Reply

This is in response to Pyrrus’ reply to my post ‘Alternative to Minimum Wage’ from a few days ago.

Okay, nice try. Let’s start at the beginning. First off this bit, ‘Handouts do not help the poor. Handouts create dependency on the government.’ It sounds nice, but unfortunately it isn’t completely accurate. If by ‘hand outs’ you mean support and aid (which I hope you meant, because that was what I was originally talking about), then it turns out that these ‘hand outs’ do help the poor.

If your theory was correct then the result would be that social mobility would be higher in America than it is in Europe (since Europe gives out more hand outs, it should create more dependency). It turns out, in study after study, that this is not the case, however. A group of researchers* has discovered that on a scale of one to zero, where one is absolutely no social mobility from parents to children and zero means complete fluidity, Scandinavia scores an average of 0.2, Britain 0.36 and America 0.54, (so the higher the number, the less chance of moving up and down through the social hierarchy). So when the poor get hand outs, they have a better chance of getting out of poverty.

Then for your second point, where you talk about big government, there you’re starting to contradict yourself. Only a few days ago you said that people were really not capable of ruling themselves, now you’re suggesting that a big government is bad. It is either or, you can’t have both a weak government and an un-empowered people. Somebody has to have the power!

Next you move onto equality, stating that modern taxation methods are unfair. I agree with you that modern taxation methods are unfair, but so is the genetic lottery that each of us is forced to play at the beginning of life (i.e. who our parents are and how capable we are). People are not born equal (different levels of schooling, financial assistance stimulation, genetic make ups, social networks, etc.) If they were and then some ended up at the bottom of the pile and some at the top, then I would be far more inclined to say ‘so be it’. But if people are not born with the same opportunities, then we should try, in some way, to bring some sort of balance. Life might not be fair, but we can try to be.

Of course, you can decide to disagree with that (apparently you do) and it is very much an emotive argument, so let me bring up another argument from a completely selfish perspective. This is the fact that those poor people have a voice and if they feel that they are going to lose what little they have they are going to use that voice to protect their interests. Everybody will do that, it’s a natural reaction to your way of life being threatened.

One force that is doing exactly that is globalisation and it is creating exactly that reaction. The poor are starting to yell for protective measures, ones that will safeguard their jobs (as they are initially the ones most likely to bite the dust) and they hold enough sway to get these kinds of measures approved, if there are enough that are upset.

If these measures get approved everybody will suffer, including (maybe even especially) the rich. Giving the poor financial support when they get paid under a certain salary, as in the top up, will turn down the volume on a lot of those voices, allowing globalisation to help make everybody else better off for longer. I think slightly higher taxes are an acceptable cost to the incredible wealth creating opportunities (and associated social upheaval) that come from globalisation.

You also seem to have got yourself stuck on the dole (i.e. the money paid out to the unemployed to help them survive, I think you call it social welfare). The dole is a feature of social support and one that has turned out not to work terribly well. There are, indeed, people who never want to get off it and live off of the backs of others. Though I am for the dole for a limited time to help a person get back on their feet and find new work, it was not what I was discussing in my last post. I was discussing minimum wage, which is something that the rich by and large do not pay for, and an alternative to it that will help all people by reducing the cost of goods, especially basic ones.

As for the Christian comment, it was probably uncalled for, but when I hear you go off about correlations between rich and poor and some sort of debt owed by one group to the other I can’t help but think ‘how unchristian of you’. Some people don’t help people because they feel they owe them something, but they do it because they feel that those with few opportunities deserve more. They don’t do it out of guilt, they do it out of compassion. I feel we should offer everybody as many opportunities as we realistically can, whether they then take them or not is up to them.

*“Non-linearities in Inter-generational Earnings Mobility” (Royal Economics Society, London). “American Exceptionalism in a New Light” (Institute for the Study of Labour, Bonn). Both by Bernt Bratsberg, Knut Roed, Oddbjorn Raaum, Robin Naylor, Markus Jantti, Tor Eriksson, Eva Osterbacka and Anders Bjorklund.