Tax credit cuts and poverty ethics

House of LordsNow that the UK House of Lords has voted against the Government’s proposal to cut tax credits, questions arise. This post focuses on poverty ethics.

Tax credits for people in low-paid jobs were a foolish idea in the first place. The Government argues that cutting them will make the economy more successful. Opponents argue that without adequate compensation the people concerned, already impoverished, will be driven into even deeper poverty. Even if the cuts will contribute to a more successful economy, people need an adequate income now. They cannot postpone their eating for a few years while waiting for the economy to grow.

This echoes the way Jeremy Corbyn has been challenging the Prime Minister at the weekly ritual of Prime Minister’s Questions. Corbyn asks questions about the desperate circumstances of individual people, adding that thousands of others are in similar situations.

David Cameron replies by ignoring the needs of those individuals and talking instead about the needs of the economy. Again and again, the two men appeal to diametrically opposed value systems. Where do these value systems come from, and how can we judge between them?

The Lords, like Corbyn, presuppose that when some people are in desperately difficult circumstances others have a duty to help. This is a Government-sized version of the normal feeling that if you are starving and I have spare food, I should give you some. On a local level, most people would; hence the food banks.

This kind of ethic presupposes that the primary ethical task is to provide for each other directly and immediately. In economic terms the main issue is distribution of resources.

Cameron’s argument is more indirect. The Government’s task is not to deliver the results but to make sure the economy does. An analogy might be a doctor faced with a patient who has come out in spots. The solution is not to cut out the spots but to prescribe tablets or cream which will remove them. Similarly when the economy is working well it will make sure needs get met.

Being more indirect, Cameron’s theory requires an additional act of faith. If you want everybody to have enough food, it is not self-evident that managing the economy in a particular way will get it to them. When doctors prescribe a particular cream for spots, behind the prescription lies a history of research and trials. Economic theories do not guarantee results to anywhere near the same degree.

The more direct ethic is simpler: if you want everybody to have enough food, give spare food to the hungry. If you do that you will achieve your aim. You don’t seem to need any additional acts of faith. Corbyn is of course familiar with the socialist and communist theories that also anticipate a rosy future if their preferred economic recipes are followed and are just as much acts of faith; but his current focus is on meeting the needs of desperate people directly and immediately.

However the simplicity is deceptive. Both the Lords and Corbyn reject some of Cameron’s acts of faith in the economy, but not all of them. Meanwhile the ethical duty to provide for the poor is itself dependent on an act of faith: faith that there are enough resources to do so.

Here Cameron scores. The world provides enough food and shelter for everyone, but cannot provide enough cars, televisions, mobile phones and freezers. If you think everyone should have those, then nature does not provide adequately. Because it is so mean we need some artificial process to pressurise each other into working harder, so that we develop new resources and produce more things.

So here’s the choice. One option is to make sure everybody’s basic needs like food and shelter are met but otherwise have a more laid back, less pressured society. This will mean living comparatively simple lives, making do with far fewer cars and freezers. We would have to restructure society accordingly.

The other option is to keep up the pressure, forcing each other to take paid employment even when we don’t feel well enough and work longer hours than we want to, until such time as we can possess all the things we’d like.

Political debate would be greatly improved if everyone were to put aside their tribal loyalties and ask themselves which would really offer a better life. Suppose we had a referendum on it? Suppose we could vote between these alternatives and thereby establish government policy for years to come? Could we?

That would imply that both options are practically feasible; that we need no more acts of faith; that we can see what the world is like and choose our lifestyles accordingly.

Of course we can’t. There are too many unknowns. The world works in certain ways and allows certain lifestyles, but will kill us off if we exceed the limits. In reality we all make acts of faith in uncertain theories.

Cameron’s act of faith is in the economy as a benign provider, albeit an intermittent one. This type of faith was invented in the eighteenth century by Adam Smith and his associates. At the time they understood quite clearly that they were offering an alternative to Christian teaching on economic ethics. Their main motive was to exclude religious doctrines from their understanding of how the world works and develop secular processes for increasing overall wealth.

Members of the House of Lords justify their votes in different ways, but I don’t think they would have overturned the Government’s proposal without a strong feeling that it was morally wrong. The impoverished should not be driven into ever deeper poverty, even if this will later produce economic success.

I would have preferred it if this moral principle had been articulated more clearly and forcefully. We ought to provide for each other’s needs, directly and in good time, not because of any economic theory but because this is the way we have been designed to live fulfilled and happy lives.

It is on this level that I disagree most strongly with the British Prime Minister. His economic beliefs have their origins in a theory that we have not been designed; that we just happen to exist on this planet because of impersonal forces causing accidents, so we may as well create the lifestyle we want. Inevitably, what that produces is the lifestyle preferred by the ruling classes, at the expense of the powerless.

It is no accident that the most perceptive opposition to this cult of economic self-interest comes from those who see deeper values lying elsewhere – in nature, in spiritual realities, in religious teaching about the common good, in gut feelings of right and wrong, in ordinary daily acts of love for friends and neighbours.

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4 Responses to Tax credit cuts and poverty ethics

  1. Steve says:

    Jonathan
    What exactly do you mean by “This will mean living comparatively simple lives”?

    • What I was thinking was: less technology, specifically the things people have in this country that couldn’t be provided to everyone – like cars and freezers. On the other hand, now that you have drawn my attention to the point, that doesn’t at all mean a life without those things is necessarily more simple. Thanks for pointing it out.

      • Steve says:

        So, how do you decide who actually gets a car and/or a freezer in this scenario?

        If you start by saying that obviously doctors and health visitors need cars, then what about plumbers and architects? What about shift workers who start and end work at antisocial times? What will quickly emerge is a society divided between those who have a car and those who do not. You have replaced the current (harsh but completely transparent) cash-based divide by cash+bureaucracy.

        On freezers: A 60 litre freezer costs £100. I do not understand how and why this makes your banned technology list.

        • My take would be that that there is something wrong with a society that does so much environmental damage. We can’t carry on as we are, and we wouldn’t survive long if everyone in the world had the things the average British person has. There are mountains of statistics on this. We should therefore be actively working towards sustainable lifestyles. Ensuring that people don’t have to do so much travelling would be high on my priority list. The amount of travelling done by doctors and health visitors has been going up and up because the economics have kept favouring it. We could localise, and change the economics accordingly (eg adjust the comparative costs between driving a car and maintaining a local clinic).

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