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Risk Factor: Bankers, Benefits and Bailouts

06/05/2013 15:26 BST | Updated 02/07/2013 10:12 BST

In their book Freakonomics Steven D. Levitt and Steven J. Dubner draw an important distinction between 'risks that scare' and 'risks that kill'. 'Risks that scare' pertain to those dangers where the 'hazard is low and outrage is high' while 'risks that kill' cover cases where 'the hazard is high' but the awareness of it is significantly less.

To illustrate the difference Freakonomics provides us with the example of guns and swimming pools. When you hear of a case of a 'cherubic four-year-old shot through the chest' it is difficult to imagine anything more horrifying, and the story would naturally garner full and intensive media coverage. But what about a child of a similar age who slips outside and falls into the swimming pool while mum or dad are busy making dinner? As tragic and devastating a loss this surely is, it is unlikely to attract the same attention and media scrutiny.

And yet, as the writers of Freakonomics point out, in the US an estimated 175 children under ten die from gun-shots each year, whereas 550 die from drowning. Not only are the deaths from pools considerably higher, but they are easily preventable. Nevertheless a swimming pool is a far less visible danger than a device such as a gun which carries with it an express promise of violence and death. As a result, the more significant danger is overlooked.

If you want to find a society-wide example of 'a risk that scares', you need look no further than the current political narrative purveyed by much of the mainstream media in regard to benefit claimants and so called 'scroungers'. In the cold, sober light of day the facts speak for themselves; we know that, between 2010 and 2011, 93% of all new housing benefit claims were made by households in which at least one adult was in work. We know too the majority of benefit spending goes to those who are not of a working age (42% to pensioners, 15% to children). And we know also - according to estimates by the Department of Work and Pensions - that during 2011-2012 only 0.7% of overall benefit expenditure was overpaid due to fraud.

But although these statistics are floated around in the background, our gaze is drawn with an almost hypnotic compulsion to the hateful image of the flabby scrounger - arse deep in sofa, sat watching Jeremy Kyle in the middle of the day, shamelessly leeching from the state while a brood of feckless, dirty children run riot in his or her midst. Many of us are half-aware that such figures - these almost pantomime like caricatures of sloth and wretchedness - exist as a tiny minority, but the need to find a visible and sinister repository in which to place our fears is both seductive and satisfying. It allows us to give our demons a palpable form, and this in turn permits us to fantasise their destruction. If we go in hard against the 'shirkers' and the 'scroungers', we somehow feel, the threat of broader economic crisis might be averted; our collective anxiety and fear is in some way allayed.

But such catharsis allows the genuine danger - the 'risk that kills' - to go largely overlooked. The risk that kills is created by a set of factors: the banking bailout, the war on public services, the slashing of taxes for the most privileged and the concomitant level of tax avoidance and tax evasion which has accompanied this. That 0.7 per cent which was lost on benefit fraud translates to roughly £1 billion but in the same period tax evasion counted for £70 billion.

And to put all that into perspective - the banking bailout itself cost £1.3 trillion or 1000 billion of tax payer's money. But though these statistics bring to light quite decisively the economic issues which have really caused the economy to haemorrhage, papers still front articles with gaudy images of 'Vicky Pollard' designed to personify the notion of a Britain bled dry by a feral underclass.

That is not to say that there isn't a benefit fraud problem or even a benefits problem. Karl Marx noted that great economic crises were, in the last analysis, characterised by a crisis of purchasing power; capital is rendered unrealizable because the population is unable to buy the surfeit of commodities which has been produced. Increasing numbers of people out of work - with access to only a basic level of funds - can only exacerbate this. But it is not a feckless, work shy underclass which has generated such a situation; rather long term unemployment has spiked 146 per cent in the very period of time in which the current administration have enacted their ruthless oeuvre of economic hack and slash.

The loud, shell-suit sporting image of the gaudy chav might well provide the means to scare. But we should remember; it is the besuited and demure figure of the Tory MP with the means to kill.