No Dr Pirie, you can't say that. It ain't so. Taking the Adam Smith Institute to task on the elderly.

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The Adam Smith Institute is one of the good guys. I like their consistent defence of liberty and classical liberalism. Sam Bowman, the Research Director is one of those amazingly and eclectically brainy people that challenge how we look at things.

Sometimes they get stuff badly wrong:

Popular perception of the circumstances in which pensioners live is somewhat out of accord with modern reality. The image of a woman with a blanket over her shoulders, huddled over a fire and wondering if she can afford to toss another stick onto the flames does not accord with present day reality for most pensioners. Some 86% of pensioners live in households with assets in excess of £50,000. The average income of over 65s is £15,400. A young person working on current minimum wage for a normal working week earns just under £13,000. Yet the young person is taxed while the older person is guaranteed a triple locked pension that will rise with inflation, or average earnings, or 2%, whichever is the highest. On top of this comes a winter fuel allowance, a Christmas bonus and a free bus pass.

Don't get me wrong here - I have some sympathy with the argument being made (although the 'it's all baby boomers fault' schtick is a load of nonsense). But if you're to make an argument do it in a way that doesn't open you to having your argument blown out of the water.

"Some 86% of pensioners live in households with assets in excess of £50,000"

Yes. And this is a consequence of twenty or thirty years paying off a mortgage plus maybe fifty years squirrelling money away in a pension pot. Nothing to do with taking money from the young. And does Dr Pirie really think assets of just £50,000 is such a great big deal - especially since those assets, most commonly, represent the person's home and the savings they'll need to see out today's long retirement. More to the point, Dr Pirie is deliberately conflating assets with income to make his point.

"The average income of over 65s is £15,400. A young person working on current minimum wage for a normal working week earns just under £13,000. Yet the young person is taxed..."

First we've compared average income for the elderly with minimum wage for the young. Secondly most working young people are earning more than minimum wage. And while its true that the personal allowance is higher for those elderly over 77 (and they don't pay national insurance), it's not true to say that old people aren't taxed. And the basic state pension is included in that calculation.

This whole argument is out of the same box as the idea (which I'm sure the ASI would criticise) that somehow the rich have got that way at the expense of the poor. It really is nonsense - by all means say that pensioners get too much of a good deal but it's simply not the case that there's a great deal of 'redistribution from relatively poor young people to comparatively affluent older people'.


Finally most of those assets and that income will, in the end, get spent (quite rightly) on providing social care (mostly delivered by those low paid young people).

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Oxfam - knowingly misleading us about wealth and income

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I don't take the view that Oxfam's charitable purposes prevent them from raising concerns about poverty in the UK. Indeed, you can look at the charity's purposes here:

OXFAM'S OBJECTS ARE TO PREVENT AND RELIEVE POVERTY AND PROTECT THE VULNERABLE ANYWHERE IN THE WORLD.  OXFAM FURTHERS ITS OBJECTS THROUGH INTERLINKED ACTIVITIES OF HUMANITARIAN RELIEF, DEVELOPMENT WORK AND ADVOCACY AND CAMPAIGNING.

You may feel that the way in which the charity interprets these objects can be challenged - I'm guessing this lies behind Conor Burns' decision to report Oxfam to the Charity Commission yesterday. You may also feel that Oxfam, in the minds of the public at least, is there to respond to the humanitarian crises that blight humanity and to support programmes to lift the poor out of poverty. And that publishing adverts that are more-or-less indistinguishable from the current campaigns of the Labour Party is less than wise. You'll definitely feel that the ad hominem attacks on Conservatives by Oxfam are also unjustified even if those Conservatives are critical of the charity's work.

But none of this contravenes Oxfam's purpose. What we should be more concerned about - other than Oxfam's focus on rural environments and the immoral sustaining of poverty-creating subsistance farming - is the manner in which the charity uses a dissembling approach (some might say deliberately misleading) to promoting its point:

1% of Britons own the same amount of wealth as 54% of the population. RT if you think this is unacceptable
— Oxfam (@oxfamgb) June 9, 2014

Let's dissect this tweet. What Oxfam wants you to think is that the inequitable distribution of wealth links to the inequitable distribution of income and, therefore, to the creation of poverty.  Now it is undoubtedly the case that wealth is unevenly distributed but it is also the case that this has little or no connection to income. Indeed it is perfectly possible for a person to have a significant income but no wealth. By way of example consider a thirtysomething couple who have just bought a London flat for £250,000. To do this they've borrowed 90% of the money from a bank or building society and, in a lot of cases, the rest of the money from the bank of mum and dad. They'll have a car on a lease agreement, credit card debt and perhaps the remnants of some student loans. They have no wealth, they're part of that 54% in the Oxfam tweet. But they will have income - probably a household income significantly above the national average. They are not poor.

Oxfam want us to believe that the lack of wealth equates to poverty because it suits their argument. But it is completely false to suggest that we have food banks because half the population have little in the way of wealth. To be clear, if you've no debts and a fiver in your pocket you are wealthier than a large chunk of the population - best part of 2 million full-time students for a start.

What Oxfam's campaigns don't tell us is why we have food banks, how zero hours contracts came about, why prices have risen (if indeed they have) and what lies behind extortionate childcare costs. The charity don't mention that food banks are needed mostly because the administration of benefits is a shambles rather than because of benefit cuts. We aren't told that half the increase in the cost of energy results from cross-subsidy to support 'green' energy - most of this going to wealthier land- and home-owners. And we aren't told that the high tax on fuel results in additional costs for food, clothing and household goods.

Levels of poverty (and this is relative poverty not the absolute poverty that calls for food banks) are falling in the UK, perhaps not fast enough but falling nonetheless. But it doesn't suit Oxfam's message to explain how this is happening or to note that liberalising employment and reducing regulatory burden on the private sector is what will succeed in reducing poverty over the long haul. Instead, Oxfam prefer to misuse statistics - as we see above - to create an impression that poverty is a bigger problem. And Oxfam also want to perpetrate the myth that someone being rich - in wealth or income - is the reason for someone else being poor.

Oxfam know that world poverty has plummeted over the last couple of decades, falling faster than ever before. A billion people have been lifted out of absolute poverty. OK they're not yet up to our western standards of living but they're headed that way. And Oxfam also know the reason for this fall in poverty but choose to ignore it and promote the keeping of peasants on barely sustainable subsistence farms through subsidy. Oxfam know that it is free market capitalism that gets people out of poverty. But Oxfam tell the public something else - Oxfam lie to us.

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Quote of the day: on the distribution of wealth...

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From Tim:

If you've no debt and a £10 note then you, yes just you on your lonesome, has more wealth that the bottom 20% of British society in its entirety.

Worth remembering this for next time some left-wing numptie confuses wealth and income.

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In which Oxfam deceive and Huff Post (and the Guardian) publish without question.

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Here's the headline:

Income Inequality Soars With Five UK Families Wealthier Than Bottom 20%

We begin with a confusion between 'wealth' and 'income' (wealth is a stock and income is a flow). The author then digs her hole of ignorance (or maybe deception) a little deeper:

The UK's five richest families have more cash between them than the poorest 20% of the entire population, 12.6 million Britons, with new research showing the chasm between rich and poor is growing wider.

The truth is that Jessica Elgot, who wrote the article has simply lifted the lies straight from the Oxfam press release without thinking - churnalism at its worst. At the top of the 'rich list' here is the Duke of Westminster with £13 billion in assets. I'm prepared to bet that, while the Duke's not short of cash, that £13 billion is nearly all land and property - and Ms Elgot put in the word cash not Oxfam.

What it isn't is income, which makes the next line of the press release (and the articles) deceptive:

Oxfam's figures also show that over the past two decades the wealthiest 0.1 percent have seen their income grow nearly four times faster than the least well off 90 percent of the population. 

This may be true but it hasn't got anything to do with wealth, with those assets that the Duke owns. Oxfam (not for the first time) are suggesting that the imbalance in wealth equates directly to an imbalance in income when it doesn't.

Whatever the political differences over inequality, we really shouldn't be making the arguments in this sloppy (or deceptive) and ignorant (or misleading) way.

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Basic income, human nature and freedom

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I thought about this basic income idea - it sounds, as these things do, wonderfully Utopian:

A basic income is an income unconditionally granted to all on an individual basis, without means test or work requirement.

And, for it to make any sort of sense, it has to be big enough for people not to have to work so as to live. According to some this is a good thing but I'm not so sure - it does rather depend on the nature of the choices made by individuals whose only options are low paid work at a level slightly above the basic income.

I recall a lecture on crime and social conditions during my masters degree study. The lecturer (I'm afraid I forget his name) began by asking us: "would you work 35 hours a week for £7?" That was - give or take a few pence - the difference then between what we might get on benefits and what we might earn in a low paid job. The response was mixed - some said 'yes' arguing that this might lead to opportunities for still more lucrative work while others said 'no' since there is no real prospect of advancement (and we could earn a little on the black).

The idea of basic income makes this even more stark. That £7 a week job is now gone since the basic income is far in excess of the previous level of benefits. And because that income is enough to live on (that's the whole point after all), the number of people who become drones - living off the efforts of others - increases and is not tolerated. It may seem cute to say this:

Jobs are scarce, so it's better for workers if some are subsidized not to seek them, leaving more opportunities for those who do want to work.

...but that little tic of common sense suggests that those idling their lives away on basic income will be resented by those working and paying for their idleness. And that more and more people would seek such a life - after all most people see their job as a means to an end rather than an end in itself. So if the reason for working - providing for self and family - is removed, these people will stop working. And will be resented by those who are working.

All this is wrapped up in the view that there are too many people - or rather, too many workers. And that this problem will increase as technology finds more ways to do things without people that now require people to do them. Hence we need to either find things for the surplus to do ("the government must create jobs") or else we pay them to sit around doing nothing.

In the end, if we pay people to do nothing (in the mistaken belief that there's nothing productive for them to do) what we'll end up with is the corvée. The workers (assuming there's a sufficiency of them) will expect those idling around on a basic income to do something. And government will find that something. The drones stop being an escape valve for supposed excess labour and become a slave resource for the wealthy governors.

Welcome to the new slave state, the 21st century oikos society!

So a glimpse at the possible future. In his monumental “History of Government”, Finer used the Greek word oikos to describe ancient world governments. Oikos means “the household” which for the Greeks meant family under a male head including slaves and other dependents. We are headed back towards such a polity – where we are free in our daily actions within the constraints placed on that freedom by the government and its advisors. And the product of our labour belongs not to us but to the group and to the state – not through confiscation but through a combination of taxation and benefit dependency. It may even be the case that those out of work will be directed toward “socially useful” labour – a precursor of which we see in Labour’s “Future Jobs Fund”. Future jobs are not wealth creating but have a social purpose paid for either through taxation or (less likely) through philanthropy.

It may be "efficient" but it won't be free.

I prefer free.
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So which is right?

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Two (adjecent in my reader, as it happens) reports on charities.

Firstly:

Analysis of quarterly Charity Commission statistics by accountant Chris Harris, drawn from charity accounts, says total income during the year rose by £3.2bn to £58.9bn

And secondly:

One in six charities believe they could face closure in the coming year amid public spending cuts and falling donations, according to a new poll.

Either one of these is wrong or else fewer charities are getting hold of the income. No idea which it is - but I have my suspicions.

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Why fans shouldn't be worried about Manchester United future income...

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...except that it's not really about Manchester:

Manchester United has signed a partnership with the first mobile phone firm to operate in Azerbaijan.

The three-year deal with Bakcell will give the telecommunications company the right to screen the club's MUTV in the eastern European country.

Bakcell will also offer United-themed phone packages, which will give subscribers access to club news, video highlights, ringtones and other features.

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About those Charity cuts...

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False Economy has the terrible truth about those cuts to charity income:

Research by trade union-backed campaign group False Economy shows that at least 2,000 charities and community groups have seen funding cuts since last summer.

According to the research, at least £110 million of cuts have been made to charities this year – although it anticipates that the final figures will be higher when local authorities confirm exactly how they will respond to the planned 30 per cent cut to their main grant from central Government.

The figures are based on Freedom of Information responses from 265 councils across England. All charities or voluntary groups receiving a funding cut of at least five per cent are listed in the research.

Dreadful I know.  But, dear reader, do you know how much charities in the UK bring in each year? You don't - let me help.

There are, according to the Charity Commission, some 162,415 charities with a combined income of £53.86 billion.  Yes, you did read that correctly - fifty four BILLION pounds of charity income.  And by my calculation £110 million represents about 0.2% of that charity income.

It's a cut.  It won't be evenly distributed. But....

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Another cash cow for doctors to trough on!

It seems that that those who run the NHS are either rent-seeking doctors or else idiots (I'll leave you to choose):

From next year, GPs will receive a payment for every obese patient they advise to lose weight - on top of money for keeping lists of those who weigh too much. 

That's right dear reader, next time you toddle along to see your locla quack you'll be told you're a little chubby and to lose weight. You hear the sound of doctors' wallets fattening nicely there, don't you?

Even the nannying fussbuckets think this is crackers - here's Tam Fry from the National Obesity Forum:

“I am in favour of GPs referring more patients to weight management schemes, like Weight Watchers and Slimming World, where there is good evidence they work, as there increasingly is. But I think it’s appalling that GPs need to be paid extra to do this - and even worse that they can get the same reward just from telling a patient to lose some weight.” 

You really have to hand it to the BMA. Probably the most successful trade union of the lot - even Bob Crow must look on in awe as they continue to feather their members nests with taxpayers' cash while pretending to be a body concerned only with the betterment of health

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