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(image: carnagenyc)

A voter’s burden

Voting, like so many things in life, is about the difficult task of weighing up many, often conflicting options. Maybe a (behavioural) economics perspective can help cut through it?

On 18 April, Prime Minister Theresa May called a snap election in the UK for 8 June. On the face of it, she is after an enhanced parliamentary majority to give her “a strong hand” in the Brexit negotiations and deliver the “best possible deal for Britain”. But even though Brexit dominates much of political life, there are other domains in politics that are pushed by the various parties. The ruling Conservative party did come up with a proposal to cap energy prices (see The anti-nudge), and their manifesto also contained a surprising plan for funding long-term adult social care.

The idea itself is rather simple. At present, if you need social care at home, you need to pay for it yourself until you have less than £23,250 left, excluding the value of your home. The proposal is to raise that threshold to £100,000, but to also include the value of the home (which may then need to be sold after your death to settle the balance). Initially, the proposal stipulated that, other than the £100k floor, there would be no limit on the total amount paid by the patient.

That would have been bad news for anyone owning even a modest home, and so there was a hurried correction to the proposal to cap the total amount payable (to a so far unspecified level). But even this amended version implies a considerable shift of the adult social care cost from the state to the (well-off) individual. Naturally, the opposition parties, well, oppose the idea, and would pretty much maintain the status quo, continuing to fund adult social care largely out of general tax and national insurance revenue.

This binary choice relating to a single policy domain, between more and less individual contribution to the cost of care, conceals a remarkable complexity, though. Choosing — and hence voting — is a daunting task. How to approach this challenge?

A material world

Financial Times journalist Chris Giles calculated what percentage of your wealth would be eaten up if the total care costs before you finally died were £150,000, as shown in the graph below. And there were several more attempts to determine more specifically under what circumstances you’d gain or lose.

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What will be left of my fortune? (source: Chris Giles)

All that is on the assumption that you will need the kind of care in question, of course. If you die without needing long-term care, it doesn’t matter how much you’d have had to pay: you can leave your estate to your heirs intact. But the state is carrying an ever increasing cost burden for long-term care, you are likely to pay for it anyway while you are still alive through higher taxes.

With the uncertainty around what you will and won’t need when you’re old and decrepit, it looks as if establishing a clear-cut cost-benefit case is not that easy.

Belief and conviction

Maybe you have been a working class Labour voter or a middle class Conservative voter all your life, convinced that your preferred party serves your class the best. But here are the Tories, proposing to take money away from the middle class, and Labour rejecting a measure that would free up billions in the social care budget by making the well-off pay more. That doesn’t help either.

Context matters

Is it a quadrupling of the amount you can keep, from £23,250 to £100,000? Or is it a dementia tax, that will force people to sell their home, reclaiming much of the one bit of wealth that people of otherwise modest means can pass on to their children? Is it a regressive measure or a progressive measure?

Is it fair because it makes people contribute according to their means, especially those lucky enough to have profited from the astronomical increase in property values? (An average house in the UK costing about £12,000 in 1976, was worth more than £200,000 forty years on, an increase by a factor 16. In London house prices grew by a factor 32 over that period.) Or is it unfair because it only affects those unlucky enough to be affected by a terrible long-term condition like dementia?

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Principles or pragmatism?

Even the hasty amendment of the manifesto proposal can be framed in two ways. Was it Mrs May’s umpteenth “U-turn”, showing what an unprincipled politician she is? Or was it a sign of pragmatism — changing your minds when the facts change (as the great economist Keynes never said — it was Paul Samuelson)?

An impossible challenge

Reflecting on all this, I should probably count myself lucky: being a foreigner, I don’t get to vote. But I will spare a thought for the poor British voter, and I sympathize with those who, having thoroughly thought everything through, decide to abstain. Some challenges are just impossible.

Originally published at on May 26, 2017.

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Written by

Accidental behavioural economist in search of wisdom. Uses insights from (behavioural) economics in organization development. On Twitter as @koenfucius

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