Benefits' biases

Alex Massie is, of course, correct to say that it is a mistake to draw any inferences from something as freakishly unusual as the Philpott case. Why, then, has the mistake been so common? I suspect there are two biases at work.

One is the confirmation bias. If you think the welfare state incentivizes bad behaviour such as laziness or fecklessness, you'll see Philpott as an extreme confirmation of your prior.

We should, here, note an asymmetry. Those who see Philpott as confirmation of the "bad incentive" hypothesis don't regard HBOS's bad lending as evidence that low top taxes have perverse incentives, or Stephen Seddon's murder of his parents as evidence that low inheritance taxes have bad incentives. This asymmetry cannot be explained by sound statistical reasoning, unless your prior is that the welfare state has stronger bad incentives than the tax system.

The second bias is a form of the halo effect.Hostility towards benefit claimants is founded upon a moral instinct - the norm of reciprocity. People fear that claimants are getting something for nothing, that "hard-working tax-payers" are being ripped off. The halo effect - the tendency to believe that all bad things are connected - lead people to think that such scrounging is also a macroeconomic problem. Which it isn't. This bias is exacerbated by our natural tendency to exaggerate harms done to us.

Herein, though, lies a problem. I fear this reciprocity norm is an atavistic instinct with an evolutionary basis which is no longer relevant to post-industrial society.

In hunter-gatherer societies struggling for subsistence the man who does no work and expects others to provide for him is a threat to the very existence of the tribe. It's natural, therefore, for a norm of reciprocity to emerge so that shirkers are stigmatized and shunned.

But we no longer live in that world. We have the opposite problem. There's not enough work to go round. In this world, the shirker does not threaten our existence. If anything, he's a help, as his not looking for work increases the chances of others getting it. And, remember, on average the unemployed are significantly unhappier than others.

My point here is a depressing one. The tendency to stigmatize benefit claimants, and so to regard Philpott as sufficiently representative of them to justify inferences (or dog-whistle "questions") is not the sort of error that can be corrected by evidence. It arises from biases and beliefs which are hardwired into us.

Comments

[Steve]

He's atypical in killing his kids of course, but in his large family is a pretty typical exemplar of the evolutionary direction that the welfare state leads humanity.

[Nkhosi]

Steve, presumably if you think Philpott's large family typical of of the evolutionary direction the welfare state leads humanity you have some reason for believing families even close to that size aren't vanishingly rare. I'll give you the benefit of the doubt.

[Luke]

Steve, a couple of minutes on google suggests rich people have more children.
http://scienceblogs.com/gregladen/2009/08/31/the-poor-and-the-dark-skinned/

http://www.overcomingbias.com/2011/06/the-rich-have-more-kids.html

I accept my approach is not entirely scientific.

[Anonymous]

During the Thatcher administration, a large number of fit job seekers were encouraged by the DWP to transform their benefit claims from unemployment benefit to sickness benefits.

It is not contentious to say this was done to disguise the real unemployment count, the size of which had become embarassing to the then Conservative government. Osborne tacitly conceded this much in his speech earlier this week.

So this policy did indeed encourage so-called feckless and lazy behaviour, the very same behaviour that our fickle masters now seek to demonise.

So there is some truth to the current spin about the welfare state's perverse incentives re encouraging fecklessness and laziness. But the ground for this criticism was brought about by the same political party which now condemns it.

And of course, having created a dysfunctional welfare state, it now becomes feasible to condemn the entire notion of social security to suit an ideological agenda and to thereby seek its abolition. Denmark and the other Nordic countries demonstrate that a strong and effective social security system without perverse incentives is a practical possibility. The UK could learn from their examples.

So let us not throw the baby out with the bathwater. Retain social security but jettison perverse incentives.

[FromArseToElbow]

I'm interested in Steve's phrase "the evolutionary direction that the welfare state leads humanity". This implies that benefits select for genetic success by encouraging above-average breeding. But unless you believe that those on benefits are a distinct genetic group, this would not privilege any subset of the species.

You must therefore presumably believe that laziness and fecklessness are hereditary, and that benefits thereby debase the national stock. Strangely, they didn't appear to have this effect between the 1950s and 70s, when unemployment (and presumably laziness) was low and benefit values were more generous than today.

I think Chris is spot-on to say that the strong emotions aroused by the Philpott case are atavistic. Stopping benefit for the third child and above, which appears to be the emerging policy, is obviously irrational and cruel, as it punishes children who have no control over their circumstances. But it makes sense if the ultimate aim is essentially eugenic: stop the poor ("weak stock") from breeding.

I wonder how long before someone suggests that benefits be made contingent on sterlisation.

[Keith]

I doubt the hate campaign against welfare spending is "hard wired" it is a transparent ploy to allow tax cuts for the wealthy.

The birth rate in most developed countries is less than the death rate and so the size of the population cohorts is becoming unbalanced.

We need to raise the birth rate to replacement level. France seems to get it and we should imitate them.

These social Darwinist propaganda campaigns are repulsive and vile. Like the politicians who run them.

[BenSix]

Steve -

About one in seven of the families that included a parent claiming out of work benefits contained three or more children.

http://blogs.channel4.com/factcheck/factcheck-the-truth-about-the-child-benefits-cap/11739

About one in seven families in the whole of Britain contained three or more children.

http://www.ons.gov.uk/ons/rel/family-demography/family-size/2012/family-size-rpt.html

I am sceptical of your claim, then, but I would welcome an expansion on it.

[link]

i don't understand it

[PJG]

Or it might be that the Welfare state is warping all our sensibilities and has run its course and needs replacing with negative income tax / minimum income.

Sorry happiness is not really something that can convincingly be measured. being content is not the same as being happy, which I believe is what we are really striving (no pun) for.

[John Eastwood]

"But we no longer live in that world. We have the opposite problem. There's not enough work to go round. In this world, the shirker does not threaten our existence. If anything, he's a help, as his not looking for work increases the chances of others getting it."

That's a somewhat strange assertion.

Assuming that the total amount of work available is fixed(you seem to be implying this assumption, obviously which isn't true, but I'll let it pass), imagine a society with 4 people in.

Dave, Carl and Steve work 40 hours a week each for £10 an hour (the total amount of work available is 120 hours a week), while Andy sits at home all day watching Jeremy Kile.

At the end of each week, out of the £400 Dave, Carl and Steve has each earned, £100 is subtracted, and given to Andy. Thus our theoretical society continues each week, with Dave, Carl and Steve each earning £300 after tax, and Andy getting £300 of benefits.

Eventually, Carl, Dave and Steve have enough of paying for Andy, and decide he needs to get a job. They speak to their employer, and agree that he will share out the 120 hours between the 4 of them. Steve, Carl and Dave all work 10 hours less and get more time to spend with the kids). Andy now has to work 30 hours too, and everyone still ends up with £300 a week.

If you can explain how it's in anyone's interest (apart possibly from Andy) for Andy to be left watching TV while the other three pay for him, I'd love to hear it.

Incidentally, my experience is that if you want a job, you can normally get a job (I'm a fairly low paid, not particularly highly skilled person), and I've signed on for less than a month in total of the 9 years since I left school. All you need is determination to keep on chasing people up (when I left school I went through the yellow pages and posted CV's to all the companies that I thought might employ me - IIRC I got at least 4 job offers from that).

[Andrew]

Yes indeed Chris, an atavistic urge.

But then, since all our urges are atavistic, who cares? Do you think there is some special set of passions that logically follow from an objective assessment of the facts of the universe?

[BenSix]

(I was wrong. About one in seven have three children, but another 9% had more.)

[Anonymous]

@John Eastwood

It's good to see you believe Andy should have an income and a job and that all four workers should be paid identically. Full employment and income equality make for good policy. Welcome to the club.

[AnotherAnon]

Equal pay for everyone is completely at odds with human nature. Many people would make little effort if there is no competitive reward. Socialism always ends up delivering poor economic results and poor living conditions for the masses.

[Blissex]

«If you can explain how it's in anyone's interest (apart possibly from Andy) for Andy to be left watching TV while the other three pay for him, I'd love to hear it.»

The obvious deliberate mistake in your argument is that it is based on the insane assumption that the number of people chasing a job has no influence at all on the leverage of workers as to the level of salaries.

So whether 3 or 4 people are chasing a job the wage remains the same.

But that is not what happens in so-called reality, and if Andy competes with jobs along with Dave, Carl and Steve, the wage of all of them is going to be lower.

So the plausible alternatives are the cases where 3 people each earn 400 a month for a total of 1200, and the case where 4 people each earn 275 a month, for a total of 1100, as the labour market has become that much more competitive with 30% more workers chasing jobs, and employers are entitled to take advantage of that.

The other minor deliberate mistake in the example is the assumption that Andy gets to stay home on full pay, which is far from reality too.

[Blissex]

«Incidentally, my experience is that if you want a job, you can normally get a job (I'm a fairly low paid, not particularly highly skilled person), and I've signed on for less than a month in total of the 9 years since I left school. All you need is determination to keep on chasing people up»

Thanks for sharing your experience.

Please tell us how this applies in general when there are 4 unemployed people for every 1 available job.

Should all 4 chase up the employer for that 1 one available job, and if they do, are they personally guaranteed by you that all 4 are going to get that 1 job?

[Anonymous]

@anotherAnon

Does it?

And capitalism doesn't?

Hmmm.

[Neil Wilson]

You can solve the atavistic effect with a Job Guarantee.

There is plenty of work that needs doing. It's the private sector failing to provide it that is the fault.

The private sector is efficient but ineffective at the society level.

[Indigo]

It's the great unspoken truth of the past 30 years. We keep inflation down by keeping wages down, and we keep wages down by having high unemployment. Given that high unemployment is therefore a necessary fact of modern capitalism, we have two choices. We can ameliorate it through welfare (as we currently do, to a decreasing extent) or let people starve. The problem with the latter is that you risk running out of unemployed people, achieving full employment, and creating hyperinflation again.

[paulc156]

@Indigo "It's the great unspoken truth of the past 30 years. We keep inflation down by keeping wages down, and we keep wages down by having high unemployment."

Whereas we could keep inflation down by increasing productivity and we could increase productivity by increasing investment and that would keep unemployment down. Problem solved. :)

[health niche]

I am pretty sure We have see this exact same form of statement in other places, it ought to be gaining popularity with all the people.

[Supporting Organization]

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