poverty inequality

Shouldn’t things be better?

“How is it that we have created so much mental and emotional suffering despite levels of wealth unprecedented in human history?” (The Spirit Level)

It’s not the sort of thing you can sort out in a blog entry, but there’s any number of things that don’t seem to add up when I think about British society now and twenty or thirty years ago.  While the authors of the above massively important book are referring to the global picture, it got me thinking about the local picture, but specifically why, after such radical change in our social and economic infrastructure from ‘the terrible seventies’, introduced by Thatcher1 and followed through by both major parties while in power, Britain ever since hasn’t really moved forward.  To what extent is this anecdotal, and what extent factual?

It will be obvious that this isn’t an academic paper, I’m more than happy for cross-examination of my assumptions and the sources in the footnotes, because they have been subjected to merely modest scrutiny, by this here layman, not the rigorous scrutiny all such things deserve…

To start with, we never used to have to pay for our higher education.  You had a grant that gave you money to live off while you studied.  It might seem like an odd place to start, but it’s pretty clear cut.  For some reason the government, once upon a time, seemed able to give us thousands of pounds each to attend university.  Now it’s gone the opposite way and the average student is finishing university with an average debt (steadily rising in the interim) of £53,4002.  While it’s clear that this funding would be unsustainable with the kinds of numbers now going to university, why is it that, with the kinds of numbers now going to university, the UK is falling behind in R+D3, despite its academic research base growing?  Perhaps it’s due to its scientists and engineers increasingly moving abroad for the best career opportunities4, but still, it doesn’t feel like society is getting any of the benefit5from having all these well-educated people swilling about the economy.  However, my confusion is compounded given other changes in the economy over a similar period.

We have a lower top end rate of tax now than we’ve had for most of the last fifty years6, we deregulated the banks in the eighties7 and we’ve since (1997 iirc?) removed interest rate setting from the government in order to free it from any changes designed to suit politicians.  These measures to increase the capital flow, confidence and incentive for investment (the ‘trickle down’) should have benefited everyone, but they haven’t8.  Add to that the dramatic reduction of union presence in the private sector9, and the increase in zero hour contracts10, and you have a plethora of measures that should, in pure market theory terms, lead to a better system for everyone because the cost of labour reductions, allowing businesses to be more competitive, should have provided even further incentive to invest.

Yet the income inequality gap is widening11, unemployment is higher than it was since the turn of the century12, more people are on benefits than ever before, partly due to these contracts, and British industry is declining in global terms13, unless perhaps you’re an estate agent.

The next obvious point is that for all the above, not only have things not got better, fewer and fewer of us can afford to buy a house.  Somehow, there was once a time where everyone could get on the property ladder and now it seems many fewer of us can14.

We’re working for longer in our lives before we get to a pensionable age yet we’re in more debt than we’ve ever been.  The house ownership and debt problems are compounded because if you’re under twenty five you’ll have a harder time getting a job than you’ve had since 1992, compared to the twenty fives and over15.

We’re also working the same hours per week, on average, that we’ve worked for decades but for less pay (because wages are rising more slowly than inflation) for a shrinking ability to provide for our own future, let alone own a home, the latter compounded by our need to have to support either our longer-lived parents (or our own longevity beyond working age) or our children through college or beyond college age in order to help them get on the ladder themselves.

What’s more curious is that, as a prominent western economy benefiting from one-sided trade agreements for our imports, protectionism via GATT and so on, we have ensured that the developing world cannot support itself adequately due to our appropriation of its natural resources at terms beneficial to us16.  The developing world is in a comparatively terrible state, presumably for our benefit, yet our lives aren’t any easier (though one of the sources in my footnotes shows that the US has grown its share of global GDP tremendously).

The families considered as living below the poverty line don’t seem to be diminishing in number17, and they have lower life expectancy and poorer health of course18, while contributing strongly to a general decline in literacy and numeracy19.  How does that work given all these graduates we have?

What fascinates me is that this blog is a microscopic example of our collective ability, over the last fifteen years at least, to cognize our situation and share and debate it.  We have never been more potent in our ability to communicate with and understand our fellow man, while we have a free enough press and a strong enough democracy that we should be able to effect the change we want to see.

I’m still confused.  Now I’m just a guy swamped by information and data and exposed to as many points of view as I care to spend time to read.  I wonder if knowledge is dangerous anymore when the freedom of speech facilitated by the internet seems to anaesthetize rather than synthesize.  Yet I can’t be the only one seeing the UK become a harder and more disillusioned country, less interested than its ever been in democratic reform, less capable of organising (despite the internet or unions) its mandate for change, and less cohesive, because of the widening income inequality leading to social groups that have so little in common that Thatcher’s statement that ‘there is no such thing as society’ is almost true.

The statistics on our national ‘happiness’ are problematic at best, and I haven’t included them here because I can’t make a solid point off them, except that they accord with research on individuals covered in Daniel Nettle’s ‘Happiness – The Science Behind Your Smile’ which concludes that an individual’s happiness generally doesn’t change no matter what happens to them.

If we’re not getting unhappy then maybe ‘better’ is a loaded term.  Perhaps it’s time to look beyond our level of material well-being as significantly relating to our level of happiness or contentment.  This isn’t a way of thinking the world wants us to follow.  It’s growth at all costs.  Play the game good boy.

  1. Here I’ll just mention that a damning critique of her change was delivered with masterful care and precision by Edgar Wilson, in his ‘A Very British Miracle’ []
  2. http://www.bbc.co.uk/news/education-14488312 []
  3. http://www.corporatelivewire.com/blog.html?id=is-the-uk-investing-enough-in-research-and-development []
  4. http://www.telegraph.co.uk/education/educationnews/9699524/Britain-being-hit-by-rise-in-graduate-brain-drain.html []
  5. http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10460366/Average-household-debt-doubled-in-last-decade.html , http://www.measuringworth.com/datasets/ukgdp/result.php (which shows that real gdp per capita rose by £8000 from 1980 to 2000 but only £2000 ever since), http://www.telegraph.co.uk/finance/economics/11892066/Britain-punches-above-its-weight-as-business-investment-climbs-to-new-heights.html (showing business investment as a % of GDP has fluctuated dramatically with the crash but otherwise averaged out, despite the title of the article.  Interestingly, it shows also that the service sector has seen most investment, while manufacturing and other investment has stagnated or fallen off.) []
  6. http://www.ifs.org.uk/fiscalFacts/taxTables []
  7. http://www.theguardian.com/business/2012/may/06/shout-rooftops-bank-deregulation-leads-to-disaster []
  8. http://www.ifs.org.uk/comms/comm124.pdf (see p.14 showing annual growth in household income has flatlined the last ten years and half of what it was the six years prior) []
  9. http://www.theguardian.com/news/datablog/2010/apr/30/union-membership-data (it’s 50% of what it was in 1979 []
  10. http://www.eurofound.europa.eu/eiro/2013/08/articles/uk1308029i.htm []
  11. http://www.ifs.org.uk/comms/comm124.pdf (showing income inequality, by the Gini coefficient, has increased dramatically over the last 35 years (there’s probably a good reason why this seems to contradict this report – https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/206778/full_hbai13.pdf (p.4) []
  12. http://en.wikipedia.org/wiki/File:UK_unemployment.png []
  13. http://en.wikipedia.org/wiki/World_economy (showing our global share of GDP against other countries dropping from 4.5% to 2.5%) []
  14. http://hoa.org.uk/wp-content/uploads/2012/11/HOA-Report-Death-of-a-Dream.pdf []
  15. http://www.ons.gov.uk/ons/dcp171776_257979.pdf []
  16. see Joseph Steiglitz’s ‘Globalization and its discontents’ []
  17. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/206778/full_hbai13.pdf (see p.2 where it shows levels are about the same as 2000, though it had risen in between) []
  18. https://www.trustforlondon.org.uk/publications/londons-poverty-profile-2017/ (statistics taken from general government figures, see its citations) []
  19. http://www.telegraph.co.uk/education/educationnews/10362061/OECD-English-school-leavers-among-least-literate-and-numerate-in-the-developed-world.html , http://www.theguardian.com/news/datablog/2011/jul/22/education-gap-by-constituency []