Tuesday, 6 September 2011

Rational Belonging

Kenneth Clarke, the Lord Chancellor, has said that: "The general recipe for a productive member of society is no secret. It has not changed since I was inner-cities minister 25 years ago. It's about having a job, a strong family, a decent education and beneath it all, an attitude that shares in the values of mainstream society. What is different now is that a growing minority of people in our nation lack all of those things and indeed, have substituted an inflated sense of expectations for a commitment to hard graft." (The Guardian, 6th September 2011)

I dimly remember from studying economics at university that there is a creature called "the rational egoist". Broadly, this creature serves his own interest with steely logic. He will take risks if the prospect of gain is proportionate to them, and avoid them if he stands a significant chance of making things worse for himself. He is not altruistic unless other people can see, think the better of him, and improve his chances of future benefit through their goodwill. Goodwill is something that can be paid for. He is prepared to trade in both love and money - although his love is not really worth having. He is not an attractive creature, but he is clever enough to make it look as if he is, until he has made enough. The trouble is, enough is never enough, and tomorrow never comes.

A lot of economic theory is based on this model, which suggests that with infinite resources, supply will rise to meet demand, and with finite resources, prices will rise to match supply.

And, of course, it doesn't work. People's tastes and priorites may be quite out of step with their financial worth. The woman who lives in a draughty room of her mansion rather than selling up and going somewhere more comfortable is not a rational egoist. The man who is offered a job that pays more, but stays with the one he actually enjoys, is not a rational egoist. Parents who would lay down their own lives to save their children, are not rational egoists. The person who keeps a cat when there is no mouse problem, or a dog when there is no cat problem, is not a rational egoist. The art-lover or gardener or hobbyist who invests money in things that will never bring any return at all, is not a rational egoist.

And there is the heart of the economist's problem - love cannot be priced up, budgeted for, or predicted. And when we have love, enough may well be enough.

So, returning to Lord Chancellor Clarke's analysis, what are we to do with the irrational egoists who brought chaos to our streets, and wrought punishment on themselves? Presumably not the same brutal punishment wrought on those who bankrupted the economy and expected (correctly) to be bailed out?

It is relatively easy, in economic terms, to create jobs. But jobs worth having are another matter. Stable families are a matter beyond even that. Whether there is any real political commitment to closing the gap between rich and poor for the sake of society in general, I rather doubt. Mr Blair - whatever happened to him? - used to talk about a stakeholder society. Or was it Sir John Major? Or even Lady Thatcher? They blur in my mind. It seems to me that a decent stake in society is a home of your own, a job worth doing, an education for your children, and freedom from the fear of illness that you can't afford. Doesn't seem a lot to ask in the country that started the Industrial Revolution.

People with something to lose don't start riots.


  1. Thanks Richard, for an eloquent analysis of the situation. I've not had any academic education, so have never heard of a Rational Egoist, but I suspect that you are right about this.

    In my view, that's a fair description of most politicians, who in the vernacular are so often found to be barefaced or two faced liars and cheats.

    Why is it that in this country, we seem unable to elect honest politicians, and those we do get side lined, just thinking of Frank Field and even Anne Widdecombe. Perhaps there is some weakness in the national character that leaves us susceptible to charmers/bluffers/liars, and we get what we deserve.

    Even a revolution wouldn't solve it. A few firing squads though might help.

  2. Curiously, for a conviction socialist, I actually warmed far more to Sir Malcolm Rifkind to Frank Field, when we had parish lunches in Chelsea. They say you get the politicians you deserve. And if the media doesn't stop nosing up scandal and unhappiness which has no relevance to their work for us, then our politicians will become more and more grey