Tag: Trickle down

Nudge and neoliberalism

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I’ve been criticising nudge and the closely related discipline of behavioural economics for a few years, sometimes with an international audience (see, for example: The connection between Universal Credit, ordeals and experiments in electrocuting laboratory rats.)  Nudge has increasingly seen by governments as a cheap and effective way of achieving social political goals in an era of austerity. 

I have several objections to the “behavioural turn”; some are to do with its impact on democracy, others are to do with its class contingency: poor people are disproportionately nudged, and without their consent. When I say ‘disproportionately’, I mean almost exclusively.

Over the last seven years, behavioural economics has come to be seen as something of a technocratic fix for a failing and overarching socioeconomic system. However, it has more in common with PR, marketing and advertising that psychology or economics. It’s part of the ‘sales pitch’ for neoliberalism, which is already a sold out event.

Behavioural economics epitomizes an era in which politics is concerned chiefly with saving money and combating the symptoms rather than the causes of growing social inequality. Nudges may serve to make poverty infinitesimally more bearable for the government, who can say that they are doing something to ‘solve’ poverty, but certainly not for the poorest people. When you zoom out, you see clearly that exactly nothing is being solved at all. At best, nudge is like persuading a person to learn how to swim in a clean and tidy swimming pool, and them throwing them back into a maelstrom out at sea.

The poorest citizens are targeted with punitive, heavily bureaucratic policies and an administrative authoritarianism, while wealthy people get the freedom to do as they please, and a rewarding form of state libertarian socialism, where the regulation book is ripped up. Unaccountable private companies design nudge strategies for profit, politicians and civil servants learn them and become board room, arm-chair psychologists, experimenting on ordinary citizens to find ways of not paying out for public services. All without the publics’ consent.

What could possibly go right? 

The government and their small army of behavioural economists argue that citizens’ characters, cognitive ‘limitations’ and ‘flawed’ decision making is the root cause of poverty and creates inequality, so handing over money every year to poor people is akin to “treating the symptoms, but ignoring the disease.” Margaret Thatcher, the High Priestess of neoliberalism, once called poverty a “personality defect.”

However, this narrative is based on assumption and fails to take into account the possibility that people’s decisions, behaviours and circumstantial problems are not the cause but the consequences of poverty. Giving poor people more money might well just genuinely work wonders, because simply having too little is THE problem. 

Nudge is an authoritarian prop for a failing neoliberal ideology and policies. Most citizens don’t benefit from a system founded on accumulation by dispossession – a concept presented by David Harvey, which defines the neoliberal capitalist policies in many western nations, from the New Right Thatcher era to the present day, as resulting in the centralisation of wealth and power in the hands of a few, by dispossessing the public of their wealth, public services and land. And increasingly, their autonomy, as public perceptions and behaviours are being aligned with politically determined neoliberal ‘outcomes’. It’s a vicious cycle – a maelstrom. 

Nudge is politically ‘justified’ by a draconian, ideological framework of beliefs, partly based on Victorian meritocratic notions of ‘deserving’ and ‘undeserving’. One theme is that poor people lack the qualities or capacities to be economically competent, and simply make the ‘wrong’ choices. But in a system where everyone competes for resources (as well as a democratic voice, government attention and funding), not everyone is permitted to be wealthy. That is the nature of ‘competition’. There is no such thing as ‘trickle down’ either. Wealthy people don’t generally share their wealth.

Image result for @LanceUlanoff on trickle down

Furthermore, being poor isn’t particularly lucrative, in fact poverty itself tends to be accumulative. Poor people are financially penalised and economically excluded. Poor citizens can’t get loans when they need them, unless they are prepared to pay eyewatering interest rates, of course. Pay as you go metered utilities – gas, electric and water, for example – tend to cost rather more than a monthly or quarterly direct debit. Poor people who get into debt with utility companies tend to be coerced into having payment meters fitted, as they are considered at ‘risk’ of defaulting on payments by big businesses.

It’s somehow become obscenely normal to charge poor people more money than wealthy people for the same services and utilities. I’ve yet to hear of a poor person who became less poor because they are being punished by having more money taken from them.

However, being wealthy is very lucrative; it’s the gift that keeps on giving. This discrimination has been dressed up carefully with a political narrative, using terms like “incentives”. For wealthy people, a reward of more money is apparently an ‘incentive’ to just keep on being wealthy. 

Poor people, however, seemingly require a different form of ‘incentivisation’. They need to be told that it’s ‘wrong’ to be poor, and that it is their own fault, rather than the consequence of a prejudiced and discriminatory government and their flawed, prejudiced and discriminatory policy designs. In a so-called meritocratic system, it follows that wealthy people ‘deserve’ their wealth – even though at least one third of them simply inherited it – and poor people deserve to be poor. If it wasn’t for the myth of meritocracy, inequality and burdening those in poverty with a sense of shame and personal failing would be considered abhorrent. However, neither neoliberalism nor it’s PR and strategic communications agent, behavioural economics, are drawn from the philosophical well of human kindness. They came to life in the degenerative, dry ruins of once civilised societies, marking a Fin de Siècle of  late capitalism.

The socioeconomic system of organisation – neoliberalism – eliminates the possibility that everyone can ‘win’, since neoliberalism is itself founded on competitive individualism, which permits only a few ‘winners’ and many more ‘losers’. The existence of absolute poverty in a wealthy country is ample evidence of a fatally flawed system, so the government uses a rhetoric of a myth – meritocracy – to justify the status quo, blaming citizens’ ‘behaviours’ and ‘attitudes’, rather than recognising the real problem and changing the system, which generates inequality from its very core.

So poor people are penalised for being poor by being incentivised’ by punitive economic sanctions that entail losses from the little money they have. This is so appallingly cruel, because scarcity completely consumes people. It eats away at human potential and stifles possibilities. And removes choices.

The patronising ‘paternalism’ of a government that assumes it ‘knows what is best’ for people – punitive nudges delivered by a group of privileged, powerful and prejudiced elitists – is doomed to fail. The key reason is that being poor means having less choice to start off with. Poor people don’t act on available choices because they can’t. They have none. They are compelled to act on necessity.

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Maslow’s hierarchy of needs outlines that our most basic needs are biological, and meeting these needs is a necessity for survival. There isn’t a ‘choice’.

Taking money from poor people is simply cruel and barbaric. It reduces ‘choices’ and increases necessity and desperation.

If we can’t meet our fundamental needs, we can’t meet higher level psychosocial needs either – the ones that do entail choices about our lives. Poverty has got nothing to do with making “irrational choices” at a personal level. It’s got everything to do with being left with NO choices.

There is a world of difference between ‘choice’ and ‘necessity’. It is time the government and the technocratic behavioural economists busy propping up a failing system recognised and acknowledged this. People are poor because we have a system that diverts available resources away from them, hanging them out to dry. Until that fundamental fact is addressed, nothing will change.

It’s time for a serious and open political debate about inequality, the limits of nudge, democracy and the fundamental failure of neoliberalism. It’s time to stop blaming poor people for poverty and inequality.

Bootstraps

Related

The connection between Universal Credit, ordeals and experiments in electrocuting laboratory rats

 The government plan social experiments to “nudge” sick and disabled people into work

A critique of benefit sanctions:  the Minnesota Starvation Experiment and  Maslow’s Hierarchy of Needs

The benefit cap, phrenology and the new Conservative character divination

Stigmatising unemployment: the government has redefined it as a psychological disorder


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A few words about trickle down economics

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Trickle down economics is a form of laissez-faire capitalism in general and more specifically, it is a form of supply side economics. Whereas general supply side theory favours lowering taxes overall, trickle down advocates prefer targeting the very wealthy for lower taxes. Trickle down theory is implicit in neoliberal discourse. As such, it’s become politically normalised. It’s become a form of tacit knowledge. 

However, the term trickle down originated as a joke by humorist Will Rogers and it is often used to criticise economic policies based on a justification of  ‘competitive individualism’ and ‘meritocracy’, which strongly favour and reward the wealthy and privileged, while being framed as ‘good’ for the average citizen. This of course is political hocus pocus and snake oil economics. The government has been pulling at supply side economic levers which, for some time, have been attached to nothing.

The economic ‘success’ of governments has increasingly been measured by an aggregated data set that fails to take into account actual wealth distribution, merit, social contribution, inequality, poverty, or even the welfare and health of public they claim to represent. This kind of economics has become overarching and totalising, sucking in the social realm of human relationships and transforming them into hierarchies of economic (and political) worth.

Democracy is shrinking with the economy, as more and more money, political power and influence is concentrated in fewer and fewer hands. 

The richest 1% of people in the UK own almost a quarter of the country’s wealth. The huge levels of inequality in the UK were revealed in a detailed assessment by Credit Suisse last year, that also showed the richest 5% of people in the country own 44% of all wealth. 

Commenting on the report, Sally Copley, the charity’s Head of UK Policy Programmes and Campaigns, said: “The wealthiest one percent of the population – who own nearly a quarter of all the country’s wealth – continue to do well whilst so many people in Britain are just about managing to stay above the poverty line.

“Globally, the richest one percent own more wealth than the rest of the world put together. This huge gap between rich and poor is undermining economies, destabilising societies and holding back the fight against poverty.” 

As we have recently learned, the wealth accumulated among the richest 1%, through the systematic dispossession of the rest of the population, is rather more likely to trickle offshore and to be hoarded than finding its way to the Treasury and then redistributed to ordinary citizens, rewarding them with a long awaited break from the futile, self-defeating consequences of neoliberalism: austerity, increasing poverty and inequality.

There is an expanding and gaping hole in the economy as more and more money is funnelled off by the government to hand out to the wealthy, while increasing numbers of other citizens are now teetering on the brink of the chasm without an adequate social safety net or political lifeline.

What remains of our public services are now also in private hands, serving the private interests of vulture profit seekers. 

Multiple studies have found a correlation between trickle down economics and reduced economic growth. Conservatives since Thatcher and Reagan, however, have insisted on imposing it, despite recessions, and the resulting social damage caused by rising inequality and poverty. When neoliberalism fails, the Conservative answer is to simply apply more aggressive neoliberal policies and increasing authoritarianism. 

According to the economist John Kenneth Galbraith, trickle down theory was once called the rather less elegant “horse and sparrow” theory, a couple of centuries back, which goes something like this: You feed the big horse all of the oats and the wee birds can feed in its wake.

Which is fine only if you happen to like a diet of horse sh*t. 

The US Chief Correspondent and Editor-at-Large of Mashable, tech expert, social media commentator, amateur cartoonist and robotics fan, has this to say:

Image result for @LanceUlanoff on trickle down


I don’t make any money from my work.You can support Politics and Insights and contribute if you like by making a donation which will help me continue to research and write informative, insightful and independent articles, and to provide support to others. The smallest amount is much appreciated and helps to keep my articles free and accessible to all – thank you. 

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