If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter.

- George Washington

Thursday, 23 July 2009

Government by the Innumerate

The Child Poverty Bill is due to come before Parliament soon. It aims to make eradicting child poverty a duty of Government, and to "outlaw" child poverty by 2020. It all sounds well and good, but it is bollocks, mathematically and logically.

The Bill refers to 'relative' poverty, where poverty is defined as being in receipt of an income a certain measure below the national average - according to the Government, 60% of average income is considered the line below which you are poor. [1] 'Relative' poverty as an idea is a very different from 'absolute' poverty, which refers to a lack of the resources to live a comfortable life.

I have no problem with aiming to eradicate absolute poverty. In a civilised society, everyone should have access to clean water, enough food to survive, basic healthcare, and a roof over their heads. As long as the society can afford to do so, this should be an obligation on every government. But that is not the same as relative poverty. Relative poverty defines itself in relation to the national standard of living, so you get the ridiculous claims of some that a home without a plasma TV and two foreign holidays a year is 'poor', while the truly poor in Africa are without water, food, healthcare or shelter. I have two problems with this, one mathematical and one moral.

The mathematical problem is that relative poverty can never be eradicated. It's not possible. As soon as you increase the incomes of the poorest, you increase the average, and they become 'poor' again. It's a process that can never have an end [2]. Ludicrously, you can eradicate 'poverty' simply by paying rich people less which, to be sure, would do nothing for the living standards of those on lower incomes, but would lift them out of relative poverty. And, of course, Gordon Brown knows this. The Bill is purely a political exercise to trap the Opposition. If they oppose it, they will be seen as uncaring. If they support it, they are lumbered with inevitable failure. It's exactly what you would expect of someone who does not expect to be in government in five years' time.

The moral problem concerns the motivation behind the Bill. What it seeks to do is not eradicate absolute poverty (which I would applaud) but even out incomes across the nation. The only way that relative poverty can be eradicated is if everyone earns much the same. This is the true levelling mindset behind the Bill - not to remove things like hunger and homelessness, but to make the poor richer by making the rich poorer. And while that may be a legitimate aim (although, historically, the outcomes have never been good), it is certainly not how Labour are presenting it. Which, of course, is no surprise at all.

[1] I am aware that the term 'average' is vague and imprecise, but I have seen various definitions of poverty involving means and modes and medians, and it doesn't make a lot of difference - the principle is the same, even if the numbers are slightly different.

[2] This reminds me of a wonderful Daily Mail article of a few years back:

Child Literacy Shock
Fully 50% of youngsters leaving primary school are below average in reading, it has been admitted.

Well, durr.


  1. Perhaps Mr G Brown has been reading up on customs and culture on remote South Sea islands (for his long holiday next year). Some islands operate on the Wan Tok system under which anyone in an extended family has call on the wealth and possessions of anyone else in his Wan Tok (One talk) family. This has the effect of spreading wealth and possessions around more and more evenly. But it also means that there is little or no point busting a gut to create wealth as all your cousins and cousins cousins will bowl up and take it all away.

    Perhaps it works better where you don't have to have the heating on in May.

  2. This sounds like my family. The Wan Ban Kak Ount tribe, who share all resources except the ability to hold down a job. It's a bit like "from each according to his abilities; to each according to his needs". Human nature says that if you are faced with the choice of being given something for free, or having what is yours taken away from you, you will choose the former, every time.

  3. endemoniada_8829 July 2009 at 00:14

    Funnily enough, that's exactly the way our pay scales work. Every year the company line is that pay awards should concentrate on "uplifting staff in the lowest quartile", meaning that those on a decent salary can look forward to a sub-inflationary rise to subsidise those on less.

    One major drawback here is that, in many respects in the real world, salaries do tend to reflect ability. In the IT profession, for example, it doesn't seem like a great idea to "uplift" a bunch of now-happy data-entry clerks at the expense of demotivating the systems administrators looking after your core business infrastructure.

    The other major drawback, is of course, that in practice it doesn't work. A big percentage to the lower-paid and smaller percentages to the higher-paid tends to add very similar amounts to everyone's base salary. So next time around, the differential is still the same and the lower quartile is still relatively poor.

    Even more ludicrously, my company actually works on medians - ie the salary of the person numerically in the centre of the entire staff list. By definition, there will always be 50% of people above and 50% below this point, unless everyone earns exactly the same amount. Reaching that point would self-evidently be a suicidal business decision, so one has to ask - why aim for it?

    There, too, is an additional point that Mr G Brown would do well to ponder. If he managed to eliminate relative poverty by effectively having everyone earn the same, who is going to pick awkward, dangerous, responsible and stressful occupations when they could get the same amount on benefits, or for idly stacking shelves for a few hours a day? Not a choice overflowing with incentives, is it?


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