That would be the same Spirit Level book which has been shown to have serious flaws, not least by omission and careful selection of data?

I would rather have inequality and be rich, than to be equally poor. If we want to increase equality, we can get rid of the rich; we’ll never lose the poor – no-one else wants them.

It would indeed be the same book that in it’s more recent version includes an additional chapter answering all of the critics main arguments point by point.

Just because someone disagrees with its findings, it doesn’t automatically mean they are right.

Poor Miliband. That speech and the agenda behind it is hopelessly contradictory.

That would be the same Spirit Level book which has been shown to have serious flaws, not least by omission and careful selection of data?

What, by a bunch of no-hoper right-wingers who have an axe to grind? Yeah, we take them real seriously.

@ Sunny,

“What, by a bunch of no-hoper right-wingers who have an axe to grind? Yeah, we take them real seriously.”

Surely you should consider criticism on the basis of whether it’s correct, rather than on who’s giving it? In the case in point, it’s not surprising that those who disagree with the book’s conclusions are more active in wishing to debunk the supposedly scientific grounds of the conclusions.

It’s a pity that the publication is factually wrong.

“This is all part of a long term trend. In the last thirty years the share of the national
income going to wages and salaries fell, while the proportion going to profits
rose”

It’s simply not true. The profit share is almost exactly where it was in 1980, 1982 (depending on how you want to measure “30 years”).

Yes, it’s higher than it was in 1975 but both Brendan Barber and the original TUC research accept that it had to be as the situation in the mid-1970s was entirely unsustainable (profits weren’t enough to even pay for depreciation, reinvestment, let alone a return to investors).

Just to lay it all out for you.

When we measure GDP by the income approach (which is what they are doing) there are four things we add up which make 100% of GDP.

Profit share, income share, “mixed income” and taxes minus subsidies.

Profit share is unchanged from 1980 ish and is pretty much on the long term trend ignoring that unsustainable dip in the 70s.

The income share is down.

“Mixed income” is up. This is income to the self employed and unincorporated businesses. We count it separately because no one’s really sure what portion of this is labour share and what profit share. This is a long running problem: most people actually running such businesses/self employed don’t make the distinction, how much of their income is due to their labour and how much to the capital they employ.

Mixed income is up because there are more self employed people now than there were.

Taxes and subsidies are up. The major cause within this is that VAT has risen substantially over the decades as a portion of GDP.

Then there’s one more step. Within the labour share of GDP there are two parts. Wages and salaries (the report, plus the earlier TUC one they use as a reference, manage to get this wrong. They say that they’re talking about wages and salaries but they’re not, they’re using labour share) and employer paid taxes on employment. Effectively, in the UK, this is employers’ national insurance.

Employers’ national insurance has risen substantially over the decades (from 7 % to 9% of GDP).

So, within the labour share more has gone in taxes and less in wages and salaries.

The labour share has also fallen. But it has not gone to profits. It has gone to the self employed (making, really, no damn difference at all) and in higher VAT.

Has the portion being paid to the workers fallen? Sure has.

Where’s it gone?

In taxes.

Want to raise the portion of the economy going to the workers?

Cut taxes then.

@ 2 JC

“I would rather have inequality and be rich, than to be equally poor.”

Well, yes. That’s hardly one of the big questions of decision theory, is it?

“If we want to increase equality, we can get rid of the rich; we’ll never lose the poor – no-one else wants them.”

Except that, depending on time and place, “poor” can mean “can’t get equal opportunities”, “can’t get decent healthcare”, “can’t feed your children” or “can’t be your own property”. In the sense that we can get rid of the rich, we can get rid of the poor – by improving their lot and making them no longer poor. And that’s obviously a better option.

“by improving their lot and making them no longer poor. And that’s obviously a better option”

How is this to be done?

@ 9 Blah

“How is this to be done?”

I’m not going to give you a full national budget proposal right now, but we could do with better schools, especially in deprived areas, an end to private schooling, better public health and public-health information (always a work in progress), and a far better public transport network, allowing people who can’t afford a car a better choice of jobs. That’s off the top of my head.

@ 5 Sunny

Weak. Ad hom attack saying the spirit level delusion book was written by a right winger and thus should be ignored.

The book points out a lot of massive flaws in the spirit level, in terms of data (or more often ignoring data unhelpful to their point), flaws in their statistical techniques and a whole load of assumptions they make by assuming correlation proves causation – which by no means it does.

So much so that Wilkinson and Pickett get really quite uppity when these errors are pointed out to them – search youtube. Ultimately though, the spirit level book is not science, not least because it’s research fails basic scientific method. it’s biased, and trying to fit data to prove a point, rather than reaching a conclusion from the data.

@2 JC
just where on the liberal left spectrum would you place yourself?

for those new to Richard Wilkinson

http://www.youtube.com/watch?v=AFOEe6M2VT4

http://caps.fool.com/Blogs/debunking-richard-wilkinson/668789

7. Tim Worstall

458 words. Funny how more words does not mean more effective argument.

8. Chaise Guevara

Well, yes. That’s hardly one of the big questions of decision theory, is it?

A lot of people seem to struggle with it.

Except that, depending on time and place, “poor” can mean “can’t get equal opportunities”, “can’t get decent healthcare”, “can’t feed your children” or “can’t be your own property”.

Except that seems irrelevant. Having almost got rid of poverty, the usual suspects decided to move the goal posts by re-defining it. That is not the point.

In the sense that we can get rid of the rich, we can get rid of the poor – by improving their lot and making them no longer poor. And that’s obviously a better option.

Yeah. Isn’t it amazing no one thought of that. We have managed to find ways to get rid of the rich. None helped the poor much and virtually all of them actually made the poor worse off. Ask the Khmers.

10. Chaise Guevara

I’m not going to give you a full national budget proposal right now, but we could do with better schools, especially in deprived areas, an end to private schooling,

Well it looks like you’re not going to do anything other than mouth platitudes actually. How do we improve schools in deprived areas? We have tried throwing money at it. People who don’t want to learn ain’t going to learn. What is more, the more you make life pleasant for people who did not work hard at school, the fewer people are going to work hard at school (or at least that would be my interpretation of the dismal East German IQ results when compared to the West). So by making society more equal, you make being a swot less appealing while hanging out with your mates smoking weed becomes more appealing. Fewer long term consequences. Thus the former behaviour will decrease and the latter increase. How are you going to stop that?

Private education provides pretty every person of any real importance in the UK. I fail to see how ruining the only bit of the British education system that works is going to help the bits that don’t. I would ask you to explain it but it is irrelevant. You are making a theological statement about your beliefs. Not an actual workable plan that you have any reason to believe is based on evidence or science or will work.

better public health and public-health information (always a work in progress)

We have poured billions into the NHS since Blair with no real improvement. The fact is if people want to smoke and eat themselves to death, there is little you can do to stop them – except cut their benefits and you won’t do that. Again pie in the sky.

and a far better public transport network, allowing people who can’t afford a car a better choice of jobs. That’s off the top of my head.

The only mildly sensible proposal among them.

@ SMFS

“Except that seems irrelevant. Having almost got rid of poverty, the usual suspects decided to move the goal posts by re-defining it. That is not the point.”

No. Absolute poverty and income disparity are both important issues. Admittedly it’s not helpful that we tend to use “poor” to mean both, it does tend to lead to equivocation.

“Yeah. Isn’t it amazing no one thought of that.”

I’d like to claim I invented it, but…

“We have managed to find ways to get rid of the rich. None helped the poor much and virtually all of them actually made the poor worse off. Ask the Khmers.”

Bollocks did they. Some of them backfired, most didn’t. What about universal education, the NHS, state support for poor families? You’ve got your blue-tinted glasses on, as usual, and you’re trying to brush off a huge range of measures with one lazy, unsubstantiated claim, also as usual.

“Well it looks like you’re not going to do anything other than mouth platitudes actually. How do we improve schools in deprived areas? We have tried throwing money at it.”

Badly. Plenty of them are low on resources, including teachers. So we haven’t thrown enough money.

“People who don’t want to learn ain’t going to learn.”

Maybe so. So let’s worry about those who do want to learn.

“What is more, the more you make life pleasant for people who did not work hard at school, the fewer people are going to work hard at school (or at least that would be my interpretation of the dismal East German IQ results when compared to the West). So by making society more equal, you make being a swot less appealing while hanging out with your mates smoking weed becomes more appealing. Fewer long term consequences. Thus the former behaviour will decrease and the latter increase. How are you going to stop that?”

Um, my proposals were about making it easier for less rich people to get good jobs, not rewarding them for getting bad jobs. Do keep up.

“Private education provides pretty every person of any real importance in the UK. I fail to see how ruining the only bit of the British education system that works is going to help the bits that don’t. I would ask you to explain it but it is irrelevant.”

What makes private schools so good? Whatever it is, why can’t we have it in state schools too?

“You are making a theological statement about your beliefs. Not an actual workable plan that you have any reason to believe is based on evidence or science or will work.”

Theological? Weird. Anyhoo, it’s workable long-term, not as an immediate policy. But obviously it would work to help achieve the aim, which is to prevent rich people from bribing the system to give their kids a superior life at the expense of poorer people. That’s alongside the aim of improving schools, BTW, before you start creatively misinterpreting me.

“We have poured billions into the NHS since Blair with no real improvement.”

Massive improvements under Blair. Damage creeping back in under Cameron. Surprise.

“The fact is if people want to smoke and eat themselves to death, there is little you can do to stop them – except cut their benefits and you won’t do that. Again pie in the sky.”

You’re in favour of banning benefits specifically for smokers? Didn’t know you were in the anti-smoker camp.

“The only mildly sensible proposal among them.”

Glad we can agree on something…