09 November 2011

Inequality: Survival of the Richest

The Occupy movement have already managed one thing - to shift the terms of debate back towards how unequal our society has become.

When 200 billionaires have more wealth than the poorest 2 billion people in this world, when 100 families own a third of British land, when we cannot pay a minimum wage that is even a thousandth of a director's bonus, it is time something was done.

The right have a number of arguments they wheel out as to why nothing can be done about inequality. One of the most commonly used is that the rich can just move abroad they cry - then tax their land assets we say. That is a tax that cannot be avoided. I admit it has got to a state where only the poor and middle classes pay income tax, only the medium and small firms have to pay corporation tax and inheritance tax is almost a voluntary tax. It is time all of these were scrapped in favour of Land Value taxes.

Then there is the argument that more equality will lead to less innovation and aspiration and less wealth creation. The Soviet Union is cited as where it will all lead. But the Soviet Union was undemocratic socialism. Real democracy leads to more equality and I would argue, more efficient capitalism. We are heading towards a system where the next government would have less than 20% support in most cities, less than 10% in the North and Celtic fringe (see Canada where 39% of the vote gave the Tories a landslide).

Our winner takes all voting system will give 100% power to a party with just 35% of the vote (even worse when you consider most adults don't vote anyway). Appalling levels of support like this lead to a government that can get away with catering just for the most powerful 5% - those who own the wealth and crucially own the media support the politicians crave.

Proportional systems are not a panacea but could double the support a party needs to win to get into power as turnout improves and at least 50% of the vote is required to govern. The occupy movement have taken this a step further with 'consensus' of all people required for decisions to be made. Peter Hitchens suggested (maybe tongue in cheek) that some people get 2 votes if they have certain respected jobs like doctors, nurses - a situation bound to harm the poorest. I would suggest (equally tongue in cheek) that maybe only the unemployed and lazy have the vote. That would at least make it more difficult for the powerful and wealthy to overlook them.

Of course some entrepreneurs/inventors etc can be argued to be worth almost any sum of financial reward, but most at the top are there for other reasons - luck of birth or even for activities that are detrimental to the economy and society. If we are to make society valuable to all, the wealthy have to come to realise that paying their taxes is noble and moral and that there has to be some common sense in the distribution of wealth and incomes. Nobody should work long hours and not be able to share in a decent amount of financial reward. Nothing would get people to work more than a citizens income and a guarantee that work will always pay well. This will require paycuts at the top.

The Victorians eventually came to realise that it was in everyone's interest to have mass sanitation. It cost them a lot but it was the only way to save their own children from the diseases of poverty that afflicted the masses. In the same way, educational standards and social wellbeing for all will only come when the rich are willing to see inequality decrease. It may even have stopped the economic crisis we find ourselves in now. The rich lent more and more to the poor to rachet up growth. But the poor are too poor to pay them back, now we all lose.

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