Some animals are more equal than others

Finance Doodle 001

In the week that the Office for National Statistics reported that the income gap in the UK is at its narrowest in 25 years, Shiv Malik at The Guardian comes down on the side of direct action over government intervention. Asking what the problems of being more equal are, Malik points to the failings of schools in Chile as evidence that social equality simply leads to a race to the bottom.

Demanding governments to intervene is also unhelpful. Malik states that taxation is not a good way to redistribute wealth because it over-complicates the argument and prevents the population from participating in proper civic engagement.

But while tax and spend solutions ask much in the way of ordinary people’s time and engagement, to understand complex issues such as how offshore accounting robs a nation of its full revenue, such solutions ask almost nothing of people in the way of civic engagement except to cast a vote every four years.

…those in poverty are hungry for justice but are not waiting to vote to get change. Employed on zero-hours contracts, unable to afford their rent and facing systemic denial of justice, [they]  fight back, not by drafting well-tempered letters to their elected officials asking for tax reform, but by demanding very specific change for themselves – better wages and conditions – from the people who hold the power over them, their employers.

They don’t beg elected officials to take responsibility for their requests. Instead we see them holding the bosses of Walmart to account at the supermarket giant’s annual general meeting and out on the streets protesting for better wages from fast-food restaurants. Today those protests have become the Fight for $15 campaign, which has managed to raise basic pay in the fast-food sector in several states across the US. Here in the UK, we should take a leaf out of their book: what’s needed is more direct action, not more redistributive fiscal policy. Shiv Malik

The strange thing with this argument is that it polarises direct action and government policy and makes no mention of Unions at all, presumably because his activists are in the non-unionised US food sector. However, what is clear is that Malik doesn’t want the ordinary people to have their brains overloaded with talk of complicated tax matters, nor trouble their politicians for help and representation, but to take to the streets and demand better conditions, a high-risk and unlikely strategy as employees on zero-hours contracts who agitate are likely to be simply sacked and not paid more.

And for some reason the fight has to be between employees and employers. These are the old battle-lines drawn up during the industrial revolution and completely ignore where the fight over inequality has now moved. Employers are less constrained by location and National borders and have a tendency to re-locate, taking on an entirely new workforce rather than improve pay and conditions. The fast-food sector is different, as the location of a burger bar is an important factor, but it is wrong to use this industry as a template for all industrial disputes.

The real battle is between the rising class dubbed by Chrystia Freeland as Plutocrats and the rest of us. Plutocrats are relatively few in number and so it should be easy to take them on. However, they are well protected, hiding behind shell companies and within the gaps of national and international law. Plutocrats are smart which is how they have succeeded, but they also have help. They see themselves at war with everyone and they are winning, changing and preserving  government policy in their favour and making the argument that if you want more, go out and take it. After all, it works for them.

This is why the recent finding that the equality gap is closing is questionable. It focuses on average pay rather than examines how those at the very top are pulling away and so, on average, while all boats seem to be rising on the tide, in actuality, many boats haven’t seen water in ages.

In their proclamation, the pigs who control the government in George Orwell’s novel, Animal Farm, betray their fellow animals when setting out the laws for their the new society:

All animals are equal, but some animals are more equal than othersGeorge Orwell

It denounces the hypocrisy of governments that proclaim the absolute equality of their citizens but give power and privileges to a class of elites. In 2010, a coalition government to power in Britain. The country’s economy had suffered terribly as a result of wild speculation in the banking sector and the new Chancellor of the Exchequer was the man to put spending back on track. His rallying call of “We’re all in this together” suggested collective action and social equality, yet in the six years that have followed, the programme of cuts and austerity measures have bitten deep into public services and yet the most wealthy have prospered.

Britain is a land consisting of owners who live entirely from rental income and who make a distinct social class, socially lower than the aristocracy yet as wealthy as some peers. They often work on their own properties or go on to became public figures holding high political or military office. While this may sound all-too-familiar, it is in fact a description of the landed gentry who thrived until the 1870s when almost 90% of British millionaires (the wealthiest class in the wealthiest country) had been landowners, a proportion that dropped significantly as competition from America, manufacturing wealth, and the First World War took their toll.

Conditions are clearly very favourable for a new class of super-rich individuals, a re-invigorated landed gentry that could not have happened without government policy and the legal framework working in their favour. Not confined to nation or geographical borders, the global marketplace offers no comparable threat to this class. Unlike the 1870s these super-rich plutocrats seem totally unassailable and it may be that sovereign governments themselves are impotent, no longer in a position to realise an equal society, even if that was the goal.

George Orwell may have been commenting upon hypocrisy of the state’s managers, but while they still ring true, perhaps the implications are darker. It’s not hypocrisy but powerlessness and that ordinary people no longer have a genuine say as their democracies no longer function for them. This is certainly the conclusion Malik encourages with his insistence that we leave governments alone, ignore wealth secreted away in trust funds and take to the streets for isolated running-battles with chain-store managers.

Beware of those that will betray you.



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