What can governments do?

Do we greatly over-estimate what governments can accomplish? This question occured to me during my holiday reading. This is because there's a common theme in Piketty's Capital in the 21st Century and in Greg Clark's The Son Also Rises. Although the two books discuss very different types of inequality - wealth in Piketty and opportunity in Clark - they share the same view that inequality is hard to change. Here's Clark:

The intergenerational correlation in all the societies for which we construct surname estimates...is between 0.7 and 0.9, much higher than conventionally estimated...The arrival of free public education in the late 19th century and the reduction in nepotism in government, education and private firms have not increased social mobility.

And here's Piketty:

France remained the same society, with the same basic structure of inequality, from the Ancien Regime to the Third Republic, despite the vast economic and political changes that took place in the interim.

Reading this reminded me of Landon-Lane and Robertson's paper, in which they argued that "there are few, if any, feasible policies available that have a significant effect on long run growth rates"

If we put all three claims together, we have a contention that should disturb leftists especially - that there is little that governments can do to radically improve the life-chances of the worst off, because there's no (feasible?) way of greatly increasing growth or of greatly increasing the redistribution of wealth or opportunity*.

I stress the words "greatly" and "radically" in that paragraph; it's quite possible that a government can nibble away at the edges of inequality, and this is not to be sniffed at. The point is merely that there might be powerful reasons why Labour governments have generally disappointed their supporters.

In this context, I suspect there has long been an excessive division on the left, the latter-day manifestation of which is between Blairites and the far left. On the one hand are those who are too happy to compromise with capital, and on the other are those who are over-optimistic about the prospects for radical change. There is, though, a third way: we can recognise that governments can only do a little to help the worst off, whilst at the same time deploring this fact and regretting the power that capital has.

In saying this, I do not intend to endorse Gramsci's phrase about “pessimism of the intellect, optimism of the will”. This has long struck me as silly: willing things don't make them so.

* I'm using "feasible" ambiguously here. Infeasible might mean that policies won't work technically, or (as I suspect instead) that they are ruled out by the power of the rich.

Comments

[Roy Lonergan]

Chris

There are policies (unknown) ruled out by the power of the rich? Or what policies do you have in mind?

Regards

[gastro george]

And yet inequality was less in the 60s and 70s, so are you arguing that this wasn't at all due to government policies and would have happened anyway?

[Chris Purnell]

Inequality of access to premier universities is a well understood engine of more general inequality. There are equally well known routes to making at least a dent in that problem. Other 'idealistic' techniques also exist i.e. Sure Start in the USA. Education is a slow and painful process but I do think that there is some possibility of denying the basic thesis of inevitablity of inequality (Piketty goes further and speaks of growing inequality)

[Socialism In One Bedroom]

I guess it depends on whether you think the distribution we have is a natural outcome that nothing but nothing could have changed. If you believe in this type of destiny then you can make the argument that there is nothing anyone or any organisation of people can do to change this inevitable fate.

However if you believe the system is already rigged and the outcome very much variable, then the question should be asked, if they can rig it one way, why not the other?

I fail to accept that a world where wealth is so absurdly distributed can be anything other than rigged.

Therefore, governments can do a hell of a lot more.

[chris]

@ Roy - some possible growth-enhancing redistributive policies that are excluded by the power of the rich might include workers coops and a (highish) citizens basic income.

[leslie48]

As a sociologist in education ( both in public & private education) I have often pondered these issues over the years. We can never arrive at a pure meritocracy but we can not give up the journey towards it; So having comprehensive schools ( not 11+) gave more chances as did the 1980s GCSE,national curriculum ( maybe Thatcher's few triumphs ) modular A Levels, expansion of universities so more and more kids progress etc., More graduate now etc, But of course the middle classes 'game' the system, so reading the league tables and so school selection by mortgages, hiring tutors, choosing the Russell group like Warwick for their Thomas or Olivia -

The Middle class power is economic, political and cultural and goes on. All we can do is keep pushing for better opportunities for our working class kids but I think we need to give them political insight too ; in my middle class area there were traffic jams outside the polling stations tonight on TV news Bradford less educated working class youngsters said there not voting because it was 'boring' and 'did not understand' Of course social science, politics, economics is not delivered to the lower orders - there's the real cause of inequality - powerlessness.

[Boffy]

"If we put all three claims together, we have a contention that should disturb leftists especially - that there is little that governments can do to radically improve the life-chances of the worst off, because there's no (feasible?) way of greatly increasing growth or of greatly increasing the redistribution of wealth or opportunity*."

It may disturb reformists and statists, but it certainly shouldn't disturb Marxists, because its something we have always known!

Marx in his Programme for the First International not only set out why taxes could bring about no meaningful redistribution, but in the Critique of the Gotha Programme he sets out what is required to bring about a different distribution.

"Any distribution whatever of the means of consumption is only a consequence of the distribution of the conditions of production themselves. The latter distribution, however, is a feature of the mode of production itself. The capitalist mode of production, for example, rests on the fact that the material conditions of production are in the hands of nonworkers in the form of property in capital and land, while the masses are only owners of the personal condition of production, of labor power. If the elements of production are so distributed, then the present-day distribution of the means of consumption results automatically. If the material conditions of production are the co-operative property of the workers themselves, then there likewise results a distribution of the means of consumption different from the
present one. Vulgar socialism (and from it in turn a section of the democrats) has taken over from the bourgeois economists the consideration and treatment of distribution as independent of the mode of production and hence the presentation of socialism as turning principally on distribution. After the real relation has long been made clear, why retrogress again?"

[Boffy]

@ Gastro George.

"And yet inequality was less in the 60s and 70s, so are you arguing that this wasn't at all due to government policies and would have happened anyway?"

Yes, it would have happened anyway. It was aperiod of Long Wave boom, the demand for labour-power was high, competition between capitals for labour-power pushed up wages and reduced inequality.

[Keith]

Yeah but you still vote. No rational person would want the UK idiots party to win all the seats in the assembly.

It is strange that people often kill to get or keep political power if it changes nowt.

[dw]

well if the government can't do much about inequality, then how do you propose that we avoid the inevitable end game? that being where those at the bottom no longer support the economic system? considering how that has worked out in the past (civil wars, the guillotine among other options) would seem to indicate doing some thing is better than doing nothingg

[Boffy]

"It is strange that people often kill to get or keep political power if it changes nowt."

Its not that political power changes nothing. Its that you can't change inequality simply as a result of government action. If it was possible to change the basis of property ownership by government action, by for example transferring ownership of all capital to workers co-operatives, then it would be possible to change the basis of inequality.

But, firstly, no such government is ever going to be elected, and secondly its impossible to bring about such a change from the top down, because you can only have real workers ownership and control if the vast majority of workers are prepared to fight for it it, and implement it. Otherwise, you simply exchange ownership and control by capitalists for ownership and control by state bureaucrats as happened in Russia after 1917.

What political power can do is to create conditions where workers can at least be free to develop in that direction, to support their actions where they do set up such Co-ops and so on, and to prevent Capital using political power to prevent their growth. We should use political means, for example, to demand that workers have democratic control over the £800 bn in their pension funds, so that they could use it to extend the number and power of workers co-ops. Personally, I'd also want to use it to take back the even bigger sum of money that workers have paid in to the tax and national insurance funds to cover their pensions and other social insurance, which they never get back to the extent they should, and which services are the first to be cut when capital seeks to make savings.

If we had all of those resources directly in our ownership and control, we would already be a long way towards having control over the real levers of economic power, and the ability to really change the basis of inequality.

[Boursin]

There is another, more "banal" reason "why Labour governments have generally disappointed their supporters": first-past-the post, combined with (or giving rise to) the basically two-party system.

First, the two-party system ensures that Labour voters' expectations are higher than in countries with proportional representation, because Labour governments are not perceived to be hindered by any coalition partners (and cannot therefore use this in public debate as an excuse for their failings). This leads to a more voluntarist view of what the party can achieve.

And second, the system ensures that changes from the Tories to Labour are historically rare, because the intervening periods of Tory rule are so long. 18 years passed between 1979 and 1997, 13 years between 1951 and 1964, and 14 years between 1931 and 1945. This means that the disappointments of the last period of Labour government are easier to forget, because they are so distant in the past.

[Keith]

Off course Labour supporters are disappointed regularly as Labour is a reformist party even at its most left wing. While a segment varying in number of the Labour membership and electorate is much more radical. The party leadership and policy makers work within the limits of representative democracy rather than workers democracy and the need to appease the apolitical swing voter. Plus Capital in the wider sense. Reformism tends to block rather then advance any drives for direct democracy. You could argue that Trade unions do the same. If workers are their own boss why do they need a union?

The problem with direct democracy and workers power is that it ignores the problem of scale. Economic activity needs to be coordinated at the national and world level as well as inside the firm. Organisation and hierarchy flow from that. An ideal workers economy still requires management and an ideal socialist world still requires a state and indeed a world Government to maintain peace and allow trade and development. How you organise the relationship between different economic and political bodies is a complicated question. The answers are more complex then people often appreciate when constructing their favourite Utopia.

[Dan Kervick]

"France remained the same society, with the same basic structure of inequality, from the Ancien Regime to the Third Republic, despite the vast economic and political changes that took place in the interim."

Because they did nothing serious during that period to redistribute capital and/or reduce the capital share of income. In the 20th century, of course, a combination of war and political change did in fact reduce inequality in very significant ways, as Piketty documents.

[Andrew Curry]

In defence of Gramsci, I think you're misreading the intention of the quote. "Pessimism of the intellect, optimism of the will" is similar to the Transition Movement's "Head and Heart" (they add "Hands") or Roy Amara's "Probable, possible, and preferred futures". Gramsci was saying to his readers that you have to be honest with yourself about the prevailing conditions within which you are acting (pessimism of the intellect), even while trying to achieve your hoped-for change (optimism of the will). And let's face it, without aspiration for change, we're just left with the pessimism part.