Canada Fiscal policy

Confused about universality? So are NDP leadership candidates

There was some pretty confused stuff on universality and means-testing during last night’s NDP leadership debate. Here are some thoughts that might help clear things up.

First, Singh’s attack of Caron on means-testing early in the debate was a bit bizarre seeing as both of them have major new means-tested transfers among their policy planks. Caron did a good job in fighting back and hit back at Singh’s move to fold near-universal OAS into a more aggressively targeted benefit. Not a very enlightening exchange.

Not to be outdone, Angus’s attack on Singh at the end of the debate was even more confused. This time, Singh did a good job of defending himself and made a clear argument on the differences between means-tested cash transfers versus universal social programs.

On OAS in particular, Singh is right: not everyone receives it because claw-backs start at $75,000 in income and the benefit is gone for those making roughly $120,000. But Caron is right in that a vast majority of income earners ($120,000 in income lines up with the top 5% of overall tax filers) will get some benefit from the program so it is de facto universal. This makes OAS very different from things like GIS for seniors or WITB for low-wage workers, which phase out much quicker and are targeted at low income folks.

The problem of middle income seniors falling behind is an important one and tied up in so much else about the economy (the decline of unions and pensions; the housing bubble where some have won the lottery and others have not; and so on). The NDP does have to think about what combination of new social programs (pharmacare in particular because it disproportionately helps seniors), expanded public pensions and income transfers will do most to improve people’s lives, and also be a foundation to build on politically—in terms of policy staying power and building winning electoral coalitions.

Economic theory

The facts are capitalist

There has been a curious debate in the past week within the world of economics blogging. It started with a post by Chris House on the contrast between a “well-known liberal bias” within the academy generally and the decidedly more conservative bent of most members of economics departments. House attributes this contrast to a conservative bias in economic facts – by this he means that much of mainstream economic theory agrees with a more right-wing view of the world. Take, for example, the view that minimum wages lower employment or that government regulation has negative effects on business efficiency. Noah Smith answered this  provocation by arguing that the positions taken by most economists are actually closer to the beliefs of the American centre-left, by which he means that much attention is focused on the trade-offs between efficiency and equity. And the debate has moved on from there.

Smith concludes his post by making explicit the key assumption behind both pieces: that there are facts and then there is the ideological perception of those facts – that the facts are in some way neutral, but can conform to one point of view better than another. There is a long line of social theory and philosophy that challenges this assumption of independence. Here, it is tempting to quote Gramsci on ideology, or Foucault on power, or a host of other authors. That would, however, take the conversation into a space completely alien to House and Smith. So nevermind Gramsci, here is mainstream Anglo-American philosopher of science Hilary Putnam on the relation between facts and values:

I argued that the picture of our language in which nothing can be both a fact and value-laden is wholly inadequate and that an enormous amount of our descriptive vocabulary is and has to be ‘entangled’… for example, to draw the distinction between courageous behaviour and behaviour that is merely rash or fool-hardy…depends precisely on being able to acquire a particular evaluative point of view. ‘Valuation’ and ‘description’ are interdependent.