Beyond social mobility

Philip Collins in the Times today gives us, albeit inadvertently, a nice insight into why Blairites have become irrelevant.

He calls for increased social mobility whilst also saying:

These days when the economy is hollowing out with posh jobs at the top and grim jobs at the bottom, the prospect of social mobility recalls Gore Vidal's aphorism: "It is not enough to succeed. Others must fail."

There's terrible cognitive dissonance here. This passage draws our attention to why increased social mobility is nothing like enough.

First, Philip fails to note that you have to go a long way to the top to find "posh jobs." As Rick has said, being posh ain't what it used to be. The fact that doctors have been so pissed off as to threaten to strike, and teachers and academics are stressed and depressed, tells us that even good jobs aren't so rewarding these days. The youngster from a poor home who "succeeds" against huge odds will face high debt, unaffordable housing and stressful and unrewarding work. If "dulce et decorum est pro patria mori" was the Old Lie; social mobility is the new one.

Secondly, the fact that the economy is hollowing out makes social mobility even more difficult: it's hard to climb a ladder if some rungs are missing.

Thirdly, even if the race for the handful of decent jobs were a fair one millions would fail, often through no fault of their own - perhaps because they inherited low ability. Why should they be condemned to grim jobs or worse?

A simple thought experiment will tell us that social mobility is nothing like sufficient. Imagine a dictator were to imprison his people, but offer guard jobs to those who passed exams, and well-paid sinecures to those who did especially well. We'd have social mobility - even meritocracy and equality of opportunity. But we wouldn't have justice, freedom or a good society. They all require that the prisons be torn down.

So it is with the labour market. What we need are better jobs and incomes throughout the economy. This requires an attack upon managerialism and more worker control; expansionary macro policy to increase demand for labour; the encouragement of new technologies and investment; and a job guarantee and basic income to increase workers' bargaining power and real freedoms. Blairites offer none of these. They fail to make the connection between the new, grimmer labour market outlook and the need for new policies. Yes, they were once the modernizers - and in some respects rightly so. Sadly, though, nothing dates worse than modernity.

Comments

[Luis Enrique]

if it's true that stress - or the dis-utility of working more generally - has increased over time, what explains that? Why would we get higher real wages over time but worsening conditions?

oh and I probably shouldn't but:

yesterday: "It sustains demand through the welfare state and procurement policies" bad

today: "expansionary macro policy to increase demand for labour" good

[Dave Timoney]

@Luis, stress is inversely proportional to power, in the sense of control over one's work and the stability of the working environment (see the famous Whitehall Study - there is diagreement over the mechanics, but not the correlation between job power and health).

Over the last 30 years we have seen a reduction in control and stability, so we would expect to see an increase in stress regardless of the movement in real wages (and bear in mind that the impact of wages on self-esteem is relative, i.e. greater inequality around a higher median may exacerbate it).

This reduction is not confined to the lower end of the jobs market, where unionised and skilled trades have been gradually replaced by non-unionised service roles. It is also evident in the professions (as Chris notes) and in offices (the impact of outsourcing & offshoring, pay for performance, and the creative destruction of M&A goes a long way up the corporate ladder). The instability of the "gig economy" is another factor.

What Collins is doing (to judge from the above quote) is candidly admitting the neoliberal reinterpretation of social mobility: no longer growing the pie to create more and better jobs, but a competition for a limited number of sinecures. Chris is being generous in assuming that the Blairites are merely wrong. A harsher view would be that a zero-sum labour market is precisely what they wanted.

[gastro george]

Who'd've thunk it.

[gastro george]

Doh, link fail: http://www.theguardian.com/business/2015/dec/18/workers-demotivated-by-executives-high-pay-survey

[Ben]

Land prices and low rates. You can't own outright but you can rent (or rent the money from the bank for a mortgage). But you can never be financially independent. So you work and every day is the day you could lose it all.

And that never changes because as productivity goes up more surplus is available to go into land.

It's land prices.

[Ben]

That guardian article is exactly the kind of retarded thinking that means we get nowhere.

CEOs won't become less "narcissistic". They don't care about the pay gap. Telling them about it won't help. Shaming them won't help.

So what can help?

Reduce land prices via land value tax (and disposing of private banking). Then I can work 3 days a week because my rent isn't taking up all my income. Want me to work more? Pay me a lot more.

We are forced to work all the time to the max because that is where land prices are set. Remove that link and watch people stop working. And watch the CEOs come cap in hand.

[gastro george]

"Then I can work 3 days a week because my rent isn't taking up all my income. Want me to work more? Pay me a lot more."

@Ben. I think you need to look more at other countries. If your rent is lower, they're just going to pay you less.

[Bob]

I think that is the key point Ben. It is total income minus tax and housing costs that matters for most people.

"I think you need to look more at other countries. If your rent is lower, they're just going to pay you less."

I would add a Job Guarantee to that. Instead of rentiers fighting over a worker's pay as he is mugged again and again get rid of the rent seeking. Let's suppose you are living in London and depending on the rental property market you'd need an income much higher than you have.

I have said this before. But with a JG in place there is another option...

You leave London knowing that there is a job for you anywhere else in the UK where you will get significantly more bang for your buck.

London will then run short of vital workers and have to put their wages up.

The 'black hole' effect of unreconstructed capitalism is halted. People are no longer sucked into London out of desperation.

Switching to a bottom up system starts to move the income distribution curve back to where it should be and the production curve back to where it should be - dealing with needs firsts and then wants.

Wealth is redistributed because the rich suddenly have to start providing services for the poor if they want to earn the money.

Once you have a JG and the 'business confidence' bogeyman that Kalecki mentions is laid to rest then you can be far more aggressive pushing up the living wage. At the top end you give the Ministry of Competition real jack boots to stop oligopolies forming.

So MMT policies along with LVT lead to the end of rent seeking.

[Ben]

Bob - UK is rentier paradise == worker hell.

The best job guarantee you can have is low land prices so you have a choice.

But the UK will never slay the rentier because they think that's what "entrepreneur" means: something for nothing. The whole outlook is utterly flawed.

[rogerh]

So, suppose we cooked up a citizen's wage and citizen's housing what then. Are these citizens going to sit at home doing Sudoko or writing blogs or rhyming couplets. Perhaps they will form happy bands of mutual help workers. Or perhaps they will sit at home watching Sky in between bouts of 'the old entertainment'. We have plenty of moaners already moaning about migrants and about feral kids, I should think that will be as nothing compared with (imho) the most likely dystopian future.

Apart from upsetting the rich by redistributing down to the citizens there is the question of who governs, who runs the show. A good job and probably not many of them - amply assisted by AI machinery. I fear the numbers will simply not add up, mouths to feed, natural resources, available energy. Then there is Climate Change which may or may not force the issue. The bottom line is I just cannot see how a liberal democracy can survive such pressures, dark images of cattle trucks and power stations come to mind.

[Bob]

Lemmas of the Lugubrious Left #1

- We need to pay people off and treat them as consumption units because there will be no work to do in the future.
- We need open borders to allow unlimited immigration because how else will we have enough people to do all the work in the future

[Bob]

"Are these citizens going to sit at home doing Sudoko or writing blogs or rhyming couplets. Perhaps they will form happy bands of mutual help workers."

Everybody still needs something to do with their day, and they still need to see other people doing something useful. Why else would the BIG people have to spend so much time describing what 'good works' people will be doing once they get their bung? Of course most people won't be doing 'good works' any more than most pensioners do 'good works' when they get their pension.

There always has to be full time jobs because there is always full time to fill. Pretending they go away is naive and foolish. It is an appeal to 'market forces' to fill people's days. We already know from the data from retirement that doesn't happen. It is simply a way of discarding the social needs of the lower classes so that the upper classes can fulfil their Downton Abbey fantasies of being aristocrats where the little people do the work and pay the taxes.

Good luck giving the 'tax cut' of the basic income to millionaires while asking those digging fat bergs out of sewers to pay a 45% tax rate on a much reduced salary for a full time job.

The 'tax cut' of the basic income has to be replaced with a 'tax rise' on employment to stop over spending the economy. That's because you have crippled your spend side auto-stabiliser.

[Jim Harrison]

I keep having the fantasy that one of these days peace will break out. "Gee, there's already lots of stuff. How about we spread it around, worked less, and spent our time playing with our kids, fixing up the back yard, improving our short game, studying the Talmud, whatever?" People trot out the bit about how bored everybody would get. It's like the notion that you wouldn't like to be immortal. Well, if they run an experiment on that, I volunteer to be in the test group.

[gastro george]

@Ben. Look for example at Spain. House prices have almost halved in the last 7 years. Are they any better off?

[Ben]

George - the young took the pain because they built up a black hole of debt. If they can keep prices low thru land value tax I'm certain the young will face a far better future than those in the UK.

High land prices (and private banks issuing money) is an *insane* recipe. Why anyone thinks this is acceptable I've no idea.

[Bob]

"Look for example at Spain. House prices have almost halved in the last 7 years. Are they any better off?"

The reason they are worse off is because of austerity. What is needed is full employment and high output *along* with stopping land rents and other upwards redistribution.

[Bob]

"People trot out the bit about how bored everybody would get. It's like the notion that you wouldn't like to be immortal. Well, if they run an experiment on that, I volunteer to be in the test group."
OK. But what if only some people can be immortal? Do the immortal people deserve free stuff until the end of time?

"spent our time playing with our kids, fixing up the back yard, improving our short game, studying the Talmud, whatever?" "

If *your peers accept that* then yes that becomes a 'job.' If not then no.

[Bob]

Chris, I have read your article "The house price disease"

"Perhaps, therefore, we need rising house prices to achieve even modest economic growth. As Larry Summers famously said two years ago, in a world of secular stagnation the economy needs bubbles if it is to grow. In this sense, house price inflation isn't merely a disease in itself, but also a symptom of a bigger illness."

Just have the government raise spending and/or cut taxes. Larry Summers is talking nonsense.

[Calgacus]

Chris Dillow:"Imagine a dictator were to imprison his people, but offer guard jobs to those who passed exams, and well-paid sinecures to those who did especially well. We'd have social mobility - even meritocracy and equality of opportunity. But we wouldn't have justice, freedom or a good society. They all require that the prisons be torn down."

This is pretty much the present reality.
The American Institutionalist John Commons - who Keynes said was the thinker whose thought was closest to his, and who is an ancestor of today's MMT, used this apt comparison of society as a prison, with people both the inmates and guards.

Gore Vidal: "It is not enough to succeed. Others must fail."

"Unemployment is not a mere accidental blemish in a private enterprise economy. On the contrary, it is part of the essential mechanism of the system, and has a definite function to fulfil. The first function of unemployment (which has always existed in open or disguised form) is that it maintains the authority of master over man. The master has normally been in a position to say: ‘If you do not want the job, there are plenty of others who do’. When the man can say: ‘If you do not want to employ me, there are plenty of others who will,’ the situation is radically altered."

(Times of London, 1943; h/t Victor Quirk, Walter Korpi)

As long as there is one person who is not offered a decent job, whether there is a BIG or whatever other quack nostrum, the core of the system remains, the atavistic, stupid idea of "the authority of master over man".

[Churm Rincewind]

I'm always vaguely taken aback by Mr Dillow's constant laments on this blog that middle class privileges are on the wane (if indeed they are).

Citing doctors, teachers, and academics as examples of people in "good jobs", Chris complains that these careers are not as "rewarding" as they were before.

Do I care? Not much. Is this even true? Probably not. I would have thought that doctors, teachers, and academics have pretty good lives compared to the rest of the population. Of course they have their complaints, and naturally they resent any criticism of what they see as their entitlements.

But it strikes me that the whole idea of a "good job" is pretty much a self-regarding middle class construct.

[George Carty]

Ben, why does red-state America have so much poverty and inequality in spite of some of the lowest land prices in the developed world?

[Staberinde]

Chris, it's a good argument but somewhat academic given the forthcoming robocalypse.

Blockchains making banks, accountants and lawyers obsolete...autonomous vehicles laying waste to cabbies, couriers and hauliers...expert systems writing news reports...

Even Andy Haldane's worried.

Let's instead posit that mass employment was a construct of the 20th century, a complement to mass production, mass-membership political parties, mass murder from Hitler and Stalin, mass media and all the rest.

What if the 21st century isn't 'mass' at all? What if, instead, employment becomes a minority activity - and even those who have jobs find work takes up less of their time?

What if labour's share goes into free-fall?

What if even middle-class jobs become atomised and Task Rabbited?

The prescriptions for social mobility and inequality have always been based on graft. Those prepared to work hard can lift themselves, or will be supported in doing so, or will find their path cleared.

Without mass employment, work could become a luxury good!

[Deviation From The Mean]

Are you approaching the point where we can begin to separate income from work?

"Those prepared to work hard can lift themselves, or will be supported in doing so, or will find their path cleared."

The historical record always says different. In the middle of the 19th century graft was at its height, workers tended to work 15 plus per day. Pay and conditions were dreadful, disease was rife, early death stalked the land. Those who didn't do hard graft tended to eat better, sleep better and lived in better houses! Social mobility was non existent either by the way.

When acts of parliament reduced working hours, reduced graft and allowed people the space to actually live some sort of a life beyond hard graft, not only was wealth increased and living conditions improved, but social mobility and productivity went up.

If we are to learn anything from history it is that we should not overrate hard graft and do everything to avoid it, just like those who would have us believe hard graft is the answer to all our problems!

[An Alien Visitor]

"why does red-state America have so much poverty and inequality in spite of some of the lowest land prices in the developed world"

If we look at Gini co-efficients I am not sure this is strictly true.

I guess a related question would be, why do places with high land values have such cheap food prices? Why are high prices for land seen as a good thing, isn't the idea of progress to reduce prices? Hasn't the increasing wealth of society been a progressive trend in increased labour productivity and a general cheapening of prices?

So I think your question about red state America obscures more than it actually answers.

[Bob]

I suggest everyone reads this:

http://www.nytimes.com/2015/01/04/opinion/sunday/is-life-better-in-americas-red-states.html?_r=0