Now isn’t this a surprise?

Will Hutton is right to identify economic inequality as the cause of so many societal ills (“We are scared to face the real issue – it’s all about inequality”, Comment). Our sluggish, low-pay economy, high levels of poverty, the housing crisis, our obesity epidemic and welfare bill are all driven by the UK’s extraordinary levels of inequality.

Hoist by our own definitions there.

The UK doesn’t actually have any poverty. What it does have is relative poverty: which is another name for inequality of course. So, yes, given that that “relative” is all too often left out of the conversation our poverty levels are indeed to do with inequality. Because they’re the same damn thing.

Further, given that we don’t have any poverty our welfare system is attempting to reduce relative poverty. So of course the welfare bill is driven by inequality. It’s an attempt to reduce inequality that causes the welfare bill, d’ye see?

As to what we do about it all, difficult one that. The various places that have tried to reduce income inequality directly have fucked up quite royally. The various places that have tried to do it by vast taxes on high incomes which are then redistributed haven’t done all that well. And the places that have managed to reduce consumption inequality the most have done so not with high income3 and wealth taxes but with high consumption taxes. Ie, the Nordic solution. Their wealth inequality is about the same, sometimes a little higher, than ours. Their market income inequality is a little lower and their consumption inequality is much lower. Paid for largely through those high VATs, for their wealth taxation is often lower than ours and their income taxation not much higher.

Which is something of a toughie for the class warriors here. The actual policies that lead to their claimed desired outcome are policies that they wouldn’t countenance in and of themselves. VAT at 25% anyone?

10 comments on “Now isn’t this a surprise?

  1. The problem being that worsening inequality in Gini terms is a direct and predictable consequence of the policies beloved of all modern governments; pouring printed money in at the top of the economy, and pouring unskilled migrant labour in at the bottom of it. And nobody approves of those policies more than the Guardianistas.

  2. The UK doesn’t actually have any poverty.

    The UK has very, very little actual poverty. And, many (although not all, by a long stretch) of those who find themselves in that situation have done quite a bit of self-contributing to their unfortunate situation. But the system isn’t perfect and some people slip through.

    Hell, although this is off-topic, the system is quite deliberately managed (if not designed) to be as unpleasant and inflexible as possible. Particularly for those not of the benefits class.

  3. Once they have tackled “economic inequality,” they can work on height inequality. And bra size inequality. And hair color inequality. Et fucking cetera.

  4. “high levels of poverty, the housing crisis, our obesity epidemic”

    Clearly a First World problem. Poverty AND obesity.

  5. Actually the UK *does* have some poverty. All of it is a direct result of government (mostly New Labour government).
    (i) It has been reported that a majority of those attending food banks do so because the DWP has failed to pay the benefits to which they are legally entitled.
    (ii) New Labour decreed that Asylum Seekers are not allowed to work for a living *and* allocated them benefits half as much as the amount paid to UK citizens in identical circumstances. This only hurt the genuine refugees (most of whom were fleeing for their lives and/or to escape systematic rape) as the economic migrants faded away into the black economy. Many are also hit by DWP errors and when this happens they are in danger of starving.

  6. Gamecock – “Once they have tackled “economic inequality,” they can work on height inequality. And bra size inequality. And hair color inequality. Et fucking cetera.”

    Hair colour inequality? I hate to ask. But bra size inequality? Who suffers from that? I would be careful what you ask for because I can imagine that among certain sections of the male population, bringing the average up to a Double D would be quite popular. Implants are already freely available on the NHS.

  7. TW does not mention that other Scandinavian social policy designed to reduce poverty – forcible sterilization.

    One way to reduce the number of children living in poverty is to prevent the poor from having any children. Especially the fackless poor. So Sweden went around sterilizing Gypsies et al into the 1970s.

    Eugenics is not a distortion of social democracy. It is an inherent and logical necessity. Let’s see if the Guardian’s readership will accept that.

  8. smfs:

    “But bra size inequality? Who suffers from that?”

    Teenage girls.

    People make different amounts of money. That is not “inequality.”

  9. Bra size inequality has genuinely been a cause for activist concern; specifically when Marks and Sparks said they were going to charge more for big bras, a bunch of busty ladies complained and forced them to return to having flatter chested women subsidise the well endowed.

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