It’s become a commonplace to say that wealth has to be created before it can be spent and the received wisdom in mainstream political discourse is that the private sector does the wealth creating which then allows the public sector to use it up. In a recession, we are told, we have to wait until more wealth is created before being able to improve public services.
Common sense, no?
Well, the problem is that this narrative doesn’t do justice to the economic contribution of our public services.
On my daily 30 minute journey to work, I see at least 6 school crossing supervisors at work. They are probably among the lowest paid and least secure of part-time public servants but they make a vital contribution to child safety, public reassurance and social cohesion. Each interaction with a child or carer is brief but taken together over time these interactions add up to an important web of social support which benefits children and society as a whole. We only need to see what happens to the school run without a crossing supervisor to imagine the social cost of not having any at all.
Once I get to my own workplace, a sixth form college, I then see the work of hundreds of other public servants interacting with young people over extended periods of time, building understanding and confidence, exchanging interpretations of the world, challenging them to think and to learn, embodying and living our shared values and creating the web of social relationships which are the fabric of a good society. Just like the crossing supervisors really. As it happens, although we are entirely publicly funded, our work is now classified as being in the private sector. Nevertheless, what we do is public service wealth creation.
Real wealth creation is about innovation and the application of new ideas and processes which expand and improve human lives in some way. Part of this is about making stuff; the economy of things, new ways to extract, process and organise matter sustainably and efficiently but it is also crucially about knowledge; the economy of ideas, new ways to think about and organise our lives. It’s also important to invest in the work which helps to maintain and repair our social fabric – call it community cohesion or building resilience if you wish. These are all highly interrelated, highly social and often contested processes, shaped by forces which can seem out of our control but which we can influence and change.
Public services are a key part of the wealth of a society; absolutely integrated into our economy and their success is essential to the progress of our society as a whole. So the contribution of teachers to developing tomorrow’s workers, citizens and carers can and should be regarded as a kind of wealth creation. It can of course be more or less successful, but that is another debate.
US senator Elizabeth Warren has expressed this in a beautifully simple way:
You built a factory, good for you. You moved your goods to market on roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe because of police forces and fire forces the rest of us paid for…Keep a hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.
The austerity currently being imposed on our public services is not the result of some iron law of economics but a political choice which threatens to impoverish us all. Of course, collectively we need to live within our means and we need to avoid being wasteful, ineffective or inefficient. But this shouldn’t require us to have to choose between public services or waiting until the ‘wealth creating’ part of the economy decides it is ready to invest in them adequately.
Every collective economic decision, whether taken within the private or the public sector, is an investment choice which will has some social impact and some opportunity costs. The job of accountable elected governments should be to ensure that the interaction of these choices; of the free play of human ingenuity and creativity with the need to plan and distribute equitably works as well as possible for the whole of human society. Privileging any one type of wealth creation over others does not move us forward.
So, politicians, by all means let’s debate how we share out the wealth there is and what we need to do to create a better society, but let’s stop assuming that teachers, nurses, doctors, social workers, crossing supervisors and refuse collectors are simply gobbling up the wealth which others produce. It’s both divisive and economically illiterate.
Let’s say it loud and proud: ‘Teachers create wealth too!’
See also: Do qualifications create wealth? (January 2015)