Following on from John’s vlog on Monday about the French elections, and given the wave of rail strikes breaking in the UK this week, billed by the press as the worst since the early 1980s, I want to discuss whether our Western democracies have become too unequal.
All free societies give rise to inequality, of wealth, of education, of health and longevity, of happiness et cetera. All unfree societies do as well, but the main difference is that democratic societies can at least try to correct these inequalities through the ballot box, if they want to.
We need to define what kind of inequality we’re talking about without becoming too boring. In the US the share of income and wealth of the richest of all earners has risen to a level not seen since the Gilded Age of the late 19th century because of the incredible fortunes built by a very successful few entrepreneurs and the investors who backed them. I’m not talking about that kind, the Elon Musk-versus-me (or anyone else) kind. Musk’s apparently crazy projects have succeeded, at least partially, and the payoff from initially unlikely success was always going to be very high. If any of the current wave of quantum computing start-ups in Silicon Valley succeed, Musk won’t be the richest man in the world for long. Good luck to them – we all benefit from innovation like this (and the wealth disparities they initially cause) in the long term.
I’m talking about something more basic and everyday. A well-educated university graduate with the ability to pursue a career in finance, tech, or the professions has put all of them in the bracket where they can reasonably expect to earn millions (even if it’s only one) per year by their mid-thirties. Meanwhile, the nurses, truck drivers, dental hygienists and policemen, as well as the professional types who focus on criminal law, human rights or small-company tax planning, cannot hope for anything like those kinds of payouts, ever. The median household income in the US is about $67,000 (very high by international standards), while in the UK it’s more like $35,000. In France it’s $27,0000. How many of your roughly equally successful contemporaries do you know on salaries like that? Not many.
Because of high taxes and expensive housing, the after-tax income of the very large majority of people in the Western world is low compared to us lucky educated types, and it’s just about to get a lot worse.
(I’m assuming, if you’re reading this, that you’re lucky like me. If you’re a dustman reading this in a break in your garbage collection round then you’re probably the best of us all, and I’d like to sit at your feet one day and imbibe your superior wisdom. I mean it: You have figured something out the rest of us haven’t.)
Why should we care about inequality, as opposed to poverty? That is a deep question that has never been properly answered and I intend to write about it more in future articles. In the meantime, let’s ask a simpler question. How big does the simple inequality between the top 10%, or 25%, of income-earners and say the 50th percentile have to become before it becomes a threat to the body politic and our way of life?
We already have one answer: populism. When the good life becomes out of reach for too many people in a rich country, politicians can win elections by peddling illusions that all voters know to be illusions. When Eisenhower promised a car in every garage and a chicken in every pot, he really meant it and everyone knew he did. After life on the prairies followed by the Great Depression and America’s great sacrifice in the Second World War, this was America’s genuine great leap forward. When modern politicians promise the modern equivalent, and they mostly don’t, everyone knows they’re lying. That kind of thing is standard in South America but is showing disturbing signs of arriving right here. Some of Boris Johnson’s claims about the benefits of Brexit look and smell like pure populism of the South American kind.
We can live with populism, although it appears to give free rein to all kinds of tribalist nonsense. But the next step is Brazilian cities. I wrote last week that the future’s already here, it’s just not evenly distributed yet. Well, the future of ever-rising inequality is Sao Paolo. If you’re a rich man living in Sao Paolo, you live very comfortably, in a lovely house and garden, with plenty of help, but you pay protection to the gang leaders who run the neighbouring Favellas. If you don’t, you and your children will be kidnapped. If you leave your garden to go for a walk, you will be kidnapped because the boss you paid off can’t control everyone out there, he can only make sure your house is not attacked. So, you can take helicopter rides, but you can’t go for a walk. I for one prefer to walk sometimes.
Fine, you say: America, France and the UK are not Brazil. We have competent police, armies, courts and they don’t. I say: For now. Last week I noted that a Namibian poacher can make $100,000 from poaching a rhino (and likely get killed doing so) versus earning $5 a day from being an honest person. Well, you don’t want to be that rhino. In some parts of the western world you already are.
Do you want that? Don’t you want to live in a country where you can always safely walk down the street or in the fields, unwary of that person coming towards you? I have spent the last two days chasing down a phantom quotation I thought was from Lord Chesterfield: England is the only country in the world where you can go for a walk any day of the year. I can’t source the quote, but I always thought he (let us say Lord Chesterfield) was talking about climate. I now think he was talking about society. No matter how unequal late eighteenth-century England was, you could mostly walk into most areas quite safely, be you rich or poor. That is true freedom.
(It’s not quite true: The messenger racing from Portsmouth to London with the news of Nelson’s amazing victory off Trafalgar in 1805 was assailed by a highwayman. When he shouted to the highwayman the nature of the news he carried, the highwayman patriotically withdrew. So England wasn’t totally safe in 1805.)
In today’s UK I know that whoever is walking past me on the country footpath or the London street is friendly, I might even stop to talk to them. I am equally relaxed in Cambridge, Massachusetts or West Los Angeles or rural Wyoming (no footpaths or sidewalks) despite our probable political differences. I’ve known for years to avoid Hyde Park in Boston, parts of the Bronx in New York, or Peckham or Tottenham in London or some of the banlieues in Paris. What if, one day, all our country becomes like such places and you have to live permanently in gated communities? I hate gated communities. That stuff is for Johannesburg or Moscow, not England.
We escaped gross inequality in the industrial revolution. Before industrialization, every poor man was every richer man’s enemy. (Remember every cowboy movie ever.)
The putative Lord Chesterfield understood a vital fact: We all have to live together. Freedom to the poor means freedom from cold and hunger. To the rich it means freedom from crime and fear. We need both. England has had the latter since at latest the mid-19th century and both since the mid-twentieth century. It’s our birthright. America mostly has it too, as do the other Anglo-Saxon nations and most of the Western European nations. Most other countries lack it. It’s beyond price, because it’s real freedom, as any woman who is scared to cross Wimbledon Common at night will tell you.
I am a staunch conservative. I deprecate high taxes and high welfare spending because I fear none of it helps much. I also cherish, no depend, on my freedom to walk, yes walk, anywhere in my own country. We have been fighting for years to make our streets safer for women. Why would we give up now and make them unsafe for everyone?
In the coming years, I think we will need to revisit the old settlement between the reasonably rich and the reasonably poor, because the gap has become wider than at any time since the Great Depression. Being good Westerners, I’m sure we will succeed in making a newer, better settlement, as we have always done before. That is how will beat our totalitarian rivals.