Education, property and caste

Taken from a comment on feanelwa's journal that kind of grew, and grew, and threatened to hijack a post about middle-class mediocrity and student loans that's well worth reading without yours truly barging in.

One of the things we've missed, as it crept up on us this last decade or so, is the retreat from the 'home-owning democracy' - the egalitarian society in which we all own land and houses, and all have capital and thus have a stake in the second pillar of a free-market capitalist democracy.*



Most of this is due to liberalised lending criteria and to low interest rates - they do not make houses more affordable, because in a market with limited supply the low interest rates initially reduce the servicing costs but rapidly raise the amount that people are prepared to borrow... Providing they are creditworthy. And, as the price of a house becomes an ever-larger multiple of the average wage, it becomes an impossible goal for the average worker. You simply cannot form that much capital in one lifetime with the average wage. Or even on a good white-collar salary.

If it can't be achieved in one lifetime, then we're left with the unpalatable truth that, if you weren't born with capital, you'll live and die without it, taking second place to an hereditary aristocracy.

Which is exactly what we have in London now: a generation of young professional people - never mind the manual workers - who will always live in rented accommodation. Nice rentals, to be sure. But it isn't home-ownership: someone else owns the asset, and someone else is banking the rent.

If the house is someone else's, it isn't suitable collateral for loans - entrepreneurship will rapidly become class-based too, with the propertied classes risking all on a funded venture with offices and employees and a year's cashflow, and the lower orders forever scrambling to get the invoices on their one-man business paid in before the bills go out - never investing, never expanding, never able to take the risks in business which their better-funded competitors can seize and tame for higher profits.

That's not quite the class-free enterprise economy we're supposed to have.

What I find offensive is that education has now collapsed into a class-based system too. Really, we could save a lot of bother by asking: "How much does your father earn" at age three and allocate the money and the teaching resources there and then. There is no social mobility through education today: it will be a generation before the sink comprehensives give a fair run at university to pupils with the ability; and at the other end of the social scale we have an equally inequitable guarantee that children from wealthy parents will get three 'A' grades, a university degree and a cushy white-collar job if their parents spend enough money.

Right now it's possible for money and good schooling to get a child of average intelligence three A grades and an Oxford place. Which is as damaging an inequality as the bar on entrance from those who are left incapable of benefiting from Oxford tuition by the inner-london comprehensives: we're left with educational institutions attempting to create an intellectual elite using economic streaming. Face it, the teachers at Westminster School & King Edward VI^th are better at what they do, for mediocre pupils as well as brilliant ones, than most admissions tutors are at weeding out the sparkling from the merely polished.

So education, at the top end, isn't much of an escalator out of the renting lifestyle, either, even for the brilliant. The evil of student loans isn't that they favour those who are already wealthy, it is that they entrain economic inequalities even at the education stage, further reducing its utility as an engine of social mobility.

This is, of course, irrelevant at the bottom end of the market, where sink schools define an hereditary caste of unskilled and disposable semiliterate casual workers.




* The three pillars or 'stakeholders' are:

1. Workers and consumers (ie: those who serve capital in return for a wage, and are the ultimate purchasers of goods and services);
2. Owners (who own the capital, providing it to enterprises in return for interest or dividends);
3. And the body politic (who must participate in the control mechanisms that define the market, and actively maintain institutions for the common good that do not arise naturally from individual self-interest)