Sunday, 21 May 2017

Despite Myths To The Contrary, Society Has Never Been More Equal

Last I heard in the Guardian, around 80% of Britons think there is a big problem with inequality in the UK. They are not alone. Barack Obama once stated that income inequality is the "defining challenge of our times", while Pope Francis calls inequality "the roots of social ills", and Harvard professor Ichiro Kawachi described inequality as a "social pollutant".

From my experience, inequality is one big non-problem - it is the issue that everyone thinks everyone else has a problem with, but no one really does. It's perhaps rather like the mythological claim that violence on television causes viewers to go out and be violent. If you asked anybody off the street whether they think television makes them more likely to be violent, they'd say no, but they could imagine it might be true in the case of some people. Well it might be true of the odd few, but I see no reason why it would be generally true, because there are lots of other qualities expressed on television, like kindness, humility and generosity - why does no one argue that television makes us kinder, humbler and more generous?

The main reason I think very few people actually have a problem with inequality is that they do not behave as if they do - they only say that inequality is a national problem, they do not act as if it is. Instead almost every day they spend their money in ways that make the country unequal, and they compete (for jobs, for status, for a partner, etc) not with those who are financially out of their league, but with those socio-economically closest to them.
People certainly do lament the amount of poor people struggling to make ends meet, but that's nothing to do with inequality at all. 200 years ago, all but about 1% of the population were mired in poverty and struggling to feed their families, not because poverty is caused by inequality, but because poverty has been the natural state of humans for most of our 200,000 year history.

Some will make claims that an unequal society causes more civil tension, unhappiness, obesity, drug use and crime - but even if there is a good argument for a direct causal link (which I severely doubt, and have not seen), no one seriously thinks that anyone who does these things would ascribe it to having damaging feelings about inequality. Actions speak louder than words. And from what I've seen, I'm going to say that the claim that "around 80% of Britons think there is a big problem with inequality in the UK" is simply not true.

I suppose one of the main reasons they frame it in terms of 'inequality' as opposed to plain 'poverty' talk is because 'inequality' terminology helps give them a platform to peddle the narrative of grabbing more and more wealth from the rich, as though it's the rich's fault that people are poor. If people are brainwashed to believe that wealth is a fixed pie, that it's zero sum, and that the rich are making fortunes at the expense of the poor, it is easier to convince them that the politics of envy can be made palatable in the form of redistribution initiatives.

We know that humans have deep-seated psychological reactions to matters of social hierarchy, feeling they need to ensure the underdog is represented. This would be noble except for one key thing - if they really had these people's best interests at heart they would learn the facts and get their reasoning right instead of propagating falsehoods. This is the big contradiction that undermines the left - if they are so on the side of the poor why do they do so much to falsify the truth, distort facts and support ideas that will achieve the opposite of what they claim to want?

Perhaps being human it is easy to not learn the facts and run along with lazy assumptions, but it's no small irony that the ones most often accused of being elitist, greedy and uncooperative are the ones doing the most for the underdog and for human progression; and the ones most loudly proclaiming themselves as justice-seeking champions of the poor are the ones doing the most to hinder the underdog and protract human progression.
Part of the misleading distortions are centred around how people do their measuring. Claims are made about wealth disparity using only a narrow range of measuring criteria - usually disposable income - when it's perfectly obvious (or should be!!) that what defines a person's well-being is so much more than that.

What I really want to push the left on is why they deliberately ignore methods of measurement that paint a truer picture and intentionally cherry pick data to distort the true picture. Because, to that end, once you factor in everything people have, inequality is at the lowest it has ever been. Once you include the market value of all the other things people have, from pensions, welfare benefits, food stamps, vouchers, state-funded health, education, social services, access to the Internet, social media, and countless other things I could mention, you'll find that apart from disposable income and status goods the world is the least unequal it has ever been.

The left, I'm afraid to say, are measuring well-being with a narrow definition of wealth that excludes all the numerous societal progressions that close the gap between rich and poor. That is to say, they are bemoaning inequality by selectively ignoring all the things that reduce inequality. Because the most important measure of equality is not disposable income, it is consumption.

And the moment you get beyond the fact that Richie Rich has a few extra yachts and luxury cars that most of us won't ever own, you'll find that in terms of the most basic consumption needs, once you factor in central redistribution through the tax and benefits system, increased technology for the man on the street, more leisure time, and so forth, the gap between Poor Pete and Richie Rich has never been narrower.

And even if you only want to measure disposable income, I read in Forbes that those in the top quintile earn on average 12 times as much as those in the bottom quintile, but that the multiple dropped to 4 times once tax and benefits were factored in. Considering the skills and academic differential between the top and bottom quintiles, an average differential of times 4 isn't very great at all. As always, far from being a den of injustice, the system is heavily skewed against the rich to favour the poor.

"Cash benefits have the biggest impact, with the average household in the lowest-earning fifth receiving £7,612 per year across pensions, tax credit, housing benefits and other means of support. Benefits in kind such as healthcare are also significant, adding up to £7,586 per household per year, but they are also received by richer households and so do less to cut inequality on this measure. In the financial year ending 2016, the average income of the richest fifth of households before taxes and benefits was £84,700 per year, 12 times greater than that of the poorest fifth (£7,200 per year). An increase in the average income from employment for the poorest fifth of households has reduced this ratio from 14 to 1 in the financial year ending 2015. The ratio between the average income of the top and bottom fifth of households (£63,300 and £17,200 respectively) is reduced to less than 4 to 1 after accounting for benefits (both cash and in kind) and taxes (both direct and indirect)."

There is no question that we are the most equal society that has ever lived. Through tax and benefits the state reduces a 12 to 1 income differential to a 4 to 1 consumption differential. The jury is still out on whether the left do not actually understand this, or whether they do but wilfully ignore it because it impugns the uprightness of their agenda. Either way, these faults continue to cast aspersions over a group that are always claiming, in public, to have more integrity than the distortions and untruths they propagate.

* A few months ago I wrote a blog post exposing some of the ways that politicians and the media distort the truth using bogus statistics.