Monday, 13 October 2014

In praise of Wilkinson and Pickett


Andrew Fisher, author of The Failed Experiment ... and how to build an economy that works reviews a new Fabian Society pamphlet: A Convenient Truth (A Better Society for Us and the Planet) by Richard Wilkinson and Kate Pickett

Like many others I loved 'The Spirit Level - Why More Equal Societies Almost Always Do Better' mainly because it confirmed with reams of objective data what I viscerally knew in my gut and had observed previously only through snippets of data and anecdote.

The book was significant and influential - it put equality (and its flipside inequality) back on the political agenda. In this Fabian pamphlet, the authors now set out some policies to create and to institutionalise a more equal society that will do better for us and the planet.

But The Spirit Level was more than mere data, Wilkinson and Pickett used the data to explain how inequality damaged everyone across income bands. This humanity shines through again in A Convenient Truth, "the larger the income difference, the stronger the impression that some people are extremely important and others are almost worthless". But there are also updated datasets which show those living living the richest 5% of UK neighbourhoods live to over 79 on average, while those in the poorest 5% manage only to reach a little over 71.

Rising inequality "changes the whole social fabric, increasing status competition and reducing trust and social cohesion right across societies" - and there's something there to consider when assessing the rise of UKIP.

What is striking - and new - about A Convenient Truth is that is offers some very sound and radical policies to build a more equal society. Like Prem Sikka and John McDonnell MP have advocated on these pages, and as the TUC too has tentatively advocated, Wilkinson & Pickett call for worker representation on the boards of "all except the smallest companies". But significantly they go beyond tokenism or the liberal view of 'if watched they'll behave less badly', and advocate that workers' representation becomes domination - "moving eventually to majority control and beyond ...by requiring that a small proportion of shares be transferred each year to employee-controlled trusts".

There is also some welcome support for better support to establish co-operatives and the suggestion for a 'democratic company' mark like the Fairtrade brand or the new Fair Tax mark pioneered by Richard Murphy. Such democratic companies should be given precedence in public sector contracts, and possibly lower corporation tax rates.

In a welcome sign of a growing consensus on the left, they strongly echo the conclusions of  both Owen Jones' The Establishment and my own The Failed Experiment ... and how to build an economy that works when they state this key truth:
"We argue the best way of building more equal and sustainable societies is to extend democracy into the economic sphere ... the next major step in the long project of human emancipation."
Like we have pointed out on this blog, there is also a recognition that trade unions were the handmaidens of greater equality in the twentieth century, and their relative decline has coincided with rising inequality. And Wilkinson and Pickett show the trend extends to other countries too - with inequality generally lower in countries with higher trade union memberships.

There are also echoes first cogently aired by Richard Murphy in The Courageous State, calling for a better politics that believes in the emancipatory capacity of the state to solve problems. Wilkinson and Pickett  berate the "appalling lack of leadership and responsibility in the face of overwhelming evidence" on climate change - and more generally the "rag-bag of uncoordinated policies" the parties offer.

But limits to the state are also recognised in the Morrisonian model of public ownership and the reliance on progressive taxation and social security benefits, which could be and were "undone at the stroke of any new government's pen". So Wilkinson and Pickett propose to build effective democratic constraints permanently into the economic system. In some ways it sounds a little like what Ed Miliband was grapsing for when he used to talk about 'predistribution'.

There are frustrations with the piece - not least the way the terms 'left' and 'socialist' are misused to represent what would more accurately respectively be 'the Labour leadership' and 'Stalinism' respectively. Likewise, I found their explanation of the psychological consequences of inequality (status competition as the motor of consumerism, debt and longer working hours) partial - failing to take account of the material consequence, which is longer hours and debt are the inevitable consequence of low pay and high housing costs.

But if you can forgive these, and you should, then overall this is an excellent evidence-based case for a more socialist society - as most socialists would conceive it: more equal, more democratic, more co-operative. Wilkinson and Pickett ask rhetorically, "Do we live in a society based on co-operation and reciprocity, or competition and rivalry?". As Rosa Luxemberg's said, it's "socialism or barbarism".
  • A Convenient Truth is published by the Fabian Society - available as a free pdf or hard copy for £9.95

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