Social mobility and incentives


Gordon Brown said in a keynote speech on Monday:

More people need to adopt the work ethic and aim high in life… We must set a national priority to aggressively and relentlessly develop the potential of the British people.

As economists frequently point out, people respond to incentives. Gordon Brown and the Labour government’s policies over the last eleven years have decreased the incentives for a strong work ethic and given incentives for laziness. It is too easy nowadays to do very little and receive life’s necessities on a silver platter from the government. People who do earn well have to give so much of their income to taxes that there is a continuously smaller reward for work and education compared to that of the welfare state.

For too long, political demagogues in the United Kingdom (and elsewhere) have sought votes by telling the poor that they have no chance because the rich exploit them, that as the “people’s" representative, they’ll make the poor richer by making the rich poorer.

Empirical data shows that poor children who do well in their studies (even in state-schools) and obtain a university education will generally escape poverty. Now the government needs to give people responsibility for their own lives, allowing them to succeed if they do what is necessary, and not giving them a free ride if they do not. If work ethic and ambition “must [be] a national priority," then Mr Brown needs to remove the incentive for laziness and let the incentives inherent in the free market return.