January 13, 2010
Making the case?
“Further, everyone is fond of whatever has taken effort to produce; for instance, people who have made money themselves are fonder of it than people who have inherited it. And while receiving a benefit seems to take no effort, giving one is hard work.”
-Aristotle, The Nicomachean Ethics
With his rampant misogyny and favouring of a hierarchical farmer-warrior apartheid society, Aristotle was certainly no forerunner for the 21st Century left. But there’s something instructive in that short passage.
For those wishing to leave their children an inheritance that they’ve worked hard to accumulate, the idea of the state stepping-in and taking a chunk can appear monstrous.
Of course – and as I’ve argued before – impressions on this subject can be misleading. Certainly, the state should respect the importance of parents being able to leave monetary gifts to their children (for the good of both generations). But only up to a point. The claims of equality of outcome and opportunity must be recognised as well, and these tend towards the favouring of increased inheritance tax, and certainly not Cameron “aspirations” to give tax breaks to millionaires.
But the left has, in recent years, found itself on the back foot on this issue.
Rajiv Prabhakar, Karen Rowlingson and Stuart White at the Fabian society have already valiantly compiled the most compelling arguments in favour of the tax in one, easy-to read little book. It shows just how powerful the case for progressive inheritance tax is.
The problem for the left, however, has never been about winning the intellectual argument. Indeed Prabhakar, Rowlingson and White are perfectly aware of this, hence including sections on forward thinking political strategy.
What really matters is making the intellectual arguments to ordinary people who are usually busy, often stressed, and frequently have little time (or interest) in the high-falutin’ rhetoric of philosophic egalitarianism.
But furthermore, compare:
The Right: It’s unfair for big government to take away people’s hard-earned cash when all they want to do is help out their kids.
The Left: It’s unfair for life-chances and material outcomes to be disproportionately affected by the arbitrary fact of birth. Nobody deserved to be born to rich parents anymore than others deserved to be born to unemployed mothers on sink estates. Accordingly – and because inherited wealth has an enormous impact upon the lift chances of those who receive it – it is fair for the state to take a proportion of what richer parents leave to their children, and use the money to improve the (undeserved) worse life chances of poorer children. However, it must recognise that it’s an important social good for parents to be able to leave something for their children (it’s part of the reason people want to work hard, and rightly so), therefore some tax-free inheritance must be allowed – we just need to think carefully about how much.
Don’t get me wrong. I don’t think ordinary voters are incapable of following the arguments. On the contrary, I reckon that the average British person is perfectly able to get their head around the latter position, and that a great many would find that it chimes with their existing sense of fairness. What most people lack is the time and inclination to root out this sort of relatively esoteric reasoning amidst the rat-race of school runs, work, meal-cooking, mortgage and credit-card juggling and actually having some time to kick back and relax.
After all, it’s not like we live in a society conducive to more abstract reflections. Heat magazine, Sky TV, The Sun et al don’t exactly encourage it. Even the “quality” broadsheets conspicuously favour easy-to-digest black/white stories.
Which isn’t to say that people aren’t amenable to thinking carefully about issues of justice. It just means overcoming some of the obstacles that currently stand in the way of encouraging and enabling people to think like that. Overcoming those obstacles must surely be the thing to try for the 21st Century left. Especially since we’ve already seen that the politics of soundbites and common-sense-obviousness tends to help the right more than the left.
The left long-ago won all the intellectual arguments, at least compared to the knee-jerk conservatism of the Tories. (Genuinely reflective libertarians are a somewhat slippier kettle of fish, because they usually have arguments behind their positions, as oppose to unreflective dogma). But winning the arguments alone isn’t good enough, if it’s simply done in theory. The arguments need to be made to ordinary people, on the door steps, time and again. Indeed, who knows; treating voters like thinking and intelligent decision-makers rather than ballots to be manipulated might even pay its own dividends.
Ultimately, as Prabhakar, Rowlingson and White observe: “Tax politics – a progressive, social democratic tax politics – cannot be a politics of enlightened technocracy in which well-intentioned experts decide what is good for the people. It must be – it must become – a politics of the people.”
Giles said,
January 13, 2010 at 10:06 am
‘The left long-ago won all the intellectual arguments’
I think you are complacent her – and the caveats you enter in your long Left section recognise this. The Right that you hold up there is a bit of a caricature, although it probably represents proto-Spectator views. By the way, I too am in favour of inheritance tax, and think the Prabhakar pamphlet is excellent.
But I find troubling the idea that it is fine for a parent to spend his money on, say, cars and holidays but that spending it on making your kids wealthier, better educated, healthier and even better connected is deeply unfair. This is the gist of some ‘luck egalitarianism’ as Dillow describes it.
We have argued about this on the matter of private schooling.
http://freethinkingeconomist.com/2009/09/27/why-am-i-brushing-the-schnauzers-eyebrows/#comment-128
Slightly unfairly, I think it is difficult to come up with a definitive verdict until you have kids and know what it feels like. The urge to do your best for them, in any way possible, is incredibly strong, and makes an overriding emphasis on getting rid of all vestiges of ‘luck’ (where your hard efforts and sacrifices as a parent, are just turned into ‘luck’ on the part of the recipient), produce a jarring account of human nature.
I see myself and my kids as broadly indivisible in certain ways: the good luck that M F and D have in being my fortunate kids is also part of my enjoyment of my hard work in bringing them up right. Eliminate all vestiges of luck and you eliminate a very large part of why people strive to be good parents.
I think this broadly leaves IHT arguments the same, because inheritors nowadays are about 50. Not kids.
Paul Sagar said,
January 13, 2010 at 10:41 am
1. I meant to do a blog about the schnauzers eyebrows interaction on private schools. I will try and get round to it, as some important points were raised.
2. “Slightly unfairly, I think it is difficult to come up with a definitive verdict until you have kids and know what it feels like. The urge to do your best for them, in any way possible, is incredibly strong, and makes an overriding emphasis on getting rid of all vestiges of ‘luck’ (where your hard efforts and sacrifices as a parent, are just turned into ‘luck’ on the part of the recipient), produce a jarring account of human nature.”
Maybe. But then, I don’t want state policy formulated by people who are tied-in to their ethical and emotional and familial commitments to specific individuals they know. Because that’s going to unfairly privilege the offspring of the ruling elites, which generally means privileging the already privileged. What I’d prefer is for the state to attempt to act and legislate impartially. We need to adopt two perspectives on these issues: firstly, that yes, for individual parents, it doesn’t seem “unfair” to help their children at all – and we recognise that, for parents, this is in fact true. It’s what being a parent is about. But then we need to step back and assume the position of legislators, impartial between child X and child Y. Is it fair that child X gets to inherit a large sum of money/go to private school/take advantage of all the benefits of being relatively wealthy whilst child Y doesnt, due to the arbitrary fact child Y was born to a poorer family? Seems hard to sustain. As legislators, we should be adopting the second position – though, of course, being sensitive to the first. That’s why I’m not against inheritance per se (private schooling a different issue).
I understand your commitments as a parent are strong and (emotively) forceful: but is that the perspective you want legislation made from? What about the kids whose parents lack your commitments and advantages? Thinking about these questions from the standpoint of Adam Smith’s “impartial spectator” is very instructive, I find.
“I see myself and my kids as broadly indivisible in certain ways: the good luck that M F and D have in being my fortunate kids is also part of my enjoyment of my hard work in bringing them up right. Eliminate all vestiges of luck and you eliminate a very large part of why people strive to be good parents.”
But now you are carricaturing my position. Indeed, my entire argument is structured around precisely the fact that we cannot eliminate all vestiges of luck, and that furthermore, this is no bad thing: doing so would also eliminate a lot of the important stuff (love, devotion, hard-work) that makes life worth living. But having said that, equality has its claims on us too – and they claim more than is currently being given.
“I think this broadly leaves IHT arguments the same, because inheritors nowadays are about 50. Not kids.”
Well to an extent. Surely you work now partly in the knowledge that one day you will leave your children something? But yes, it does mostly affect those in their 40s/50s. In which case, it seems to me, the “undeserved privilege and wealth” argument becomes over-riding, because the “helping your kids get started” line drops away, and the “working hard to leave something for your offspring” line is weakened if your offspring are fully grown and ought really to have learned to fend for themselves.
freethinkingeconomist said,
January 13, 2010 at 11:46 am
Working backwards:
“Surely you work now partly in the knowledge that one day you will leave your children something?”
Well, no, not really. I want them adequately equipped, character and finance-wise, long before then. I like IHT because it incentivizes investments in kids while they are still young and moldable.
Obviously, we don’t want legislators to shape their laws according to their current preferences for specific Child A that currently exists. But they ought to shape such laws in the knowledge that the world in which such laws will come to exist will contain masses of parents whose overriding concern is to ensure that their own kids are as lucky as they can make them. Therefore, laws that aim to eliminate or reduce such luck will be continually fighting against this force, and in a sense declaring it a ‘bad thing’.
Whatever law is brought in to make sure that the children of millionaires do not have a better ability to do well than the children of benefit recipients will quite likely produce the consequence that they make discretionary decisions to devote resources towards child-improvement less effective. because if such a devotion of resources is effective, it makes for an unfair advantage to the well-resourced. I see this as an irreducible dilemma.
One of the problems of the debate is that, at some point, if the focus is always on equalisation, then because it weighs one end of the seesaw, an act I take to improve M’s or F’s possible outcomes – be it by sitting down with them to teach them French or Maths, or having a worse holiday to send them to private school – in some sense “worsens” the outcome that the left-minded legislator is focussed on, because F or M end up further apart from the other kids. This is an awkward outcome.
I don’t have a smooth answer to this; I just don’t think the Left can claim “we got this one right” when reasonable minds can still see acute dilemmas.
James Arnold said,
January 13, 2010 at 3:42 pm
Incidentally (this is kind of off topic), another interesting thing about the Politics is that Aristotle seems to recommend, for democracies at least, some kind of redistributive policies. He argues that, whilst demagogues shouldn’t be able to demand what they like for the poor, “for such help is like water poured into a leaky cask”, nevertheless “the true friend of the people should see that they not be too poor, for extreme poverty lowers the character of the democracy; measures therefore should be taken which will give them lasting prosperity; and as this is equally the interest of all classes, the proceeds of the public revenues should be accumulated and distributed among its poor, if possible, in such quantities as may enable them to purchase a little farm, or, at any rate, make a beginning in trade or husbandry.”(Book 6, Part V)
He also argues for relative equality of wealth. When there is pervasive inequality, Aristotle suggests, there “arises a city, not of freemen, but of masters and slaves, the one despising, the other envying; and nothing can be more fatal to friendship and good fellowship in states than this”. For him “the best constitution for most states” is one “in which the citizens have a moderate and sufficient property; for where some possess much, and the others nothing, there may arise an extreme democracy, or a pure oligarchy; or a tyranny may grow out of either extreme”. (Book 4, Part XI)
Now, I’m not arguing that Aristotle was a social democrat or radical liberal or anything like that, but there are clearly themes and arguments in the Politics which resonate with modern liberal thinking.
Peter said,
January 13, 2010 at 4:19 pm
I get uncontrollably angry when right-wingers have the audacity to go “waaahhh, I can’t leave more than £300k tax free to my kids!”. People who come out with such self-absorbed, narcissistic shit need a good lesson in how people worse off than them live, and maybe then they’d think twice before being such selfish wankers.
I mean … THREE HUNDRED THOUSAND POUNDS!!! That really does need emphasising. That’s more than my parents’ house is worth (and it’s quite a big house). It’d take me and 95% of my work colleagues THIRTY YEARS to earn that much money, let alone save it and be able to give it someone else. THIRTY YEARS!
That is how many ordinary people have to live. Right-wingers need to appreciate that before they get on their “help, help, I’m being oppressed” hobby horse. I mean, oooh 40% on everything over and above £300k. Boo fucking hoo.
Being angry and rude to right-wingers on this issue really is the morally appropriate response, I feel. Whether it is good political strategy I don’t know, but it makes me feel better haha!
Mark said,
January 13, 2010 at 4:32 pm
If we`re concerned with life outcomes then why concentrate solely on money?
Money isn`t going to buy us love, a pleasant personality, a pretty face or anything else which really matters beyond a can of beans.
Not only is a university education worth less than parents with a keen interest in reading ( to the extent that we can probably never make up for it), but ensuring that we all receive exactly the same quantity and quality of consumer goods as everyone else is hardly likely to answer any problems. Unless, of course, we assume that the overwhelming problem in most peoples lives is jealousy of others possessions.
I`d also say that once society reaches a certain level of wealth there is a bit of a danger that continued redistribution is simply taking money from those who care about it and giving it those who don`t. At least to me, another x-box in the hand would be less desirable than the potential freedom to spend my own money as I wish.
Mark said,
January 13, 2010 at 4:34 pm
Peter.
Can you come round and give me a kiss goodnight, I`m feeling a little lonely.
Peter said,
January 13, 2010 at 4:38 pm
Mark,
“I’d also say that once society reaches a certain level of wealth there is a bit of a danger that continued redistribution is simply taking money from those who care about it and giving it those who don`t.”
- Maybe, but we aren’t anywhere near that level of wealth in the UK. As for bedtime kisses, only if I can be big spoon.
Mark said,
January 13, 2010 at 4:45 pm
Peter – but presumably at some stage in the next century we`ll be able to draw a line under the redistribution of wealth by providing the poor with a simple minimum. At that stage we can stop worrying about how much someone else has?
freethinkingeconomist said,
January 13, 2010 at 4:46 pm
Yeah, surely once people have what is needed to provide them with their basic capabilities, we should no longer obsess about how much Beckham and Bill Gates have. I can undestand the obsession if it’s 1909, Lloyd George is getting up a head of steam, and the top 1% own 60% of the assets. But now they own 20%.
Paul Sagar said,
January 13, 2010 at 5:46 pm
Wow, I go to two classes and look what happens.
Replies forthcoming tomorrow or maybe tonight.
Peter said,
January 13, 2010 at 5:54 pm
Mark,
Peter said,
January 13, 2010 at 5:54 pm
Damn, messed up the blockquotes. The latter bit is my reply (from “I don’t agree” onwards) if it’s not clear.
Dave Semple said,
January 13, 2010 at 6:59 pm
On a historical note, I think you misinterpret the Aristotle quote, possibly deliberately in order to better reflect what it is you’re trying to explain.
Franlydie said,
January 13, 2010 at 8:31 pm
“Money isn`t going to buy us love, a pleasant personality, a pretty face or anything else which really matters beyond a can of beans.”
Money buys you a lot more than a can of beans; go spend a day at a spa, being physically pampered, mentally relaxed and eating good food if you don’t believe me (cost c. £80)
Paul Sagar said,
January 15, 2010 at 6:02 pm
Ok, the Internet connection in my flat is buggered and has been all day. I’m using my iPhone to leave this comment. But I’m not going to use it to reply at length to the above. That will have to wait til some point this weekend. During which I am very busy indeed…
Grassroots Tories on Tax: Ignorant and Incoherent « Bad Conscience said,
January 16, 2010 at 10:29 pm
[...] it is a considerable sum of money. As Peter recently pointed out, somebody on minimum wage would have to work for thirty years to even earn [...]
Paul Sagar said,
January 16, 2010 at 10:53 pm
Giles,
I’m not sure we really disagree about all that much.
You seem to agree that inheritance tax is justified, but that it’s important for parents to be able to leave their children something. Which indeed is my position.
Where we seem to fall-out is that you apparently think that the demands of (luck) egalitarianism demand that I levy a huge inheritance tax, and allow only tiny amounts to be passed on to children.
I’m going to leave it as an open question what I think about this in the abstract realm of philosophical thought experiments.
As for real-world politics, what I’m primarily concerned about now is not having the threshold made higher a-la-Tories, when spending that supports the poorest is going to be cut and Osborne says “we’re all in this together”.
Would I like to see it lower Actually, yes. How low? I don’t know, exactly. But right now the priority is keeping the existing threshold, not trying to lower it.
What I’m not about is imposing stringent egalitarianism on an unwilling, unconvinced public. What I want is for the public to be happy with – perhaps even demand – high levels of inheritance tax.
Utopian? Perhaps. But if we don’t dream, we never change anything for the better.
As for the point about equality as a relative thing Peter covers half my answer.
Giles, you are like my girlfriend Beth: you only care about inequality insofar as the people at the bottom are badly off. Once they are well-off, you/she don’t care whether other people have trillions. We might say that you really care about poverty, and that inequality is just a problem when coupled with poverty.
Peter and I are more hardline egalitrians. We tend to care about inequality in itself.
But then, I’m with Peter ultimately: that’s a theoretical debate; in the world we live in now, the best bet we have for alieviating the plight of the poorest is to deal with inequality and attempt to level up. Maybe one day we’ll get to the point where the “poverty” and “inequality” issues come apart.
But we’re not there yet, not by a long shot.
Paul Sagar said,
January 16, 2010 at 10:55 pm
Oh, and Dave: i do sort of “misinterpret” the Aristotle quote. Or more accurately, I lifted it out of Book IX of the Nic Eth without it’s surrounding context, which is about friendship, and did so for my own rhetorical purposes.
I don’t think it’s particularly important.