Tag Archives: inequality

Equality of Voice – An Introduction

Stating Your Case - The Common and Most Basic Capability
Stating Your Case – The Common and Most Basic Capability

Everyone in British politics, right and left, is now talking about inequality and social justice. But there is much confusion and obfuscation. Specificity is required. Social justice has rather different implications depending on whether it comes from the right or the left of the political spectrum. Leaving aside issues of capital ownership, right social justice essentially relies of the economic concept of the ‘marginal productivity of labour’ (MPL). An individual’s share of society’s material rewards should exactly represent his or her individual contribution to the output of society (usually in effect the output of their employer). Continue reading Equality of Voice – An Introduction

The Role of Capital in Inequality

Thomas Piketty’s “Capital in the 21st Century”, published in 2014, played an important role in directing attention to the issue of inequality in the developed economies of the 21st century. The book was both praised and criticised from many parts of the political and economic spectrum. Least controversial was his laying out of the evidence that inequality of both income and wealth has increased markedly since the 1970s, particularly in the US and the UK. A little more controversial is the suggestion that this increasing inequality is harmful to the societies of those countries. Most controversial, and more technical, was Piketty’s espousal of a ‘fundamental law of capitalism’ that when the return on capital (r) exceeds the rate of economic growth (g) inequality will increase.

The chart below shows the change in the fraction of total income going to the top 10% of the distribution for 1900 – 2010.

The Top Decile Income Share, Europ and the US, 1900 - 2010
Source: Thomas Piketty, Capital in the 21st Century

Continue reading The Role of Capital in Inequality

If ‘Neoliberalism’ Is So Great, Why Lie About It?

What is it about ideological free marketeers and their shaky relationship with the facts? Everyone likes markets and free exchange is one of the best manifestations of human co-operation there is – so why tell lies about their limitations and the infrastructure required to make them work for our benefit?

Sam Bowman of the Adam Smith Institute is keen to adapt the often pejorative label of ‘neoliberalism’ to his cheery brand of paid-for market propaganda, and promotes it under this banner in an article in the online i newspaper. He defines a neoliberal as

someone who thinks that lightly-regulated markets, free trade and free movement are the best way to create wealth and innovation domestically and globally, but that the state does have a role to play in redistributing some of the proceeds to the least well-off. Continue reading If ‘Neoliberalism’ Is So Great, Why Lie About It?

China, Democracy and Reality

Tianan'men - The Gate of Heavenly Peace, Beijing, China.
Tianan’men – The Gate of Heavenly Peace, Beijing, China. www.diarmidweirphotography.co.uk

 

Having recently had the opportunity to visit China and combine that with some reading about the country, I’ve come away with some inevitably fairly superficial thoughts about how the Chinese and the West do things differently. While the Chinese government sets limits on voiced or organised challenges to the Communist Party’s control of the country, it seems that most Chinese are able to pretty much get on with their lives as they wish. Having visited the great open spaces at the centre of London, Paris, New York, Berlin and Madrid, it felt disturbing to be shooed off Tiananmen Square at dusk, but otherwise despite the presence of police and soldiers at nearly every turn in central Beijing, I felt able to move around and take photographs pretty much as elsewhere.

I suspect the vast politically apathetic majority of Westerners would feel no restriction of their freedom under the Chinese regime. If the rise of Donald Trump and apparently popular strongmen such as Russia’s Vladimir Putin and Turkey’s Recep Tayyip Erdo?an, along with Brexit, show that the ability to vote is not enough to sustain government by reason then Mao Zedong’s Great Leap Forward and Cultural Revolution show that the lack of a democratic buffer leads to the deaths of millions.

Continue reading China, Democracy and Reality

Independence is Nominal

Independence is Nominal – long-gestated thoughts given birth to in response to Brian Barder’s blog post on the lack of post Scottish referendum preparedness and the need for the UK coalition government to resign if there is a ‘Yes’ vote.

The view from Scotland
The view from Scotland ©DWP

Here I am, up in Scotland and strangely detached from the debate. (For comparison I was very active for the Yes side in the devolution campaign.) This detachment is partly due to personal events over the last 18 months, but also to a difficulty in getting a handle on what it all means. Continue reading Independence is Nominal

Unemployment – Morality, Money and Increasing Returns

Returns to Scale in Frankfurt's business district
Returns to Scale in Frankfurt’s business district ©DWP

The causes of unemployment make it a moral issue. Radical solutions are required.

In an earlier post I noted some features of unemployment from a UK perspective. The main thrust was that a fairly constant proportion of the population in employment (around 72% of those of working-age) hides a serious decline in the availability of adequate work, due mainly to the increase in women in the workforce and the fall in the ratio of full-time to part-time work. In a paper I wrote and referenced here on welfare I hinted at a moral dimension to the issue of unemployment in a capitalist economy (by which I simply mean an economy where physical means of production tend to belong in more or less concentrated hands).

I have now written a rather more formal paper (pdf 198kb) which I presented to the Post-Keynesian Study Group annual workshop in May this year in which I expanded on why we have a persistent problem with unemployment, and why this has a significant moral implications in our attitude to the unemployed. In this light of this I review the inadequacy of current policy and look at some of the more radical solutions proffered. The following is a non-technical summary of the paper. Continue reading Unemployment – Morality, Money and Increasing Returns

The Callousness of a Conservative

Charles Moore is the official biographer of Margaret Thatcher, former editor of the Daily Telegraph and an Old Etonian. He has nicely epitomised the indifference, evident intentional ignorance and convenient innumeracy of a particular type of Conservative. Writing in his column in ‘The Spectator’ magazine (May 4th) he devotes a mere 262 words to writing-off the problems of those on low incomes in Britain.

[T]he people who best understand how welfare works are either its recipients or those who work on low wages and are scarcely better off for doing so

he writes. So far so reasonable. He goes on:

These people recognise that being on welfare is — in effect, though not morally — like having a job. There is a wage for it, plus various equivalents of overtime and fringe benefits, and the task is to get as much of these as you can.

There’s a half-truth in there. If work seems like an impossibility, or hardly worth the candle given its poor rewards and insecurity, self-interest would suggest that you look for all the benefits you might be entitled to – although many don’t. But he continues:

 One effect of this has been to destroy the working class. Its more enterprising members have become middle class and the rest have discovered that they can live by not working.

At a stroke of his expensively-educated pen, Moore dismisses the existence of all those struggling to make ends meet in low-paid jobs. Four million Britons over 18 are in jobs that pay £7 per hour or less; seven million in ones paying no more than £8 per hour. (The minimum wage is set at just over £6.) They cannot reasonably be said to have joined the middle class, and if they could ‘live by not working’ they certainly choose not to. Continue reading The Callousness of a Conservative

Equality of Voice and ‘Devo-localism’

Dependent Smurf
Don’t I get a say?

 

That’s where the real constitutional debate needs to be – around a radical constitutional option that puts Scotland back into the hands of its people: devo-local, if you like. Trevor Davies, The Scotsman 10/5/2012

 [Politicians] see themselves as propping up something which is tottering rather than letting citizens build anew something that is soundly based. Charles Moore, Daily Telegraph 13/7/2012

 

Power wielded from the centre is slow to react, inflexible and discriminates poorly. Yet political power at all levels has been steadily eroded as a consequence of the economic demands of global corporations and the economic strain on central government to provide for these corporations and mop up the damage they cause. No redistribution of political power from centre to periphery can be sustainable without addressing the centralisation of economic power. The willingness to address the latter is surely what will separate the left ‘devo-localist’ from the right. Continue reading Equality of Voice and ‘Devo-localism’

Unemployment and Policy

This post is on 2 pages. Please click on the appropriate page number at bottom of text to navigate.

There’s a very interesting take on UK unemployment trends in the July NIESR Review, written by the NIESR director Jonathan Portes. One should perhaps bear in mind that he has previously worked to formulate employment policy for the Blair and Brown governments.

His essential point is that while the overall UK 16-64 employment rate has remained steady for over 30 years, this has been combined with some major changes in the patterns of that employment. This has major implications for the likely outcome of current government policy towards those out of work and their benefits.

In this post I summarise Portes’s findings and analyse more closely two points his paper overlooked: the impact of increased part-time working and the discrepancy between a rising population, a steady employment rate and falling numbers of benefit recipients. The findings suggest that the situation may be rather more serious than Portes fears, with significant implications for social welfare and cohesion. Continue reading Unemployment and Policy

The Riots of August 2011

The riots that engulfed London and other cities in England began one year ago today. Just to hark back to my piece ‘Riots: Looking Deeper’ on this topic last year, written one week after they started. I think it’s fair to say that it was a reasonable analysis. In particular the Independent Panel set up to investigate their causes stated

Clearly the importance of those attributes becomes even more pronouncedwhen young people are faced with growing up in a time of austerity, a struggling job market and pervasive messaging telling them that criminality provides a fast track to achieving status among their peers. For example, while we know that most convicted rioters were not gang members, we also know that gangs operate in a large number of areas where the riots occurred. Some young people are exposed to imagery and attitudes associated with gang culture from an early age, which glamorise a life of criminality outside the system and which eschews any empathy for the victims of crime.

An article by Richard Wilkinson and Kate Pickett (of ‘The Spirit Level’ fame) on today’s Guardian CiF specifically blames inequality. You might care to look here at my general response to that thesis.

As Laura Wilkes, Policy Manager at the Local Government Information Unit, points out today on LabourList

…with local authority cuts set to continue the environment will become more challenging than ever before – if we are to avoid a repeat of 2011 councils need to have the funding to invest in key intervention programmes, community development and economic growth; all things that could help to prevent future riots. As things currently stand, government policy could threaten this.