotation for the more academic schools or stigma for the less academic ones.

That or a socialist revolution, whichever's easier.

[dsquared]

[2. Forget about using the state to protect people from macroeconomic fluctuations. Instead, encourage the development of markets in GDP, industry and occupational derivatives, which allow individuals to buy insurance against shocks to their own livelihood.]

to buy it from whom?

[Bob B]

A sobering assessment in tomorrow's Economist of our government's contribution to the management of state education in Britain:

"The strongest evidence of poor spending decisions in education, though, is the dubious quality of the end product. The OECD ranks Britain 17th among 57 countries in literacy, 24th in mathematics (below the average) and 14th in science—a poor showing for a rich country with a fine intellectual tradition. And by international standards very large numbers leave school without what it calls 'baseline qualifications' (five good GCSEs): two-fifths of all 16-year-olds, fewer than half of whom remedy the omission later. This large, ill-educated rump face the second-highest earnings penalty for their lack of qualifications in the OECD, behind only America’s, and a high risk of joblessness too."
http://www.economist.com/world/britain/displaystory.cfm?story_id=12208999

After Blair's declared priority in 1997 of Education, Education, Education, it seems there's not much to show after all those years of New Labour government.

[Patrick]

Chris,

A good start but still lacking a deeper understanding. The views of 'the Left' are not policy driven but ideological in nature. They really (I mean REALLY) don't care about ends but absolutely about means. It is anathema to a lefty that education in general be vastly improved for almost everyone if that even slightly increased inequality.

A French lefty once quipped 'sure it works in practice but does it work in theory?'

What we're fighting here is a religion. (Go to a dictionary or otherwise find a working definition of 'religion' and tell me that state socialism is not one (or environmentalism for that matter).

Evidence, facts, failed experiments, repeated disappointment - they all count for precisely diddly squat.

You can't persuade a born again Christian that his faith is bollocks no matter how many facts you throw at him.

Lefties simply cannot be reasoned with - so don't even bother trying.

The appropriate course of action is simply to keep them away from the levers of power - otherwise the present state of the country is what you will get every time without fail.

[reason]

Patrick
and those of us on the pragmatic center left think (except for the word left) exactly describes libertarians. Who are these generic 'lefties' you are talking about. Name names.

[Alex]

Unfortunately, Chris, a lot of people look at basic income, see Mark Wadsworth (or functional equivalent), and conclude that it's a neat way to cut benefits, possibly to a practically nonsurvivable level.

Further, "The Admiral", I conclude from your comment that you are only saying this because you hope for a giveaway from the Tories. This is the unavoidable corollary of your argument.

[Innocent Abroad]

[Sept 11, 06:37pm] Precisely. Chris seems to imply that the only reason these products don't already exist is that the State has crowded them out. It is equally likely that there simply isn't the profit in them.

There is no a priori reason to think that either the State or the market can meet all our needs, and therefore no reason to suppose that they can do so between them.

What is needed is the development of a third sector (including but not limited to co-ops and charities) to take up the slack, whether in health, education, innovation or elsewhere. One thing that clearly only the State can do is to create a regulatory and tax framework that promotes this outcome.

Behind all this lies Reich's conundrum: capitalism has developed to the point at which it values only consumers and investors. Yet few if any of us - even if we had the moolah - could live a fulfilled life just going shopping. (And even fewer managing investments...)

The left needs some big thinking. We are still applying 20th century solutions to 21st century problems.

[Bob B]

"Who are these generic 'lefties' you are talking about. Name names."

Bryan Gould? Tony Woodley?

Bryan Gould in 2006: "Tony [Blair] has lost it, he's living in a world of his own, and - as most will say - he's deluded on Iraq."
http://news.bbc.co.uk/1/hi/uk_politics/6097946.stm

Tony Woodley in 2008: "Just three words from Gordon Brown could transform Labour's prospects even now: 'Blairism is dead.'"
http://www.guardian.co.uk/commentisfree/2008/jul/25/gordonbrown.labour?gusrc=rss&feed=commentisfree

[reason]

Next question - why are they important?

[Bob B]

"Next question - why are they important?"

Heavens above: Tony Woodley is joint general secretary of Unite, one of our largest trade unions in term of membership.

As for Bryan Gould, according to widespread rumours, Kinnock had him lined up to be secretary of state for the DTI had Labour won the 1992 election. Rumour also had it that Keith Cowling, professor of economics at Warwick, would have joined the DTI as chief economic adviser.

Now I had a brush with Professor Cowling at a public conference in 1992 on the way to the general election. He was saying that Britain should have an industrial policy like Japan and the DTI should take Japan's Ministry of International Trade and Industry as the model to emulate. Some model. After 1992, Japan's economy stagnated through the rest of the 1990s.

As for why Labour lost the 1992 election, try this:
http://en.wikipedia.org/wiki/Sheffield_Rally

"Name, names"

How about this for the authentic voice of the proletarian left in Parliament?

"George Mudie, the Labour MP for Leeds East who is a member of the Treasury committee, queried whether Mr King's frequent lectures on policies outside his control had 'strayed across the line' of acceptability."
http://www.ft.com/cms/s/0/338e2ac4-8063-11dd-99a9-000077b07658.html

[Bob B]

For more on Mr Mudie, try this profile:
http://www.theyworkforyou.com/mp/george_mudie/leeds_east

Mr Mudie was born in Dundee, like George Galloway.

[Bob B]

Update on the proletarian left in Parliament:

Siobhain McDonagh, the MP for Mitcham, has just been sacked from the government:
http://news.bbc.co.uk/1/hi/uk_politics/7613086.stm

[James]

D-squared: Those who assign a lower probability of recession or are less sensitive to macroeconomic fluctuations would be on the selling of a GDP derivatives market.

But suppose the brain inside your skull just couldn't possibly imagine who might be on the selling side of a GDP derivatives market. You realize that such a state of affairs has little to no implications concerning anything outside of your skull, right?

[reason]

They sound pretty unimportant to me.

[The Great Simpleton]

You can come up with all the theories you like for education. You can hose money at the universties to take on those from a poor background if you like; you can throw money at education vouchers for the poor to the extent they could afford Eton or Harrow and have change to spare.

You can shout about fairness and equality of opportunity, or even outcome, for all I care, because it is all wind baggery until you solve this problem:

http://tomisswithlove.blogspot.com/2008/09/obstacles.html

The problem isn't just that education isn't valued by a large minority of the population, there is a significant part of that minority that positively delights in ignorance and inflicting their ignorance on others and stops them making the best of their opportunities.

[种子罐]

"George Mudie, the Labour MP for Leeds East who is a member of the Treasury committee, queried whether Mr King's frequent lectures on policies outside his control had 'strayed across the line' of acceptability."
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