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How can we convince the public of re-distribution?


11:25 am - June 24th 2009

by Dave Osler    


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My entirely apolitical buddy Nick – we played in a band together in the early eighties – puts the the fact that I am a socialist down to some inexplicable quirk I picked up while I was a wanky student and he was already doing a proper job of work in a bathroom supplies warehouse.

While I subsequently swanned around doing non-jobs and trying to foment world revolution, he knocked his bird up, secured a council flat which he was then able to buy ridiculously cheaply courtesy of Shirley Porter, climbed the property ladder and eventually established his own bathroom supply business, doing a roaring trade knocking out plush bog seats to the Bishop’s Avenue set at two grand a time.

The inevitable divorce cost him a few bob, but I assume he is still a millionaire, at least on paper. Not bad for a council estate boy, right? Such a story is of course indicative of what happened to a certain layer of the working class in the Thatcher, Major and Blair years.

Although Nick is where he is as much by luck and political design as the graft he undeniably did put in, he naturally believes that he is entitled to what he has got, and that the trouble with bloody lefties like me is that we want to take his dosh away and give it to other people.

The thing is, basically that is what we do want to do. It is an engrained aspect of socialist sensibility to be horrified by poverty, to be outraged at extreme wealth, and to see wealth redistribution as the obvious solution.

We do our best to come up with analytical justification for this stance, endlessly monitoring the ever-expanding ratio between the salary of the average chief executive and the average employee, and memorising the trend line for the UK Gini coefficient and Lorenz curve.

Our logic seems so compelling to us that we find it difficult to believe anybody can see things any other way. Yet the majority of the population still think like Nick, as the latest empirical research from the Joseph Rowntree Foundation and the Fabian Society seems to underline.

Regardless of where they actually do stand in the income rankings, most people consider themselves as somewhere close to the middle. Over two-thirds believe that everybody has at least the opportunity to get on in life.

Attitudes are more likely to be negative towards the poor than towards the rich; common sense dictates that the bosses deserve their huge remuneration, although that seems to be changing slowly in the wake of meltdown in financial markets last year.

Consequently, few are convinced by abstract arguments in favour of social equality. Indeed, inequality is considered fine, so long as it is ‘deserved inequality’.

While there is public support for progressive taxation and income redistribution, much of this is premised on fear of the negative consequences of poverty. Put crudely, those surveyed regarded income support as the price society pays to keep burglary and mugging down to acceptable levels.

All of this represents a major problem for any left that is actually interested in expanding it base. Capitalism – and the inequality it creates – continue to enjoy moral legitimacy in the eyes of an overwhelming majority.

While the unfolding recession has generated popular outrage aimed against those at the apex of the banking system, clearly general purpose ‘tax the rich’ fat cat-bashing will most of the time have little purchase.

I’m not suggesting any retreat whatsoever from the underlying principles involved. No socialism worthy of the name can be anything but redistributive in nature. But we need to come up with a more effective way of selling the message to the public, and sooner rather than later at that.

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About the author
Dave Osler is a regular contributor. He is a British journalist and author, ex-punk and ex-Trot. Also at: Dave's Part
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Reader comments


New blog post: How can we convince the public of re-distribution? http://bit.ly/15G2IG

I think that eventually if a policy that is relatively straightforward and easy to explain (redistribution of wealth means that no-one should be too poor or too rich. Accordingly we will take money from the people that are too rich and give it to the people that are too poor) remains widely unpopular with the people at large, then the problem is more likely to be with the policy than the people.

While there is public support for progressive taxation and income redistribution, much of this is premised on fear of the negative consequences of poverty.

So what you’re saying is that while people support redistribution – which I agree they already do (hell, even I do) – they must be re-educated to support it for the “right” reason??

Given the current mess of the public finances, and with tax rises already in the pipeline to pay down the debt, I would just be grateful for the support you already have!

Alternatively, as Dillow has pointed out, you could shrink the size of the state in order to facilitate more redistribution.

http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2009/04/shrink-the-state-a-leftist-aim.html

“Big government cannot be redistributive government.”

“All of this represents a major problem for any left that is actually interested in expanding it base. Capitalism – and the inequality it creates – continue to enjoy moral legitimacy in the eyes of an overwhelming majority.”

Going rather off subject, I’d be interested in a proper examination of whether capitalism does in fact create inequality. Yes, I can see it in Gini and Lorentz information, but they are only partial measures: money income (or even money consumption) are not the be all and end all of life quality or life equality.

You could argue for example that we have a great deal less calorie inequality now than we did a century ago. A great deal less child mortality inequality. I’d wager (although don’t know) that we’ve less life span inequality. Less health inequality (and no, not just the NHS, I think there’s probably less (the caveat being that I am speculating, not asserting) in countries without the NHS). There’s less height inequality between the classes, which probably links in with having less calorie inequality. Less transport inequality, less education inequality…..

I agree, not all of those are purely a result of capitalism (and some might be results of redistributive or State efforts) but wouldn’t it be interesting if someone really studied inequality. Is life, in the round, in general, now more or less equal than it was in, say, 1750, before we started this capitalism shtick?

Dave & Co

Is it just the rich bankers that got caught in the credit crunch fiasco that is displeasing to the socialists or do the highly paid actors, musicians, athletes etc that are also thought to be making too much money? Do socialists think that they shouldn’t be paid that much in the first place or rather that they should be paid that much but must give it away to those less fortunate?

Liberal Conspiracy » How can we convince the public of re …: About the author: Dave Osler is a regular contrib.. http://bit.ly/GNq1O

Lilliput

“do the highly paid actors, musicians, athletes etc that are also thought to be making too much money”

The cynic in me would say that the left (not necessarily socialists) are so reliant on celebrity culture for messaging, that they can’t be too condemnatory. Sean Penn, George Clooney, Bruce Springsteen et al are praised by the left despite the fact that they contribute nothing tangible whilst businessmen, who at the very least create jobs, are villified. You are right, an interesting irony.

“While there is public support for progressive taxation and income redistribution, much of this is premised on fear of the negative consequences of poverty.”

So we are willing to suffer our pay being pillfered to avoid people starving in the street but dissaprove of outright theft? Who’d a’ thunk it?

“Capitalism – and the inequality it creates – continue to enjoy moral legitimacy in the eyes of an overwhelming majority. ”

Capitalism works, it rewards those who through hard work and risk taking provide something new or better or cheaper. From that we all benefit and expect there to be rewards for providing that benefit. This will result in inequality but that is not problematic, its supposed to have that result or there is no possible reward system, (and you wonder why it “enjoys moral legitimacy”).

The general public will never be ‘sold’ redistribution because it goes against basic human nature. People may feel sickened by the City’s bonus culture or by the amount of money a premiership footballer earns, but they still feel people who work hard and show ingenuity should be alllowed to reap the reward.

“Equality of opportunity is freedom, but equality of outcome is repression” – Dick Feagler

10. David Moss

A start might be recognising that a central problem is lack of awareness of the uncontroversial facts of the matter. I don’t think there’s actually a fundamental ideological problem regarding redistribution just a (potentially intractable) strategic one.

Council estate millionaire Nick is a bad example of the problem the left faces. For Nick et al redistribution might well be a bad thing. The reason why socialism is fundamentally right for our society is because most people actually would benefit from leftist policies. The problem is that the vast majority of people who see themselves as “in the middle” are just plain wrong: people who would benefit from more equitable distribution firmly think more tax would strip them of their earning (for hordes of asylum seekers, unemployed single mums etc) and people with a couple of “modest” homes think of themselves as “getting by.”

Inheritance tax is the most flagrant example of this. I remember in vain trying to convince a family member that they wouldn’t be hit by inheritance tax (they would have been around 200k short of the threshhold. In my experience most people aren’t ideological libertarians or ideologically much of anything really. They oppose more tax because they sense they’d lose out, not because they think they’d gain personally but oppose redistribution on sheer principle. Wealth distribution is so enormously unjust at present that more progressive policies could be defended simply on self-interested grounds for median incomes. The problem is people simply don’t believe it. Once you factor in slightly more complex factors: like the innumerable benefits Millionaire Nick’s business derived from a well-functioning society the factual case becomes even more stark.

So at least the first problem as I see it, is convincing people of the truth of inequality in Britain today relative to their household, which is a strategic and practical problem: most people are reading the Mail not articles on inequality indices. So long as we live in a society where wealth is predominantly held by a vanishingly small minority (incommensurate with merit), where your start in life overwhelmingly does cripple your chances of “getting on in life” regardless of graft (certainly true of all the non-millionaires from the council estate where I went to school) and where masses of people don’t reach their potential (even in terms of basic ability to contribute to society), then the left can stick with making the factual case. Convincing millionaires and purely principled free marketeers of the normative case for social justice is a worthy but quite separate and peripheral task.

“Capitalism works, it rewards those who through hard work and risk taking provide something new or better or cheaper.” Er, yeah, right. Working brilliantly right now, isn’t it?

We’re all socialists, of course – even the most ardent, free-market right-winger would levy taxes and spend them on things to benefit the broader good. OK, so for some that might solely be public order and defence; and for others it might be ponies for the ickle children on the council estates. But there is a middle ground.

Government revenue needs to be spent efficiently. Even the most ardent socialist wouldn’t argue that flinging money at those who can’t be bothered to get up off their arse is a good idea. Money well targeted to help people deal with the mental or social disfunctions that prevent them getting up off their arses? Hmm. Sounds better. But only if it works. (How appropriate that news of the failed £1m pilot scheme to repatriate failed asylum seekers should break today…)

Without wanting the re-hash all that Scandinavian social policy stuff, they do seem to have to nailed. My Danish friends love their state provisions and seem pretty sanguine about their high taxes to pay for it. Why? Because they can see their redistributed wealth at work all around them. It benefits their own friends and family (even if they’re well off). And it makes their country nicer to live in. It makes redistribution a lot easier to sell.

(But hey – I’m just a John Lewis Partnership socialist… Workers’ ownership of the means of producing lovely furniture.)

12. John Band

Despite the fact that [Bruce Springsteen, George Clooney] contribute nothing tangible whilst businessmen, who at the very least create jobs, are villified

Oh come on, that’s ridiculous bollocks. Springsteen and Clooney *make people happy*. If they’d never been born, there are artworks that people love and derive enjoyment from that would never otherwise have been created. Whereas if the CEO of Hammerson (to pick a FTSE100 company at random) had never been born, then somebody else with pretty much the same skillset would be doing his job pretty much equally well.

So at least the first problem as I see it, is convincing people of the truth of inequality in Britain today relative to their household, which is a strategic and practical problem: most people are reading the Mail not articles on inequality indices. So long as we live in a society where wealth is predominantly held by a vanishingly small minority (incommensurate with merit), where your start in life overwhelmingly does cripple your chances of “getting on in life” regardless of graft (certainly true of all the non-millionaires from the council estate where I went to school) and where masses of people don’t reach their potential (even in terms of basic ability to contribute to society), then the left can stick with making the factual case.

Everything in this paragraph is made of truth and WIN, although it’s going to be a hell of an uphill task to achieve.

I don’t want most people to benefit from whatever we call the system that rules our lives – I want to see some tangible benefit to my life.

If I go around accepting that more people benefit from socialism than the alternative then I won’t have to wait long before I’m told to shut up complaining because some empirical statistic tells the bureaucrat that I’m on the prescribed list.

I’d don’t want socialism because poor people like me get shafted whenever any possible excuse is given for helping the majority at the expense of everybody.

Let everybody recognise that socialism isn’t about equality, it’s about sharing out favours, just like conservatism.

Yeah, I think you are kinda in a bind there, Dave. In the modern libertarian bible, Anarchy, State and Utopia, Robert Nozick describes his intuition that people are entitled to the fruits of their labour and the results of consensual transactions with others as being essentially the same as what socialists originally believed. It is when people’s ownership over their own labour is compromised that exploitation usually takes place. Nozick asked what happened to that sort of socialist.

Well it looks like they got more interested in persecuting small business owners who got a little bit more lucky than others. These are people who probably didn’t attain too many specific political favours on their way up, and so, in all likelihood, got their wealth by delivering things like bathrooms to ordinary people at a better price than the competition. We can certainly contest whether he “deserves” all his wealth in the moral/ethical sense, but undoubtedly he can legitimately expect to hold onto a large chuck of it, as those are the institutional rules under which he worked to improve himself.

By reforming the tax system so that lower paid people pay less taxes (preferably, at the lowest end no tax at all), and pay for this by closing off some of the reliefs enjoyed by higher paid people so that it’s tax neutral. Then explain this new system adequately to the electorate. There are more lower paid people than higher paid people. QED.

16. Matt Munro

“Even the most ardent socialist wouldn’t argue that flinging money at those who can’t be bothered to get up off their arse is a good idea.”

You obvioulsy haven’t been reading LC as long as me……………..

17. Matt Munro

“Why? Because they can see their redistributed wealth at work all around them. It benefits their own friends and family (even if they’re well off). And it makes their country nicer to live in. It makes redistribution a lot easier to sell.”

You’ve hit the nail on the head. I, and many like me, who voted labour in the past definatly *cannot* see the fruits of redistribution being distributed on anything like an equitable basis. An example

Any improvements to the roads disproprtionately benefit cyclists and public transport users, not the majority who drive cars. E.g roads get “widened” to accomodate a bus/cycle lane even though only a minority travel that way. End result – my journey to work takes twice as long as it did 10 years ago. (This might just be a local issue but it demonstrates the point)

The nulabour “project” got hijacked by political dogma, caved in to minority interest and forgot that if you take money from the majority, then when it’s spent it needs to benefit the majority. The attitude seems to be that if you have a job/car then you can “afford” to pay more tax and shouldn’t expect anything in return.

Great article

Hmm, Matt, thanks for the back-up, but that’s not *quite* what I meant. Transport spending for car users is a good example. In my (admittedly relatively limited) experience of Copenhagen, public transport and cycling is heavily encouraged and (presumably) heavily subsidised. That benefits car users: fewer people drive, so those that do have less congestion and easier parking. Result? Everyone benefits.

I do agree that dogma is a poor substitute for progressive politics, and that New Labour ran out of steam in about 1999. But can’t we all just agree with St Barack of Chicago on this one? “The question we ask today is not whether our government is too big or too small, but whether it works — whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified. Where the answer is yes, we intend to move forward. Where the answer is no, programs will end.” That sounds like a decent plan for smart redistributive policies.

“Even the most ardent socialist wouldn’t argue that flinging money at those who can’t be bothered to get up off their arse is a good idea.”

Sound of dog whistle.

Salleeeeeeeee!!!!!!!

21. Denim Justice

How can we convince the public to do anything that isn’t about self-interest, I’d like the answer to that

22. David Moss

“I don’t want most people to benefit from whatever we call the system that rules our lives – I want to see some tangible benefit to my life.” Thomas

-That’s fine by me, so long as most people also just want tangible benefits to their lives then the fact that more equitable distribution provides just such tangible benefits to most people offers sufficient justification of socialism. And that’s without having to make contentious suggestions like ‘people care about things other than their own lives’ or ‘making most people better off through a fairer society is likely to substantially benefit those not directly gaining advantage.’

Nick:
They all realised that in any modern society (“where getting on” requires more than unhindered access to a plot of soil and your gathered turnips) everybody’s self-ownership was compromised anyway. So all the socialists stopped being interested in self-ownership and started caring about how different facets of society (like massive inequality) impact affect individuals.

I intentionally steered clear of debating “desert”: stick Nozick and Hilary Putnam in a room forever and you won’t get a consensus. We can debate more than simply whether some-one made their wealth “legitimately” according to the institutional rules though. We can debate whether we should play by those rules. If those rules ensure that some people never get a look in despite equal natural talent, equal graft, equal need because of some arbitrary factor like being born on a council estate, it’s worth second thoughts.

Sure the ‘Lucky Bathroom Salesman’ worked for his millions, likely everybody else he knows who worked as hard and was as talented didn’t become a millionaire. Plausibly more equal distributions so that the talent in the council estate get some of the opportunities concentrated in a small minority might produce a better game by any number of measures.

Denim Justice: “How can we convince the public to do anything that isn’t about self-interest, I’d like the answer to that”

An odd proposition. Do you or do you not believe that socialism, properly implemented, would be good for the majority of people? If not, then why do you expound it? If so, then great, it is in their self-interest, so why not sell it as such.

““Capitalism works, it rewards those who through hard work and risk taking provide something new or better or cheaper.” Er, yeah, right. Working brilliantly right now, isn’t it?”

Pretty well yes. Bar the interference of government in propping up failed enterprises, (Obama and the motor companies for instance), resources are being moved from failing business’ to more efficient ones. Capitalism doesn’t cause absolute continuous growth with no setbacks. What it does do is provide continously better use of resources over time.

“We’re all socialists, of course – even the most ardent, free-market right-winger would levy taxes and spend them on things to benefit the broader good.”

Nice dividing line there; in the red corner we have the socialists, in the blue corner we have everyone else and they’re all anarchists.

“But hey – I’m just a John Lewis Partnership socialist… Workers’ ownership of the means of producing lovely furniture.”

Works for John Lewis, great. That doesn’t mean that it is the best system for everyone and it certainly doesn’t imply that it would work for government.

“then the left can stick with making the factual case….

….it’s going to be a hell of an uphill task to achieve.”

Very true, getting the left to stick to the facts is often difficult, (unfair cutting of the quote I know but what the hell). As for the rest of the para there is a slight issue, with inequality of opportunity you need some redistribution but not on the scale argued for above.

25. Denim Justice

@Alix

I should have said, immediate or short-term self-interest.

“But we need to come up with a more effective way of selling the message to the public, and sooner rather than later at that.”

Unfortunately there’s 30 years of the status quo to deal with.

people have been consistently fed a myth – which all the main parties now endorse – that if you just work hard, you can make it. It’s the American Dream-lite; the myth of equality of opportunity, stripped of the pioneer history and jingoistic overtones. It directly contributes to the Fabian’s findings, and is a natural cause/correlate/consequence (delete as you find most convincing) of a mass consumer society.

So as usual, education is probably the key. If people are told on a regular basis that 90% of the population make less than £40,000 a year, that the median income is c.£21,000 a year – meaning 50% of people make *less* than this, etc, then attitudes may start to change. Hard facts may have some bearing on the social attitude that the Fabians have uncovered.

But further than that, we need to start talking about why tax is *good* and why tax is *fair*. For a long time now, tax has been a dirty, drity word. But I don’t believe that. I believe tax is THE social asset; it allows society to exist in the first place, and it is the best resource we have for creating fairer, more equal and more desirable societies.

But at present, most people see tax as being something negative, imposed upon them unfairly. We need to reclaim that discourse – and we can.

An area to start is tax havens: ordinary people can easily get behind why tax havens are wrong and unfair. We can use the issue of tax havens to open up the debate on tax fairness generally.

The top rate tax increase is another. Let’s be vocal about why it’s good, right and fair to have a top 50% band of tax for the 1% of wealthiest earners.

Failing health services are another: explain to people the link between failing health services and low tax – making straightforward comparisons with places like e.g. Sweden and Norway; high-tax societies with excellent social indicators for e.g. health.

etc.

Hey, Falco – nice to know you *are* a socialist, though: “with inequality of opportunity you need some redistribution”. So the fisking of my reply was pretty redundant.

What you seem to be arguing (I think – it’s hard to be sure) is that only those meddlesome kids in government have stopped capitalism’s grand plan: the collapse of everything to create new opportunities for entrepreneurialism. But the “setbacks” you cite could be cataclysmic. Your straw man – no-one here thinks people shouldn’t be rewarded for hard work or success – is a bit flimsy. And are you seriously suggesting zero regulation of markets is a good plan? Hooray! Let’s all chose a corporate to follow and engage in hand-to-hand combat! Only the fittest shall survive!

(Anyone here remember Need To Know, the “nasty, British and short” nerds’ newsletter? Their shorthand for companies or technologies going bust was “Falco!”)

Let’s be vocal about why it’s good, right and fair to have a top 50% band of tax for the 1% of wealthiest earners.

OK – why is it? You need to do more than just assert it.

(Leaving aside the IFS estimate that it would raise no extra.)

Though in fact you can’t leave that aside.
There aren’t enough rich people to support state spending north of 40% of GDP.
So as Dillow points out – link @2 above – you can have a big state, or redistribution, but not both.

So basically your mate was had the benefit of state aid to help him on his way. I.e. given the right to buy his flat at a fraction of it’s true worth. Just another example of how Conservatives are the real welfare scroungers. They just love themselves some state asset’s on the cheap. Houses. Oil, water ,gas, land All given away at a knock down price.

And they have the front to complain about people living off the state. Priceless.

Paul, much of what you say on tax is about right (though I’d be wary of depending on being able to attach moral values to what is, at the end of the day, a compromise/barter process between state and individual – and that goes for the tax-is-theft gang as well. Tax is nothing more or less than an insurance policy against war, famine and pestilence). So why not do the logical thing and aim to even out the tax system itself before we start arguing over ways and means to improve wider quality of life and the extent to which the state should be involved in that?

I’m not particularly opposed to a 50% band. It’s as arbitrary as any other band and there’s nothing innately heinous about it. But the whole point of “redistribution” is lost if you don’t give it back to people at the other end of the income scale (and it doesn’t raise much anyway, incidentally. It’s a bit of a showpiece – much more profound change to the tax system is needed).

Once you’ve done that, then you can have a shot at convincing people that socialism is the best way to provide healthcare, education etc. Until then it really does look to most people as if it’s all just words. To put it at its simplest, if you’re into redistribution, why aren’t any of you remotely interested in literally redistributing? I don’t want to have the whole big state-small state thing out now, but seriously, why has no socialist in this thread (or on any of the others on similar subjects) raised the possibility that letting the poor keep more of what they earn mightn’t be a bad idea. I’m trying to be helpful here – you do see where the “control freak” labels come from, don’t you?

To link back in to what Denim Justice is saying, just how long-term will the alleged benefits of socialism be, in your eyes? Why are you fighting for it? Can you point to an outcome and a timescale and say, “By such and such, you will have this in return for your taxes” (and obviously avoid the Five Year plan overtones!)? Because if you can’t, you’re basically stuck with trying to sell a jam tomorrow ideology where the only material benefit (I’m guessing) is a feeling of self-denying virtue.

Reading your comment in the round, that sell basically seems to be what you think needs to happen here.

Me, I’m a simple soul, I just want the poor to pay less tax.

“It’s as arbitrary as any other band and there’s nothing innately heinous about it. ”

I stand corrected by cjcjc if that is so about the 40% rate.

Alix – that is precisely Dillow’s argument.

http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2009/04/shrink-the-state-a-leftist-aim.html

I would happily (almost happily) pay 50% tax if the tax threshold were raised to 52 x 40 x min wage ie around 12,000 so that the lowest earners paid no tax.

@29

From the IFS

The Government’s plans to raise income tax rates for people on incomes
above £150,000 are very unlikely to raise the revenue that it has predicted,
and indeed more likely to reduce revenue overall than increase it, without
additional steps to tackle tax avoidance or to discourage people from
reducing their taxable income by other means, according to a study by IFS
researchers.

http://www.ifs.org.uk/pr/taxing_rich.pdf

Alix – I don’t think you see anyone arguing that the poor should pay *more* tax. You’ll find plenty of liberals who argue that raising the zero-rated threshold and introducing much finer levels of progessive taxation are the way forward. (Although the tax credit system always seemed a bit arcane to me…) I’ll give you the need for massive reform. But the principle at stake – that wealth redistribution is good for society at large – seems intact.

cjcjc – in other words, because the rich can afford good accountants, they get away with it.

Perhaps so.
Yet another argument for *simplification* then, I agree.
But you still need to make the case for (say) 50% rather than simply assert that it is “fairer”.
And address the Dillow point – are you taxing to redistirbute to the poor or to spend on behalf of the poor (because you know better).

“Er, yeah, right. Working brilliantly right now, isn’t it?”

Capitalism is working fine, what we’re seeing is the effects, within capitalism, when people collectively take a risk. The problem is not the system, it’s the people in it making stupid choices.

“Capitalism works, it rewards those who through hard work and risk taking provide something new or better or cheaper. ”

How old are you 5? The bullshit libertarian argument. Please spare me all the bull about people who work hard getting rewarded at the expenses of the lazy. It is such a crock of shit that only the insane believe it.

Capitalism rewards those that generate wealth, not those that work hard. They are two very, very different things. I can show you plenty of wealthy people who have never done a hard days work in their life. Inherited their fortunes or got daddy to start them up in business, after business. And I can show you plenty of people who work flat out 15 hours a day for peanuts.

Lets take the example of a premiership footballer and an Olympic champion rower. Who earns the most? The footballer, but does he work harder than the Olympic champion? No. The reason of course is that no one wants to watch rowing on a commercial basis so the footballer earns millions while the rower scrapes by. Nothing to do with who works harder.

@30 likewise. see, we do agree on some things.
@31 Tory faketank ‘research’, fit only for bogroll.

In the mindspace of Dillow. Must be having a good day 🙂

Richard, I am one such liberal, and I am entirely pro redistribution (as I define it!). I’m just getting genuinely curious as to why socialists aren’t keener on the idea of a little bit of actual redistribution, as opposed to the sort where the government takes all our money away and tells us it’s for our own good. And yes, I know socialists have no problem with that. But would a little bit of jam today, as it were, to balance the huge amounts of jam tomorrow be so wrong? It’s something that ought to make a socialist feel good – lifting several million people out of paying tax altogether?? That’s a virtuous thing, surely.

Tax credits, yeah, with you there. I’d scrap ’em and give it back in a mix of tax cuts and reinforcing existing benefits that work without a crazy malfunctioning bureaucracy. Mind you, that in itself can cause problems. My mother gets a winter fuel payment. She and my father have just sold their Surrey house for over half a million quid. Redistribution is not working terribly well there. I’m always stunned when Gordon Brown trots out the WFP as an indisputable achievement. It’s painfully easy to knock down.

Sorry did I miss someting?

I thought that the Tory party thinks the 1980s were the golden years. The land of milk and honey so I am told.

And yet for all of that decade apart from the last 18 months we had a top rate tax of 60%

Yet now the world is going to end if we have a 50% top rate. Odd that.

@37

(1) indeed
(2) if you say so, but are they wrong in this case (I assume their assumptions can be worked out quite easily)

I would think so. Number of earners in the top band, median amount earned and natural wastage can all be estimated easily. One would have to check the quality of their estimating mechanism though.

“And are you seriously suggesting zero regulation of markets is a good plan?”

There you go again, anyone who isn’t a socialist must be an anarchist. What definitions are you using because they seem to be your own personal ones?

“Your straw man – no-one here thinks people shouldn’t be rewarded for hard work or success – is a bit flimsy.”

All I pointed out is that inequality is the inevitable result of the reward mechanism, the more you tax to combat it, the less reward there will be.

“What you seem to be arguing (I think – it’s hard to be sure) is that only those meddlesome kids in government have stopped capitalism’s grand plan”

What I was arguing, with reasonable clarity for those with a reading age above 5, was that the current “crisis” is not the death knell of capitalism. The market will have its ups and downs but gets more efficient as a result and government intervention in that process can have significant downsides.

Richard, to help your understanding of the above as you seem to have been having problems:

clarity = a quality making something easy to work out
reading = working out what those shapes mean
death = what has really happened when they tell you that your dog has gone to live on a farm
knell = a bell like sound associated with such things as dogs going to farms
capitalism = the system that actually works

Do let me know if you have any further trouble with basic comprehension.

Sorry Sally, missed you there while typing the previous:

“How old are you 5? The bullshit libertarian argument. Please spare me all the bull about people who work hard getting rewarded at the expenses of the lazy.”

Hard work and risk taking are necessary but that doesn’t mean that they’re sufficient. To take your example of the rower and the footballer, they both work very hard but only one of them provides what many people want and so they get the reward. What is the problem with that? Would you prefer that everyone gets the same reward regardless of whether they produce what people want or not?

And yes, I am aware that some people inherit money rather than taking the route described above but that is partly an inheritance tax issue and partly the fact that life just isn’t fair and no system is going make it perfectly so.

By the way (w/r/t Sally @39) is anyone commenting here actually a Tory?

As long as we make sure that the very poor don’t starve and have access to good education and housing, who cares how rich the director of a particular company gets? I note that the “poor” of this capitalist country are a hell of a lot better off than the poor in about 90% of those other countries out there.

David Moss,
is ‘redistribution’ an end in itself or is it a means to an end, and, if so, what is that end?

If that end is getting Labour re-elected then count me out. The faces of the people in charge are meaningless to whether I can afford to feed myself.

Alix (38), you’re right that it is absurd that your parents get winter fuel payments, that people on 6 figures get child benefit, etc. But I would rather have the silliness attached to universal benefits such as this, the state pension, & possibly a CBI than the indignities of the means test.

You speak of the tax credits fiasco, rightly. It is truly horrifying how many people are flayed alive after being overpaid benefits, usually because they forgot to notify someone of a change of circumstances or some such. This is the real problem, that people can’t do a few hours of overtime or set up a savings account or whatever without getting a kicking for it so they just don’t bother.

For all the anecdotes about universal benefits often going to waste, the alternative costs a fortune to administer, is degrading, & doesn’t benefit the worst off, especially because half of them don’t claim whether this be out of ignorance or of the horror stories they’ve heard. I myself will be 25 in a few months & eligible for benefits which I don’t have any intention of claiming, because even someone as educated & aware of the workings of the DWP & HMRC as I am is fully aware that it’s a fucking jungle out there.

I think some people on the right will consent to this. I view myself as left-wing, but I know of libertarians who essentially think the same way as me on this issue.

The treatment of people on Jobseekers’ Allowance (who, lest we forget, are steadily growing in number) is another matter which needs to be addressed. I propose a simple recognition of the fact that it will be some time before they find work. Rather than sending them on pointless “courses” which are simply designed to appease the Daily Mail by reassuring them that people are being punched in the face whenever they sign on for their £60 (less if you’re under 25), it is best to encourage & permit people to do worthwhile voluntary work, including on local conservation projects & such like.

There would be no element of coercion (more harm than it’s worth, not wanted by the third-sector organisations anyway & in general a fucking bird-brained idea typical of these authoritarian twats in government) & a minimal role for the state. We are always hearing about NEETS & that, why not deploy them in a useful manner?

I repeat that such business should be voluntary. Most people would rather be at work (only we must now acknowledge that the jobs don’t exist) & can be convinced without too much difficulty that something which helps them become more employable is good.

When I was out of work I volunteered, having decided to do so of my own accord, & in fact my action was in the face of Job Centre opposition, but it helped me more than they ever did in terms of entering the workforce & of getting a right good education.

50. Matt Munro

The current crisis is actually the death knell of “neo liberal-leftism”, given that it’s roots lie in the idea (forced on banks by left wing policies in the name of reducing inequality) that even people who can’t afford morgages should be encouraged to buy houses.

@48, please explain the mechanism by which UK banks were forced by left-wing politicians to grant mortgages they didn’t want to grant…

“The current crisis is actually the death knell of “neo liberal-leftism”, given that it’s roots lie in the idea (forced on banks by left wing policies in the name of reducing inequality) that even people who can’t afford morgages should be encouraged to buy houses.”

Nobody forced the banks to lend money to anyone they did not want to. Lloyds did not lend money to the sub prime market. This idiotic straw man argument is typical of the people who just can’t deal with the fact that the free market blew itself up. As it always does.

Nice piece, Dave – but while *I* understand what you’e saying – literally millions wouldn’t.

I am a cynic by heart and nature – and as such the reason I see governments taking the teaching of politics out of the education curriculum is to keep the people dumb regarding politics, political thinking etc.

People are bereft of ideas and cannot put forward their own simply because they don’t know how to.

I cannot have a good political discussion with some because I use ‘big words’ and what I am saying ‘just won’t work’. As you can understand what I am eluding to I won’t continue that point.

^Up there some said it is not just about the money, and as a socialist/Marxist myself – I 100% agree with that. And that is where the whole argument falls before anyone will listen – they just think, wrongly, of course, that socialists or Marxists or anyone at all on the left, is simply going to pay the surgeon the same as the cleaner – the skilled mechanic the same as the benefit mum with 13 kids.

THAT is what needs to be addressed 1st – and until it is – people will not see the benefits of socialism only the American/Reaganesk view of it.

54. Matt Munro

“Nobody forced the banks to lend money to anyone they did not want to. Lloyds did not lend money to the sub prime market. This idiotic straw man argument is typical of the people who just can’t deal with the fact that the free market blew itself up. As it always does.”

It’s only the left that can’t deal with it, i.e “An end to boom and bust” anyone with half a brain knew that was an impossible aspitarion, which, if it could been done, would already have been done. It’s like saying “an end to night and day”.

Asquith, I think on the whole I agree that I’d rather accept the wastage. But I have some optimism that it should be possible to do a little better than no means testing at all. Some benefits are means-tested very broadly (JSA for one). In the old days before tuition fees, (don’t know whether this is still the case) govt university grants used to be means-tested on some brutally simple order of magnitude (basically if you had tuppence, you got nothing). I don’t recall that being an unmitigated bureaucratic disaster. There must be some very simple ceilings you could impose without doing any damage to the deserving or costing a fortune to administer.

On JSA more generally, I entirely agree. I was shocked to discover people on JSA couldn’t do training or voluntary work without running into disregards. I was also shocked to discover the thing that prevents me from getting it, which is that self-employed National Insurance Contributions DON’T COUNT towards your entitlement! What the fuck have I been making them all this time for, then? I would cancel the direct debit, but I know the government would send dogs after me if I did that. They made me go through eight weeks of their disorganised and costly shite before they deigned to tell me that too, the bastards.

And people wonder why no-one trusts the state.

Yes, I’ve known a fair few people who were too proud to claim JSA or didn’t think they were entitled to it, even though they generally could get contribution-based. There they were thinking they’d live off their savings, surely a laudable thing to do for those who don’t want to be a burden on the welfare state. But too much of that & you’ll get a bollocking for not keeping your contributions up.

They don’t seem to realise how many of us are in insecure employment.

The point they are supposedly making is that any activities people do of their own accord will get in the way of sitting at the jobs point like a twat. But see this, which confirms my innate scepticism about the DWP regime:

http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2008/12/does-job-search-work.html

I take your point about the possibility & sometime practice of a sane means test, but there is obvious scepticism as to whether it’d work. I still hold the view that the waste I described, which outrages so many, is less bad than the waste produced by endless HMRC & DWP workers doing what are esentially useless jobs.

I’m surprised that we’ve got this far without anyone mentioning ‘The Spirit Level’:

http://www.taxjustice.net/cms/upload/pdf/Wilkinson_09_inequality.pdf

I’m inclined to agree that the political ignorance described by Will has a lot to do with the answer to Dave’s question. As such, the information in the above link should be added to the National Curriculum (although we’re all going to have to be brave boys and girls, and face up to the fact that some newly-forged political literates are going to go to the Dark Side).

58. Shatterface

It’s not inequality so much as exploitation that angers me: a multi-millionaire footballer offends me far less than someone paying someone else peanuts to manufacture football shirts.

A more equal society is a fortunate biproduct of a more equitable redistribution of power in the workplace. People get rich because they have the power to do so: that power has to be countered by collective action by people who are, individually, less powerful.

although we’re all going to have to be brave boys and girls, and face up to the fact that some newly-forged political literates are going to go to the Dark Side

Yet that is the real acceptable part of it. Socialism doesn’t preclude anyone being anything they want to be – unlike how it is painted by the right. Socialism is all a matter of being tolerant to those we disagree with.

A more equal society is a fortunate biproduct of a more equitable redistribution of power in the workplace. People get rich because they have the power to do so: that power has to be countered by collective action by people who are, individually, less powerful.

100% behind that.

60. Charlieman

I quite fancy a TV programme where a low income family (possibly with unpredictable income) and a small business owner (net return roughly £45,000) fill in their tax and benefit forms. You’d have to perform the form filling exercise twice: the first time unassisted and the second time with expert assistance. Owing to our ridiculous tax benefit system, I decline to make predictions.

Dave puts it well and reasonably. Doesn’t occur to him for a second that the people might be right and the left might be wrong. Not a teensy weensy nagging doubt? Carry on comrades.

“I’m surprised that we’ve got this far without anyone mentioning ‘The Spirit Level’:”

I’m not.

It’s a desperately bad piece of work, manages to contradict itself in one or two sentences.

As an example, just an example, they continually describe Japan as an equal society.

Seriously? The most rigid social hierarchy of any rich country, this is “equal?”

Me, I think they’re fuckwits, the people who wrote that book. Purely personal opinion, of course.

“Socialism is all a matter of being tolerant to those we disagree with. ”

Hm, that’s liberalism. I’ve nothing against socialism, I want to see an effective socialist party in this country. But it’s nothing to do with tolerance towards other viewpoints. In social terms, yes. But economically (where it really matters, if we’re talking inequality) anything but. The very act of taking someone’s money in taxes and spending it on something you think they need tells against that. They may disagree – the whole idea of a socialist economy is based on the premise that it doesn’t matter if an individual disagrees, provided The People (which may or may not be a genuine majority) approve it.

@60: aren’t they thinking specifically in terms of income equality? Japan does do very well on this (is second to Denmark in the UN’s table of the Gini coefficient, for example. Although it does much worse according to the CIA World Factbook’s figures, admittedly.)

There’s an interesting analysis of income equality in Japan in the comments in Duncan Green’s blog post on the book: http://www.oxfamblogs.org/fp2p/?p=250 for those who are interested.

Of course other sorts of equality in Japan – notably gender equality – are sorely lacking.

65. Denim Justice

The very act of taking someone’s money in taxes and spending it on something you think they need tells against that.

So liberals are against all taxes on principle?

Hold on – is Tim Worstall actually thinking about gender equality? No really, I’m intrigued

As I said above, I don’t see any point in attaching moral values to the process of taxation. It’s the bargain the individual makes with the state to avoid, at a minimum, war, and in latter times, famine and pestilence (i.e. the welfare state and the NHS). The precise terms of the bargain and how much the state does depend on the historical balance at any one time.

So it’s not a matter of me being “against” taxes or “for” them. But it is undeniably true that taxation involves collecting money to spend in ways that are not necessarily agreeable to the individual. That doesn’t mean, however, that the individual necessarily begrudges the tax (let alone all taxes). E.g. I disagree with most British defence policy since 1815, but that doesn’t mean I begrudge the principle of spending on defence so that I don’t have to be afflicted by war.

Guido Fawkes (fake libertarian)

“Doesn’t occur to him for a second that the people might be right and the left might be wrong. Not a teensy weensy nagging doubt? Carry on comrades.”

Talk about pot and kettle.

You have been wrong on just about everything.

69. Mr. Feathers

If Guido Fawkes is a fake libertarian, what is a real libertarian?

Would you agree with a real libertarian if you found one?

“Would you agree with a real libertarian if you found one?”

I think Sally believes that real libertarians have horns and torture the the damned.

All libertarians are fake. .

72. WhatNext?!

Sally, 50: “This idiotic straw man argument is typical of the people who just can’t deal with the fact that the free market blew itself up. As it always does.”

Maybe Sally, but it keeps on going. On the other hand, how’s Socialism doing? Not too great a success out there in the real world, I fear. Maybe that’s why nobody wants it anymore.

35 – “Capitalism is working fine, what we’re seeing is the effects, within capitalism, when people collectively take a risk. The problem is not the system, it’s the people in it making stupid choices.”

I like the idea that the only problem with capitalism is that people are too stupid to use it properly 🙂

38 – Chris Dillow’s argument that big government can’t be redistributive is daft because, as pointed out in the comments, it doesn’t count spending on benefits as redistribution.

Alix – “I’m just getting genuinely curious as to why socialists aren’t keener on the idea of a little bit of actual redistribution, as opposed to the sort where the government takes all our money away and tells us it’s for our own good.”

I think this is a bit of straw man socialism (I’ve never known socialists who oppose tax cuts for the poor). Worth noting, though, that if the aim is to get more money into the pockets of the poor, it is sometimes (though not always) the case that higher benefits or better public services are more effective ways of doing this than tax cuts, though there may be other advantages to tax cuts.

e.g. if you scrap tax credits and spend the money on raising the income tax threshold, lots of poor people would lose a lot of money and lots of better off people would gain, net overall effect: redistribution from poor to rich. I suspect, for example, that the Alix Mortimer tax reform plan which scraps tax credits and uses the money to pay for benefits and tax cuts would absolutely hammer some low income workers over the age of 25 who have children, for example.

74. WhatNext?!

@71:

“I like the idea that the only problem with capitalism is that people are too stupid to use it properly”

What’s your alternative? Not Socialism surely, as this has been an astonishing disaster in practice (the Soviet Union being the apogee). Or were people just too stupid to use it properly?

“if you scrap tax credits and spend the money on raising the income tax threshold, lots of poor people would lose a lot of money and lots of better off people would gain, net overall effect: redistribution from poor to rich”.

It all depends on how you do it. For example if you gave the poor the money previously wasted on this inefficient system as well as raising the threshold …… Your statement is completely unsubstantiated (and how do you feel about the very severe poverty trap created by tax credits?).

“What’s your alternative? Not Socialism surely, as this has been an astonishing disaster in practice (the Soviet Union being the apogee)”

Something more like Scandinavia than like the Soviet Union.

“It all depends on how you do it [replace tax credits]. For example if you gave the poor the money previously wasted on this inefficient system as well as raising the threshold …… Your statement is completely unsubstantiated (and how do you feel about the very severe poverty trap created by tax credits?).”

But how do you decide who gets the money and how much they get? Tax credits have relatively high admin costs and error rates because they target the money to people on low incomes. If you instead spend the money on tax cuts, then much more of the money goes to people who are better off, ditto if you spend it on universal benefits. So the poor end up with less (though in this specific case, single people, and those under 25 do better, and those with kids do much worse).

As for the severe poverty trap created by tax credits (by which I think you mean the fact that marginal tax rates are very high), it’s tricky. The problem is that tax credits try to ensure a decent minimum income for people (particularly parents) who are not working or in low paid work, which means that as people’s income from work increases, they get less in tax credits.

I’d either try to reduce the marginal rates (which is very expensive because it means paying tax credits to higher earners) or have a simpler and flatter payment system which is less sensitive to income changes (so it is more like a basic income system).

76. councilhousetory

Not one mention of the Citizen’s Income/Basic Wage/Negative Income Tax.

But then such an idea would enshrine income inequality in the very fabric of societ and we can’t have that now, can we comrades.

If large numbers of midle class bureaucrats were sacked , many more people would take redistribution seriously. The Welfare State has become an excuse for employing large number of mediocre middle class Labour voting bureaucrats and quangocrats. In local councils there always seems to be plenty of office workers but few tradesmen to repair council homes.

Sally I assure you that I and many others are real. Do you have some sort of bizzare libertarian slanted solipsism? Or alternatively, are you simply so convinced of your beliefs that you think other people are just trying to play a trick on you and are pretending they’re dissagreeing? I noticed that you’ve made no reply to my response @43 but then if you don’t believe I exist or think that I’m joking I can see why you wouldn’t want to put in the effort.

The greater good? Why doesn’t the Britsh public agree to the redistribution of wealth? http://snipr.com/kulca

80. Praguetory

You can only equalise downawards.

DonP “because they target the money to people on low incomes”

But you know that’s not altogether true. You can have a household income of up to c.£68k and still get a couple of hundred quid a year, as your later point about marginal rates implies. You know about clawbacks, you know the system needs to be changed and you yourself suggest a model along the lines of CBI. And yet you still reject my overall suggestion. Why? Because you can?

Interestingly, I think my overall observation still stands. It took dozens of comments for anyone to start addressing the possibility of letting the low-paid keep more of their money, and now that it has been addressed I am told dismissively that it’s a straw man, and I won’t find any socialist opposed to the idea.

Well then, why aren’t you arguing for it? Why don’t I constantly hear the drum banging for it on this site? Why aren’t you supporting the Liberal Democrat policy to do it, and why aren’t you copying it for yourselves? Why this wriggling away from, e.g. tax credit reform, when in the very next breath you describe the problems very well and prescribe a decent sounding solution? Why is this whole debate framed in terms of the complex ideological sell that must be made to the people for their own good, and why wasn’t the first reply something like “Well, we can reform the tax system for a start, and then we can do xyz.” Reforming the tax system is the single, simplest way to leave low-paid people better off, immediately.

“aren’t they thinking specifically in terms of income equality?”

Yes, I know that Japan does very well on the gini etc.

However, throughout the book they bounce back and forth between two explanations of why inequality is bad. Sometimes it’s income inequality, at other times it’s the existence of social heirarchies, of an unequal society. The effects of inequality upon health, for example, they ascribe to social hierarchies.

But they then go on to entirely ignore that Japan has an extremely rigid social heirarchy, referring only to its income equality. That isn’t even rigorous logic, let alone good science.

As just a little example of their, umm, flouting of accepted standards, they state that unequal societies work longer hours than more equal ones. (They make the gross error of only considering working hours in the paid economy, not including home production but that’s another matter.) Now, what ‘s one of the things that we know about Japan? Other than it’s income equality? Yes, the incredibly long working hours.

Amazingly, Japan is not included in their chart of equality and working hours. Odd that the one data point which doesn’t fit the theory gets dropped, isn’t it?

The book is riddled with these sorts of, well, I’ll be polite and call them errors. Even their logic isn’t very strong. They state that economic growth has diminishing marginal returns in terms of increases in human happiness….quite rightly. But the next paragraph says that “now we have come to the end of what economic growth can do for us” (roughly, I paraphrase) which ain’t true and they haven’t proven. Especially when a few chapters later they themselves talk about the fall in inequality in hte early 90s….driven by a booming economy.

The book is tosh on any scientific level but because the message is what some want to hear it gains plaudits.

This has been another good discussion, following the one kicked off by Don yesterday. Dave highlights some of the ways in which the research shows how there are some important barriers, which is certainly true.

The research also highlights some opportunities for pro-equality policies about how to frame campaigns and issues in a way which gives salience to arguments most likely to chime with broader coalitions of support; and also some of the key areas for campaigners to think about either challenging or accomodating prevailing atttitudes.

Of course, how far to seek to challenge and reshape public attitudes and how far to work with them is a choice in political strategy, but an understanding of them is necessary to do either. We all want to be makers as well as takers of public attitudes and opinions: that is the point of politics. (One typology of these different levels has been offered by Bob Worcester …. “Values are “the deep tides of public mood, slow to change, but powerful.” Opinions, in contrast, are “the ripples on the surface of the public’s consciousness—shallow and easily changed.” Finally, attitudes are “the currents below the surface, deeper and stronger,” representing a midrange between values and opinions. According to Worcester, “the art of understanding public opinion rests not only on the measurement of people’s views but also on understanding the motivations behind those views”).

This research seeks to get at some of the deeper values which drive attitudes, how these are structured, and particularly how some conflicts between attitudes are structured, and so how these might come to be resolved in public/political debate.

These points draw on the current Fabian/JRF research on attittudes to inequality, and also on the earlier Fabian/Barrow Cadbury Trust research on public attitudes to poverty and inequality, and other parts of the JRF Public Interest in Poverty programme.

– We are sceptical about self-interest explaining everything. Rather there are a range of competing ideas about what is fair: these are powerful and often appear to override self-interest.

– Because people think anecdotally, there is a strong sense that ‘some people can beat the odds’ (like Alan Sugar or my uncle Bob). This is combined with a strong awareness that the odds are stacked against whole groups of people. But the individualised explanations are more powerful and salient. So the question of how to communicate the problem of stark inequalities of opportunity effectively is central to establishing that there is a problem. (Clearly, we are not short of evidence that this is the case).

– So these workshops found strong responses to evidence of unequal life chances: eg that school results are so strongly linked to social class. ‘This drives support for fairness responses, with participants often suggesting quite tightly targeted responses: focus resources on the toughest schools; incentivise teachers to teach there.

– Again, politically, helping the bottom and the middle through such approaches is important to have a politics of support which works. This is an important reason for universalism – as discussed yesterday. The important question for those who want a more targetted approach is whether they propose one which cuts out much below the top 10% of the income range (eg £40k-ish). That is politically very difficult. The financial gains of targetting provision only cutting out those on £60-80-100k become very small. However, a ‘progressive universalism’ approach with tapering is effective, as long as it is broad.

– The widespread belief in deserved inequality in principle holds for those rewards and outcomes which do appear to reflect merit. This depends on there having been fair chances to achieve them; that the rewards do reflect both effort and success; and fair rules in deciding this. There is a rather stronger tendency to discriminate between the ‘deserving’ and ‘undeserving’ rich than there was a year ago.

– Here, procedural justice is very important. A major driver of anger about city bonuses is not the telephone numbers themselves but that it is a very odd way of deciding pay … ‘one rule for them’ kind: it is not like how salaries and wages are decided; it is a mega-bonus for doing your job; it is decided by you scratch my back committees, not involving scrutiny; you can still get a mega-bonus when it all goes wrong). Ditto, MPs expenses. This means that challenging unfair rules which lead to unfair outcomes is a powerful message. There is very wide support for ideas of transparency; of employee representation on boards and renumeration committees, etc – and it is very difficult to explain how these should be rejected if the rewards are fair and merited.

– There are strong support for challenging some rewards at the top, but rather less for helping the poor. The cluster analysis shows that traditional egalitarians (22% of us) with a needs-based approach; and traditional free marketers (20% of us) broadly cancel each other out. So what makes the 50p tax rate is very broadly popular because it combines traditional egalitarians (£150k is as much as anybody needs) with merit questions (many of these rewards aren’t earned) and pragmatic non-ideological responses (right now, those doing best can contribute a bit more). Only in principle free market anti-egalitarians are on the other side of the question.

I doubt there is much scope for higher marginal tax rates in terms of effective policy. But several of the responses which Alix and Don have offered from different perspectives should chime with current attitudes.

For example, questioning eg pension relief for top rate tax payers (putting everybody on the same level of tax relief) and using the resources for either/ both of raising thresholds at the bottom and/or supporting tax credits or other progressive universalism measures for the bottom and the middle would probably have similar broad popularity – and there is several billion involved there. (Again, the argument can be made in terms of fairer rules and equitable treatment in pension relief, since such a high proportion of it goes to the most affluent).

– There is strong support in principle for public services and universal welfare provision. The question of ‘future willingness to contribute’ is the most important thing in driving support for welfare provision. This means that engrained stereotypes of the poor are v.important barriers. Some approaches (such as New Labour’s) seeking to ‘gain permission’ to redistribute to the deserving have at the same time entrenched such stereotypes. More needs to be done to challenge these.

However, if forms of conditionality which were non-stigmatising but which did capture citizenship commitments to reciprocity, these could well prove powerful in entrenching support for benefits and welfare provision. These could be more powerful if they were responsibilities across society: rights and responsibilities at the top matter too. (Reciprocity in society was the founding argument for needs-based public welfare provision. If this approach is rejected as a matter of principle, it will leave egalitarians working against the grain of quite deeply entrenched attitudes. How it could or should be reflected in a principled way seems an important issue).

– There are very few positive images or stereotypes of the working poor – ie, parents struggling to hold down two jobs. How could campaigners address this?

– Abstract definitions of poverty and inequality naturally fail to resonate. But, from the position of not being sure there is any ‘real poverty’ in Britain today, the Fabian/BCT research found surprise (and indeed shock/anger) at tangible descriptions of what being in relative poverty means (but little understanding of abstract definitions or measures). It is the difficulty of families to afford to spend extra on celebrating birthdays, or leisure activities like going swimming, which resonate.

– There is strong bubbling up dissatisfaction with the way in which an excessively speeded up materialism puts everybody under extra pressure … and a feeling that other things matter in life – family, relationships, time – and are being undervalued. (This is unlikely to mean a wide majority acceptance of hairshirt anti-materialism of the type deep greens would like to see. But, as in the early/mid-90s, there is a wide sense that the balance of social values has got out of kilter).

– Fatalism is an important driver …. If people think things could be different, they would like things to be different. Again in the earlier Fabian research on poverty, there was engagement with the ability to get large numbers of children out of poverty, and with the idea that some other countries had real world ways to do it differently in an imaginable way. This can help challenge the idea that (i) feckless parents will waste any extra money on fags and booze. (ii) the government will just pour money down a black hole. Those are important cruxes for those who are well motivated and wish to think of themselves as being so, so would support doing something if anything could work, but don’t think anything could.

So showing that change is possible matters. If it is possible, then this helps to unlock a ‘business’ as well as moral case (can we afford as a society not to do it, if we are storing up so many social problems), which is something people respond to strongly and articulate themselves.

praguetory@77

“You can only equalise downawards”

Did the introduction of the NHS equalise health provision downwards? How? Or the provision of universal state education? How? Did the introduction of a universal welfare national insurance system do so? How? Or the minimum wage, etc, etc.

“Did the introduction of the NHS equalise health provision downwards? How?”

You’ll recall that the NHS only funds treatments which have a cost per QUALY of less than £30,000.

Now, this might be sensible, might be the right way to ration scarce resources. But you do have to admit that banning high cost treatments is indeed equalising downwards.

@82 – In what way was there provision of such treatments prior to the NHS which has now been banned? Had private health provision been outlawed with the NHS that would follow.

From today’s paper, purely by chance:

http://www.telegraph.co.uk/health/healthnews/5632576/Thousands-of-elderly-cancer-patients-dying-prematurely.html

“Research by the network suggests up to 15,000 people a year are not living as long as they might after developing cancer.

Cancer survival rates in the UK are lower than in western Europe and the US with one possible explanation being that people in the UK are diagnosed later. “

Tim, if I allow your assertion that the NHS equalises healthcare downwards is a proven fact rather than a mere contention, can you suggest an alternative system that will be as good at providing healthcare for everyone?

Do bear in mind that there have been many extortionately expensive experiments with private sector provision within the NHS, and the majority have not been a roaring success.

@84 dying at age 85+ is hardly premature. If the NHS doesn’t spend enormous sums in cancer treatment for people who’re near death anyway, that strikes me as a feature not a bug.

Sunder K. The Industrial Revolution was largely a product of Quaker and Protestant craftsmen. The Quaker education taught practical skills and knowledge rather than classics in their own schools( they were not allowed to attend public and grammmar schools- run by the CofE). A major belief of the of the Protestants from he 16 c onwards was that ability , hardwork and leading an honest life would bring rewards. The only assets the Quakers possesed were practical education, a craft skill and the willingness to work hard and a repuation for honesty – hence they became bankers. Perhaps if the Labour government recreated the same quality of schools run by the Quakers in the 16-18 centuries and incalculated the same sort of attitudes there would be less inequality. If one compares the Asians who arrived from East Africa in the 60s-80s and the Pakistanis , the former appear to be far more successful. The Asian from East Africa have acted in a similar manner to the French Huguenots who arrived in England in the 16-17 centuries .

I believe Joseph Rowntree wasa Quaker. Perhaps it is time the JR Foundation re-learnt and re-aquired the skills of the early Quakers and then promoted them , there would be less in-equality.

Hi Alix,

I don’t think we disagree on anything substantive here (and apologies if my tone in the earlier post implied otherwise).

I’ve written a fair amount about the need for tax cuts, e.g. http://don-paskini.blogspot.com/2008/04/fairer-taxes.html or http://don-paskini.blogspot.com/2009/04/budget-priorities.html

But I’m not as optimistic about you about the advantages of prioritising tax reform. For example, any “revenue neutral” way of changing the current tax system by getting rid of tax credits is going to leave a lot of poor people worse off. The changes which I suggested would involve spending billions more on tax credits.

It’s worth remembering the fate of the last major attempt at reforming the tax system, which left millions more poor people better off than the ones who lost out – the 2007 budget which is rightly remembered as a disgraceful betrayal by the Labour government.

@79: thanks for that. ‘The effects of inequality upon health, for example, they ascribe to social hierarchies.’ – not according to the graphs I posted in the link – all the health indicators there are measured against income inequality, and they all fit the thesis.

I’m sure it’s possible to pick holes in the book, but do you really think that the entire thesis is mistaken? Even if you entirely remove Japan from the equation, it seems to me that there’s a very strong case.

“I’m sure it’s possible to pick holes in the book, but do you really think that the entire thesis is mistaken?”

Whether the thesis is mistaken is one thing. What I’m certain of is that they haven’t proved it. I’m still tracking down where they got their statistics from (the reference section is appalling) but there are so many glaring errors that I’m seriously considering writing up a full scale criticism of their methods and logic. If I can find the energy and time that is.

One of the problems is, I think, that they’re both epidemiologists. That means that they have no understanding of how the economic statistics they use are calculated. For example, at one point they claim that the US poverty rate is 12% and isn’t that appalling? Well, perhaps, but they don’t realise that that is the poverty rate “before” the impacts of the tax and benefit system. US poverty statistics are presented completely differently than those of other countries which are “after” the impact of the tax and benefit systems. So you cannot simply compare the raw US poverty figures with those of, say, Sweden (there are other differences as well which make them entirely unreliable as comparisons).

The vast majority of the book is based upon two sets of statistics. Inequality between countries and inequality between US states. As I say, I’m still trying to track down their sources for these but I strongly suspect that the US state figures are before tax and benefits….and yes, each state does have different tax and benefit policies over and above the Federal ones. They say that their international numbers are adjusted for tax and benefit but I’m not sure….as I say, I’m trying to track it down. Certainly, most of the UN/World Bank/Luxembourg Income Study numbers are not but perhaps they’ve found a subset that are.

@90: it would be interesting to read it, if you get around to writing it!

At the moment, I am rather persuaded by the fact that the book’s been out for about six months, and you’re the first person I’ve come across (from the Economist upwards/downwards, depending on your perspective) who has cast doubt on its conclusions.

This is why I’ve become a Liberal Democrat, because they’ve given the answer…just look at their policies…

96. Matt Munro

“Did the introduction of the NHS equalise health provision downwards? How? Or the provision of universal state education? How? Did the introduction of a universal welfare national insurance system do so? How? Or the minimum wage, etc, etc.”

Posssibly, yes. As in without those services provided by the state, we would all pay a lot less tax and be able to pay for those services to be provided privately and to a higher standard.
In practice this probably isn’t true for health, as the USA shows, but for education it certainly is, with even relatively cheap private education outperforming almost all public provision. The NI pension model is a busted flush, but I wouldn’t trust the stock market either, so probably a score draw overall.

As a general principle surely it’s obvious that equality sucks downwards, otherwise everyone in soviet russia would have been as rich as Abramovich and everyone on the planet would be a raving communist. People don’t support capitalism because they are uncaring or nasty, but because socialism has been demonstrated not to work, making capitalism the “least worst” socio-ecomonic system.
In simple terms if you spread limited resources more evenly, they are going to be spread thinly. The left really need to understand that resources are limited, otherwise socialism would have worked.

even relatively cheap private education outperforming almost all public provision

SAMPLE BIAS ALERT!!! – if someone’s paying to have their kids educated privately, they’re someone who places a high value on education, who’ll support their kids’ learning efforts, make them do their homework and back up their teachers’ criticisms, and who is very unlikely to be at the bottom of the income distribution.

And even in “relatively cheap” private schools the cost is higher per pupil than in state schools, so they can attract better teachers, have better facilities and equipment, small classes etc.

99. Matt Munro

Agree with both points but not the interpretation you place on them

@94 Yes, the biggest single determinant of educational outcomes is parental aspiration. This has been known for some time but it’s not a statistic you’ll hear bandied about on the left because it undermines the case for comprehenisve education and supports selective/grammar school education.

@ 95 So what ? If anything that’s an argument against the huge overhead the state adds to education even before a teacher opens his/her mouth. The quality of teachers, the equipment, and the size of the class make relatively little difference to outcomes (see above). I went to a grammar school with classes of around 36 to one teacher (the days before teaching assistsnts were deemed necessary) , the difference was kids who on the whole wanted to learn and teachers who were allowed to control the class…………..

Don P, “It’s worth remembering the fate of the last major attempt at reforming the tax system”

It wasn’t in the slightest a major attempt at reform. Gordon Brown said it was, that does not make it so. All it did was cut out the 10p band, decrease the 22p band, and knock out one of the most workable and fair pieces of tax law the Conservatives ever produced, viz the stepped-rate Capital Gains Tax, reducing all rates on gains to 18%, where they had been 10/20/40% depending on your earnings. Well, of course all that’s going to make the poor worse off. So obviously you don’t do any of that. That is a controllable outcome – the tax system is not some wild beast with unpredictable behaviour that you throw a reform at and hope for the best. It is completely possible to do calculations to predict how certain changes will affect certain groups (and yes, Brown did them, but went ahead anyway).

More generally on reform, the bits of tax law that are well known, like bands, rates and allowances, are pathetically simple. Even the central rules of the capital gains tax calculation can be taught in five minutes. The legislation that takes time to create and reason, and is hardest to unpick, is not the calculation legislation – it’s the provisions for reliefs, exceptions and special cases. That’s where tax accountants can do their stuff (I often notice people referring darkly to “clever tax lawyers”. Believe me, they ain’t that clever! 😀 ) That’s the stuff, for the most part, that needs a whole new approach. Any fool can mess with tax bands on income tax and CGT, but that a million miles away from “major reform of the system”. It’s merely one of the easiest things you’d do as part of root and branch reform.

Hi Alix,

Additionally, though, any tax reform also needs to consider the interaction with the benefits system – which I’d have thought would make it considerably more complex?

So the argument for redistribution stands on the basis of ever-increasing state power, using the NHS as an example?

Sorry, but the law of diminishing returns applies here.

Health and education might be legitimate areas for state intervention and additional compulsory taxation because of the requirement for universal provision, but not all services fall into that category, so there has to be strict limits on the application of the principle.

There also needs to be strict scrutiny on the value-for-money provided by public services, otherwise the taxpayer starts to be seen as a bottomless resource for the state to plunder at the expense of individual needs – as this current Labour govt has.

The NHS is a very bad example.

Does no-one ever wonder why no-one else on earth – including those nice people in France where health outcomes are so much better – has gone down this route?

Health insurance for all – yes, of course.
State monopoly on provision – no thanks.

@97 – indeed, and it was only a “reform” in the sense that idiot GB was removing a complication which he himself introduced – and then lied about its impact.

Absolutement. It would take the backs of many envelopes and a lot of awfully clever people, and probably some slips in spite of all the pre-calculations that can be done. Still, I reckon, complicated as it is, it would easier than formulating a grand plan to lead the country towards socialism and expecting people to swallow that as an idea. A tax cut for low-paid people sells itself. Look at that notorious barking right winger Cjcjc 😉 above saying s/he’d be (almost) happy to pay a 50% rate if the money went back to the bottom end of the scale.

I suppose it works as a sort of a bluff-caller, doesn’t it. No-one’s going to say “No, I don’t want poor people to be taxed less”, but they may well feel entitled to say (for example) “I don’t want to pay for the NHS because it doesn’t work, and here are the reasons why in all these reports”. Tax reform is much more of a no-brainer, morally speaking. When the Lib Dems announced their raising the 0% threshold to £10k a while back, Guido turned up on LDV and said we’d have his vote if he had a vote (though I think it might have been the accompanying CGT provisions more than the threshold thing). I’m still trying to work out whether we should be flattered or alarmed 😀

Sorry that was to Don P

“wouldn’t it be interesting if someone really studied inequality. Is life, in the round, in general, now more or less equal than it was in, say, 1750, before we started this capitalism shtick?”

I guess you’ve never heard of feudalism then?

“The NHS is a very bad example.

Does no-one ever wonder why no-one else on earth – including those nice people in France where health outcomes are so much better – has gone down this route?

Health insurance for all – yes, of course.
State monopoly on provision – no thanks.”

Except plenty of countries have health care similar to the NHS e.g. Italy, Spain.

And it’s silly to suggest there is no “State monopoly on provision” under health insurance. There certainly is in France. Who do you think provides most of the insurance?

43 “Would you prefer that everyone gets the same reward regardless of whether they produce what people want or not? ”

Why is it the Japanese car manufacturers have been so successful over the last 20 years while only paying their top people 30 times what the average worker earns, and yet American car manufactures like General motors have paid their top people 400-500 times what the average worker gets paid?

Gm certainly wasted their money on their CEO’s. But then if you believe the myth that you have to pay huge wages to get the best people you will end up with the egg on your face. Not that the Ceos mind as they have already gone elseware with their ill gotten gains.

Extraordinary that you think we have to have either, ultra socialist or ultra free market doctrine.

“Why is it the Japanese car manufacturers have been so successful over the last 20 years while only paying their top people 30 times what the average worker earns, and yet American car manufactures like General motors have paid their top people 400-500 times what the average worker gets paid?”

You ignore that a Japanese senior executive has huge social status. Absolutely massive (as well as a huge expense account).

You cannot look at “equality” solely on the basis of money income. I’d have thought that was a fairly uncontroversial idea on the left….which then means that you cannot determine Japan’s equality or inequality purely by income. The status that comes with being a CEO of a major Japanese firm doesn’t really translate well into English terms. Think House of Lords plus sucessful striker for a Premiership team and you’re beginning to get close.

112. Kristin Lee

Dear Dave,

You, Sir Socialist, are insane. If you are disgusted by capitalism then move to a country that supports your outlandish ideals. Please stop destroying my Constitution by spewing your venom of envy and disdain. Income redistribution as a working force in government is a fallacy. Your entire view appears to be encompassed by one friend who got a leg up on you and your jealousy has eaten you alive for decades now. I am sad for you sir. Please, seek counsel.

Kristin Lee


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