Stop blaming state school pupils for their lack of 'confidence'

It’s easy to claim richer students are more confident because of their superior education, but it may be more accurate to say they’re more confident because they’re rich.

There is a simple reason why some of the best private schools, and some of the best state schools too, focus on developing a young person’s whole potential. It’s because it prepares them for the future.

So says Stephen Twigg, shadow education secretary. And who can argue with that? Well, I can, for starters. I’ve nothing against developing potential in the young and preparing them for the future. Nor do I mind teachers playing a part in this. All the same, I suspect my understanding of “potential” and “preparation for the future” isn’t necessarily the same as Twigg’s.

According to the Telegraph, Twigg and the Labour party believe “state schools should look to private schools by putting lessons in speaking and debating skills on the timetable” and that “state sector teachers should adopt tactics seen in private schools to ensure children gain a range of ‘life skills’ skills needed to succeed in the workplace”. In their focus on traditionalism in order to achieve vague, pseudo-egalitarian goals, such assertions all feel rather Gove-esque. Hence it’s not surprising to see the Conservatives adopting a similar approach towards addressing the imbalance between the privately educated and their less well-off peers. Writing in the Guardian, in support of the social enterprise group upReach, Conservative parliamentary candidate Charlotte Leslie argues that “the less well-off need support to develop vital networking and social skills”. Yes, because that’s the problem, or to put it more precisely, they’re the problem. The children of the poor have “scantier knowledge as to how to go about achieving their ambitions” and “have been less equipped with the soft skills employers want”. So far, so vague, but do you know the other thing about the children of the poor? They have less money. Of that there is no doubt. They have less money and that, more than anything else, is destroying their prospects.

It strikes me that political rhetoric relating to education and social mobility has fallen prey to exactly the same passive-aggressive victim blaming that characterises discussions on poverty and benefits. The adult world is divided into workers and shirkers, but it’s not the shirkers’ fault they’re lazy; it’s the fault of overly liberal policy-making for spoiling them with a luxurious benefit system and making them morally weak. Similarly, school leavers are now divided into the well-educated, work-ready wealthy and the badly skilled, worthless poor, but it’s not the poor’s fault they’re worthless; it’s the fault of a state education system that’s been lacking in rigour and tradition. Hence it’s not privilege and discrimination that make certain professions a closed shop; it’s the fact that no one in his or her right mind would want to employ the products of a wishy-washy, PC, “all must have prizes” state system.

I will be truthful: I have nothing against tradition or rigour. I like depth and grammatical accuracy (a red flag, if ever there was one, for anyone reading this to highlight all the errors I’ve made). Moreover, I’m not under the illusion that all state schools are brilliant. I am a parent who lives in a “poor” catchment area for secondary schools. If I ever get the chance, I’m outta here. I went to a “good” state school and I want my children to do so, too. Like most parents, I have that unselfish-selfish investment in my children’s welfare; I’ll sacrifice myself for them, but when pushed I’ll sacrifice your kids, too. Even so, I don’t believe doing so would make my children more valuable or useful than yours (I mean, they are, but that’s just because they’re mine). I just – if I am honest – want my children to be seen to have that value. I want them to have a chance to play the game, even if it’s rigged.

Offering to help state school pupils buy into a system that rewards “networking” and suitably vague qualities such as “resilience”, “self-confidence” and “leadership” presupposes that such a system a produces a fair and reliable measure of employee potential. But does it? Are these not all dangerously subjective measures which allow elite groups to privilege their own? Aren’t we being asked to buy into the idea that it’s not what you can do but whether or not you’re a jolly good chap that matters? The proverbial foot in the door is being offered only to the few – upReach is currently being piloted with a group of 40 students, while one presumes that not all children are to become Twigg-inspired debating society heroes –  yet all children who do not attend fee-paying schools are condemned by newspaper reports suggesting they lack not just “speaking and language skills”, but “character”, “life skills”, “resilience” and “self-confidence”.

Do you know what really crushes self-confidence? Being told you’re rubbish. Endless articles and speeches listing all the skills you lack. Hand-wringing self-fulfilling prophecies from those who claim to have your best interests at heart. Being told that doors are closed in your face because you’re not good enough, not because they’d never have been opened to begin with. Poorer students may lack confidence to begin with but this is because failure is a real option for them, with real consequences. It’s easy to claim richer students are more confident because of their superior education, but it may be more accurate to say they’re more confident because they’re rich. From the moment they draw breath they are considered to be worth more.

There are obvious differences between state schools and private schools, and between the state schools attended by the privileged and those attended by the disadvantaged. These include areas such as class size, resourcing, staff turnover, subject choice, attendance, and exam results. Most of these things are specific and measurable. This is a real, concrete imbalance, not an abstract clash of philosophies. However, we’re being asked to accept that it’s all one slippery slope of failure. State school pupils don’t attend debating societies therefore they lack “resilience” therefore they lack “life skills” therefore they are justly overlooked by employers. Give me a break. I just don’t believe that the average old Etonian has greater reserves of resilience than someone who’s been raised in abject poverty. He just thinks that he does – but right now, he’s in charge so I guess that’s all that matters.

Eton boys, perched on the wall, watch the tradtional wall game. Photograph: Getty Images.

Glosswitch is a feminist mother of three who works in publishing.

Getty
Show Hide image

We're racing towards another private debt crisis - so why did no one see it coming?

The Office for Budget Responsibility failed to foresee the rise in household debt. 

This is a call for a public inquiry on the current situation regarding private debt.

For almost a decade now, since 2007, we have been living a lie. And that lie is preparing to wreak havoc on our economy. If we do not create some kind of impartial forum to discuss what is actually happening, the results might well prove disastrous. 

The lie I am referring to is the idea that the financial crisis of 2008, and subsequent “Great Recession,” were caused by profligate government spending and subsequent public debt. The exact opposite is in fact the case. The crash happened because of dangerously high levels of private debt (a mortgage crisis specifically). And - this is the part we are not supposed to talk about—there is an inverse relation between public and private debt levels.

If the public sector reduces its debt, overall private sector debt goes up. That's what happened in the years leading up to 2008. Now austerity is making it happening again. And if we don't do something about it, the results will, inevitably, be another catastrophe.

The winners and losers of debt

These graphs show the relationship between public and private debt. They are both forecasts from the Office for Budget Responsibility, produced in 2015 and 2017. 

This is what the OBR was projecting what would happen around now back in 2015:

This year the OBR completely changed its forecast. This is how it now projects things are likely to turn out:

First, notice how both diagrams are symmetrical. What happens on top (that part of the economy that is in surplus) precisely mirrors what happens in the bottom (that part of the economy that is in deficit). This is called an “accounting identity.”

As in any ledger sheet, credits and debits have to match. The easiest way to understand this is to imagine there are just two actors, government, and the private sector. If the government borrows £100, and spends it, then the government has a debt of £100. But by spending, it has injected £100 more pounds into the private economy. In other words, -£100 for the government, +£100 for everyone else in the diagram. 

Similarly, if the government taxes someone for £100 , then the government is £100 richer but there’s £100 subtracted from the private economy (+£100 for government, -£100 for everybody else on the diagram).

So what implications does this kind of bookkeeping have for the overall economy? It means that if the government goes into surplus, then everyone else has to go into debt.

We tend to think of money as if it is a bunch of poker chips already lying around, but that’s not how it really works. Money has to be created. And money is created when banks make loans. Either the government borrows money and injects it into the economy, or private citizens borrow money from banks. Those banks don’t take the money from people’s savings or anywhere else, they just make it up. Anyone can write an IOU. But only banks are allowed to issue IOUs that the government will accept in payment for taxes. (In other words, there actually is a magic money tree. But only banks are allowed to use it.)

There are other factors. The UK has a huge trade deficit (blue), and that means the government (yellow) also has to run a deficit (print money, or more accurately, get banks to do it) to inject into the economy to pay for all those Chinese trainers, American iPads, and German cars. The total amount of money can also fluctuate. But the real point here is, the less the government is in debt, the more everyone else must be. Austerity measures will necessarily lead to rising levels of private debt. And this is exactly what has happened.

Now, if this seems to have very little to do with the way politicians talk about such matters, there's a simple reason: most politicians don’t actually know any of this. A recent survey showed 90 per cent of MPs don't even understand where money comes from (they think it's issued by the Royal Mint). In reality, debt is money. If no one owed anyone anything at all there would be no money and the economy would grind to a halt.

But of course debt has to be owed to someone. These charts show who owes what to whom.

The crisis in private debt

Bearing all this in mind, let's look at those diagrams again - keeping our eye particularly on the dark blue that represents household debt. In the first, 2015 version, the OBR duly noted that there was a substantial build-up of household debt in the years leading up to the crash of 2008. This is significant because it was the first time in British history that total household debts were higher than total household savings, and therefore the household sector itself was in deficit territory. (Corporations, at the same time, were raking in enormous profits.) But it also predicted this wouldn't happen again.

True, the OBR observed, austerity and the reduction of government deficits meant private debt levels would have to go up. However, the OBR economists insisted this wouldn't be a problem because the burden would fall not on households but on corporations. Business-friendly Tory policies would, they insisted, inspire a boom in corporate expansion, which would mean frenzied corporate borrowing (that huge red bulge below the line in the first diagram, which was supposed to eventually replace government deficits entirely). Ordinary households would have little or nothing to worry about.

This was total fantasy. No such frenzied boom took place.

In the second diagram, two years later, the OBR is forced to acknowledge this. Corporations are just raking in the profits and sitting on them. The household sector, on the other hand, is a rolling catastrophe. Austerity has meant falling wages, less government spending on social services (or anything else), and higher de facto taxes. This puts the squeeze on household budgets and people are forced to borrow. As a result, not only are households in overall deficit for the second time in British history, the situation is actually worse than it was in the years leading up to 2008.

And remember: it was a mortgage crisis that set off the 2008 crash, which almost destroyed the world economy and plunged millions into penury. Not a crisis in public debt. A crisis in private debt.

An inquiry

In 2015, around the time the original OBR predictions came out, I wrote an essay in the Guardian predicting that austerity and budget-balancing would create a disastrous crisis in private debt. Now it's so clearly, unmistakably, happening that even the OBR cannot deny it.

I believe the time has come for there be a public investigation - a formal public inquiry, in fact - into how this could be allowed to happen. After the 2008 crash, at least the economists in Treasury and the Bank of England could plausibly claim they hadn't completely understood the relation between private debt and financial instability. Now they simply have no excuse.

What on earth is an institution called the “Office for Budget Responsibility” credulously imagining corporate borrowing binges in order to suggest the government will balance the budget to no ill effects? How responsible is that? Even the second chart is extremely odd. Up to 2017, the top and bottom of the diagram are exact mirrors of one another, as they ought to be. However, in the projected future after 2017, the section below the line is much smaller than the section above, apparently seriously understating the amount both of future government, and future private, debt. In other words, the numbers don't add up.

The OBR told the New Statesman ​that it was not aware of any errors in its 2015 forecast for corporate sector net lending, and that the forecast was based on the available data. It said the forecast for business investment has been revised down because of the uncertainty created by Brexit. 

Still, if the “Office of Budget Responsibility” was true to its name, it should be sounding off the alarm bells right about now. So far all we've got is one mention of private debt and a mild warning about the rise of personal debt from the Bank of England, which did not however connect the problem to austerity, and one fairly strong statement from a maverick columnist in the Daily Mail. Otherwise, silence. 

The only plausible explanation is that institutions like the Treasury, OBR, and to a degree as well the Bank of England can't, by definition, warn against the dangers of austerity, however alarming the situation, because they have been set up the way they have in order to justify austerity. It's important to emphasise that most professional economists have never supported Conservative policies in this regard. The policy was adopted because it was convenient to politicians; institutions were set up in order to support it; economists were hired in order to come up with arguments for austerity, rather than to judge whether it would be a good idea. At present, this situation has led us to the brink of disaster.

The last time there was a financial crash, the Queen famously asked: why was no one able to foresee this? We now have the tools. Perhaps the most important task for a public inquiry will be to finally ask: what is the real purpose of the institutions that are supposed to foresee such matters, to what degree have they been politicised, and what would it take to turn them back into institutions that can at least inform us if we're staring into the lights of an oncoming train?