Abstract
In an interview with the Daily Telegraph in April 2012, Chancellor George Osborne described himself as ‘shocked’ to discover that some of the wealthiest people in the country pay ‘virtually no’ income tax. Disingenuous or not, it’s not only Osborne who appears to have little knowledge of, or even interest in, the financial habits of the rich. As Karen Rowlingson and Stephen McKay point out in this useful book, the wealthy have also received much less attention from social science academics and policy makers than the poor. Their book is an attempt to address that deficiency.
Discussions of wealth, poverty and inequality often concentrate on income differentials. Clearly, these are important. Yet as Rowlingson and McKay observe in Chapter One, what is often ignored is the role of assets, including financial wealth, housing and pensions. In respect of inequality, their distribution is far more unequal than the distribution of income. They cite a 2004 study by John Hills showing that the Gini coefficient for the distribution of assets in 2001 was 68%, twice as high as the comparable figure for income. A second reason for their focus is that the promotion of private assets as a substitute for publicly provided services has been a key plank of British social policy since the Conservatives’ Right to Buy policy in the early 1980s and one which was continued after 1997 by New Labour in the form of ‘asset-based welfare’.
Chapters Two to Five are concerned with establishing the extent of wealth inequalities, why they matter, and identifying who the rich are. Britain is now a more unequal society than it has been for more than fifty years. In 1950 the top 1% claimed around 13% of total income. This declined to a low of 6.5% in 1978 but by 2000 was once again approaching 13%. Against the conventional wisdom of the New Labour years, Rowlingson and McKay argue that this level of inequality matters for four reasons: firstly, because of the relationship between socioeconomic inequality and health (albeit that they do not appear to accept all the arguments of The Spirit Level); secondly, the contribution of inequality to the current economic crisis; thirdly, restricted social mobility – not all can become rich; and fourthly, the implications for social justice.
Drawing on the Wealth and Assets Survey (WAS) which the authors describe as ‘the most thorough attempt to measure wealth so far in the UK’ (p. 57), Chapters Three and Four seek to establish how wealth is currently distributed (no easy task since, as they point out, the very wealthy are understandably reluctant to engage in discussion with social researchers about wealth inequalities). Alongside many statistics, they provide a powerful visual image of the extent of inequality with their ‘parade of dwarfs and a few giants’ (p. 82). In this scenario, if the entire population of the UK was paraded past a particular point in the space of one hour, with an average mean income represented by the average height of five feet eight inches, for the first six minutes the bottom ten per cent would pass, who have yet to reach a height of two inches. After eighteen minutes, the bottom thirty per cent would have passed, only just exceeding one foot tall. Not until fifty-four minutes would the top ten per cent start to pass, with an average height of thirteen feet. The top one per cent (forty feet) would appear in the last minute with the final six per cent appearing in the last ten seconds. Last of all would be Lakshmi Mittal, Britain’s richest man (£17.5 billion) at a height of some sixty-four miles!
Sadly, given this degree of inequality, the various remedies proposed by the authors in the last two chapters manage to seem both extraordinarily timid and wildly utopian. A ‘more holistic asset-based policy’ (p. 152), for example, would barely make a dent on the levels of inequality they describe but neither is it likely to be introduced in a situation where house prices are stagnant or falling, private and public sector pensions are under attack and wages are being held down. Similarly, their call for a ‘fundamental review’ (p. xiii) of wealth and inequality is both redundant (we have already had the Report of the National Equality Panel in 2010) and also futile, since it is unlikely to be taken seriously by a government two thirds of whose members are already millionaires. Alongside these political weaknesses, the book suffers from a number of theoretical weaknesses, both in its discussion of class (many of those whom they describe as ‘the rich’ are likely to be trade union activists who have been on strike over the past year) and also in its failure to address the ways in which capitalism, and not least its neoliberal variant, systematically produces inequalities.
Despite these limitations, the book is worth buying for the valuable data it contains. Those seeking a more realistic and effective political response to the obscene levels of inequality which Rowlingson and McKay document, however, would be better advised to study the experience of the Occupy movement of the last year whose message of the ‘99%’ against the ‘1%’ highlighted for millions across the globe the real nature of the society we live in.