Income inequality – Tories v Labour


12:49 pm - August 29th 2008

by Sunny Hundal    


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Looking at the above graph (via), would you say income inequality has increased more under this Labour government, or under earlier Conservative governments?

I think it may be obvious but someone may want to explain this to Chris Mounsey of Devil’s Kitchen, the idiot with tourette’s syndrome and a penchant for writing sexual fantasies about newspaper columnists, who thinks this is rubbish. It doesn’t help does it, if you’re angry at someone saying nasty things about right-whingers, and then get it wrong yourself with irrelevant statistics.

Update: Unity at Ministry of Truth sets the fool right, decisively.

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About the author
Sunny Hundal is editor of LC. Also: on Twitter, at Pickled Politics and Guardian CIF.
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Story Filed Under: Blog ,Conservative Party ,Economy ,Labour party ,Westminster

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Reader comments


Well, you’d have a point if you’d said “income inequality” in the first place; however you didn’t, leaving it open to interpretation.

In his post, DK is talking about wealth ownership. You’re talking about income. There’s nothing glaringly wrong with, or “irrelevant” about, DK’s statistics (nor is there anything glaringly wrong with yours).

You’ve just moved the goalposts to make it look like you were right all along, and he was wrong.

What sort of inequality was I talking about then? The number of donkeys people own? He just didn’t have the right stats to back up his point. I never mentioned wealth ownership – he did.

Sunny,

You talked about inequality. Income isn’t really relevent in these terms: wealth is.

Compare and contrast a worker earning the median wage of £24k, and someone with a £1 billion Trust fund who doesn’t work but simply draws down the capital. By the measure that you favour, i.e. income, the worker is considerably better off than the playboy.

Which is why the measure of wealth is much more important.

DK

How does the ONS factor in pensioners (or do they look at working age people only here)? They tend to be pretty wealthy, but their income isn’t usually high. Could simple demography be playing a role here?

Given that Labour activists go On and On (and On) about income inequality, your lot don’t seem to have done very much about it.

Is that a failure to deliver?

Jacart – yes, that’s a failure of this Lab govt (assuming you agree they should do something about it) and secondly its not easy to do given the free market economy and how badly things had gotten under Thatcher.

DK – that is disingenous for various reasons. Your stats give you broad aggregates for various percentiles, but don’t say anything about how things may have progressed within them either.

So the poorest parts of the population are caught in the ‘Most Wealthy 50% of the population’ – which is too broad to mean anything.

Within that 50%, it could be that the top 10% get considerably richer and the bottom 40% get considerably poorer and your overall stat would remain the same.

And as it is, the poorest segments of the population have little in terms of assets of wealth. So looking merely at wealth distribution means little because they start from such low percentages anyway.
So even if the bottom quarter of the entire population got relatively richer or poorer – it would have little impact on the stats since the richest 10% own such a high percentage of assets and wealth.
At most, the stats would move 1% or 2% either way because their proportion of the overall wealth of the country is so low to start with. So again, its rather disinegnuous.

I look forward to you altering your original post linking back to here with my response, so your own readers can see what a prat you are.

Even using an unweighted Gini coefficient for wealth shows a rise in wealth inequality in the Tory years (almost all post-1992, mind) – 65 to 69 – which is much greater than that since 1997 – 69 to 70.

http://img185.imageshack.us/img185/4529/wealthjg5.jpg

Using stats on wealth inequality in this way (or any other way, really – it isn’t particularly useful on its own as a statistic) is pretty dodgy anyway given that the makeup of the top percent had been changing and that a changing proportion of wealth (the stats here only include “marketable wealth”) isn’t particularly liquid. I think I’m right in saying (though I will check later) that the proportion taken by the percent had been falling almost continuously since the 1920s/1930s (and possibly even before) and, I’d venture to suggest, would have fallen much faster but for changes in policy under the Tories. That said, I might well be wrong about that: I’ll have a look later if I get the chance and find any solid stats. Regrettably, I am not the Institute for Fiscal Studies, but then neither is DK: I think he’s a hell of a long way from being entitled to draw the particular conclusion that he does from the data. Despite DK’s entirely reasonable objection, I also think that income inequality is a much more useful measure.

All that said, I do agree with him that it’s a bit of a cheap (not to mention incorrect) comment to say “[t]his is the level of intelligence that the political right has” and similarly to say that his statistics are irrelevant, with no further justification for this. I partly agree on the latter, but perhaps not for the same reason (?) as Sunny.

8. Mike Killingworth

[3] If I had capital of half a million, let alone a billion (other than the house I lived in) I would expect an income of £25k from it.

“There’s nothing glaringly wrong with, or “irrelevant” about, DK’s statistics (nor is there anything glaringly wrong with yours).”

Can we all kiss and make up then?

Without wanting to become ridiculously prissy about ‘blog etiquette’, I don’t think that you should refer to DK under his real name unless he chooses to use it. Admittedly, he hasn’t levelled his “cuntelycuntcunt” barrels at me yet, but I’d prefer that anonymity was honoured.

Ben

The start of the second paragraph should read

“Using stats on wealth inequality in this way (or any other way, really – it isn’t particularly useful on its own as a statistic) is pretty dodgy anyway given that the makeup of the top [small number] percent had been changing and that a changing proportion of wealth (the stats here only include “marketable wealth”) isn’t particularly liquid. I think I’m right in saying (though I will check later) that the proportion taken by the top [small number] percent had been falling almost continuously since the 1920s/1930s (and possibly even before) and, I’d venture to suggest, would have fallen much faster but for changes in policy under the Tories.”

“small number” got lost on both occasions, presumably because I used angle brackets which the software picked up as an attempt at html code.

8 – true, but a more general point that high wealth high income is well made.

@septicisle: Not up to me!

Dear Mr. Hundal,

I came across this post via ‘The Devil’s Kitchen’. I am the contributor to that site to whom Chris has referred as suffering from severe Tourette Syndrome.

It is disappointing to see your casual, lazy reference to what is an extremely debilitating and embarrassing condition on a post the topic of which has absolutely nothing to do with TS. Such references do nothing but continue to spread the lamentable misconceptions about TS which persist in the public mind.

Surely part of the problem is that no single statistic is valid: we need infmation on income and , assets
The median, average, and interquartile range and ratio of top and bottom 10% earners for assets and income of the British people would help to provide information. The land owners of the UK are often asset rich, especially with the increase in land prices but have relatively lower incomes.
Where I would suggest that massive increases have occurred are assets. Once someone has been earning £0.5M-£1m/yr, with sensible management and expenditure, they can have easily created assets of £10M-£20M over the last 15 years. Those on average incomes probably have no more than £100k-£200K equity in their homes with little or no savings .

Just wondering if anybody has the Gini Co-efficient stats since 1900 (or there about) online anywhere? Not trying to make a point about the stats presented its just that I’ve wanted to see them for a while and haven’t been able to find them.

I look forward to you altering your original post linking back to here with my response, so your own readers can see what a prat you are.

I am delighted to oblige you, Sun, though I don’t think that it will yield the result that you desire.

Mike,

[3] If I had capital of half a million, let alone a billion (other than the house I lived in) I would expect an income of £25k from it.

Which is why I specified a trust fund: any income would go to said fund and not therefore be counted as the playboy’s income. However, it would be perfectly possible for said playboy to simply remove a chunk of capital from said fund every six months, say.

DK

it’s a very odd graph. The Labour years trend flat from start to finish but the Conservative years show a rising trend. In fact, the largest rise was under the Conservatives and Labour are struggling to keep it flat. What does that prove? Probably that the author of this article is half-witted.

I don’t think that you should refer to DK under his real name unless he chooses to use it.

He has his real name all over the blog. It doesn’t take a genius to figure that out, especially if you click on the prominently visible LinkedIn icon. I find it funny that he’s censoring out his own name on his blog – maybe he thinks his readers are that thick.

Given he links to the libertarian blog, and the party, where his name is prominent, it doesn’t take a genius to figure it out. Again, like I said, maybe he has a lesser view of his readers.

The point is, he thinks he can swear like a nutbag at others… oh and also casually smear them with anti-semitism, and get away with it because his name is not attached to any of it. So he doesn’t have to worry. But since his name is all over the blog – why not start taking responsibility for his own words eh?

Also, a bit bizarre he has to refer to my “fine Asian features”, when it has nothing at all to do with the topic at hand…. and put up my pic.

I could play that game too, Mounsey, but some of us are more grown up than others.

DK, you said

“You talked about inequality. Income isn’t really relevent in these terms: wealth is.

Compare and contrast a worker earning the median wage of £24k, and someone with a £1 billion Trust fund who doesn’t work but simply draws down the capital. By the measure that you favour, i.e. income, the worker is considerably better off than the playboy.

Which is why the measure of wealth is much more important.”

Is wealth more important than income? More important for what? Living standards, of course. So is wealth more important than income for living standards?

Who will have more money to spend? If the wealthy person just spends the capital, then there’s no problem because after a while they will no longer be wealthy. But of course no one really does that – everyone with lots of wealth has it invested, so would have a big income as well.

Mike said

“If I had capital of half a million, let alone a billion (other than the house I lived in) I would expect an income of £25k from it.”

You replied

“Which is why I specified a trust fund: any income would go to said fund and not therefore be counted as the playboy’s income. However, it would be perfectly possible for said playboy to simply remove a chunk of capital from said fund every six months, say.”

You specify a trust fund. Firstly, this argument doesn’t concern the vast majority of wealth, which is not held in trust funds. Secondly, even if all wealth was held in trust funds, the argument still doesn’t work. The trust fund makes money. The person gets money from the trust fund. It’s income to the trust fund. Saying that it is stored up as capital for a brief period of time doesn’t make it not the person’s income.

This is all silly anyway. Wealth generation is more important than wealth distribution. “From a dollars-and-cents point of view, it is quite obvious that over a period of years, even those who find themselves at the short end of inequality have more to gain from faster growth than from any conceivable income redistribution. A speedup in real output of only one extra per-cent per year will soon lift even the economically weakest into income brackets to which no amount of redistribution could promote them”

“and also casually smear them with anti-semitism…and put up my pic.”

Fair points.

Ben

21. Mike Killingworth

[19] First, my thanks to Hugo for understanding my earlier comment.

Unfortunately, his last paragraph veers off into propaganda. Apologists for capitalism like to think that “all boats rise on the incoming tide” (of wealth generation) with its unspoken mendacious implication that everyone benefits equaly from it. The record does not bear that out – far from it. Even if it did, there would remain the issue of the utility of a marginal increase in income. One of the reasons the very rich get even richer is because they have more income than they wish to spend (playboys are atypical) – the argument for progressive taxation in pure economic terms is that the tax take should be arranged so that the income taken in taxes has a constant marginal disutility. Of course, in the real world, no one knows exactly what that is, because it depends on other factors too.

Finally, I should note that Hugo’s implication that there is a trade-off between wealth creation and redistributive taxation is also mendacious propaganda. If economic historians had been able to find a relationship between the two, we wouldn’t be having this discussion. But they haven’t and they won’t – too many other factors, not least the business cycle – occlude the data.

Stage 1: Sunny Hundal writes a post which says that making unscientific allegations that Gordon Brown suffers from a specific mental illness is the lowest possible form of politics practised by right-wingers.

Stage 2: Sunny Hundal writes a post which unscientifically accuses a right-wing blogger of having a specific mental illness.

Got to love the consistency

God when will you lot listen DK is a wanker, through and through. He’s not worth the fucking pixel space…

Anyhoo…Sunny, that Ministry link gives me a 404 error, any idea what’s up?

“I could play that game too, Mounsey, but some of us are more grown up than others.”

So, when will you be apologising for the Tourette’s comment then, Sun?

DK

I find it funny that he’s censoring out his own name on his blog – maybe he thinks his readers are that thick.

It is symbolic, Sun; yes, I am sure that the vast majority of my readers do know my name or, as you point out, could find it. But that is not really the point. So, I put up your picture to respond in kind.

Oh, and anti-Semitism? Where?

DK

So, when will you be apologising for the Tourette’s comment then, Sun?

Not really, Gordon Brown is a public figure and constantly in the press. You’re a nobody. The point was about making light of mental illness in the press. And you behave like someone with Tourette Syndrome. By your own coverage of Brown in this context, it means the shoe fits for you too.

Lastly, on the anti-semitism, forgotten this?
http://devilskitchen.me.uk/2007/10/sunny-hundal-intellectual-pygmy.html

Funny, you also had to mention by “Asian features” alongside a picture of me, which had no relevance to the topic. Don’t worry Mounsey, I’ll come back to this. Your pictures are all over the web too.

Christ, these bloggy disputes are tedious.

Sunny,

DK’s quite right. If you condemn frivolous invocations of medical disorders then it’s hypocritical to use them. I think there’s a problem in your claim that DK acts like he has tourettes, because one would hardly wish to painstakingly transcribe the verbal tics that one suffers from.

DK,

Here you accuse Sunny of being a racist, Islamist cheerleader and ‘tacit anti-semite‘. The fact that you don’t remember it suggests that you were being pretty flippant, and it’s hardly surprising that the accused isn’t going to treat you with particular courtesy.

Ben

I think there’s a problem in your claim that DK acts like he has tourettes, because one would hardly wish to painstakingly transcribe the verbal tics that one suffers from.

Let’s get one thing straight. Chris Mounsey and his acolytes aren’t condeming me because they disagree with being flippant about mental illness – after all, they’re quite happy doing that with Brown. They only want to win a point over Mounsey, which is rather different. And yes, trying to psychologically analyse him would expose a whole range of other issues.

I wonder what chris mounsey would say if someone else addressed a point by a writer/blogger and put up a picture alongside referring to his “Jewish features”. Maybe it has editorial relevance – who knows eh?

Let’s get one thing straight. Chris Mounsey and his acolytes aren’t condeming me because they disagree with being flippant about mental illness – after all, they’re quite happy doing that with Brown.

Yes, DK only wants to win the point, or else he’d avoid displaying his ‘blogger most likely to have tourettes-syndrome‘ award. Unless Martin hasn’t noticed this, it also suggests that he was only trying to win a point in accusing you of spreading “lamentable misconceptions“.

However, claiming that it isn’t hypocrisy because DK is identifying it is still ad hominem – you can’t claim that it’s immoral to flippantly diagnose mental disorder and then do it yourself in a different context.

For one thing, it refutes any future argument.

Ben

Sunny @ 28:

I wonder what chris mounsey would say if someone else addressed a point by a writer/blogger and put up a picture alongside referring to his “Jewish features”.

What does that mean? Are you suggested he has done so on his blog? If so, via the power of Google, could you point us to it?

I’m no acolyte Sunny – it was just that I was amused at how the outrage you displayed over Guido’s ‘Aspergers’ comments was so quickly brushed aside when you wanted to make the same sort of allegation against someone you don’t like.

If the DK wrote a post complaining about inappropriate or vulgar language I’d be equally amused.

Er perhaps I’m missing something but that graph shows that the conservatives increased “income inequality” and labour have, in 10 years, done nothing to reverse it – hardly an acheivement.
It’s generally aknowldged that the only groups who have done well under Nu Lab are the top 10% (whose marginal tax rates are lower now than they ever were under the tories) and the bottom 10%, who have benefited from generous welfare payments and now have the disposable income and lifestle of an averagely paid worker. Everyone else has seem real incomes declline to fund these two groups. The answer you arrive at will always depend on how you define and measure “equality”.

Can I just point out that Tourettes is a neurological disorder caused by excessive dopaminergic activity which affects speech and movement, it’s not a “mental illness” in the generally accepted sense of the word.


Reactions: Twitter, blogs
  1. Marcus Wood

    @PeterWatt123 @sunny_hundal @PaddyBriggs Here's Sunny accusing another blogger of having, yes, Tourettes – http://t.co/xRke7Z2l

  2. Paul Hirschfield

    In other news, here's Sunny Hundal calling someone a Tourette's sufferer. Same old lefty hypocrisy.
    http://t.co/AmeTTStJ

  3. Polittiscribe

    @sunny_hundal u comment on Cameron. Do u remember this from 2008? http://t.co/4FRI6ApH

  4. Michael Holt

    @sunny_hundal u comment on Cameron. Do u remember this from 2008? http://t.co/4FRI6ApH

  5. Craig

    @sunny_hundal u comment on Cameron. Do u remember this from 2008? http://t.co/4FRI6ApH

  6. anthea daunton

    @sunny_hundal u comment on Cameron. Do u remember this from 2008? http://t.co/4FRI6ApH

  7. Rob Broome

    Sunny Hundal hypocrite shocker! http://t.co/NSwlTAdd

  8. Ben Cooper

    What's the saying… RT @PeterWatt123: Sunny Hundal hypocrite shocker! http://t.co/gvA86vER

  9. Sofia K

    Sunny Hundal hypocrite shocker! http://t.co/NSwlTAdd

  10. kiramadeira

    Oh. Dear. RT @BenCooper86: What's the saying… RT @PeterWatt123: Sunny Hundal hypocrite shocker! http://t.co/F0OEFf26





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