Tesco and the ‘living wage’

Tesco says national living wage will cost it £500m by 2020

Tesco has said George Osborne’s new ‘national living wage’ will cost it £500m by 2020, putting further pressure on profitability at Britain’s biggest supermarket.

The current Tesco boss, Dave Lewis, said focusing on profits had led Tesco to make bad choices for staff as well as customers. ‘On behalf of myself and the team, the only thing we can say for the choices we made is sorry.’ (The Guardian)

The implication here is presumably that, if resources are transferred from shareholders to people who are paid a relatively low wage, this must be a good thing.

No wonder the share price has been falling if the CEO says, in effect: ‘Sorry we have been trying to make profits for shareholders.’

Maternity pay

When my colleague Dr Fabian Wadel was a graduate student in economics at Oxford, he once expressed to another such student (male) possible reservations about the idea of maternity leave. The other student found this so unacceptable that he stormed off. Fabian says his reaction was not atypical.

In his conversation with the fellow graduate student, Fabian did not express the most serious objection to maternity leave, which is that it deprives employers of the freedom to employ whom they wish. They will tend to employ fewer women if they know that a potential liability such as maternity leave is attached to them. Since the state does not wish fewer women to be employed, but more, the result is that quotas then have to be introduced with which employers have to comply.

Labour Party leader Jeremy Corbyn recently said that self-employed women should have access to maternity pay. Presumably this is because it is considered ‘unfair’ that they should miss out on an advantage provided to women who are employed. If one regards maternity leave as allowing women to have children without risking dismissal, the idea of applying it where a woman employs herself may seem illogical. But perhaps it should really be regarded as a form of unemployment benefit.

Jeremy Corbyn is proposing that, in the case of self-employed women, it should be the state (as opposed to the employer) which funds maternity pay. Intervention is a violation of the freedom to contract as one chooses. However, it is not clear which is the worse violation: forcing an individual employer to pay for an arrangement he would not otherwise have chosen, or forcing all taxpayers to contribute an additional amount towards funding such an arrangement.

I appeal for financial and moral support in improving my position.
I need people to provide moral support both for fund-raising, and as temporary or possibly long-term workers. Those interested should read my post on interns.

Minimum wage, maximum interference

A legally imposed minimum wage is a violation of the principle that individuals should be able to contract with one another in whatever way they choose.

As with other welfare legislation, once a principle has been violated, even if only in an apparently minor way, the initial violation facilitates further advances in the same direction, and is likely to lead to such advances.

Once the principle against a minimum wage was broken in the UK (in 1999) it became relatively uncontroversial to increase the level. Initially the minimum wage was £3.60 per hour; currently it is £6.50, and is about to rise to £6.70. Adjusting for inflation, it has increased by about 30 percent.

The minimum wage concept is now being used for a different purpose than the one for which it was intended. The government is proposing to increase the rate to £7.20 in 2016, rising to at least £9 by 2020, as a way of reducing dependence on state benefits. The objective of decreasing state expenditure may seem laudable, but doing so by further damaging people’s ability to contract on terms that suit them is morally and economically questionable. It is likely to mean the destruction of certain areas of activity.

For example, some home care organisations are saying that it will make the provision of home visits impossible, because visitors will have to be paid rates* that are unviable.

I appeal for financial and moral support in improving my position.
I need people to provide moral support both for fund-raising, and as temporary or possibly long-term workers. Those interested should read my post on interns.

* See for example ‘Living Wage could harm home care sector’, BBC News, 27 July 2015.

Herbert Spencer on status and contract

Herbert Spencer (1820-1903)

Herbert Spencer was an English philosopher and political theorist of the Victorian era. During his lifetime he achieved great authority, and was for some years one of the world’s best-known intellectuals. When I was about twelve, he was my favourite philosopher, although by then he had become far less well-known.

Spencer is now regarded by libertarians as a pioneer of free-market thought. Among contemporary academic philosophers, however, he is held in very low esteem, being seen ‘primarily as the enthusiast for extreme laissez-faire or Social Darwinism’ (Oxford Companion to Philosophy).

When I was working on my doctoral thesis at Oxford’s philosophy department (which was then located in Merton Street) I noted with interest that the department’s lecture room was called the ‘Herbert Spencer Lecture Room’, but that there appeared to be no books by Spencer on the shelves of the department library.

The department seems to have dropped Spencer’s name in referring to the lecture room. ‘Herbert Spencer Lecture Room’ produces no results in a Google search, the room being referred to as ‘the Lecture Room’ in the documents that come up. However, I distinctly remember seeing the name ‘Herbert Spencer’ prominently displayed above the entrance.

Spencer was opposed to state intervention. He was also against female suffrage, hypothesising that women would be too likely to support paternalistic (or interventionist) policies – perhaps another reason why he has become unfashionable.

One distinction which Spencer made, using terminology proposed by nineteenth-century jurist Henry Maine, is between relations based on status and those based on contract. In Spencer’s model, societies evolve from a condition in which roles are largely determined by status; to one in which primacy is given to contract, so that roles and relations become largely chosen.

The following is an extract from Spencer’s Autobiography, in which he appears to foresee the regression of British society towards something resembling the former condition, so that interactions and relationships are no longer freely chosen by individuals, and contract is interfered with in numerous ways. (See, for example, the story of my grandfather and his shop.)

... it was absurd to suppose that the great relaxation of restraints – political, social, commercial – which culminated in free-trade, would continue. A re-imposition of restraints, if not of the same kind then of other kinds, was inevitable ...

... it is now manifest that whereas during a long period there had been an advance from involuntary co-operation in social affairs to voluntary co-operation (or, to use Sir Henry Maine’s language, from status to contract), there has now commenced a reversal of the process. Contract is in all directions being weakened and broken ...

... we are on the way back to that involuntary co-operation, or system of status, consequent on the immense development of public administrations and the corresponding subordination of citizens ... a new tyranny ...

(Herbert Spencer, An Autobiography, 1904, chapter 55*)

Spencer would no doubt have disapproved of many of the upcoming measures threatened by the current government, including enhancing the state’s powers of surveillance, banning speech which ‘undermines democracy’, and further distortion of the labour market by means of the minimum wage.

I appeal for financial and moral support in improving my position.
I need people to provide moral support both for fund-raising, and as temporary or possibly long-term workers. Those interested should read my post on interns.

* Complete publication available at Online Library of Liberty.

Early closing and the road to serfdom

Jarrow marchers (1936)

In the pre-totalitarian world which prevailed in this country before the onset of the Welfare State, there was a constant awareness of the risk of starvation. An undersupply of food would lead to physical weakness, and eventually illness and death. People were motivated to earn money in any way they could, and to gain favour with employers who were capable of paying or feeding them.

People then wished to do what their employers wanted – unlike employees now, who will not, for example, do laundry within the hours for which they are paid because, they say, that is too ‘personal’.

The underlying ideology of totalitarianism was, however, already present then. For example, there was a wish to prevent people from competing with one another in ways which might lead some to improve their position faster than others.

At a very early stage, interventionist legislation was brought in which had the effect of restricting competition.

When my mother was about eight, that is, about 1910, my maternal grandfather, who was a shopkeeper, started to take her to music halls on Sundays, because he was not allowed to sell anything in his shop on that day of the week.

The reforms of 1904 to 1914 introduced a number of restrictions on the operation of shops in Britain, including limiting trading hours. For example, the Shop Hours Act 1904 gave powers to local authorities to make ‘closing orders’, fixing the hour at which shops had to stop serving customers; while the Shops Act 1911 made it compulsory for shop assistants to be given half a day off every week (‘early closing’).

Previously my grandfather had been willing, and able, to sell things at any time. People who wanted to buy a bar of soap or a packet of sugar in the night could throw stones up at his bedroom window, and he would get up and come downstairs to serve them. By being more willing to provide this service than other shopkeepers, he could have made more money, allowing his additional efforts to be rewarded.

The rules on trading and employment by shops must have reduced the ability of people like my grandfather to improve their position for the benefit of themselves and their families.

The famous Jarrow March which took place in 1936 is now taken to show the inadequate nature of unemployment benefit at that time. The level of benefits available two or three decades earlier would have been even more limited. It seems reasonable to assume that the restrictions that were introduced in the early twentieth century, doubtless bringing about job losses in some instances, will have caused harm in some cases, including starvation and death.

As Friedrich Hayek wrote in The Constitution of Liberty,

A society that does not recognize that each individual has values of his own which he is entitled to follow can have no respect for the dignity of the individual and cannot really know freedom.

What does a little girl want with chess?

When I was about 6, my parents and I moved back to Gants Hill in East London after having been evacuated during the war. After we returned, we began regularly visiting my maternal grandparents’ house in Forest Gate. I believe that the incident I am about to describe happened soon after our return, and that this was my uncle Harry’s first meeting with me in the new context. I had never played chess and did not know anything about it. Uncle Harry* was captain of the Essex County chess team and played in tournaments. He also played postal chess with people in other countries.

On one occasion when I visited my grandparents’ house with my mother, Uncle Harry (who lived in the house) sat down with me and started to play chess with me. It took me a little time to get the hang of the rules, and I occasionally made moves which were not permissible. Uncle Harry allowed me to correct them and continue the game. From time to time I had to ask him to remind me what moves were possible for a particular piece.

Uncle Harry told me the rules for playing in tournaments. You had a certain amount of time to think about making your next move. If you touched any of your pieces, you then had to move that piece before the end of the allotted time, or lose the game.

After some time of this, my mother came and said she was wanting to go home, so I should stop playing and come with her. Uncle Harry did not demur or suggest quickly finishing the game. I went away looking forward to playing with him again the next time I came.

When I again visited my grandparents’ house, I immediately asked Uncle Harry to play chess with me. He was unresponsive at first, so I persisted, and he finally answered in a very rebuffing way, saying ‘what do little girls want with chess?’ I had been looking forward to playing chess so much that I burst into tears.

My grandfather, trying to console me, started to offer me books from his library which might appeal to me, climbing up his library stepladder to do so. I accepted the books and thanked him, but was still crying quietly. After we left, my mother took me to visit my father at the school where he was teaching, to tell him that Uncle Harry had refused to play chess with me. I was treated by my parents as if I needed to be cheered up, to help me ‘get over it’, but neither my father nor my mother suggested getting me a chess set or a book explaining how the rules of chess worked.

Uncle Harry never played chess with me again.

It may be noted that the people involved in this incident – my parents, grandfather and Uncle Harry – all had very high IQs (over 160 at least) but appeared to be worried by the possibility of someone demonstrating an even higher IQ. In retrospect, I regard the incident as another illustration of the fact that people were usually threatened by my IQ and did not want me to have opportunity to show it.

I appeal for financial and moral support in improving my position.
I need people to provide moral support both for fund-raising, and as temporary or possibly long-term workers. Those interested should read my post on interns.

* Harry Cleare, brother of Dorothy Green (née Cleare), my mother

State pension: too little, and getting less

In 2011, I commented on the fact that the basic state pension is acknowledged to be well below the level of income needed to reach a minimum living standard.

According to the Joseph Rowntree Foundation’s most recent report* on this, the annual cost of the ‘minimum basket of goods and services needed for an acceptable living standard’ for a single adult is now £10,155. The current full basic state pension, on the other hand, is £6,029 per annum – 40% below this minimum level.

The typical annual council tax alone takes up a sizeable proportion of the current state pension. A single pensioner living in even a modest home can easily spend over £1000 per annum on council tax, nearly 20% of his income, if forced to rely on the state pension.

Incidentally, the Rowntree Foundation report notes that the cost of the minimum basket has risen ‘by between a quarter and a third’ since 2008. If we assume that 33% is the more realistic figure, then the government’s CPI figure, which is one of the factors used to determine increases in the state pension, but which has risen only 19% over the same period, has severely understated the inflation faced by low-income pensioners, with the result that the annual pension has actually fallen in real terms since 2008.

I appeal for financial and moral support in improving my position.
I need people to provide moral support both for fund-raising, and as temporary or possibly long-term workers. Those interested should read my post on interns.

* Joseph Rowntree Foundation, ‘A Minimum Income Standard for the UK in 2014’

The continuation of the pensions swindle

Nicola Sturgeon

Ahead of the General Election, which is said to be more focused than ever on the votes of pensioners, I am again re-posting my comments from 2010 on The Great Pensions Swindle.

I note that at least one political leader has now explicitly recognised that there is something unprincipled about deferring the age of entitlement to the state pension. Nicola Sturgeon, Scotland’s First Minister and Leader of the Scottish National Party, has argued that ‘it would be completely unacceptable for people in Scotland who have paid in to a state pension all of their lives to lose out’. Admittedly she is linking this to the egalitarian argument that Scottish people have a lower average life expectancy, and hence will lose out more – an argument that has been ridiculed by some commentators – but at least she appears to realise there is something wrong with a system into which people have paid on the basis of government promises, which are then abandoned retrospectively.

The unjust deferrals of the state pension age that have already happened should be reversed.

I have a book entitled The Great Pensions Swindle* which, 40 years ago, made some useful points about the likely unreliability of state pensions. The following, however, is unrealistic:

The breaking point is not postponable indefinitely. The resistance to periodic increases in ‘social insurance’ contributions will begin all the sooner when the ‘contributors’ realise they are paying not insurance contributions but an income tax. (p.128)

In fact, no significant realisation arose that ‘National Insurance’ contributions were just a form of income tax, which increased the Government’s current spending money. Otherwise the book anticipates very much what has happened. What happens when a future generation decides it prefers to spend its money on what is fashionable at the time (overseas ‘aid’, social workers, ‘universities’, etc.) rather than providing a former generation with the pension it thought it was paying for? The pensions are ‘too expensive’; they are suddenly means-tested, and paid at ever later ages.

Not least, let it be clearly understood that ‘right’ (to the pension) and ‘contract’ are two more good words that have been made misnomers. A ‘right’ to a pension that a man acquires by saving for it is unambiguous. The ‘right’ a man has to an income when he can no longer work is of a different kind. The word has been re-defined to mean a moral right or claim on society. But transfers of income from one age-group, or class, or generation, to another represent decisions by one group, or class, or generation, to help another in time of need. No group, or class, or generation has a ‘right’ in any absolute sense. (p.129)

Retrospective legislation has become increasingly frequent, and by now no one seems to remember that there was ever anything against it. It used to be said that the individual had a right to know what was legally open to him (in taxation, etc.) so that he could plan his affairs to secure the best outcome in view of his own interests and priorities, as he conceived them to be.

The recent changes in the ages at which state pensions become payable is really an egregious example of retrospective legislation, and directly affects people in as bad a position as we are. If a company which offered pension schemes were suddenly to announce that all its pensions were to be paid two years later, those who had been paying into the schemes might well wish to sue it for breach of contract. When the government does the same thing, no legal redress is available. This has happened recently and seems likely to happen more, so that my junior colleagues’ pensions recede as one approaches them. The age at which one of them will start receiving her pension was first shifted from 60 to 62, then to 64, and then to 65. Another’s pension was shifted from 65 to 67, and seems likely to be further delayed to the age of 68.

Thus the state has already deprived us, who are trying to build up towards an adequate academic institutional environment, of seven years’ pension money, i.e. at least £42K at today’s pension rate.

There are several other examples of abandonment of principles, and I should be able to write about them at length because they are serious.
I appeal for financial and moral support in improving my position.
I need people to provide moral support both for fund-raising, and as temporary or possibly long-term workers. Those interested should read my post on interns.

* Arthur Seldon, The Great Pensions Swindle, Tom Stacey Books, London, 1970.

Jesus on feminism

Arthur Schopenhauer
(1788 - 1860)

copy of a letter to a philosopher

Someone recently suggested that I am more cynical about society than any other writer in recent history. Even Schopenhauer only observes that people are sadistic in certain ways, and in certain situations. But it appears that some two thousand years ago, somebody may have been comparably cynical about society, and open to the possibility that it is antagonistic to the individual.

In the gnostic Gospel of Thomas, Jesus is credited with the idea that the valuations of society block the individual’s access to psychological advantages. This gives rise to the metaphor of the ‘strong man’, who wishes to deprive the individual of potential advantages. It is only by binding the strong man’s hands (so that he is unable to reward the individual by reinforcing his significance) that the individual is able to enter his house, and gain access to the treasures it contains.

Jesus said: ‘It is not possible for one to enter the house of the strong man and take it by force unless he bind his hands; then will he ransack his house.’ (saying 35)

There are other sayings in The Gospel of Thomas which convey the idea of devaluing society, describing it, for example, as a ‘corpse’.

Jesus said: ‘Whoever has known the world has found a corpse, and whoever has found a corpse, of him the world is not worthy.’ (saying 56)

Another of my unacceptable ideas also appears to be paralleled in The Gospel of Thomas. Most reactions to feminism argue either that women are inferior, or that they are equal to, but different from, men. When I was at school I could not identify at all with the attitudes of the girls around me, who were interested in marriage and boyfriends, and who were at pains to make themselves more ‘feminine’. I wrote the aphorism, ‘The female sex is a fictional concept’.

It appears that two thousand years ago, somebody had the idea that women had the same potentialities as men, but could only realise them by adopting male psychology.

Simon Peter said to them: ‘Let Mary go out from among us, because women are not worthy of the Life.’
Jesus said: ‘See, I shall lead her, so that I will make her male, that she too may become a living spirit, resembling you males. For every woman who makes herself male will enter the Kingdom of Heaven.’ (saying 114)

I appeal for financial and moral support in improving my position. I need people to provide support both for fund-raising, and as temporary or possibly long-term workers. Those interested should read my post on interns.

State pension: still below the poverty line

I am re-posting this piece from 2011 as, despite any changes in the system since it was first published, the comments are as relevant as before.

From time to time someone complains that the state pension, together with the means-tested part, is becoming less and less adequate to cover the most obvious, basic costs of keeping physically alive.

A pension of £10,000 a year will barely cover the basics such as food, fuel and utility bills. It is below the minimum income standard set by the Joseph Rowntree Foundation, which estimates somebody needs at least £14,400 a year to escape poverty ... The full basic state pension is £97.65 a week [i.e. £5,078 per annum].
(Daily Mail, 30 March 2011.)

The fact that a means-tested supplement to the pension is available will never be any good to me, or to anyone who is here now, because we would not apply for a means-tested benefit even if we became eligible for it. One simply would never have anything to do with what could only be got by exposing oneself to scrutiny and ‘assessment’.

Throughout the four decades when I paid in voluntary contributions for myself, and encouraged everyone here to do the same, I did so because the eventual pension would be ‘as of right’ and not to any extent means-tested, even if what was paid out ‘as of right’ was at the whim of the government.

I see also from today's Mail that pensioners with savings who go into ‘care homes’ will find themselves paying more, to subsidise those who do not have to pay fees because they do not have savings. That is better, at any rate, than making all pensioners, whether they are in ‘care homes’ or not, pay a tax to the government to subsidise those who go into these ‘homes’, as was at one time suggested.

Making people pay for living in these prison-homes is all right if that is really what they choose for themselves, i.e. provided they cannot be forced to go into a state (or private) death camp against their will, but can be left alone to starve to death at home if they prefer. Unfortunately, I believe this is not the case, and pensioners can easily be ‘sectioned’, or the current equivalent thereof, by a couple of authorised medical sadists (doctors). Even if not legally coerced in this way, I doubt whether many in ‘care homes’ could be said to have chosen what they are being forced to undergo.

I appeal for financial and moral support in improving my position. I need people to provide support both for fund-raising, and as temporary or possibly long-term workers. Those interested should read my post on interns.