The writers Richard Wilkinson and Kate Pickett outline extensive research in their book to show that more equal societies always do better than unequal ones. Not only do smaller income differences help the poor, they also help everyone in society.
They looked at all the wealthiest societies and found that it isn't so much inequalities between different societies that do so much harm as inequalities within societies.
Both Japan and Sweden do well on equality. ‘Sweden does it through redistributive taxes and benefits and a large welfare state. As a proportion of national income, public social expenditure in Japan is, in contrast to Sweden, among the lowest of the developed countries. Japan gets its high degree of equality of market incomes, of earnings before taxes and benefits.'
Thus:
‘Greater equality can be gained either by using taxes and benefits to redistribute very unequal incomes or by greater equality in gross incomes before taxes and benefits, which leaves less need for redistribution.’
Wilkinson and Pickett, looked at a variety of measures such as: the number of teenage pregnancies, health factors including mental health, friendship and trust, violence and the consequences of crime eg the prevalence of prisons etc.
Obesity is an interesting one. ‘…In poorer societies both obesity and heart disease are more common among the rich, but as societies get richer they tend to reverse that social distribution and become more common among the poor.’
They found that ‘Friendship and involvement in social life are highly protective of good health, while low social status or…more inequality, are harmful.’ They found that social status and friendship represent the two opposite ways in which human beings can come together. On the one hand, social status stratification is ‘fundamentally ordering based on power and coercion, on privileged access to resources, regardless of others’ needs’. Friendship on the other hand is ‘about reciprocity, mutuality, sharing, social obligations, co-operation and recognition of each other’s need’.
‘Less hierarchical societies are less male-dominated…and the position of women is better. Similarly the quality of social relations in more equal societies is less hostile. People trust each other more and community life is stronger, there is less violence and punishment is less harsh.’
Wilkinson and Pickett found that ‘dominance strategies are almost certainly pre-human in
origin. They would not have been appropriate to life in the predominantly
egalitarian socities of Stone Age human hunters and gatherers’ and that 'the current highly unequal societies are
exceptional. For over 90% of our existence as human beings we lived...in highly egalitarian societies…modern inequality arose and spread
with the development of agriculture’.
'Dominance hierarchies are about self-advancement and status competition. Individuals have to be self-reliant and other people are encountered mainly as rivals for food and mates. At the other extreme is mutual interdependence and co-operation…sense of self-worth comes… from the contribution made to the wellbeing of others.’ Ring any bells? This government's whole Welfare strategy is based on the survival of the fittest.
The authors compare eg Cuba and the States: Cuba, despite its much lower income levels, has life expectancy and infant mortality rate almost identical to those in the United States.
Closer to home, egalitarian policies were implemented by Britain during the Second World War. ‘To gain public co-operation in the war effort, the burden had to be seen to be fairly shared.’
It’s often suggested that invention and innovation go
with inequality however evidence shows that more equal societies tend to be
more creative. More patents are granted per head in more equal societies.
‘Whether this is because talent goes undeveloped or wasted in more
unequal societies, or whether hierarchy breeds conformity is anyone’s guess.’
'Working hours vary in relation to inequality. More unequal countries tend to have
longer working hours and also differences in working hours changed in line with
changes in inequality over several decades…people in more unequal countries do
the equivalent of 2 or 3 months’ extra work a year.’
The authors also show that ‘inequality weakens community life…the weakening of
community life and the growth of consumerism are related.’
‘…more equal countries tend to pay a higher proportion
of their national income in foreign aid…more unequal societies also seem to be
more belligerent internationally.
Inequality is related to worse scores on the Global Peace Index which
combines measure of militarization with measures of domestic and international
conflict, and measures of security, human rights and stability.’
‘Politics was once seen as a way of improving
people’s social and emotional wellbeing by changing their economic
circumstances. But over the last few decades the bigger picture has been lost.’
In Britain & US, inequality increases peaked in
the early 1990s and have changed little since then. ‘In both countries
inequality remains at levels almost unprecedented since records began…' Indeed income differences are now ‘not far short of 40% greater than
they were in the mid-1970s’.
Widening of income differences occurred particularly during
1980s and early 1990s in Britain and the USA. Paul Krugman, Nobel Prize winning
economist, analyses reasons for rising inequality in the USA…one of the main
features was runaway income at the top eg CEOs. Krugman argues that rising
inequality was driven by “changes in institutions, norms and political power”.
He emphasises 'the weakening of trade unions, the abandonment of productivity
sharing agreements, the influence of the political right, and government
changes in taxes and benefits. He could also have added the failure to maintain
adequate minimum wage legislation.'
'In USA inequalities rose to a peak just before the
Great Crash of 1929, then narrowed so dramatically in the late 1930s and early
40s that the period is sometimes referred to as the ‘Great Compression’. Income
differences then remained narrower until the late 1970s or mid 1980s. Then they
started to widen rapidly again until just before the recent financial crash
where they reached levels of inequality not seen since just before the 1929
crash.'
‘If “market forces” were the real drivers of
inequality, it is unlikely that the post-war settlement would have remained
intact for 3 or 4 decades…the ending of that consensus was very clearly related
to a rightward shift in political opinion. The triumph of the new right
extolling the benefits of the free market and the dominance of monetarist
economics were enshrined in the political leadership of Reagan in the USA and
Thatcher in Britain. Communism had ceased to be a realistic threat and many
governments privatised what had been state owner public utilities’
'In Japan there is often a much closer relationship
between management and unions…the Japanese Federation of Employers Association
found that 15% of the directors of large companies were former trade union
officials. In the countries of the European Union the earnings of some 70% of
employees are covered by collective agreements, compared to 15% in US. At 35%
the UK is among the lowest in the EU.'
‘If you fail to avoid high inequality, you will need
more prisons and police, have higher rates of mental illness, drug abuse and
every other level of problem…if keeping taxes and benefits down leads to wider
income differences, the need to deal with the ensuing social ills may force you
to raise public expenditure to cope’. It is perhaps telling that since 1980, in the US, public expenditure on prisons
increased six times as fast as education.
In Britain over the last 20 years polls have shown that
around 80% of the population has thought that income differences are too big
(rarely dipping below 75%) even though most people underestimate how big income
differences actually are.
'It is in institutions where we are employed that we are most
explicitly placed in a rank-ordered hierarchy, superior and inferiors, bosses
and subordinates.'
'Denationalization of major industries and the
privatization of large numbers of friendly societies, mutuals, building
societies, provident societies and credit unions, which had been controlled by
their members, may have made a substantial contribution to widening income
differences.'
Here is a sobering thought: ‘Numerous corporations are now bigger than many
nation states....Other estimates suggest that half the world’s largest
economies are multinationals, and that General Motors is bigger than Denmark,
that Daimler Chrysler is bigger than Poland; Royal Dutch/Shell bigger than
Venezuala, and Sony bigger than Pakistan…these productive assets remain
effectively in the hands of a very few, very rich people..’
‘Democratic employee-ownership not only avoids
concentrating power in the hands of the state but evaluations suggest it has
major economic and social advantages over organizations owned and controlled by
outside investors in whose interests they act.’
Studies of how work affects health show that …'people seem to thrive when they have more control over their work.
Having control at work was the most successful single factor explaining
threefold differences in death rates between senior and junior civil servants
working in the same government offices in Britain..probably to do with a sense
of autonomy and not feeling so directly subordinated…there is growing evidence
that a sense of unfairness at work is an important risk factor for poor health.'
'Employee-ownership increases equality – it is
bottom-up rather than top-down…employees might agree that the CEO of the
company could be paid a salary several times as big as their own – maybe three
or perhaps even ten times as big as their own. But unlikely that they would say
several hundred times as big… such huge differences can only be maintained by
denying any measure of economic democracy .'
‘Who, apart from the super-rich would vote for
multi-million dollar bonuses for the corporate and financial elite while
denying adequate incomes to people who undertake so many essential and
sometimes unpleasant tasks – such as caring for the elderly, collecting the
trash, or working in emergency services?…Modern inequality exists because
democracy is excluded from the economicsphere..’
'If Britain became as equal as the four most equal rich
countries: Japan, Norway, Sweden and Finland, levels of trust might be expected
to be two thirds as high again as they are now, mental illness might be halved,
everyone might get an additional year of life, teenage birth rates could fall
to one third of what they are now, homicide rates could fall by 75%, everyone
could get the equivalent of 7 weeks extra holiday a year and the government
could be closing prisons all over the country.'
But this has to take the biscuit:
In a major speech at the end of 2009 David Cameron said ‘The
Spirit Level’ showed ‘that among the richest countries it’s the more unequal
ones that do worse according to almost every quality of life indicator…per
capita GDP is much less significant for a country’s life expectancy, crime
levels, literacy and health than the size of the gap between the richest and
poorest in the population…we all know, in our hearts, that as long as there is
deep poverty living systematically side by side with great riches we all remain
the poorer for it.’
So what happened, Dave?
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