There is a fundamental difference of opinion that dominates politics nowadays. The mindsets which underpin these opinions rest upon whether you believe that success – or failure – starts and ends with individuals, or that intervention by others, including the state, makes a significant difference to our achievements.
In politics, the ‘individuals’ position flows from Thatcherism and is endorsed by David Cameron’s administration. Likewise the ‘interventionists’ are on the Opposition bench and take their lead from New Labour – in many ways a political attempt to marry social justice and big business.
With economists as our ‘gurus’ these days, it’s not hard to see these positions as a battle for influence between the views of Keynes and Hayek. Keynes begins with the observation that under conditions of economic uncertainty it’s foolish to assume stable outcomes and therefore we need to devise ways of intervening to bring these about. Hayek, writing quite consciously against Keynes, argues in the Road To Serfdom that intervention – or planning – however benevolent or well-intentioned, whatever the political context – must end badly. Hayek’s key message is ‘don’t plan, don’t intervene’ and remains the dominant moral position in the United States.
Looking even deeper we can see the potential for splitting and projection for adherents of either position. For both, the other side must be wrong, the individualists are merely justifying excessive greed and self-importance, while the interventionists are simply reconstructed statists.
Once splitting (right/wrong thinking) is in place, it is very hard to achieve any balance. Every living person knows that at times in life accomplishments are based on individual performance, but even so, that performance stands upon the encouragement, example and inspiration from others. Donne’s words, ‘no man is an island’ are even more accurate in a global age.
Meanwhile, in this time of ascendance for the individualists, the gap between rich and poor is doubling every twenty years. The top 1% now own 14% of Britain’s wealth. If this is pattern continues then the richest 1% will own 108% of Britain’s wealth by 2112. (Thanks to GR for the calculation!). Already the real value of wages has been in steady decline since the 1970’s. Very soon you will be working for coppers (that’s the small brown coins), as they did in the Good Old Days!
The real problem here is the weakening of the social contract as people’s wages become worth less and their entitlements are cut. This will increase in intensity, since this year public spending has actually grown (by 5%, corrected for inflation) and the cuts are due to get steeper over the next few years. You are going to get less, while our top 1%, including Dave’s Dinner Pals, are getting more.
How do you feel about that? Wouldn’t you be just a bit tempted to cheat here and there to make ends meet?
And so the corruption will spread, out of the unreasonable demands and unfairness levied on ordinary men and women. It will be a Big Society, but dominated by Cheating and Looking the Other Way as we did in the Thatcher years. Gradually all around us, the very fabric of society, our shared capital will be eroded and you will notice it in the streets, on people’s faces and in all public places.
Incidence of Social Problems Related to Inequality
[For those who would like to study this picture more closely, if you click the graph above and then click the graph once more in the window that opens you will get an expanded version.]
Thank you, to the more than one hundred of you who have read my post on the riots and my view of where they come from. I feel honoured that you took the time and trouble and hope that the post was interesting. Like everyone else I was horrified by the level of violence during the riots and accept that those who committed acts of violence & arson, including the killing of 5 innocent people must be punished fully as they would be in normal circumstances. Yet I can’t help but think that what we saw last week can’t be explained by Cameron’s labels of criminality, thuggery, gang culture, poor parenting and lack of values.
Whenever you explain the anti-social behaviour of the poor in empathetic terms you risk being branded a socialist or a liberal – labels that should be compliments, but have been turned into insults in our era. [Socialism by association with the failed communal policies of Soviet Communism, and liberalism by association with tree-hugging and simple mindedness.] These biases alone demonstrate what a hold right-wing rhetoric with its talk of crackdowns, rubber bullets and the harshest sentences the law allow, has on our daily discourse. Meanwhile those knights of the realm Sir Philip Green and Sir Richard Branson – and a whole range of MP’s – take as much as they can and threaten to move their businesses off-shore should anyone ask them to contribute more.
My observations and analysis are, however, as far as I can make them empirically backed. Using the best data I can find – particularly that compiled by Richard Wilkinson and Kate Pickett in the Spirit Level, and extended by the eminent historian Tony Judt in his last book, ‘Ill Fares the Land’ – I have been convinced that the growing inequality in incomes in our society are driving much of our dysfunction and unrest. You will see from the graph above that the UK, just behind the US and Portugal had the third highest income inequality in the developed countries, a staggering fact in itself!
This state of affairs leads inexorably to an unfair society: one where bankers can pocket bonuses of millions for their speculations and where any stock-holder can receive dividends from shares of companies, the work of which he has not put a hand to – and may not even know what that work is.
It was not always like this. As Tony Judt points out: “From the late 19th century until the 1970′s, the advanced societies of the West were all becoming less unequal. Thanks to progressive taxation, government subsidies for the poor, the provision of social services and guarantees against acute misfortune (currently in force as compensation schemes for victims of the riots!), modern democracies were shedding extremes of wealth and poverty….Over the past thirty years we have thrown all this away. To be sure, ‘we’ varies with country. The greatest extremes of private privilege and public indifference have resurfaced in the US and the UK: epicentres of enthusiasm for deregulated market capitalism.
The UK is more unequal in incomes, wealth, health, education and life chances than at any time since the 1920′s. There are more poor children in the UK than in any other country of the European Union. Since 1973, inequality in take-home pay increased more in the UK than anywhere except the US. The consequences are clear. There has been a collapse in intergenerational mobility. The poor stay poor. Economic disadvantage translates into ill-health, missed educational opportunity and increasingly the familiar symptoms of depression, alchoholism, obesity and minor criminality.” (my italics)
Is it any wonder that at this time we are experiencing a growing feeling of tension and outbursts of discontent and unrest?
Watching the original film ‘Wall Street’ it is chilling how far we have come since 1987 along the road to celebrating the dissolution of the state and the supremacy of private enterprise. The words ‘public services’ have a derogatory ring to them: we suspect that such services will be inefficient, mildly or openly disrespectful, bureaucratic and slow. There is a palpable feeling of envy that public servants, alone of all of us, have maintained pension entitlements. Thirty years ago we all had them. We have come to despise our schools – the very engines of our social mobility – and are scornful of our own institutions; the very institutions that helped lift the masses out of poverty and lack of identity.
In their place our heroes have become CEO’s (now earning 900 times more than their average worker), entrepreneurs and the rag-tag celebrities of movies and TV shows. We secretly envy their lives, peering at them through the press and TV, while rejoicing in their misfortunes, perhaps because they mirror our own. We fail to notice the difference, that when you are worth a few millions or so misfortune is a very different animal than when you have £200 between you and eviction, or when you have nothing at all except hand-outs.
We also fail to notice that the dominant characteristics of our new heroes are narcissism and selfishness. None – or very few of them – can ever get enough. Rather than acting as a lesson to the rest of us, the failure of acquisitions and money to produce happiness and repose does little to dispel the myth that riches will make everything OK. We have replaced our focus on building community, even a nation, with stashing the cash, flashing the card, collecting hoards of stuff and hoping to win the lottery.
It is tragi-comic that hundreds of youngsters were willing to risk imprisonment for an Adidas tracksuit or a pair of Nike trainers. Even the boldest could think of little better to steal than a 42″ flatscreen TV. Perhaps these images should inspire our pity as much as our hatred. I cannot think of a more frightening wake-up call, a more chilling end to the excitement than the battering of the ram through the door of your council flat at six in the morning. Not one but twenty police, clothed in helmets and riot gear pour into your home and seize the glorious track suit, cuff you and lead you off to the cells. You are denied bail, remanded in custody even though you have no record – and the magistrate sends your case to the crown courts because he can give no longer than a six month sentence. You don’t even get to keep the track suit.
And because we were afraid, a great many of us cheer your draconian punishment. You deserve it, you are scum – just as you always feared. Within moments last week some of my liberal chums were tweeting for tanks and live rounds to be used on the streets. And the way back from a night when you surrendered your reason to the thrill of the mob? There is no way back for most of you. Social services have been underfunded for years and are virtually dismantled with vacant unfilled posts in every department. No employer will look at you now. You will even have to listen to people say that you got off lightly.