Why inequality matters

IMG_1269“The people will always forget” was a significant line in the documentary The Divide which I saw this weekend as part of the Bristol Festival of Ideas. In the film the line refers to the belief repeated by those to blame for the sub prime mortgage crash in the US, the bankers and financiers, who led us into the Global Financial Crisis and then expected us to bail them out. It’s an assumption that one could well believe our politicians make on a regular basis when taking some of the decisions they do – it’s ok they’ll forget about it when it comes to voting! It’s also an assumption that means we fail to learn from the mistakes of the past and that potentially stops us from addressing many of today’s issues and concerns. Which brings me to the subject of this discussion – the increasing levels of inequality in the UK and the growing divide between top and bottom.

The Divide catalogues the stories of different individuals in the UK and US just trying to get on in life. It highlights all too easily the increasing divide between those that ‘have’ and those that don’t. It illustrates the growing extent to which many of us are perhaps mistakenly driven by money and consumerism, by keeping up with our peers or striving to do better than them, and aspiring for things that are, in the end, unlikely to make us any happier. The main message of the film is based on the book “The Spirit Level” by Richard Wilkinson and Kate Pickett, first published in 2009, but becoming ever more pertinent as time goes on. One of the most important points that the book makes is that inequality affects all of us. The problems are not just confined to the poor, the effects are seen across all aspects of society. Income inequality is a social pollutant because it spreads and everyone is worse off in a more unequal society.

The film illustrated many relevant issues that we are beginning to see the impact of in the UK, but in this post I’m just going to pick up on a couple of them that I think are becoming ever more relevant, that is, the impact of zero hours contracts and the growth of gated communities.

The use of zero hours contracts has become more prevalent in the UK in recent years across a range of sectors. Whilst some in government have tried to argue that it suits both workers and employers, the human impact of these contracts is illustrated particularly well by the film. If you don’t know how many hours you will be working in any particular week how can you budget for rent, food, bills etc? Imagine the levels of stress this type of contract could impose on you from day to day. You don’t know when you will be needed or for how long, so you don’t know what time you need to go in to work, if at all. You don’t know what you will earn in a week, so how can you plan ahead? The insecurity and uncertainly this creates is huge. Imagine having to live with that, even as a single person, but what if you have children and have to plan for their lives too, how does that work? In New Zealand this form of contract has been banned altogether (by a centre-right government), perhaps we could learn something from them?

The concept of gated communities has been around for some time now, with many more at a massive scale in the US, but something that is also creeping into the UK. In the US it’s a way of creating a sanitised community, where white people can feel safe surrounded by other white people, protected by armed guards at the entrance to their ‘community’. The community in the film had its own golf course, lake, play areas and parks and was characterised by large individual houses in their own plot of land. It’s a community that to many would look and feel like ‘prison’ but which in the US is something to aspire to. In the film these places came across as very exclusive, a place to live where people felt safe, but also where people felt isolated. There was in fact little sense of community in evidence, with estate agents promoting the place as lovely and quiet and where you won’t see your neighbours. That’s not a community! In the UK these types of gated community are happening, not on the scale of the US, but they’re there to make people feel safe, so people can surround themselves with other people who have money and status. To me it would feel like a prison, where you have to sign in visitors and go through guard gates just to get home, and where the diversity that makes our communities so rich and fascinating is totally missing. Let’s hope we choose to learn less from the US and focus more on the innovative and creative approach of our European and Scandinavian neighbours.

This point on who we learn from is an interesting one, which was picked up during the discussion with Kate Pickett after the film. It seems the devolved administrations of the UK are more likely to look to Scandinavia, The Netherlands and Germany for inspiration, when it comes to tackling inequality, than the UK Parliament as a whole, where sadly, all to often we look to the US for ideas.

From "The Spirit Level"

From “The Spirit Level”

That is the US where health and social inequalities are worse than anywhere else and where income inequalities are at their most extreme. There are many lessons to learn from elsewhere but let’s please make sure we are looking in the right direction. For example, in Utrecht, in the Netherlands, they are looking at paying citizens a basic income and in Bhutan a Gross National Happiness Framework was introduced to replace measures based on GDP. 

Inequality destroys empathy” that’s why whilst inequality does of course matter, it doesn’t matter how you achieve greater equality. There are a range of many different measures and policies from across the political spectrum that can work. The key is to do something about top and bottom levels of pay to create greater income equality because as Kate Pickett put it “every action we take individually matters and can make a difference”.

Economic Growth & Poverty

Are we asking the wrong questions?

DSCN0159In February I wrote a blog about economic growth and poverty that talked about why a focus on creating jobs and GDP growth wouldn’t actually tackle poverty. This followed some excellent work from JRF on Cities, Growth and Poverty which concluded that there is no guarantee that economic growth reduces poverty. At the time I was particularly concerned with the role of Local Enterprise Partnerships (LEPs) and the Strategic Economic Plans (SEPs) they were developing. In discussions arising from my blog, I found many people ‘defending’ the position of LEPs on the basis that their remit is clearly to create jobs and grow GDP; they are not there to address social issues, apparently, that is for local authorities and others to deal with. Therefore, the SEPs being developed would of course be focused on jobs and GDP growth and not a lot else – they are after all merely plans to extract funds from government rather than real plans created to deliver what is actually needed in an area – they are dancing to the tune of central government! The questions this leaves us with are:

  • Should we be planning for economic growth that doesn’t address core issues, like poverty and inequalities of opportunity, in an area?
  • Are we addressing the wrong question to start with?

What I mean by the last point is, what if economic growth isn’t our best option, what if the question should be about something else entirely. To consider this, think about what makes a city a good place to be, what makes our neighbourhoods great and what do we enjoy about life – is it really just about having a job and earning money? What got me thinking about this issue again was two things; one was losing my job last year, which is pretty life changing and makes you think about what you really value in life and what motivates you; the other was some reading I was doing for an essay. The essay was on whether or not capitalism is compatible with an environmentally sustainable world? The reading around this subject sent me back to Jonathon Porritt’s book “Capitalism as if the world matters” something I read in 2007 when it was first published, and to books I hadn’t read before – Joel Kovel (The Enemy of Nature) and Tim Jackson (Prosperity without Growth), all brilliant books in their own way and all presenting different approaches to the same question with different responses and solutions.

What struck me most was firstly, trying to put together some compelling facts about the ecological crisis we face and what it looks like was not as easy as I thought it would be – I couldn’t find in one place the key facts around the issues I wanted to present and finding up to date statistics on key issues was pretty difficult. Secondly, there was something compelling about each of the different arguments presented, I could have accepted elements of all of them – I summarise (inadequately) the key points below:

  • if capitalism (neo-liberalism) is about continual growth then in a finite planet this can never be compatible with environmental sustainability, and capitalism is to blame for many of the ecological crises we face – true?
  • capitalism reforms and evolves to provide solutions to the problems it causes, so technological advances will help us to solve the ecological problems we face and growth can continue – possible?
  • within a capitalist world alternatives already exist in different places, traditional growth can be stopped and prosperity can be measured in a different way that doesn’t rely on increasing personal consumption – yes?

And so to my main point, and maybe I am coming at this a lot later and slower than many who have been pushing some of this agenda for a fair while (such as those involved with Happy City) but the point is – should we be focused on measuring prosperity as a city/city-region/area in terms of economic growth alone, or is there another way? And would that other way be more inclusive? That’s not to say that we all stop worrying about having a job, earning money, buying a bigger house, taking holidays, etc but that we stop seeing these as the key to personal status – a process we all seem to get trapped in to a greater or lesser extent. Maybe part of the answer is about introducing a range of other measures that cover things like, quality of life, governance, education, health, and environmental/ecological resilience rather than money, economic growth and consumerism.

We tried this, sort of, in 2010 when David Cameron launched the National Wellbeing Programme – a new way of measuring wellbeing and measuring our progress as a country in a different way! In his speech, however, Cameron made it very clear that this was not an alternative to focusing on economic growth and GDP growth rather it was just an add on – “growth is the essential foundation of all our aspirations” apparently and by that he meant economic growth. So we can measure wellbeing, but not at the expense of GDP or other economic measures, because they are more important! The quote below on the government’s own website sums it up perfectly:

“It’s important to say that this is about neither replacing GDP nor creating a ‘happiness index’. The objective is to complement the more traditional economic measures used by policymakers and to provide an additional way to think about what we value and the progress we’re making as a society” National Wellbeing Website.

So not really a particularly worthwhile Programme then and it certainly doesn’t seem to have changed anything for the better – we are living in a more unequal society now than we were a few years ago, there are more people in poverty with less access to even a basic quality of life, more people using food banks, more people excluded from a housing market that seems to cater for those with money and exclude those who really do need somewhere to live! The question remains – are we measuring the wrong things?

This seems a particularly pertinent question a the moment, with the recent publication by the Post Crash Economics Society (PCES) at Manchester University which talks about how economics is being taught in Universities and the type of economists this is producing, as well as why those same economists were incapable of predicting the Financial Crisis of 2007/08, issues discussed by Alex Marsh in his recent podcast ‘rethinking post-crash economics‘. It also comes at a time when Thomas Piketty’s book ‘Capital in the Twenty-First Century‘ is receiving much acclaim for its questioning of a system that leads to the “growing concentration of income in the hands of a small economic elite” – powerful stuff but what will be the response?

But what’s all this got to do with LEPs and SEPs – well probably nothing and that’s the point, they are addressing entirely the wrong issues, focused on economic growth and jobs, with little or no view about quality of life and equality of opportunity. So does it matter that these plans and partnerships are drawing up plans and bidding for funds that will make little or no difference to the majority of people in their area – no probably not? We are focusing on not only the wrong question but the wrong plans, we should perhaps be focused on plans for “prosperity without growth” on plans that focus on those most in need and address the very real issues they are facing. Plans that are about creating quality of life for everyone not just the select few and that show no tolerance or acceptance of poverty and inequality. Those are the kind of plans I would like to see developed and I hope they are already there or in progress, but I see little evidence of this in practice – I wait for others to tell me they exist!

Postscript – interesting article in The Guardian, published 29-4-14 about Bhutan and their pursuit and measurement of Gross National Happiness rather than GDP