Sunday, 4 September 2016

Social Mobility: Separating The Myths From The Facts

A follower of this Blog, who himself blogs as Sub Specie Aeternitatis, emailed a couple of queries about social mobility as per my last post. I wasn't going to make a whole new blog post out of them, but after watching a documentary on south London gangs yesterday evening (with extremely rare and candid footage on account that it was filmed privately by gang members), and observing so many interesting parallels with other kinds of rat races higher up the social strata, I decided I would.

So, this week, new Prime Minister Theresa May made it clear enough that she wants to be the most radical of PMs in tacking the apparent social mobility problem in the UK. Social mobility, like natural selection in biological evolution, is a strong genetic factor in human progression. People at a young age look to climb the social ladder, increasing their skills and earnings along the way - which means that people with better abilities are generally in higher positions.

What also advances this trend is that whenever possible women tend to partner socially upwards, as social gradations are correlated with fewer deleterious genetic variations. In other words, it's assortative mating for better genes. Obviously this translates in the social world as dates at the movies, meals in restaurants, kissing, copulation, marriage, and kids you want to go on to do better than their parents, but in evolutionary terms it's an assortative mating process with fine margins, carried out over thousands of years. It's a biological percentage game, but a subtle and long one.

There is also a natural limit on manageable social groups. You've probably heard of the Dunbar number - it's Robin Dunbar's putative cognitive limit to the number of people with whom folk can maintain stable social relationships. The Dunbar number maxes out at about 150, after which maintenance of that social circle becomes prohibitive*.

This also fits in with anthropological observation of many different hunter-gatherer societies, particularly in environments where food (particularly protein) is hard to obtain, such as arid savannah or in raid forests. The other route that over-large groups take is when one group starts dominating another, and then another, and builds up a fully-tribal structure. This happened in North America, of course, before we colonised it.

The anthropological consensus is that tribal structures begin to develop when agriculture starts to enter the scene, even if only partially. But when a very much richer agriculture develops then the tribal structure becomes more like an empire with a distinctly small leadership (though supported with a praetorian guard to keep order if civil strife gets out of hand).

The Aztecs, Incas, Egyptians and no doubt our Wessex Empire are good examples -- when there were huge numbers of peasants who could be drafted to build huge architectural monuments in between seeding and harvest times. To some extent we can regard the modern nation-state as closely resembling mini-empires. They rapidly took shape in the modern form about 300 years ago with the rise of the artillery regiment.

To use them properly they have to be moved rapidly over decent road and rail systems so this tended to force their territories into much smaller sizes than the old-fashioned empires. Also nation-states are small enough to do what empires were previously unable to do - impose a common language, and close the gap bwtween citizen and state.  

I'm afraid, though, moving to the prsent day, what we see at the moment is that some of the people determined to change social mobility for the better are, while good intentioned, rather ill-informed about precisely what has been happening in the global context, and why times have changed.

A UK background story
Once upon a time, thanks to up and coming advancements like stream powered cotton mills, coal mining, increased agricultural machinery and major increases in the production of metals, textiles, and many other manufactured goods, there were once thousands of fresh job opportunities emerging for people in the UK - creating a new middle class and transferring lots of wealth from the richer faction of society down to those now in industry.

As this continued, 19th century social mobility rose fairly consistently through the majority of the UK population, as opportunity to work begat further opportunities to work, on a durable rinse and repeat cycle. While it was far from all rosy, these were the incipient foundations for what is now a very prosperous modern Britain. Similar developments are occurring throughout the world in countries that are currently as poor as Britain was a century or so ago.

By about the 1870s, most of the relatively poor folk in the large manufacturing cities of the north and the midlands were paying fees (yes, that's right, paying fees) for the education of their children, by and large in what was called the monotorial system (brighter pupils assisting teachers in passing down knowledge to less able pupils), which were as expensive as most of the parents could afford.

The religious charity schools for the poor were also proliferating, as were the more expensive private schools for the emerging middle-classes and the aristocracy (though some of them bore the appearance of grammar schools and began opening their doors to talented children of the poor).

Although the rate of positive social mobility continued to rise, what began to slow it down was the government-mandated institution of state schools in the 1880s - but it's important to point out what should be more obvious to some historians and political commentators - that slowing down of positive social mobility is not the same as a decline. If average height across the population increases by 1.5cm every 20 years from 1880 to 1920, by 2.5cm from 1921 to 1941, and then by 2cm from 1942 to 1962, only a fool would suggest that average height had declined from 1921 to 1962.

The rise and success of grammar schools for the talented workers’ children helped things further still, and by the 1950s, the grammar schools were turning out highly educated pupils on a par with private schools.

An important decline?
A team of sociologists, led by Prof Erzsebet Bukodi, has fairly rigorously shown (and sociological surveys these days have to be more rigorous than yesteryear) that at least in one sense it is possible to argue that the social higher numbers of the population has been declining since the forties. It works like this.

Generally speaking, stabilisation of peak social mobility (declining social mobility on one side, slightly increasing, or stabilising social mobility on the other) will occur when the higher paid strata (about 30% of the population according to Bukodi) can supply from within itself enough of the new middle-class (the new professions and businesses deeply dependent on high-quality scientific training) sufficient expertise to keep the better-off (who are producing most of the value-added goods and services) able to keep their heads above water in this highly competitive age. This is epitomised by the success of London while the rest of the country is growing more slowly.

What's been happening is that most of the country’s workers have not been able to raise their skill levels both relatively (to approximately the top 30% of the country) and even in many cases, absolutely (some of this is still relative to skills in other advanced countries which are able to be traded internationally).

So yes, in one sense, it can be argued that the social mobility of most of the country at most social levels is declining both relatively (to the top 30% of the population) and absolutely (to the past). A social-economic-educational gap is opening up and fewer people than ever before are able to bridge it and join the highest social levels.

But all that said, the stats about earnings and career prospects are only a part of the equation - we must not forget that general prosperity and well-being are about more than just earnings and career prospects – we need to factor all sorts of things like improvements in technology, services, scientific capabilities, access to knowledge and so forth. We must also not forget that the whole landscape has shifted upwards, so being poor relative to better of people these days is still much more prosperous than being less poor relative to better off people in the past.

That is to say, if we define social mobility as whether you can easily move up and down income levels, occupational structures and/or levels of education or other social structures, how this compares to others’ chances, and how much your chances are determined by the equivalent position of your parents, it may be argued that social mobility is declining.

But it is questionable how important this actually is. People of the UK today have a better standard of living, access to more knowledge, better medicine, more leisure time, more films, music, books, better technology, etc than any generation that preceded them. Whichever way you cut the cloth that has to be the most important factor in the social sciences.

Getting the gap part right
Another matter that needs addressing with regard to social mobility is this one. Even if we completely overlook the fact (oft-repeated on here) that a more globalised economy is going to see many of our own domestic jobs and industries losing out to greater efficiency aboard (not to mention changing technologies), a common claim too often made is that poorer people are worse off due to the existence of richer people.

People say this because they assume it holds that if richer people are better off due to the existence of poorer people (which is definitely true), then poorer people must be worse off due to the existence of richer people (which definitely isn't true).

Of course, if you're only interested in relative status then the statement becomes less untrue because relative to a rich person's increase in wealth a poor person can become poorer. But absolute well-being of Tom is the only really important factor, not Tom's wealth in relation to Dick's. As Bertrand Russell once put it, beggars don’t envy millionaires, they envy other beggars who are doing a little better. The well off simply have no reason to view the poor as rivals; they don’t compete for the same jobs, the same private health care, or the same houses in the same school districts.

Take dental care as an illustration. If Harry gets dental care to the quality rating of 15/20 and gets overtaken by richer people who can afford 17/20 dental care, Harry is not made worse off. To complain that Harry is no longer getting the best dental care with the implication that he is now worse off, when what has actually changed is not the dental care he can get but the care others can get, is to treat a relative change as if it were an absolute change.

To tease this out, imagine two hypothetical societies - the first consists of the current UK population, and the second consists of the current UK population plus another 75,000 millionaires. I'm guessing most on the left would prefer the first scenario - after all, an additional 75,000 millionaires drastically increases the inequality in our society.

Ah but you see, unless those 75,000 millionaires got their money by forcing people to part with it against their will, the existence of the 75,000 extra millionaires has made society better off, not worse off.

To see why, for analogical purposes, apply the dentistry model to education. Going to a better school makes you more likely to be accepted into a higher paying job. But the distribution of available jobs in the labour market is not a fixed pie, it reflects, among other things, the distribution of productive abilities available.

Presuming the 75,000 extra millionaires spend some of their money in the education sector, the result will increase the number of educated people, which may for some affect their relative position, but it won't make scholastic standards any worse off in absolute terms - just the opposite. Playing a longer percentage game, the best schools will go on to be better, which will improve the quality of the next best schools, and so on.

There is also the important principle of comparative advantage to factor in: that is, the societal gain by the existence of more and more people that are different to us. This holds true because we gain more by mutually voluntary exchanges with people who are different from us than with people who are similar to us.

Alan Sugar would find it difficult to persuade Claude Littner to wash his car at a mutually agreed price, but he would have no trouble finding willing car washers if he stopped by on any of the numerous roadside forecourts we see dotted about. Alan Sugar is better off by the existence of the car washers and they by his existence, because their different wants and needs make possible exchanges to both of their mutual advantage. Take that to a more general level and you should be able to see why this is the case nationwide.

A relative education matter
Consider for a moment the difference between State-funded health and State-funded education. Our health is primarily measured in absolute terms, not relative terms. I don't feel better about having a migraine knowing that Dick has a brain tumour; my having a fractured jaw bone isn't ameliorated by Tom having a broken spine, and so forth. Education on the other hand has absolute value, but it's predominantly relative in its measurements. That is to say, what matters most is how your academic achievements compare to other people's academic achievements.

An Oxford or Cambridge graduate benefits not just in absolute terms related to his or her own well-being, but as a measure against other Oxbridge graduates, but frequently more importantly, against non-Oxbridge people. For that reason, excessive spending on education is an arms race that imposes negative externalities on society in the direction of those who performed less well. We are always being told that more needs to be spent on education. But if you consider why people say this, they really mean spend more to improve people's relative position compared with others.

There's no denying that education investment is important because if all schools get better that means that students are learning more—becoming better doctors, lawyers, businessmen, parents, farmers, consumers of art and literature, or whatever they are going to use the education for. The result is a more productive economy with more stuff for people to consume and consumers better able to take advantage of what is available to them.

Increased wealth has been important too. Everybody gets richer, which means the quality of schools has increased everywhere. The relative position of everyone is retained and the absolute position of everyone improves, as richer people will still, on average, have better schools, and the less good schools improving on the legacies of the past.

That is why education spending may be too high. If I go to Cambridge university and you go to Leicester, that may result in a better social status for me, which affects my earning potential, carer prospects, etc. Increased spending on academic achievement,  insofar as it confers status, imposes a negative spillover on others, which means people are likely to overspend on education. The analysis of prudent spending would need to be about whether the benefits of an educated populace outweigh the costs of such high spending and its concomitant status-mongering. Alas, also, in a society that places a high premium on status, more people are less inclined to look out for those below them on the socioeconomic ladder

Interestingly, neither education nor health care are fixed resources. There are no barriers to continual increase in education and continual increase in health care, because both evolve with the landscape. Status on the other hand is fixed because it relies on people, of which there is a fixed amount, because other mates are a fixed resource. If my health increases by 5% and everyone else's increases by 30% I am still better off than I was before. But if my status increase by 5% and everyone else's increases by 30% my overall position probably will have fallen.

But there are also negative externalities from low incomes and positive externalities from high incomes. Consider a school that consists of a variety of pupils of varying scholastic abilities. A standard competitive model that factors in status would predict that grades would scale in proportion - so if smart Tom produces significantly better grades than Dick, then Tom will be worth more to the school's status and to a prospective employer.

But caring about both absolute and relative performances, Dick's presence contributes an additional input to the school's other students, because his presence raises the relative status of the brighter pupils. By the same token, Tom's presence contributes a negative input, since his presence lowers the status of other pupils. The market outcome thus brings about something that closely resembles income redistribution.

This can be seen even more clearly if you consider the same situation occurring in a factory. If you replace grades with wages and pupils with factory workers you'd see that increased happiness in the workplace would ultimately show up in the company's bottom line, since the cost on the firm diminishes with a better performing workforce. If everyone in the factory earned the same wage then low productivity workers are being paid more than in proportion to their physical output, and the high productivity worker, less.

The main point about the relative nature of education here is this. Suppose everybody in the world had their scholastic ability reduced by 10%. Nothing would change in relative terms - the brightest group would still be brighter than the 2nd brightest group by the same amount, and they brighter than the 3rd group, and so forth. If everybody in just the UK had their scholastic ability reduced by 10%, there'd be no difference in relative terms within the UK, but there'd be a comparative disadvantage with the rest of the world who didn't incur the 10% reduction. .

Now extend those principles to earnings. If relative position was the only game in town then you would be better off earning £100,000 a year in 1916 than in 2016. But in absolute terms you're far better earning that kind of money today - not just because there are so many more things to spend it on, but because if you had to, for example, cook a Sunday roast, cut the grass, travel 100 miles on holiday or seek medical treatment, you're much better off having access to today's facilities than those of 100 years ago, even if the £100,000 per year earnings in 1916 would make much more difference to your relative position in society.

Or to put it another way, if you had £100,000 a year you could live like a king in 1480, but a king of 1480 would be better off being an average earner in the UK in 2016 than a king in 1480. It's certainly true, and can be argued, that there are some cases in which living in 1916 on £100,000 confers advantages you wouldn't have now. For example, if you wanted a South Bank London apartment with a nice view over the water, £100,000 would have bought you one in 1916 whereas it wouldn't today.

But that would be a weak argument for preferring to live in the London of 100 years ago because there would be far more opportunity costs living in the past than in the present. In other words, the advantages of living in today’s wealthier nation easily outweigh the disadvantages of having lower relative income compared with 1916.

The take home wisdom, then, of this admittedly longer than usual blog post can pretty much be summarised as follows:

1) Social position is not an absolute matter, it is a relative matter, and is contingent on not just the downs of societies over generations, but the ups too.

2) A big thing that affects the ability of some relatively well off people in the UK to move up the social strata is that some relatively less well off people around the world are doing better than before in terms of economic well-being.

3) Social mobility is rendered more trivial than is often exclaimed by the fact that people's lives of today are immeasurably better than at times when social mobility was higher.

4) There are absurdities to statistics if you are too narrow in your perspective. As the above report mentions, in 1979 13% of the UK population was living below the relative poverty threshold (the relative poverty measurement is really only a measure of inequality). By 2005, the real disposable incomes of those in the lowest quintile had risen by more than 50%, and yet 18% of the population was now recorded as living in poverty. In other words, despite the incomes of Britain’s poorest people rising by 50%, the official poverty figures rose by about 50% at the same time.

5) Whenever rich people getting richer is thought by pundits to be a problem, type a little comment at the bottom of their article, reminding them that in most cases a person’s income and wealth simply measure the extent to which they have provided value to society, and the extent to which others have benefited from trade with that person's company.

If you made it this far, well done, you did well - that was a lot to get through!

* Slight side note, as I've blogged about once or twice before, socio-personal socialism remains at its strongest in those Dunbar groups, and becomes diluted as we add more and more people to the mix. as more and more people increases the range of goods and services available, and customers willing to partake in the mutually beneficial exchanges. In that sense, trade is a bit like doing good things for strangers. To succeed in the market economy requires innovation and ingenuity, as well as good character and reputation.

Just as in biology copulation mixes up combinations of genes so that heritable survival traits occur more frequently for natural selection to act on the genotype, similarly the market economy produces survivability in business and commerce, where less-good suppliers are out-competed by better ones. A social mobility-conscious socialism that tried to level things out by extending beyond the socio-personal into the market economy would be bound to retard innovation and progress, just as trying to organise biological organisms from on high would inevitably be less successful than the mechanism of natural selection.

The benefit of the market economy is that trading with strangers transcends the limitations of the Dunbar-esque socio-personal economy, bringing about huge mutual benefits not just for both buyer and seller but also everyone in society too. To try to arrange such an economy in an attempt to mirror the socio-personal economy, as socialists try to do, is a bit like being in a field full of 30 million bees trying to make them all fly clockwise. It's crazy!!