ONCE AGAIN we see and hear the left; first Glastonbury, then Glasgow, London, and now Hamburg resonating to angry shouts from those claiming to be downtrodden, or acting on the behalf of the dispossessed.
Corbynism has re-ignited a new confidence in outraged social critique; that leftist clutter of demands that blames all the problems of the world on other people, a rigged system that denies their interest in increased collectivisation.
What we are seeing is a revival of what Hayek called the “fatal conceit”; specifically the assumption that someone else is always the source of mistakes, for example a tower block that goes on fire being a testament to uncaring business people intent only on profit. That a mix of institutional failure in the form of poorly written rules, plus human fallibility in the form of general muddle, and a good dose of trial and error as innovations are tried out can create horrible outcomes, is quickly dismissed in favour of hatefulness being sprayed at all who are not on your side of reactive non-reasoning.
The problem is that this collectivism of the marching group is really tribalism, a declaration of being holier-than-others simply because you empathise with your own kind. Hence, demands that top judges should not be allowed to apply objectivism to analysis of events, and that others who “understand what it is like to be one of us” should be asked to proffer opinion instead; presumably imbued with “emotional intelligence” in their utterances, to the delight of a media determined to personalise all human errors into anecdotal evidence while ignoring the interests and incentives of injured parties.
Such ethics are truly dangerous when applied in the creation of public policy, by which I mean government policies that are meant to serve the people. I offer two examples.
First, Uber. The case of the left against Uber is that it shows the “dark side of the gig economy” in turn part of what the TUC calls a “rigged economy, where bosses weasel out of paying the minimum wage or providing basics such as holiday pay and rest breaks”.
Nicola Sturgeon calls these key employment rights. But these rights are not human rights; they are state enforced contractual rights. We do have a human right not to be starved, or killed through endless unavoidable toil, but we do not have a right to any particular level of income or number of days off. Why? Because the margins that allow incomes and work benefits to be paid are not generated across all employers or employees equally; to declare that all employers have to offer equal benefits from work is an injustice to both.
That enforced equalisation is unfair on both employers and employees is central to the case for Uber in the market for cab trade and employment. Uber’s business is a disrupter, it brought information into the cab market that cab users want; how quickly can a cab get here? How long will it take to get to my destination? How much will it cost? Will it be safe? In addition, it brought implicit service monitoring, and customer reassurance about that service. All of these are part of the price of getting someone from A to B in a way that makes them happier.
Against this, the old Hansom cab business is a dinosaur; often restrictive in its services, over-priced due to enforced rationing, frequently with prejudiced and rude drivers; price controlled and regulated in its product but not in its service quality; but of course well connected in the corridors of local and city government power and able to preserve its privileges. The connection between price and service is fundamentally de-linked.
This is the real lesson of leftist tribalism, it protects its own and generates elites who care not a jot about the downtrodden or dispossessed; rather they tread down and remove access to incomes for those who are not them.
The fallacies of the left are built on this sclerotic approach to employment practices. They want to create a world in which employment is perennial and unchanging, with payment for just being there rather than doing anything new or difficult. It’s very safe and non-entrepreneurial, and de-humanising in the long term; ask a taxi driver.
Uber’s gig economy, with its flexibility, ever changing patterns, incentive for drivers to be innovative, new add-on services; and dispassionate service control system integrates the product with the quality of service. Yes, drivers have to be on their toes and are aware that a bad customer report can damage them, but equally they avoid being caught in the illiberalism of enforced work practices and being forced to toe the line on how things are to be done by unionised bosses.
Our politicians are completely at sea on the matter of work and pay in today’s digitised world when dealing with entities like Uber and Deliveroo. They are fighting a battle about a tax regime that was built for a nation of nationalised entities that have, thankfully, long gone.
The root of mischief here is not the flexibility of Uber, but the inflexibility of our payroll taxes. The left want us to pay taxes for collective ends that their tribe decides on; a true liberal wants to pay taxes to support our liberties when life is stressful or times are bad. I too think Uber drivers should pay tax, including a contribution to the common weal, but if a minimum wage, a holiday, and less hours are important to Uber drivers, let them choose at what level they wish the price for those benefits to be.
The obvious thing to do is to let Uber workers drive as freelance employees, but provide them with a thrift system of saved contributions, for example a small percentage of income payable from the first pound earned; its level chosen by each driver. The externality of an excess or shortage of work is thereby brought in as a cost to earning their income in the form of self-insurance. Uber’s management and its drivers can then adjust pricing and service levels to satisfy both customers and workers.
This notion of introducing individualised flexibility into life’s choices brings me to my second example, social care.
We are told that we have a social care crisis. No we don’t, we have a free rider crisis brought about by socialising social care production. It’s not some bad guys ripping us off for profit that means granny gets a five minute wash and her bed made before her carer runs out of the door; socialists need to recognise that these services are contracted by the same state collectives that are failing for very good reason.
We are short of social care for the same reason that without Uber you get stuck without a cab in city centres in the evening whenever it rains – too much demand and not enough supply. The controlled price of social care has been set to zero for public sector delivery and thus socialism has, as always, rationed provision.
We can start solving the social care system tomorrow by coming clean and being honest with the younger generation. We need to tell them that socialised social care has failed their parents by running out of money and that we are moving to an individualised providence account system like Singapore. That’s the only good news for them, because the second bit of news would have to be that we are going to tax the heck out of their funds until the free-riding generation that socialism created die off.
Why is this honest? Because the younger generation are going to be taxed to the hilt come what may and we have a moral duty to hypothecate this liability transparently for them. Apart from the fact that it might stop them spouting nonsense about rip-off capitalism when on their marches, the great gain for them is that their residual funds and the liberty to use them would be theirs as they grow old. Today’s Ponzi scheme – rip-off socialism – would finally be dismantled.
It is truly galling that there are no politicians, Tory or other, declaring that the present system is bankrupt and too risky for a free society to continue with. We economists are partly to blame for this by not shouting loud enough about the numbers.
Instead, we get politician after politician agreeing with the collectivist left that all MPs of all parties should “support taxes that generate sufficient revenue to meet the minimum needs of schools, hospitals, prisons, the police and other services”. What tribe decides on “sufficient” or the level of the “minimum”? The one that marches sounding off slogans?
We cannot continue to believe that higher taxes are the answer to how the state can ensure that everyone can live at the expense of everyone else. We have to allow the liberty to store our own wealth for our own futures.