Thursday 7 June 2007

The Bible and productivity

I remembered a Bible text recently and it set me thinking. It turned out to be quite profound. No doubt this view is not original, but still . . . . it's mine.
The text is Leviticus 19, v 9 - 10.
Extract (KJV): "And when ye reap the harvest of your land, thou shalt not wholly reap the corners of thy field, neither shalt thou gather the gleanings of thy harvest . . . . thou shalt leave them for the poor and the stranger."

The first thing that comes to mind is this: the Bible is telling us that we should not drive for maximum productivity and profit margin, but that we should consider the position of the poor and needy.
The context makes it clear that it isn't about giving alms to the poor, or paying taxes to support them. It's about the actual production process; we are ordered, by the Lord, no less, that the poor should be involved in gathering some sustenance at least from the productive capacity of the counry and region they live in.
Of course, not many live by gleaning nowadays (if ever). But there are numerous ways in which this Biblical injunction is still kept, quite unconsciously. It is kept, in short, whenever compassion for a person's circumstances leads managers and owners of businesses to be less than totally ruthless in getting value from labour.
For example:
The woman in the back of the office who makes mistakes but her workmates cover for her because she's going through an awkward divorce.
The old man who is kept busy doing work that a machine could do, but the foreman likes having someone he can call on for odd jobs.

The manager who allows the local scrap dealer to take away surplus metal but doesn't charge very much because it's good policy to buy services locally.

We can all think of similar examples. They are the little ways in which humanity takes the edge off the tough commercial world.

On the wider scale, it's always better for a society to allow the poor to work and contribute in some measure to the society, than to have them live off the latter day version of alms, the social welfare, which in the old English phrase is "as cold as charity".

The "Anglo-Saxon model", as it is called, maximises employment and then tops up earnings with welfare. The "Continental model" - such as France and Germany - attempts to help the poor by telling business to pay them the minimum wage. The result is unemployment and a ruthless drive for productivity which replaces men with machines at the lower end of the job market.

We shall see, eventually, which one will survive the longest.

Update: I had an e-mail from Germany querying the opposition to the minimum wage, and recommending a citizen's basic income.
Oddly enough, I support the idea in pinciple, though I wonder about the practicality. (Also a bit worrying - "You're a citizen, you get a basic income. You're not, so buzz off and starve.")
Leaving aside that, I wonder if there isn't a simple error creeping into the debate.
The distinction between "wage" and "income" isn't always clear. Guaranteeing a minimum wage per hour is nto the same as guaranteeing a minimum income over the year.
Furthermore, the concept of "income" ought to include the benefits provided in kind, in goods and services funded from taxation or national insurance.
And the traditional socialist argument that the "social wage" (roads, waste disposal, clean water, etc.,) must be taken into account in assessing welfare should be dusted off for a re-think.
Regarding the minimum wage: suppose there are three people doing a basic job in a factory. They are doing the same work, same output per hour. The work is simple so the wage is low.
But the workers are not identical in their needs. One may be a student taking a year off before going to university, and still living at home. One may be a person nearly retired, with no mortgage to pay and working to pay for a nice holiday. One may be a single mother with two children.
Their needs are different. If the wage is raised artificially to help the needy one (the third) then the others say "Thanks very much, more beer money for us".
(There's anecdotal evidence that the main beneficiaries of minimum wage legislation are young single people in rich areas who have easy holiday jobs).
And we should not assume that the employer is necessarily making a profit from the lowwages - that may be the case, but it might not be.
So the employer may decide to invest in a machine to do the job - he won't make anyone redundant, but the one will retire and student will go to univeristy and there are two fewer jobs for the next student.
If, however, the wage is set at the market level, then the employer still provides the jobs, and more people are involved in work.
The student will still get his subsidised training, the mother will still get help with rent and child benefit, the retired person can work to retirement.
Targetting benefits to need works just as well in a market-wage society as in a minimum-wage one. And it maximises contributions to society through work.
"From each according to his ability, to each according to his needs".

And before anyone says it: yes, some employers are making money out of paying low-wages for valuable work. Certainly unfree labour is an evil, and factory inspectors can shut down unhealthy workplaces. But the best weapon against such employers is free-trade. Other employers will offer better wages and still make a profit - if they are allowed to set up in that market. Barriers to entry have to be low.

Tuesday 5 June 2007

England forever !

There's a lot on the internet at least about the English "national identity". Especially since the government comes up with its cack-handed proposal for a "Britain Day". First they erode democracy with devolution to everone but the majority, thereby creating two classes within the country, then they want to celebrate the "things that we have in common".
A sense of fair play, for starters.
And a recognition that England is a country - perhaps start by getting Europe to put the name on its map? And to give us a vote on devolution.
We only want the rights everyone else has.

But to the point.
One can hear people denying that there is an "English national identity". After all, there are so many different cultures that make up the country, so many different national origins, they aren't really one nation, are they?
Are these commentators on another planet? Does anyone say that the Welsh are a single culture? Are the Lowland Scots the same as the Highlanders? Blue and Green Glaswegians wouldn't agree they are the same. And the Northern Irish?

The fact is - and it's a remarkable fact that this is rarely noted - that the English are what they are simply because we all live here.
There is no requirement to be of "English blood". (Unlike Germany, which still has a race-based nationality).
Just one simple question: are you born here? Makes you English.
Or, you voluntarily come to live here and to submit to our laws.

England is here, and will not go away. And don't forget that.

Years ago, I lived abroad and had to fill in official forms.
Address: easy - "United Kingdom".
Nationality: easy - British passport, so "British".
Country of birth: I often paused and wondered what to put. Neither of the above options seemed right. Eventually I settled on "England", but did wonder what the significance was.

Now I know. England is home, England is the source of our liberties and traditions and rights. England is forever.

Saturday 2 June 2007

Protestantism & wealth

http://andrewleigh.com/?p=1477

The above link connects to a study which queries the basis of the "Protestant ethic" explanation for wealth creationm expounded by Max Weber.
Briefly, this theory states that the teachings of Protestantism created the conditions for economic growth. Protestantism recommends that we be thrifty, careful with money, scorning adornment and superficial conspicuous consumption; that we shoudl save for the future, just as we look to the life after death.
A sub-set of the theory states that Calvinism in particular taught that only the elect go to heaven, but nobody knows who they are. Because God blesses those who believe in him, then your wealth indicates how blessed you are and is an indicator of whether you are one of the elect. So Calvinists become wealthy.
The theory isn't popular nowadays, except the bit about wealth being an indicator of faith. The "prosperity Gospel" teachers say that if you believe faithfully then you will receive all manner of good things, which they interpret as being large lumps of money. In particular, if you give to the church (i.e., them) then you will certainly receive ten times that much back.
Yes, they are disgraceful scum. Not a very good reading of the New Testament, or the prophets of the OT either, come to that. Never heard about the "eye of the needle" story, clearly.
But that's another story.

Another flaw in the Weber thesis is evident nowadays. There's a dstinct lack of Calvinism in the highly wealthy Shintoist Japanese. The Jews in business and the professions, and in Israel, are not famous for being Protestants and the religion doesn't even teach life after death. Indians used not to care about wealth because it was all the result of previous lives. Moslems - well, if you can find a reason why Islam doesn't have a good track record in wealth creation, you're cleverer than me.

Back to the link.
The link above identifies the connection between Protestantism and prosperity, but sees the causality elsewhere. It's the focus on literacy that made the difference. Because Protestants are taught to study the Bible, they had to learn to read. So there is a correlation between literacy and wealth. (Though numeracy is probably just as important. If a worker can't count, how does he check his overtime?)
And not mentioned is another spin-off from religion. If you study the Bible and stand up for the interpretation, you develop an independent attitude. You are not subservient to another's view, and not dependent on him. This may breed an entrepreneurial attitude.
Only a theory, no evidence for it.

Friday 1 June 2007

Economic lunacy

Is the President of Iran an agent of the Mossad?

During a recent economic crisis, he telephoned from germany to give the solution to the crisis, involving inflation hitting 15%.

He ordered the banks to cut interest rates to 12%.

If that continues, there will be more inflation, a fall in the value of the currency, more expensive imports and a squeeze on living standards for the poor. Who voted for the President.

If there is an economic disaster, in a volatile country, can the nuclear programme continue?

So: is he an agent of Israel?