The Universal Fallacy

October 5, 2010

I honestly don’t understand the argument being put forward in Labour circles that the curtailment of child benefit at the upper tax band will cause the welfare state itself to fall into disregard amongst the middle classes. It’s not a universal benefit. You only get it if you have kids. In the same way, you only get Jobseekers’ Allowance if you’re out of work. The distinction is between universal (everyone gets it regardless of circumstance) and conditional (you only get a benefit if you meet certain conditions).

What’s important is the principle that the welfare state is always there to provide a safety net if things go wrong. Child benefit will continue to be paid if you earn below a certain amount, in recognition of the fact that children are costly*. The state should be able to make that economic judgement. What it shouldn’t do – as Polly Toynbee claimed it should do on Newsnight last night – is say that having children is something that is valued. That’s up to the individual, not the state or society.

In general, for those benefits like income support and NHS prescriptions which do have an income-based element public support remains strong. No-one in contemporary British politics wants to scrap the welfare state entirely. What they do want to do – and which I would applaud – is to make sure we can afford it not just for the present generation, but forever.

*The way in which this has been implemented – which uses individual rather than household incomes – is stupid, I agree.

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17 Responses to “The Universal Fallacy”

  1. Laurence Boyce said

    “Child benefit will continue to be paid if you earn below a certain amount, in recognition of the fact that children are costly. The state should be able to make that economic judgement. What it shouldn’t do – as Polly Toynbee claimed it should do on Newsnight last night – is say that having children is something that is valued. That’s up to the individual, not the state or society.”

    Hmm, I think that’s a moot distinction. The fact is that as soon as the state starts making such payments, it is bound to influence things one way or another. It’s just not possible to be wholly neutral and have no net effect. So I would posit that child benefit – to some extent – encourages people to have children.

    Now here’s the strange thing. Climate change is supposed to be the great threat to mankind, but it has been suggested that having fewer children is possibly the single biggest thing we can do. The 10:10 campaign is trying to shave 10% off our emissions, but having one child instead of two, say, is a 50% lifetime reduction straight away. So why are we encouraging more children?

    There’s a huge disparity between what politicians say on climate change and what they do. If we were really serious about climate change, surely we would have phased out child benefit by now? Maybe we should even penalise having children with a green tax? That might be the logical consequence of Polly’s argument – she should beware!

    But seriously, why does child benefit still exist? It’s not like anyone is forced to have children.

  2. declineofthelogos said

    You’re right that any state payments to individuals will inevitably impact on their behaviour – but there’s a strong distinction between impacts that prevent harm and impacts that are intended to promote a particular mode of living. There will inevitably be crossover at the boundary between the two – a case in point would indeed be child benefit; the relative reward for having children is significantly greater for the less well off, increasing the likelihood that they will opt to have children. Conversely, the existence of free-at-point-of-care treatment on the NHS has not increased the physical risk-taking propensity of UK citizens – if anything, it’s gone down.

    While certain greenies would claim we should penalise having children (and also stop immigration into a relatively carbon-intensive economy), I’m a little more confident that we’ll lower our emissions enough to make this unnecessary. Per capita emissions for UK citizens have been steadily declining over the last twenty years: http://www.google.com/publicdata?ds=wb-wdi&met=en_atm_co2e_pc&idim=country:GBR&dl=en&hl=en&q=carbon+emissions

  3. Laurence Boyce said

    “Conversely, the existence of free-at-point-of-care treatment on the NHS has not increased the physical risk-taking propensity of UK citizens – if anything, it’s gone down.”

    Sorry totally disagree with that. From the obesity epidemic to drunken behaviour at the weekend, it’s perfectly clear that UK citizens do not take the care of themselves that they should. It can’t help that they know the NHS will always pick them out of the gutter. This then leads the NHS to get involved in healthy living campaigns, thereby compounding the problem and the reach of the nanny state.

    Ask anyone who works in A&E on Friday and Saturday night, whether they don’t think they should start charging for treatment.

  4. declineofthelogos said

    Bit puzzled why you think this is a new thing, or has anything to do with the NHS. The US has a bigger obesity problem than us and they’ve only just got round to having anything even approaching state-funded healthcare. France has a better system than us and manages to be far less drunk. The British have always done this sort of thing, look up Gin Lane.

  5. Laurence Boyce said

    Sorry, but we haven’t always done this sort of thing. The sheer scale of the Friday/Saturday night binge drinking problem is a relatively recent phenomenon, and leads to around a million NHS admissions per year. What should we do? Should we charge for those admissions, or should we spend a load more money on a public health campaign?

    Sure drinking per se goes back to the ark.

  6. declineofthelogos said

    When alcohol is relatively cheap, more people drink it in greater quantities. The impact of the NHS on this is negligible; indeed the upswing in weekend drinking you refer to is much more recent than the NHS itself. There’s just no correlation. http://www.guardian.co.uk/education/2004/jul/23/highereducation.research

    As to what we do about it, we tax alcohol more highly in relation to its social costs.

  7. Laurence Boyce said

    “As to what we do about it, we tax alcohol more highly in relation to its social costs.”

    Ah yes, make everyone pay for the actions of the few. Makes perfect sense.

  8. declineofthelogos said

    Because clearly drunken people in city centres are the only negative externality of alcohol. You’ll pay in proportion to the amount you drink, which will have an impact on your health in the long-term, not just the moment.

    One could argue that a better tax for alcohol would increase exponentially over a given time period, but that would substantial bureaucracy.

  9. Laurence Boyce said

    “One could argue that a better tax for alcohol would increase exponentially over a given time period, but that would [require] substantial bureaucracy.”

    One could argue that, but not if one wanted to call oneself a liberal and keep a straight face.

  10. declineofthelogos said

    Are you trying to claim that Pigou taxes are illiberal now, and that you should be free to perform acts that have harmful consequences for others (in this case the impact on the NHS of excessive drinking)? That’s a pretty bloody weird version of liberalism.

  11. Laurence Boyce said

    But I don’t believe the NHS treatment should be free. It’s certainly illiberal to tax in order to protect people from themselves, the more so if sensible drinkers are caught in the net. But I’m not saying there are no negative externalities at all – there obviously are.

  12. declineofthelogos said

    So you’re saying that people should be charged for using NHS services when they’re at fault for their own ill-health, while I’m arguing that people should pay a premium for taking actions that constitute a risk to health. While there are some cases where your approach might be applicable, there are a far wider set of cases in which it seems incorrect.

    For example, rock-climbing constitutes an unnecessary risk to health, so under your model rock-climbers would be liable for the costs of their treatment if they fell off a mountain, say. The same would apply to almost all sports; any injury sustained within would arise from taking unnecessary risks with their health.

    A problem arises inasmuch as luck comes into the equation. It is not the case that everyone who climbs a mountain will fall off, just as much as it isn’t the case that everyone who drinks to excess will contract cirrhosis of the liver. Some of these factors are not determined by the individual; being made to pay for your treatment when unbeknownst to you you have a weaker liver than average seems unfair.

    Similarly, living in the city rather the countryside while having asthma could constitute an unnecessary risk; but demanding that the asthmatic pay more for treatment if they live in the city again seems unfair.

    Of course, if you don’t believe NHS treatment should be free for anyone at all, then we’re talking at cross purposes, as I would claim that one of the main conditions of freedom is to not be constrained by sickness.

  13. Sam said

    Are you trying to claim that Pigou taxes are illiberal now, and that you should be free to perform acts that have harmful consequences for others (in this case the impact on the NHS of excessive drinking)? That’s a pretty bloody weird version of liberalism.

    But an alcohol tax doesn’t even come close to describing the impact on the NHS. It’s not a Pigou tax.

    There are two alcohol-related costs to the NHS – the treatment of the George Bests of this world with chronic liver disease, and the Friday night special alcohol-fuelled violence, PFOs and the like.

    The latter category is entirely driven by choice, not alcohol. People choose to be violent. They choose to drink beyond the point where they lose control. They choose to get in the car whilst drunk. Anybody who has ever been drunk understands how he behaves whilst drunk.

    The liver disease is driven by alcohol, but in a highly nonlinear way. A moderate drinker has the same chance of having liver problems as a teetotaller, so a linear tax on alcohol isn’t in any way a Pigou tax, and a nonlinear tax is impossible to implement in a reasonable way.

    • declineofthelogos said

      Bit confused by this bit:
      “The latter category is entirely driven by choice, not alcohol. People choose to be violent. They choose to drink beyond the point where they lose control. They choose to get in the car whilst drunk. Anybody who has ever been drunk understands how he behaves whilst drunk.”
      You appear to be arguing that alcohol plays no part because it’s all down to choice, and then claim that alcohol does play a part. Surely the choice to buy alcohol in excessive quantities is the choice that’s subject to taxation to pay for the externalities generated by that choice.

      I would dispute that nonlinear tax is impossible to implement. I wouldn’t want to implement one as it’d be illiberal, but to do it you’d require an ID card to purchase alcohol, and a database of those purchases over a 24 hour period. You could then ramp up the tax in proportion to the amount purchased.

      The best system may be a combination of the approaches discussed above by Laurence and myself; a ‘basic’ alcohol tax to cover the health risk associated with alcohol consumption, representing an insurance premium for a risky activity whose negative outcomes are nonlinear, and a surcharge on NHS treatment for those who repeatedly require treatment for excessive alcohol consumption. The latter would have to be very tightly prescribed to be fair; otherwise it would have an impact on alcoholics with associated mental health issues.

  14. Laurence Boyce said

    “If you don’t believe NHS treatment should be free for anyone at all, then we’re talking at cross purposes, as I would claim that one of the main conditions of freedom is to not be constrained by sickness.”

    The principle of a free NHS was actually given up on long ago. We pay for prescriptions, eye tests – dentistry is largely private now. It’s just a question of degree.

    Certainly I would be willing to extend this, but it doesn’t have to be all or nothing. But totally free is bad. Any free service will naturally be abused and taken for granted. On the other side of the fence, a free service loses its sense of accountability to the consumer and begins to be run for its own benefit.

    • declineofthelogos said

      I think we can find agreement here; it’s mostly a question of proportionality. Access to healthcare should be free if you can’t afford to pay. Beyond that it’s largely open to discussions of effectiveness and sustainability.

  15. […] The Universal Fallacy on Adam Bell’s Decline of the Logos. ‘What’s important is the principle that the […]

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