“Imagining Other... “

 

‘Inequality’ Updates

Links:

Updates for CSR

CSR Chapter 8 Inequality  

Imagining Other Index Page

List of contents/topics covered: here

List of links to other relevant pages: here.   

 

Explanatory Notes:

(i) See: Corporate Social Responsibility and Inequality (CSR8) for my original notes on inequality, which go up to the mid-‘noughties’. This page (originally to update the above notes) has been compiled since the mid-noughties. I have now (2012) uploaded this page - even though I know the notes are ‘bitty’ and many things are missing - since it reflects the growth of awareness, especially since the credit crunch of 2008, and the subsequent recession, of the centrality of inequality to our economic problems.

 

(ii) The ‘Occupy’ movement must take a lot of credit for pushing onto the agenda public disquiet at the disparity between the 1% and the 99%.

See Noam Chomsky’s book: Occupy (Penguin May 2012). There is an extract from Chomsky’s book in the Guardian for 1st May 2012:

http://www.guardian.co.uk/world/2012/apr/30/noam-chomsky-what-next-occupy?INTCMP=SRCH. 

 

Also I have written brief notes on Occupy at: Social Movements Today.

 

(iii) These notes have very few comments on the current Tory/Lib Dem coalition’s policies: the press is full of points about this, and it is hardly necessary for me to re-iterate what anyone can read any day.

I would only say that I am saddened and angered at the attacks on the poorest and most needy, as the government claims to be ‘reducing the deficit’ – a deficit not caused by the poor. No amount of cutting of welfare etc will get us out of the recession: we need more and better-paid jobs, not less welfare!!

 

- contents/topics (these are written in alphabetical order by topic):

Academies: link

America: link

Anger: link

Attacking the poor: link

Benefits cuts: link      Britain (including coalition government’s policies): link

‘Capital’ by Thomas Piketty: link                 Childbirth (stillbirths): #childbirth     Child poverty: link     Children’s teeth: link      

            [Class: see social class]         China: link                  Co-operatives: link   

Economics: link          Education:  link          Executive Pay: link

Finance Capital and its effects on equality: link      Freedoms, capabilities (Amartya Sen): link

Health: link 

Housing: link

Hutton, Will (articles etc): link

Inequality and the crisis – possible slump...: link

Islington: link

Labour’s record on child poverty: link 

Land ownership in Britain: link

OECD on wealth gap and growth: link

Piketty – see Capital above

Poverty – Business and addressing poverty: link

Private schools:  link

Psychological effects: link

Race: link

Salary/wealth differences: link          Savings (rich vs. poor) link                Sennett (Richard):  link                     Social class: link       

            Social enterprise: link            Social geography: link                       Socialism: link

Tax evasion: link                   Third world link: (health , population growth, women)    Top 1%:  link      Toynbee, Polly articles: link  Travellers: link

Voluntary sector: link 

Wealth tax: link         Welfare: see benefits            Women’s Pay: see Feminism notes: pp21, sm6. 

Working Class: link 

Zero hours contracts: link

 

 

Notes:

 

Academies and ‘free schools’ as proposed by Tories – all evidence suggests they do not drive up overall standards, but divert money into the private sector, [e.g. Nestle!! according to a letter in Guardian 29.05.10] and they reward some schools at the expense of others. For example, academies ‘will be allowed to spend the 7 – 10% of funding currently retained by the local authority for support services that are most likely to be needed by poorer children.’ (Letter, Michael Pike CASE, Guardian 29.05.10)

Also: what is really happening with these proposals is the undermining of local authorities’ powers, a process begun under Thatcher… (Letter ditto Susan Lakeman).

 

America: income inequality now at highest since 1928 (George Eaton NS 24.10.11): Richest 1% took home 23.5% of national income in 2007, up from 10% in 1980. Top 0.1% has increased its share even more (6.04% up from 0.9% in 1978). Income inequality previously peaked in 1928 (richest 1% had 23.9%) – shrunk during New Deal and has remained steady since – soared under Reagan who slashed tax rates from 50% to 28% for richest.

 

You can fool some of the people some of the time: “A poll in 2000 showed that 19% of Americans thought they were in the richest 1% - and 21% expected to be in the richest 1% in the next 10 years.” (Michael Zweig, director of the centre for the study of working-class life at State University of New York, quoted by Gary Younge, 140408).

 

In the US, after the shooting of Trayvon Martin, and the jury finding his killer not guilty, there has been outrage. According to the Malcolm X Grassroots Movement, (http://mxgm.org) in 2012 one black person was killed in an extrajudicial shooting every 28 hours, by police, security guards and vivilantes.

 

Anger: Priyamvada Gopal piece (G 010811) argues that the anger of the Norwegian gunman was of one kind, but another – and justifiable – kind of anger is being shown in the public reaction to Murdoch and co. And while Niall Ferguson dismisses popular protests as ‘global temper tantrums’ – now even Charles Moore is saying:

“I’m starting to think the left might actually be right… The rich run a global system that allows them to accumulate capital and pay the lowest possible price for labour. The freedom that results applies only to them. The many simply have to work harder, in conditions that grow ever more insecure, to enrich the few.”

 

Attacking the poor and the disadvantaged: February 2007:

 

It’s almost unbelievable that these two news stories came out on the same day (Tues. 6th Feb, both stories in the Guardian): 

 

1. President George Bush’s budget includes a huge rise in military spending, which will be paid for by cuts in Medicare, the health scheme for the poor.  (Report by Ewen MacAskill in Washington).

 

There will be $66bn cuts over five years in Medicare for the elderly, and $12bn cuts in the healthcare scheme for the poor.

 

The wars in Iraq and Afghanistan are getting $100bn extra this year (on top of $70bn already allocated) and $141.7bn next year.

 

The Iraq war has so far cost an estimated $500bn and is likely to end up costing more than the Vietnam war (which lasted 13 years). When the war was mooted, the suggested cost was $50bn, and a White House economic advisor was sacked for suggesting it could be $200bn!!

 

“The New York Times noted that the cost of the war would have paid for universal health care in the US, nursery education for all three and four-year-olds in the country, immunisation fro children around the world against a host of diseases, and still leave about half the money left over.”

 

2. (Report by Polly Curtis). In Britain there have been cuts of some 3,000 places for students with learning disabilities (out of 20,000 such students), according to a survey carried out by the LSC.  Bill Rammell, for the government, says he is “heartened by the results [of the survey]” (!) because they show no central government drive to cut provision. He claims the cuts were made to poorly-performing courses, and the majority of students had found other places.

 

This is no comfort to parents or carers of students who can no longer study, and David Congdon of Mencap suggests the courses that have been cut are those which the LSCs “have never particularly liked because they don’t lead to qualifications.”

 

This is an experience many of us have had, with adult education courses in, for example, yoga threatened, and choirs no longer receiving funding –simply  because they don’t give you a qualification or prepare you for a job!!! It seems there is no interest in the quality of life of the elderly or of those with learning difficulties: a short-sighted policy, since without courses to study and satisfying leisure activities there will be more depression and ill-health.

 

Benefit Cuts and the least well-off: Guardian editorial (30th April 2012) points out that we have had £18 billion cut from the benefit bill, and Osborne wants to cut a further £10 billion. How intriguing that opposition to further cuts is coming from Iain Duncan Smith. (Perhaps his time dealing with real people has taught him something).

Article: This week 70,000 seriously ill people will lose their £99-a-week allowance: http://www.guardian.co.uk/society/2012/apr/29/sickness-benefit-cuts?INTCMP=SRCH 

 

Britain

 

Sep 2013. Polly Toynbee has another good piece on ‘whose recovery’ – i.e. the lower and middle earners are not gaining from the improvements in the economy:

http://www.theguardian.com/commentisfree/2013/sep/06/recovery-election-question-living-standards. She highlights the way that stories and examples of fraud have been publicised, which are designed to turn public opinion against claimants. She says the government’s claim that the new system of Universal Credits will save money by detecting fraud is untrue, as the National Audit office has said it cannot be done. The same press release with the dramatic stories in it claims that benefit fraud cost £1.2 billion last year – but doesn’t say that this is 0.7% of the budget. Many businesses etc have fraud rates higher than this she says.

 

The problem with benefits now is (i) that the cuts are eating into them in a harsh way (ii) incomes in Britain are getting left behind the pay of directors etc, and a million are paid less than the living wage - hence the need for more benefits to enable people to survive. A million people are on zero hour contracts, and of the ‘new’ jobs that have been created, a third are part-time and a third are temporary!

 

Feb 2013. Yet another report – Resolution Foundation think-tank, shows that the top 1% of earners now pocket 10p in every pound (10%) of income paid in Britain, while the bottom 50% take home only 18p in every pound between them (i.e. 18%). Inequality has worsened in the last 15 years: in the mid-90s the top 1% took 7% of earnings, and the bottom 50% took 19%. http://www.guardian.co.uk/society/2013/feb/10/uk-super-rich-richer-as-majority-squeezed?INTCMP=SRCH

 

Sep 2012. Observer, 23.09.12 cites new report by Inst for Fiscal Studies and Inst for Employment Research, for Resolution Foundation: Who Gains From Growth? Shows that even with growth, the incomes of the poorer half are set to fall, and the incomes in the top half will continue to rise.

http://www.guardian.co.uk/politics/2012/sep/22/living-standards-report-divided-britain?INTCMP=SRCH

 

Aug 2012. Tanya Gold, Guardian 25.8.12: the King’s Fund reports that the rich outlive the poor by seven years on average... a committee of MPs concludes that social mobility in the UK is among the lowest in western Europe, it has declined in the last 30 years, and the professions and parliament are over-populated by the 7% who went to private school.

The media confuse the issue by talking of those on £80,000 as middle class, when the average wage was £26,200 last year. More than 70% of the population self-identify as middle class.

The PM said in 2010 that ‘The differences in child outcomes between a child born in poverty and a child born in wealth are no longer statistically significant when both have been raised by confident and able parents.’ He took this from a Demos report, but the co-author of the report disputed it – love is not enough to compensate for the disadvantages of being poor. The danger, as Gold points out, is that people will conclude from the PM’s position that it is only parental failure that reduces a child’s opportunities – ‘Only the bad die young’ will be the story...

http://www.guardian.co.uk/commentisfree/2012/aug/24/britons-masters-class-denial-what-means?INTCMP=SRCH

 

Letter from Michael Meacher MP, Guardian 3rd May 2012:

Sunday Times Rich List 2012 shows that: the richest 1,000 (= 0.003% of the adult population) increased their wealth over the past three years by £155 bn. This is enough to pay off the UK budget deficit (and leave £30 bn over).

Some 77% of the budget deficit is actually being recouped by cuts in public expenditure and benefits, and only 23% by tax increases. More than half of the tax increase comes from VAT, which hits the poor hardest.

The total wealth of the richest 1,000 amounts to £414 bn – which is more than a third of Britain’s GDP.

The richest few include 77 billionaires and 23 others each possessing more than £750 million.

The increase in wealth of this group over the last 15 years has been £325 bn: if they had been taxed at 23% (current capital gains rate) this would yield £88 bn...

 

Book by Robert Peston: Who Runs Britain? How the super-rich are changing our lives.

 

Article by outside observer (Katrin Bennhold) on Britain and the class war: http://www.nytimes.com/2012/04/27/world/europe/27iht-letter27.html?_r=1

 

Capital by Thomas Piketty, reviewed by Nick Pearce, New Statesman 28 March – 3 April 2014.

http://www.newstatesman.com/2014/03/french-revolutionary

Argues that in societies where the rate of return on capital outstrips economic growth, wealth inequality ineluctably rises. The middle of the 20th century was an exception, not the norm, and the fall in inequality was due to: capital shocks of two world wars, decolonization, and the growth of the welfare state. Capital was destroyed, taxed or nationalised to pay for the war effort and the building of public services and social security.

In the late 70s and 80s growth rates slowed, capital was rebuilt, taxes on wealth and top incomes were cut, and the institutions of social democracy dismantled.

We now have levels of wealth inequality that are like the Edwardian era – except that the middle class holds a bigger share (between a third and a quarter as against 5% before – taking the middle 40%). The poorest half of the population own less than 5% of the wealth, as it did before WW I.

Piketty is critical of what he calls ‘meritocratic extremism’ – the argument that high pay is needed to contribute to social justice by rewarding talent, and by avoiding the situation where only those who inherit wealth can gain.

We seem to be headed for the worst of two past worlds combined: very large inherited wealth and very high wages (the latter justified by the meritocratic argument) – a race between super-managers and rentiers to the detriment of those who are neither...

Proposes a global tax on wealth - a tax of 1% on fortunes of between 1 and 4 million euros and 2% above 5 million would only affect about 2.5% of the population of the EU and would raise 2% of Europe’s GDP. 

 

Another review, by Will Hutton: http://www.theguardian.com/commentisfree/2014/apr/12/capitalism-isnt-working-thomas-piketty

And an interview; http://www.theguardian.com/books/2014/apr/13/occupy-right-capitalism-failed-world-french-economist-thomas-piketty

 

And a riposte by Paul Mason to an attempt by the FT’s Chris Giles to dismiss Piketty’s statistics as ‘constructed out of thin air’. Mason’s point is that there is no clear way of measuring wealth, especially since those who hold it go as far as they can to hide it! Also, Piketty’s main point is a prediction based on a simple logical prediction: ‘if growth is low, and the bargaining power of labour low, and the returns on capital high, then it is more logical to sit on assets and speculate rather than accumulate wealth by work, invention or entrepreneurial risk.’ All the FT is trying to do is justify their adverts for ways of hiding wealth e.g. Rolex watches, fine art etc.

http://www.theguardian.com/commentisfree/2014/may/26/thomas-piketty-economist-ft-attack-rising-inequality-bling

 

Childbirth: still birth rates:

See article by Sarah Boseley, Health Editor of the Guardian: the rate in the most deprived 10% (3043 stillbirths 2000 – 2007 inclusive) is twice that in the wealthiest 10% (1489 in same period), according to BMJOpen (online journal):

http://www.guardian.co.uk/uk/2012/jun/25/stillbirths-900-preventable-england?INTCMP=SRCH

900 babies a year could be saved if the rate was the same as in the wealthiest section.

 

Child Poverty:

 

28th Jan 2014 – from new Statesman 10 – 16 Jan: according to the Joseph Rowntree Foundation ‘more than half of all children and adults living in poverty are now from working households’ (from editorial/comment p5).

 

15.06.12: 2 million still live in poverty – and face an increasing risk of homelessness. Dept for Communities and Local Government figures show 50,290 households are homeless and in priority need – an increase of 14% on the year before. Almost 2/3 of these have dependent children. 61% of children in poverty have working parents – up from 45% in the 1990s.

Poverty is currently measured by income – £251 a week or less per household. Row brewing as Duncan Smith wants to change the definition. See Randeep Ramesh:

http://www.guardian.co.uk/society/2012/jun/14/children-homelessness-housing-crisis?INTCMP=SRCH 

http://www.guardian.co.uk/society/2012/jun/14/child-poverty-iain-duncan-smith?INTCMP=SRCH

 

 

Child poverty in Britain – the reality, 2009:  http://www.guardian.co.uk/politics/2009/mar/27/global-crisis-impact-poor

 

- a staggering account of how a young mother of two small children gets by: she gets £136 in income support and tax credits, spends £20 a week (a week!) on food shopping, regular bills (gas, TV, nappies etc) take £47.50.  The article doesn’t say how much rent she pays, and there’s clothes etc on top… but all she has left is just under £70.

 

- 30% of children in Britain (3.9 million) remain on the breadline, despite measures taken by the government – we are still bottom of the table for child poverty in Western Europe, equal with Spain and Italy. A majority of the children in poverty have at least one parent working (so they are not the result of ‘scrounging’). Nordic countries have on around 7% of children in poverty.

 

Under New Labour 600,000 children have been lifted out of poverty in the last ten years – but at least another 1billion needs to be spent to lift another 250,000 out (this short of government’s target, but would be a start says Lisa Harker) G 100308. See IPPR…

 

Jenni Russell, G 060809: Harlem project: Harlem Children’s Zone (HCZ) – 10,000 children live in 97 blocks in one of most devastated communities in America. An 8 yr old boy has 33% chance of prison, ¾ schoolchildren can’t pass grades for their age. Unemployment double national average etc. Geoffrey Canada set up HCZ, wanting to raise expectations of whole community, not just rescue a few as he had been (as community worker). Children from different backgrounds were getting different amounts of contact with parents in first crucial few years of life: poor children had had average of 25 hours (a year?) of one-to-one reading, middle-class: 1,700, and the latter children had heard 6 x more encouraging words than discouraging, while the poor had been reprimanded 2 ½ more times than praised. He started with parenting classes, involved pre-kindergarten academies, tutoring, dance and sport classes, food co-ops, social services, and help with housing and health. Every child would be offered help. He engaged the whole community. He raised millions of dollars, 1/3rd from govt, 2/3rds from philanthropists and charities, cost of $5,000 per child per yr. Five years ago opened first school, Against usual American pass-rate of 7% black 14 yr olds passing maths, 97% in eighth grade. Elementary school has closed racial gap in language and maths, and the pre-kindergarten children are out-performing their white counterparts.

 

On inequality, internships etc: Lynsey Hanley (G 040809): at age four children already show deficits if born into households that qualify for school meals: may not know their name, or alphabet, whilst others are reading and writing (see millennium cohort study). Working class boys worst off: ¾ not get 5 GCSEs above C (whilst 2/3 rest do). Low Pay Unit is investigating whether interns are exploited, but if someone is able to get an internship they are already way ahead of the game – and you don’t need one if you are only going to earn £7 an hour as a retail assistant. Nearly half the working population earns less than £20,000 a year, and Government could do more: when minimum wage level was raised, pay rates of a quarter of all jobs in hotel and catering sector improved.

 

Children’s teeth as indicator of inequality, including in the US: Jonathan Kozol, 1991 book: Savage Inequalities… quoted by DD Guttenplan, in G, ‘Bleeding gums, impacted teeth and rotting teeth are routine matters for the children I have interviewed in the Bronx.’ US National Institute of Health says that poor children today are still likely to have bad teeth, as a result of drinking sugary drinks from bottles. A person’s class is etched in their teeth says Guttenplan.

 

China: ... may have as many as 600 dollar billionaires, as well as 300 million people without access to clean drinking water (Julia Lovell, reviewing: Tiger Head, Snake Tails: China Today... by Jonathan Fenby (Simon and Schuster); Saturday Guardian 07.04.12.

 

Co-operatives:

 

* Sep 2012. It is worth noting that the John Lewis Partnership is not a co-operative... Its staff are ‘partners’ and benefit from this, but currently it has excluded its cleaners from being partners – and they are campaigning for inclusion and for better pay. See Polly Toynbee, Guardian 14th Sep 2012, and correspondence Tues 18th Sep. http://www.guardian.co.uk/commentisfree/2012/sep/13/john-lewis-model-ethical-cleaners?INTCMP=SRCH

 

A letter from Stuart Newbold, the secretary of Cambridge and Saffron Walden Co-operative Party summarises the values laid down by the Rochdale Pioneers in 1844: ‘self-help, self-responsibility, democracy, equality, equity and solidarity; plus the ethical values of honesty, openness, social responsibility and caring for others. And to ensure the values work, co-operative principles of open membership, democracy, autonomy and independence, member economic participation, education, co-operation among cooperatives and concern for the community must be practised.... The model works for 1 billion co-operators in over 100 countries in areas from finance to housing, schools, retail and farms... 2012 [is] the UN International Year of Co-operatives.’

 

* Radical Routes is a ‘co-op of co-ops’ according to Rob Ray (Freedom 280209). ‘An umbrella organisation for some 28 co-operatives, at various stages of development, representing hundreds of people, and provides sustainable finance to radicals wanting to set up horizontally-run housing or workers’ groups, primarily on low incomes.’ The group has an investment vehicle ‘Rootstock’ which supplies bridging loans until co-ops can get loans from e.g. Triodos bank. The recession, with lower prices for property, has seen an increase in co-op activity. Success rate for paying back of loans has been pretty much 100%. Officially founded in 1991. In Germany there is a much larger equivalent, Methauser Syndikat, with 33 million Euros of property, whilst RR has a few million.

See www.radicalroutes.org.uk

 

* Details in Money Guardian 30.07.11 of east London housing co-op: The Drive – see www.thedrive.coop. They bought a former children’s care home in Walthamstow for £620,000 with funds from Co-operative and Community Finance and the Co-operative Loan Fund, but mainly with a mortgage from Ecology building society. Seeking loans from members of the public…  Also noted at: Alternatives ('imagining other...')

 

* Robert Oakeshott Obit: http://www.guardian.co.uk/business/2011/aug/03/robert-oakeshott-obituary?INTCMP=SRCH

 

Corporate Power (the ‘revolving door’...)

 

Economics: 10 economic myths, from New Internationalist: http://newint.org/themes/politics/economics/

 

Education:

 

Schools to be given targets to reduce inequality (Guardian 14.04.12, Patrick Wintour). £2.5 billion a year will be spent on the pupil premium, (given to schools on the basis of the number of children qualifying for free school meals). Children from low income backgrounds are half as likely to get five good grades at GCSE as their classmates. They are also more likely to leave school at 16, become NEWTs, and less than half as likely to go on to higher education. “Britain has one of the widest and most entrenched education attainment gaps between poor and wealthier children in Europe.” (PW).

 

Jan 2012: Nick Gibb (source?): analysis of Dept of Education League Tables shows that children from disadvantaged backgrounds have only a 35% chance of getting five good grades – as against 58% of all pupils in state secondary schools. There is therefore no equality of opportunity.

 

Fiona Millar (G 0812009): five years ago, (2004) before the last election, there had been some improvement in education: more money (*) for schools, and better results; fewer schools failing, more young people wanting to go into higher education than could be catered for.

Recently media reports suggest there are serious problems, but this is a ‘travesty of the truth’. Considerable progress has been made in most schools, though there are unprecedented problems for a minority of schools. However, no-one agrees how to measure progress/improvement…

Gap between top and bottom socio-economic groups in terms of GCSE attainment is 57% (cf. gender gap of 7%, ethnic gap 28%). Problem remains especially of concentration of poor children in certain areas and schools, when ‘countless studies’ have shown that school with balanced intakes do best for all children and are what most parents want.

The increasing stratification of schools is not helping – Prof. Stephen Gorard (to be published in 2010 in British Journal of Education studies): segregation between different types of school is now so great that we may be ‘recreating and threatening to surpass the diversity of grammar, technical and secondary modern schools created in 1944.’

 

(*) Polly Curtis (ditto): by 2008, schools budget was £31 bn a year, up 56% in last decade. In 2000 40.7% of pupils got five good GCSEs including English and Maths by age 16. In 2008 47.3% did. Sats results p from 75% to 80% in English, 72% to 79% in maths, by end of primary school. 

 

Only 7% of young people go to private schools, but these then make up 50% of the students at Oxford and Cambridge (Peter Mortimore, G 040308)

 

Sutton Trust (charity) study of children who went to private schools under the Tory assisted places scheme in 1980s and ‘90s: the children felt ‘estranged and alienated’, were not able take part in extra-curricular activities (financial and social reasons). Only around 7% came from working class backgrounds.

 

Small cadre of elite feeder schools gets pupils into Oxbridge: 100 schools account for nearly 1/3…

 

Nuffield Review beginning of June (3 yr study): current system for 14 – 19 yr olds was tailored to suit interests of richer pupils.

 

Official figures also show drop in number of working class students admitted to university last year. (Points from Freedom, 060609).

 

Polly Toynbee comments 210709 on ?forthcoming report by Alan Milburn on social mobility/inequality: well-coached but mediocre applicant from a ‘good’ i.e. private school wins in job applications against someone from a state school who had struggled but got good A levels – even though the latter get as good or better grades at university.

 

Families with average incomes and high aspirations also lack contacts and influence to push their children into high positions – internships are ‘free labour slavery for the young who can afford to do it and yet denies access to all without parents to support them’. It should be banned, but all that is proposed is a code of practice with a kite-mark and a requirement for wages and grants.

One of the report’s authors works for Social Mobility Foundation which mentors pupils from school who otherwise might not apply. He tells of a bank which send staff out for a few days a year for community work in schools – but they won’t consider mentoring schoolchildren.

 

Executive Pay:

Notes from article by Ed Smith (New Statesman 18-24 July 2014): In the first decade of this century, the average pay ration of CEO to employee climbed from 47 to 128. Clearly this doesn’t reflect improved performance!

It doesn’t always have to be the case that executive pay must rise over time: between 1930 and 1960 the real income of top US managers fell.

Nor is it explained by supply and demand, but by culture – e.g. contagion effect. Also at work is the halo effect: we tend to ruch to appoint superheros, even on shaky evidence (see Phil Rosenzweig in The Halo Effect).

Finally, we must have transparency (we know how good sportsmen are, so we can compare their – still too high – pay with other sportsmen – but we can’t do the same for managers).

See also Ferdinand Mount: The New Few.

Ed Smith is author of : Luck: a fresh look at fortune (Bloomsbury).

 

Finance Capital and its effects on equality:

Book: Who Runs Britain? By Robert Peston (Hodder and Stoughton, 2008): new financial devices, whilst supposed to “direct money where it can be used most productively” (P. Wilby review Guardian 02.02.08) actually direct it to the rich first and foremost. Wealth of 1,000 wealthiest in Britain is £360 bn (50 times economy of Uruguay). Hedge fund managers can earn up to £120 m a year in UK (£500 m in USA). Sir Philip Green paid himself a tax-free dividend of £1.2 bn in 2005. Money from their tax-dodges could provide several hundred schools or hospitals. As Marx said “all that is solid melts into air…”

 

Freedoms:  Amartya Sen article, based on Demos lecture 2010, in which he argues that identifying freedoms and capabilities to exercise them is a good way of dealing with inequalities and poverty – better than just focusing on poverty… Quotes Steve Biko: ‘Powerlessness breeds a race of beggars who smile at the enemy and swear at him in the sanctity of his (sic) toilet; who shout ‘Baas’ willingly during the day and call the white man a dog in their buses as they go home.’

http://www.guardian.co.uk/commentisfree/libertycentral/2010/mar/23/social-justice-philosophy-freedom?INTCMP=SRCH

See also: http://www.guardian.co.uk/books/2010/jul/18/idea-of-justice-amartya-sen?INTCMP=SRCH – review of Idea of Justice –

See also ppbooks part 2 (other recent thinkers – pp24?)

 

Health: the Marmot Review, 2010 – see www.ucl.ac.uk/gheg/marmotreview/FairSocietyHealthyLives - Marmot is president of the BMA – his report identifies how the gradient of inequality affects health: not just the poorest who need their lives improving, but also those in the middle stratum. Shocking stats (G supplement on Healthcare, 230610): health inequalities have less to do with healthcare than with social and economic inequalities; key determinants relate to a host of issues: child development, housing, transport and employment; argues for a measure of ‘healthy income’ i.e. minimum income for healthy living; double the percentage of children in the top 10% of households get five or more A* to C grades than those in the top 20% - 30%; children from richest backgrounds are more likely to start school with higher personal, social and emotional development and communication, language and literacy skills than the poorest; on a measure of ‘school readiness at three’, children from wealthy families are 10% more ready than middle-ranking and 30% ahead of those at the bottom; if everyone had the same mortality rate as those with a degree, 202,000 premature deaths at age 30 upwards would be saved each year ( = 2.5 million life years lost); Marmot is worried about proposals to speed up raising pension age: ¾ of people at 68 could have a disability – even if there is money spent on improving the lives of the poorest you would still have many reaching retirement who become disabled.

 

Thatcher government ‘suppressed’ the Black report because it disagreed with it and didn’t want to spend money on removing inequality… www.sochealth.co.uk/history/black.htm

 

Housing:

 

Homelessness: from Big Issue Nov 2-8 2015: campaign ‘Fill ‘Em Up’ (#FillEmUp)  – to find ways of using empty properties. ‘In parts of Britain there are TEN homes lying empty for every ONE homeless family... NB Centrepoint says there are 136,000 young homeless – government says 16,000. Not at al sure why the discrepancy...

 

2009 house prices – gap between north and south of Britain:

 

Prices have risen in 2009 by up to 7.1% in London, but fallen by 12.2% on average in Scotland

 

Other increases: Brighton 5.9% and Southampton 4%

Other losses: Newcastle and Manchester – double-digit losses

 

In London average house price 434,923 (up 28k on a year ago)

Other average values: South East 273,198, East 213,874, South West 239,938

East Midlands 172,000, Yorks/Humber 162,960, North East 151,199, Wales 176,097, West Midlands 176,132, North West 158,418, Scotland 148,122.

 

(From Times 26/12/09).

 

Compass report on housing market in Britain – “Don’t bet the house on it: No turning back to housing boom and bust” by Toby Lloyd, www.compassonline.org.uk – proposes land value tax to curb property speculation, replacing business rates and council tax (regressive, and doesn’t distinguish enough between expensive and poorer properties). NB (Ashley Seager G 100809): house price rises benefit nobody – there is no net gain, just a shifting around of the property-values among younger and old.

 

David Cooper of Lib Dems Action for Land Taxation and Economic Reform agrees on land tax. 

 

Inequality of property is much greater than of income – top 5% of wage earners earn 20% more than next 5% - with property top 5% own 60% more than next 5%. Income is taxed progressively, but wealth isn’t. Measuring land value is easy: take market value of property and subtract rebuild value. (?)

 

Hutton, Will: articles etc:

http://www.theguardian.com/commentisfree/2014/jan/19/inequality-threat-recovery-poverty-pay

 

Inequality and a possible slump. See Stewart Lansley, Observer, 5th Feb 2012: http://www.guardian.co.uk/business/2012/feb/05/inequality-leads-to-economic-collapse

 

 

Islington:

 

Has set up a ‘fairness commission’ under Richard Wilkinson (of ‘Spirit Level’) [SocietyGuardian 080611, Rachel Williams] – borough contains on one hand Barnsbury/Thornhill Estate etc, where Blairs used to live (houses priced in six figures) and on the other Bemerton Estate. Wealthiest fifth of households earn 60,000 +, and poorest 15,000 -. Almost half its young people live below the breadline, and a third of its working-age population don’t work. Wilkinson believes pay is the basic factor, and wants living London wage to be paid. Council has reduced differentials (local authority = 1:11, NHS = 1:9, police 1:7) but private sector can be 100-fold.

Other parts of the scheme are on lines of ‘big society’ – e.g. residents helping each other with reading, books. Light Project leafleted asking for volunteers and/or swaps, but only got response from Bemerton…

 

Labour’s record on child poverty:

See Mike Brewer’s piece, Society Guardian 13.06.12: http://www.guardian.co.uk/society/2012/jun/12/labours-effort-cut-child-poverty-exceptional?INTCMP=SRCH – Labour’s record was exceptional, he says (professor of economics at the Institute for Social and Economic Research, University of Essex). Money spent on tax credits and benefits was massively increased, and although critics say it didn’t work, it can be seen that without these measures, child poverty would have risen to around 4.3 million by 2010. Instead it fell from 3.4 million to 2.5 million, a reduction of 900,000 – ‘a remarkable achievement, certainly without historical precedent in the UK, and impressive compared to other countries”. Parental employment was a crucial factor in reducing poverty among children (accounted for a quarter of the reduction).

 

Land ownership in Britain:

 

See George Monbiot’s piece, Guardian 05.06.12: http://www.guardian.co.uk/commentisfree/2012/jun/04/wildlife-land-aristocracy?INTCMP=SRCH

 

From Observer Magazine 07.08.11: UK is 60m acres in extent, and two-thirds of it is owned by 0.36% of the population, i.e. 158,000 families. See Kevin Cahill: Who Owns Britain… also Mervyn King on British tax… 24m families live on the 3m acres of the nation’s ‘urban plot’ – and feel overcrowded.

 

Similar figures given in New Statesman editorial (02.04.12): only 10% of England (and 6% of Britain) is developed (i.e. used for housing/industry etc). Land is not scarce, but rather ‘landowners are paid to keep it off the market through a system of agricultural subsidy’. There is a shortage of land for housing – especially in the South-East, and as urban land gets more congested, the price of land goes up. Of the UK’s 60 million acres:

 

41 million acres (69%) are designated agricultural land – 158,000 families, or 0.6% of the population

15 million: forests, rivers, mountains etc (= ‘natural wastage’!) – owned by Forestry Commission, Ministry of Defence etc (hmph!)

4 million = urban plot – on which 62 million people (24 million families) live (over 99% of population!!).

 

Moreover, ownership of 30% of the land of England and Wales is not known, since there is no legal obligation to register land ownership. If this land is agricultural, the owners still receive subsidies (not sure how ‘owners’ are known for purpose subsidies but not legally registered...)

 

Carol Wilcox, secretary of Labour Land Campaign asks: why not impose an annual tax on the productive value of land per acre (excluding occupied houses in the lower tax bracket)?

 

Typical ‘old’ landowners (ownership derived from feudal times, or grace and favour, or profits from slavery):

- Duke of Buccluech: 240,000 acres

- Duke of Northumberland: 131,000 acres

- Duke of Westminster: 129,000 acres

- Richard Grosvenor Plunkett-Ernle-Erle-Drax – MP for South Dorset (known to Cameron as Richard Drax)  - has a wall which is the longest continuous structure in England along its side.

 

In 1980 there was a 70% likelihood the owner/buyer would be from this category. But typical owner is changing: foreign investors own 60% of London properties worth over GBP 2.5 m e.g.:

- steel magnate Vladimir Lisin: 3,300 Aberuchill Castle estate, Perthshire (6.8m)

- Boris Berezovsky: 172-acre Hascombe Court (10m)

- Roman Abramovic: Fyning Hill nr. Midhurst (12m)

- Leon Max (Russian-born fashion retailer): 600 acre Easton Neaston, Northants

- Stefan Persson, owner of H & M, 8,500 acres in Wiltshire and Linkenholt estate, Hants, 1,500-acres.

 

Also:

- Madonna and Guy Ritchie: Ashcombe, Wilts (former home of Cecil Beaton) – they also bought the local airfield to stop people flying over.

 

OECD report shows that wealth gap is holding Britain back: http://www.theguardian.com/business/2014/dec/09/revealed-wealth-gap-oecd-report

Article 20th March 2012 quotes OECD report by Angel Gurria (secretary general) “Divided we stand” – warning of dangers of widening inequality. If the OECD is worried, when it traditionally supports the free market etc, then there must be a problem! In UK and US the gap between top 10% and bottom 10% has multiplied by 14 in the last 25 years. Social mobility happens least where inequality is greatest. We have, under the coalition’s austerity policies: women losing more in cuts to public sector jobs, childcare, tax credits, benefits, blacks are twice as likely to be unemployed – young black men 56% unemployed. And now regional variations in public sector pay (worst-off regions’ workers suffering reductions in pay!!!).

 

 

Poverty – role of business in addressing: New Statesman supplement, ‘Should Business play a role in addressing poverty in the UK?’ (23 – 29 Oct).

Note: of the 13 million people in the UK in poverty, half are in work. That is, their annual pay is less than £13,920. Of these 236,000 will be earning less than the minimum wage, and 4.9 million earn less than the Living Wage (£9.15 an hour for London, £7.85 for the rest of the UK).

 

Private schools: http://www.theguardian.com/books/2014/dec/05/-sp-social-mobility-decline-elitist-education-david-kynaston

Deals with the sociological literature on social mobility, and demonstrates that it is declining. On what to do he argues that there can be no more upward mobility without some downward movement as well. Do we prioritize negative liberty (not to be interfered with) for the top 7% or positive liberty (to be given the same chances in life as every other citizen) for the 97%?

 

Psychological effects of inequality:

 

Was an article in British Medical Journal, says Jenni Russell (G, 18.01.08) describing feelings of unemployed working-class man when in company of well-dressed confident middle-class people – “sweating… shuffling… you feel, I shouldn’t be there… they look at you like they’re disgusted… It fucking stresses you… etc.   Russell goes on to say that the middle classes now feel similarly when comparing selves to better-off (e.g. professionals, with high-flying City earners with half million bonuses). As social beings we cannot avoid comparing ourselves with others.

 

Research by Richard Wilkinson and Michael Marmot shows connection between status and: health, life expectancy…

 

Scandinavian research showed the middle classes are in favour of more equality of opportunity only so long as the middle class is expanding… i.e. when their own children’s social mobility not threatened. We have now reached a point when the middle class will not expand any more, and upward mobility can only come at someone else’s expense. Maybe the left (?! – surely the middle classes generally) feels that it might suffer if something is done about inequality - hence the appeal of Cameron’s plans to tax non-doms, but cut inheritance tax. But we must tax the very wealthy to prevent them becoming the standard for comparisons.

 

Race:

 

According to Gary Younge, Guardian 30.03.09: two-thirds of Bangladeshis, and over half of Pakistanis in Britain live in poverty. The unemployment rate for Bangladeshis is more than five times higher than for whites, and for Pakistanis it is four times higher. Among the youth it is worth.

In areas of high Muslim concentration, whites are poor as well.

The gist of this article was that the government is taking the wrong line by trying to identify the ‘ideal Muslim’ – and it was wrong to put pressure on the MCB. He quotes Amartya Sen on the dangers of this kind of ‘identity politics’: people are never just ‘Muslim’ or ‘Christian’ but have a variety of ways in which they link up with other people. To stress one part of an identity is to isolate people and turn them against each other.

 

See also #america

 

Salary differences:

 

See Michael Meacher’s piece, Guardian 31st May 2012, for astonishing statistics on the way the better-off have benefited whilst the poor have fallen even further behind  since the 2008 collapse: the richest 1,000 own more than 3 times the budget deficit, the richest 1% (some 300,000 people) own £1 trillion, and the top 10% control £4 trillion. The GDP of the UK is £1.45 trillion!!!  A few taxes would soon solve the deficit crisis and create many jobs.

http://www.guardian.co.uk/commentisfree/2012/may/31/how-to-kickstart-uk-economy

 

Public Sector managers’ salaries: G 210310, Jane Dudman: chief exec of Birmingham city council earns £200,000. Is this too much? But she is responsible for 35,000 employees, and a budget of £3.6 bn. There are many private sector managers earning as much or more with nothing like his responsibilities. Problem also is we don’t know much about private sector managers’ pay. Cameron demand for not more than x20 salaries in public sector would get rid of much inequality if applied in private sector!! Peter Smith, head of Hay Group recently dispelled many myths about public sector pay – sector is diverse, with different employment conditions. Biggest rises in NHS are going to newly appointed chief execs. Question should be: why such a high turnover in these posts?

 

Reminder: Nicholas Ferguson in 2007 admitted something was wrong with the tax system when a high earner like himself paid a lower rate of tax than his cleaners (Dan Roberts, G 180510) [for rest of piece on tax see economics].

 

Salaries: Will Hutton (Obs 100110):  “There are 10 million men and women in work who earn less than 15,000 a year; nearly all their parents were in the same position, as will be their children. There are 3 million people of working age who do not make themselves available for work… – again reproducing itself through the generations…” Meanwhile the middle and upper classes are ‘opportunity hoarding’ (the expression is from Charles Tilly).

 

“The good luck of being born into the right family is profound. Two American researchers, Betty Hart and Todd Risley, found that children from professional families hear on average 2,153 words per hour compared with 616 for kids in welfare families”. By age 3, there is a 30 million word gap (i.e. words heard?). Welfare kids hear discouraging words twice as often as encouraging words, those in professional families hear encouraging words 10 times more often.

 

There is also a correlation between children’s maths performance and their father’s earnings (!): ‘a boy whose father earns twice another’s will score 5% more in maths.’

(see also under social mobility)

 

The richest 10% of UK population spend 7 times as much as the poorest 10%. (Guardian 24/01/02) Per week: richest spend L849, poorest: L126.70. (UK Family Expenditure Survey Jan 2002)

 

Salaries: Polly Toynbee, G 250809: Fabian Society research for Joseph Rowntree Foundation (Understanding Attitudes to Tackling Economic Inequality ? shows how little people know about earnings – people on £42,000 do not know they are in the top 10% (= more than £946 gross per week – bottom 10% earn less than £262, while the median is £479, but that is from £521 for men, and £412 for women, in 2008 according to http://www.statistics.gov.uk/cci/nugget.asp?id=285). Alan Duncan MP complained about how low his salary was, at £64,000 – he perhaps does not know that over 95% of people earn less than this. Top rate tax is paid by 3.7 million, according to Daily Mail, which is the top 12% acc to http://www.poverty.org.uk/09/index.shtml - who contribute 60% of tax takings (in 2005 – a figure disputed by the government, who put it at 55%).

 

The report also points out that most people think about inequality in terms of the gap between themselves and the richest, not the gap between the poorest and the richest.

 

Note that the income of the top 10% is greater than the combined incomes of all those below average i.e. bottom 50% acc to http://www.poverty.org.uk/09/index.shtml

 

Salaries: John Hutton (G March 2008), the business and enterprise secretary, defends high salaries: “aspiration and ambition are natural human emotions” – “we should celebrate the fact that people can be enormously successful in this country” - “any progressive party worth its name must enthusiastically advocate empowering people to climb without limits, free from any barrier holding them back”. Apparently he approves of the fact that we are now an individualistic society and we no longer have “blind faith” in institutions.

 

Iain McKay (Freedom 1500809): despite the Mail giving the impression that if you earn (G March 2008). £50,000 (*) you are middle class, the facts are:

- over £50,000 puts you in top 5%

- along with 1,680,000 others

- below this are 28,590,000 – 64% of taxpayers!

 

Median (50th percentile point) of taxed income is £16,400 – at the 90th percentile point it is £39,000, and at 95th it is £52,400.

Median earnings in 2007 were £19,943 per annum, and mean earnings £24,908. the 90th percentile earned £42,902.

 

Top 25% of wealth holders has 72% of our wealth, top 5% has 53%, top 1% has 21%.

 

(*) Cameron apparently suggested withdrawing tax credit on households earning above this figure. The Mail was not amused!

 

Salaries: Guardian 24/01/02:

The richest 10% of UK population spend 7 times as much as the poorest 10%.  Per week: richest spend L849, poorest: L126.70. (UK Family Expenditure Survey Jan 2002)

 

Savings – rich vs poor: 29th May 2014 Post Office report says rich are saving more while poor are spending more than they earn...

http://www.theguardian.com/uk-news/2014/may/29/richest-uk-save-poorest-spend-crisis-post-office-data

 

Sennett, Richard: The Corrosion of Character, 1998: our society has become ‘short-term’: ‘how can long-term policies be pursued in a short-term  society… how can a human being develop  narrative of identity and life history in a society composed of episodes and fragments?’ Quoted by Ed Howker and Shiv Malik: Jilted Generation: how Britain has bankrupted its youth – though this blames the ‘baby-boomer’ generation. Not so, says Madeleine Bunting: it is more a question of inequality and the effects of globalisation. What hit the industrial working class hard in the ‘80s and ‘90s – no jobs for life, constant re-skilling, insecurity generated by globalisation – has now percolated to privileged, high-status elements of the middle class. (G 230810)

 

Social Class and Social Mobility:

 

Book, and review by Lyndsey Hanley: Social Class in the 21st Century by Mike Savage http://www.theguardian.com/books/2015/nov/13/social-class-21st-century-mike-savage-review - we need new words to describe the fracturing of class... borrows Bourdieu’s idea of ‘symbolic violence’ to describe the way the traditional working class and the ‘precariat’ are treated by those who refuse to shoulder their share of the ‘burden of the world’ (Bourdieu again). A new level of snobbery has developed as inequality has increased, says Hanley – including from working class people towards ‘scroungers’ etc. 

 

 

The Class Ceiling – an article in Guardian Review Sat 24th Oct 2015 by Mike Savage, author of Social Class in the 21st Century (to be published Nov by Penguin) says that inequality is perhaps the defining issue of our age... (see http://www.theguardian.com/books/2015/oct/22/new-class-war-politics-class-just-beginning)

 

The ‘middle class’?:

Letter in Guardian Mon 21st Dec 2013 from Prof David Byrne and Dr Sally Ruane - http://www.theguardian.com/society/2013/dec/22/middle-class-on-top -

notes how the income of the different tenths of the population declines from the top (figures from the Office for national Statistics data for 2011 - 2012):

 

Top 10th received 27% of all income (both gross and after tax)

Next tenth down: 16%

Next: 13%

Remainder show gradual decline in proportion of income.

 

Note, then, that (i) the gap between the top two is a rise of nearly 70% - whereas the rest are closer together; and that (ii) ‘We have an upper class of plutocrats who do not really appear in the relevant data set and who pay very little tax because of their systematic use of tax avoidance; a middle class of those in the top decile of households... and the rest of us below them.’ This is a return to the 19th century view of a middle class as between the very top and the rest. The writers also point out that this middle class manages the rest of us on behalf of the plutocrats, by keeping us on low pay and benefits!!

 

Online representation:

Study by Jen Schradie of Univ of California, Berkeley shows that those most ‘online’ are mainly those who have a college degree, and this is a stronger predictor than whether they are young or old (from Freedom 180611). The internet is not leveling the playing field or broadening the range of voices being heard, but reinforcing socio-economic divisions that already exist, and may be heightening them.

 

Broken Britain? Crime in Britain has fallen 45% since 1995, according to The Economist (!) – ‘less killing, fewer teenage mums, far fewer fags, perhaps a bit less drink and drugs’. OECD finds Britain most class-bound of developed nations and least social mobility (*). 75% of voters say gap rich and poor too big. ‘Death tax’ slogan was unfair as Tories propose voluntary 8,000 charge on retiring which won’t cover residential care, and leaves paying for care at home to local authorities. (Polly Toynbee G 130210).

 

(*) G120210 (Randeep Ramesh) OECD report shows that in UK father’s income determines son’s to greater extent than in any other wealthy nation – half of a high earner’s advantage is passed on (which 3 times more influence than in Australia, Norway, Denmark). ‘Education is not as important for social mobility... as for other countries.’ (Romain Duval, head of economics dept of OECD). Only Italy and America are more unequal (i.e. distribution not only opportunity). Different classes are brought up to follow different rules about how to think, talk and behave… Middle classes ‘hoard’  opportunities and this kicks away the ladder for the poor (Richard Reeves of Demos). Middle class women (says David Willetts, Tory shadow universities spokesman) have taken advantage of educational opportunities – but inequality based on class persists.

 

Will Hutton (Obs 100110):

Alan Milburn’s report on social mobility showed that while only 7% of children are privately educated, 75% of judges, 70% of finance directors, 45% of top civil servants and 32% of MPs were privately educated.

 

‘Class’: Alexander Chancellor, G 220110, comments on Harriet Harman’s speech introducing the Hills report on social inequality – ‘persistent inequality of socio-economic status – of class – overarches the discrimination or disadvantage that can come from your gender, race or disability…’ (whilst Cameron says that ‘warmth not wealth’ is the key to a child’s wellbeing and prospects). Hills report underlines differences in prospects and life-span from inequality. Chancellor says it was Prescott who said ‘we’re all middle class now’ (before 1997 election). Surveys show we are confused about class:

Future Foundation a few years ago: 29% of bank managers believe they are working-class… and 36% of builders thought they were middle-class. Younger more likely to think they are w.c. (56% of 25 – 34 yr olds), and only 48% of 55 – 64 yr olds did. Guardian poll showed a quarter of C2s (skilled w.c.) considered themselves middle class; of Ds and Es, 1% thought they were upper class…

 

Ditto: Ruth Lister, Prof of Social Policy, Loughborough: meritocracy and social mobility do not equate with social justice – not everyone wants to or can ‘climb the ladder’ – ought to ‘shorten the ladder, narrow the gaps between the rungs, improve rewards at the bottom’. (Letter, G)

Same issue of G: five giants we must remove: ‘want, ignorance, disease, squalor, and idleness’ need replacing with ‘inequality, greed, self-interest, unemployment, indifference.’

 

Book: Mind the Gap: The new class divide in Britain, Ferdinand Mount, Short Books, 8.99. Similar solutions to current Tory policy…

 

Guardian Dec 13 2007 (Polly Curtis):

Study by Sutton Trust (Chair Sir Peter Lampl): social class is still the biggest predictor of school achievement, the likelihood of getting a degree, and even of a child’s behaviour. Advantages of being born in privileged home have not changed in 30 years.

 

44% of people from richest fifth of thee population. Have a degree – 10% from poorest fifth.

 

Children born in 2000 to the lowest income households, and who had scored best in test results aged three, had fallen behind by age five. By seven they will be overtaken by those from wealthier backgrounds who had come bottom in tests aged three.

 

Previous research suggested decline in social mobility between 1958 and 1970. Now it’s at a standstill.

 

Social Enterprise etc:

 

Letter in Guardian 16/6/2016 from Peter Holbrook, Chief Executive, Social Enterprise UK:

‘We must stop idolizing business owners who are relying on taxpayers, driving down wages, pushing people and families into poverty. The real business superheroes are those leading the 70,000 social enterprises across the UK. Research shows that 74% of social enterprises pay the living wage, as accredited by the Living Wage Foundation – not the lower ‘national living wage’ recently introduced by the government. Social enterprises reduce the need for wages to be topped up by the public purse. They also pay their taxes and reinvest their profits. Last week Welsh Water announced that it will offer a £32m windfall to its customers, reducing bills. This is what is possible when companies are free of the shackles of shareholders.

These businesses have the promise to make capitalism great again, and to reduce the gulf between rich and poor. Britain’s future business leaders are choosing social enterprise, which has three times the startup rate of mainstream SMEs. But their entrepreneurial efforts will be stifled unless policymakers take great strides to support them.’

 

Another letter, from Michael Bassey, quotes the Companies Act of 2006 – paragraph 172 (1): ‘A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole.’ The paragraph goes on specifically to mention employees and ‘the need to act fairly as between members of the company.’ Surely, then, excessive pay for managers/owners, and excessive bonuses to shareholders, infringe this Act?

 

 

These are now (post 2012) very popular, it seems!

Big Issue founder John Bird is associated with www.socialsaturday.org.uk (13th Sep 2014) – organised by:

Social Enterprise UK
0203 589 4950
socialsaturday@socialenterprise.org.uk
139 Tooley Street
London SE1 2HZ

Head of policy at Social Enterprise UK is Dan Gregory (Big Issue New Year 2016) @CommonCapital

There are also new enterprises of a ‘radical” kind:  Observer, New Review 19.02.12 has a list of 50 ‘New Radicals’: organisations that set out to ‘make Britain a better place.’ They were judged and ranked – top in the article was: My Bnk, in east London; The Liverpool Project – training young people in cardiopulmonary resuscitation; Incredible Edible – started in Todmordon Yorkshire, growing food in public open spaces; etc.

My only reservation is they are a bit like ‘the big society’ (in fact DC is a keen supporter!):

http://www.nesta.org.uk/news_and_features/britains_new_radicals/3space

 

Social Impact Bonds (SocietyGuardian 06.10.10, Alan Travis): to attract investment from outside government for a range of hard-to-fund preventive schemes, (such as Peterborough prison’s use of a voluntary organisation to reduce re-offending rates) to tackle social problems. Money also coming from Big Lottery fund (5m). Social Finance is the organisation behind the scheme. Private banking networks said to be interested in investing in social progress. In the Peterborough scheme, the organisations involved, if successful, will get payments from Ministry of Justice (i.e. payment-by-results). A 10% reduction for the first 1,000 prisoners through the scheme will bring payouts for investors. A sustained reduction of 10% would bring a return to investors of 7.5% per annum compound over an eight-year period… If they fail, the investors get nothing back. Crucial is upfront contributions from large charities, but they see it as better than giving grants, because they can get returns. 

 

But are these just the latest vehicle for city slickers to make a fast buck?

 

Social Enterprises: acc. to Randeep Ramesh, SocG 210710, a third of local authority leisure services are run by soc ents. In the last 20 yrs more than 30,000 new charities have been formed. So ‘big society’ idea is not new.

 

 

1. SocietyGuardian 09.01.08

 

(Lord) Andrew Mawson has written a book on social enterprises: The Social Entrepreneur: Making Communities Work, pub. Atlantic Books Jan 15th 2008.

Extract in SocietyGuardian 090.01.08 describes his work in Bromley-by-Bow. He had been involved with the Kingsley Hall community centre, but felt it had “forgotten who it was there to serve” (members were hostile to police, churches, anyone not in Labour Party, and to “anything that reeked of enterprise and entrepreneurship”; talk there was of “rights” and rarely of “responsibilities” – which Mawson describes as “liberal ideology… running amok”. Its “logic was built on theories about equality and race… It had no real understanding of what it means to be a human being”. [Wow!]

 

Because of his experience with a single mother with terminal cancer, who had slipped through the net and was not getting any support – and especially after a meeting of the professionals involved which became an “exercise in face-saving” – he argues that the (NHS and other) staff though “incredibly well-meaning” had ”forgotten the realities of the people with whom they were dealing… in the scramble to demonstrate equality of opportunity, or efficiency of delivery, or equitable use of public money”.

 

He set up, with others, the Bromley-by-Bow Centre, which would not be hostile to entrepreneurial approaches. The plan, to build a health centre which would put more control into the hands of the users, was blocked by the NHS on the grounds that it would be “inequitable” … The then Tory Health Minister, Brian Mawhinney took up the case and instructed the chief executive of the health authority to provide money to set up the centre. This was done by 1997, when New Labour came to power, and it was thought that the new government would welcome such initiatives. The Bromley-by-Bow centre was a prototype of the kind of health centre New Labour promised, that would “belong to the community”. Its key concepts were “to set health in an integrated social context” with a “holistic attitude to clinical services”.  Tessa Jowell opened the centre in 19998. Then a £300m Lottery fund was established by the government, and a committee of 12 (with no experience of setting up such centres) would establish 257 healthy living centres across the country. Many failed, because they were not sustainable and ran out of money. Mawson also blames “confused ideas about fairness”….

 

The Bromley-by-Bow centre is, he says, still flourishing but it “has to administer 77 different funding sources, from a range of different government departments, all demanding their outputs, evaluation procedures and audit trails”. Although Hilary Armstrong, cabinet minister, was told about this, she could do nothing it seems and so: “very little changed during the Blair years”.

 

Mawson’s summary of the Blair ”vision for communities” is interesting: “it sought to systemize the most dynamic, fluid and intangible qualities of successful; community organisations, and to link them to the most general objectives of a government for society – dignity, activity, wealth and progress. On top of that, it challenged some highly-cherished principles about equity, risk-management and democratic accountability that are strongly defended by many politicians and public sector officials – often in the face of evidence that they simply do not deliver for the poorest communities in the country”. Mawson feels that “academics and civil servants” should be kept at a distance from neighbourhood renewal. 

 

Comment: very revealing!  Codes here for values that I would call liberal (dignity, activity, wealth, progress), rather than socialist…  and the hostility to notions of equity/fairness, safety/security and democracy/accountability is astounding…

 

2. SocietyGuardian 16.01.08

 

Good to read a response by Lynsey Hanley, author of Estates: an Intimate History (Granta). The Bromley-by-Bow centre is “yards from” where she used to live for 13 years… “many of his claims for its success   bear little resemblance to my experience of life in the area.” The centre created “as much resentment as good will” – it was seen as a “club”, with all that implies about exclusivity and “I’m-all-right-Jack-ness” etc. She adds that “The living conditions of many within reach of the centre remain broadly unchanged”.

 

Whilst agreeing that the work of the centre has made a huge difference to the lives of the people who became involved in it, and that Mawson deserves credit for setting up the centre, which employs 100 local people, “there are thousands [within a few steps of the centre] who are stuck with very little prospect of change without massive intervention, which… would have to come from the state”.

 

The social enterprise approach is piecemeal. Not everyone wants to set up a pottery, so why use this as a model for social change? These organisations must not be presented as the only way to do things, and they must admit they can only do so much – otherwise they are in danger of perpetuating the “blame the victim” approach to those who do not escape from their poverty.

 

Social geography: Danny Dorling: Injustice: Why Social Inequality Persists, and Carl Lee: Home: A Personal Geography of Sheffield. Mentioned in Guardian article by Dorling, (social geographer) 261010, where he describes taking several short films about inequality around the country to various educational establishments, and the different responses he got. ‘… as our education system has become more divided, as people further segregate by area, and hence by school, divide further still where selective entrance is allowed and further still where school fees are soaring, it become harder for students to know what is normal, and easier to feel aggrieved’ [unjustifiably in many cases] He could see how adults end up with such different views from each other if their backgrounds are so different. ‘We teach young people in separate institutions how to fit into an unjust society. Those most likely to get to the top are the ones most likely to think it fair that they got there.’

 

 

Socialism: Sunder Katwala points out that socialists have never sought complete equality, rather equality of life chances – or as Amartya Sen puts it, equality of autonomy. (G Response, 21/10/10)

 

Tax evasion:

 

G has published research on tax evasion –

 

In 2009 budget govt announced repeal of section 765 of Corporation Tax Act, which makes companies seek permission from Revenue before moving cash offshore, and allows tax investigator to ask if moving the cash is detrimental to UK Treasury. Tax avoidance costs ca. £13bn a year

 

Corporate sector has lobbied for repeal, Lib Dems will move an amendment.

 

Govt plan is for companies to report cash movements after the event. Previously failure to report could lead to prison, new proposals: £300 fine plus £60 a day for each day of non-reporting (!!)

 

Budget supposedly had £4bn crackdown on corporate tax avoidance schemes… Govt has increased powers of Revenue inspectors, and put new duties on senior execs to ensure accurate tax returns (!)  (Nick Mathiason).

 

 

Third World:

 

22nd May 2013: letter in Guardian (20th May) from Prof Kate Pickett and Richard Wilkinson, saying that Cameron is blocking efforts to focus on inequality in the UN high level panel on post-2015 development. Smaller income differentials lead to more sustained economic growth. Text of letter from 50 academics to UN on this issue at: http://tinyurl.com/bsdqpm2

 

World Bank president says world poverty can be ended but it will tale a long time. http://www.guardian.co.uk/business/2013/apr/04/world-bank-chief-poverty-hiv

There are 1.2 billion people living on less than $1.25 a day. This is harder to tackle than Aids, he says (he previously launched a global campaign to provide blanket treatment for Aids).

 

Health:

Emigration of doctors etc from African countries is worsening healthcare there: Africa has 11% of world’s population, 24% of world’s disease, only 3% of world’s health workers. 65,000 people left Africa in 2000, (92.4% of all who left), going to 9 countries (US, France, South Africa, Belgium, Canada, Spain, Australia, Portugal). Britain has recruited 51% of the healthcare workers who have left Kenya. Around 5% of South African healthcare workers leave the country.  Uganda has 1 doctor for every 15,000 patients, and a shortfall of 2,290 nurses out of required 5,568 in government funded hospitals. (Freedom 150308)

 

Population:

In the next 25 years the world population may grow by 2 billion. Of these, 1.95 billion will be in poor countries and 50 million (.05 billion!) in rich countries. A ratio of 400:1.

 

Women:

ActionAid report (G 0703008) says women and children are discriminated against in such a way that UN poverty-reduction targets will not be met. They are more likely to be poor, sick, illiterate, hungry than men. 75% of all young people in Africa with HIV/Aids are women. Women in Africa together spend 40 bn hours a year fetching water ( = a year’s labour by whole workforce in France).

Around the world, women workers are paid 16% less than men – and the gap for better educated is greater… (ITUC research).

 

Top 1% in Britain – article by Danny Dorling: http://www.theguardian.com/society/2014/sep/15/how-super-rich-got-richer-10-shocking-facts-inequality

 

 

Polly Toynbee articles:

 

http://www.theguardian.com/commentisfree/2013/dec/20/charity-cant-justify-inequality includes the following:

Figures from the Charities Aid Foundation https://www.cafonline.org/PDF/UKGiving2012Full.pdf - show ‘£9.3bn [was] donated [to charities] in 2012 – a goodly sum, but a flea bite beside the state’s £700bn spending. If good works replaced social security and public services, we’d be back with Victorian destitution. The better-off give most cash because they have the most – but they make a far smaller sacrifice. Surveys always show the poorest 20% give considerably more of their incomes – 3.2% – while the richest 20% donate a meagre 0.9%. That is remarkable when you consider how much harder it is for those living near the poverty line to give anything, while the top 1% takes an enormous 14% of national incomes. Those closest to needing help seem the most understanding about the difference small sums make to those on the edge. After the crash, the professional classes dropped their giving by more than those who earn less. But in the world charts, Britain does well, as sixth largest giver (pdf).

What’s best about charity is also what’s worst about it: it is paid out by the whim of the giver and among the rich often with strings attached. Women give more than men, the older more than the young. Charities that top the giving register are not purely altruistic, but causes that might one day benefit the giver – medical research, hospitals then hospices.

Only after them come children and young people. Religion draws most cash – and you wonder why that’s a charitable cause at all.’ 

*******************

 

Property and inequality: the day after the election the luxury flat market rocketed G 30/5/15: http://www.theguardian.com/lifeandstyle/2015/may/30/london-property-market-boom-housing-tower-hamlets In Tower Hamlets, 23% of families live on less that 15k a year, and 53% of children come from families living on unemployment benefits.

Canary Warf, next door has an economy worth 6bn a year – greater than that of Monaco...

There is a waiting list of 20,000 people (for social housing) in Tower Hamlets.

 

http://www.guardian.co.uk/commentisfree/2012/mar/19/george-osborne-budget-inequality

 

 

Travellers: Review by Fran Abrams of ‘No Place to Call Home’ by Katharine Quarmby (Oneworld) in New Statesman 23 – 29 Aug 2013, covers Dale Farm and other conflicts, and suggests that when the environment is hostile then ‘outside’ groups find family and tradition more important (Dale Farm Travellers didn’t move away from the area when offered alternative housing or other traveller sites).

 

Voluntary sector - or “third sector” (see csr 1 and 2 [Carnegie])

 

LSE estimates: half-a-million third sector bodies, with a workforce of 1.5 million staff and a volunteer workforce of 6 million.

 

This includes some 55,000 social enterprises [see above], also Registered Social Landlords (many are registered charities) – combined turnover of RSLs = £9 bn and workforce 125,000.

 

Article on need for professionalisation of third sector, Stephen Bubb, Guardian 7.11.07

 

A wealth tax? Polly Toynbee’s articles are very good on this. For example, 12th March 2013: Labour is backing a tax on mansions worth over £2 million – but the motion is unlikely to get passed. If it were brought in, it would bring £2 billion – yet there is property worth £10,300 billion in private hands.

 

Currently wealth tax (mostly council tax) only delivers 5.9% of all revenues. Inheritance tax brings in only 0.5% and is only paid by 3% of estates.

Council tax is actually regressive: a house valued at £3 million in 1991 (prices for council tax purposes are tied to this year still) pays only 0.3% of its worth, while one worth £40,000 pays 2.4% (8 times more)

 

From the 1920s to the 1970s wealth spread out more equally each year – since then it has gone into reverse, and the top 10th now own 44% of everything.

 

Welfare: See ‘Why hard times became harsher’ by Tom Clark NS 25 July – 7 August 2014.

http://www.newstatesman.com/politics/2014/07/life-after-crash-why-have-hard-times-made-us-harsher - how the poor get clobbered more hard than the middle/comfortable, and how the latter can easily be persuaded there is no welfare problem.

Tom Clark is author of: Hard Times: the divisive toll of the economic slump (Yale UP).

 

The working class:

 

The People: The rise and fall of the Working Class 1910 – 2010, by Selina Todd, John Murray £25 – looks like an excellent book... Reviewed by Suzanne Moore:

http://www.theguardian.com/books/2014/apr/11/people-rise-fall-working-class-review 

And see: A Precariat Charter: from denizens to citizens, by Guy Standing, Bloomsbury £16.99 reviewed by John Harris:  http://www.theguardian.com/books/2014/apr/09/precariat-charter-denizens-citizens-review - Standing’s 2011 book The Precariat: The New Dangerous Class set out its story: the term was originally used in 1980s France to denote temporary and seasonal workers, but now, with labour insecurity a feature of most western economies, it is the perfect word for a great mass of people, "flanked by an army of unemployed and a detached group of socially ill misfits", who enjoy almost none of the benefits won by organised labour during the 20th century. In Standing's view, they increasingly resemble denizens rather than citizens: people with restricted rights, largely living towards the bottom of a "tiered membership" model of society, in which a plutocratic elite takes the single biggest share, while other classes – the salariat, free-ranging "proficians", and what remains of the old working class – divide up most of what remains.

 

Zero Hours contracts:

 

New Zeeland has passed a bill to abolish them, with unanimous support in parliament. Meanwhile in Britain, Sports Direct has thousands of employees on them. Average weekly earnings for employees on zero hours contracts are £188, compared to £479 for permanent workers. (Guardian Sat 12th March 2016, Eleanor Ainge Roy).

 

Links: Imagining Other contents page

Notes on Socialism before Marx

Notes on Marx

Notes on socialism (since Marx)

'Alternatives' - in notes on Imagining Other