politics problems society WellFair

The Tory’s Awful Honeymoon

As our social fabric wears out we are still waiting to see the full effects.

It takes years of patient and hard work to rebuild communities if they breakdown, and so it makes perfect sense that it takes years of underfunding before the consequences of failing to nurture a community also become apparent.

Across this land the awful tragedy of the almost impossibly arrogant notion of a “big society” promulgated by the Tories in this decade is now unfurling. The idea that the voluntary sector can and would pick up and replace public services when the government abandoned them could only make sense to a shallow-thinking, protected group of naives. But it is the curse of those who view the world exclusively through the lens of motivation that they cannot see the social imperative that makes their view possible.

Leaders in the NHS are sounding alarms about the effect on health services, but they are just the ‘canary’ for a much wider thinning of our social fabric.

The voluntary sector is reporting rising demand across the spectrum, from youth services to domestic violence, from food banks to credit advice, and from edge to edge across our geography. The cause is simple: public services are being retrenched, but demand remains the same.

The load on a human society to support those who need help does not change just because you withdraw the services, because the vast majority of that burden is “base load”, it is social support that needs to be provided to deal with the consequences of other decisions made years ago, at home or abroad, by us and by others across the globe.

And the notion that society is stacked with sufficient well-meaning types of sufficient means to provide their own labour for free and fund all of their supporting service infrastructure so that public governance can simply step out of the way, is such fantasy that it deserves nothing better than the shortest shrift.

Compile on top of this the impending pensions crisis. In the coming years the first cohort of workers who never had access to the old company/public pension schemes, and were funnelled into a voracious and predatory private market, will start to retire. Today we talk about the yawning gap in pension provision in abstract terms, because largely we are talking about a future event. But once the cohort in which 75% really only do have a few thousand set aside reaches their retirement age that change in fortunes will become very real very fast. If we feel that the government has been under undue pressure to help the heavy-voting older section of our population lately, just wait till most of them can barely survive.

Now the solution to all of this is not to spend more money per se, it requires a much deeper restructuring of our idea of what our society is for and how it’s going to work. The reality is that we are still using models for providing social safety that were developed in the fantasy period half-way between the last two great financial crises (1929, 2008), when there was still plenty of exploitation of planet and (other) people to go around, and that meant that it seemed possible to fund decent public services out of reasonable taxes. However without exploitation we will need a whole new model.

You can’t take more than half of anyone’s money away and not expect to affect their motivation, and the same is true for human societies generally. The reality is that the maximum tax burden that a free and open society can sustain is around 40%, and if you go much above this number you start incentivising corruption and reducing motivation in ways that are counter-productive. In the UK the total tax take is running just a little under 40%, and we could have discussions about whether an additional 3%, 4%, or even 5%, is available to increase tax revenues, but it’s not much more than that. And yet if you add together the funding requirements for all of the different areas that are suffering at the moment, you end up with numbers that are much closer to 10% higher than today. (Keep in mind that we already spend 3% more every year than we raise in taxes.)

This is the dilemma that seems to stump just about everyone. And why is that? Why is it that this relatively simple problem of how to fund the necessary social safety services that underpin the fabric of a human society is escaping the greatest minds and best intentioned people across the world? The closest answer to that question I have come to so far is simply that the answer is too obvious. The answer is to reduce the cost of living, and the way to reduce the cost of living is to reduce the amount we each receive in exchange for our labour. Now you may have a visceral reaction to that last sentence, and that will help explain why this is not a commonly considered solution, but bear with me for a few more lines while I explain why this is both good sense and good practice.

The quality of life that we each experience is some combination of the existing infrastructure of our community around us, and what we can each individually purchase for ourselves. And there is a strong relationship between these two components. Healthcare is a great example: because we have the NHS we do not each individually need to buy ourselves health insurance, for which we would individually need £500 a month or more. How much we are paid for our labour is not the ultimate determinant of the quality of our lives, it is just one component and it depends on what else is provided as part of our public infrastructure. And, as humans, we are naturally hardwired to expect and understand this, it is perfectly natural for us to see the fruits and rewards of our labour as benefits that we receive on top of the social structure of our community that we rely on. And conversely, the lower the quality of our social safety net, the more we know we need to rely on our personal incomes.

We’re only talking about a few percent of GDP here, in fact the number is 7%. If we can move some percentage of our basic requirements from the category of personal expense into the category of public provision, we can make the necessary savings to fund a decent society. About half of the savings come from the enhanced efficiency of public service provision over personal acquisition, and half comes from the unconscious trade in which we each accept greater security in lieu of greater pay.

The Tories are walking into a minefield of their own making, and which will be their undoing, but that field exists within the global context of a mined landscape in every society across the planet. Exploitation is not available on a sufficient scale to make the old system work, and human populations are ageing unstoppably. This problem must be solved. And there is a solution. #ProperChange

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