Tag Archives: The Spectator

Blade Runner with Food Stamps and Benefits Street

I realise that many of my readers may not have the stamina for my longer posts, so wish to repackage some ideas raised within the extended pieces as mini-posts all to themselves. First up is Walter Russell Mead‘s alternative visions for a world in which computers replace work. One of these is the faintly dystopian Blade Runner with food stamps explained within a lovely essay in The American Interest titled “Jobs Jobs Jobs”. Russell Mead sets out his stall thus:

There are really two choices before us as we think about the future of jobs in an age of information. Either most human beings are about to become economically obsolete, or the information economy can find a use for their talent and hard work. Much depends on which of these two pictures turns out to be the best description of the future.

If we believe in the first alternative, we are going to start planning for the mother of all welfare states. There will be a period of transition, but something like 80 percent or more of the population is going become superfluous to the economy. There will be no jobs where the work of this group could command a living wage; the state must somehow make provision for them or wait for them to fall into poverty and risk the social explosion that will probably follow.

It’s likely that an information age welfare state would consist of two components: straight out welfare and “social inclusion” payments for some, subsidized make-work jobs (like Postal Service employment in an age of email) for others. The money to fund these programs will have to come from corporate profits and from the incomes of those who still manage to surf on the waves of digital change.  That suggests rising tax burdens and a constant class struggle between the economically connected citizens who want to keep what they have earned and the clients of the welfare and make-work state.

He that goes on to describe a world that is not a million miles away from what we see today in the U.K., at least in the extraordinary bifurcation of the country into greater London and the rest of the country.

If the information economy works like this, the whole country would start looking more like California and New York City: unbridgeable class divides, huge inequality, fountains of innovation, and tiny islands of great wealth and privilege surrounded by proles on the dole. Inside the glittering bubble, the digirati and their courtiers would live lives of intense purpose and excitement. Outside the bubble, meaning would be the good in scarcest supply. To have a life where your work means something and your hands help steer the world would be the exclusive privilege of a tiny handful of enlightened, intelligent, and energetic people.

However, “the mother of all welfare states”, as he describes it, is a working class (or shall we call it non-working class) dystopia:

This is Blade Runner softened by food stamps, but as in the public housing projects and other warehouses where we store “surplus” people today, the most acute form of poverty and deprivation will not be the lack of food, clothing or even shelter. It will be a lack of social connection, of independence founded on achievement, on the human dignity that comes from doing work. Bellies will be full, but lives will be empty, and with that emptiness will come ills of every kind: addiction, brutality, ugly, and stunted sexual and emotional lives for many, neglect of the young and the old.

The images tap into voter angst on both sides of the Atlantic, through which those precariously in work, but suffering from declining livings standards and a risk-filled future, may be inclined to kick out at the welfare-supported underclass rather than the elites. In Britain, the Channel 4 documentary “Benefits Street“, which tracks the lives of welfare claimants on a Birmingham residential road, has caused a firestorm across the political spectrum through playing on the same theme . Many see the lives depicted on “Benefits Street” as ’empty’ and ‘stunted’, yet still lives of deliberate choice. Nonetheless, the right-of-centre Spectator has a slightly different take on this underclass (here):

The biggest scandal of Benefits Street, which Channel 4 is unlikely to reveal, is that White Dee is behaving rationally in deciding not to work. This is not something ministers like to divulge, but Policy in Practice, a welfare and employment consultancy, has run the figures for The Spectator. Dee is a single mother with two young children.  Were she to earn, say, £90 a week as a cleaner, then the system would reduce her benefits by £70 — an effective tax rate of 78 per cent on that £90 she’s earned. She’d thus be slaving away all week for £20 — far less than the minimum wage.

It doesn’t get too much better higher up the scale. If she landed a £23,000-a-year job, her effective tax rate would still be 74 per cent – so she’d end up just £5,975 a year better-off than if she’d spent the year sitting on the sofa watching daytime TV and chatting to her pals on the street. If she then worked extra hours, or earned a pay rise, she’d keep a pitiful 9p in every extra pound paid. This is nothing to do with indolence. Which of us would work at a 91 per cent tax rate?

The mother of all welfare states, or Blade Runner with food stamps, is also referred to by Russell Mead as the ‘blue model’. The American colour coding for political allegiance is alien to most Europeans. Red is the natural colour of socialists and blue conservatives in the U.K and on the continent. In the following  15-minute video, however, Russell Mead attaches ‘blue’ to Democrats and ‘red’ to Republicans as he critiques the ‘blue model’.

This analysis of the problem is correct in one respect: if technology gradually replaces ever more workers, then the state may face a choice of letting them fall into poverty or provide them a living stipend. Yet Russell Mead doesn’t quite leave it there. He attaches a moral imperative to work, much as many critics of the unemployed in Benefits Street have done as well.

Nonetheless, I think even the left needs to think carefully about Russell Mead’s three-pronged solution: 1) make hiring easier and cheaper, 2) promote the service economy and entrepreneurship and 3) feed the state to the people.

The last concept is the most interesting and perhaps the most open to misinterpretation. Feeding the state to the people doesn’t have to mean a Tea Party call for small government (which frequently is a smokescreen for the promotion of financial and corporate interests). Rather, the state could provide the financial, physical and legal capital to establish community-centred markets that help distribute community-centred goods and services.

This may not be as efficient as the production of goods and services by the global economy, but we seem to be suffering from diminishing welfare returns to production efficiency anyway. If so called efficiency leads to a vibrant elite but a dysfunctional mass—albeit one with plenty of toys—then this is unlikely to produce a happy and healthy society. Nor for that matter will it produce a stable climate. Time for some fresh thinking.