Does inequality matter?

(25 Posts)
ttosca Fri 07-Sep-12 11:59:07

As Class releases Why Inequality Matters - a new publication based on the findings of The Spirit Level, Owen Jones asks do we really need to worry about inequality.

classonline.org.uk/blog/item/does-inequality-matter

Does inequality matter? The leading lights of New Labour certainly thought not. ‘We are intensely relaxed about people getting filthy rich,’ Peter Mandelson once famously boasted, with the caveat ‘as long as they pay their taxes.’ By the time Labour lost power, it was clear that large numbers of rich people were not doing even that. For a generation, inequality has been increasingly dismissed as an airyfairy irrelevance: all that matters is that the living standards of all were improving. It has certainly been a long time since that has happened: four years before Lehman Brothers came crashing down, the real income of the bottom half began to flat-line; for the bottom third, it actually declined. The Coalition’s mantra that ‘We’re All In It Together’ has shifted between the ludicrous and the offensive ever since it came to power: while the average Briton faces the most protracted squeeze in living standards since the 1920s, the Sunday Times Rich List reveals an ever-booming elite.

But the case against inequality is not an abstract, moral argument. With an abundance of evidence, The Spirit Level dramatically revealed that it actually has an impact on people’s everyday lives. And as the Nobel Prize-winning economist Paul Krugman has shown, there is a link between inequality and financial crises. As he pointed out, it is no accident that both major modern crises – the first beginning in 1929, the second in 2008 – coincided with historic levels of inequality.

In part, this could be because of ‘common causation’: that free market or neo-liberal economics fuelled both inequality and economic crisis. But there are other theories too. As Robert Reich, the former US Secretary of Labour, put it: ‘The problem wasn’t that consumers lived beyond their means. It was that their means didn’t keep up with what the growing economy was capable of producing at or near full-employment. A larger and larger share of total income went to the people at the top.’

But Krugman discusses another theory: that as the wealthy spend more because they have more money, it encourages others to do the same. It’s ‘keeping up with the Jones’ on a massive scale. That meant saving less and borrowing to spend more. In the United States, household debt and inequality both soared in the run-up to the crisis. And – as Krugman has pointed out – inequality has helped sabotage government action to deal with the financial crisis, as the very wealthiest wield increasing political power and use it to pursue short-term self-interest.

Inequality also played a key role in some of the worst disturbances in post-war Britain. As research by Wilkinson and Pickett and others has shown, inequality weakens social cohesion and a sense of community, and produces more crime and violence. We saw, in part, the consequences of that in last August’s riots. Take London, one of the most unequal cities on Earth, where the top 10% receive 273 times more than the bottom 10%. We live in a hyperconsumerist society, where status has so much to do with what we wear or own: with such grotesque inequalities, there are those who feel excluded and can see what they are denied on an almost daily basis. A toxic mix of extreme inequality and consumerism had a clear role in the looting and riots.

Of course, there’s so much more: as Wilkinson and Pickett have shown, less equal societies tend to do worse when it comes to health, education and general well-being. But it is clear that the scourge of inequality has had a real role in the current intractable economic crisis. The pursuit of equality is not just a moral imperative, not just vital for the poor and for the social cohesion and wellbeing of society, it is also necessary for a stable economy. So just as the Beveridge Report, with its attack on the five great evils of society, underpinned the achievements of the 1945 Labour Government, the thinking of The Spirit Level and the pursuit of equality must play a pivotal role in the construction of the alternative policies which will replace those of our disastrous Coalition government.

Why Inequality Matters is released today and can be downloaded here:

classonline.org.uk/pubs/item/why-inequality-matters

Thanks op, I am really interested in ineqilailities, have been meaning to read spirit level and so will add this to my pile.of reading.

FrothyOM Fri 07-Sep-12 13:01:02

Yes it does.

Solopower Fri 07-Sep-12 20:59:24

In a world where everyone has enough for their needs and gives whatever they can to others, no it doesn't matter one jot.

Until then, however, it does - because people who are pushed too far end up with nothing to lose, and they tend to react with violence and desperation.

Solopower Fri 07-Sep-12 21:02:56

What's your gut reaction to inequality? Does it make you feel good?

MrJudgeyPants Sat 08-Sep-12 01:17:43

You can equalise inputs as much as possible (wealth, education etc) but people react very differently (ambition, intelligence etc) so there will always be an inequality of output. One family may stay together, the other may split up. Similarly, give two families with children a comfortable amount to live on and one may prioritise books and learning, the other may prioritise McDonalds and games consoles. The first family may tend to produce academic kids; the second may tend towards lower academic achievement. Of the kids in my junior school class I went on to start a small business whilst another ended up homeless with heaps of drug issues - all babies may be born equal but, sadly, it doesn't stay that way for long.

The best I think we can hope for is an equality of opportunity - good schools, good healthcare and a decent economy to provide us with jobs. Sadly, with families which have multi-generational worklessness (and, in many cases heaps of other problems too) I cannot see how you can realistically expect an equality of output. There has to be some element of meritocracy in our society which will always mean having winners and losers.

Inequality to me tends to be associated with healthcare. Why do we have children in some areas who have poorer health than children in other areas (rhetorical question). Finding and addressing the root causes of the differences tends to improve the health of all and close the gap.

adeucalione Sat 08-Sep-12 09:55:44

I would discourage anyone from reading Spirit Level without also reading Spirit Level Debunked or listening to the BBC R4 interview with Spirit Level co-author Kate Pickett - a few excerpts here

twofingerstoGideon Sat 08-Sep-12 13:13:52

The best I think we can hope for is an equality of opportunity - good schools, good healthcare and a decent economy to provide us with jobs.

Well, we don't have equality of opportunity in any of those things, so now what?

LurkingAndLearningLovesOrange Sat 08-Sep-12 13:20:42

That extract reads like a bunch of shitty excuses to me.

What a bad title. Sure, inequality doesn't matter! Let's go back to the 'one drop' system, The Stolen Generation, force women back into the home, disallow abortion or contraception or pain relieve during birth, disallow education for people who happen to be female, black, or GOD FORGIVE; black AND female!

Let's not forget to lynch homosexuals and those who commit 'tresaon.'

Of course equality matters. Using money to explain equality really speaks volumes about other prejudices...

Solopower Sat 08-Sep-12 14:38:07

I think it goes beyond equality of opportunity, Mr JP, though that is the least that we should be able to hope for. Even if you managed to equalise access to housing, education and health care - which would be absolutely fantastic, of course - people have to know how to take advantage of their opportunities and make the most of them. Sadly, a lot of people just don't.

So what is also needed, imo, is a way of encouraging people to behave in a way that is best for them and for society. It's not enough to plonk an excellent school two minutes from their front door, though it does help, of course.

The problem there is who decides what is best for people and how do you make that decision. A family might think that keeping their daughter at home to look after Grandma rather than sending her to school is best for them.

On the other hand you might get a rich family who decide that what is best for them is to keep a tight hold of their money and resist any government attempts to make them pay their taxes. Priorities like these have an effect on the whole of society.

Step one: equality of opportunity.
Step two: changing attitudes so that people see that we are part of society and we all need to do our share in order for all of us to reap the benefits.

<removes preachy hat and wipes brow>

MrJudgeyPants Sat 08-Sep-12 23:43:44

Solopower I appreciate the preachy hat disclaimer - as a peace offering I'll take off my judging trousers!

The problem with trying to tell people how best to lead their lives (which is essentially step 2) is that all people are individuals and, as you point out, face problems in different ways to how you or I would choose to face them. Some people are hard wired to beat the system, others to conform. Asserting some sort of orthodoxy is, I feel, doomed to failure for this reason.

As I said earlier, you can try and equalise opportunity which, as twofingers points out, is a hard enough task - trying to equalise outcomes is impossible.

Without equalised outcomes, equality is also impossible.

I don't see it like that though. I see it as looking at inequality to highlight unfair differences. And most of the times they will. If you look at infant mortality and one area has double the infant mortality rate than the other then it's a sure bet that behind it you will find either differences in the population or in the services. In both of those cases, services can be improved, either to work better with the different population, or to be brought in line with the best. I don't think there would ever be uniformity, precisely because, as others say, people are individuals and make different choices based on the information, resources and preferences unique to them. The fact we'll never get there doesn't mean working to reduce inequality is pointless. We can close the gap while accepting it may never be zero. And working to close the gap should improve the lives of everyone, whichever side they're on. You can't narrow the gap by bringing the top down.

Solopower Sun 09-Sep-12 09:49:49

Thank you, Mr JP. The thought of you without your trousers on is oddly disconcerting. Though not wholly unpleasing.

I'm not sure what you mean about equality, btw. What I mean is more like what StealthPolarBear says, ie fairness. No-one wants uniformity, do they, but I think we could definitely have a fairer society, and an end to the bullying that goes on. Why do we feel we need to manipulate the system in order to get a good education - for our own children, of course - we don't really care about anyone else. Why do we have to elbow other people out of the way in order to make our own way in the world?

I really don't think things have to be this way. United we stand ...

<preachy hat goes back on. Sorry>

For example, and I'm going to get flamed here, but many women bottle feed because its the cultural norm. We can work to change that and therefore improve breastfeeding rates while respecting that for some women bottle feeding is still best for them, or the choice they're going to make. On the flip side, in areas of London with an ethnic make up that is very differnt to other areas of the UK, breastfeeding is the norm and rates are correspondingly much higher. Where the deprivation may be similar. I don't know London but I am sure I could find an area (tower hamlets?) Which is deprived but has high breastfeeding rates, and compare it to an area in the north - redcar or Knowsley spring to mind which are similarly deprived but have breastfeeding rates much lower than in that area of London. So we can work to change the underlying reason for that without insisting that individual women breastfeed, that would be unethical and counter productive.

flatpackhamster Tue 11-Sep-12 11:14:35

solopower

The problem is, what's fairness? What does it actually look like?

Everyone's definition of fair is different.

twoGoldfingerstoGideon Tue 11-Sep-12 14:42:51

Well, flatpack I would say a good starting point for 'fairness' would be ensuring that in a country where there is more than enough in terms of wealth and resources to go around, no-one goes without food, clothing or a roof over their heads. After that we could attempt to debate what fairness 'actually looks like'. Of course, everyone's definition of fair is different, but I think I can say with absolute certainty that it is 'unfair' that people are not even having these most basic needs fulfilled.

flatpackhamster Tue 11-Sep-12 22:10:34

Well to me, that isn't fairness. That's command-economy redistribution. You're going to take from group X and give to group Y. By the sound of it you're going to give quite a lot, too. A "free" (or "fair" to use your word) house, food and clothing, all paid for by group X.

Perhaps group X might not consider your definition of 'fair' to be 'fair'? After all, if they have to work to buy their food and house and clothes, why should group Y receive it for free?

Do you see the problem?

twoGoldfingerstoGideon Tue 11-Sep-12 22:28:21

I did not mean 'free' housing, food or clothing at all, so please don't imply I did. I am talking about more equitable distribution of wealth and resources, particularly in the workplace. I do not believe in a system that pays a small number of people in excess of what any reasonable person would want (eg. annual salaries in excess of £1M) when others are not covering their basic living costs.

I like the John Lewis Partnership employment model, which is not only fair, but also profitable.

Presumably your definition of fair is the opposite, ie. greedy people who earn multi million pound salaries should be able to continue to do so, while other people good to food banks.

We will have to agree to disagree I think.

flatpackhamster Wed 12-Sep-12 07:18:59

twoGoldfingerstoGideon

I did not mean 'free' housing, food or clothing at all, so please don't imply I did. I am talking about more equitable distribution of wealth and resources, particularly in the workplace.

Well you did write that nobody should go without housing, food or clothing. So how are they going to get it? What if they don't want to work? Should they still get the housing, food or clothing?

Is it 'equitable' to take from someone who's working and give it to someone who isn't?

I do not believe in a system that pays a small number of people in excess of what any reasonable person would want (eg. annual salaries in excess of £1M) when others are not covering their basic living costs.

You seem to be looking for a simple fix for a complicated issue. In my experience, those simple fixes are illusory, and income redistribution to solve cost of living issues is illusory.

I like the John Lewis Partnership employment model, which is not only fair, but also profitable.

So does everyone. Is it sustainable across an entire economy?

Presumably your definition of fair is the opposite, ie. greedy people who earn multi million pound salaries should be able to continue to do so, while other people good to food banks.

I don't consider the word 'fair' to be a useful one when deciding division of resources. One man's fair is another man's theft. I think that the discussion would be significantly improved if everyone stopped using vague waffly terms like 'fair'. That's the point I was making above. Spare me your emotional blackmail.

We will have to agree to disagree I think.

I don't see how what you call 'fair' is fair by any rational definition of the term. And it seems to me that, by refusing to define it with any accuracy, and attacking me when I question it, you recognise the weakness in the use of the word but are afraid to deal with that weakness.

MrJudgeyPants Wed 12-Sep-12 09:51:10

flatpack The left movement is full of ill defined words and terms which can mean whatever you want it to mean and which can change on a whim like the days of the week. Fair is a good example but my arse winks whenever anyone uses words and terms like progressive, inclusive or social justice too.

ttosca Sat 15-Sep-12 13:50:50

flatpack-

I did not mean 'free' housing, food or clothing at all, so please don't imply I did. I am talking about more equitable distribution of wealth and resources, particularly in the workplace.

Well you did write that nobody should go without housing, food or clothing. So how are they going to get it? What if they don't want to work? Should they still get the housing, food or clothing?

The percentage of people in the population who refuse to work is a fraction of 1%. This is not a big social issue. The is a big problem when a substantial minority of people who are living in poverty are, in fact, working. There is something deeply wrong with society when someone works full time and still can't afford the basics of living.

Is it 'equitable' to take from someone who's working and give it to someone who isn't?

It's certainly the civilised thing to do in some cases, yes. When someone is disabled and cannot work or is suffering mental health problems, etc.

In any case, there are more rich people who don't work and live off rent, or interest on savings, or at the public expense (The Royals) than there are a tiny, tiny, minority of workshy people who claim below poverty level benefits.

I do not believe in a system that pays a small number of people in excess of what any reasonable person would want (eg. annual salaries in excess of £1M) when others are not covering their basic living costs.

You seem to be looking for a simple fix for a complicated issue. In my experience, those simple fixes are illusory, and income redistribution to solve cost of living issues is illusory.

That's nice. What you're trying to say, really, is that you don't like wealth redistribution.

Presumably your definition of fair is the opposite, ie. greedy people who earn multi million pound salaries should be able to continue to do so, while other people good to food banks.

I don't consider the word 'fair' to be a useful one when deciding division of resources.

Of course not, because you're a Capitalist libertarian sociopath. 'Fair' is a perfectly reasonable term to use when deciding how to run an economy. We use terms like 'Just' when making laws and when shaping the legal system, even though not everybody agrees on what is 'Just', almost everyone agrees that 'Justice' is a good aim.

One man's fair is another man's theft. I think that the discussion would be significantly improved if everyone stopped using vague waffly terms like 'fair'. That's the point I was making above. Spare me your emotional blackmail.

This is your problem, really. Civilised people in society don't think 'fair' is a bad word or not a suitable concept to use when discussing the economy

I don't see how what you call 'fair' is fair by any rational definition of the term. And it seems to me that, by refusing to define it with any accuracy, and attacking me when I question it, you recognise the weakness in the use of the word but are afraid to deal with that weakness.

Get over yourself.

flatpackhamster Sun 16-Sep-12 10:32:07

Ahh, Ttosca, Ttosca. If you didn't exist we would have to invent you.

CommunistMoon Fri 28-Sep-12 22:31:32

^No you wouldn't. 'Demolished' is the word that springs to mind when I read your post.

Sparrowp Fri 28-Sep-12 23:07:23

Thanks OP, Inequality is possibly the biggest problem we face in our economy and society.

Very important. Good post.

Join the discussion

Join the discussion

Registering is free, easy, and means you can join in the discussion, get discounts, win prizes and lots more.

Register now