The charity conundrum

I puzzled for a while now about how differently I react to requests for charity. Money that is to you and me. It's probably fair to say that I have always given generously and on a regular basis to organisations such as Unicef and others. In fact, about 15 years ago I promised to myself always to give about 2 percent of my after tax income to charitable causes. So far, I kept that promise, with Unicef the most prominent benificiary over the years. One of the most satisfying instances of giving for me was with the Guardian scheme in Katine, Uganda, where every pound was matched by Barclays Bank for five years (check it out HERE, it was an amazing project!). The money was spent on training programmes for schools, midwives and health visitors in several villages in and around Katine and the Guardian and the charity reported annually about progress and difficulties. I enjoyed giving to it since I felt it could make a difference and I had a sense that there are real people at the end of this programme. Also, I thought the money would not be spent on temporary disaster relief but on permenantly building up the community resilience to problems. Sadly the programme ended after five years, perhaps a sign of how effective it has been in improving people's lives there.

This mix of motifs and incentives also lies at the heart of what puzzles me about charitable giving. What attracted me to the Katine programme was clearly the ability to see firsthand that there were actual people at the receiving end, that the money was used to provide them with help to help themselves, and that there was significant oversight and reporting on progress made.

Cut to a street in Liverpool or London in 2017 where I am being approached by someone who asks for a pound. No matter how desperate, homeless or not, I simply would not get my wallet out (before you set off in indignation let me add, I used to give on the street as well). Worse, when being confronted by images of poverty in the UK, homelessness and the like, I feel no pull on the heart strings.

Copyright: Peter Shelomovskiy

Which one would you give to? 

Copyright: Telegraph

So why is this? There is nothing more concrete and immediate than a person standing in front of you asking for money. I know where the money would go and how it would be used if I was to give any. Why don't I feel the same generosity when I am confronted by the signs of UK poverty as it is when I see it in far away countries?

I think it has something to do with the differentials in opportunities between both contexts. I recognise that people can get into all sorts of difficult situations where they need help, either from their own family and friends or from the local community. However, there is a crucial difference between the two environments. In the UK, whatever you think about injustices built into the system there are enormous opportunities for education, training and work with a basic safety net that includes homeless shelters. This highlights, rightly or wrongly, the role of personal responsibility in creating your own destiny. It emphasises how much we are all in the driving seat when it comes to forging our own future.

This heightened role of personal responsibility carries risks of failure for those who struggle to reconcile personal obligations with individual behaviour. In those cases, we are all called upon to help. But the help should be provided, in my mind, by (local) government, not by individual charity.

The situation of a child (or adult for that matter) in a village in Uganda is considerably different. It's position vis-a-vis opportunities is hampered by ineffective or non-existent government services in the first place, due to state failure or corruption. Here it does not matter whether or not anybody accepts responsibility for their own future. The barriers are simply too great to overcome. Charity in this context is mitigating state failures to ensure that they do not translate into personal tragedies.

I acknowledge that there are structural injustices in both contexts which conspire to hold people back. Yet, the fundamental difference remains: where states function well, opportunities, however small, exist. None of this means that we should be heartless or cold towards personal suffering wherever it occurs. It does however tell us something about our own agency and how we behave in the face of need. In the UK, as largely in the Western world, we mitigate need through government and its myriad organisations, stressing the sense of personal responsibility. In the developing world we recognise that the failure of government itself is the main cause of poverty and the lack of opportunities. Personal responsibility does not take you far where state institutions have broken down and do not provide the basic infrastructure to allow you to thrive as a human being. It's there that we are all called upon to help.

How charitable is the Church of England?

The Archbishop of Canterbury has recently been embarrassed by the financial investments of his own church. While he was ranting against Wonga, the high interest pay day lender, it was revealed that his own church had invested in Wonga for a handsome return.

The church claims to have a charitable function in society and as its religious purpose recedes increasingly into the background, it is the church’s work for the poor that becomes the bedrock of its moral impetus. But what about its charitable purpose? How effective is it? 

Hypocrite or saviour of the poor?

The short answer is: we dont know. Neither the Anglican Church nor the Catholic Church ever open their books to public scrutiny to allow us to test their claim to help the poor. Whilst every other charitable organisation in the country is obligated to detail exactly how much they spend on fund raising, staff, and core charitable programmes, the churches refuse to publish these data. 

So, strictly speaking we have actually no evidence whatsoever where the money goes that we drop into the collection box at the church's exit. For all we know, they may just as well use it to pay for their gold-embroidered frocks and man-servants at the Bishop’s Palace. 

So, besides its important role to provide pastoral care, we dont know much about how effective the church is as a charitable organisation. Their charitable status hails from a time when we granted any religious organisation a charitable motivation per se, but those times are over. In fact, it has been these very established churches that have fought tooth and nail against other religious organisations to be granted the same privileges (think of Anglican Bishops sitting in the House of Lords for no apparent reason or justification but that it is an 'established church'). 

It is about time we know more about how effective the Anglican and the Catholic Church are in dispensing aid to the poor. The first step would be to open their books to public scrutiny. By becoming more transparent in financial affairs, the Archbishop Welby may just make the transformation from hypocrite to moral crusader. Perhaps. 

What happened to Liverpool?

About three weeks ago, I moved to Liverpool. Leaving Cardiff was difficult since I have lived there for more than a decade. I only say this because my affection for Cardiff may cloud my judgement a tad. My first impression of Liverpool goes back to the year 2008, when it was European City of Culture. I visited the city and really enjoyed my stay. I don't remember much about where I stayed but the city centre seemed vibrant and clean.

My second impression couldn't be more different. When I moved here in April this year, I was genuinely shocked. The areas to the north of the city centre are mainly rows of boarded up houses or large free spaces without any urban feel to it whatsoever. I ended up taking a place in Kirkdale, just around the corner from Everton (Goodison stadium) and nothing I have seen in the UK or anywhere else in Europe in fact, prepared me for this. There is practically no community centre left in Kirkdale. The area is marked by large open spaces or newly built houses (the usual boxy, faintly bucolic style that passes as homeliness in Britain), with broad dual lane avenues running through the middle of it.

The former Police and Post Station in Kirkdale

There are hints of former glory which produce a pang of nostalgia. Some of the corners still have grand brick buildings with intricate ornate brick work, but the buildings themselves are either run down, burned out or simply left to rot. They are also typically standing alone with no adjacent buildings, adding to the feeling that this is not an urban place at all. It is devastation on a grand scale. But how did this happen? And why? What happened here? I am at a loss to explain it. I have never seen anything like this level of deprivation and devastation in an urban space in the UK. It almost seems as if this is a city in eternal decline.

Why higher taxes wont help the poor

About two weeks ago Dave and Angela Dawes from Cambridgeshire won the lottery. The final amount they bagged was more than 101 million pound sterling. It made them one of the richest couples in the UK. It certainly, in case you wondered, put them into the top 1% of people who are called by the protesters outside St Paul’s the ‘filthy rich’. 

When asked about what they would do with the money Dave Dawes, a Chelsea fan, mentioned that they may buy a house near the Chelsea football ground. Chances are that, once they have spent their win, or invested it somewhere, they will not have gained entry to what Pareto long time ago called ‘the elite’. As they may or may not find out, to get access to power, money is in fact of little consequence. 

Presumably, that is not what the protesters outside St Paul’s think. Their anger is firmly targeted at the inequality that comes with income. We have been here before. In 1974 the Labour government under Harold Wilson identified the root cause of all social injustice: personal riches. It took to tax everyone into oblivion. The top rate of income tax reached the dizzying height of 83% with a marginal top rate of personal income tax of 98% including investments. 

While this meant that government expanded exponentially, income redistribution to the poorest in society (in the age before tax credits) did not improve. In fact social mobility was affected very little. The main beneficiaries were people in the middle income bracket who gained big pay rises and generous pension settlements through their employment in the public sector. 

What is so puzzling about the obsession of the ‘Occupy London’ campaign with money is that taxes as a primary mechanism to transform society have long failed to show any results. Income inequality may be bad or good for society, taxing the super rich however does not tilt the balance of power in favour of the poor. 

Marx knew a thing or two about this. He had very little interest in money as such; the cause of power imbalances, so he argued, was ownership of means of production. In our times, you may call this access to resources, educational, economic and social. They’re the things that make a difference to your chances in life as you grow up, and the record of any UK government, Labour or Tory, is pretty bad at transforming the life chances of the bottom rank. 

Top schools and universities in the UK are still fiendishly out of reach for ordinary people, social networking amongst the country’s elite still significantly contributes to the chances you have in landing a plum job in the city or in government, and with the banking sector ever more reluctant to lend money, establishing a business (still the most important route out of poverty) is near impossible. 

So where does that leave the ‘Occupy London’ campaign? Their ignorance of the Marxist critique of capitalism is mind-boggling. Marx was full of disdain for ‘re-distributive policies’. He clearly saw that any preoccupation with income and taxes is likely to fail to make any significant dent in the distribution of economic, social and political power. And he was also (famously) critical of any moral case for re-distribution of income. Taxing the ‘rich’ may conspicuously be in line with our immediate sentiments of equality, yet, he was convinced,  it would leave the fundamental iniquities in place. So whether or not the ‘Occupy London’ campaign will be successful in making the case for more taxes, chances are it wont change a thing for the bottom 1 per cent of this country. 

Does inequality make sick?

Tony Blair was famously 'not bothered' about the super rich. However, more recently, the Labour Party has found its passion for a more equal income structure. There have also been some academics who argued for a while that there is a link between income inequality and health (The Spirit Level: why equality is better for everyone by Richard Wilkinso, Kate Pickett). In other words, they claim that there is evidence that the bigger the gap between top and bottom earners in terms of take home pay, the less healthy a society is. Health is often measured by morbidity, i.e. incidences of ill-health.

While for the Labour Party this new agenda may be prompted by its desperate search for its left-leaning voters, the case of academics is more puzzling. I believe there are some problems with their argument and here is why.

First, the evidence available is not in their favour. The Agency for Statistics in Germany has just released the figures of morbidity for the German states. The stats make interesting reading. Hamburg, Bremen and Bavaria, all states with the highest income gap, have the best population health. Thuringia and Saxony, states with the smallest income gap (half that of Bavaria), have the worst health outcomes for their populations.

So the evidence is at least contradictory. More importantly, however, there is, second, another problem with the supposed link between income inequality and health.

There has always been clear evidence that health is influenced by factors (amongst others) such as poverty and deprivation, access to prevention programmes, and health care quality. Now, the income gap says little about poverty. In fact, states with a large income gap between top and bottom earners might still have earners at the bottom of the scale that earn far more than those at the top of the scale in other states that have a small income gap.

In other words, income gap does not mean poverty. It's a relative measure of how far top and bottom are apart, which leaves the possibility (for example Hamburg), that the bottom earners are still better off than those in other areas.

Also, much has been made of the bad health outcomes figures of the US. However the figures there are skewed. Until recently, a small but sizeable minority of people had not access to health care at all, except for emergency care. It is difficult to see how this could NOT influence health outcomes. Early detection and treatment are a central pillar of good health care.

So, the argument will continue, but so far I am unconvinced that we have incontrovertible evidence that the income gap itself makes people sick.