18 November 2019

Labour’s middle class freebies are not ‘progressive’ at all

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Jeremy Corbyn’s Labour like to insist that their policies are progressive, ‘for the many’, not the well-off few.

Looking at what they have offered the electorate so far, that’s a claim which is pretty debatable. First, though we need to distinguish what ‘progressive’ really means.

A Progressive is, roughly speaking, someone who self-declares that they’re going to advance society through the expansion of state power or provision. A Progressive policy is therefore something supported by Progressives, there is no other valid definition. Trade union rights, the NHS and the welfare state might all be considered ‘Progressive policies’. More recently, policies such as abolishing student fees and loans, free broadband, free dental checkups and clearing the oceans of plastic all fit into the ‘Progressive’ basket.

The problem is that progressive has another, more specific, meaning. In economic terms a progressive policy is one which benefits those of lower income more than those of higher. So, when we refer to progressive taxation systems we mean that the average tax rate increases as income does. Average here again has a technical meaning: the portion of a person’s total income paid in taxation, rather than the marginal tax rate on the last unit of it.

This is quite a useful example of the difference between progressive and Progressive. The American federal taxation system, for instance, is markedly more progressive than the Swedish. The average US tax rate rises sharply in a manner which the Swedish one doesn’t. Nor does the US federal government impose VAT, which is one of the more regressive forms of taxation (individual states may have sales taxes, but they are at a much lower rate than VAT).  Despite all that, it is Sweden that is so often cited as the Valhalla of progressivity because of its high tax rates, whereas few on the left would ever cite America as an example to follow.

With this distinction in mind, it’s clear that much of what Labour is promising is not in fact progressive. Those who gain degrees will, on average, earn more over their lives than those without. To offer such qualifications for free, or rather funded from general taxation, is effectively charging the poorer for the gains to the lifetime richer. This is quite clearly a regressive, not progressive, policy.

Free dental checks is another good example. The poor already get free dental care, so giving it to everyone irrespective of income is again spending general tax revenue on those already well off enough to pay for it themselves.

You could make the same argument about the NHS itself. Before the nationalisation of hospital facilities in 1948 – don’t forget the NHS didn’t actually build a new one until 1962 – the poor largely gained their health care through charity. After it the rich gained theirs from the general tax pot. Letting the entire population have tax-funded health care is an article of faith for Progressives, but there’s nothing obviously progressive about it. Nationalising healthcare made it cheaper for those on higher incomes, while the bill was more equally spread.

As for nationalising broadband, that might actually be progressive in the sense that poorer people will get something they previously had to pay for for free. The only problem with the policy is only that it’s a remarkably stupid use of public money. But then, no one ever said that either form of radical policy making had to be sensible.

Of course, there is a reason why Progressive politics has become as it is. There’s not really a working class left in the Marxist sense of there being a proletariat, therefore elections are a battle to offer the middle class as many bungs as possible. That might sound great on a leaflet, promising all and sundry ‘free’ to people who can already afford it – but don’t pretend it’s progressive.

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Tim Worstall works for the Continental Telegraph and the Adam Smith Institute