Why doesn’t the left think more about how to shift public opinion?


1:26 pm - May 15th 2013

by Chris Dillow    


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What function do, or should, left-wing parties serve? I ask this old question because of a paper which Jon has drawn my attention to.

Peter Taylor-Gooby points out that, as inequality has risen, attitudes towards the poor and benefit recipients have hardened. He suggests several longer-term reasons for this, among them the decline of class alignment and rise of individualism. I'd add three other factors:

– A mistaken factual base. The public under-estimate bosses' pay and over-estimate welfare benefits.

– Recessions usually make people more mean-spirited.

– Capitalism generates cognitive biases (ideologies) that result in hostility to welfare recipients.

As Taylor-Goody says, it doesn't need to be this way: "Alternative approaches that emphasise reciprocity, solidarity and inclusion are possible."

This poses the question: how do we get to such approaches from where we are? One possibility is to look to a leftist party to argue for them. But there are good reasons to expect the Labour party not to do this. Just as companies' marketing strategies rarely work by telling potential customers they are stupid, so political campaigns rarely do so. This is why Labour panders to some of the worst aspects of public opinion, on immigration or welfare, rather than outrightly opposes it. The Labour party is a managerialist marketing strategy, not a force for truth and justice.

But if Labour is not an agency for radical change, what is? Sure, there are a few bloggers and columnists who are trying to shift the Overton window, but these tend to preach to smallish groups of the already-converted.

This, of course, is not to deny that social attitudes can change. For example, during my lifetime, attitudes to gays has improved considerably. But I fear that this progress has been like Max Planck's view of scientific advance – it has happened one funeral at a time.

And herein lies a paradox of the left. Whilst we have spent decades advocating social change, we have remarkably few answers to the question: through what mechanisms, exactly, can it be achieved?

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About the author
Chris Dillow is a regular contributor and former City economist, now an economics writer. He is also the author of The End of Politics: New Labour and the Folly of Managerialism. Also at: Stumbling and Mumbling
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Reader comments


I’ve started saving for a national newspaper. I should warn you it might take a while.

2. Planeshift

“This, of course, is not to deny that social attitudes can change. For example, during my lifetime, attitudes to gays has improved considerably.”

Study how this process occured, and we may have answers 😉

FWIW thoughts on two barriers the left encounters in getting over its message:

– Much effort is invested by established powers to divert attention away from substantive contentious issues towards political froth – whether referendums on membership of the EU in four years time after the completion of negotiated reform settlements, British medals in the Olympic Games or the celebration of jubilees and the like. Recall that Cameron, on Osborne’s advice, appointed Andy Couslon, a previous editor of Murdoch’s News of the World, to be director of government communications, which tells as much about Cameron’s news priorities. The Conservatives didn’t criticise the invasion of Iraq without the sanction of the UN Security Council – and recap that Obama, as US Senator, opposed the Iraq war from the start.

– Social critiques are often made on the strength of extensive documentation or academic studies, which don’t make for light reading.

@2

Largely due to cross-party actions by single-issue groups, primarily Stonewall.

That ain’t gonna get the Tories out and progressives in.

I think that our politics has generally been weakened by cynicism fostered by newspapers who’s owners don’t the idea of a strong parliament that can stand up to them. That wealthy people hold influence because they hold the purse-strings is another factor and a strong argument for public funding for political parties.

Political parties have become part of the problem too. Labour far too frequently parachutes loyalists into safe seats, leading to too many of the same sort of people in Parliament. Stalwarts like Dennis Skinner would not get a seat today.

Pusillanimous, weak-minded career politicians who still behave like they’re in the Student Union, with no commitment to anything but themselves and the party, or guts to do what’s right and hang the consequences. That’s where the leadership of the Left represented by Labour fails.

5. Man on Clapham Omnibus

Who cares about Peter Taylor-Gooby . You should be reading Gramsci who pretty much tells it how it is.
Labour I would suggest is not an agent for change, since its roots lie very firmly Within capitalism as did the trade unions and indeed most of the social relations that we currently see within Britain. The only people that are manifestly out of step in this process are the Royal family whose traditions we all love and follow and are rooted firmly in feudalism. Given this backdrop, I think it is very presumptuous of Taylor-Gooby to suggest alternative approaches that emphasise reciprocity, solidarity and inclusion are possible,particularly in an era when the social relations within Ponzi Britain are likely to become more and more individualistic as the capitalist state continues to collapse.

@Planeshift (2)

Tricky. On the one hand, that suggests you need social and political protest moments (Stonewall riots; Rosa parks) and movements (LGBT rights; the Civil rights movement). On the other, ‘identity politics’ provides more obvious (if not fixed) ‘markers’ to challenge prejudiced and hostile attitudes (see ‘coming out’) that don’t quite work the same way as class/poverty or a broad ‘left’ politics.

I suspect the answer to Dillow’s question is ‘with a lot of hard work, from the ground up’.

Two thoughts on this:

1 – spin has an important role to play. Lengthy, esoteric, wonkish arguments, maybe for counterintuitive conclusions, are not going to shift public opinion. But the right fact presented in the right way might just do it.

So on the removal of Child Benefit from higher-rate taxpayers, for instance, nerdy arguments about universalism are going to pass most people by; whereas people can easily see the unfairness of a benefit being removed from some households on £45,000 but paid to other households on £88,000. On the 1% rise in benefit payments, producing graphs showing the declining value of out-of-work benefits relative to wages is not a winning strategy; pointing out that 60% of people affected are in work is.

2 – attitudes often change in response to experience rather than argument. Is homophobia in decline because people have familiarised themselves with the best evidence and the most compelling arguments against it? Or because people have got used to being around openly gay people who seem quite nice on the whole?

So our response to increasing inequality, say, should not be so much to ask: how do we convince people that benefit claimants aren’t a feral ‘breed apart’, in order to win support for greater equality? as: how do we promote greater equality, in order to make people see that benefit claimants are not a feral ‘breed apart’? There’s plenty of evidence to suggest that in a more equal society, many of these ugly attitudes would wither away.

8. the a&e charge nurse

‘What function do, or should, left-wing parties serve?’ – well at the risk of stating the obvious there are no (main stream) left wing party, just varying degrees of centre – right wing politics.

There are micro and macro arguments as to why this state of affairs has arisen but to my mind the most significant is the vice like grip exerted by power elites in the media, banking and the business world.

The corporations now have such a stranglehold that any left leaning opponent must feeling like they are pissing in the wind – take the NHS, and witness how effortlessly a valued national institution has been passed over to the profiteers without so much as a by your leave.

75% of the way through ‘Dial M for Murdoch’ – even our most senior politicians were shit scared that Roop might unleash media hell (against selected individuals) if they did not support the likes of his B-Sky-B bid, or other business and social agendas that he was pushing.

‘It is said – if you know your enemies and know yourself, you will not be imperiled in a hundred battles
If you do not know your enemies but do know yourself, you will win one and lose one.
If you do not know your enemies nor yourself, you will be imperiled in every single battle’ (Ch 3).
http://en.wikiquote.org/wiki/Sun_Tzu

It seems like the left do not know either their enemies or themselves.

9. Richard W

You know maybe the problem is not with the public but is in fact with the left and their understanding of human nature. The dumb wing of the contemporary left believe human beings are born essentially good before being corrupted by the “system” and the rightwing press. Therefore, they are obsessed with the rightwing press because they believe if the rightwing press did not exist then everyone would agree with the left.

The default assumption is people should agree with the left, so only some external factor can be preventing the natural order. A monumental collapse in press sales has done very little to shake the unfalsifiable faith in the nefarious power of the rightwing press. Basic common sense should tell us falling sales will equal lower potential influence. We know that is true because an advertiser would not pay the same fee if the newspaper suffers a steep decline in sales. Even though only a minority of the public ever read a newspaper rightwing or not nothing will prevent the left from the conviction that the press shape human nature.

It really is not the case that it is the press preventing the public from turning into Polly Toynbee. Press EU scare stories stopping the British public from loving Barroso, Van Rumpuy and Baroness Ashton. Maybe something deeper is going on that the left consistently misunderstand.

What if human beings are selfish? What if human beings engage in self-interest? What if human beings do not care as much for their fellow man as the left believes they should? What if nasty stories are not creating nastiness but are just tapping into nastiness that is already there? What if most people are able to look through rightwing distortions but still genuinely disagree with leftwing solutions? What if people believe the left are well-meaning but often take bad situations and make them worse?

What if people without much themselves do not care how many millions the CEO of Tesco earns but do resent the pittance that benefit claimants get? What if the problem is not lack of awareness but familiarity? They are unlikely to interact with Tesco CEO but see and interact with the benefit claimant. If they get pissed off with Tesco they take their business elsewhere so have a small feeling of empowerment. Difficult to see how they feel any empowerment through the political system. What if it is not just the public who suffer from confirmation bias, but the left through cherry picking reports and data suffer their own confirmation biases? What if the contemporary left often exist in a bubble of other lefties with identikit views where they all agree on everything. In such a bubble the empirical world of what people are really like would look a very strange place compared to the bubble.

What if the left are just not very good at convincing anyone not already in the choir, taking people with them and understanding what motivates human beings?

“What if people without much themselves do not care how many millions the CEO of Tesco earns but do resent the pittance that benefit claimants get?”

What>? That cant be right! How could they not be against some one successful?

“What if the left are just not very good at convincing anyone not already in the choir”

You are brain damaged or not basically, the left can not talk people into their warped disabilities.

11. Thornavis

Funnily enough this is a mirror image in many ways of some of the views I read at libertarian and conservative blogs – why aren’t people more like us ? Conservatives, like the left, don’t seem to easily understand that others don’t necessarily see their views as being self evidently correct. Although libertarians are usually more thoughtful there’s still an underlying tendency to think that others are really just like us and would see the light if only we could get our ideas over more effectively. However most people seem to have a view of the world which is at one and the same time both communalist and selfish. Which means that there is an eternal paradox where neither statist or liberal ways of managing the world’s affairs can ever gain the upper hand or work out as intended.
That doesn’t really bother me any more as I’m really quite happy to leave others to lead their lives as they see fit, I just wish that conservatives and the left generally would do the same.

12. Richard Carey

Great comment @ 9 from Richard W

What if the blame game is so much easier to comprehend and play than reading challenging texts requiring a university degree to grasp?

Press circulation in Britain may have fallen but look at the relative circulations of the popular press:
http://en.wikipedia.org/wiki/List_of_newspapers_in_the_United_Kingdom_by_circulation

Compare that observation about standards of adult literacy by the HoC Public Accounts Committee:

“Up to 12 million working UK adults have the literacy skills expected of a primary school child, the [HoC] Public Accounts Committee says. . . The report says there are up 12 million people holding down jobs with literacy skills and up to 16 million with numeracy skills at the level expected of children leaving primary school.” [BBC website 2006]

By the end of the 1970s, the Conservative and Labour parties had spent almost equal time in government since WW2. By the mid 1970s, half of Britain’s adult population had no education qualifications at all. [BBC website 2006]

By the end of the 1970s, the Conservative and Labour parties had spent almost equal time in government since WW2. By the mid 1970s, half of Britain’s adult population had no education qualifications at all.

Apologies for the screw up with my cut ‘n’ paste.

On the percentages of Britain’s adult population by age groups without any education qualifications, try this:
http://poverty.org.uk/59/index.shtml

But if Labour is not an agency for radical change, what is?”

UKIP.

“What if the blame game is so much easier to comprehend and play than reading challenging texts requiring a university degree to grasp?”

I doubt very much people arent converting to the left and agreeing with things such as:

We can replace the 80 million barrels per day energy requirements with wind farms!

We should focus on high earners who pay taxes instead of none earners who recive them!

Because of their literacy skills. What do Labour stand for these days? Priministers Questions does not provide much of a clue.

16. domestic extremist

Funny thing how when Labour was in power it did zilch to democratise the media and make it more representative of the division of political opinion in the country, not to mention combating such right-wing ideas as that the poor have only themselves to blame and are in any case feather-bedded by state benefits.

I suggest that Labour is actually at ease with a right-wing press, which it can always blame for not being able to do the radical things it doesn’t really want to do anyway, like rocking the capitalist boat. And that Labour would actually hate to see a media system which systematically exposed its Tory-lite, US-subservient and pro-wealthy class policies for what they are, and which mounted a consistent, sustained attack on the kind of poisonous, regressive, anti-socialist ideas which the Murdoch press and its ideological allies exist to promote.

um, cause the Left don’t own and run large parts of the establishment and most prominently the mainstream media?

The “right-wing” establishment may own and run the media but don’t most journos have radical and iconoclastic inclinations?

Michael Foot was happy to work as a leader writer for the Beaverbrook press for years before WW2. The lead economics writers for the Financial Times have been persistently writing criticisms of Osborne’s austerity policy.

19. IconoclasticNan

@Planeshift
>“This, of course, is not to deny that social attitudes can change. For example, during my lifetime, attitudes to gays has improved considerably.”

Study how this process occured, and we may have answers <
With homophobia it would seem apparent that the significant lessening of prejudice coincides time-wise with the media depiction of sympathetic gay characters in Soaps and popular series. Convincing demolition of bigoted attitudes played no small part. A whole generation has grown up with early exposure to this in their favourite shows. If it were possible to treat economic injustice, irrational displacing of blame and xenophobia etc in similar Soap story fashion to the same degree and extended period of time, I reckon we might see similar cultural and ideological change in consciousness.
The big snag here is that not just the press but the whole media would not stand for such an obviously privilege-threatening sub-script. I truly don't see a solution to this and agree completely re Labour's entrenched uselessness for any meaningful change.

There is no obvious correlation between so-called “left-wing” or “right-wing” politicos being gay. It isn’t challenging to come up with examples from either political tribe belonging to the gay community or communities. Chris Dillow’s original mission statement still stands: How is “the left” to attract popular support for its political mission despite all the obstacles?

I assume Blair thought about this which is why he appointed Alastair Campbell to be director of government communications in 10 Downing St. Campbell’s CV included that he had previously been political editor of the Mirror, which tells us something about the skills he developed for the readership he wrote for.

Compare that with Bernard Ingham, who had been Mrs T’s press secretary. When John Major became PM, he appointed Gus O’Donnell as his press secretary. In due course, Gus O’Donnell became cabinet secretary and head of the civil service. The differences are pretty stark.

During the past thirty years, incomes have grown more unequal, a small group at the top has captured a much greater share of resources and poverty has increased.

There are two problems with this analysis. Firstly, it is founded on the above lie which is the starting point of the paper discussed.

Poverty has NOT increased unless you are prepared to stretch your definition to the tautologous “relative poverty”. Over the last thirty years we have all become richer- though I agree it is true that some have become richer than others.

Which brings us to the issue of inequality.

As Richard points out so eloquently @9, people are not as the left would wish them to be and anyone with eyes to see can also work out that people are NOT equal in terms of their talents and abilities.

Given this, why does anyone believe they should they be equally rewarded?

The calls to “reduce inequality” are ultimately calls to curb aspiration and punish success. They are grounded in vile impulses such as greed and envy and, if such policies were successful, we would all be much poorer.

And not just financially.

22. Planeshift

“um, cause the Left don’t own and run large parts of the establishment and most prominently the mainstream media?”

But this failure of the left to own tabloids didn’t prevent attitudes to homosexuality changing over a relatively short period of time.

“With homophobia it would seem apparent that the significant lessening of prejudice coincides time-wise with the media depiction of sympathetic gay characters in Soaps ”

I think ultimately it is simpler than that. Too many people found themselves with gay children, friends, colleagues etc. Whilst some parents may have disowned their children, others would have re-examined their own attitudes.

I think attitudes towards people claiming disability related benefits are also changing for the better precisely because too many people have become victims of ATOS etc, and the stories are finally getting into the press thanks to people like Sue Marsh.

With unemployment and benefits associated with long term unemployment (wrongly sometimes such as with housing benefit), attitudes remain based upon exagerated and unrepresentative examples. Which seems to me to suggest part of the solution will involve people ‘coming out’ to their friends and family as people who are, or have been in the past, claiming benefit.

My name is Planeshift and I was unemployed for 5 months in 2008. I claimed the dole and housing benefit, and eventually got another job. The fact that at the time, even on a forum like this, I wouldn’t have admitted this demonstrates the issue somewhat doesn’t it?

21

“The calls to ‘reduce inequality’ are ultimately calls to curb aspiration and punish success.”

LOL ! Why are the banks paying out billions in compensation to their depositors for mis-selling PPI and Credit Default Swaps? Why this?

Banks braced for hefty fines over rule breaches: Regulators in the US and UK are expected to announce a series of expensive and potentially explosive actions against banks including HSBC, Standard Chartered and RBS
http://www.guardian.co.uk/business/2012/dec/07/banks-fines-libor-manipulation

Why are corporate CEOs paid so much more relative to production line workers than then used to be?

“In 2007, the world’s highest paid chief executive officers and chief financial officers were American. They made 400 times more than average workers—a gap 20 times bigger than it was in 1965. In 2010 the highest paid CEO was Viacom’s Philippe P. Dauman at $84.5 million. The US has the world’s highest CEO’s compensation relative to manufacturing production workers. According to one 2005 estimate the US ratio of CEO’s to production worker pay is 39:1 compared to 31.8:1 in UK; 25.9:1 in Italy; 24.9:1 in New Zealand.” [Executive Pay in Wikipedia]

Why this?

“The number of town hall officials paid more than the Prime Minister has increased by a quarter in the last three years, according to new figures.” [Telegraph 10 May 2013]

“Why are corporate CEOs paid so much more relative to production line workers than then used to be?”

Some one like you focuses on the “why” any rational person would focus on the extra taxation paid into the system to support all by those individuals, and is aware of what would happen should the top earners stop.

“Why are the banks paying out billions in compensation to their depositors for mis-selling PPI and Credit Default Swaps? Why this?”

Because they mis-sold them, and although our system is not 100% fair, as no such system could exist, the fairness within our system has caught up to their wrong doing and put them right…do you blame inequality on PPI alone?

@ pagar

“Poverty has NOT increased unless you are prepared to stretch your definition to the tautologous “relative poverty”.”

I’m not sure what you think ‘tautologous’ means, but in any case – no stretching of definitions is required. ‘Relative poverty’ is the standard meaning of ‘poverty’ in social and political discourse. It’s relative poverty to which official targets on child poverty relate, etc. And quite right too.

Suppose we take two snapshots of a society thirty years apart. The first snapshot shows a society in which 95% of households have decent housing, decent food, a phone line and a TV. But only 50% own a car and get to go on foreign holidays, and only 5% own a computer and a mobile phone.

In that society, it’s only the 5% of households that lack the basics enjoyed by nearly everyone that are poor. You don’t stand out as being worse off than most people just because you don’t own a car, say.

The second snapshot shows a much richer society in which 99% of households have decent housing, decent food, a phone line and a TV. But now 90% also own a car, get to go on foreign holidays, and own a computer and a mobile phone. (Maybe 50% own two or more cars and 5% own a 3D home cinema system.)

In that society, 10% of people are poor. Now you *do* stand out if you don’t own a car, if you’ve never been abroad, if you don’t have a computer with internet access. You are missing out on things that are ‘basic’ not in the sense that food and shelter are basic, but in the sense that they’re fundamental to the way life is lived by most people in your society.

OK, you can argue about the ‘real’ meanings of terms like ‘poverty’ and ‘poor’ if you like, but *something* worth highlighting, because it’s a Bad Thing in itself, is affecting 10% of people in that later society where it was only affecting 5% 30 years earlier.

“people are NOT equal in terms of their talents and abilities… Given this, why does anyone believe they should they be equally rewarded?”

Nobody *does* believe that. What we believe is that people should be *more* equally rewarded, so that the gap between different income brackets is not as wide as it is.

“The calls to “reduce inequality” are ultimately calls to curb aspiration and punish success.”

Quite the reverse. They’re calls to move the rungs of the social ladder closer together, hence promoting aspiration and putting rewards for success within reach.

“Quite the reverse. They’re calls to move the rungs of the social ladder closer together, hence promoting aspiration and putting rewards for success within reach.”

How does lowering one individuals wage make any Real world difference to another individuals wage? “putting the rewards in reach”..the rewards were in reach for the those who have got them at the highest levels (I am not included in that group) What you want to do is raise the rewards for those at the “lower” end…cutting the head off the tree does Nothing for the lower branches, its nothing more than a concept of evny and the only difference it would make in the real world is to lower tax revenues.

What is with all this “but it feels good” over real world what works and what does not.

Chris, it is almost as if you do not believe that the Left’s focus on gay marriage, gender specific toys the Plight of Palestine and the witterings of the chattering classes are bearing fruit for the Left.
Is it possible that the Left preach to smallish groups of the converted because the Left are normally preaching about subjects that only exercise the minds of smallish already converted? Imean that, I bet the Left have got the ‘Chemistry sets are for everybody, not just boys’ set sewn up, but how much millage is there for that left? People are being hounded out of their homes and into committing suicide and the Left have a ‘wall of shame’ for those MPs who opposed gay marriage?
The Left have abandoned the ideological battlefield instead swinging in behind the Right’s agenda. We have taken our eye of the ball and failed to observe our enemies’ moves anticipate where the theater of war was switching to. The Right’s attacks on the BBC have been successful to the extent that they are now unable to challenge blatant lies and misrepresentations for fear of being labeled ‘Left Wing’. When the Right bleat about bias on the ‘bedroom tax’ for examples, the Left’s response is too anemic. Normally a sigh and a shrug and not enough using that as an opportunity to highlight the fact the Right hate these arguments being muddied by facts. The same can be said regarding the Right’s attacks on the BBC regarding Climate Change, disability benefits, the role of bankers on the crash unemployment and the like. The Right have seized the agenda and the Left have given up this ground willingly and without argument to the extent that Right Wing commentators merely have to mention ‘Labour’s economic mess’ or ‘Labour increased the number of disability benefits claimants’ and the Left are left spluttering in the background.
The result being that Labour have been forced to accept the Right’s shorthand and Worldview. Far too many examples to mention here, but I cannot resist an example :
During the Eastliegh by election the Labour Party put of a useless yes man into the fray. Obviously, the debate moved onto ‘immigration’ and specifically Eastern European immigration. It was announced the common practice of a largish employer who employ an agency based in Poland to recruit staff. O’Farrel rose onto his hind legs and announced with all the dignity he could muster that off course ‘English youth should have access to these zero hour, agency, employment protection free jobs’.
Implying that the way to get young people into jobs is a race to the bottom. I ask you, is that the way to inspire people into the voting booths? Not exactly a post war settlement is it? Is that likely to inspire an apathetic electorate? Is that Labour clarion call to the disaffected?

Well not really because the transgender rights people are up in arms because of a barbie doll or something and we must win that debate beefore we go forward.

GO @25

Thank you for your lucid description of what “relative poverty” means (although the original paper here had a graph showing incomes of around 50% of the median).

But the question arises about what is the best thing to do today for the person in the bottom 10% who can’t afford a car.

One option, which I imagine you favour, is for the state to compel the other 90% of citizens to pay some of the income they have earned to the the poor man so he can have a car and therefore no longer be relatively poor.

But is that actually a good thing to do?

Some of the people who have had money taken from them will resent it, particularly if they don’t feel rich but are working for their income and the “poor” man is not. They are also less motivated to work harder because much of the additional income earned from doing so is heavily taxed.

And what does the provision of a car do for the poor man?

Does he value the vehicle in the same way that he would if he had earned it himself? Is he more motivated to get a job or to go to night school to improve his prospects so that he can fulfil his aspiration to vehicle ownership?

No. He has learned that if he does nothing to help himself the state will provide for him. And the fact that he has not been helped is demonstrated by the appalling effect such policies have had on the underclass in the UK where whole communities have been destroyed by such good intentions.

That is why, in looking at poverty, we need to get back to thinking in terms of absolutes.

@ Onbe

“How does lowering one individuals wage make any Real world difference to another individuals wage?”

Erm… maybe because the money being withheld from the former individual can then be paid to the latter?

“What you want to do is raise the rewards for those at the “lower” end”

No! You exposed the true horror of my position.

“cutting the head off the tree does Nothing for the lower branches”

Let me turn this around. Do you accept that if a company is making a finite amount of money, the amount of money available for executive salaries/bonuses rises, all else being equal, as the wage bill for ordinary employees falls? Of course you do. So do I. I also accept that the converse is true.

“the only difference it would make in the real world is to lower tax revenues.”

Only if that money literally vanished. If it were paid to ordinary workers, though, I’d imagine tax revenues would go up if anything, since those workers are less likely to avoid tax and more likely to spend the extra income.

“What is with all this “but it feels good” over real world what works and what does not.”

Quite. Have you actually looked at any of the evidence about the social and economic effects of high inequality? You talk as if it’s obvious that greater equality means less money in the kitty overall – otherwise why would tax revenues fall? – but in fact greater equality has been associated with *higher* growth:

http://blog-imfdirect.imf.org/2011/04/08/inequality-and-growth/

Then there’s all the evidence on the social effects of inequality:

http://www.equalitytrust.org.uk/

@ pagar

You’re helping yourself to the assumption that all or most of the poor households in that society include working-age, able-bodied adults who aren’t working (and are poor for that reason). But in the real world, those will often be retired households or low-income working households (especially those with children), or perhaps households including adults who are not able to work because of disability, sickness, caring responsibilities etc.

You’re also assuming that benefits necessarily weaken incentives and therefore aspiration. In fact, of course, they can be used to strengthen incentives by topping up low wages to ensure that working *does* mean the difference between (say) being able to afford a car, or not.

You can make a case for its being tolerable that some level of relative poverty is tolerable, for some period of time, for some households – e.g. maybe it’s not a huge problem if a household’s income dips to 50% of median during a six-month spell of unemployment before bouncing back to 75%. But the danger is that we start tolerating children growing up unable ever to go on school trips or use a computer at home, or pensioners or disabled people being unable to get out and about for years on end, because they’ve got a roof over their head and enough to eat so they’re ‘not really poor’.

Oh, and I tend to make a point of challenging this sort of thing –

“compel the other 90% of citizens to pay some of the income they have earned to the the poor man so he can have a car and therefore no longer be relatively poor.”

– on the grounds that it draws the line between people who make a net contribution to the system, and people who take out more than they put in, in completely the wrong place. Most of us are in essentially the same boat as the poor man; we pay some taxes, but not enough, over our lifetime, to cover the cost of our own education, health and social care, pension, benefits and tax credits, etc., plus our share of the cost of national defence, policing, infrastructure projects, etc. Hence it’s silly to suggest that we’re subsidising the poor. Most of us are *being* subsidised by the rich; though the income they’re taxed on, of course, is largely the product of ordinary people’s labour in the first place.

31. Mediastinum

@GO

You are making some really great, clear arguments GO, I am enjoying them.

However I think you have opened the flood gates with this statement.

‘Though the income they’re taxed on, of course, is largely the product of ordinary people’s labour in the first place.’

I doubt you will be ever able to convince them of this. If you do though I will definitely donate £25 to the charity of your choice.

@ GO

But in the real world, those will often be retired households or low-income working households (especially those with children), or perhaps households including adults who are not able to work because of disability, sickness, caring responsibilities etc.

I take your point on this, however even the disabled etc should not be deprived of all aspiration.

You’re also assuming that benefits necessarily weaken incentives and therefore aspiration. In fact, of course, they can be used to strengthen incentives by topping up low wages to ensure that working *does* mean the difference between (say) being able to afford a car, or not.

If the state believes those on low wages should be topped up to incentivise work, why does it tax those on minimum wage?

But the danger is that we start tolerating children growing up unable ever to go on school trips or use a computer at home, or pensioners or disabled people being unable to get out and about for years on end, because they’ve got a roof over their head and enough to eat so they’re ‘not really poor’.

I’m all for children being given an equal opportunity though how many lives have been blighted because they did not make a school trip is debatable. As for the rest, I presume you have heard of free travel passes and Motability?

Most of us are in essentially the same boat as the poor man; we pay some taxes, but not enough, over our lifetime, to cover the cost of our own education, health and social care, pension, benefits and tax credits, etc., plus our share of the cost of national defence, policing, infrastructure projects, etc. Hence it’s silly to suggest that we’re subsidising the poor.

Err… just a minute.

I’m the one who is arguing that people should take responsibility for their own lives and, in general, pay their own way in the world. Now you are saying that because the state has become so all encompassing and has compelled me to accept some of its largesse in return for what it has demanded from me, that I should be grateful and tug my forelock?

Not going to happen, I’m afraid.

I’d be quite happy if Labour dedicated itself exclusively to changing people’s way of thinking, even if that meant giving up on government for 20 years or so. In the end it would be worth it.

@ pagar

“I take your point on this, however even the disabled etc should not be deprived of all aspiration.”

Of course not – but merely lifting someone out of poverty does not deprive them of aspiration. Nor does keeping them *in* poverty encourage it. We would hardly be *depriving* a disabled person of aspiration by raising their income to a level that allowed them to run a car, for instance, and so to attend training courses, job interviews etc.

“If the state believes those on low wages should be topped up to incentivise work, why does it tax those on minimum wage?”

For good pragmatic reasons. It’s simply far cheaper to offer targeted ‘tax rebates’, in the form of benefits and tax credits, to low earners than it is to raise the personal allowance for everyone. Plus the benefits/credits model means you don’t have to stop at income tax; you can effectively hand back *all* of the tax paid by low earners, including VAT etc., if you want to. What matters at the end of the day is the overall net tax burden on people after benefits etc., not the figure in a column labelled ‘income tax paid’.

“I’m all for children being given an equal opportunity though how many lives have been blighted because they did not make a school trip is debatable.”

Yes, but it’s the cumulative effect of missing out on various things year in, year out – school trips, holidays, days out, etc. If everyone else has had those experiences and you haven’t, your horizons are narrower than theirs. Narrow horizons and ‘aspiration’ are uneasy bedfellows, to say the least.

“As for the rest, I presume you have heard of free travel passes and Motability?”

Not sure of your point here. Those things represent state subsidies intended to mitigate the effects of poverty, or de facto lift people out of it – which, yes, I support.

“I’m the one who is arguing that people should take responsibility for their own lives and, in general, pay their own way in the world. Now you are saying that because the state has become so all encompassing and has compelled me to accept some of its largesse in return for what it has demanded from me, that I should be grateful and tug my forelock?”

No; of course you can continue to argue that you’d rather pay lower taxes and fund your own healthcare, education, pension etc. If you’re in the top 5% or so of earners and got a *very* large tax cut, you might even be better off.* It’s just that, as a matter of fact, given the way things work right now, most of us don’t pay enough in tax over our lifetimes to cover the cost of the services and benefits we ourselves receive (plus our contribution to defence etc.). Hence I always think it’s a bit silly to suggest that ‘hard-working taxpayers’ are, as a rule, giving any of the money they earn to the poor. It’s rather like a man who chips in £5 for a neighbourhood barbecue and eats £6 worth of food complaining that he’s subsidising the bloke who’s gatecrashed and helped himself to a burger.

*Probably not though. Back-of-a-fag-packet calculation: assuming an income of £60,000, a fall in your overall tax burden from 40% to 30% – achieved by introducing a flat income tax rate of c. 15p, say – would leave you £6,000 a year better off for, say, 40 years of your working life. That’s £240,000 in total. Good luck getting 85 years of comprehensive private healthcare cover, 13 years of private education, and a £7,000 a year private pension out of that.

35. Derek Hattons Tailor

The point of left wing parties is to act as a buffer against the worst excesses of capitalism. It was the threat of socialism that forced capitalism to adopt a paternalistic model which was far more benign than its original mercantile version.

Personally I cannot understand why we can’t have a state which is powerful enough to provide security but without being overbearing, and an economic system that provides most people with a reasonable standard of living without excessive exploitation or obscene concentrations of wealth. Talent/ability is not evenly distributed and capitalism reflects that but I don’t believe that Roman Abramovich is a zillion times as talented as me even though his wealth compared to mine would suggest it. Left and right are both right and they are both wrong.

I have come to the conclusion that the average voter doesn’t really care as long as they have enough cash to buy enough pointless consumer shite that the neighbours won’t think they are poor.

36. Mediastinum

@ Derek Hattons Tailor

‘Left and right are both right and they are both wrong.

I have come to the conclusion that the average voter doesn’t really care as long as they have enough cash to buy enough pointless consumer shite that the neighbours won’t think they are poor.’

Totally and utterly agree with you.

message sent from Mediastinum’s iPhone

“I’m the one who is arguing that people should take responsibility for their own lives and, in general, pay their own way in the world.”

There may be a reason for that:

Men who are physically strong are more likely to have right wing political views

Weaker men more likely to support welfare state and wealth redistribution

Link may reflect psychological traits that evolved in our ancestors

Men who are physically strong are more likely to take a right wing political stance, while weaker men are inclined to support the welfare state, according to a new study.

Researchers discovered political motivations may have evolutionary links to physical strength.

With this in mind, Professor Petersen and Professor Sznycer hypothesised that upper-body strength – a proxy for the ability to physically defend or acquire resources – would predict men’s opinions about the redistribution of wealth.

The researchers collected data on bicep size, socio-economic status, and support for economic redistribution from hundreds of people in the United States, Argentina and Denmark.

In line with their hypotheses, the data revealed that wealthy men with high upper-body strength were less likely to support redistribution, while less wealthy men of the same strength were more likely to support it.

Men with less upper body strength are more likely to support the welfare state – like Labour leader Ed Miliband

Professor Petersen said: ‘Despite the fact that the United States, Denmark and Argentina have very different welfare systems, we still see that – at the psychological level – individuals reason about welfare redistribution in the same way.

‘In all three countries, physically strong males consistently pursue the self-interested position on redistribution.’

Men with low upper-body strength, on the other hand, were less likely to support their own self-interest.

This is among the first studies to show that political views may be rational in another sense, in that they’re designed by natural selection to function in the conditions recurrent over human evolutionary history.’

The findings were published in the journal Psychological Science.
———–
“I have come to the conclusion that the average voter doesn’t really care as long as they have enough cash to buy enough pointless consumer shite that the neighbours won’t think they are poor.”

That is created from your model of the world, how you view your self in relation to it. Not every ones buys “pointless consumer shite” to look “rich” for the neighbours. Infact people actually buy consumer items they Like because it adds comfort and value to their lives, regardless of what the neighbours think, people work as hard as they please and amount differing levels of wealth because again it adds comfort and value to Their lives, its not about you, for you, anything to do with you.

Because you cant understand how/why is irrelevant, it has nothing to do with you. What good could your attitude ever come to, a massive reduction of philanthropists and taxation revenues in return for an inner sense of “whats right”…go to the gym..

Price fixing by cartels is one reason why income distributions don’t reflect natural ability or academic learning. Adam Smith warned of that in The Wealth of Nations (1776).

(BRUSSELS) – They claim whiter than white results but housewives got proof of price-fixing Wednesday as the makers of Ariel and Persil agreed to pay 315 million euros ($456 million) in fines for running a washing-powder cartel.

Global giants Procter & Gamble and Unilever will pay fines of 211.2 million euros and 104 million euros respectively after reaching settlements with the European Commission which polices business abuses across the European Union’s market of half a billion consumers.
http://www.eubusiness.com/news-eu/us-chemical-sector.9jt

Another reason is insider trading.

“A City banker who amassed almost £600,000 through insider trading with his wife and a friend has been jailed for three years and four months. Christian Littlewood, 37, listened in to conversations in pubs and spied on colleagues’ computer screens and documents, Southwark Crown Court heard. His wife then used her Chinese name to invest in firms about to be bought.” [BBC website February 2011]

More reasons why income distributions don’t reflect natural ability or acquired learning and skills:

“Britain’s financial regulator has fined the UK subsidiary of the Swiss private banking group EFG International £4.2m ($6.4m) for failing to establish effective controls against money laundering for its wealthy customers.”
http://www.guardian.co.uk/business/2013/apr/24/efg-bank-fine-money-laundering

“when Barclays was fined £290m in June last year after some of its derivatives traders were found to have attempted to rig this key rate, already weak public confidence in banks was harmed further.” [BBC website 6 February 2013]

In testimony on 24 October 2008 to the US House of Representatives Oversight Committee, Alan Greenspan said: “Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief.”

“The Financial Times has examined what has happened since the crisis to the payrolls of 13 glocal financial institutions – expressed as a proportion of pay plus net profits (including those distributed as dividends). This approach allows you to see how the ‘cake’ has been shared out between employees and shareholders.

“What the analysis shows is that the lion’s share has been taken home by the bankers in the form of pay and bonuses, rather than paid out to investors or left in the business to support lending activity. The part represented by payroll has on average gone up from 58 per cent in 2006 to 84 per cent last year. Meanwhile, the share accounted for by dividends has slumped by two-thirds – from 15 per cent to just 5 per cent. . . Banks’ return on assets – an unleveraged measure of performance – has barely changed in decades.” [Financial Times 5 June 2012]

“More reasons why income distributions don’t reflect natural ability or acquired learning and skills”

You are trying to present several cases of out right criminality as reason why hundreds of thousans/millions of hard working legitimate honest people do not deserve the money they make…why?

What is it you want Bob, compensation the reflects the value added in the financial sector? That sounds fair, yet how are you to know if running such a firm is infact a lot harder requiring more skill in these times compared to an easy profit bull market? Perhaps things are more complex that veiwing several numbers at the end of each year…which still leaves us with the point that it makes zero diffeence, in a real world sense…to anyone.

@ Onbe, 37

Just take a moment to reflect on the difference between the first and second parts of your post.

In the first, you take seriously the idea that evolutionary pressures might have shaped our psychology in such a way as to predispose us to hold certain political views. Obviously that goes against our ‘common sense’ view of ourselves as rational beings whose beliefs simply reflect their assessments of evidence and arguments.

Then in the second, you revert to a ‘common sense’ position and insist that “Infact people actually buy consumer items they Like because it adds comfort and value to their lives, regardless of what the neighbours think”.

I think you should follow your own example and take seriously the evolutionary pressures that have shaped our psychology. In fact you only have to reflect on the importance you attach to ‘aspiration’ to see that the pursuit of social status, and its ‘markers’ such as expensive cars or jewellery, is absolutely fundamental to people’s motivations – not least because high social status, especially in men, is associated with sexual success.

How would *you* explain the following phenomenon:

“Would you rather earn $50,000 a year while other people make $25,000, or would you rather earn $100,000 a year while other people get $250,000? Assume for the moment that prices of goods and services will stay the same.
Surprisingly — stunningly, in fact — research shows that the majority of people select the first option; they would rather make twice as much as others even if that meant earning half as much as they could otherwise have.”

That’s a particularly striking result, but it’s not controversial that a desire to maintain or improve one’s social status drives ‘conspicuous consumption’. Hence the link between rising inequality and rising levels of personal indebtedness:

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/27/trickle-down-consumption-how-rising-inequality-can-leave-everyone-worse-off/

“Then in the second, you revert to a ‘common sense’ position and insist that “Infact people actually buy consumer items they Like because it adds comfort and value to their lives, regardless of what the neighbours think”

Its a good point, I do take seriously the pressures that have shaped and continue to our psychology, my wording was not every ones buys pointless crap to look good and gain status with those around them, because the forces driving our pychology do change in our life spans along with our priorities, its undeniable that when young or of any age in a situation of lack we aim to create an attractive situation to draw potential mates into our world. Some, infact a lot of people enjoy consumer items without any consideration of what others think, because their priorities instead concern protecting the property and wealth they have already amassed and raising their children, or they are in a long term relationship or they have simply found equilibrium and self knowlegde in their lives.

Even if it were the case are we simply to call every technical advance and luxury in our present day lives “crap” because its part of a process that makes the human race continue, should we disown everything we have and just fuck in caves because thats the bare essential required anyway? What a morbid view of life.

“Would you rather earn $50,000 a year while other people make $25,000, or would you rather earn $100,000….That’s a particularly striking result”

It is, the first thing I would have asked was what are the jobs and which develops me most as a person, via my own expereince, the most? If all options provided the same position and I enjoyed it I would have selected the most money because when I close that door at night my family behind it are all that counts,if I had not yet created the curcumstances and life style I would be comftable rasing a child within, extra resources are going to take me a lot further towards that goal than a thought in my mind that tells me I have more than the guy next door.

No human is rational all of the time, some humans are a lot more irrational than others. I suspect that thought process behind the above example is very similar to the thought process that calls for 50% taxation even though it will generate Less revenue, or even worse restrict wages across the board, taking half of it simply was not enough to create comfort, they have to make sure there are people out there who do not get it at all, despite the even larger lose to society as a whole in term of taxation

In my view the weaker of the left prefer a powerful government acting on behalf of their interests because it serves to counterbalance their disadvantages.Its not just physical strength,its their entire capability, intellectual,strength of character, emotional stability and maturity etc. The less developed they are the more they focus on things that just do not work in the real world, only to prove a point..in the same sense the less developed a man is the more he will focus on his assets to draw in potential mates, as opposed to those things being just a small part of his “package”

You do not need to be a leftist to belive in fairness and quality of life for all, but you need to work with reality to provide those things.

@ Onbe

Thanks for the thoughtful response.

“the forces driving our pychology do change in our life spans along with our priorities, its undeniable that when young or of any age in a situation of lack we aim to create an attractive situation to draw potential mates into our world. Some, infact a lot of people enjoy consumer items without any consideration of what others think, because their priorities instead concern protecting the property and wealth they have already amassed and raising their children, or they are in a long term relationship or they have simply found equilibrium and self knowlegde in their lives.”

No doubt there’s some truth in this, but we need to be wary of the idea that just because we’re not consciously basing our actions on consideration of what others think, those motivations aren’t still at work at some level. These things run very deep; it’s implausible that they get ‘switched off’ just because our conscious priorities change, just as it’s implausible that our sexual responses to other people get switched off once we find a partner.

“Even if it were the case are we simply to call every technical advance and luxury in our present day lives “crap” because its part of a process that makes the human race continue, should we disown everything we have and just fuck in caves because thats the bare essential required anyway? What a morbid view of life.”

That’s certainly not my view. We should value happiness and fulfilment and the things – including material things – that make us happy and fulfilled. But plainly the endless pursuit of more stuff in a race to keep up with the Joneses is not the route to happiness and fulfilment. (Rather, it’s a recipe for stress, debt etc.) On the other hand, most people find it hard to feel content if they feel much deprived relative to the majority of people around them. In a more equal society, then, it’s easier to be happy with what you have; but that’s not to say ‘what you have’ shouldn’t include material things that genuinely enhance your life.

“the first thing I would have asked was what are the jobs and which develops me most as a person, via my own expereince, the most? If all options provided the same position and I enjoyed it I would have selected the most money because when I close that door at night my family behind it are all that counts,if I had not yet created the curcumstances and life style I would be comftable rasing a child within, extra resources are going to take me a lot further towards that goal than a thought in my mind that tells me I have more than the guy next door.”

That’s fine, but given everything you say about respecting ‘how the real world works’, you need to recognise that you’re in a minority. Most people find it very hard to be content while the people around them are much better off than they are. (And understandably so; I wonder how content you’d really be with that $100,000 lifestyle if most of the people in your society were living a $250,000 dollar lifestyle? Sticking to the theme of your family being what counts: suppose your family was viewed as deprived just because your children attended a state school or needed to take out a loan to go to university? It’s not hard to see, really, why you might choose instead to be the $50,000 earner in a society of $25,000 earners, whose family was seen as well-off because the kids had their own laptops and got to learn piano, take driving lessons and go on foreign holidays.

“the thought process that calls for 50% taxation even though it will generate Less revenue”

There’s no evidence for this. Of course it’s trivially true that the Laffer Curve exists, but this is simply to say that as you reduce the tax rate on some activity from 100%, to 99%, to 98%, or increase it from 0%, to 1% to 2%, revenues rise until somewhere in between the two extremes, a tipping point – a revenue-maximising rate – is reached. What that rate is, in the case of income tax on high earners, is not known, but a quick trawl of the web suggests that the best estimates put it somewhere between sixty-odd and eighty-odd percent. So we can be reasonably confident that a 50p rate is not going to reduce revenues.

Even if you disagree about where the Laffer Curve peaks, it’s not fair to talk as if lefties know a 50p rate will reduce revenue but want to introduce it anyway. We don’t ‘know’ any such thing, and in fact we’re perfectly justified in assuming the opposite.

“In my view the weaker of the left prefer a powerful government acting on behalf of their interests because it serves to counterbalance their disadvantages.Its not just physical strength,its their entire capability, intellectual,strength of character, emotional stability and maturity etc. The less developed they are the more they focus on things that just do not work in the real world, only to prove a point..in the same sense the less developed a man is the more he will focus on his assets to draw in potential mates, as opposed to those things being just a small part of his “package””

Hmm. This is all getting a bit Nietzschean now.

40

Onbe: “You are trying to present several cases of out right criminality as reason why hundreds of thousans/millions of hard working legitimate honest people do not deserve the money they make…why?”

How naive can you be?

It is costly to investigate and prosecute cases of rigging markets, cartels, fraud and insider trading so we can never be sure just how much more in going on which has bypassed the (? under-resourced) efforts of the regulators. The unending succession of reports about corporate fines and convictions suggests that we have little reason to suppose that such market failures are in the least unusual so we have no reason to conclude that income distribution reflects innate abilities and acquired learning and skills.

Try: Fraud and the Pharmaceutical Industry
http://www.uow.edu.au/~bmartin/dissent/documents/health/pharmfraud.html

I fully agree that people deserve to keep what they have earned.

It is sad that no mainstream political party these days agrees, though I seem to recall that one of them used to. Something about securing for the workers by hand or brain the full fruits of their industry…

No doubt there’s some truth in this, but we need to be wary of the idea that just because we’re not consciously basing our actions on consideration of what others think, those motivations aren’t still at work at some level. These things run very deep; it’s implausible that they get ‘switched off’ just because our conscious priorities change, just as it’s implausible that our sexual responses to other people get switched off once we find a partner.”
————————————

Hey, I did not mean switched off in that sense, I meant more in a resouce allocation sense, the nest is full so to speak and the instinctual drive to create and attract potential mates to it, the energy behind that is redirected into the drive to maintain what is already built and within existance. As though when we reach a stage in our progression the tools we used to get there are freed up from it, yet we still have our subjective ties and interests in those things, its just we are at a stage in our development in which we do not care what others think, which to me points out that something has shifted deep within, freeing up this area from the purpose spoken of, to one that can be expereinced without limitation.

Case in point, I have a freind who drives a 1960s Volkswagen Beetle of a godawful colour, he would not have been seen dead near it never mind in it some years ago before he settled down, he owns it because he likes it and the negative impression it creates, which are as impactful if not more impactful than the positives in this area, simply do not exist on any scale of importance to him.

Another owns a Ferrari and did his best for some time to hide its ownership from the locals, to him it was his dream vehicle from an engineering and performance point of view, but it was just a vehicle, to some it was half the value of their homes sat on 4 wheels as expandable cash, instead of the “status” and envy he just wanted to be the same guy at the bottom of the street he always was. The situation is complicated due to constant advertising, celebs and the “must have imagine” yet with progression in life and the maturity that comes through self knowledge it really can be put to the side.

But just like you say it is always there in some form, just like a married man can still feel instant attraction for another women, he can also subconsiously sense his partner is nearing the end of her fertility with age, before he knows it he is acting like a 20 year old, red sports car and all, doing everything he once did for a time to attract women without even knowing it, they call it the midlife crisis.

My point is we can be free of this debt to our instinct, it may flare up from time to time or we may never graduate past it but our interests, our passion, the things we buy can just be about us as individuals, an expression of self for the pleasure of self, not the eyes of others.

“””That’s certainly not my view. We should value happiness and fulfilment and the things – including material things – that make us happy and fulfilled. But plainly the endless pursuit of more stuff in a race to keep up with the Joneses is not the route to happiness and fulfilment. (Rather, it’s a recipe for stress, debt etc.) On the other hand, most people find it hard to feel content if they feel much deprived relative to the majority of people around them. In a more equal society, then, it’s easier to be happy with what you have; but that’s not to say ‘what you have’ shouldn’t include material things that genuinely enhance your life.
———————————————–

I know that is not your view but it is a very common theme among those who do not understand wealth or want of others. “I do not understand why people would want that, plus society and everything in it is a load of pointless shit” etc

Keeping up with the Joneses is not the way to happiness, the person you become, the relationships you cultivate, the expereince you have and if your a family man the tribe you create is the way to happyness and fulfilment in life. The only people I know who are truly content in life, some being ultra wealthy others being just above the poverty line are those who adressed life as a whole. The wealthy I know are not getting their happyness from their 18th year of profits, they are using business to plough their energy into and taking on a task that feels productive to them, is a challang to them..those on the lower end of the scale I know who are content for the most part do not feel productive in their jobs but they have made one hell of a job at scultping their family/relationships and general life.

I also know both the wealthy and not who are not content, they are either looking in the wrong place for it or have not accepted where they are and built the life out side of finance that offers the most value, in both these cases a more equal society would produce the same result, as the challange seeker would be limited and still neglect the other areas of life to be cultivated and those at the lower end of the scale would find them selves in the same position..looking at others and comparing them to your self is really a very limited and short term means of happyness.

The great advancements of society were not born out of an enviroment of equality yet the greater they became the more lives they touched and this is how it will continue until true equality is bought about via technology and “free” energy…society will be equal when its developed enough in what ever terms are required to provide the means to provide and sustain equality, in the same manner society did not become civilised or safe in this time periods terms until it developed to a point it could provide the means to..true equality is not fiat currency wage manipulation or goverment control of wealth, its our ability to produce energy and craft resouces into products. The advances in the coming century alone will be profound.

“That’s fine, but given everything you say about respecting ‘how the real world works’, you need to recognise that you’re in a minority”
————————————————–

If I am a minority and the majority want to ignore “the real world” and impliment an extremely high rate of taxation for instance, which over all lowers revenues and the states ability to provide for that very majority then that is fine, it just communicates to me that things are a bit unstable and I can rely on the state even less should I need to, which signals me to work harder to provide a saftey blanket for those I love.

“Most people find it very hard to be content while the people around them are much better off than they are.
——————————————————-

Then perhaps instead of chopping a CEO who has spent the last two decades dedicated to improve his skills and reaching the pinicle of his professions nuts off to adress these peoples issues, they should take a trip abroad to the third world and expereince what it is like not to be born into an advanced industiralised nation..any country a person can say the words “realtive wealth” is a Dam good country to live in no matter your current position, the fact that you have not only the right but the infastructure and means to improve your position as an individual here is an indescribable privilage in comparision to the the opportunities in the lives of millions around the world.

“I wonder how content you’d really be with that $100,000 lifestyle if most of the people in your society were living a $250,000 dollar lifestyle?
—————————————————–

I would be ecstatic, whilst living a life of comfort shelter food and even hobbys/interests I would also be free to expand my income provided I had the skills and know how to do so, how would I feel molding mud bricks 12 hours a day for $1 a week and not understand I could catch a plane to another country where there are real opportunities because in my understanding of the world planes arent for transportation, infact the only things planes do is drop bombs on my head?

“Sticking to the theme of your family being what counts: suppose your family was viewed as deprived just because your children attended a state school or needed to take out a loan to go to university? It’s not hard to see, really, why you might choose instead to be the $50,000 earner in a society of $25,000 earners, whose family was seen as well-off because the kids had their own laptops and got to learn piano, take driving lessons and go on foreign holidays.
—————————————————–

I can provide twice as much with the 100 thousand than the 50 thousand, that the children next door do not own laptops but my children do would make Zero difference to me and I certainly would not inflict it upon them, to be frank this mind set is fucking insane. The only reason I would buy a laptop for my children in the first place is because it is practical for schooling, whilst at state school I would make sure they know in no uncertain terms that they should make the most of this period of education because what comes next is going to cost them a lot.

Taking a loan out for university is an investment in them selves, their first major financial investment, the first major opportunity to stand on their own feet and strive for the best return on their money and efforts, concerns about being viewed as “deprived” long ago vanished by this point only to be replaced with ambition to do something that is meaningful to them and the knowledge that any financial lack they are experiencing will be over come with their efforts and hard work. The only way to get anywhere in life and expereince it for what it truly is, is to have got there by your own effort. I cant “look after” them for ever and if they arent fully functional by adulthood their basically fucked,the concerns you have literaly do not Exist for me, make the best of what ever situation there is and send them into life with a good attitude and work eithic.

“There’s no evidence for this. Of course it’s trivially true that the Laffer Curve exists, but this is simply to say that as you reduce the tax rate on some activity from 100%, to 99%, to 98%, or increase it from 0%, to 1% to 2%
———————————————————

UK 50 pence tax rate hike costs £7 billion in lost Treasury revenue

In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs. This number fell to just 6,000 after the announcement.

Most interestingly, however, the number of million pound earners has now increased to 10,000 after the announcement by the Conservative Chancellor George Osborne that the top income tax rate would be brought down to 45 pence from next April onwards”

Throw it on for a decade lets watch what happens, may as well add a transaction tax and theres another 4 billion a year cost on goverment debt.I have nothing against paying fair taxes for productive uses, taxes of envy are a fail.

Hmm. This is all getting a bit Nietzschean now.
——————————————————–

I think you will find there is a big difference between whats fair and “cut them down to my height so I can cope with my compulsive need to compare them to my self instead of realize how lucky I am to live here and if desired improve upon that” If a persons own skills and abilities can be looked upon by them as a means through life why the hell would they even think about reducing what others can get via theres.

Peace.

Ok Bob EVERYTHING is a fraud, we dont just have fraud and criminal behaviour existing in a system as it would it any, no..everything is a fraud, and this is evidence people dont earn there money..and it was probably the illuman..

@ Onbe

I won’t try to keep up this level of detailed discussion, but two things that jump out:

“to be frank this mind set is fucking insane.”

Well, yeah. Irrational, anyway. To quote from the article citing that research:

“This research goes a long way toward debunking one of the biggest myths in all of psychology and economics, known as “Homo economicus.” This is the theory that “economic man” is rational, self-maximizing and efficient in making choices. But why should this be so? Given what we now know about how irrational and emotional people are in all other aspects of life, why would we suddenly become rational and logical when shopping or investing?”

On the one hand you’re insisting that we base policy on ‘the way the real world works’, but on the other hand you seem to bridle at the idea that this might mean accommodating the irrationality of what motivates people and makes them happy/sad/stressed/contented in the real world.

“UK 50 pence tax rate hike costs £7 billion in lost Treasury revenue

In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs. This number fell to just 6,000 after the announcement.

Most interestingly, however, the number of million pound earners has now increased to 10,000 after the announcement by the Conservative Chancellor George Osborne that the top income tax rate would be brought down to 45 pence from next April onwards”

If you announce that a big tax rise for high earners is coming in next year, what they do is bring forward some of next year’s income to avoid the tax. And if you announce that a tax *cut* is coming in next year, they *defer* some of *this* this year’s income. This is just what happened. Ergo –

“Throw it on for a decade lets watch what happens”

– this.

>On the one hand you’re insisting that we base policy on the way the real world works.
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Because a functional world requires functional policy built on rational ideas that work and returns a worthwhile result to sustain advance and grow our society.

>On the other hand you seem to bridle at the idea that this might mean accommodating the irrationality of what motivates people and makes them happy/sad/stressed/contented in the real world.
————————-

The impacts of irrational thinking & perceptions on individuals are highly destructive and you suggest we transfer this irrationality to the governing of an entire country? To the economy that feeds and clothes millions?

Several thousand years ago although irrational it may have been acceptable to murder a local and knock down his house because his was bigger than yours, no matter how much you tried it was just to hard to feel content knowing his was bigger than yours. Society has come a long way since this stone age mind set, racists are frowned upon homosexuality is accepted, society is so stable individuals can conduct business and invest their wealth in personal property without fear (for the Most part) of having it taken from them.

If you think the square cause of happyness is money then you will never have true happyness, not only because your solution to lack is not to Produce something or Add value to the economy in return for it, its to stop someone Else reaching their desired level of wealth, leaving your finacial situation 100000% the same as it was but you get to “look” at others and not “feel” as “beneath” them.

I cant actually belive I am having to write this, if you feel lack its a signal to go out and create for your self, what would you have done back in the day, protested at the tribe in the next woods that their winters food store made you feel “uncomftable” and they should dispose of the majority of it and not collect so much next year to protect your feelings?? We arent even talking about bringing the bottom up here, its the most envious idle incompitent thing I have heard in my life and you are not the majority.

9/10 brits will stick there middle fingers up to a bankers bonus, The same amount will not stick there finger up to a wealthy hard working business owner or ceo, generaly people are more comftable with them selves and there lot.

>If you announce that a big tax rise for high earners is coming in next year, what they do is bring forward some of next year’s income to avoid the tax. And if you announce that a tax *cut* is coming in next year, they *defer* some of *this* this year’s income. This is just what happened.
————————-

Yes if you announce a big tax rise those impacted will do everything in their means to avoid it, if you do not announce a tax cut within a reasonable amount of time they will look to permenant measures of avoidance hence the decline in revenue.

You are a very irrational person, that you quote studies that explain your irrationalism and then ask why we cant create policy around it takes it to a new height. The average person looks to correct an irrational thought when they realise they have one..thats not to say im a rational expert, rather your just off the fucking charts.

Interesting talking to you anyway.

Onbe: “Ok Bob EVERYTHING is a fraud, we dont just have fraud and criminal behaviour existing in a system as it would it any, no..everything is a fraud, and this is evidence people dont earn there money..and it was probably the illuman..”

I didn’t say that, Dumbo. It isn’t difficult to find and post links to umpteen cases where non-financial companies and financial institutions have been fined for competition policy offences or for market manipulation and mis-selling. But there is absolutely nothing illegal about hiking the pay of corporate CEOs or local government officials. The question is whether such hikes reflect substantive contributions to their respective organisations or abuses of power.

The realities of a capitalist market economy, with the documented examples of market failures, give us no reason for supposing that pay differentials reflect differences in innate ability or differences in acquired learnbings and skills.

51. Charlieman

@46. Onbe

About 2,000 words. That’s an essay that the tutor hands over to the PhD student.

Are you taking the piss? Or are you so arrogant that every word must be delivered, without contradiction?

How about 500 words, with an allowance either side for enthusiasm.

>It isn’t difficult to find and post links to umpteen cases where non-financial companies and financial institutions have been fined for competition policy offences or for market manipulation and mis-selling.
————————

No its not difficult to find because we catch the fuckers ~ your claim that this can be used across the board to assess pay is off.

>About 2,000 words. That’s an essay that the tutor hands over to the PhD student.
————————

Oh im sorry, were the thoughts off the top of my head to much for you? Have you considered starting a political group to limit the number of words others can write? Have you communicated with the wider public how anything beyond a twitter line causes deep emotional turmoil and no matter how much you try you just cant be content, its a serious issue.

I make an effort to communicate with someone,leftist strolls in, decides its not right for Him, attacks person who was not even speaking to him and wants it changed to suit him = THE LEFT.

@ Onbe

“You are a very irrational person… thats not to say im a rational expert, rather your just off the fucking charts.”

For what it’s worth, Onbe, I *am* ‘a rational expert’ in the sense that I’m a philosophy postgraduate who has taught Reason and Argument at degree level.

“The impacts of irrational thinking & perceptions on individuals are highly destructive and you suggest we transfer this irrationality to the governing of an entire country? To the economy that feeds and clothes millions?”

What I suggest is just that in formulating policy, we need to bear in mind what *actually* makes people tick, according to the best evidence – not what we feel *ought* to make them tick if they were perfectly rational.

If the best evidence suggests that people in very unequal societies tend to be more stressed, more indebted, less healthy, less trusting, etc. etc., for a range of sociological and psychological reasons, it’s no use huffing and puffing and insisting that people ought to be more rational and start appreciating what they’ve got. Where does this end? Is the state going to start deciding whether it’s ‘rational’ for people to value the arts, or green spaces, or privacy, or marriage, or whatever, formulate its policies accordingly, and insist that people just ‘get over it’? We have to take people as we find them.

Of course it’s true that we can’t, for instance, ride roughshod over the rights of minorities in the name of the happiness of an irrational or prejudiced majority – e.g. by enslaving some groups, or denying them basic rights. Which brings us to the basic question of whether tackling inequality, in the name of making life happier for most people, involves unduly trampling on anyone’s rights.

And I just don’t see that it does. Whether the incomes of the rich pull away from the incomes of the poor or, alternatively, the incomes of the poor catch up to those of the rich, is not a matter of whether the rich get more of what’s rightfully theirs or, alternatively, the envious poor steal it off them. It’s a matter of who manages to protect their own interests in negotiating over pay, lobbying over tax policy, etc.

Onbe: “No its not difficult to find because we catch the fuckers ~ your claim that this can be used across the board to assess pay is off.”

But we don’t know how many cases have been left open and unreported because regulators are under-resourced or because conclusive evidence wasn’t uncovered.

Cases of fraud, insider trasding, market manipulation and competition policy offences are notoriously challening to investigate and prosecute. Conclusive evidence often depends on whistleblowing by involved parties or highly intrusive surveillance or evidence gathering, very possibly through dawn raids to gather documents, usually as a last resort.

For those reasons, it would be presumptious to conclude that pay differentials reflect differences in innate abilities or acquired differences in learning and skills.

I repeat, pay hikes for corporate CEOs and local government officials aren’t illegal but there is little assurance that those pay hikes reflect substantive contributions rather than the exercise of power.

55. Charlieman

@52. Onbe: “>About 2,000 words. That’s an essay that the tutor hands over to the PhD student.
————————

Oh im sorry, were the thoughts off the top of my head to much for you? Have you considered starting a political group to limit the number of words others can write?”

Do you want people to read what you think? If so, write concisely and get to the point. You don’t have to be George Orwell.

The authors of original pieces on LC have a word limit (about 500 words but it is flexible). It’s reasonable to expect commenters to observe that convention.

56. Derek Hattons Tailor

@ 37 It is a huge amount to do with “me” as in the generalised other. Are you familiar with Festinger’s – social comparison theory ? Probably not as you sound like a banker, but it’s one of the most influential theories in social and consumer psychology. It and countless other studies have shown that comparisons with your peer group are a significant motivator to acquisition. It’s the essential dynamic of virtually all marketing. To put it laymans terms, many consumer objects are status symbols – meaning their value is as much symbolic as practical, and the whole point of symbols is that others can see them. If you want a car then you buy a car, why buy a Ferrari when a Skoda does the same job ? Everyone would obviously prefer a Ferrari because it’s an immeasurably better car in engineering and style terms, and as the man Descarte pointed out, speed is the only “new” thing we have. But, it still just gets you from one place to another and, on average, cars only spend about 2% of their lives actually being driven, and most of the time you can’t drive a Ferrari as it’s optimised to be driven, so it won’t even get you there more quickly, so what’s all the extra money for ?
Where I used to live – a gentrifying area of Bristol – there was a vociferous local campaign against a supermarket development, Tescos. When Tescos pulled out and Sainsburys replaced them, the opposition all but disappeared. What’s that about ? Both are supermarkets selling essentially the same products, both would be in the same place, the same size and have the same advantages/disadvantages for the local area – could it be that the residents, having made it into a desirable area now saw themselves as “Sainsbury’s people” or at least not as “Tesco people” where does that come from if not a desire to differentiate, to show which socio-economic clan you (want to) belong to ?
Do you really think people buy iphones because they improve their lives, rather than because other people they perceive as cooler/richer than them already own them ? They want to be part of that in-group, and want everyone to know it. How does an iphone “improve your life” in a way that any other generic smartphone does not ? Once you have the essence (a mobile computer with a phone attached) the differences are minute, the real value is symbolic. You don’t need most of the stuff you own, you definitely don’t need the most expensive version of it.

It’s not going to happen but I would suggest that the left (a broad church) just let it be: no intervention in the economic base, no proposed alternative ideologies, in hindsight, this was Labour’s big mistake, attempting to create a more equal society only masked the real nature of capitalism.

What I suggest is just that in formulating policy, we need to bear in mind what *actually* makes people tick, according to the best evidence – not what we feel *ought* to make them tick if they were perfectly rational.
——-

I would say the best evidence for what makes people tick are the fruits of their labour and that happens to be industrialised society its self which was not born out of an envious need to keep others inline with our own personal capabilities. When formulating policy we must keep in mind what works and what will deliver the most substantial benefits to all instead of letting infantile desires cut the legs from others resulting in less for all.

If the best evidence suggests that people in very unequal societies tend to be more stressed, more indebted, less healthy, less trusting, etc. etc
——-

If all thats required is equality those perfectly equal societys of the very distant past were a utopia I guess(if you could keep your head attatched)Being indebt and stressed due to that plus having poor health because of a poor diet and lack of exercise is impacted in no way what so ever by making sure someone who is not earns less.

It’s no use huffing and puffing and insisting that people ought to be more rational and start appreciating what they’ve got. Where does this end? Is the state going to start deciding whether it’s ‘rational’ for people to value the arts, or green spaces, or privacy, or marriage, or whatever, formulate its policies accordingly, and insist that people just ‘get over it’? We have to take people as we find them.
——-

We Do need to take people as we find them and thats exactly why huffing and puffing and insisting Dave who has spent his life dedicated to education and improving his professional skills should not earn as much this year to make John who has done neither feel better about him self is madness, where does it end???

I am not insisting people be more rational I am insisting we do not transfer irrationality into state policy, not only because if an individual cant “get over it” otherwise known as appreciate what they have in life, no amount of taking away from others will cure that, they will just find something else externaly to project there negative feelings on and claim its the cause, but its extremely limiting and restrictive to society as a whole…what next IQ reductions so people who cant be content in the knowledge that some of those around them are more mentaly capable than them selves can feel better?

Which brings us to the basic question of whether tackling inequality, in the name of making life happier for most people, involves unduly trampling on anyone’s rights.
——-

The financial system is a tool of our socitial evolution, propertys financed to be built for instance werent for the benefit of the financier, they werent for the benefit or the ceos and those organizing the projects from up high or the insanly skilled highly paid engineers making it possible or the labourers who conducted the physical work, they were for the benefit of those who lived in them and under our system every single person involved benefited, thats how our system works, some make less some make more.

The difference between you and me is I want equal opportunity and you want equal outcome, the further society progresses in its ability to transform resources into products and goods the wider the inequality will become But the higher up in living standards All will be taken until we reach a tipping point concerning technology and energy at which point all will have exactly the same, this is the way to an equal society, real physical process, not pissing about with the amount of paper or digits one person received to make some one who received less “happy”.

It can be hard out there and thats a consistent reality of life, if people want to wreck there lives with envy whilst living in These times then so be it, those same people would have been fucked in the brutal past at least they get to survive and have comfort in these times, the most advanced time there has ever been.

If you arent happy with your position in life you have two options, the first to get over it, the second is to rise above it. The second is what took humanity out of the caves and has created an enviroment that makes it much easier for any one to appreciate what they have because we all have so much.

Who is the most selfish and who is going to provide the most value and advancment to society:

A person who works extremely hard and enjoys a big income.

A person who has not been financialy successful, tells you its riciculous that they should appreciate what they have especially in comparison to the poverty of third world countrys, a reality they avoided by the inequality of birth, and who demands others should get less whilst not even adding to what they have because it helps them “cope” with life.

I am glad you went to univeristy I would have liked to have gone, I grew up on a council estate which wouldt have been a problem I could have got my own loan instead of having it paid for by the parents, but sadly by the time I left school my reading and writing skills werent so good, dyslexic fuckwit as there known. I went straight into the work place and taught my self what I needed to, its lean hard times at the moment yet in a few years it will have paid off.

I have never felt envious or wished less upon anybody, I think one needs to face some hardships and disadvantages in their own lives before they take responsibility for everything they are and understand taking away from others to medicate there own lack and feelings amounts to the square root of fuck all. For those who overcame there lot in life yet still feel uncomftable others have more, society is not about you, no one cares that you never took the risks and worked 12-14 hour days to get where others are, or even did so but in a feild that does not reward in the same manner and no one would care if you did.

Life is short and brutal, there are a lot harder realitys than economic, the fact that one day we are going to drop dead and face the possibility of seeing every one we love die before that day for a start, get your heads together enjoy what you have instead of focusing on others because you arent getting this chance again.

If you want a car then you buy a car, why buy a Ferrari when a Skoda does the same job ? Everyone would obviously prefer a Ferrari because it’s an immeasurably better car in engineering and style terms, and as the man Descarte pointed out, speed is the only “new” thing we have. But, it still just gets you from one place to another and, on average, cars only spend about 2% of their lives actually being driven, and most of the time you can’t drive a Ferrari as it’s optimised to be driven, so it won’t even get you there more quickly, so what’s all the extra money for ?
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The grin on the drivers face when he floors the accelerator caused by the release of adrenaline endorphines and neurotransmitters on a private track of course;) Its about expereince, one you are either drawn to or not, the same as anything else in life.

Do you really think people buy iphones because they improve their lives, rather than because other people they perceive as cooler/richer than them already own them ?
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Put another way your asking if I really think there arent people in society that place absolutly everything on image, there are and most of the time they have very little in the way of anything interesting to say. Just because you have academic theorys that describe their behaviour does not mean everyone follows suit.

There is a tescos icelands morrisons and sainsburys in my area, people go to the nearest. Once you own the basics the differences are minute, that does not take away from the fact my freind has a 7,000 pound personal computer and talks about it to no one, we cant even sit in that room with him because the sofa is so stuffed it literaly stabs you, that does not take away from the track day ferrari man or anyone following a passion/interest or buying something that looks attractive to Them with their hard earned money.

We dont Need any of the stuff we own we did fine for centuries without it but we have it, its a fruit of modern society, the result of us and many generations that came before us. Some in society base everything on image, so what? You lot fall into that group to but your thinking is different, your images are so threatened by others instead of adding to your own lot you want to take away from them, justified by theorys and reducing society down to its components and labeling it “shit”.

Even if the theory stands as 100% true what is your point?
“Humans do this as part of their drive to procreate and exist in society inline with their instinctual needs so we should stop this from happening because its only part of the drive to procreate and be human”

If you truly wanted to live a simple life of little excess that is exactly what you would do. It would make no difference to you that someone else had an iphone never mind why they had it, but you cant do that can you, your feelings about it wont allow.

And no im not a banker but even if I was its just a job, im sure there are many bankers educated on social theory and a huge variety of subjects just out of personal interest, we arent all so one sided we have to turn everything into ideological warfare.

I’ve been increasingly impressed by just how dim and ignorant bankers are.

As several reports by competition watchdogs and Parliament have made crystal clear, competition in banking in Britain is blunted, which makes it much easier for bankers for rip off their customers. And those additional rewards have been to the benefit of bankers’ pay, not to the benefit of bank shareholders, which are often pension funds.

Also, market concentration in UK banking has increased since the start of the financial crisis. For interest, try passages from the speech made last year by John Fingleton, chief executive of the OFT on: Competition in UK Banking:

For too long, competition in the banking sector has not functioned well. The Cruickshank report on ‘Competition in UK banking’ in 2000 highlighted concerns about a lack of effective competition. Since then, there have been interventions by competition authorities, consumer bodies, regulators and the Government. Even where these have had positive effects, progress has been too slow and incremental, and fundamental concerns remain about the competitive structure and performance of these markets. . .

The Cruickshank report on ‘Competition in UK Banking’ in 2000 found that banks were making substantial excess profits from their personal and SME customers. The report identified a number of problems with banking markets, in particular that:
• the market was highly concentrated, especially for SME banking
• there was a lack of information provided to personal customers and SMEs, and customers perceived significant barriers to switching current accounts, and
• the banks were effectively in control of the money transmission service, resulting in barriers to entry, poor service levels, high charges and a lack of innovation.

On concentration, most banking markets experienced little change between 2000 and the financial crisis. They saw very sharp rises in concentration levels between 2008 and 2009.
http://www.oft.gov.uk/shared_oft/speeches/2012/speech0212.pdf

Speak truth unto power

The authors of original pieces on LC have a word limit (about 500 words but it is flexible). It’s reasonable to expect commenters to observe that convention.
—–

It wasent done to wind you up and I have seen longer on here, get over it.

—-
For those reasons, it would be presumptious to conclude that pay differentials reflect differences in innate abilities or acquired differences in learning and skills.

I repeat, pay hikes for corporate CEOs and local government officials aren’t illegal but there is little assurance that those pay hikes reflect substantive contributions rather than the exercise of power.
—-

Ok, stick a building labourer or someone from the tesco check out as head of a bank or fortune 500, see how that one works out.

The general public are as thick as pig shit and been nudged to the right over many years by the media remorselessly drip feeding it scare stories about welfare cheats and similar. Politicians, who are generally much better educated and in possession of the facts, should lead and not be led by a rabble of ignoramuses. If I’m sick I go to a doctor and if my car breaks down to an expert mechanics, not to some dumb semi-literate glove puppet who doesn’t know his (or her) rectum from a hole in the ground.

Britain has a poor and miserable future outside the EU.

(England is about the same size as Idaho in the USA, one of that country’s smallest and most insignificant states.)

There’s a lot of people who need to grow up and smell the coffee.

58

Comparing ancient and modern societies isn’t very realistic, as the economic base evolves and changes, so does culture. Ancient societies were mainly guided by religious ideas, certainly in England the principle Christin notion was that God created the social order and reward for embracing God’s will would be entry to heaven. Capitalism creates a culture of greed for everyone, not just the few, and, as been noted above, success is symbolized by material possessions. In fact, capitalism cannot stand still, it has to create a situation where, for most, there is a necessity for constant acquisition of new products, the lack of them denotes failure.

There is also degrees of inequality, not having the latest model of Ferrari is not the same as having to queue for food handouts. And being born into a family who can pay for the best education and are able to access elite social groups for future employment gain is not equality of access or outcome.

Over the past 150 years or so, successive parties have attempted (via the actions of the state) to address the inequalities of market outcome and still we are failing. At the present around £51 billion of state hand-outs are given to working people and that doesn’t include the benefits paid to the unemployed.

More state intervention will not address the problems, I doubt if there is anywhere that the state could intervene if only for it to be a temporary sticking plaster as the past has shown.

There is also degrees of inequality, not having the latest model of Ferrari is not the same as having to queue for food handouts. And being born into a family who can pay for the best education and are able to access elite social groups for future employment gain is not equality of access or outcome.
——–

I know, thats what I grew up in and I agree comparing ancient and modern societies is not very realistic, yet im sure we can agree being at the bottom now is a funfair in comparison to then. Infact its higher than any king of those times.

The equal opportunity of today is that any person of any standing can invest/start a business – work there way to the top of any industry – gain the funds over time to access that education, and so forth. In the past only those born into the right familys could, by equal opportunity I did not mean “equal easy” I meant taking life by the ears and yanking it, having no one stood there with a stop sign.

“More state intervention will not address the problems, I doubt if there is anywhere that the state could intervene if only for it to be a temporary sticking plaster as the past has shown.”

I also agree and I think those studies are flawed, I mean ask some body sitting down in a room on their tea break if “they would like 100,000 or 50,000” compared to others, how is their answer reliable?

PUT 50,000/100,000 pound INFRONT of them and offer them the same job for both, a years wages upfront, see how much they care about what others get Then.

For an education on society and equality I guess we could then put the same amounts infront of them, the 50 for a warm comfortable stable office job and the 100 for a back breaking out door year round long houred sewage crawling filthy job, lets see which job the average person chooses.

Then we could put 500,000 on the table and tell them it can be theirs! Perhaps after 8 years of break even hard work and oh, they might lose everything they own including their home in the process should it not work out, or perhaps 12 hour days and a life dominating job, after 2 decades they may be part of the few percent who make ceo.

Or we could even put a few million on that table, perhaps if they just take an idea and back it with uunfaltering persistence and dedication for ten years
through rejection after rejection, betrayal after betrayal,let down after let down, it could be all theirs! Even though statisics show they will likely end up with nothing but the cost of that journey..will the average person take this option to? I mean they could end up with more than every body else..right?

The risk reward system we have is as it is for a reason, there is not inequality because some group of bankers decided so, its all well and good to quote answers asked in comfort when there is nothing asked of the individual, the answers completely change when it goes from “would you rather me give X amount so you have X amount in comparisons to the people around you” to “are you willing to invest your blood sweat and tears into this position and do you have the skills and determination to stick at it Long term until You make it to the top”

Its apparant from some individuals postings that they are among those who if Offered would select less for their fellow man, even if that meant less for them selves, if only to have more in comparison. Thats unfortunate, people ask for change in the community around them when they do not give a Shit about the community, they would sacrifice a gain for the community even at a loss to them selves just to feel above the community, at what level of adulthood does this behavour truly exist?

Sure there are people who want more only to impress other people, god bless there souls perhaps after reaching the end of the rainbow they will find some depth within their characters. But what we have here is something different, most likely issues concerning self worth being projected onto the world, turning up at this time in society and demanding it be restricted only to benefit their handle over the thoughts and emotion in their own minds.

I long ago realised I cant change the views of others and the holder of a veiw is the first to suffer at its hands, it would not be productive to continue with this subject after this point, I just hope some find equilibrium within and mature, life is way to short.

@ Onbe

“industrialised society its self which was not born out of an envious need to keep others inline with our own personal capabilities.”

You always put it this way round, as if a desire for greater equality is about wanting to cut other people down to size. In fact it has historically been about worse-off people wanting more of what better-off people always had – e.g. incomes you can live on, decent housing, access to healthcare and education. (Oh, the ‘envy’!) Of course, for worse-off people to have those things, better-off people had to take a smaller slice of the wage pie and pay more taxes than would otherwise have been the case.

“If all thats required is equality those perfectly equal societys of the very distant past were a utopia I guess(if you could keep your head attatched)”

What the evidence seems to show – and I urge you to read The Spirit Level, or at least take a look at the Equality Trust website – is that increasing prosperity within a developing society leads to greater happiness, better health etc. *up to a certain point*. (Obviously everyone needs to have enough to eat, clean water etc.) But if you compare *rich* societies with one another, it’s not the ones that get *even richer* that are happier and healthier; it’s the more equal ones.

“Being indebt and stressed due to that plus having poor health because of a poor diet and lack of exercise is impacted in no way what so ever by making sure someone who is not earns less.”

I’m struggling to follow this sentence, but I think what you’re saying is that one person’s health can’t possibly be affected by the fact that other people are much richer than them? All I can do, again, is point you to the evidence that says otherwise.

“if an individual cant “get over it” otherwise known as appreciate what they have in life, no amount of taking away from others will cure that, they will just find something else externaly to project there negative feelings on and claim its the cause”

That’s your hunch, but the evidence doesn’t support it. It suggests people are generally happier and healthier in more equal societies. And importantly – I haven’t emphasized this enough – *not just poor people*. The argument is not just that poor people are happier/healthier when rich people are poorer. It’s that *almost everyone* is happier/healthier when the gap between rich and poor is smaller. Relatively well-off people are not immune to the problems associated with greater inequality.

“what next IQ reductions so people who cant be content in the knowledge that some of those around them are more mentaly capable than them selves can feel better?”

Again, you’re insisting on putting things that way round – taking from those who have, rather than giving to those who don’t. How about improved educational opportunities for people at a natural disadvantage – like, oh, say dyslexics – to close the attainment gap between them and current high achievers?

“The difference between you and me is I want equal opportunity and you want equal outcome, the further society progresses in its ability to transform resources into products and goods the wider the inequality will become…”

Not necessarily. Some advanced societies have become very unequal (e.g. the USA) and some haven’t (e.g. Japan)”.

“If you arent happy with your position in life you have two options, the first to get over it, the second is to rise above it.”

Sure, but demanding a more equal slice of the pie is a perfectly valid way to ‘rise above it’ – that’s how our grandparents managed to secure (for themselves and us) better wages, better homes, better healthcare, better access to education etc. It doesn’t have to be about ‘rugged individualism’.

“I am glad you went to univeristy I would have liked to have gone”

And that’s fair enough. I think you *should* resent the fact that your dyslexia and/or financial situation held you back. I think you’d be perfectly justified in calling for people of my generation and older, who got a free education and have reaped the benefits, to pay more in tax so that the next generation of children can have the same chance we had (and so that dyslexic children get the extra support they need in school). Yet you insist on talking as if the high incomes enjoyed by yesterday’s graduates must be the result of sheer hard work, and it would be pure ‘envy’ to make any such demands of them.

Can you not see that the rich are laughing at you? They got the free education, the high-paying jobs, *and* the low tax rates. You missed out on the same opportunities, in spite of being no less hard-working than them. Yet here you are, not demanding that they give something back, but defending their right to keep all their money for themselves while you endure ‘lean hard times’ as a result of missing out on the things they had handed to them on a plate.

You always put it this way round, as if a desire for greater equality is about wanting to cut other people down to size.
—–

I am resonding because you have moved the goal posts – equality for me has always been about raising living standards for all. Our system is providing that, its a long term play and although beyond our life times a tipping point will be reached via advancments at which point the same amount can be provided for all.

Equality for you as displayed in the above postings is about how hard people find it to be content while the people around them are much better off than they are. You take this to such a point you question my ability to be content with a ONE HUNDRED THOUSAND POUND annual income, the only basis for your questioning was that other people have a 250,000 annual income. You then ask me if push came to shove would I rather inflict poverty on those around me so only my kids can have laptops piano lessons and holidays, with no mention of the practical returns those things give in life, it was simply because “my family was viewed as deprived” IE Impression.

I told you that this was fucking madness, you said well..yea…but look at this research to prove it! Then you asked me why on the one hand I insist we incorporate what works in the real world into policy but on the other object to incorporating irrationality into policy, because after all..it exists in the real world..so..what are we to make of the “equality legislation” you would like to see from your comments? Its certainly not the type that lifts the bottom up and thats the end of it, dear god 100k a year is not good enough if there are people earning more, one cant be content!

Regardless how much you have there is Always going to be someone way better off than you, you come across as the type of person who would suffer at that and thats come through in every one of your posts.

What the evidence seems to show – and I urge you to read The Spirit Level, or at least take a look at the Equality Trust website – is that increasing prosperity within a developing society leads to greater happiness, better health etc. *UP TO CERTAIN POINT*. (Obviously everyone needs to have enough to eat, clean water etc.) But if you compare *rich* societies with one another, it’s not the ones that get *even richer* that are happier and healthier; it’s the more equal ones.
—–

Correlation doesn’t equal causation and thank you for the offer however I wont be needing to read it I understand it on a personal and societal level as quoted from my self below, rather amusing considering the main motivations of my postings here have been in response to the utter shock of you going on about people not being able to be content even though they have food shelter clothes and warmth, exactly what you would have in any equal society yet the pressures of people having more are enough to blunt this fertile ground in which any one can build a fantastic worth while life upon.

Some of us understand wealth makes you happy to a certain point, thats why we cultivate the rest of our lives and thats the only reason why anyone is or can be happy. Having everything one would have in an “equal nation” yet still finding ones self not to be content, then concluding it has nothing to do with you as an individual and our society just has to be made more like theres because then like magic you shall find happyness is a black hole in logic that should rightly suck the face off the owner.


Keeping up with the Joneses is NOT THE WAY to happiness, the person you BECOME, the RELATIONSHIPS you cultivate, the EXPEREINCES you have and if your a family man the TRIBE you CREATE is THE WAY to happyness and fulfilment in life. The only people I know who are TRUELY content in life, some being ultra wealthy others being just above the poverty line are those who adressed life as a WHOLE. The wealthy I know are NOT getting their happyness from their 18th year of profits, they are using business to plough their ENERGY into and taking on a task that feels productive to them, is a CHALLANGE to them..those on the lower end of the scale I know who are content for the most part do not feel productive in their jobs but they have made ONE HELL OF A JOB AT scultping their family/relationships and general LIFE.
—-

I’m struggling to follow this sentence, but I think what you’re saying is that one person’s health can’t possibly be affected by the fact that other people are much richer than them? All I can do, again, is point you to the evidence that says otherwise.

Can ones personal health be affected because other people smoke 60 cigars a day while they smoke 0 and never stand in the same room as the smoker?? No it can not possibly impact their health, in the same way someones health can not be impacted because Others are richer. The cause of health problems is the INDIVIDUALS lack of money which is not caused by someone else being richer.The stress induced by the lack of funds to service bills and the poor life style choices afforded concerning food and so forth can be delt with by making That individual “richer” the impacts of stress “go” and their life style choices concerning food & healthy eating + exercise “change” because they have the “means” and the “time” to make this “happen”.

(However if they have a lump sum dropped into their lives, the lottery as an example, a lot of the time they come out of the situation broke and worse off due to the very forces that stop them becoming rich in the first place)

They become “healthy” because they “changed” their “individual situation” – the millionair down the road still does not know there name and has not changed in the slightest. I am All for bringing the bottom up, we need to focus on the people with the issues and change their life situations not that of those who are fine, you can point me towards “evidence” as you like, its as valid as evidence stating an individual smoking 60 cigars a day impacts one who has never taken a puff in their life time.

That’s your hunch, but the evidence doesn’t support it. It suggests people are generally happier and healthier in more equal societies. And importantly – I haven’t emphasized this enough – *not just poor people*. The argument is not just that poor people are happier/healthier when rich people are poorer.

The argument is not Just that poor people are happier when rich people are poorer however that is part of the argument, to the point that above you have claimed that being rich alone is a sole cause of illness in the poor, again I add Correlation doesn’t equal causation. If we were to examine and compare the following habbits and actions of the rich and the poor we will find the answer:

Smoking
Exercise
Alcohol consumtion
Drug both legal and illegal consumption
Nutritional choices
Ability to plan ahead, deal with and counter not only financial induced stress but stress from every cause in life.
Keeness to learn and expand ones perspectives, from degrees to several books a month.
Time spent stationary consuming television media
Confidence to act etc

If we are talking making the rich poorer in comparison to the poor because the poor get richer I am all for that but that is not what you are saying. “Affected by the fact that other people are much richer than them” is not saying affected by the fact that the individual is not paid enough, its saying they are impacted by the fact they have something to compare to and fall on the wrong side.

How about improved educational opportunities for people at a natural disadvantage – like, oh, say dyslexics – to close the attainment gap between them and current high achievers?

There are many high achieving dyslexics across the board infact some of the highest achivers known, Steve Jobs, Branson, Sugar, Theo Paphitis, Anita Roddick (body shop), Jamie Oliver, Madejski (AutoTrader), Kamprad (ikea), Speilberg (scary big dinasaur) W.F Woolworth, J. watson, Walt Disney, Paul Orfalea, Alan Meckler, Charles Schwab for a start. By all accounts 35% on up of entrepreneurs in America are dyslexic and 20% of the UKs are. UK entrepreneurs are five times more likely to suffer from dyslexia than the average UK citizen which is a substantial amount.

The most important thing for a dyslexic is to be taken as he is yet however hes taken he soon learns what he faces which at its roots is what we all face in life, being alone and the sole cause for our achievement.(Yes if we have a business its only possible by the efforts of thousands, but if you never leave the house or the dole, or learn to master how you work best as an individual, it does not exist…)

Not developing the ability to learn to read and write in the manner its taught to the indiviuals peers for a time period that lags in years, one realises that the answer to issues arent outside of them. Im not putting it anyway other than what I have read in your posts.

Sure, but demanding a more equal slice of the pie is a perfectly valid way to ‘rise above it’ – that’s how our grandparents managed to secure (for themselves and us) better wages, better homes, better healthcare, better access to education etc. It doesn’t have to be about ‘rugged individualism’.

Yes! I believe thats all China and so forth has done in the last few decades, demanded there slice of the pie resulting in a shift of labour and a distruption in our system as we know it, times have changed since our grandparents. Todays demanding a larger slice of the pie must be a demand expressed in action and output not words and entitlement, we all want better education and housing.

And that’s fair enough. I think you *should* resent the fact that your dyslexia and/or financial situation held you back.

It did neither for life is not a time tabled scheduled play, how could I resent what I am and the position of those who cared to raise me, resent is posion.

I think you’d be perfectly justified in calling for people of my generation and older, who got a free education and have reaped the benefits, to pay more in tax so that the next generation of children can have the same chance we had (and so that dyslexic children get the extra support they need in school). Yet you insist on talking as if the high incomes enjoyed by yesterday’s graduates must be the result of sheer hard work, and it would be pure ‘envy’ to make any such demands of them.

I reap the benefits created by the older generation, I was born into a functional society, my pc cost over one billion pounds, my car skoda or ferrari cost well in excess of that, the wealth is not in my bank account, its in the tarmac of the road surface, the network of open shops left right and center, products and services from medical care to google each being developed over significant time spans and requiring trillions of invesestment – hundreds of millions of hours of work, when all added together.

That is my wealth, that is what I have to work with, this entire network of soceity with all its tools and aspects its what I will use to create something to exchange for the tokens of wealth, because this is my time and setting my self up as well as I can to introduce my children into the world is my job. The older generation had there time and there job, they used the means avalable in those times, every generation has and will until humanity is toast.

Can you not see that the rich are laughing at you? They got the free education, the high-paying jobs, *and* the low tax rates. You missed out on the same opportunities, in spite of being no less hard-working than them. Yet here you are, not demanding that they give something back, but defending their right to keep all their money for themselves while you endure ‘lean hard times’ as a result of missing out on the things they had handed to them on a plate.

The highest-earning 1 per cent of Britons pay almost 30 per cent of all income taxes, according to research.

The 308,000 on the 50p top rate – who earn more than £150,000 – pay £47billion a year to the Treasury.

Since 2000, the share of tax paid by the highest earners has risen from 22.2 to 27.7 per cent.

Research by Oriel Securities shows the 3.7million who earned more than £35,000 and pay 40 per cent tax, hand over £57billion in tax, 34 per cent of the total.

The lower-earning 50 per cent pay £17bn – less than the housing benefit bill.

Overall, 90 per cent of all income tax is paid by half the working population.

I am happy with their contribution and I can assure you they arent laughing at anything, being business minded you have no idea of the amount of them I have heared talking about what could have been, if the country was governened by the economicaly literate, if instead of blowing tax revenue to literaly buy votes a good wack of tax revenue over the Long term went To lending and investing in resouces around the world allowing the country to eventally hit a tipping point at which time it actually had an income which it used in the most efficent manner possible to fund this countrys needs, lowering taxation and improving spending power for all, with the saftey net of an extremely business freindly booming economy to fall back on at the times our means faced issue.

Theres no point in getting hung up on it though, what is is what is.

66

The main impetus of capitalism is that we are never content, markets have to create needs (not wants) in order to drive production. But as well as the psychological cost of failure (not being able to even acquire the basics) the whole system is actually inefficient. If we look at education, a necessity of the industrial environment, the market could not meet this basic need, it required the state to intervene. This was also the case for health, infrastructure such as roads, street-lighting ect. But markets are also wasteful, in the race to provide wants, there are invariably losers, so vast amounts of investments are lost and people lose their jobs, we (the taxpayer) then have to subsidize the unemployed to be idle.

If you feel that capitalism is a worthy economic system then it should be left to run its’ own course, intereference merely confounds the market process and eliminates the need for individuals to act rationally. This can be clearly seen by the failure of certain banks where the taxpayer (that’s every adult whether rich or poor) having to bail them out while the culprits continue to collect massive bonuses for failure. If this is a circumstance which you find acceptable, then so be it, we are all entitled to our opinions.

Any system has needs behind it, I belive capitlism offers the most freedom, its not all roses and there is waste its case speaks for its self though. As for the bailouts, the path to that and the inefficency of goverment + their history grads trying to play economics on a nation by nation scale, thats an issue that would require way to many more words to cover 😆 peace.

The case for market capitalism is basically the same as the case Churchill made for ‘democracy’: the worst possible system apart from all the others.

The sensible debate is about the interventions by governments and regulatory agencies needed to minimise the hazards and inequalities resulting from free market capitalism. Recap on those fines imposed for market manipulations, fraud and breaches of anti-trust rules posted in this thread.

Income inequality growing faster in UK than any other rich country, says OECD

Top 10% have incomes 12 times greater than bottom 10%, up from eight times greater in 1985, thinktank’s study reveals [Guardian: 5 December 2011]
http://www.guardian.co.uk/society/2011/dec/05/income-inequality-growing-faster-uk

@ Onbe

“what are we to make of the “equality legislation” you would like to see from your comments? Its certainly not the type that lifts the bottom up and thats the end of it”

Actually, I’d happily sign up to legislation that simply lifts the bottom up, hence bringing them closer to the middle and top. But where is that magic extra money going to come from? In reality, it’s about who gets what slice of the pie. More money going to wages (for ordinary people) means less to profits (for the rich).

“Regardless how much you have there is Always going to be someone way better off than you, you come across as the type of person who would suffer at that and thats come through in every one of your posts.”

Actually I’m not that bothered, personally speaking – consciously at least. I quite like being the contrary one who doesn’t have a car etc. But I’m not going to project my own viewpoint on to everyone else.

“Correlation doesn’t equal causation”

Yes, and the leading academics doing this research understand that perfectly well (obviously) and put a lot of effort into ruling out alternative causal explanations for their findings.

“Having everything one would have in an “equal nation” yet still finding ones self not to be content, then concluding it has nothing to do with you as an individual”

This is not about individuals looking around and deciding they’d be happier if society was more equal. It’s about academics looking around and seeing that people *are* happier when society is more equal.

“Keeping up with the Joneses is NOT THE WAY to happiness”

Exactly. Hence the wisdom of removing societal/psychological pressures to keep up with the Joneses by making society more equal.

“in the same way someones health can not be impacted because Others are richer. The cause of health problems is the INDIVIDUALS lack of money which is not caused by someone else being richer.The stress induced by the lack of funds to service bills and the poor life style choices afforded concerning food and so forth can be delt with by making That individual “richer” the impacts of stress “go” and their life style choices concerning food & healthy eating + exercise “change” because they have the “means” and the “time” to make this “happen”.”

Again, you’re elevating your own common-sense hunches above the evidence.

It’s probably worth pointing out here that I never used to think inequality was a problem in itself. I remember seeing Tony Blair interviewed about this: he insisted that *poverty* needed tackling, but the gap between rich and poor didn’t matter in itself. I agreed because that seemed like common sense. Then I took a look at the evidence to the contrary and changed my mind.

“I am All for bringing the bottom up, we need to focus on the people with the issues and change their life situations not that of those who are fine, you can point me towards “evidence” as you like, its as valid as evidence stating an individual smoking 60 cigars a day impacts one who has never taken a puff in their life time.”

So your attitude to evidence is: common sense tells me that result *must* be wrong, so I’m not going to bother looking. Has it occurred to you that this is the same ‘common sense’ that tells us the earth is flat?

“you have claimed that being rich alone is a sole cause of illness in the poor”

No I haven’t.

“If we were to examine and compare the following habbits and actions of the rich and the poor we will find the answer:

Smoking
Exercise
Alcohol consumtion
Drug both legal and illegal consumption
Nutritional choices…”

Yes, these are the sorts of things the authors of the Spirit Level look at. But they’re digging down a level and suggesting that there’s a causal connection between the levels of inequality in society and the levels of alcoholism, overeating etc.

“Todays demanding a larger slice of the pie must be a demand expressed in action”

Presumably, though, this doesn’t include political action intended to see a higher proportion of national income go to wages and a lower proportion to profits?

“It did neither for life is not a time tabled scheduled play, how could I resent what I am”

I’m not saying you should resent what you are. I’m saying you should resent a system that dismissed you as a ‘fuckwit’ (your word) because of it.

“The highest-earning 1 per cent of Britons pay almost 30 per cent of all income taxes, according to research… Since 2000, the share of tax paid by the highest earners has risen from 22.2 to 27.7 per cent… the 3.7million who earned more than £35,000 and pay 40 per cent tax, hand over £57billion in tax… The lower-earning 50 per cent pay £17bn – less than the housing benefit bill… Overall, 90 per cent of all income tax is paid by half the working population.”

This argument makes me furious. *Of course* if higher earners take an ever larger slice of the GDP pie for themselves, they are going to pay an ever larger share of tax! In a more equal society, people would pay more equal shares – which I would be fine with.

“I am happy with their contribution”

Not as happy as they are with yours.

@ Onbe

“*Of course* if higher earners take an ever larger slice of the GDP pie for themselves, they are going to pay an ever larger share of tax!”

Just to illustrate this: imagine a mini-society of 10 ‘bosses’ and 100 ‘workers’.

Suppose the GDP of this society was £2,500,000 in 2000. Of this, the bosses paid themselves £60,000 each and their workers £19,000 each. The personal tax-free allowance was £5,000 and there was a flat income tax rate of 25%. So each boss paid £13,750 in tax and each worker paid £3,500.

Total tax paid – £487,500. The bosses pay 28% of that, the workers 72%.

Ten years later, in 2010, GDP has risen by 40% – £1,000,000 – to £3,500,000. There’s also been an explosion in inequality. The bosses have doubled their own incomes to £120,000 each, while raising workers’ incomes by just 21% to £23,000 each. (To put it another way: the bosses have increased their collective slice of the pie from 24% to 34%.)

Supposing the personal allowance has risen to £7,000, each boss now pays £28,250 in tax and each worker £4,000.

Total tax paid: £682,500. The bosses pay 41% of that, the workers 59%.

Wow! What a fantastic contribution the bosses are making! It’s gone up from 28% to 41%! We couldn’t *possibly* ask them to be any more generous! In fact we should probably cut their taxes – it’s not *fair* that more than 40% of the nation’s income tax is being paid by less than 10% of the population!

A moment’s thought is enough to reveal the absurdity of this argument, yet it’s one we can expect to hear more of as wages continue to stagnate and unemployment stays high. ‘Now the top 10% are paying 50% of income tax! Now it’s 60%! Oh, those poor souls!’

69

Agree, the issue now is the states’ role in the economic base. The sensible path was to intervene to guide a more efficient outcome, hindsight tells us that if what we see is the most efficient, we need to look at a different system.

72

“we need to look at a different system”

After centuries of attempts, they’ve not discovered a better system for allocating resources than market capitalism with continuing debates over interventions by governments and regulatory agencies to prevent or mitigate the worst aspects. In the 1930s, the fascists thought they had discovered a successful Third Way between market capitalism and Bolshevism but even that didn’t work out and Bolshevism finally collapsed c. 1990 in a mess.

A worrying insight is that both the Communist Party in China and the Islamicists have rejected the politics of multi-party democracy.

73

The problem with looking over the past century of state intervention in capitalism is the changing environment in which capitalism operated. For example, the post-war period appeared to suggest that Keynsian economics was the answer but that was before the newly industrialied countries such as Japan existed to impose greater competition.

The environment which state-communism/capitalism emerged was on the back of a mainly feudal system, although I would not suggest that an all embracing, centrally planned economy is the answer either.

Maybe a re-structuring of communism (meaning a centrally planned economy) could be tempered by individual production.

74

“the post-war period appeared to suggest that Keynsian economics was the answer”

Keynesian economics was about developing a theory to explain how a market economy could get stuck with persisting spare capacity and a high level of unemployment. It did not purport to provide an answer for all problems of market economies.

Deficient demand is not the only potential problem of market economies. There are also misallocations of resources because of externalities, monopolies, cartels, natural monopolies arising from economies of scale and the loss of welfare from trade barriers as well as unacceptable inequalities of income distribution and relatively poor productivity performance.

75

Agreed, but there are thousands of publications about how and why markets fail and though this makes for good academic debate it does sod all to address the problem.

77. Derek Hattons Tailor

@ 70 “Actually, I’d happily sign up to legislation that simply lifts the bottom up, hence bringing them closer to the middle and top.”

“Lift them” to where ? If you are looking at deciles or percentages then all would happen is that for every person you lifted up another would fall down. 20% (or whatever) stay in poverty, they are just different people. You cannot lift people out of relative poverty – it’s mathematically impossible

76

“Agreed, but there are thousands of publications about how and why markets fail and though this makes for good academic debate it does sod all to address the problem.”

It is not as bad as that. Banks and cartels have been heftily fined for market manipulation and price fixing. Insider traders have been jailed. The banks are paying out billions in compensation for mis-selling PPI and Credit Default Swaps, the latter supposedly to insure SMEs against the costs of an unexpected rise in interest rates. The banks are being obliged to increase their capital reserves. The EU is proposing to cap bankers’ bonuses. And more.

The daunting costs of investigating and successfully prosecuting causes of market failure are challenging regulatory authorities in Britain, which is one reason why we need to recognise the valuable work done by the Competition Directorate in the EU Commission in chasing up price-fixing cartels.

As you can see, Gay Marriage and a proposed national referendum in 2017 on leaving the EU have chased important issues on economic recovery and sorting out the banks out of the news.

Some of us suspect this pressure to withdraw from the EU is motivated by the large fines imposed by the EU for abuses of market power and self-serving objections to EU banking regulations. The main front page headline in the FT on Monday: Cameron feels the Tory rage over Gay Marriage. A subsidiary headline report on the front page: Worker security at 20 year low.

@ Derek Hatton’s Tailor, 77

“You cannot lift people out of relative poverty – it’s mathematically impossible”

No it isn’t.

Imagine a mini-society of 100 people split into five quintiles thus:

1st quintile income: £10,000
2nd quintile income: £15,000
3rd quintile income: £20,000
4th quintile income: £30,000
5th quintile income: £50,000

The median income there is £20,000, 60% of which is £12,000. So those poorest 20 people are all living £2,000 below the line for relative poverty.

Now suppose we distribute that money differently:

1st quintile income: £13,000
2nd quintile income: £16,000
3rd quintile income: £20,000
4th quintile income: £29,000
5th quintile income: £47,000

The median income is still £20,000 and the poverty line is still £12,000, but relative poverty has been eliminated. And inequality is down any way you slice it, with the gaps between bottom and top, bottom and middle, and middle and top all having closed. Hurrah!

80. Derek Hattons Tailor

Er, no it isn’t. The median of a 10 to 50 range is not 20, its 30. The poorest group are 66% below that and the riches are 66% above it.

The median in the new range is still 30 and the richest group are now 56% above it, the poor group are 56% below it.

I repeat, it is not mathematically possible to lift anyone out of relative poverty without dropping someone back in their place.

81. Charlieman

@80. Derek Hattons Tailor: “Er, no it isn’t. The median of a 10 to 50 range is not 20, its 30.”

The first range proposed by GO @79 is not linear, which I presume is the source of your mistake. I calculated the propositions in Excel*, like what I have done for 25 years.

The two ranges have the same mean and median.

* I used Excel because it was handy. I wouldn’t use Excel to calculate anything that really mattered.

@ Derek Hatton’s Tailor

You’ve misunderstood what ‘median’ means. It’s not the midway point between the lowest and highest number in a set of numbers (as £30,000 is midway between £10,000 and £50,000); it’s just the number that appears in the middle of that set when the numbers are put in order from lowest to highest.

So the median of 1,2,5 is 2, not 3.

In the case of an income distribution, just imagine that everyone in a population is lined up in order from lowest income to highest. The income of the person halfway along the line is the median income.

(NB where the number of numbers in a set is even, so that there *is* no single number right in the middle, the median is taken to be the mean of the *two* middle numbers – in this case, the mean of £20,000 and £20,000, which are the incomes of the 50th and 51st people in that income distribution.)

http://www.bbc.co.uk/schools/gcsebitesize/maths/statistics/measuresofaveragerev3.shtml

In the case of an income distribution, just imagine that everyone in a population is lined up in order from lowest income to highest. The income of the person halfway along the line is the median income.

…incidentally, even if the median *was* the midway point between the bottom and top of a range, it would *still* be mathematically possible to lift people out of relative poverty.

Take this income distribution again:

1st quintile income: £10,000
2nd quintile income: £15,000
3rd quintile income: £20,000
4th quintile income: £30,000
5th quintile income: £50,000

60% of the DHT-‘median’, £30,000, is £18,000, right? So, if we really go to town on redistribution:

1st quintile income: £20,000
2nd quintile income: £20,000
3rd quintile income: £20,000
4th quintile income: £25,000
5th quintile income: £40,000

– we can lift everyone above the DHT-median (which stays at £30,000 in that second distribution).

Oops.

“we can lift everyone above the DHT-median”

…above *60% of the DHT-median*, I mean.

And sorry for the duplicated paragraph @ 82.

78

In the final analysis, economic efficiency is what is needed not fines (which are tiny compared to profits) and fining large corporations does very little for the poorest, nor does it make the market act any differently.

Exactly. Hence the wisdom of removing societal/psychological pressures to keep up with the Joneses by making society more equal.

Again, you’re elevating your own common-sense hunches above the evidence

So your attitude to evidence is: common sense tells me that result *must* be wrong, so I’m not going to bother looking. Has it occurred to you that this is the same ‘common sense’ that tells us the earth is flat?
—–

Rather than elevating my common-sense “hunches” above “evidence” what I am actualy doing is stating what worked for me as an individual after a long drawn out thinking process about society and my placement within it. The Wealthy in society that press on full steam ahead who are in no way content with their situation, or those at the lower end who are fully content and live happy meaningful lives are not anomalies, its due to differing thought processes and approaches to life its self.

If we are to change any societal pressures I suggest we start with the pressures concerning Image, especially in the sense its forced onto the young via media and (unreachable) celebs, its been said we do not Need the majority of the consumer items we buy and in a sense thats correct, they arent the cause of happyness, if the internal processes of an individual arent well adjusted for this world no amount of them will created happyness.

The pressure communicated via these means dont just concern wealth, its everything from inteligence to looks. The average young female, sadly, is in much deeper turmoil about her looks in comparison to the “perfect” celebs rammed down her throat daily than she may ever be about the inequality of wealth and its the same forces at work as the cause. It does not matter how beautiful she is told she is, it does not matter how productive her looks are concerning the results she gets with men, it persists.

If equality is all it boiled down to, we were all leveled to a shelter and three bowls of rice per day or had every consumer item we wanted I assure you happyness would not be created across the board, infact thats the reason humanity developed beyond that first point. To you, if only equality meant everybody having exactly what they want, somehow it would all be different..this logic is on par with the earth being flat.

Yes, these are the sorts of things the authors of the Spirit Level look at. But they’re digging down a level and suggesting that there’s a causal connection between the levels of inequality in society and the levels of alcoholism, overeating etc.
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Some within wealthy over eat & drink to, inherited or underserved wealth is notoriously connected to a life of unappreciative dysfunction warped perception and damaging excess, I put it to you that the cause is neither the absence or precense of wealth, the thought processes perceptions and the ways of being born out of those cause one person to blow a fortune and another expressed in its unique way to never gain it. No one is ever going to approach things in a productive way unless their take on the world accomodates productive action.

Me for example, what exactly would have my actions have returned if I resented not only those around me but those who came before me, because not only was I born into a poor family, I was seen as a fuckwit by the very group of people I had no choice but to interact with whilst building my self image.

Well I will be honest, I never resented but I never thought I had a place in the world, by 19 I had burned lining of my stomach with excess alcohol and was a heavy drug user. Do I take my expereince and think just because I came out the other end it should be the shinning light, the road for every body? Hell no, life is more complex than that, we are each individuals, we have our own paths and challanges, what I understand is that you cant remove them. Its clear you have very good intentions yet this one size fits all soltution is not the answer or even possible at the moment.

Presumably, though, this doesn’t include political action intended to see a higher proportion of national income go to wages and a lower proportion to profits?
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No, unless you see the goverment owning the private sector. On a side note creating businesses from the ground up in which all employs own a worth while equity stake is an ambition of mine and an effort that would create a difference, it comes from a different line of thinking than you are producing.

This argument makes me furious. *Of course* if higher earners take an ever larger slice of the GDP pie for themselves, they are going to pay an ever larger share of tax! In a more equal society, people would pay more equal shares – which I would be fine with.
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I have no doubt it does make you furious and in the most respecful way possible, outside of the impact upon your well being, your egos reaction to reality is irrelevant.

You are just looking at a spread sheet of numbers and thinking hmmm we could just hand that out equally, you hear I am in lean times yet instantly assume its because I was robed by an older generation. You took no account for the possibility lean times may be current because I place the majority of income into a business.

On the one hand you have no issue placing so much weight on the pychology of others having more yet on the other you place zero weight on the pychology of striving to do more, risk more, create more, for more.

You do not consider the variables motivations and differering pychologys/dynamics of the jobs that those numbers represent, you would happily have someone doing XXX amount of work requiring XXX amount of skill as well as XXX amount of risk paid the same amount as someone doing a third of the lot.

Competition breads results, remove the rewards you remove the compition and the results of that compitition, a person heading and liable for the faliure of a company is compensated more than a 9-5 worker for a reason, an engineer of an 8 year education is in demand and compensated more than a brick layer for a reason.

I dont have every answer required, its been my expereince that you are much more likely to hear what you have said from a philosophy or soft sciences graduate than a hard sceince or business gradutate, that is not because they are selfish.

For as long as you remain in resent and pass snarky..oh those poor soul..comments, is as long as another mind stays offline to coming up with real solutions to the issue.

85

“In the final analysis, economic efficiency is what is needed not fines (which are tiny compared to profits) and fining large corporations does very little for the poorest, nor does it make the market act any differently.”

There’s much in that IMO. As best I can tell, there is no transparency about how the regulatory fines for infringements are assessed.

There is reputational damage from the reports of the fines but my guess is that those soon drop out of the news and public awareness. To my knowledge there have been major changes in the management of Barclays and Lloyds Banks where the top flights of management have been cleared out.

To maintain the name and shame, I think we need a public website to display a rolling record of regulatory decisions on fines and sanctions with links out to the substantive reports. That would be a powerful incentive to maintain regulatory compliance.

87

Sorry Onbe but the notion that it is the rich who pay for the poor is a fallacy, we all pay into the pot for education and health care. Out of that pot comes around £31billion of tax-credits paid to the working poor while large companies who make massive profits are subsidized by the same working poor.

Sorry Onbe but the notion that it is the rich who pay for the poor is a fallacy
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Not one im pushing ~ just trying to point out thats arent as unfair as some see them.

Steveb

Relating to our earlier dialogue on the transparency and justice of regulatory fines on banks for malpractices, on market manipulators and on price fixers, there is a highly relevant column in Wednesday’s FT by John Kay on: Prosecutors must uphold the law, not cut deals with the accused
http://www.johnkay.com/2013/05/22/prosecutors-must-uphold-the-law-not-cut-deals-with-the-accused

This is in the FT, the leading business newspaper, and John Kay is a leading mainstream economist, so it cannot be brushed aside as just more hairy left-wing stuff. Kay’s column will make for unpleasant reading by bankers, market manipulators and price fixers. Labour could make a running on this for the next election but I doubt that it will because big money from vested interests would pour into the Conservatives or UKIP to beat Labour down.

91

Thanks for the reference, one of the main problems with markets is that while the theory may sound rational, the practice is anything but. Competition is fine but if the participants are allowed to cheat with no appropriate sanctions, then it will create a culture of cheating as all attempt to create an even playing field.

92

“Thanks for the reference, one of the main problems with markets is that while the theory may sound rational, the practice is anything but. ”

Absolutely – and that is one of the key points Keynes makes about financial markets in his General Theory:

“There is no clear evidence from experience that the investment policy which is socially advantageous coincides with that which is most profitable. . . Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes a bubble on a whirlpool of speculation. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill done.” (chp.12)

As for consumers, try this Google lecture by Prof Schwartz (a psychologist) on: The Paradox of Choice – Why more is less: http://www.youtube.com/watch?v=6ELAkV2fC-I

Compare also a BBCTV2 doc by Adam Curtis on: The Century of the Self – Part 1 of 4, about Edward Bernays, a nephew of Sigmund Freud, who virtually founded the “public relations” profession to manipulate public opinion and consumption spending.

But the fundamental issue is whether alternative economic systems to market capitalism, with government interventions to deal with the causes of market failures, would make a better job of allocating scarce resources between alternate uses.

Highly recommended documentary about Edward Bernays, a nephew of Sigmund Freud who founded the public relations profession.

Century of Self Part 1: http://www.youtube.com/watch?v=s7EwXmxpExw

This pretty well explodes a myth that markets reflect rational purchasing decisions.


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