Friday, 4 July 2008

Did Thatcher make the underclass?

In an interesting response to a post below, John B replied:
But denying that the underclass *originally arose* between 1979-97 is stark raving mad
The concept of the underclass was originally introduced by Charles Murray in the US. He published The emerging British underclass in 1990 in which he identified a nascent British underclass. Writing for Civitas in 2001 he charted the progress of the underclass in the UK. Whilst there is no doubt that an underclass has grown since the 1970s, I think we must be clear in distinguishing between the growth of an underclass and the effects of 'sticky' structural unemployment.

Murray links three factors to define the growth of the underclass; unemployment, violent crime and illegitimate births. He hypothesises that the proximate 'cause' of an underclass is the lack of socialisation resulting from absent fathers. This lack of socialisation is manifested by 'voluntary' unemployment, particularly in the under 30s, and a rise in violent crime.

Britain's 'tin bashing' industries grew largely in north Britain during the Industrial Revolution because coal, limestone, iron ore and labour were available there. By the closing decades of the 20th century, demand had declined, production had shifted abroad and the world was shifting economically. Governments could artificially prolong the life of dying industries by direct or indirect tax subsidies, or artificially maintaining low exchange rates. None of which are in the nation's long-term interests; sooner or later the bullet had to be bitten. The social costs of this adjustment will always be high - workers unemployed, the wealth of dependent communities slashed. How rapidly the structural unemployment so caused adjusts, and to what extent the social costs of transition are eased, are inter-related to some extent. Generous welfare replacement will cause structural unemployment to be 'sticky', and long-term unemployment to grow. Those unfortunate workers unable or unwilling to move to find work, or to re-skill, may become poor. But it doesn't make them part of the underclass.

We have 5m adults of working age out of work at a time when demand deficient unemployment should have been minimal, and when the adjustments of structural unemployment from the 80s, nearly 30 years ago, should have faded. The factors that determine high levels of frictional unemployment are far less prevalent now than they were 10, 20 or 30 years ago. The economic causes of involuntary unemployment are not significant.

The numbers of 'NEETS' - young people not in education, employment or training, and the drop-out rate of the young from employment markets marks a significant increase in voluntary unemployment. At the same time illegitimate births have soared; 27% of white children and a startling 67% of afro-Carribbean kids are growing up without their biological father. At the same time violent crime has become endemic. This is the underclass that Murray defines.

If Murray is right, and bastardy is the proximate cause of the underclass, we need to ask if Thatcher was responsible for the rise in illegitimacy. Well, in a curious way she might have been. "The war between the family and the State is very old" wrote Robert Nisbet "when one is strong the other is generally weak". Thatcher departed from the advice of gurus such as Hayek and Ralph Harris, and the period from 1979 marks the growth of a Leviathan central State, which Nisbet contends is at the expense of the authority of the family. And bastardy has certainly grown rapidly since 1979 (from Murray):

I also think John B has a point about oil revenues; we have used them to ease the social shock of economic structural adjustment, and as a result welfare dependency has increased. But Labour have exacerbated welfare dependency since 1997. And again, not all those who are welfare dependent are members of the underclass. As the Hills Report demonstrated, living in a Council house is a greater determinant of welfare dependency than anything else.

John also comments that
... the suggestion that the Tories, who created welfare-dependent communities, have any desire, intention or plan to end them is simply hilarious.
Ah, well we'll have to wait and see, won't we?


John B said...

Interesting piece, thanks for the response. I'm sceptical about Murray's single-parenthood theories (correlation != causation, etc), given the number of dependent variables, but a convincing refutation is going to take rather longer than a blog comment ;-)

One bit I'm pretty certain doesn't follow, though:

"As the Hills Report demonstrated, living in a Council house is a greater determinant of welfare dependency than anything else."

That may be true now, since council housing has become last-resort rather than general. However, I think the parents of the kids I grew up who had decent working-class jobs and who lived in council houses at the beginning of the 80s would have been deeply and rightly offended to be accused of welfare dependency.

Blue Eyes said...

The Tories better have the intention to start sorting out the welfare trap because it is *the* underlying issue which is implicated in all the other things which the new government will have to address: crime, productivity, housing, etc..

I said...

You should cross reference this to Hatfield Girl's recent posting on all this:

The debate is getting interesting.

hatfield girl said...

Sackerson on Bearwatch has recent posts on the destructive cheap alcohol culture too. In previous centuries such circumstances threw up great social reformers, now there is only the regime, determined to be the sole provider in the client state and excluding such possibilities.