Inequality in the UK, It's coming sometime and maybe...

September 13, 2016 8:35 PM

"The richest one per cent of the UK population now owns more than 20 times the total wealth of the poorest fifth, making the country one of the most unequal in the developed world, according to analysis by Oxfam. The figures suggest that around 634,000 Britons are worth 20 times as much as the poorest 13 million and the charity urged Theresa May to take action to close the gap between the “haves” and the “have nots”." [SL-Indy]
posted by marienbad (35 comments total)

Why does this sounds so familiar....?
posted by BigHeartedGuy at 8:44 PM on September 13, 2016 [2 favorites]

Three words: Basic Income Needed.
posted by storybored at 9:11 PM on September 13, 2016 [2 favorites]

What is the point asking Theresa May to do something about this? Do they not realise she is the leader of the Tory party and has been part of a group working assiduously towards this result for decades?
posted by wilful at 10:26 PM on September 13, 2016 [30 favorites]

the charity urged Theresa May to take action to close the gap between the “haves” and the “have nots”."

Hahahahahaha... Ha...

Fuck.
posted by Dysk at 11:11 PM on September 13, 2016 [8 favorites]

I've always wondered what a "natural" wealth inequality would look like with perfect income equality; young graduates have a negative net worth for a large part of their career (until they pay off their student loans) whereas on the day before you retire, your net worth is at its maximum. In addition there is probably a distribution of savers and spenders such that there is a baseline level of wealth inequality expected even in a perfectly equal society income-wise. And why do we never talk about spending inequality? (disclaimers: I am not an economist so I am asking from a position of naivety and it looks clear from this article that there is significant inequality in the UK, I am certainly not arguing against that)
posted by askmeaboutboardgames at 12:50 AM on September 14, 2016 [3 favorites]

" the charity urged Theresa May to take action to close the gap between the “haves” and the “have nots"

Might as well urge May to produce unicorns that lay golden eggs out of her backside. Tories believe that life, nature and the world is fundamentally unequal, that anything that tries to buck this reality is a waste of time, is doomed to fail, is pointless. Therefore might as well embrace this natural inequality, in fact encourage it - the sooner the mass population wake up to this reality, the sooner they will do something about it. If they don't, well, that's their choice, and just yet another affirmation of the inherent inequality of life.

So, there's as much chance of May doing anything about this as there is a squad of Dodo's marching down 10 Downing Street and demanding civil rights for extinct creatures.
posted by rolandroland at 1:19 AM on September 14, 2016 [7 favorites]

Three words: Basic Income Needed.

I really don't understand this. In the first place, the richest one percent (and businesses) virtually everywhere are entirely resistant to paying their share of tax which would make this possible. Look at the growth of tax havens in the new century. Secondly, governments around the world are incapable of providing a living income for the unemployed - how on earth will they provide that for every citizen regardless of employment status? Especially given the general right-wing resistance to 'handouts' evident everywhere from your uncle's Facebook feed to the national newspapers (the printout of your uncle's facebook feed *snigger*). Paying everyone the same basic living rate sounds really great, but it's an idiot solution - part of the slow neoliberal degradation of systems that actually work in favour of experimental schemes that inevitably fuck up (viz. education, health care, public transport, privatization, etc.)
posted by prismatic7 at 1:24 AM on September 14, 2016 [2 favorites]

Secondly, governments around the world are incapable of providing a living income for the unemployed

They don't currently, that isn't quite the same as being incapable. It's a matter of priorities, both with taxation and with spending. The UK could certainly fund a universal basic income just by taking a giant chunk out of the defence budget (scrapping Trident would be a good start, for example).
posted by Dysk at 1:27 AM on September 14, 2016 [5 favorites]

Dysk, I agree that cutting defence budgets massively is a potential source for a Basic Income, but what I mean by a government's capability to provide it also includes the general and vocal resistance to 'handouts' to 'scroungers' that infects the media on a Daily (Mail, Telegraph) basis. Just consider for a second the agonised squealing that would occur if any government cut defence to fund welfare - it can't be cut to fill actual revenue holes without the keyboard classes crying treachery and shame.

I mena, I do think the Basic Income is a stupid idea anyway - if tax scales were set appropriately, the people (and more to the point, businesses) who are taxed actually paid their share of tax, and public services and welfare were actually funded properly - then the effects of this rampant inequality could be cushioned far better.
posted by prismatic7 at 1:40 AM on September 14, 2016

That's the public being (in aggregate) unwilling to do a thing, not a government being incapable. Lord knows Tory governments (and Labour, for that matter, though it's less relevant right now) aren't shy about wildly unpopular policies from time to time, when it's something they're ideologically invested in. This just isn't one of those things. But make no mistake, they could do it if they were so inclined; it is definitely within their capability.
posted by Dysk at 1:43 AM on September 14, 2016 [2 favorites]

But the issue is that they are not so inclined! A Tory government instituting welfare reform that gives money to people? It's ideological kryptonite. Governments are not pure rational actors (hopeless swills of stupid ideas delivered by barely competent halfwits, IMO) and as the John Quiggin piece I linked above notes, they are inextricably wedded to market-oriented reform. Whatever you may think of the capacity to fund such a reform, the shitting terror of politicians for the tabloid headline will steer them away from any competent action whatsoever.

The reality is that the UK and many other countries do not currently fund welfare adequately. Why on earth would they institute a Basic Income scheme? Given the ongoing failures of every other public-private partnership reform, in every public sector area, what evidence suggests it would be done competently?
posted by prismatic7 at 1:54 AM on September 14, 2016

Also, as you yourself said just a few comments ago:

the charity urged Theresa May to take action to close the gap between the “haves” and the “have nots”."

Hahahahahaha... Ha...

Fuck.

posted by prismatic7 at 1:56 AM on September 14, 2016

I don't quite understand - you seem to think that I'm arguing that it can and will happen? I'm not. I know the Tories won't implement it. But I also want them held responsible for that, for the fact that they're choosing not to do it rather than structurally prevented from doing so.
posted by Dysk at 2:10 AM on September 14, 2016 [8 favorites]

I'll see if I can find a link, but the Oxfam wealth stats are basically nonsense for most purposes.

If you have any kind of loan then you are less wealthy than a homeless guy who only owns his sleeping bag and a starbucks cup. In the words of a guy discussing it on BBC Radio4's More or Less "I gave my daughter 50p as her first pocket money this morning, and she's instantly more wealthy than 20% of the population". If he has a mortgage, she's "wealthier" than him too...
posted by sodium lights the horizon at 3:02 AM on September 14, 2016 [1 favorite]

If you have any kind of loan then you are less wealthy than a homeless guy who only owns his sleeping bag and a starbucks cup.

This is unbelievably shitty statistics if so. I can understand counting say, credit card debt against your savings balance, but your mortgage, without considering the value of the mortgaged property? I almost find that hard to believe, but... Oxfam.
posted by Dysk at 3:09 AM on September 14, 2016 [1 favorite]

Best I can do while at work Oxfams's latest global inequality report is confused.
posted by sodium lights the horizon at 3:19 AM on September 14, 2016

Does that change the fact that the UK has rampant inequalities? No. It's a valid point, even if they don't argue the statistics well.
posted by trif at 3:43 AM on September 14, 2016 [3 favorites]

Did I imply that it didn't?

The use of dodgy stats is increasing^{[citation needed]} all the time, and it bugs me. Genuine stats can prove the point without having to rely on sexy inaccurate ones.
posted by sodium lights the horizon at 4:28 AM on September 14, 2016 [3 favorites]

The problem isn't that some people have custom Range Rovers; it's that those people are going to use their ballooning resources more and more to stack the deck against the rest of us.

Governments become a service sector for the wealthy, if there's too much money and not enough investment opportunities. Corrupting politicians and lobbying for more loopholes become rational investment choices.
posted by newdaddy at 5:18 AM on September 14, 2016 [3 favorites]

In the words of a guy discussing it on BBC Radio4's More or Less "I gave my daughter 50p as her first pocket money this morning, and she's instantly more wealthy than 20% of the population". If he has a mortgage, she's "wealthier" than him too...

More or Less have it right here, but your final sentence rather overeggs the pudding - unless the guy on the radio is in negative equity, owning a house with a mortgage is a net asset according to the Oxfam figures, and thus positive wealth. From your own link:

"Oxfam defines wealth as assets minus debts."

Real estate is an asset.


I'm actually also struggling to square some quotes from the Indie article ("the poorest 20 per cent share just 0.8 per cent of the country's wealth between them" - implying that even the poorest 20% are not in negative equity overall) with your quotes from More or Less ("I gave my daughter 50p as her first pocket money this morning, and she's instantly more wealthy than 20% of the population" - implying that the poorest 20% are in negative equity or near enough parity). 0.8% of the wealth split among 20% of the population is more than 50p each. So the More or Less quote has to be bollocks, right?
posted by Dysk at 5:46 AM on September 14, 2016

(Also from the World Finance article: "Global inequality and stagnating incomes within mature economies are however, two separate issues. To muddle both, as the Oxfam report does, is cause for confusion. If Americans were to secure for themselves faster wage growth, this would actually exacerbate Oxfam-style measures of global inequality."

This doesn't necessarily follow. It depends on how the faster wage growth is secured, and for whom. Faster wage growth for the poorest through redistributive schemes is unlikely to change the overall concentration of wealth in America (using their example) meaning little to no impact on global inequality, except in the reduction of inequality within America. It wouldn't necessarily leave the Chinese workers worse off relative to America in aggregate, as the article suggests it would.)
posted by Dysk at 5:50 AM on September 14, 2016

The UK could certainly fund a universal basic income just by taking a giant chunk out of the defence budget (scrapping Trident would be a good start, for example).

Hey, Defence is a very nice basic income for a lot of people . . .

My part of the elephant says we don't need BI as much as we need to reverse the rife parasitism in real estate.

It's the primary sector where people get something for nothing, the monopolistic ownership of the commons.

Adding BI to this will just make it worse, giving more money to the masses for the privileged to beat out of them.

Funny how just about everywhere other than Germany has a fucked real estate sector. Japan hasn't seen much appreciation, but only because they already went to the moon in the 80s.
posted by Heywood Mogroot III at 5:57 AM on September 14, 2016

Three words: Basic Income Needed.

I'll add two more, Ban Billionaires.
posted by Beholder at 6:33 AM on September 14, 2016 [2 favorites]

wealth compounds, so inevitably any statistic on wealth inequality is going to throw up tremendously terrible sounding numbers - even in places with relatively flat income distributions.

Better to focus on Income inequality. Including income from capital.
posted by JPD at 6:57 AM on September 14, 2016 [2 favorites]

The problem isn't that some people have custom Range Rovers; it's that those people are going to use their ballooning resources more and more to stack the deck against the rest of us.

And let's be clear on what "stacking the deck" means — it means making workers work longer hours for them under increasingly worse conditions, in order to make more money for them to better fund their comfort, and in order to better solidify their control over the political institutions that keep the game running.

Your health, your life, your children — all of these are less important than the maintenance of ongoing wealth transfers from workers to capital-holders.
posted by You Can't Tip a Buick at 7:15 AM on September 14, 2016 [6 favorites]

And let's be clear on what "stacking the deck" means — it means making workers work longer hours for them under increasingly worse conditions, in order to make more money for them to better fund their comfort, and in order to better solidify their control over the political institutions that keep the game running.

no. That's not really what these people are doing. You stack the deck by reducing the size of government to eliminate safety nets, create unequal education opportunity, and reduce economic mobility - with the added benefit of lower tax rates allowing wealth to compound at a faster rate, making it even easier for the wealthy to subvert the system.

It has very little to do with working conditions, after all the main beneficiary of zero-hours contracts and amazon are really the working middle class. The reason why the wealthy want to make those things happen is because it provides those groups with the false impression that their living standards are sustainably improving.

I'd gladly trade a 25% marginal tax rate for 5% higher grocery prices. But if you are already paying low taxes, that trade isn't so appealing.
posted by JPD at 7:41 AM on September 14, 2016 [1 favorite]

Hey, Defence is a very nice basic income for a lot of people . . .

It's an income, aye, but it's a disastrously ineffecient way of giving some people a living. Besides which, I'm not necessarily married to the idea of finding the budget for it in defence specifically (I'd much rather see an increase in income taxation at the top levels, as well as a willingness on the part of HMRC and government to close tax loopholes and actually collect the tax corporations are liable for, but scrapping Trident is always a good idea). My point was more to use an illustrative example to demonstrate that the lack of funding for UBI is a policy decision, not a structural constraint.

I also totally agree that the real estate market is completely fucked in the UK, and a major vehicle for redistributing wealth upwards. Nationalising that shit, providing social housing scrapping, and housing benefit in the form it exists now (as a subsidy for buy-to-let landlords, basically) would go a long long way to alleviating that issue.
posted by Dysk at 7:45 AM on September 14, 2016 [1 favorite]

And let's be clear on what "stacking the deck" means — it means making workers work longer hours for them under increasingly worse conditions, in order to make more money for them to better fund their comfort, and in order to better solidify their control over the political institutions that keep the game running.

No. It's increasingly come to mean being replaced with a computer or robot and losing everything you own in a cloud of debt.
posted by Beholder at 8:02 AM on September 14, 2016

As for basic income - once unemployment starts to rise again as technology and automation replace more and more middle-class jobs, I expect the widespread national opposition to giving any sort of help to "unemployed scroungers" will quickly evaporate.

That's pretty optimistic. My expectation is that the people who currently grumble about "unemployed scroungers" will continue to do so even as they demand governmental support for themselves as tragic victims of the changing times.

It will literally be like "It's not the taxpayer's fault all those Form 16b clerks were too dumb to get out of the way before automation hit. The money the government proposes to spend on welfare for unemployed Form 16b clerks would be much better spent on additional payments to unemployed Form 18i clerks like myself, who invested significant time in their educations and entered their line of work with a good-faith expectation of a lifelong etc. etc."
posted by No-sword at 8:23 AM on September 14, 2016 [2 favorites]

And let's be clear on what "stacking the deck" means — it means making workers work longer hours for them under increasingly worse conditions, in order to make more money for them to better fund their comfort, and in order to better solidify their control over the political institutions that keep the game running.

unfortunately the old Marxist political paradigm doesn't work so well with "post-industrial" Britain and US.

it's more like a classic mafia "bust-out" where the wise-guys take control of the management of a nightclub or restaurant, steal all the worker's tax money, the pension money, grab all they can and when there's nothing left, burn it all down for the insurance.

there's no "policy" response to that.
posted by ennui.bz at 8:32 AM on September 14, 2016 [5 favorites]

the first problem with "basic income" proposals is that they essentially endorse the economy as it is, but think it's purely a question of distribution of income.

but if the economy is basically about liquidating assets and large-scale financial scams ie. thieving. then a BI income proposal is saying "after you steal a fiver out of my pocket, why don't you kick back a pound just to keep things going."
posted by ennui.bz at 8:36 AM on September 14, 2016 [4 favorites]

I've always wondered what a "natural" wealth inequality would look like with perfect income equality; young graduates have a negative net worth for a large part of their career (until they pay off their student loans) whereas on the day before you retire, your net worth is at its maximum. In addition there is probably a distribution of savers and spenders such that there is a baseline level of wealth inequality expected even in a perfectly equal society income-wise. And why do we never talk about spending inequality? (disclaimers: I am not an economist so I am asking from a position of naivety and it looks clear from this article that there is significant inequality in the UK, I am certainly not arguing against that)

Economists all agree that money is an informational medium and I think it would be generally agreed by non-economists too. But informational structures tend to be distributed unequally in the first place, by a really simple universality - not the central limit theorem universality, but a universality. So "perfect income equality" is like saying, "what if 10000 IID samples came up and the empirical distribution was uniform?", or "what if 10000 words randomly sampled from a real corpus had the word 'the' in equal proportion to the word 'hapax logomenon'?" - a probability that is far too out in the tail to exist empirically.

Every single inequality you're talking about is lognormal or Pareto-distributed, by the way (with too little data or too much hidden data to definitively ascertain which is which, in most cases).

I tend to think that redistribution is astoundingly comparable to L2 regularization in statistics for credit-assignment, so someone should read this and go find something more comparable to dropout.
posted by hleehowon at 11:08 AM on September 14, 2016

Any assets over a billion get trimmed off the top and redistributed to the bottom. Yeah, I know, trying to make it through life with just One Billion Dollars will be hard. It will be tough (Rocky Theme), but with faith, with family, and with prayer, the super rich will get by.

Even if they have to clip coupons.
posted by Beholder at 12:36 PM on September 14, 2016

Lognormal distributions have a scale parameter, they can be shaped very differently than a Pareto.
posted by benzenedream at 12:50 PM on September 14, 2016

No. It's increasingly come to mean being replaced with a computer or robot and losing everything you own in a cloud of debt.

Which is actually also a good reason to have a basic minimum income. If nobody has anything to do, the choices are paying them for doing nothing and letting them starve. The "productivity" has got to go somewhere. (And the impetus to produce has got to come from somewhere.)

Though I confess, as a non-economist, it starts to sound awfully like a perpetual-motion machine.
posted by klanawa at 4:24 PM on September 14, 2016 [1 favorite]