Wednesday 16 April 2014

Misunderstanding The Basics

Here's a rather misleading headline doing the rounds today:


While the issues are serious, that’s exactly the kind of irresponsible and counterfactual way that you’d expect a Daily Mirror columnist to frame the question.

Here are my brief answers to the misjudged insinuations:

1) We have more millionaires than ever before in the UK because the market rewards success and innovation.

2) We've handed out 1 million food parcels because people are caring and want to help, and have found the means by which they can now assist those with less to eat than themselves.

It's odd how the reactionary media see Foodbanks as a sign that things are getting worse. Things might be getting worse in a lot of places, but there's every chance they might be getting better. Either way, an increase in Foodbanks is not necessarily a sign that things are getting worse - it's probably a sign that more people are now being helped than was previously the case. Here's an analogy. In the first year of their inceptive period the Samaritans received thousands of calls. That didn't mean suddenly everyone was getting depressed that year, it meant suddenly more people had someone on the end of a phone to offer support. That's probably the case with Foodbanks - it doesn't mean more people are now hungry, it more than likely means more hungry people are getting practical help, and that communities are doing more to provide that help.

Of course, it may still be the case that these Foodbanks are bad portents, and indictments of very bad times for many, but however that's addressed, it certainly is nothing to do with the fact that there are now more millionaires in the UK than ever before. This is a strange fallacy of the left - they have this foolish idea that it's because successful people are successful that unsuccessful people are unsuccessful. Anyone with more than a basic GSCE grade in economics would know that's absurd. Let me illustrate how it really works with two analogous statements:

A) Hunger occurs not because food is bad but because some cannot participate in eating food.

B) Inequality occurs not because trade is bad but because some cannot participate in trade.

People struggling in a free market are struggling because they haven't yet been able to capitalise in a way that benefits them. They perhaps haven't fully developed their skills yet, or they haven't yet found their vocational niche in a supply and demand market that rewards industry and innovation. Perhaps many never will – and that’s a worry, and it ought to be a signal that they need all the help and support that can be offered to them. But admitting that does not entail falling into fantasy. The current plight of those people, and the wages of low earners, are not dictated by the wages of high earners, they are dictated by the market value of the skills and labour. If the Chief Executive of a company had a government-mandated extra £50,000 a year knocked off his salary it wouldn't mean that the same firm's staff on £18,000 a year would suddenly find a wage increase. That is not how the employment market works, and nor should we want it to.

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