R M Cullen MD MSc MFM BA DipStats DipProfEthics

Midinomics

definition and motivation

Midinomics is the study of communities within macro-economies.

My interest is in the development of community level structures, in communities of relative economic deprivation, which increase both the average income of members of that community and the overall wealth of that community

I am an unashamedly left wing economist.

One of the features of developed capitalist economies is the segregation of capital. At one extreme are the excessively wealthy, a small group within which an inordinate amount of wealth is concentrated. Then there is the large middle class of families who own their homes, have stable employment, and are able to save even if they choose otherwise. At the other extreme is an underclass - commonly ethnic or religous minorities living in inferior, rented accommodation, in low paid jobs or dependent on welfare, over-represented as both perpetrators and victims of crime, with low levels of educational achievement, inferior health status, and reduced life expectancy.

This economic underclass represents the 'distribution problem'. In capitalist free market economies most people would not be indifferent as to whom their parents were (assuming they could choose before birth) This is because there is an underclass whose standard of living is unacceptably low when judged against what the average person in that country would accept as a minimum for him or herself. And that is the problem.

The goal of my research in this area has been to determine if there are any structural solutions to this problem.

In absolute terms, the person in a country with a per-capita GDP of, say, USD20,000 per year, who is poorer than 90% of her fellow residents, has a much higher standard of living than her ancestors of 300 years ago. She is also much better off than the average person in a country with a per capital GDP of less than USD2,000 per annum. But that is no solution to the distribution problem.

One approach, the historical approach, to this problem is to blame the poor for being poor. "Anyone can make it if they are are prepared to work hard. The poor are poor because of the choices they make." If that were true, then millions of African women would be millionaires and not surviving on one or two dollars a day.

However, this victim blaming has become embedded in political discourse. The ideology today is that the role of government, with regard to poverty, is to make it possible for those who so aspire to improve their lot. The mantra is personal responsibility. So it is up to the individual to get the best education, to save for a house deposit, to save for retirement, and so on.

The agenda of the right is to ensure that the problems of rort and fraud are perceived as embedded features of the welfare system, even when the evidence available to those same politicians does not support such a conclusion.

At the same time, the centre right and the right do not pursue policies which actually lift the educational achievement of the less well off, or which make home ownership a realistic goal for the poor.

The result is that the poor see no way of advancing themselves, while the well off believe that the playing field is level.

Indeed the attitude of the well off to the welfare system is hypocritical. Accommodation supplements do not benefit the poor. They benefit the well off who own investment properties and have the government, for which they voted, paying off the mortgage. Accommodation supplements contribute to house price inflation and move home ownership further from the reach of those on lower than average incomes. Similarly, government payments to doctors in private practice enrich those doctors, not the poor. The ultimate beneficiaries of welfare payments are those who own the companies where those payments are spent.

This cartoon, by Sharon Murdoch appeared in the Sunday Star Times Feb 14, 2015

introduction to midinomics
a modern socialist community
paths to a modern socialist community