No it’s not an investment

The IFS is focused on the idea that taxpayers’ money is being wasted on childcare. What the thinktank doesn’t seem to understand is that this wise and sensible investment is actually generating taxpayers, now and for the future.

Whatever the rhetoric here this is still current spending. It could even be desirable current spending, something that a decent society does. But it is still current spending, not investment.

42 thoughts on “No it’s not an investment”

  1. The phrase “generating taxpayers” brings to mind that scene in The Matrix when Neo wakes up in a tank of translucent ooze to find himself literally plugged in to a machine which, alongside countless others, is farming and harvesting him.

  2. A business would happily Capitalise stuff like this as an Intangible Asset if it was confident that such an Asset would be Revenue generating over the life of that Asset.

  3. So Much for Subtlety

    What the thinktank doesn’t seem to understand is that this wise and sensible investment is actually generating taxpayers, now and for the future.

    I take it the hidden subtext is much the same as in America – if we take the children of the underclass away from their mothers and give them to some nice middle class girl called Jacinta they won’t grow up to be feral. Which is to say, if we take the Black children of the underclass and give them to nice White middle class girls.

    This has to be true given they are not talking about the benefits of *present* tax payers (i.e. the mothers who would be in the work force) but *future* ones (i.e. said ferals once they have grown up).

    Which is all well and nice if a tad offensive. Except there is no evidence for it. As bad as underclass mothers are, taking their children away from them does not teach them middle class values, but weakens their faith in human relations. What said underclass children need is a mother who is committed to being there for them 24/7.

  4. I suppose it could be considered a kind of investment from the point of view of a tax farmer. It isn’t an investment from the point of view of the cows though.

  5. So Much for Subtlety

    That article is worse than Ms Orr’s usual tripe.

    Plenty of women work while they have small children, even though it doesn’t make any short-term financial sense at all. Why? Because they know that the alternative – taking a break from work – would almost certainly blow a long-term hole in their career and therefore in their future financial prospects.

    That is not the issue though is it? Why should I care that woman keeps her options open? Why should I be forced to pay for her career success? She is the main beneficiary of her career, indeed the only beneficiary, so she ought to pay for it.

    The idea that a couple of hours of childcare a day is economically wasted on you because you haven’t bounded straight off to work is risible.

    Then make a case for it being worth the rest of us paying for.

    It’s easy, when you’re looking after a baby, to start feeling that your life is not your own.

    Tough. If you can’t behave like a grown up and deal with your own sh!t don’t have children.

    Taking a small amount of time to work out who you now are, and what you want to do next, is hardly a crime.

    No it is not a crime. It is a self-indulgence.

    Nor is finding that, for the first time in three years, you have time to paint the living room or pluck your eyebrows. Having re-established some control in their lives and some confidence in themselves, these parents may yet sally forth into the employment market in much more positive shape.

    They may. They may not. Either way why should I give a f**k much less be forced to pay for it? People without control or confidence should not be having children to start with, but if they do, taking my money and giving it to these pathetic excuses for adults is not a good idea.

    The decision to have children never makes financial sense, not on a personal level. It certainly does on a societal level, though. Populations in decline mean economies in decline, and people becoming elderly without young people supporting their needs.

    So there’s a solution to that – Kinder, Küche, Kirche. Not further devaluing of family life and weakening of the bond between children and their mothers.

    Osborne is happy to see more women in work because he knows that women in work have been making a huge contribution to economic growth in Britain for half a century.

    It does not look like it to me. Women are concentrated in sectors that are mainly useless like Human Resource Departments. Although it is nice that so many of them can type. Where they control bureaucracies those institutions are failing. We would be better off if they stayed home on the whole I think.

    Much of the £800m that the IFS would have us believe is squandered has in fact been spent on letting all mothers know that the state respects and supports their wish to work for a living, enough to offer practical and financial support in the early years.

    This is so illogical I hardly know where to begin. There is no contradiction between being a gesture to let women know the State respects their wish to pluck their eyebrows and it also being a complete waste. Is this the best she can do?

    What the thinktank doesn’t seem to understand is that this wise and sensible investment is actually generating taxpayers, now and for the future.

    Paying for a token amount of child care will do nothing to push up the birthrate. The future taxpayers of Britain will all be speaking Urdu and Ms Orr’s suggestions will do nothing to slow that trend.

  6. This is what is wrong with the Guardian left.

    A policy was set up to help working women. It turns out that most of the money is being spent on non working women so the policy has failed – it isn’t helping working women.

    Separately it may or may not be a good idea to provide free childcare to non-working women, but that policy needs to be discussed on its merits and financed separately. By conflating the two issues we end up with waste and confusion.

  7. SMFS,

    You must be a particularly low-capability failed white male to have to blame everyone but yourself so vehemently and unrelentlingly for your own inadequacy complex.

  8. So when are you joining the Taliban, then, SMFS? It’s clearly your natural home. Apart from the language, of course. But you should have no problem learning Urdu. After all, a language spoken by inferior races can’t pose serious difficulties for a brilliant white male like you. Who knows, you could even teach the Taliban a better way – speaking English could help them take over the world. Good grief.

  9. So Much for Subtlety

    Bloke in Germany – “You must be a particularly low-capability failed white male to have to blame everyone but yourself so vehemently and unrelentlingly for your own inadequacy complex.”

    Sure. But at least I am capable of constructing an argument rather than resorting to personal insult.

    Frances Coppola – “So when are you joining the Taliban, then, SMFS? It’s clearly your natural home.”

    The sad thing is that you are capable of doing better than this and I do not need to point out the vast middle ground between stoning rape victims to death and pointing out that children are better off with their mothers at home.

    Nor do I need to point out what a massive logical failure it is to pretend that middle ground does not exist.

    You don’t like my views? Fine. I doubt either of us will lose sleep over it. But it is your credibility you destroy with replies like that. Especially as mothers consistently report wanting to spend more time with their children. I expect that a lot of government policy is written by people like Simone de Beauvoir who said women couldn’t be allowed that choice between too many would take it.

  10. The Laughing Cavalier

    Calling current spending “investment” was a trick by the madman Gordon Brown who hoped that renaming his irresponsible spree would make it respectable.

  11. So the current score is: we must pay more in child welfare to boost the birth rate and help society, but humans are a plague on Gaia so we must reduce the birthrate until the population reaches a ‘sustainable’ level.

    Would this be a fair summary of Guardian views?

  12. @BiG / Frances

    Why not explain where he’s wrong?

    I think he’s right about some stuff, wrong about other bits eg

    “This has to be true given they are not talking about the benefits of *present* tax payers (i.e. the mothers who would be in the work force) but *future* ones”

    Whereas Orr clearly says:

    “The IFS is focused on the idea that taxpayers’ money is being wasted on childcare. What the thinktank doesn’t seem to understand is that this wise and sensible investment is actually generating taxpayers, now and for the future.

  13. “Which is to say, if we take the Black children of the underclass and give them to nice White middle class girls.”

    “The future taxpayers of Britain will all be speaking Urdu ”

    “Women are concentrated in sectors that are mainly useless like Human Resource Departments. Although it is nice that so many of them can type. Where they control bureaucracies those institutions are failing. We would be better off if they stayed home on the whole I think”

    ” Kinder, Küche, Kirche.”

  14. Children being future taxpayers? The evidence does suggest some will be a net drain on the economy (born disabled, becoming disabled later, long term illness, long term unemployment etc) – some will become taxpayers, some will not.
    Some will become criminals – is that also a result of this ‘investment’? What other sub optimal results of this ‘investment’ will there be?

  15. Pretty certain subsidising the results of a private parties sexual habits is not something a decent society does.
    Want children, pay for them yourself.

  16. SMFS,

    “It does not look like it to me. Women are concentrated in sectors that are mainly useless like Human Resource Departments. Although it is nice that so many of them can type. Where they control bureaucracies those institutions are failing. We would be better off if they stayed home on the whole I think.”

    Nonsense. The best software test managers and the best testers I’ve worked with are women. The best translator I’ve dealt with was a woman. The best web designer I’ve worked with is a woman.

  17. An extension of welfare is claimed to reduce welfare dependency, who’d have thought it? Of course – it’s b*llocks.

  18. Isn’t everyone (except perhaps Edward Lud) missing the point that those who talk about ‘creating taxpayers’ should probably be introduced to a length of stout rope before they become even more dangerous? Nobody aspires to being a taxpayer, we are forced into it by the government.

    And, as we all know around here, it isn’t by paying taxes that we contribute to society.

  19. Interested,

    FWIW I happen to think that Ms Orr is talking a fair amount of nonsense. But SMFS is talking far more nonsense. See the responses from others on this thread, such as BIG and The Stigler. I don’t think I need to say more.

  20. SMFS,

    The Taliban’s ideological position is that the role of women is to stay at home and look after their husbands and children. In what way does this differ from your advocacy of “Kinder, Kirche, Kuche”?

    You say that many women would like to spend more time at home with their children. Very true. But Ms. Orr says that many women would like remain in the workforce, because children are only small for a little while but the damage done to women’s careers and earning potential by taking time out to care for small children is permanent. This is also true. Rather than addressing this, your response is to assert that women don’t do anything useful in the workforce anyway so they might as well stay at home. I would venture to suggest that there are thousands of employers who would disagree with you. And in the end, their views are far more important than yours. Fortunately.

  21. Strange thread, this one. Are children investments or pets?

    Orr was only making a modest proposal, that the taxpayer should subsidise motherhood a bit. Seems OK to me, so long as it’s not paid so much as to be a career choice.

    (BTW, SMFS, I hope that if the worst comes I’ll be looked after by a nice Urdu speaking nurse rather than have to recall my kids from Silicon Valley or wherever they’ve got to by then.)

  22. Orr was only making a modest proposal, that the taxpayer should subsidise motherhood a bit.
    But why should they do so?
    I make all sorts of personal decisions, and generally they involve costs and benefits to me – why don’t I get to transfer some of those costs to the taxpayer? Why does this particular personal decision deserve subsidy?
    The only economic rationale for third-party childcare is if the lower income parent in the family makes enough (which in a free employment market is shorthand for “adds sufficient economic value”) to cover the costs of having a lower-paid person (adds less economic value) supplying childcare services. In that case, the supposed problem takes care of itself, doesn’t it? If the lower income parent doesn’t add that much value, then as a society we are better off if they care for their own children. This frees the resources that would otherwise be used to provide third-party care to seek their own highest rewards.

  23. Most people on the thread seem to have departed from Tim’s point that this is current spending to argue about whether or not it is desirable spending.
    So I am going to say that Tim is right and Ms Orr is wrong.
    Then I am going to say that Ms Orr describing a simple correct calculation as “anal” shows that she doesn’t have an honest answer. The programme is blatantly not cost-effective. If any mother was going to earn £66k, she could pay for 40 hours childcare out of her earnings

  24. @ bif
    You’re presumably not a taxpayer and so have not looked at just how much motherhood is subsidised in the UK. When I was a kid mothers got a few shillings a week for every child after the first and those who took enough years off paid work (as distinct from unpaid work) got a pension based on their husband’s contributions that was indirectly subsidised by bachelors.
    When I was a bachelor I was quite happy to pay my share of the subsidy because if I was paid the same as a married man I had surplus income and could afford it.
    Now, when a bachelor can do all the housework needed in two hours or less a day plus a bit of weekend, mothers get pension credits during the years they are not in paid work, paid maternity leave, child benefit (unless they are higher rate taxpayers), social security if they are single mothers, subsidised childcare, and I forget what else.
    When does this get too much? Well, when single mothers choose to have more children by different fathers just to extend their time on the gravy train before someone asks her to go to work and earn a living. No, I did not get this from the Daily Mail, I got this from moans by an active Socialist about her adopted daughter.
    Subsidies should be targeted at those who need it. I really object to the idea that I should subsidise Nicola Horlick’s nanny. Incidentally, I am in favour of “stay-at-home” mums, although mine didn’t stay at home all the time, she did a vast amount of unpaid voluntary service (to the extent that on a couple of occasions I was conscripted as a temporary acting member of the WRVS, just possible the only teenage boy to be one, when her meals-on-wheels partner was suddenly unable to help). However, I cannot see any economic justification for subsidised childcare for stay-at-home mums unless they are unable to cope due to a disability of either parent or child.

  25. John77, I hesitate to call you insane.
    Have you any idea of the money that needs to be paid out of that £66k every month? The spa, the tennis lessons, the clubs, the gym, the clothing, the makeup, the meals out, the drinks with friends, the mortgage, the holiday each month, the cottage in the Cotswolds, the cars, the travel to work, the sheer number of outfits needed….
    £66k isn’t much. (TIC).

  26. @ dcardno
    Your analysis misses out tax. The problem only sorts itself if *after-tax” income of the newly-available worker covers commuting costs plus the pre-tax cost of childcare.
    You’re right in principle.

  27. John77

    I’m a taxpayer in two jurisdictions, not just one. So yah boo sucks to you!

    Macro issue: should taxpayers fund reproduction?
    In my opinion: yes, a bit
    Micro issue: should taxpayers fund me?
    No.

  28. @bif
    Did you notice “presumably”?
    And have you counted the subsidies in the UK?
    “yes a bit”: I agree with that – and I pay for it.
    BUT what is “a bit”?

  29. Wasn’t the point of subsidising childcare for working mothers that it shifts breeding from the feckless unemployed underclass to the working lower-middle classes?

    The hope being that the next generation is also working lower-middle class rather than feckless unemployed underclass.

    I paraphrase, but I thought that was the aim behind it.

    If successful, that would be an investment from the State’s point of view, shifting future generations from drains on public finances to contributors.

  30. @ Richard
    Ms Orr claims that subsidised childcare helps three times as many non-working mothers as working mothers so it should increase the ratio of feckless unemployed underclass to working lower-middle-class in the next generation.
    “The argument is that only one in six children with free places wouldn’t have been in pre-school had free places not existed. Of these one in six, only one in four of their mothers is working.”
    Is that what you want?
    FYI I would support targeted subsidised childcare but not with Ms Orr’s targets.

  31. These ‘careers’ that women have. Are they all that enjoyable. Does working in a button factory or waiting on tables enrich people?
    Have you explained all this to the ‘diverse’ people who might not agree.
    Do men get a say in this as you churn the money round and round..

  32. So Much for Subtlety

    Frances Coppola – “The Taliban’s ideological position is that the role of women is to stay at home and look after their husbands and children. In what way does this differ from your advocacy of “Kinder, Kirche, Kuche”?”

    The Taliban also believe the world is round. I assume you accept this. Do I need to ask how you differ from the Taliban? Come on, this is just not grown up. Anyone with a shred of decency can see the difference between the way Britain was in the 50s and the Taliban.

    “You say that many women would like to spend more time at home with their children. Very true. But Ms. Orr says that many women would like remain in the workforce, because children are only small for a little while but the damage done to women’s careers and earning potential by taking time out to care for small children is permanent. This is also true. Rather than addressing this, your response is to assert that women don’t do anything useful in the workforce anyway so they might as well stay at home.”

    Actually that is not a fair characterisation of what I said. I did address it. I point out that paying to help women minimise the damage to their careers is a private good. It is to their benefit. Not mine. And so I should not be expected to pay for it. I also assert that on balance we would be better off with few women in the work force but that is another argument.

    “I would venture to suggest that there are thousands of employers who would disagree with you. And in the end, their views are far more important than yours. Fortunately.”

    If their views are so strong on this issue I am sure you would agree with me that Ms Orr’s proposals are not needed then? As those employers will be employing those women anyway.

  33. So Much for Subtlety

    Bloke in Germany

    It is nice you can quote what I said, but it is a pity you still can construct a coherence argument as to why I am wrong. Especially as actually you are not quoting my arguments.

    “Which is to say, if we take the Black children of the underclass and give them to nice White middle class girls.”

    This, for instance, is how I described other people’s views. Not my own.

    “The future taxpayers of Britain will all be speaking Urdu ”

    We are going to gain another 12 million immigrants over the next 20 years. Two thirds of them will be from outside Europe. Britain is poised to over take Russia as Europe’s largest country. The native birth rate is below replacement. I mean, what possible objection can you have to that claim?

    “We would be better off if they stayed home on the whole I think”

    Odd that you are so threatened by an opinion.

    ” Kinder, Küche, Kirche.”

    And what? You’re denying this used to be German policy?

    The Stigler – “Nonsense. The best software test managers and the best testers I’ve worked with are women. The best translator I’ve dealt with was a woman. The best web designer I’ve worked with is a woman.”

    So your anecdote trumps my anecdote? How does that work? Women are a tiny number of people in IT and their numbers are falling. I expect that many of them are also ethnic minorities. They are even less important than their numbers would suggest given it is hard to think of a single one since the Countless Lovelace who has had any impact on the field. The parts of the economy that grow and have the most innovation are invariably those parts dominated by men. Seems an iron law.

    Frances Coppola – “I don’t think I need to say more.”

    And yet you did.

    bloke in france – “Strange thread, this one. Are children investments or pets?”

    I would hope neither. But how should *we* see children, especially other people’s? They are not pets for us. But suppose that we do see them as investments. Then we ought to be asking for the most bang for our buck. The best children going. Now it is hard to say what makes a Darwin or an Einstein. But we can play the averages. And the averages say middle class (and say it very quietly, White) children are vastly better investments than the children of the underclass.

    So if we go down this road, surely we need to be a little bit more eugenical?

    “Orr was only making a modest proposal, that the taxpayer should subsidise motherhood a bit. Seems OK to me, so long as it’s not paid so much as to be a career choice.”

    Subsidise eye brow plucking actually. I am fine with subsidising motherhood as it happens. I do think that future taxpayers are important. But she does not want to subsidise motherhood. She wants all of us to pay for an alternative to motherhood. She wants all of us to pay to get women away from motherhood as fast as possible with the least damage to their careers. How this is in the public interest I cannot see.

    “(BTW, SMFS, I hope that if the worst comes I’ll be looked after by a nice Urdu speaking nurse rather than have to recall my kids from Silicon Valley or wherever they’ve got to by then.)”

    I am not sure I would wish either fate on anyway. But I hope you get what you want. I think one of the reasons that the NHS is full of people dying of thirst is not merely that it is incompetently run – one of the biggest employers of women in the world. I also think that the ethnic differences with the nurses play a role. Why would an Urdu speaking foreign nurse care about a rich old White person who is probably guilty of Imperialism or worse? Let’s hope she is not too educated so that Cultural Marxism does not over ride her basic decency.

  34. Odd how some people seemingly only argue from a position of what benefits/disbenefits them personally.
    If you never use the NHS why pay for it? If childless why bother with paying for someone else’s children to be educated?
    There are choices societies make via their political processes that work across society.Why educate 50% of your population and then say that if society wants another generation to follow on,

  35. “You say that many women would like to spend more time at home with their children. Very true. But Ms. Orr says that many women would like remain in the workforce, because children are only small for a little while but the damage done to women’s careers and earning potential by taking time out to care for small children is permanent. This is also true. Rather than addressing this, your response is to assert that women don’t do anything useful in the workforce anyway so they might as well stay at home. I would venture to suggest that there are thousands of employers who would disagree with you. And in the end, their views are far more important than yours. Fortunately.”

    If employers disagree then there is nothing for the state to do here. Non-existent problem solved.

  36. “Odd how some people seemingly only argue from a position of what benefits/disbenefits them personally.”

    Odd how governments and their supporters want always to do things that favour certain people over others.

    “If you never use the NHS why pay for it? If childless why bother with paying for someone else’s children to be educated?”

    Why indeed?

    “There are choices societies make via their political processes that work across society.Why educate 50% of your population and then say that if society wants another generation to follow on,”

    Society (by which you must mean the functional majority via the democratic process) has no place in deciding to interfere in the personal life decisions of individual people. Unfettered democracy is a huge problem.

  37. Apologies for the truncated comment.
    I meant to conclude by saying that if “society” operates so as to discount using that 50% of its population effectively I would think that makes life much more difficult for all of us.
    I would not describe potentially half the population as “certain people”, or think it unusual for a society to adopt laws and practices that do “interfere” with the personal life decisions of individual people. No man (or woman) is an island.

  38. iain – …if “society” operates so as to discount using that 50% of its population effectively…
    But that’s not what we are doing, Iain. It’s reasonable to assume that there will be childcare provided by someone for each child. That care can be provided by the parents (and typically more-so by the mother) or by third parties, which will typically be other women. If the mother really is more effectively utilized in her existing career, then we will see that by virtue of her being able to afford third-party childcare. If she cannot afford it, we have evidence that her effectiveness in that other career does not justify diverting that second woman from whatever other pursuits she might have otherwise followed. If we are going to provide for children, and on your comment, you think providing care for them is an “ineffective” use of (some) women’s time, then the question is which members of society are going to be consigned to such ineffective pursuits.
    Yes, as noted up-thread, there is a tax wedge – although in many cases (at least here in the new world) childcare is deductible. As well, the mother (and the father) may well consider this question on a lifetime basis – over the length of her career the present value of increased earnings available by not taking time off will be worth more than the simply the earnings over the child-rearing period.

    It is also possible that some (usually) women will have few skills to compete in the high-income employment market and will find childcare to be the highest and best use of their talents. It is also possible that we can capture economies of scale in having one (typically female) caregiver providing care to several children. In both cases, third party childcare would represent the optimal allocation of resources across society – but note, if it truly is optimal, we won’t need subsidies to get there; if we apply subsidies, the chances are that we will wind up somewhere less than optimal.

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