Biggest drop in income inequality in 30 years

[rendelharris]

Jeremy Wrote:

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> Rendel, seems to me that you're arguing for better

> social justice, higher taxation for the rich, etc.

> So that's what I'd call social democracy - and it

> is entirely compatible with a capitalist system.

Well, yes that is what I'd argue for, but to me social democracy really means moving towards equality within a capitalist framework - if the resulting fairer/socialist society is still called capitalist, fine. I don't think anywhere above I've said I want capitalism destroyed, have I?

[Earl Aelfheah]

Come on Loz - looking at the top 10 richest people in the world? It's a tiny and extreme sample. It tells you almost nothing about social mobility generally.

[Loz]

rahrahrah Wrote:

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> Come on Loz - looking at the top 10 richest people

> in the world? It's a tiny and extreme sample. It

> tells you almost nothing about social mobility

> generally.

I answer rendelharris's question: "> Yes, so in theory everyone can reach the top...do you really see much sign of that in practice?" Even to the point I quoted it at the top of my post.

If you don't like the answer, it's often best to blame the question. Not the answer.

[rendelharris]

But looking at such an extreme example as the top ten richest people in the world isn't an answer to my question, Loz. If you can show me a statistic showing that 30% of people earning between ?100k and ?500k are from poor backgrounds I'll gladly cede the point.

[Earl Aelfheah]

[deleted - posted twice for some reason].

[Earl Aelfheah]

Loz - you're talking about an extreme and unrepresentative sample. When people say it's more difficult for those from the poorest backgrounds to get to the top', that's generally true. I doubt Rendel literally meant 'the top 10 richest people in the world'. But you know that of course.

To suggest that as long as a small number of people in the top 10 list come from 'humble beginnings', then everyone should 'be happy' is mischievously reductive.

[Jeremy]

rendelharris Wrote:

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> I don't think anywhere above I've said I want capitalism destroyed, have I?

Well the discussion seemed to start with you paraphrasing Marx, comparing capitalism with feudalism. My answer was that mobility is a fundamental difference, and that capitalism itself isn't bad provided certain mechanisms are put in place. So I guess we've kind of come to an agreement...

[Loz]

rendelharris Wrote:

-------------------------------------------------------

> But looking at such an extreme example as the top ten richest people in the world isn't an answer to

> my question, Loz. If you can show me a statistic showing that 30% of people earning between ?100k

> and ?500k are from poor backgrounds I'll gladly cede the point.

That's not the top. That's 'somewhere up there, not the very top but sort of near it. Kind of.'

And I might be bothered to do that if you define what 'poor backgrounds' means. Because I'd probably get the numbers together and you would then change the definition. Like you just did with your other question.

Anyway, I get the distinct impression from your talk of pyramids early that all this stuff about people getting to the top isn't actually about social mobility at all. You are just annoyed there is a 'top'.

[rendelharris]

You're being rather silly Loz, any reasonable person reading my question "Yes, so in theory everyone can reach the top...do you really see much sign of that in practice?" would assume that I was talking about the highest levels of wage earners, not literally asking for proof that there are any people from poor backgrounds in the world's top ten billionaires.

To quote my own post above: "but there must surely come a cutoff where society says yes, good for you and thank you, and you're entitled to a ?10M a year wage (or wherever the line is drawn)" so no, people being at the top doesn't bother me in the slightest and I recognise the need for incentive. What bothers me is the size of the bottom of the pyramid and the gap between top and bottom.

But if you don't want to provide figures as I have to back your argument there's not much point in having the discussion.

[miga]

Jeremy Wrote:

-------------------------------------------------------

> rendelharris Wrote:

> --------------------------------------------------

> -----

> > I don't think anywhere above I've said I want

> capitalism destroyed, have I?

>

> Well the discussion seemed to start with you

> paraphrasing Marx, comparing capitalism with

> feudalism. My answer was that mobility is a

> fundamental difference, and that capitalism itself

> isn't bad provided certain mechanisms are put in

> place. So I guess we've kind of come to an

> agreement...

I think it started with me half-jokingly saying inequality is inevitable in our system, then someone said 'would you rather feudalism?' etc.

Anyway, there was mobility in feudalism too, you could earn your freedom by going to a city (hence the saying "city air makes you free") or joining the Crusade etc. What were they all complaining about with their missing teeth and their funny medieval headwear.

[Jeremy]

Yep disparity is inevitable in a capitalist system, but the earnings of the super-rich do not bother me at all as long as they pay their tax (a huge caveat of course... I'm talking ideologically). What should concern us is quality of life for the poor and vulnerable, and ensuring there is no "cycle of poverty".

Medieval headwear sounds good though.

[Earl Aelfheah]

Personally, I think inequality matters. Of course there will be disparities in wealth in a system of incentives and positional competition, that is indeed inevitable (in fact essential). But there is a point where the gap can become too large, such that it is counter productive, inefficient and potentially destructive to the system.

[rendelharris]

Absolutely RRR - there seems to be an idea amongst the ideologues of the right that there is an infinite money supply and anybody can simply "create" wealth. The truth of the matter is that were there an infinite money supply then runaway inflation would inevitably ensue. The amount of money available is necessarily finite, and if someone is drawing an enormous salary in 99% of cases that will mean many other people working for the minimum wage to fund it. It should be possible to have a system whereby hard work, good ideas and talent are well rewarded without preventing those who just want to do a fair day's work for a fair day's pay getting a (proper) living wage as well.

[Jenny1]

I agree rendelharris.

And there's been quite a lot written in recent years about how inequality is bad for absolutely everyone. It doesn't even make people who have the most money any happier. That's not a new idea of course - most religions got wind of it many centuries ago.

The problem is that putting this right is an ongoing, complex and difficult juggling act. Constant, vigilant regulation and tweaking of the economic system to ensure both healthy levels of innovation and activity and also adequate state-funded welfare provision for those who need it (which in the case of medical emergencies is all of us, all of the time).

I don't think any of this is helped by thinking that either 'left' or 'right' has all the answers/has got it all wrong. As ever in life it's only the middle path that gets you anywhere. The problem with the middle path is that it doesn't have the catchy slogans. It's hard work, it's subtle and it acknowledges that there's no such thing as arrival at perfection, or indeed easy answers - only a constant open-minded effort to make things better.

[miga]

Jeremy Wrote:

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> Yep disparity is inevitable in a capitalist

> system, but the earnings of the super-rich do not

> bother me at all as long as they pay their tax (a

> huge caveat of course... I'm talking

> ideologically). What should concern us is quality

> of life for the poor and vulnerable, and ensuring

> there is no "cycle of poverty".

Well I'm not bothered by displays of great wealth either - if you take the long view, the trappings of wealth of our age will probably seem as ridiculous to our descendants as the day long gorging on food practiced by feudal lords does to us.

We live in a system rooted in the accumulation of wealth, but with finite resources. We believe that we can participate in this economy and do well for ourselves, and we'd like the opportunity to accumulate wealth (which is why every side of politics, Corbyn included, rabbits on about opportunity, aspiration etc.). But on the other hand, we also believe that kids shouldn't be hungry, people should have a roof over their heads, the holy NHS should remain "free" etc. And the latter doesn't square with the former, so politicians temper with things like top or minimum pay, welfare state etc.

Before the state started tempering with the economic system, or trying to kerb its natural tendencies, there was also a huge wealth gap (Marx' 1850s that you mentioned through to like 1930s-1940s), and since the state has stopped tempering with the system (or freed it up a bit) - the last 30 years or so - the wealth gap has increased. People like us, who (I assume) work fairly well paid white collar jobs don't feel the pinch much - yet.

[rendelharris]

miga Wrote:

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> Well I'm not bothered by displays of great wealth

> either - if you take the long view, the trappings

> of wealth of our age will probably seem as

> ridiculous to our descendants as the day long

> gorging on food practiced by feudal lords does to

> us.

Just on a side note, a friend who recently spent a year doing doctoral research in Denmark told me that not only is there far greater integration of wage strata there - it's not uncommon for a junior office worker to live on the same street, or at least in the same district, as the company CEO - but virtually nobody, however rich, buys Ferraris, Porsches etc as they're regarded as a vulgar ostentation; people literally point and laugh in the street when they see them.

[Jeremy]

A Swedish friend told me something similar... that ostentatious displays of wealth are seen as vulgar and tasteless.

But then, when we went over there for his wedding, nice cars (Audi, Mercedes, etc) were everywhere. Wealthy country I guess. And there was a McLaren dealership over the road from our flat..

[JohnL]

miga Wrote:

-------------------------------------------------------

> Jeremy Wrote:

> --------------------------------------------------

> -----

> > Yep disparity is inevitable in a capitalist

> > system, but the earnings of the super-rich do

> not

> > bother me at all as long as they pay their tax

> (a

> > huge caveat of course... I'm talking

> > ideologically). What should concern us is

> quality

> > of life for the poor and vulnerable, and

> ensuring

> > there is no "cycle of poverty".

>

> Well I'm not bothered by displays of great wealth

> either - if you take the long view, the trappings

> of wealth of our age will probably seem as

> ridiculous to our descendants as the day long

> gorging on food practiced by feudal lords does to

> us.

>

> We live in a system rooted in the accumulation of

> wealth, but with finite resources. We believe that

> we can participate in this economy and do well for

> ourselves, and we'd like the opportunity to

> accumulate wealth (which is why every side of

> politics, Corbyn included, rabbits on about

> opportunity, aspiration etc.). But on the other

> hand, we also believe that kids shouldn't be

> hungry, people should have a roof over their

> heads, the holy NHS should remain "free" etc. And

> the latter doesn't square with the former, so

> politicians temper with things like top or minimum

> pay, welfare state etc.

>

> Before the state started tempering with the

> economic system, or trying to kerb its natural

> tendencies, there was also a huge wealth gap

> (Marx' 1850s that you mentioned through to like

> 1930s-1940s), and since the state has stopped

> tempering with the system (or freed it up a bit) -

> the last 30 years or so - the wealth gap has

> increased. People like us, who (I assume) work

> fairly well paid white collar jobs don't feel the

> pinch much - yet.

But as many of our pensions are mucked up we need a second

source of income for retirement - and that's where it's nice

to have a bit of wealth.

[miga]

You work with what you've got. Until the serfs come with burning pitchforks.

ETA: By which I mean, you gotta do wotcha gotta do.

[NomDePlume]

I Thank Keith Lindsay-Cameron for this thoughtful paper.

Cities are incredibly vulnerable places and I am not sure that the Tories and neoliberals across the world have thought this through.

London is becoming increasingly gentrified as a matter of policy, big money is enforcing social cleansing, it's getting rid of the poor and creating a haven for wealth, and wealth in and of itself is essentially useless, relying on others to make the stuff that sustains life and having it imported, hence the super port called 'London Gateway' in Thurrock, Essex.

The culture of greed of the global 1% enshrines competitiveness as if it is holy writ, whilst denigrating cooperation as weak, leftist, bleeding heart, socialism.

We are in the midst of a global economic apocalypse, driven by greed at the cost of everyone and everything else on the planet and the poor in particular. Those who are amassing global wealth know the price of everything and the value of nothing.

Right now our NHS is in crisis, this has been caused wilfully and with intent to privatise the nations health service and introduce an insurance payment system which, because such a system is predicated on profit, not health, will deny comprehensive health care to millions of people. People will be abandoned to die for want of care because their needs are a profit loss and therefore of no value.

The staggering stupidity of this is that they seem not to realise that they are driving people out of health care professions, which makes health care precarious for everyone, including them. The junior doctors dispute caused by Jeremy Hunt, has alienated an entire national group, a labour force, of real, actual, people, personally, politically and professionally.

Biting the hands that heal us has to be the very pinnacle of stupid.

Living in cities has, at its very core, dependence, there is not a city on Earth that is capable of providing its needs without a vast infrastructure to provide for those who live there by road, rail, sea and air. Supermarkets are contingent on daily deliveries of stock, Millions of people live one pay day away from starvation whilst entire cities and towns are just a few days away from starvation reliant, as they are, on 'just in time' deliveries.

I well recall going to a local supermarket for a loaf of bread after an overnight snow fall to discover that the bread shelves were empty, along with eggs and milk, I drove out of town to a bigger supermarket to find their shelves empty as well. The very fact that I could drive there says everything about panic buying for no reason and the fragility of supply.

Whilst governments hold us to ransom to sustain the competitive thirst of big business for profit, big business also holds us for ransom for overpriced goods to sustain their profits.

Cities like London, Birmingham, Manchester, Newcastle are consumer monsters, resource hungry, not least in fossil fuels, for their daily survival.

Prior to the 2008 banker driven crisis this may well have seemed an irrelevant issue to raise, but with the imposition of austerity on ordinary people, increasing poverty, inequality and global unrest, the cooperative endeavour that maintains modern life is not just being denigrated, it's being attacked by those whose only motivation is greed, which includes the government which is hell bent on finishing what Thatcher started.

The so called 'free markets' are anything but free for the vast majority of ordinary people who are merely food 'stock' for corporate greed and the wealthy few. The richest 1% own more wealth than the rest of the entire world and a mere 62 people own half of all global wealth.

We no longer have a 'salt of the Earth' working class but a denigrated, demoralised, demonised and penalised working class who are being killed off at a terrifying rate and whose only function is to serve greed or be abandoned to manage, somehow, or die. Homelessness is on the rise and homeless people are being criminalized in a country in which the government makes no attempt to address the housing crisis. If the government really cared about jobs and housing the answer would be to build social housing! That they don't and won't is the measure of the hostility and contempt they have for our lives.

Those who live the most precarious lives are being targeted by government and if the consequences of that are of society rotting under the insanity of neoliberalism, it has only one direction to go and we're already seeing the results. Student debt, shrinking the welfare state, the destruction of front line services, including our NHS and those who staff it, asset stripping the nation and selling off everything that we, tax payers, have paid for and maintained, if all that isn't creeping rot from the bottom up I do not know what is.

On 17th January 2017, the Guardian reported that the government is failing to deal with corruption at home and in Britain?s overseas territories, David Cameron said at last years anti-corruption summit which he hosted, corruption is "the cancer at the heart of so many of the problems we need to tackle in our world." He was in prime position to know, but there are consequences to state corruption which I am not sure he's really thought through any more than Theresa May or the rest of the right wing ideologues.

Servicing cities and, indeed, an entire nation is a mind buggering undertaking and yet it goes largely unremarked, it's tempting to call it a logistical nightmare, except that it carries on day and night, a gigantic cooperative operation organised by countless people in countless ways. In human terms roads and railways are the nations arteries, then there are great ships and planes traversing the world and all the technology to make it all work, including all the communications networks and who makes it all work? Not the government. There is nothing coordinating the entire system, it's an astonishing collective effort run and operated by millions of ordinary people in which we are all players, reliant on one another and yet almost all complete strangers to each other.

If one person ceases to be able to function, however that may be at home or at work, it's no big societal deal, but as life becomes more precarious and unstable for increasing numbers of people then the system will become affected, in ways great and small, and the more that is pushed by government policy and corporate greed, the more complex the problems become and the more chaotic.

All of this is being caused by a neoliberal agenda of unrestrained vulture capitalism and greed which, according to right wing doctrine, left to its own devices will privatise everything and sort the world out and do it more efficiently and offer better value for money and choice than public ownership and collective action. That is the same as saying that in order to sort out the Fukushima Daiichi nuclear disaster, what we need is another tsunami, bigger and more destructive than the first one that caused it.

I look forward to the day when the whole thing unravels for only one reason, when a banker comes to rural Peasedown St John, where I live, with a bar of gold, begging for food because he and his kind have turned London into a wasteland, I want be in the front line to tell him that having done it all for what's sitting in his hand, he can now "Fuck off and eat it!" Bear in mind that David Cameron and George Osborne, the two arch criminals and architects of austerity for the poor in Britain, are currently (Jan 2017) reported to be earning five figure sums for 20 minute speeches to bankers, the architects of the global economic meltdown in 2008, at the World Economic Forum in the Swiss resort of Davos. The solution to greed is yet more greed (economics for the terminally stupid).

Our day will come although it'll get worse before it gets better, but sooner (probably) rather than later, we will either wrest the world from their grasp, or it will unravel through their senseless greed, and we will have to restore sharing, cooperation and collective action for all our sakes, but never forgive those who caused it and have treated us with such brutality and contempt.

There are two certainties in life, they say, death and taxes, now there is a third, the absolute greed of the few at the expense of the entire planet. The world is drowning in their arrogance and stupidity.

This is global economic warfare, and there is no possible excuse for it, nor is there a way out unless we resist and fight back in whatever way we are capable of. Our essential instincts of flight or fight won't help us here, there is nowhere to run that can ever be anything but a temporary shelter from greed. The world is our birthplace and our birthright, it is a closed system, but it is also now a prison being run by criminals who are destroying it. Our only choices are to do nothing or fight. It is as hard and as simple as that, but above all, never, ever, vote for them, that's not democracy, that's suicide.

[jaywalker]

"I am not sure that the Tories and neoliberals across the world have thought this through"

They have a model of the human that is centred on rational self-interest. This is scalable: so the UK (considered as an individual) can, to their certainty, show its energy and competitiveness in a free-trade world. Thus the EU is only a constraint on trade, its social and justice policies merely disincentivise that energy so should be abandoned.

The aporia (in May-type conservatives) is that this must then canalise a reactionary nostalgia for the 'greatness' of our past; before we were led astray - not least by liberal cosmopolitanism with its 'corrosive' effect on traditional values; but a cosmopolitanism on which, in fact, the wealth of free trade is predicated not to mention the enlightenment itself. So only those born here should benefit from the competitiveness (but unfortunately if we can prohibit the free movement of people we certainly cannot prohibit the free movement of capital - so the subsidies have already started). She will pay a heavy political price for this - the economic damage will be enormous and precisely the people of her atavistic dream of order (how many times did she mention terrorism in her recent speech on EU negotiations when that had absolutely nothing to do with it?) will be most affected.

[Earl Aelfheah]

From today's FT:

"Nearly a third of people in the UK live in a household where there is not enough money for adequate food, clothing and housing and the basics of a social life, up from a quarter at the start of the financial crisis, according to new research.

The number of people living in households with income below a minimum standard rose from 15m in 2008-09 to 19m in 2014-15, according to analysis by researchers at Loughborough University for the Joseph Rowntree Foundation. Most of the increase happened in the three years until March 2012 and was not then reversed."

[Jeremy]

Sad reading, RRR.

But reinforces my belief that quality of life for the poorest is a much more important indicator than the wealth gap. Who cares if the super-rich have taken a knock, if things haven't improved at the other end of the scale?

[DaveR]

"Nearly a third of people in the UK live in a household where there is not enough money for adequate food, clothing and housing and the basics of a social life, up from a quarter at the start of the financial crisis, according to new research.

The number of people living in households with income below a minimum standard rose from 15m in 2008-09 to 19m in 2014-15, according to analysis by researchers at Loughborough University for the Joseph Rowntree Foundation. Most of the increase happened in the three years until March 2012 and was not then reversed."

It is worthwhile drilling down into the methodology a little. The Minimum Income Standard for a family with two parents and two children is ?39,000 per year. It is calculated from the gross income necessary to meet a list of weekly 'outgoings' that include rent, food etc., but also ?107/week for social & cultural activities, ?85/week for travel and ?49/week for clothes, for example. The essential point is that MIS is not intended to be and should not be considered a poverty measure (JRF consider 75% of MIS indicates poverty so c.?30k/year for a family of four). It is a measure of what "is enough to cover what the public think is needed for a minimum acceptable standard of living." (that is the actual definition).

Edited to add:

There is a calculator on the MIS website - that's where I got the figures above from. If you try some variables you get some surprising (to me at least) results, that also put the report findings into context. For example, the MIS for a lone parent with a baby, a toddler and a primary age child is apparently ?73,000/year, which seems a lot. It may be explained by the 'outgoings' including ?440/week for childcare.

http://www.minimumincome.org.uk/

[JohnL]

Jeremy Wrote:

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> Sad reading, RRR.

>

> But reinforces my belief that quality of life for

> the poorest is a much more important indicator

> than the wealth gap. Who cares if the super-rich

> have taken a knock, if things haven't improved at

> the other end of the scale?

Trickle down economics doesn't appear to work it

seems (unless you have a very close community)