Inequality in a Context of Climate Crisis after COVID: A Complex Realist Approach 2020057117, 2020057118, 9780367464776, 9780367464745, 9781003028970

Table of contents :
Cover
Half Title
Series Information
Title Page
Copyright Page
Dedication
Table of Contents
Figures
Tables
Series Editors' Preface
Preface
Acknowledgements
Abbbreviations
Chapter 1 Inequality: An Issue Whose Time has Come
Why Complexity?
Governance
The Capitalocene
Global Elites are Worried About Inequality
Climate Crisis and Governing Complexity: a Preliminary Take
And Then Came Covid-19
How this Book Is Organized
A Note on My Method of Working
Notes
Bibliography
Chapter 2 Conceptualizing Inequality
Gender and Inequality
Ethnicity and Inequality
Class and Inequality
The Middle Class
Social Exclusion Versus Inequality
Notes
Bibliography
Chapter 3 Describing Inequality
Counting Inequality
Inequality in Incomes and Wealth
Inequalities in Health and Well-Being
Interaction/Intersectional: a Complex Realist Take on Individual and Household Data on Inequality
Spatial Inequalities: Patterns and Consequences
Qualitative Approaches to Inequality
Conclusion
Notes
Bibliography
Chapter 4 Income, Wealth, and Inequality
Inequality Through the Life Course – in the Past and in the Future
Notes
Bibliography
Chapter 5 Inequality and Capitalism(s) in the Twenty-First Century
Austerity, Neo-Liberal Governance, and Financialization/Deindustrialization – the Triple Whammy for the ...
Inequality and the Social World of China
Beyond China – Brazil – Another High Middle-Income State
Conclusion
Notes
Bibliography
Chapter 6 The Role of the State in Relation to Inequality in a Context of Climate Crisis – How this Works Out for ...
Taxation and Benefits
Reforming the Tax Structure to Confront Inequality and Address Climate Crisis
The Politics and Practice of Taxing Incomes
The Politics and Practice of Taxing Wealth
Taxing Real Property
Consumption Taxes
Cash Benefits
How States Act on the Labour Share of the Social Product
The Interwoven Systems Which Determine Who Gets What
Notes
Bibliography
Chapter 7 The Role of the State in Relation to Inequality in a Context of Climate Crisis – the ‘social Wage’ and Spatial ...
Inequality and the Social Wage
Equality of Opportunity
Inequality in Health
Inequality in Education
Services are also Jobs
Inequality and Urban Planning
Notes
Bibliograpy
Chapter 8 The Formal Politics of Inequality: What Kind of Governance Systems Do We Need to Confront Inequality in a ...
Complex Government of Complexity From All Directions
The Right Mode of Governance to do What Needs Doing
How to Change Governance Towards Coping With Inequality in a Context of Climate Crisis
Notes
Bibliography
Chapter 9 The New Politics of Equality
Parties And/or Agents of Civil Society?
So What Is to Be Done?
And Then Came Covid-19!
Turn Too the Young
Notes
Bibliography
Chapter 10 The Futures That are possible for Us
And Then Came Covid-19
Programmes for Making Things More Equal While Addressing Climate Crisis
Notes
Bibliography
Index

Citation preview

INEQUALITY IN A CONTEXT OF CLIMATE CRISIS AFTER COVID

Inequality in a Context of Climate Crisis after COVID uses a complex realist approach to examine the crisis of three interconnected problems: economic inequality, climate change, and the COVID-​19 pandemic. Widely acknowledged as the key driver of political discontent and social instability, economic inequality across high and middle-​ income countries is profoundly interconnected with climate change. Both of these issues are now set within the particularly acute context of COVID-​19 and its aftermath. Confronting the crisis of these inherently interwoven issues is now the major problem for all political and governance systems. This book uses a complex realist frame of reference to understand the character of social-​cultural-​economic-​political-​ecological systems. It gives us a vocabulary and modes of thinking to confront these societal challenges and inform future action. Contributing to our thinking about dynamic social systems, this text deploys complex realism to understand our trajectory towards increasing inequality. It puts complexity to work in addressing fundamental social issues in a context of climate crisis after COVID-​19. This book will be of interest to students and scholars across the social sciences, in particular to those studying social inequality, climate change, heterodox economics, complex systems, and Master’s students in programmes with an applied focus. It will be of use to policymakers and practitioners. David Byrne is Emeritus Professor of Sociology and Applied Social Science at the University of Durham. He has written widely on methodology and inequality deploying the complexity frame of reference to inform all his work over the past twenty-​five years. His recent books include Complexity Theory and the Social Sciences –​ An Introduction (1996), Interpreting Quantitative Data (2002), Social Exclusion (2005), Applying Social Science (2011), Complexity Theory and the Social Sciences:The State of the Art (with Gill Callaghan 2014), Paying for the Welfare State in the 21st Century (with Sally Ruane 2017), and Class after Industry (2019).

COMPLEXITY IN SOCIAL SCIENCE

This interdisciplinary series encourages social scientists to embrace a complex systems approach to studying the social world. A complexity approach to the social world has expanded across the disciplines since its emergence in the mid-​to-​late 1990s, and this can only continue as disciplines continue to change, data continue to diversify, and governance and responses to global social issues continue to challenge all involved. Covering a broad range of topics from big data and time, globalization and health, cities and inequality, and methodological applications, to more theoretical or philosophical approaches, this series responds to these challenges of ­complexity in the social sciences –​with an emphasis on critical dialogue around, and application of these ideas in, a variety of social arenas as well as social policy. The series will publish research monographs and edited collections between 60,000 and 90,000 words that include a range of philosophical, methodological and disciplinary approaches, which enrich and develop the field of social complexity and push it forward in new directions. David Byrne is Emeritus Professor at the School of Applied Social Sciences, Durham University, UK. Brian Castellani is Professor of Sociology at Durham University, UK. He is also Adjunct Professor of Psychiatry, Northeastern Ohio Medical University. Emma Uprichard is Associate Professor and Deputy Director at the Centre for Interdisciplinary Methodologies, University of Warwick, UK. She is also Co-​director of the Nuffield, ESRC, HEFCE-​funded Warwick Q-​Step Centre. Lasse Gerrits is Professor of Urban Planning at the Institute for Housing and Urban Development Studies at the Erasmus University of Rotterdam (the Netherlands). Books: Realism and Complexity in Social Science Malcolm Williams Inequality in a Context of Climate Crisis after COVID A Complex Realist Approach David Byrne For more information about the series, please visit: www.routledge.com/​ Complexity-​in-​Social-​Science/​book-​series/​CISS

INEQUALITY IN A CONTEXT OF CLIMATE CRISIS AFTER COVID A Complex Realist Approach

David Byrne

First published 2021 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 605 Third Avenue, New York, NY 10158 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2021 David Byrne The right of David Byrne to be identified as author of this work has been asserted by him in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing-​in-​Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-​in-​Publication Data Names: Byrne, D. S. (David S.), 1947– author. Title: Inequality in a context of climate crisis after COVID : a complex realist approach / David Byrne. Description: First Edition. | New York : Routledge, 2021. | Series: Complexity in social science | Includes bibliographical references and index. Identifiers: LCCN 2020057117 (print) | LCCN 2020057118 (ebook) | ISBN 9780367464776 (paperback) | ISBN 9780367464745 (hardback) | ISBN 9781003028970 (ebook) Subjects: LCSH: Equality. | Climatic changes–Economic aspects. | Climatic changes–Social aspects. | COVID-19 (Disease)–Economic aspects. | Social ecology. Classification: LCC HM821 .B97 2021 (print) | LCC HM821 (ebook) | DDC 305–dc23 LC record available at https://lccn.loc.gov/2020057117 LC ebook record available at https://lccn.loc.gov/2020057118 ISBN: 978-​0-​367-​46474-​5 (hbk) ISBN: 978-​0-​367-​46477-​6 (pbk) ISBN: 978-​1-​003-​02897-​0 (ebk) Typeset in Bembo by Newgen Publishing UK

To my partner Kate Calder who is patient with my work obsession and my daughter Clare who will have to live through all of this.

CONTENTS

List of figures  List of tables  Series editors’ preface  Preface  Acknowledgements  List of abbreviations  1 Inequality: an issue whose time has come 

ix x xi xvii xix xx 1

2 Conceptualizing inequality 

24

3 Describing inequality 

45

4 Income, wealth, and inequality 

64

5 Inequality and capitalism(s) in the twenty-​first century 

81

6 The role of the state in relation to inequality in a context of climate crisis –​how this works out for incomes and wealth 

103

7 The role of the state in relation to inequality in a context of climate crisis –​the ‘social wage’ and spatial planning 

130

viii Contents

8 The formal politics of inequality: what kind of governance systems do we need to confront inequality in a context of climate change and after COVID? 

148

9 The new politics of equality 

166

10 The futures that are possible for us 

181

Index 

197

FIGURES

7 .1 7.2 7.3 7.4

Value of incomes in kind and final income: non-​retired households  Value of incomes in kind and final income: retired households  Value of health and education in kind: non-​retired households  Value of in-​kind income health and adult social care: retired households 

132 132 133 133

TABLES

4.1 Market and disposable income Gini coefficients  4.2 Two generations  7.1 Health expenditure details 

68 72 137

SERIES EDITORS’ PREFACE

Dave Byrne has done it again. He has produced another wonderfully informed book, with deep insights into the current state(s) of inequality globally and its entanglement with the impending climate crisis faced by all societies, as well as glimpses of how some futures might be made to be better for many. In a nutshell, this is a book about the importance of addressing inequality in order to tackle climate change. Byrne’s central point is that, in order to tackle climate change, we need to focus especially on the inequality of middle-​and high-​income countries. The book is timely and made all the more poignant given the COVID-​19 context we are now living in. While COVID-​19 exacerbates both crises –​that is, the crisis of inequality on the one hand and that of climate change on the other –​it also makes much more visible the urgency –​and indeed the increasing demand –​for new kinds of national and global governance within the context of the existing ‘Capitalocene’, where almost everything is driven by the logics of capital accumulation. These are complex times where complex governance is needed and Byrne tells the story about how we got to be where we are and where we are both inevitably and potentially heading. This is not the first time Byrne has zoomed in on inequality. In many ways he has been working on the topic throughout his career. Pretty much everything he touches –​whether it be housing, schools, cities and urban regions, method and measurement, class, policy –​becomes tinged more or less explicitly with issues of inequality. Inequality is one of the key ingredients that, for me at least, flavours a lot of Byrne’s work, even though he does not always make the topic centre stage. So, what we see here is culmination of years of thought where Byrne tackles inequality head on by beautifully meshing together set national and global trajectories that are at the heart of inequality and importantly the kind of thinking that needs to happen for inequality to be transformed. In so doing, he paints a picture of how a set of national and global trajectories have become interdependent and

xii  Series editors’ preface

path-​dependently twisted together.What Byrne has managed to illustrate a number of ‘transformation of kinds’ –​phase-​shifts in complexity-​speak –​across a wide range of institutional, socio-​political and economic lineages, in the UK, USA, China, Brazil, and other national spaces. By the end of the book, I was reminded Lynn Margulis’ (1981) work on endosymbiosis, where a major organizational shift in the structure of cells in which mitochondria become ‘part’ of the cell and thereby transforming life itself. Here, Byrne shows how inequality and climate change are now intrinsically intertwined and emerge from a complex set of national and global trajectories, which produce a new kind of ‘inequality-​climate change and post-​ COVID-​19’ beast that national and global governing bodies are increasingly forced to engage with. The way Byrne does this is by ‘putting complexity to work’ –​an important idea that packs its punch throughout the book. Ultimately, we might also see this book series as ‘putting complexity to work’ more generally in terms of how we think of the complex social world. A lot can be said about this book, but the key take-​home messages that can be gleaned in relation to what it means to ‘put complexity to work’ can be summed up in the following five points. First, putting complexity to work means dealing with multi-​dimensional phenomena. The multi-​dimensionality of the complex social world is not new in of itself. Indeed, it is common now to use the term ‘multi-​dimensional’ in a rather blasé manner, especially when dealing with complex systems. But it is worth reminding ourselves what is at stake when something is really multi-​dimensional. What actually are the implications to multi-​dimensionality –​practically at both policy and political level? What does it mean to look at, in this case, inequality, in its multi-​dimensionality? This is in many ways what Byrne goes about answering. For example, as Byrne explains, inequality is defined usually at the individual and household level but can also be considered in relation to many other dimensions, such as power, social status, education, health, and so on –​we know this kind of multi-​dimensionality through the idea of multi-​level mechanisms. But it is more than merely thinking of levels of inequality. Rather, and this is important, inequality is a property of the system and the vast variation in the degrees of inequality being part of the system as a whole. In other words, how inequality is lived, experienced, measured, politicized, and made to endure and change across and between different and similar scales, needs to be understood both qualitatively and quantitatively, almost as a phenomenological approach to the understanding, describing the nature of the inequality as a whole. This is complexity at work. Second, putting complexity to work means focusing on the relations rather than the parts. Byrne follows Morin’s (2008) ‘general complexity’ framework, which focuses on the relations of the parts that make up the whole, as opposed to a more reductionist approach, which focuses on the parts. Complexity is often seen to be a set of ‘systems of systems’ and here we see Byrne bring together many systems that go into shaping global inequality. So, some of the systems of systems that constitute inequality and indeed also emerge from inequality that Byrne discusses include climate change, nation-​states, state policies and practices, disposable money incomes and stocks of

Series editors’ preface  xiii

wealth, taxation and state interventions, cash benefits, political economy, pension provision, spatial planning and urban governance –​including air quality, education systems, and many others. As Byrne says himself, he works primarily as a ‘synthesist’; he works by ‘putting things together’. This is a very different approach to breaking things apart –​a feature of most analytical endeavours. By ‘synthesising’ and ‘putting things together’ what we get is a complex realist approach to inequality and climate change that is a lot more holistic than many will be used to. Importantly, he does not merely present these issues as a list of things that matter. Rather, he brings them together in a way that shows the layered entanglements between them, much like a live holographic image of the dynamic trajectories of inequality that reveal how futures could be different and may be made to be different. Third, putting complexity to work means dealing with trajectories and their path dependencies. By shedding light on the myriad of national and global trajectories across numerous socio-​economic, political, financial, and ecological and demographic domains, two things become apparent. On the one hand, we start to see the contingencies, the accidents, the fragility of some of the entanglements that are at play in ‘knotting’ together a set of path dependencies that also have the potential to be and become transformed. On the other hand, we also begin to see the interdependencies of path-​dependencies across seemingly different domains, and vice versa the growing path-​decencies of those interdependencies. This attention on what might called ‘inter-​path-​dependencies’ is an issue that is worth thinking about further, as it may help to deepen our understanding of not only the multiplicity of possible futures, which is something that is a common issue of concern across a lot of complexity-​driven thinking, but also how more deterministic and ‘sticky’ futures come to be and continue to become. Fourth, putting complexity to work means the property of a system, as it is described, is both a cause and effect of that system. For many working in the complexity space, we are already familiar with some of what this statement involves –​the importance of dynamics such as autopoiesis and feedback/​feedforward loops are increasingly well recognized. Likewise, the notion of equifinality, where similar outcomes may emerge through different pathways and, vice versa, how different outcomes can be produced from a similar set of initial conditions is also increasingly appreciated. These concepts are both useful and important when dealing with complex systems and the related the ontological, epistemological and methodological issues that make them difficult creatures to know and understand. But when Byrne paints the picture of ‘inequality as both a cause and effect’, he is saying that how we describe inequality is both a cause of inequality as well as the effect of it.Therefore, he argues, one of the things that is required to ‘making’ futures is the explicit spelling out and description of alternatives and importantly, the explicit development of policy to implement that alternative. This is not about raising awareness of alternatives as a way of creating ‘hope’, although Paulo Freire has taught us that this is indeed a necessary though not sufficient part of social transformation. Rather, what Byrne’s ‘complex synthesis’ does here is to remind us about the power of description to create change –​as an effect of the cause. As Lewes (1904) put it over a hundred years

xiv  Series editors’ preface

ago, ’explanation is only a fuller description’. So, perhaps the kinds of complexity-​ informed descriptions we may need in order to co-​create alternative and desired futures are precisely ones such the one that Byrne provides here: a description, which is also an explanation of multiple presents, as told through informed histories, which deepen our understanding about how futures may be more or less inevitable and how some may be actively implemented. Finally, putting complexity to work means paying attention to how context matters in relation to ‘what can be made to happen’. There are three ideas packed into that statement. The first is that we need to talk about futures –​not just any futures, not even the multiplicity of futures, but rather the futures that can actually be made to happen. Pragmatic futures. Ones that can happen. These may be different futures to ones that might be predicted or the anticipated or the forecasted futures. The issue is not on whether they futures are short or long term, although the fact that they may be perceived as such may be a contingent necessary condition of us being to imagine them at all. In terms of complex governance, the futures that can be made to matter are those that we can actively and reflexively exercise agency, individually and collectively. The spaces where agency –​in the present –​can happen, where actions can happen. We take it for granted that the future is unknown, difficult to predict. The second is that the futures we are speaking about are those are also grounded in the historical present context. Context here is intrinsically temporal: it is understood historically as emerging from, and a property of, the dynamic set of multi-​dimensional interactive trajectories that have caused it to there in the first place and are themselves the effect of them also. Until we are clear about how we got to be where we are, then we cannot intentionally create futures we are clear that we want.Third, the futures worth being made to happen are those that are ethically driven. That is to say, we are talking about the kinds of futures that Adam and Groves’ (2007) referred to where action, ethics, and knowledge come together to create futures to which we can hold each other accountable. Accountability is key here, for we are also accountable for not taking action to address inequality and climate change. We have become so familiar with not being able to see too far ahead and update our plans that it is easy to miss or become apathetic to the spaces where we can actually make a small difference. Creating futures out of ‘what can be made to happen’ grounds us. There is a lot in this book and much more to say about it. It is full of golden nuggets –​words that will amuse as much as transform and influence. This is a book that demonstrates what it means to be ‘put complexity to work’. What is left now is for us to do the work that this involves. For these reasons and more, we welcome Byrne’s book to the book series and hope that the reader will be as inspired as we are. On behalf of the editors, Emma Uprichard

Series editors’ preface  xv

References Adam, B. and Groves, C. (2007) Future Matters: Action, Knowledge, Ethics. [Online]. Brill. Lewes, G.H. (1904) Science and Speculation, 2018 reprint. London: Forgotten Books. Margulis, L. (1981) Symbiosis in Cell Evolution: Life and Its Environment on the Early Earth. San Francisco, CA: W.H. Freeman. Morin, E. (2008) On Complexity. Cresskill, NJ: Hampton Press.

PREFACE

I started writing this book in late 2019 between Christmas and New Year –​always a time when I like to have something to do other than watch TV, eat too much, and drink to excess.That was before the emergence of Gaia’s harsh reminder of how we live in a natural world and that world has massive causal powers in determining how we live, and for old people like me if we live at all –​COVID-​19. The complexity frame of reference is a very good way of handling understanding of COVID. It is an external disturbance in systems where the existing character of the systems interacts with the external disturbance to change the character of the systems subject to the disturbance. The key character of existing nation-​state systems globally is that the great majority of them had undergone the health transformation, that is, moved from the major causes of death being infectious diseases across the life course to being the diseases of degeneration in old age. At the same time, welfare capitalisms and welfare non-​capitalisms (notably China) had developed curative health care systems, which meant that states had taken on the role of stopping people dying. It is this which has caused the enormous economic impact of COVID. Just over a hundred years ago the much more deadly Spanish flu did not cause anything like the economic and social disruptions of COVID. States now have a responsibility to act beyond basic preventive public health –​vital though that is. And COVID has shown that faced with a system destabilizing crisis states can act.They have not always acted well.Trump’s USA and Bolsanaro’s Brazil have been outliers of ignorance and incompetency by government but Johnson’s England (and even Sturgeon’s Scotland –​not quite as rubbish as Boris but almost as bad) have been particularly weak, not least through Johnson’s government’s turn to disaster capitalism and throwing money and power at their own private sector supporters. Of especial importance has been the abandonment of constraints on government expenditure both in the short term and in principle going forward to resolve the economic crisis caused by COVID. That commitment of treasure is necessary to

xviii Preface

fund any kind of infrastructure-​based confrontation with climate catastrophe. But just spending on climate focused infrastructure is not enough.Very few governments in high-​income countries have even started to confront the implications of the transition of their societies from industrial capitalism to post-​industrial capitalism where the dominant forms of capital are real estate and financial. Few have started even to assert that universal basic services are not only great equalizers but also the source of much of the employment in meaningful good jobs, which are available in a post-​industrial world. Tax has become a political issue again but not to the degree that it should be. The super-​r ich and merely rich have done very well out of last fifty years through that transition from industrial to post-​industrial societies. Far too much of that new wealth has come not from productive entrepreneurial developments in useful things but from pure speculation in financial instruments and real estate. Real estate capitalism is a disaster for both equality and the climate. When it generates new construction, it does so to a very considerable degree by intruding into agricultural land when feeding the world is a developing issue. When it deals in speculation in existing assets it pushes decent housing and a reasonable lifestyle beyond the reach of many young people. The young in post-​industrial capitalism are the first generation since the industrial revolution likely to be worse off in not only material terms but also in their sense of their place in the world than their own parents and grandparents. The speculative side of unregulated finance capitalism, not the real functional banking supporting real economic activity, is a disaster for all of us as we should have learned in 2008, COVID has brought back the role of the state as the agency which can get things done which ‘free market’ capitalism cannot do.The Government of devolved Wales has introduced a policy principle asserting that the interests of future generations should be the primary concern of all policy developments and that whatever governments do should be judged against that criterion. This is a very good thing. What is also necessary is a change in the way governments govern. We do need big government but governance processes have to be changed so that there is much more engagement of people at every level. The United Kingdom is rather fortunate in that has a pre-​existing model of how to do this –​the way the home front was run during the Second World War. One of the themes in this book is that that mode of governance and social organization, very different from the command economies of the Soviet systems but equally different from supposedly free market capitalism, is the way we need to go to confront inequality in a context of climate crisis and after COVID.

ACKNOWLEDGEMENTS

A lot of people have helped me in my thinking, which has led to this book. Gill Callaghan has always been important in shaping the way I think about complexity. Brian Castellani, Emma Uprichard, and Lasse Gerrits have done the same. Sally Ruane got me thinking about tax systems and their massive significance for shaping inequality in post-​industrial capitalism. The people I have worked with on the CECAN project –​Centre for Evaluating Complexity Across the NEXUS –​ brought me into contact in a direct way with governance in important domains and conversations and engagement with all of them have shaped the way I now think. The Chinese students I taught on the Masters in Social Research at Durham University were not only a delightful bunch but also made me recognize the significance of China for all our futures. I have drawn on lots of people’s work in writing what is an explicit synthesis in addressing inequality in a context of climate crisis and now after COVID. As always, the responsibility for what follows is mine alone but I have had a lot of help in doing it.

ABBREVIATIONS

ACFTU ANT CDP CO2 DEA DJ EU FE FIRE GDP HLY HMRC IEA IMF ILO K LEP LGFV LSP NAO NE NHS OECD ONS PAC PFI

All-​China Federation of Trade Unions Actor Network Theory Community Development Project Carbon Dioxide Department of Economic Affairs Disc Jockey European Union Further Education (UK) Finance, Insurance and Real Estate Gross Domestic Product Healthy Life Years Her Majesty’s Revenue and Customs (UK) Institute of Economic Affairs International Monetary Fund International Labour Organization One thousand Local Economic Partnership Local Government Financing Vehicle (China) Local Strategic Partnership National Audit Office (UK) North East (of England) National Health Services (England, Scotland, Wales and Northern Ireland) Organization for Economic Cooperation and Development Office for National Statistics (UK) Political Action Committee (US) Private Finance Initiative (UK)

newgenprepdf

Abbreviations  xxi

SES SIMD SNP TINA UBI UBS UK USA VAT VIP WHO

South East Scotland Scottish Index of Multiple Deprivation Scottish Nationalist Party There is no alternative Universal Basis Income Universal Basic Services United Kingdom United States of America Value Added Tax Very Important Person World Health Organization

1 INEQUALITY An issue whose time has come

Inequality is a major social and political issue across the world in the twenty-​first century. This is the case both in high-​income countries –​those with a per capita gross national income of more than $12,615 and 16 per cent of global population and in upper middle-​income countries with a per capita gross national income between $4,086 and $12,615 and 35 per cent of global population. The focus in this book will be on countries in these two categories because high-​income countries generate 38 per cent of global emissions of carbon dioxide and upper middle-​ income countries generate 48 per cent. The 49 per cent of the world population living in lower middle-​income and low-​income countries are responsible for just 14 per cent of global CO2 emissions (Ritchie, 2018). Climate catastrophe is facing us because of what happens in the high and upper middle-​income states.1 High-​ income and upper middle-​income states have political systems, which generally have to respond to public perceptions of inequality. Not all of them are democracies but rulers have to pay attention to how people perceive their relative status in the social order. What matters is not just the snapshot of inequality at any given point in time but the actual dynamic trend in changes in inequality through time. So the rapid increase in the share of income going to the most affluent in the English-​ speaking world up from the historic low levels of that share in the 1970s has very considerable political salience. It is not just changes in or levels of income inequality which matter, whether we define income in market terms or as disposable income after the impact of tax and benefit systems. Changes in wealth are also crucially important. Wealth represents two different but related things. On the one hand wealth is a source of ontological security, particularly in high-​income countries.2 Wealth understood as the basis of security takes the form of pension assets and owner-​occupied housing. To have a decent owned home and the reality or prospect of a decent income when you have ceased to work is a source of personal and household security. There is also

2  Inequality: an issue whose time has come

generally a strong desire to have assets, which can be passed on to children to ensure their security. While pension assets can generally only be inherited by a spouse/​ partner, housing assets are inheritable. On the other wealth takes the form of the ownership of assets, which give command over the product of the labour power of others –​the old and absolutely correct labour theory of value as developed originally by Adam Smith. There is of course an overlap between wealth as security and wealth as the basis of expropriation. Funded pension schemes invest in ways which give access to profits and rents. Even pay as you go schemes, including state social insurance schemes, involve an intergenerational transfer of income from workers to the retired, albeit on the basis of an implied contract that the workers themselves will benefit in the future. Funded pension wealth is an important element in wealth inequality. Intergenerational changes in wealth are affected to a very considerable degree by the impact of wealth accumulated as housing and how this wealth is distributed on inheritance. These things matter a great deal and trends in wealth inequality have the same salience for politics as trends in income inequality, although they have greater significance in high-​income countries than in upper middle-​income countries. And then there is consumption –​the source of CO2 and the driver of climate change. Much CO2 is produced in processes of production, in making steel, cement, chemicals, in energy generation, in transport of goods and in agriculture, rather than in direct personal consumption. But all production finally translates into consumption because the cost of production of CO2 is embodied in consumption whether by individuals/​households or on some collective basis. High-​income countries are responsible for 46 per cent of CO2 by consumption. High middle-​income countries are responsible for 41 per cent by consumption. There is an inherent link between inequality and climate crisis. This is usually and quite properly addressed through discussions of inequality on a global scale but the politics of climate change, despite efforts at global agreement on emission control, derive from the domestic politics of nation-​states. In the short to medium term a politics directed towards the development of governance, which confronts climate catastrophe has to engage also with inequality –​towards a ‘just transition’.There will only be the political space for confronting climate catastrophe if inequality is confronted at the same time. This is not going to be easy because the conventional economic approach of using growth as the basis for both improving absolute living standards in material terms and reducing relative inequality is incompatible with confronting climate crisis.

Why complexity? The title of this book includes the phrase:‘a complex realist approach’. I will not here lay out what is meant by a complex realist approach in referenced detail. That has been done in the book I wrote with Gill Callaghan (Byrne and Callaghan, 2014) and readers are referred to that for elaboration. However, the essentials of complex realism do need to be specified. First, the complex ones: which here in comprise an ontological specification with epistemological and methodological implications.

Inequality: an issue whose time has come  3

Ontology in broad summary describes the set of philosophical questions which are concerned with the nature of reality.The reality of significance for us when we look at inequality in a context of climate crisis is comprised of a set of what I now like to call ‘interwoven’ complex systems. Complex systems have emergent properties, that is, they have properties which cannot be derived from the analytical specification of the properties of their components. Second, although complex systems are generally robust and continue in a relatively stable form for periods of time, significant changes in them are not changes of degree but changes of kind. They become different and one form of difference is ceasing to exist. We cannot establish what causes changes of kind by reductionist analytical methods because the causes themselves are both complex and multiple. Climate regimes are complex systems and changes in them are radical indeed. They are non-​linear. That is why the tools used to model them are simulations which deploy non-​linear mathematical methods.The scientific descriptions of climate crisis are essentially non-​linear in form. All social systems are complex systems from the level of each individual person through households, institutions, places understood as social, all political levels and the global system itself. The complexity frame of reference gives us a way of understanding and engaging with the social and natural world in which we live. These are not separate. To see them as such has been a great error of both science and political action. The social is embedded in the natural and has crucial causal powers in determining what will happen to the natural just as the natural sets limits to the range of possibility for the social. To regard the natural as having no delimiting power over the social is a fundamental error. The climate crisis exists at the intersection of the natural and the social and is interwoven with all other aspects of crisis in the contemporary global system and social systems at every level. Crisis itself is a very useful word. It comes from classical Greek medicine where it was used to describe the crucial period in the course of an infectious disease before the availability of magic bullet antibiotics.3 Either the immune system overwhelmed the infection and the patient recovered or the infection overwhelmed the immune system and the patient died. A crisis was necessarily of short duration, even for infections like tuberculosis which could be present and active for a long time. Crisis is when things cannot stay the same and change must happen. That is where we are now. It is very important to recognize that in any crisis where part of the causal process is down to the actions of human beings, down to human agency, then it is not a matter of what will happen but what will be made to happen. There are macro system events which are beyond the present ability of the most advanced human systems to do anything much about them. An asteroid strike or a tsunami on the scale of that caused by the Storegga slide4 would have catastrophic consequences for human civilization across an enormous area and possibly globally. There is very little we could do about either. In contrast we can possibly, if we act hard enough and quickly enough, do something to avert or at least ameliorate a climate catastrophe. The impact of the COVID-​19 pandemic globally illustrates the vulnerability of social systems to the natural world and the ability of governance systems when faced with a short-​term and immediate crisis to respond by a

4  Inequality: an issue whose time has come

radically different set of policies. Social contexts themselves influence the inter-​ relationships between public expectations of governance and what governments feel obliged to do.The ‘Russian flu’ of the mid-​nineteenth century and the ‘Spanish flu’ after the First World War both were much more severe in terms of mortality than COVID-​19, but they happened before the great majority of nation-​states had undergone the health transformation. Before that transition most people died from infectious diseases particularly in infancy and childhood but across the life course. After it most deaths occurred in old age from causes other than infection. If people were used to dying from infections and there was no general and large-​scale health system in place then the impact of pandemics, unless they like the Black Death of the fourteenth century in Europe fundamentally changed the demographic structure, was momentary and passing. Now things are different. Context matters. The form of complexity theory/​the complexity frame of reference that informs this book is what Morin (2008) called general complexity. There is a strong but completely erroneous belief held by many5 that complexity emerged from mathematical physics in the late twentieth century as a consequence of the development of techniques which can cope with non-​linearity and emergence. Actually complexity thinking can be traced back to the philosophical response by George Lewes (1875) to Darwin’s scientific method in The Origin of Species6. Much of ‘scientistic’ complexity theory operates in the frame of what Morin called ‘restricted complexity’ –​that it is possible to achieve some sort of understanding of complex systems solely on the basis of techniques of scientific inquiry and mathematical representation of the kind, which have informed what Dilthey called the nomothetic sciences since their emergence in the seventeenth century and formalization in the nineteenth.This is wrong.While mathematical formalism through non-​linear modelling and the very different approach of agent based modelling do have real utility in addressing complex systems, in any system where human agency is significant they are not only never enough but also mostly not the best way to start. We have to engage through the human sciences to use Vico’s distinction. The human sciences are sciences –​not simply humanities in the aesthetic sense. Science is defined not by a particular set of methods –​in the sense of techniques –​nor by the generation of accounts of reality in mathematical form. Rather science is as stated by the Gulbenkian Commission on the future of the social sciences –​the production of: ‘… systematic secular knowledge about reality that is somehow validated empirically’ (1996: 2). When we deal with systems which are generated by and/​or responsive to human agency qualitative understanding is generally our best starting point. Here narratives are essential and narratives can be both quantitative and qualitative. It is inherent in the nature of complex systems that they have multiple possible future states depending on how the causal processes generating those states work out through time. The key aspects of climate catastrophe over which we have control are our pattern of consumption and the degree to which we generate greenhouse gases to fuel that consumption. Climate change is anthropo-​generated in this era of the Anthropocene.

Inequality: an issue whose time has come  5

The inclusion of the word ‘realist’ in the title to qualify complex is important in two respects. First, it simply asserts that there is a world which is real and which can be known, however much our accounts of that reality are social constructions.They are surely social constructions but they are made from something in the world, not from our imaginations. Reality has a voice in science. Second, to talk about complex realism is to endorse the Bhaskerian account of three levels of reality –​the real, which is the level of the complex generative mechanisms, which are the source of all causation; the actual which is what the world in all its aspects looks like given the way the generative mechanisms of the real have been expressed in context –​both spatial and temporal; and the empirical which comprises the descriptions of the actual and the real, which we have constructed through investigation and theorizing as science. The assertion of complex realism has particular importance in discussing inequality in a context of climate crisis because to endorse that frame of reference leads to the necessary dismissal of the relevance of the neo-​classical/​posited7 school of economics as having any role in our understanding. That school is an ideological assertion of material interests masquerading as social science and needs to be eliminated from our discussions in its entirety. The interwoven set of systems which constitute the human world of the twenty-​ first century are first all aspects of social systems –​political, economic and cultural –​together with subsystems including fiscal systems (tax, spending and social distribution); planning systems incorporating land use planning, transport planning and environmental regulation; production systems including manufacturing, energy generation, agriculture and transport of goods; and all the cultural and political systems which generate social attitudes, beliefs and propensities to act, individually but more importantly collectively through political processes, policy formation and policy implementation. Second, in constituting that human world are the ecological and climate systems –​nature very broadly defined –​which set the limits for the scope of human action. Nature sets limits and that was forgotten for some two hundred years through industrialization up to the present day.8 Human agency, and especially policy formation and implementation, has to operate within the boundaries of the possible set by those limits unless we can deploy technologies which breach them. And we live not just in the era of the Anthropocene but of the Capitalocene and that has enormous significance for how we set about dealing with both inequality and climate crisis. So this book is written as a contribution to our thinking about complex social systems. It is not meant as a development of the theoretical basis of that thinking but rather to put complexity to work in addressing fundamental social issues: here inequality in a context of climate crisis and now after COVID. There is no rigid difference between the development of social theory and empirical work. They are always in dialogue with each other. Likewise there should be no boundary between social sciences as academic discipline and the application of social science to social practice. So here the argument draws on complexity theory as a frame of reference in its general form, locates explanation in terms of complex realism, and is very deliberately written in a way which breaks down the boundaries among theory,

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empirical social science and the application of social science towards the solution of social issues. Complexity has to be put to work.

Governance A central concern of this book is the nature of governance processes. Governance is a fashionable and useful but slippery term in the social sciences. It allows us to extend our consideration of how things are done in politics beyond the formal level of states and explicit politics at whatever level including sub-​national local states and transnational state forms9 to include other institutional actors which have important powers. In the UK, this would include entities like Local Economic Partnerships (LEPs) and Local Strategic Partnerships (LSPs) in England, various management and purchasing groups in the devolved National Health Services, bodies delivering and managing social housing, and ad hoc bodies created to manage planning and other functions over wider areas than those covered by elected local authorities. The idea of governance focuses not just on institutions but also on the actual implementation of policies in practice rather than the determination of them in the supposedly adversarial process of politics. In reality extra political governance includes a very important level of policy formation as well as implementation. Governance is often enacted through networks with varying degrees of formal institutional status. So, for example, UK Local Economic Partnerships (LEPs) include representatives of business as well as elected local authorities on their controlling bodies alongside members representing quasi-​businesses in the semi-​privatized public sector including educational institutions. One important aspect of governance is that the network framing, which gives access to private sector actors, resonates with the neo-​liberal turn in politics. In formal assertion this admits ordinary people into the process but the only players with any real say represent corporate and business interests. Public participation through modes other than formal elections is asserted as an objective and participatory mechanisms are often in place but these have minimal influence on actual decision-​making processes and outcomes. This is not inevitable. It would be possible to have real participation in ways which go beyond the corporatism of welfare capitalism. One notable difference between neo-​liberal governance and corporatism is that trade unions have minimal if any influence in the former but had quite a lot in the latter. In the neo-​liberal era neither has any other organized representation of popular interests. Contemporary governance is inherently neo-​liberal, but it is perfectly possible to imagine and even to draw on historical precedent to propose governance forms which are very different. The key point is that governance is how political power is enacted in order to do things. The systems examined in this book are those which have the potential both to manage the issue of inequality and to remedy the consequences of climate change in relation to climate crisis. The arguments presented will be addressed not to business and political elites but to the broad public –​to nail the political colours to the mast to the many not the few. However, this will not be done through

Inequality: an issue whose time has come  7

political rhetoric and/​or grandiose theoretical assertion. The objective is to outline what has to be done and how it might be done in down and dirty real administrative actions.

The Capitalocene Hunting large mammals to extinction is one thing, but the speed and scale of destruction today can’t be extrapolated from the activities of our knuckle-​dragging forebears.10 Today’s human activity isn’t exterminating mammoths through centuries of overhunting. Some humans are currently killing everything, from megafauna to microbiota, at speeds one hundred times higher than the background rate. We argue that what changed is capitalism, that modern history has, since the 1400s, unfolded in what is better termed the Capitalocene. Using this name means taking capitalism seriously, understanding it not just as an economic system but as a way of organizing the relations between humans and the rest of nature. Moore and Patel, 2017 Broadly I agree but I want to focus not just on capitalism as a system change innovation but on post-​industrial capitalism. Of course, the world is not post-​industrial at all. There are more industrial workers now both absolutely and as a proportion of global population than there have ever been. They are simply somewhere else –​mostly in South and East Asia but also across the rest of the global South. What is post-​industrial is the world that used, when I was an undergraduate more than fifty years ago, to be described as ‘advanced industrial’ –​the USA and Canada, North and Western Europe and then Europe as a whole including states formerly in the Soviet system, and Australasia. However, the capitalist forces located in the old now post-​industrial countries still have enormous causal power on a global scale, although China is coming up very fast on the rails. Capitalism is responsible for the transformation of nature but we need to look closely at its dominant present form –​ neo-​liberalism. The ideological cover and colour of the whole process of system transformation –​the phase shift in complexity theory terms -​from industrial to post-​industrial capitalism has been provided by neo-​liberalism whose: one dominant theme [is] that free markets in which individuals maximize their material interests provide the best means for satisfying human aspirations, and that markets are in particular to be preferred to the state and politics, which are at best inefficient and at worst threats to freedom. Crouch, 2011: vii Neo-​liberalism is intimately associated with the neo-​classical school in contemporary academic economic theory. This form of economics is often described as a social science, but in reality is neither social nor scientific. Its abstract posits devoid of any empirical justification purport to be neutral and objective but are ideology

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in the service of capital hidden as Joan Robinson put it, behind a thicket of algebra (1962: 112).11 As Crouch (2011) explains neo-​liberalism has not promoted unfettered markets but rather has led to penetration of government by giant transnational corporations and the shaping of all governance to suit the interests of business as understood by such corporations. Privatization and/​or marketization of public services is one aspect of this. Another is the form of international trade agreements, which not only treat corporations as real social actors with rights but actually have sort to remove the resolution of disputes between governments and corporations from national courts to transnational dispute resolution through mechanisms dominated precisely by the corporations themselves. Crouch has written persuasively (2000) on the post-​democratic character of governments in post-​industrial and post-​welfare capitalism where political parties have differed very little in political understanding and have sought election on the basis of supposed managerial efficiency and/​or personal style of the leadership. In the neo-​liberal world it is business elites who call the shots and call them in their own material interests and for continued capital accumulation. However, the popular masses –​to use an old but valid expression –​are not outwith these processes. In what Hobsbawm called the fortunate third quarter of the twentieth century in what was then still the world of advanced industry, including much of the Soviet sphere, the material circumstances of most people improved markedly on the basis of higher real wages and developed welfare states. This was general across what are now high-​income countries. Subsequently, although there has been less development of welfare states the transition from peasant agriculture to industrial employment, particularly in China, has led to much improved material circumstances without in the Chinese case the horror of nineteenth century urban industrial life in the West.12 High middle-​income countries in recent years have tended to develop more redistributive fiscal regimes and moved in a welfare capitalist direction. Marcuse referred to the good years post–​Second World War up to the 1970s in the then advanced industrial countries as a period of repressive tolerance with increased consumption buying the consent of workers to the continued existence of capitalism or in the Soviet system state capitalism. Regulation theory used the term ‘Keynesian’ to describe macroeconomic policy regimes directed to combining full employment which stimulated demand with welfare state expenditures, themselves an important source both of demand and legitimation of market capitalism. Life became much more comfortable just as life for Chinese industrial workers is more comfortable than life as a peasant as it was for my own great grandparents when they moved from the congested districts of nineteenth-​century Ireland to the North East of England as coal miners. People in the West began to think of themselves as middle class rather than as workers.Things are changing now.

Global elites are worried about inequality In the neo-​liberal, post-​democratic era concern about inequality has traditionally been something for ‘bleeding heart liberals’ (in the US vernacular sense of

Inequality: an issue whose time has come  9

liberal). The traditional Labour and Social Democratic parties of post-​industrial, post-​welfare capitalism have made noises about inequality but often in relation to ‘equality of opportunity’ –​that is equal opportunity to become unequal –​given that even relative, let alone absolute social mobility seemed to be closing down in their societies. Things have changed. When the Organization for Economic Cooperation and Development (OECD), along with the World Bank and the International Monetary Fund one of the trio of enthusiastic proponents and indeed often imposers of the neo-​liberal programme in the latter half of the twentieth century, publishes a series of informative reports on the issue of increasing inequality in its member states (2014, 2015, 2018, 2019) –​mostly the former advanced industrial countries of Europe and North America –​then we can see that global elites perceive inequality to be a serious socio-​economic problem. Even the World Economic Forum in Davos, the annual jamboree of the global economic elite, has identified inequality as a crucial social and political issue. For most OECD members states the last three to four decades have seen a massively disproportionate share of increases in income and wealth go to the most affluent 10 per cent and even 1 per cent. The bottom 40 per cent of households by income in these countries have seen almost no material gains in income terms. Of particular political importance is what has happened to middle-​income households, defined by the OECD as households with incomes between 75 per cent and 200 per cent of the median household income in their own country. Although these households have not done as badly as the bottom 40 per cent their share of income and wealth has declined considerably in relation to the share of elites. Moreover, and this is very important, the cost of elements of life which have traditionally reinforced the status of being middle class –​most people in most countries with the interesting and important exception of the UK regard themselves as middle class –​have become increasingly expensive in relation to middle household incomes. This is especially the case for housing. There are marked intergenerational inequalities here. Younger people find it much more difficult than their parents or grandparents to access good housing and in particular owned housing. The things that make life ‘ontologically secure’ –​owning your own home, having access to a pension scheme that will ensure continued comfort in retirement, security and stability of good employment, are all in retreat and the young find it very hard to obtain them. Add to this the effect of austerity on the elements of welfare capitalism of most significance to the middle people –​good health care and free or relatively cheap higher education –​then the pressure is definitely on. The OECD authors (2018) make it clear that they regard increasing inequality in general as not only an economic problem –​for them it constrains economic growth –​but also and perhaps primarily as a political issue: A strong and prosperous middle class is crucial for any successful economy and cohesive society. The middle class sustains consumption. It drives much of the investment in education, health and housing and it plays a key role in supporting social protection systems through its tax contributions. Societies

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with a strong middle class have lower crime rates, they enjoy higher levels of trust and life satisfaction, as well as greater political stability and good governance. Foreword Social stability requires a middle class which is comfortable in its skin. Although the OECD authors do not mention this, or perhaps even know it, almost all revolutionary transformations have been triggered when groups above the poor have seen a relative immiseration of their own condition. However, not all middle groups globally are experiencing increasing inequality. In many of the higher middle-​income countries middle-​income households have seen a recent increase in their relative incomes and standard of living to an extent there the median income expressed as purchasing power of urban households in China is now higher than that in several European countries including European Union (EU) member states. Milanovic identifies one of the key issue of the current globalization process: the diverging economic trajectories of people in the old rich world versus those in resurgent Asia. In short the great winners have been the Asian poor and middle classes: the great losers, the lower middle classes of the rich world. 2016: 20 As Milanovic points out this is not what politicians the West in the 1980s said that globalization and a shift from welfare capitalism to neo-​liberal reliance on markets would deliver to their electorates. The rise in populism across post-​industrial capitalism is complex and differentiated. Some populist parties, for example, Law and Justice in Poland, are deeply collectivist in their social policies however illiberal they are in relation to the politics of identity. Others are strongly neo-​liberal notably the Trump regime in the USA. That said the newly elected Biden, although introducing some redistributional tax policies, remains deeply connected to the corporate friendly wing of US politics. What these developments do demonstrate is the profound influence of corporations and the very rich on the social and economic politics and policies of post-​industrial capitalism. What the rich and corporations want they have very much tended to get. All that said the increasing prosperity of so many in the Global South matters enormously, particularly as this develops in China. When the present author13 looks at contemporary TV pictures of Chinese cities (in relation to the January 2020 COVID issues) he sees a society much more prosperous than the industrial world of his own childhood seventy years ago and exceeding in prosperity the world of his young adulthood fifty years ago.

Climate crisis and governing complexity: a preliminary take In this book the notion that we are facing a climate crisis consequent on the way our way of living changes atmospheric chemistry and physics along with the biological

Inequality: an issue whose time has come  11

character of the planet will be taken as a given. Wallace-​Wells in The Uninhabitable Earth (2019) sums up what is facing us in the very first paragraph of that necessary and persuasive jeremiad. Here I am simply going to note that this is not just the view of radical ecologists or radicals of any stripe. Just as the OECD is very much an institution of global elite and we can say if it is worried about inequality then inequality really matters, so when the McKinsey Global Institute –​the intellectual arm of one of the major commercial actors promoting neo-​liberalism and new public sector management approaches globally –​publishes a report titled Climate Risk and Response: Physical Hazards and Socioeconomic Impacts (Woetzel et al., 2020) and says absolutely correctly that: ‘The socioeconomic impacts of climate change will likely14 be non-​linear as system thresholds are breached and have knock-​on effects.’ (ibid.: viii) then we can agree that elites are worried about climate change as well. That report gives a very good account of what might happen at the lower end of the consequences of climate catastrophe. We can, and I will, certainly challenge the corporate mode solutions proposed for confronting climate crisis but that we need to confront it should be beyond dispute.Those who disagree with that assertion are wrong and if they have the power to resist necessary action then they are criminals. The McKinsey authors agrees that confronting climate crisis/​catastrophe requires a complexity frame of understanding because we are facing the most wicked of all wicked problems: The search for scientific bases for confronting problems of social policy is bound to fail, because of the nature of these problems. They are ‘wicked’ problems, whereas science has developed to deal with ‘tame’ problems. Policy problems cannot be definitively described. Moreover, in a pluralistic society there is nothing like the undisputable public good; there is no objective definition of equity; policies that respond to social problems cannot be meaningfully correct or false; and it makes no sense to talk about ‘optimal solutions’ to social problems unless severe qualifications are imposed first. Even worse, there are no ‘solutions’ in the sense of definitive and objective answers. Rittel and Webber, 1973: 15515 The term wicked issues/​wicked problems has been widely deployed across both academic discussion and in reflections by senior policy makers and others working in governance. There is considerable overlap between the notion of wicked problems and the general character of the complexity frame of reference.The word ‘complex’ almost invariably appears in discussion and reflection on the ‘wicked’. However, despite a recognition that human agency is a key factor in making issues ‘wicked’ and some recognition of the reality of conflicting real interests at play in the social domains of the wicked, there has been minimal effort to relate the ‘neutral’ and ‘practice centred’ use of the concept to the ideological character of politics and the way in which underlying policy there are fundamental issues of conflict. The discourse of wicked issues has let complexity thinking into governance but done so in a characteristically apolitical fashion in which neutral administrators are

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understood as working for the general good. That said there is a recognition of the need for complex governance to confront complex issues albeit that to use a rather neat piece of administrative zoology from Peter Ho, former Head of the Singapore Civil Service, when we look at climate crisis/​catastrophe it often seems as if we are dealing with a ‘black elephant’. What is the black elephant? The black elephant is a cross between a black swan and the elephant in the room.The black elephant is a problem that is actually visible to everyone –​the proverbial elephant in the room –​but no one wants to deal with it, and so they pretend it is not there. When it blows up as a problem, we all feign surprise and shock, behaving as if it were a black swan. 2018 Talking the talk is not walking the walk. Governance of the complex is a political process and real politics matter. McConnel puts this well: in the context of liberal democracies, how do we identify and explain the role of ‘politics’ in shaping government responses to wicked policy problems? … a ‘policy’ approach to understanding and addressing wicked problems incorporates everything from seeking greater clarity and evidence around wicked problems and possible interventions, to examining actors, institutions and networks in the policy space, including possibilities for greater collaboration, working across departmental silos and other such initiatives. By contrast, a ‘political’ approach, as defined and argued here, is focused very much on issues of reputation and political capital, the politics of managed crowded policy agendas, and the promotion of ideological visions. 2018: 165 The ideological character of discussion is demonstrated by the form of understanding of complexity, which is informing policy discourse. Mostly this is a micro-​emergent understanding in which the nature of complex systems can be understood essentially as the product of the interaction of individual agents (of whatever form) without reference to any pre-​existing structure with causal powers which are themselves emergent. It is restricted complexity at its worst. We can trace this current back to Hayek who in his economics ‘Nobel’ prize presentation lecture (1974) equated micro-​emergent complexity with the operations of unrestricted free markets as an idealized system for the allocations of scarce resources. It should go without saying but it probably needs to be said that in reality markets never remotely approximate to the ideal posited model but are characterized by imperfect forms of monopoly and oligopoly and direct interference by powerful economic actors in all aspects of governance. Interestingly post-​modernist understandings of complexity also tend towards the view that the complex character of reality renders control or management impossible:

Inequality: an issue whose time has come  13

It is important to emphasise the distinction between the deterministic ontology of nonlinear outcomes in simple complexity and the understanding of emergent causality of general complexity theory. Calculation or control and direction become impossible in general complexity theory, but the unknowable is not a result of hidden determinism (as in simple complexity), nor can it be the result of blind chance or luck. Lyotard insightfully flagged up how an emergent complexity approach transformed the ontology of knowledge and unknowability and its implications for modernist subject/​object distinctions. Chandler, 2014: 50 Chandler develops his argument by reference to Donald Rumsfeld’s (in)famous distinction among known knowns, known unknowns and unknown unknowns –​ which actually makes quite good sense when thought through sensibly: These crucial knowledge gaps are therefore the ‘known unknowns’, the hidden, underlying, processes of determination, which we know we do not fully know. For resilience approaches, working on the basis of emergent causality or general complexity, there is no deterministic understanding of ‘known unknowns’ operating underneath or at a deeper level of causation. In the more open interactive ontology of resilience, it is the ‘unknown unknowns’ that have the central role in emergent causation meaning that contingent outcomes only reveal concrete causality after the event and are impossible to know beforehand. 2014: 50 Well, that is science oot a the winda then. Post-​modernist pessimists never assign causal capacity to intentional human agency and since the central purpose of this book is to argue that intentional collective human agency expressed through a transformation of the structures and processes of governance is the only possible means through which we might confront inequality in a context of climate crisis, then we can proceed without taking too much notice of the essentially epistemological pessimism of post-​modernism as a whole. Chandler demonstrates how various ‘policy intellectuals’ including Dominic Cummings and Geoff Mulgan, key advisors to the Conservatives and ‘New Labour’ respectively have employed a policy vocabulary, which draws on complexity thinking. He endorses the approach adopted by Stears who argues for a political programme addressed to resilience. Resilience in general refers to the capacity of a system to maintain its essential integrity in response to pressure. According to Chandler (2014: 61), Stears argues that instead of governing for the market the state needs to govern through society as a whole and reject the traditional left/​r ight arguments about state versus market.The public must not be passive objects of governance. That is right but states and institutions matter and cannot be dismissed as crucial to how things are done.

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To do that is to endorse the micro-​emergent style of complexity reasoning. There is a lot of it about, notably in Green Party and ecological movement emphasis only on bottom-​up popular action as the appropriate response to climate crisis. The problem with this style is that it is incapable of taking account of the reality of existing social structure and social forms. It is not that general social action outwith the framing of a coercive state does not have a place –​and the state has coerced ‘New Public Sector Management’ in the neo-​liberal era rather more strongly than any coercion that happened under democratic planning regimes, The forms of governance action which are required demand a dialogue between conventional forms of power and participatory elements. What is absolutely certain is that they have to be end directed. According to Cooke and Muir, Stears is arguing for: a politics that does not aim towards a known, identifiable end state. It rejects utopianism and embraces uncertainty. Taken to its logical conclusion, such an approach would be a radical departure for the centre-​left, which has long defined itself in terms of a ‘vision’ for how society should be (in words such as ‘equality’). In its purest form, Stears’ argument is a call to abandon the pursuit of objective outcomes with politics coming instead to focus on the design of processes –​especially ones that enable relationships. The specific ‘ends’ that people make of these ‘means’ –​both individually and collectively –​is then a matter for their own determination. This offers citizens, he argues, the prospect of both liberty and responsibility. 2012: 6 Indeed –​but the abandonment of objective outcomes in relation to climate crisis is more than likely to lead to the end of human civilization as we know it and whilst the centre-​left may be persuaded to abandon equality as a project –​centre-​left governments in high-​income states seem to have done that already –​old leftists like me will not do so. Fortunately, we do have an alternative and an alternative which succeeded in practice during the last great global crisis, the political crisis of the Second World War when the insane political programme of Nazism was put down like a mad dog. This is the approach adopted in the UK during that war,16 which moved towards the programme proposed by Devine17 of democratic planning through negotiated coordination. Devine does note that: For a small number of strategic objectives, given overriding priority, a centralized planning system in which the centre communicates its requirements directly to production units has been shown to be effective, at least for a limited time period, both in capitalist countries in wartime and in the Soviet Union. 1988: 10

Inequality: an issue whose time has come  15

Devine is focusing on production but the same argument can be applied to all aspects of social life. As he says: ‘… a condition of working class cooperation was the sense of equality of sacrifice’ (1988: 32). Note that his description of wartime UK planning, which is sustained absolutely by the documentary and oral historical record is not one of absolute central direction but rather of one of constant negotiation and re-​allocation.The key element allocated was directed labour but the same principles applied to other aspects of life, notably the rationing of food and fuel and the provision of the war-​time Emergency Health Service. In some ways the system without using the word operated according to the principle of subsidiarity: the principle that a central authority should have a subsidiary function, performing only those tasks which cannot be performed effectively at a more immediate or local level.18 A key level was sub-​national. Most social functions were organized on a regional level at the levels which more or less correspond to the region/​nation levels in contemporary UK administration. Interestingly the development of information technology makes this kind of coordinated and discursive social and economic management much easier to achieve. In Red Plenty (2010) Spufford used the form of a novel to describe attempts by the Soviet Union to deploy mathematical and computing methods to achieve coordination across their economy in the post-​ war years. The current state of technology makes that now possible.

And then came COVID-​19 The original version of this chapter was written before the COVID-​19 pandemic hit the world. I got to Chapter 2 before I went into lockdown as my partner is on immune-​suppressant medication and most of the book has been written while the UK was in lockdown. COVID-​19 is exactly the kind of social crisis that happens when there is a trans-​specific infection hitting a globalized human population –​when Gaia strikes back. The Nobel Prize winning author William Goldman, a friend of Lovelock who coined the Gaia hypothesis, said that when Lovelock explained it to him: ‘I heard Gaia in the voice of my mother herself saying: Don’t care was made to care.’ The robust system of feudalism in Europe was so severely affected by population loss caused by the Black Death that it was transformed over time into a wage labour capitalist system. COVID-​19 won’t have that kind of system transformative effect but it will –​let us hope –​have an impact on popular consciousness and democratic politics. This should happen because the COVID-​19 pandemic demonstrates in spades the incapacity of neo-​liberal governance for handling a black elephant crisis. The problems posed for the English National Health Service by privatization, new public sector management, and the splitting off of public health to massively underfunded local authorities show that whole system management is essential when societies face serious crises in their relationship with nature. If COVID-​19 is a black elephant, climate crisis is a herd of black mammoths stampeding towards us. We will come back to COVID in all discussions of governance in this book.

16  Inequality: an issue whose time has come

How this book is organized Chapter 2 presents a literature informed discussion of inequality in relation to the multiple sets of dimensions along which inequality is usually described, not only in relation to forms of identity but also in terms of spatial and health inequalities. Inequality must always be understood in intersectional terms –​with intersectional understood as a synonym for interaction in the statistical discussion of causality. That is to say that the location of any individual, household, social group of whatever kind, or spatial location and the dynamic trajectories of such entities through time is always a product of complex causes but that the nature of the organization of the underlying social system –​in Marxist terms of the mode of production –​has the most fundamental causal power.The chapter will relate inequalities along all the dimensions citied to the nature of post-​industrial and post-​welfare capitalism in the high-​income countries and to the forms of development, and especially development of industrial systems, in the high middle-​income countries. The emphasis on purely material accounts of inequality will be challenged. Although the word ‘well-​being’ has been deployed in policy in a largely rhetorical fashion, how people feel about themselves and their relative place in the social order is now as important as material circumstances in high-​income countries and is becoming increasingly important in high middle-​income countries. The dominant culture sees ability to consume as the basis of sense of self and well-​being but in an era of ‘enough’ this needs to be challenged. The argument will be illustrated by examples drawn from a range of high-​income and high middle-​income states. Chapter 3 will address the ways in which inequality and its consequences can be described. It will begin with a dynamic complexity take on the measurement of inequality which will review, often very critically, conventional approaches in economics and sociology. A key focus will be on the nature of the cases which are used as entities in the measurement of inequality and the relationship among cases at multiple levels including the individual, the household, identity groups and spatial levels. The chapter will also examine how inequality has been and can be represented in qualitative terms. Measurement itself is a mode of representation but in this section the emphasis will be on qualitative description and the use of narrative as a way of dealing with dynamics of inequality. Of particular importance will be use of life course/​life history approaches but these will be set in relation to broader historical accounts of social change at higher order system levels including both spatial systems (neighbourhoods, localities, city regions) and national social systems. Finally, the chapter will develop a mixed methods informed account of how quantitative and qualitative modes of description and causal specification can be brought together. Chapter 4 deals with two aspects of inequality which are conventionally considered most important in relation to life chances and power, that is, income and wealth. It will begin with a discussion of how incomes are received through the prospective life courses of people going forward towards mid-​century and how cash benefits and taxation interact in terms of the levels of income received. The

Inequality: an issue whose time has come  17

examination of taxation will not only review how taxes are paid by individuals and households but also the character of corporate taxation and the taxation of incomes derived from the ownership of wealth. The discussion of wealth will begin by differentiating between wealth as a source of ‘ontological security’ and wealth as a source of economic and political power. One hundred years ago the vast majority of the world’s population had no wealth unless they were peasant proprietors. Now many in high-​income countries and to a lesser degree in high middle-​income countries possess wealth in the form of housing and pension pots. Both are sources of ontological security. This has to be contrasted with wealth, which gives command over the product of the labour power of others and at the same time is increasingly a source of political power in societies, notably but not exclusively the USA, which now look more plutocratic than democratic. Historically in feudal and other pre-​capitalist social orders ownership of land was crucial to life and the relationships of landlord and tenant remain central for many, particularly in Asia other than China. However, the world is now predominantly urban with 55 per cent of people living in cities or urban areas projected to rise to 68 per cent by 2050.The relationship of residential landlord and tenant remains a crucial one in urban areas themselves but that is a relationship in consumption rather than production. The revival of the for-​profit private landlord, particularly in the UK, is an important recent trend with considerable implications for inequalities in both wealth and income. The privatization of public services and many other modes through which publicly owned resources have been transferred to the private sector is a new form of enclosure in which the collective resources of the welfare capitalist state have been made sources of exploitative private profit. This aspect will be considered in this chapter. Finally, the chapter will consider why wealth has become more unequal in the last half century and how the pattern of wealth distribution and the forms of wealth relate not only to inequality but to consumption patterns causal to climate crisis. This will draw on Piketty but the discussion will go beyond his review to consider how political actions have contributed to this change. Chapter 5 will explore the political economies of the different sorts of society/​ nation-​state being reviewed in the text. By political economy is meant both the economic base of the societies together with the ways these have changed over the last thirty years and are likely to change in the thirty years to mid-​century, and the political systems. In high-​income countries we are dealing both with what Crouch has called ‘post-​democracy’, that is, the abandonment of ideological and class-​based politics in favour of /​governance by technological and neo-​liberal elites, and the rise of different kinds of populism, often with a nationalist or even fascist character. In the Global South the very different cases of South Africa and Brazil have politics which revolve around the failure through corruption of reformist parties and in Brazil the re-​emergence of right-​wing militaristic quasi fascism. In China massive and internally uneven development has been achieved under Communist party rule but with the creation of an enormous and relatively (although absolutely much better off) deprived industrial proletariat.There are specific tensions here, not

18  Inequality: an issue whose time has come

least in relation to demography and the special case of Hong Kong. The chapter will conclude with a discussion of how impending climate crisis is a common issue faced by all these societies and how this is intruding into all aspects of economic, political and even cultural life. Chapter 6 will begin the examination of how states operate in relation to inequality. This chapter will focus on the ways in which state policies and practices affect disposable money incomes and stocks of wealth through the interlinked taxation and cash benefit systems and through legal regulation of the labour market. The political economy analyses introduced in Chapter 4 will be developed with a focus first on the politics of taxation and benefits –​a single interlinked system –​ including the role of states in relation to pension provisions broadly defined. It is generally supposed that while taxation operates to reduce market income inequalities (whilst doing very little if anything in relation to wealth inequalities) and benefit systems do so more extensively, we will find that when tax expenditures through social purpose focused allowances against tax liability are taken into account things look rather different. State interventions in labour markets run in opposite directions. Legal minimum wages can promote equality of income. State restrictions on the effective operation of trade unions have made it much harder for them to increase the labour share of the social product. Unions have found it very difficult to penetrate whole areas of ‘new work’ although there are efforts in relation to the gig economy and zero hours work. Not only states but the European Union operate in reverse directions with labour rights on the one hand asserted as a key foundation of Social Europe and European Court judgements working the other way. Taxes, benefit and state intervention in labour markets all have implications for climate crisis. The chapter will conclude with a complexity-​informed discussion of how they work taken together and what policies are most likely to combine redressing inequality with confronting climate crisis. Chapter 7 will continue the discussion of how states act in relation to inequality in a context of climate crisis through their actions other than those which determine (in the sense of set limits to) the pattern of household disposable incomes. There are two broad areas of state operation that will be covered here. The first is the role of state delivery of income in kind through the provision of services broadly defined. How health is funded and provided in societies which have undergone the health transformation –​that massive demographic system change from morbidity and mortality have being largely a matter of the consequences of infectious disease particularly in infancy and childhood but throughout the life course, to social orders in which most people live to old age and most morbidity and mortality is concentrated in that part of the life course –​is of enormous social significance.19 All high-​income and high middle-​income countries have undergone this transformation. The role of educational systems is also enormously important not least because states promote ‘equality of opportunity’ –​which is actually a normative assertion of the right to equal opportunity to become unequal –​primarily through their educational systems

Inequality: an issue whose time has come  19

The importance of services providing incomes in kind is not just a matter of which households gets how much. Collective services generate much employment. In the high-​income countries, state employment generally defined, much of which is in health and education, now is of the same order as industrial employment and comprises about a third of all service sector employment. In reviewing inequality in a context of climate crisis the scale and nature of state employment matters a great deal. The rest of Chapter 7 will examine how spatial planning and urban governance in relation to planning work out in relation to inequality in a context of climate crisis. Spatial planning systems in high-​income countries where real estate has become the dominant economic sector have generally become subordinate to private developers. This is also happening in high middle-​income countries. The role of spatial planning, which in welfare capitalism was a driver for equality, has now been reversed with spatial planning commonly promoting exclusion and the expulsion of poor and even middle-​income households from residential areas. Planning processes have contributed massively to active deindustrialization in previously industrial city regions. Spatial planning is a key policy area for the development of responses to the climate crisis and there will be a developed discussion of how a complexity frame of reference can relate planning policies to confronting both climate crisis and inequality, not least in relation to how issues of air quality are associated both with inequality and with the potential for action to confront it. In Chapter 8 the politics of inequality in the states selected for illustrative examples will be reviewed in relation to the different forms and levels of political process and policy formation/​implementation which are expressed in: • • • • • • •

Political politics –​the role of political parties Industrial politics –​the role of trade unions Interest politics –​the role of identity group-​based politics Generational politics –​inequality across generations Ecological politics –​confronting the Capitalocene Governance politics –​how political processes really work Local politics –​how inequality is addressed by politics at the level of city region/​locality

Governance is the actual terrain in which politics and political processes are developed under the influence of multiple actors and pressures into real political action. That is why the discussion of governance will follow on from a review of conventional party politics, industrial politics, and ecological politics as these related to inequality. The governance-​themed discussion will precede the review of the local politics of inequality because it is at this level that inequality is so often experienced and especially so in an era of austerity which has such a general impact of living standards and the government-​provided services which constitute the social wage. The local is also very often the level of the informal politics of inequality and this will lead into the content of the next chapter.

20  Inequality: an issue whose time has come

Chapter 9 deals with ‘the New Politics of Equality’. Note the shift in the title words from Chapter 8 to Chapter 9. Chapter 8 deals with formal politics in which inequality is understood as a source of social tension and social problems. Chapter 9 deals with new forms of politics which have equality as an objective in and of itself. The chapter will examine the new politics of equality and the links of this to an older socialist politics. It will pay particular attention to new forms of community organizing both as resistance, especially in relation to cuts in services and the privatization of public services at a local level, and as directed towards positive innovations towards equality. The issue of how local organization and campaigning can be linked up into national and even global political action will be examined. Themes addressed will be: • • • •

Equality and social movements The politics of real community organizing –​grass roots confrontation with inequality and the processes which create inequality The politics of connecting across space in promoting equality Connecting ecological crisis and inequality in political action.

Finally, the chapter will consider how ecological politics and the politics of equality can and should be linked at every level of political intervention. Chapter 10 will conclude the book and will be the Cassandra chapter. It is not a case of what will happen but what can be made to happen. In accord with the principles of complexity and the multiple futures in the possibility space there is more than one possible outcome for 2050 depending on the actions which are taken. The chapter will compare and contrast the two possible states which might emerge. A key resource here will be dystopian science fiction which is rather good at illustrating a future of ecological catastrophe and gross inequality. There is less utopian material available but a, if not utopian (nowhere after all), at least better possible future will be described.

A note on my method of working I work primarily as a synthesist –​the occupation of one of the characters in John Brunner’s Stand on Zanzibar (1974)20 but not actually available as a paid job outwith science fiction other than in the meaning of a musician who plays a synthesizer! That means I work by putting things together. So I draw on many other authors and on a very wide range of evidence. I want to specify how I use evidence. To quote my colleague at Durham University, Nancy Cartwright, I deploy ‘a whole tangle of evidence’ of all kinds, quantitative and qualitative. In this book quantitative evidence is almost all descriptive and derived from secondary data sources. In Byrne (2002) I asserted that our quantitative measures are not ‘real variables’ with independent causal powers but rather traces of the trajectories of complex social systems through time. I maintain that position absolutely but now feel that I must give

Inequality: an issue whose time has come  21

qualitative descriptions of systems exactly the same status as traces of the character of social systems at every level.What those traces enable us to identify is when systems change their kind, not in the social world a momentary transformation but rather the accumulation over time of change so that quantity becomes quality –​iterative change results in a phase shift. Two of the transformations which are fundamental to the account presented here is that from industrial welfare capitalism to post-​ industrial and increasingly post-​welfare capitalism in high-​income countries and from pre-​capitalist and peasant (mostly) to industrial capitalist with welfare elements in high middle-​income countries (passing of course through ‘communism’ in the enormously important case of China). Those transformations are complete and relatively stable for the time being although to confront inequality another transformation is necessary in high-​income countries and something similar is necessary (in a somewhat different form) in high middle-​income countries. I make no apology for deploying qualitative material to describe and understand these changes and to specify the kind of change required to confront both inequality and climate catastrophe –​quite the contrary. Useful science proceeds by mixed methods. That is how this book has been constructed.

Notes 1 China is an upper middle-​income country. India is a lower middle-​income country although approaching upper middle status. 2 It is not the only source. Easy access to what we will call universal basis services (UBS), especially health care, are also crucial in establishing ontological security. It is possible to envisage a social order in which there is no personal wealth but proper universal basic services deliver security instead. 3 And increasingly in the future after the disappearance of effective antibiotics against evolved resistant organisms. 4 The collapse of La Palme in the Canaries could be a potential reprise of that event. 5 Colander and Kupers (2014) –​exemplify this in a book which is often useful if essentially wrong and we will return to their arguments later. 6 The only numbers in that seminal text are those telling the reader which page they are on. 7 Neo-​classical economics is often described as positivist but this is wrong. It does deploy mathematical reasoning, essentially rather trivial non-​linear modelling, but it is founded on posits –​on assertions about the nature of reality –​which have no empirical foundation. There is a lot wrong with positivism but positivists have always worked through empirical methods which investigate how the world works rather than merely asserting that it works in a particular way. 8 The potato famine in Ireland in the 1840s, the reason I live in Britain not Ireland, was a natural phenomenon but the human agency of British government response in the era of laissez faire –​that is to follow the advice of The Economist and do as little as possible so as to reduce the surplus population and transform Ireland from peasant farming to capitalist agriculture, had enormous significance for the outcome. 9 Only the European Union is a real transnational state form but other set-​ups, notably in relation to trade and its regulation, have some important aspects of the state including courts.

22  Inequality: an issue whose time has come

10 Really –​knuckle dragging –​Cro-​Magnon were taller, healthier, and better looking than we are.These authors are no oil paintings. Doesn’t mean that they are wrong here –​they are not. 11 Since the models based on this algebra are essentially linear, they have proved to be completely useless in dealing even in descriptive terms with transformational crisis. Physicists who can at least handle non-​linear modelling have developed a school of ‘econo-​physics’ in an effort to transcend this. However, only if this approach can handle messy reality and deal for example with the issues raised by Institutional Economics will it actually prove to be of any real use. Moreover, in practice as noted by Colander and Kupers (2014) the primary application of econ-​physics has been by ‘quants’ in the financial sector engaged in terribly short term arbitrage, a process which has rendered most of banking not only useless to the real economy but actually worse than useless with profound negative consequences. 12 Although air pollution is a real issue but not on the scale of nineteenth-​century infectious disease. It is a symptom of climate crisis as much as a daily issue. 13 Who spent the last years of his teaching career running a Masters in Social Research Methods with a very high and often primarily Chinese intake. I very much liked these students and enjoyed teaching them. 14 Without the use of the word likely: changes will certainly be non-​linear. 15 Cited nearly 12,000 times. 16 Conservative historians tend to downplay the UK’s role but I prefer the version offered by the father of a Russian acquaintance, a man who fought at Kursk and in the taking of Berlin. His line was: The Russians gave the blood. The Americans gave the money. The British gave the time. 17 Devine taught my oldest daughter history of economic thought at Manchester in the 1990s. She regarded this as one of the few worthwhile components of her education as an economist. 18 This originates in Catholic social teaching. 19 Although COVID-​19 has had such an enormous social impact its demographic impact has been rather small. It has mostly killed or injured older people with pre-​existing conditions. 20 Brunner’s multi stranded narrative in Stand on Zanzibar (which he explicitly said he imitated from Dos Passos’ USA) is a mode through which complexity can be represented in a fictional narrative. It has a lot in common with my approach in this book.

Bibliography Brunner, J. (1974) Stand on Zanzibar. New York: Doubleday. Byrne, D.S. (2002) Interpreting Quantitative Data. London: Sage. Byrne, D.S. and Callaghan, G. (2014) Complexity and the Social Sciences: the state of the art. London: Routledge. Chandler, D. (2014) ‘Beyond neoliberalism: resilience, the new art of governing complexity’. Resilience 2(1), 47–​63. Colander, D and Cooper, R. (2014) Complexity and the Art of Public Policy. Princeton: Princeton University Press. Cooke, G. and Muir, R. (2012) ‘The Possibilities and Politics of the Relational State’ in Graeme Cooke and Rick Muir (eds) The Relational State: How Recognising the Importance of Human Relationships could Revolutionise the Role of the State. London: IPPR, 3–​19. Crouch, C. (2000) Coping with Postdemocracy. London: Fabian Society.

Inequality: an issue whose time has come  23

Crouch, C. (2011) The Strange Non-​Death of Neo-​Liberalism. Cambridge: Polity. Devine, P. (1988) Democracy and Economic Planning: The Political Economy of a Self-​Governing Society. Pat Devine, Polity Press, Cambridge. Gulbenkian Commission (Wallerstein Ch.) (1996) Open the Social Sciences. Stanford: Stanford University Press. Ho, P. (2018) The Challenges of Governance in a Complex World. IPS Lecture Series, Singapore. Lewes, G.H. (1875) Problems of Life and Mind (first series). London: Trübner. McConnell, A. (2018) Rethinking wicked problems as political problems and policy problems. Policy & Politics, 46 (1), 165–​180. Milanovic, B. (2016) Global Inequality. Cambridge MA: Harvard University Press. Morin, E. (2008) On Complexity. Cresskill, NJ: Hampton Press. Moore, J, and Patel, R. (2017) ‘Unearthing the Capitalocene:Towards a Reparations Ecology’. Rage Roar Issue 7. OECD (2014) Top Incomes and Taxation in OECD Countries:Was the Crisis a Game Changer? OECD (2015) The Labour Share in G20 Economies. OECD (2018) Inequalities in household wealth across OECD countries: Evidence from the OECD Wealth Distribution Database Working Paper No. 88. OECD (2019) Under Pressure: the Squeezed Middle Class www.oecd-​ilibrary.org/​social-​issues-​ migration-​health/​under-​pressure-​the-​squeezed-​middle-​class_​689afed1-​en (accessed 16 October 2020). Rittel, H.W. and Webber, M. (1973) ‘Dilemmas in a General Theory of Planning’. Policy Sciences, 4 (2), 155–​169. Ritchie, H. (2018) Global Inequalities in CO2 Emissions OurWorldInData Published online at https://​ourworldindata.org/​co2-​by-​income-​region (accessed 16 October 2020). Robinson, J. (1962) Economic Philosophy. London: C.A. Watts. Roser, M. and Ortiz-​ Ospina, E. (2019) ‘Income Inequality’. Published online at OurWorldInData.org. https://​ourworldindata.org/​income-​inequality (accessed 20 October 2020). Spufford, F. (2010) Red Plenty. London: Penguin. Stears, M. (2011) Everyday Democracy: Taking Centre-​Left Politics Beyond State and Market. London: IPPR, 2011). Stears, M. ‘The Case for a State that Supports Relationships, Not a Relational State’ in Cooke and Muir, The Relational State, 35–​44. von Hayek, F. (1974) Prize Lecture -​Lecture to the memory of Alfred Nobel. The Pretence of Knowledge. www.nobelprize.org/​prizes/​economic-​sciences/​1974/​hayek/​lecture/​ (accessed 16 October 2020). Wallace-​Wells, D. (2019) The Uninhabitable Earth. New York: Tim Duggan Books. Woetzel, J., Pinner, D., Samandari, H., Engel H., Krishnan, M., Boland, B. and Powis, C. (2020) Climate Risk and Response: Physical Hazards and Socioeconomic Impacts. McKinsey Global Institute www.mckinsey.com/​business-​functions/​sustainability/​our-​insights/​ climate-​r isk-​and-​response-​physical-​hazards-​and-​socioeconomic-​impacts (accessed 16 October 2020).

2 CONCEPTUALIZING INEQUALITY

Inequality can be understood in the complexity frame of reference as a property of a system with the degrees of inequality along multiple dimensions being crucial as to the nature of the system as a whole. Social systems can be defined in geographical/​political terms where inequality describes the degree of inequality of within a nation-​state, a city region, a locality, or a neighbourhood. We might also consider inequality within institutions or organizations in the same way. Nation-​state inequality is measured along some dimension, which categorizes the sub-​units being ranked within that geographical/​political/​institutional entity. The commonest categorical distinctions expressed in conceptual terms are some notion of social class, ethnicity, gender, and less commonly sexual identity/​orientation. In some contexts religious identity matters and mattered a great deal historically. Inequality is always multi-​dimensional. That is to say it is defined in relation to the category of the sub-​unit –​usually an individual or a household –​but can be expressed along multiple dimensions: economic resources; power; social status; occupation as ranked; educational attainment; health/​well-​being; cultural character; more are possible. We can think of inequality in terms of how sub-​units –​individuals, households, aggregate social categories by attribute, for example, ethnicity or disability; spatial aggregates, for example, neighbourhoods, are distributed in relation to any one or more of the dimensions under consideration. Then we can define the degree or extent of inequality through some measure of the extent of the spread or (the or is very important) degree of categorical difference –​that is to say in scalar or ordinal terms –​on that dimension. So inequality can be expressed as a description or set of descriptions of a system. However, inequality is not just a matter of simple description. First in terms of the account of measurement presented by Byrne (2002) any measurement of a complex system should be understood as a trace of the condition of the system as a

Conceptualizing inequality  25

whole.1 To use the term ‘trace’ is to assert that any measurement at any one point in time is a description of the system at that time point along a trajectory.Trace implies dynamism. Systems may stay much the same but they may change and for complex systems the changes which matter are phase shifts, changes of kind, transformations. So changes through time in inequality expressed along either any single dimension as measured or, and better, along a set of dimensions can indicate that a social system has undergone a transformation. Changes in inequality, however defined/​measured, are more than just signals that something has happened.We have to think of inequality as possessing causal powers. Changes in inequality may be, and often are, causal to changes in the nature of the systems for which we have measured such changes as descriptions. So inequalities as we described them, usually but not exclusively through some form of measurement, are causes –​in complexity terminology control parameters –​which can engender system transformation. But they are not only causes.They are also effects.2 Inequality in whatever form in realist terms is something which exists at the level of the actual. Our descriptions exist at the level of the empirical. The ultimate causes at the level of the real are the profound generative mechanisms which create reality itself. So we can think of economic systems, particularly capitalisms of whatever form; hierarchical gender relations as expressed through patriarchy; racist social orders, especially those which derive from either or both of chattel slavery and racist colonialism; and any form of social practice set/​social order, which excludes and subordinates others as having generative capacity. Note that none of these systems are more than relatively permanent –​that is to say that they can change and even change to the extent of disappearing and they operate in interaction with each other and with all the systems of the natural world, which impose constraining limits on the scope for human social actions in general. Understood in this way inequality as a property of a social system is both an effect of underlying generative processes and a cause of the nature of that social system. So there is an ongoing two way pattern of cause always in operation. The qualitative –​in this context ordinal rather than scalar –​level of inequality in a system is caused by the system and has consequences for the system itself. Our discussion has necessarily taken us into a consideration of cause not as single cause but rather with causation understood as complex and multiple. There are various ways in which this kind of understanding of causation has been developed across science. In the construction of conventional statistical causal models complexity has been admitted both through the fitting of interaction terms in models and through the recognition that causes towards effects can operate at multiple levels. The general social concept of intersectionality is a qualitative equivalent of statistical interaction. A very common way of expressing this is in terms of how gender, ethnicity and class interact in determining the life courses of women. In methodological terms, Ragin’s (1987) conceptualizing of causes towards outcomes as configurations is another way of saying causes are complex and multiple. So inequality of whatever form understood as an effect will have multiple and complex

26  Conceptualizing inequality

causes and this matters most when we see qualitative changes, changes of kind, in inequalities however we measure or otherwise describe them. To say that inequalities have causal powers should be rather obvious when we look at how inequality expressed in relative terms has an impact on the life trajectories of individuals, households, or any meaningful collective social category. Categorical inequalities in relation to class, gender, and ethnicity, all have clear impacts on inequalities in outcomes in relation to health, educational attainment, and social position. Moreover categorical inequalities have causal powers in relation to each other, notably in terms of relationships between ethnicity and class although in post-​industrial capitalism those relationships are being attenuated. But inequalities also have recursive causal powers in relation to the very generative mechanisms which engender them. They have such powers because inequalities can lead to social action directed at the transformation of those generative mechanisms. So in the last fifty years in democratic societies there has been a general change in the saliency of all of gender, ethnicity, and sexual identity in relation to life course and life chances.To say this is not to say that gender, ethnicity, and sexual identity no longer have a causal impact on life course and life chances. They do but their impact is less than it was at mid-​twentieth century. A very obvious example of this is the radical change in the position of Afro-​Americans, particularly in the Southern states of the USA.There is still enormous inequality but the Civil Rights Movement’s social and political and legal action has led to a fundamental shift through the enforcement of citizenship rights and the development of anti-​discrimination legislation.3 The women’s movement in its successive waves of feminist action has led to changes, again in no way complete, but nonetheless significant in relation to gender. Perhaps the most fully developed change has been in relation to sexual orientation (if not yet self-​specified gender) identity. Within the adult lifetime of this author for gay men in the UK and Ireland not only has there been decriminalization but also the introduction of anti-​discrimination legislation to an extent where there is something approaching absolute equality in relation to that categorical set. The great exception in post-​industrial welfare capitalist states is class. Class action through socialist/​Labour political parties, and through influence on other parties as with the US democrats, in response to the inequalities of industrial societies, led to radical transformation to levels of inequality in economic terms. It is the reversal of this change since the late 1970s which has led to inequality being understood as a fundamental issue for social order and social coherence. The policy focus on inequality from governments and transnational bodies has primarily addressed inequalities in relation to income and wealth. There has been a, usually implicit, endorsement of Weber’s conception of the nature of classes as aggregates with common life chances as determined by position in market relations in general and labour market position in particular. Most of the discussion in this book will be about class inequalities but first it is useful to say something about the other categorical bases –​identities –​around which we can construct both descriptions and causal accounts of inequality.

Conceptualizing inequality  27

Gender and inequality Throughout most of recorded world history and in most places women have been subordinated to men. It was only in the twentieth century in liberal democracies and communist states that women achieved equal political status through admission to the franchise. The concept of patriarchy describes social orders in which women are subordinated to men in terms of power, moral authority, possession of property, and general social privilege. Historically most women have in some way been treated as under the control and to a degree at the disposal of men –​fathers before marriage, husbands when married, and often sons in widowhood. Feminist action addressing patriarchal relations has sought to give women independent property rights, to obtain access to political power through the franchise, and to render discrimination on the ground of gender –​the social expression of biological sex4 –​illegal.The author’s mother was dismissed from her permanent position as an executive grade civil servant with good promotion prospects on marrying in 1946 and had to give up her temporary and unestablished/​un-​pensioned civil service job entirely on the author’s birth.5 The impact of having a child on women, that is the biological and social roles of being a mother, have always been crucial feature of how women experience inequalities in a life course. My mother returned to work as a primary school teacher and was the main wage-​earner in the household throughout my childhood and adolescence. A key characteristic of most high-​income and high middle-​income countries over the last fifty years has been an ever-​increasing proportion of women working for wages outside the home. 15.3 million women in the UK aged 16 and over were in employment in October–​December 2018. The female employment rate was 71.4%, which is the highest it has been since comparable records began in 1971. The male employment rate was 80.3%. 9.0 million women were working full-​time and 6.3 million were working part-​time. 41% of women in employment were working part-​time compared to 13% of men. Powell, 2019: 3 Now in the UK the majority of women with dependent children work for wages outside the home. The employment position of women remains unequal. The UK gender median pay gap for full-​time women workers was 8.9 per cent in 2019. Women part-​time workers earn more than men who work part-​time but as far more women are employed part-​time and part-​time workers earn less than full-​ time workers the overall gender pay gap was 17.3 per cent. Women are less likely to be promoted, less likely to have managerial roles, and in general are worse placed in all aspects of employment. One important contrary development has been the increasing entry of women into high status and highly remunerated professional occupations, notably medicine, accountancy, and law.

28  Conceptualizing inequality

The relationship between female employment and inequality is not simple. At the level of individual women inequality remains very considerable although in many countries it is decreasing albeit slowly. However, most people do not live in single-​person households but live in couple relationships, the majority of which take the form of a heterosexual partnership. There has been a massive increase in the proportion of all women who work, particularly in what is called ‘the prime working age group’. The UK economy looks dramatically different today from how it did in the 1970s. One of the most striking changes in the labour market is the increased share of women in employment. Focusing here and throughout this briefing note on those aged 25–​54 (often called the ‘prime working-​age’ group) the proportion in paid work (including self-​employment) is up from 57% in 1975 to 78% in 2017. As Figure 1 shows, this increase was most rapid over the late 1980s, with the employment rate rising by 10 percentage points between 1983 and 1990 alone. But it has continued rising almost continuously since and is already well above its pre-​recession peak. Roantree and Vera, 2018: 3 Almost all of this increased female labour market participation is a consequence of the increase in the numbers of women working full time. The numbers working part-​time have not changed. Not only has general female labour market participation increased but there has been a very large rise in working by mothers of children. This has been particularly marked among the partners of higher earning men, although there is a lower rate of working by the partners of very high-​earning men. A consequence of these changed employment patterns is that a large majority of couples with children now have both parents in paid work. … this share rose from 49% in 1975 to 68% in 2015, with a corresponding decline in couples where only one parent is in work, from 47% to 27% over the same period. The biggest rises in maternal employment have occurred among the partners of relatively high-​earning men. … the partners of fathers in the upper half of the earnings distribution are now the most likely to be employed.This was not previously the case: 40 years ago mothers partnered with men in the bottom and top halves of the male earnings distribution were equally likely to be in paid work themselves, with employment rates of 61% and 60% respectively. Those figures are now 70% and 79%. In other words, for every additional mother in employment partnered with a lower-​earning man, there are around two additional mothers in employment partnered with a higher-​ earning man. Ibid.: 12 The conclusion we must draw is that whilst gender inequality remains substantial the size and pattern of increased female participation in the workforce has

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contributed to increased inequality among households, the crucial unit –​case –​for inequality in terms of both incomes and wealth. People partner with people like themselves particularly in terms of education and income earning capacity and potential. This sorting has important consequences for inequality in material terms.

Ethnicity and inequality The generative mechanisms relating ethnicity to inequality lie in the histories of colonialism and chattel slavery. These are highly contextual. So, for example, the relationship between miscegenation laws and ethnic identity in the USA –​the one drop of blood rule and the outlawing of legal marriage across racial lines –​ generated a very different social structure from that of the New World’s other enormous slave based society, Brazil (Kabeer and Santos, 2017). Indeed US conceptions of Black identity seem to be an outlier. Ethnic inequality in North America and Europe is mostly a matter of inequality affecting ‘people of colour’ although in much of the UK and in Australia there was a long history of exclusion of the Irish descended and in the Protestant state for a Protestant people of Northern Ireland discrimination continued and led to a civil war within UK territory. Ireland has a good claim to be the oldest colony that can be understood through a discourse of colonization and even in the USA the Irish had to ‘become white’. That said we can identify clear and distinct economic and life course patterned inequalities relating to being a descendant of chattel slaves, of a disposed indigenous population (Native Americans/​First Nations, Australian Aboriginals –​the worst positioned groups by far), or of ‘other than white’ post-​colonial immigrants into a nation-​state, which was a colonizer. The USA used to be an exception to some degree given the enormous Latino immigration from states, which had not been formal colonies of it. However, Europe is now subject to similar economic/​ refugee immigration with sources beyond its traditional colonies although many of those migrants to come from originally colonized places. In general, some concept like ‘colour’ is used as a social differentiating principle. South Africa is plainly an outlier with the majority of the Black and ‘Coloured’ population, the great majority of the whole population, being massively disadvantaged in relation to the White minority. Again political and social action by those dispossessed by racism and colonialism, particularly in the USA and South Africa, has had an important if very much incomplete impact on inequality. Legal and political exclusion is now outlawed in many states and groups have in nominal terms full citizenship rights if they have the status of citizen in the state. Being illegal matters a great deal and there is plainly an intersectionality of this with ethnic status. Although illegal Irish immigrants to the USA do get deported they are not targeted in the same way as Latinos. It is important to note that the US history of miscegenation laws and continuing cultural attitudes after their abolition are unusual and extreme in their consequences. In the UK inter-​racial (ethnic) partnerships are very common and the fastest growing group by identity describe themselves as in one way or another ‘mixed’.

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There remains very considerable inequality along the dimension of ethnicity, but it is not fundamental to the nature of twenty-​first century capitalism in general. We observe this inequality in relation to the position of individuals, households, and whole ethnic identity groups along the dimensions of inequality constituted by income wealth and power together with the extreme interaction of income/​wealth with power. In other words we relate ethnic inequalities to something very much like class. Here the notion of intersectionality is very helpful in taking us forward. Callaghan explains what this means in relation to class and patriarchy: Actors dealing with structures of class and patriarchy do so from different positions and with different interests, even within the same family. These structures are both externally imposed and internalized. If this were not the case it would be difficult to explain people reproducing structures that are based on their own subordination. Callaghan in Byrne and Callaghan, 2014: 111 There is a developing argument that the insistence on the politics founded around identities is a major distraction from the real political issues of the early twenty-​first century. Lind (2020) argues with some considerable justification that neo-​liberal elites have deployed a politics of identities other than class to deflect attention from class conflict in what is in reality The New Class War.6 Piketty (2020) describes late twentieth century and twenty-​first-​century politics in high-​income countries as being conducted in terms of a Brahmin Left and Merchant Right with considerable dissociation from the material interests and (as does Lind) the cultural interests of the traditional but dispossessed industrial working classes of those countries. These arguments have considerable force. Walby (2007) noted the resonance of the notion of intersectionality with the complex realist frame of understanding of the causal processes, which at any point in time determine social identity and social condition. Here it is useful to consider the notions of vertical and horizontal inequality and to expand on the implications of a focus on intersectionality for these framings. This distinction was developed by Stewart (2002). The vertical model of inequality ranks individuals or other social units (households, neighbourhoods etc.) according to income, assets, human capacities, health, or some other dimension, which is unequal in reality. The horizontal model recognizes that members of a social group may be present at different levels in a vertical ranking but are still unequal. So affluent women or members of an ethnic minority are still unequal because group based inequalities are the product of cultural norms, values and practices which serve to routinely disparage, stereotype, exclude, ridicule and demean certain groups relative to others, denying them full personhood and the ability to participate as equal citizens in the life of their community. Kabeer and Santos, 2017: 6

Conceptualizing inequality  31

These authors argue that it is the intersection of vertical and horizontal inequality which generates the most severe disadvantage and social exclusion. They are absolutely right. However, it is important to note than the disadvantages associated with horizontal modes of determining inequality are open to modification by legislative and policy interventions within what continues to be a capitalist social order. Northern Ireland provides a good example here. The ‘Protestant State for a Protestant People’ established on the partition of Ireland in 1920 operated on the basis of gross discrimination against the Catholic minority regardless of economic position or social status. It was precisely this that provoked the Civil Rights Movement of the 1960s, which was explicitly modelled on the US Black Civil Rights Movement. In the Northern Ireland of 2020 most if not yet all forms of discrimination against Catholics no longer operate. The Civil Rights Movement was supressed with great brutality but the consequent armed struggle has led to a profound change in the situation. Anti-​discrimination legislation in the wider UK while by no means complete in its impact has led to very considerable change. Pregnant women regularly lost their jobs as recently as the 1970s. Discrimination on racial grounds was overt. This is now not legally permitted and there are reasonably effective forms of enforcement. Globally horizontal inequality remains prevalent. Palestinian citizens of Israel, let alone Palestinians in the occupied territories, live under grossly discriminatory and excluding conditions. That is just one example but within a capitalist social order things can change.The continuing generative force in such an order remains class. In the era of the Capitalocene, it is capitalism which has the greatest generative causal power for social structures, and for the relation of the social with the natural. Capitalism can cope with female, Black, and gay chief executives of expropriating corporations and indeed with someone who is intersectionally all three. However, other than in terms of origin it would never be meaningful to describe such a person as working class. There is no exclusion from possession of great wealth on the basis of gender, ethnicity, or sexual identity. Women and people of colour are considerably less likely to be exceptionally wealthy7 or hold positions of great economic power but they can be wealthy and powerful. In terms of the reality of class position it is impossible for anyone with great wealth or power to be working class. So for the rest of this chapter we will proceed by considering just what is meant by class in capitalism in the era of the Capitalocene.

Class and inequality We may speak of a ‘class’ when (1) a number of people have in common a specific causal component of their life chances, in so far as (2) this component is represented exclusively-​by -​economic-​interests in the possession of goods and opportunities for income, and (3) is represented under the conditions of the commodity or labour markets. … The term ‘class’ refers to any group of people that is found in the same class situation. It is the most elemental

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economic fact that … Other things being equal … This mode of distribution gives to the propertied a monopoly on the possibility of transferring property from the sphere of use as a ‘fortune,’ to the sphere of ‘capital goods’; that is, it gives them the entrepreneurial function and all chances to share directly or indirectly in returns on capital. … ‘Property’ and ‘lack of property’ are, therefore, the basic categories of all class situations. … But always this is the generic connotation of the concept of class: that the kind of chance in the market is the decisive moment which presents a common condition for the individual's fate. ‘Class situation’ is, in this sense, ultimately ‘market situation.’ … Therewith ‘class struggles’ begin. Max Weber, Class, Status and Power The forms of inequality which have been identified as a problem for social order and/​or economic growth by the OECD and many national governments can be subsumed under Max Weber’s classic specification of class as being a common location in market situation. Note that this account is not a causal explanation of how classes come to be, other than in the way in which Weber identifies how the owners of property have access to the returns on capital goods as deployed in production. Weber created a typology along the dimension of market situation. But his account is causal going forward because he describes class having determinant power over an individual’s fate, over their life course. Marx in contrast starts his account of class through reference to a generative mechanism. For him classes are constituted by common position in relation to the mode of production. His grand abstract scheme for the era of capitalism differentiates between those who own the means of production and those who have nothing to sell but their labour power –​between capitalists and the proletariat. This is a high level of abstraction and there are sub-​categories within both groups. Marx recognized that land and command over rents was in principle different from ownership of capital goods used in direct production. Likewise it is always useful to recognize the distinctive role of finance capital. So we have the categories of rent, profit, and interest. In practice roles were and are combined in Britain great landowners were not only rentiers but significant in capital development in coal mining and marine transport and associated with banking in the nineteenth century. Marx worked with a labour theory of value coupled with a theory of exploitation. He described the wage labour relation as one in which workers were obliged to sell the labour power component of the commodities, which were the products of their work for a wage, which represented less than the value of the element of their own labour incorporated in that commodity. It is always useful to look at a practical example and the labour of coal miners, the occupation of two of my great grandfathers, one of my grandfathers, and (albeit briefly and incompetently) of my father, provides one. Coal matters ecologically. As Clark and Jacks put it: ‘the switch from a self-​sustaining organic economy to a mineral resource depleting inorganic economy was central to the British Industrial Revolution’ (2007: 2) and hence central to the emergence in full destructive power of the Capitalocene. In the

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early twentieth century the coal owner –​that is the owner of the mineral rights who could command a rent –​was paid one shilling per ton, which was more than went to the hewer who cut the coal. There were also the actual profits of the capitalist concern operating the mine. The differences between wage paid plus necessary operating costs and price for coal at pithead was for Marx the surplus value extracted from the labour of the worker. This was how miners and their families understood that they were being exploited but the notion of exploitation is important not just in terms of classes understood as common positions in relation to the means of production but also in relation to class consciousness. Marx in The 18th Brumaire distinguished between classes in themselves –​that is simple aggregates in a common position in relation to the means of production, and classes for themselves –​classes which recognized their common position and acted upon it. The difference was class consciousness and his examples were class conscious industrial proletarians –​notably coal miners who knew and resented exploitation and fought against it up to and beyond the nationalization of the UK’s coal mines –​and peasants who lacked this collective consciousness as a basis for action.8 When we consider individual people it is useful to distinguish between class position –​membership of an aggregate as defined by relation to the real historical instantiation –​in realist terms the expression in the actual, of the real generative mechanism –​from the way in which people understand their own position and may act in whatever way but especially collectively on the basis of that understanding. It is also crucially important to distinguish between how social science assigns people to a class position and how people understand that position themselves. Evans and Mellon (2016) make a useful distinction between the way people locate themselves in a class structure –​class identification –​and what they call class awareness: By class identification we simply mean the tendency for people to place themselves in a social class It is distinct from ‘class awareness’, which is present when people believe that class position has important consequences, that there are barriers between classes, and that social class still has an impact on their own and others’ lives. Evans and Mellon, 2016: 3 We might call this ‘class identity’ to relate it to the notion of identity as the basis of ethnic and gender identities. It is not enough for the whole of class consciousness, which we should reserve for the propensity to act on the basis of class awareness but it is an essential precursor of consciousness.We can give an account of class position on the basis of characteristics of individuals and households in terms of some set of measures in relation to income and wealth in materialist terms and if we follow the Bourdieusian school in relation to taste and distinction. However, to get a fix on class identity we will always have move into qualitative accounts both of what people tell us in interviews and how we observe their actions through ethnographic procedures. It is always useful in discussing class to remember what E.P. Thompson had to say about it:

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class is not this or that part of the machine, but the way the machine works once it is set in motion –​not this interest or that interest but the friction of interests –​ the movement itself, the heat, the thundering noise. Class is a social and cultural formation (often finding institutional expression) which cannot be defined abstractly, or in isolation, but only in terms of the relationship with other class; and, ultimately, the definition can only be made in the medium of time –​that is action and reaction, change and conflict. When we speak of a class we are thinking of a very loosely defined body of people who share the same categories of interests, social experiences, traditions and value-​system, who have a disposition to behave as a class, to define themselves in their actions in relation to other groups of people in class ways. But class itself is not a thing, it is a happening. Thompson, 1978: 85; original emphases The inequality, which is the source of policy concerns, is very closely aligned with class position in a Weberian sense and has a real relationship with Marxist conceptions of class. The bridging link between these two ways of thinking relates to power, much as Weber defined it in his classic article but specifically to the way economic power translates into political power. The most influential recent writer on inequality has been Piketty (2017). Piketty deployed a descriptive account of a long run of economic data to argue that throughout history, the rate of return on private capital has usually exceeded the rate of economic growth, expressed as the relation r > g. This means that the owners of capital increase their wealth faster than the rate of economic growth, which means that relatively speaking, the rest of us will fall behind. Although Weber is not referenced in Piketty’s main text, it provides a data-​based account, which resonates absolutely with what Weber had to say about the differential advantages of returns to capital. Piketty’s work has become part of the public as well as intellectual discourse as to how we should engage with inequality. For some this requires an abandonment of engagement with our classic discussions of class, especially in relation to class action. Thus: Piketty focuses on accumulation rather than exploitation as the central dynamic of capitalism. This move is controversial in some quarters, but it has been argued elsewhere that this framing has great strategic advantages in moving debates about inequality away from abstractions towards the kind of empirically nuanced perspectives. Rather than fixating on dividing lines between exploiters and exploited, dominators and dominated, and so forth, and which defaults to a problematic politics of ‘class antagonism’ that cannot do other than reproduce the very same kind of divisions which it seeks to dispel, a focus on accumulation recognizes that class relationships are not zero sum games, that all agents, differentially positioned within society, develop sensible (in their own terms) strategies to secure and advance their position. However, the overall result of such accumulatory politics can nevertheless be

Conceptualizing inequality  35

to generate structural inequalities. Without class conscious agents or overt antagonisms, powerful inequalities can be generated. Piketty … allows us to see how fundamental inequalities can be generated by agents who are completely oblivious to class and who are not necessarily collectively organized. Savage, 2014: 600 Well up to a point Lord Copper and not much of a point at that. Savage went on to note that Piketty shows rewards to labour relative to wealth were at their highest generally in what were then ‘advanced industrial societies’ at a time when trade union-​based class antagonism in the workplace was at its height –​in the fortunate third quarter of the twentieth century. That is when trade unions were relatively free to act in the interests of their members they won gains. What is missing both from Piketty’s general account9 and from many commentaries on it is an understanding that economic power is also political power and the political power has been exercised against the interests of labour in a systematic fashion most importantly through the systematic legal destruction of trade union’s ability to engage in effective strike action. Hopkins notes the absence of politics from Piketty’s analyses:10 ‘Even if the fact of capital accumulation may respond to an economic logic, the process is embedded in a very political logic’ (2014: 678). He refers back to Polyani’s The Great Transformation (1944), which demonstrated exactly the wholly symbiotic relationship between power exercised through control over the state and the development of market capitalism.The formerly advanced industrial countries have undergone what Byrne (2019) has described as ‘the second great if partial transformation’ from industrial to post-​industrial condition. The United Kingdom –​in the 1960s the most industrial society in terms of the proportions of adults employed in production and of gross value added generated from production anywhere in the world ever –​is now a profound example of deindustrialization, is now post-​industrial in every respect. This has not been simply an economic shift generated by the comparative advantage of low-​waged labour in the East and Global South coupled with the massive reduction in the transport costs of finished manufactured goods following the general introduction of container based marine and land transport. The economics matter but so do the politics. Shi-​Ling Hsu puts this very well: Piketty, his supporters and his critics are all missing a huge piece of the puzzle: the role of law in redistributing wealth. That wars and recessions necessarily wreak havoc on capital investments is intuitive enough. But in times of peace and prosperity, the legal mechanisms by which the rich accumulate, consolidate and increase their wealth remains a black box in this discussion. 2014: 4 We might say it was ever thus. In precisely the period that Polanyi examined, the Black Acts were used to destroy customary land rights across lowland England (see

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Thompson, 1975). Hsu gives a convincing account of how US politics and hence law has been worked in the interests of the 1 per cent and relates this both to the mode of campaign finance and the ability of Political Action Committee US PACs to dominate campaigning through funding and the political allegiance of US Supreme Court Judges who have been nominated over the years.11 In the UK, the Thatcher government destroyed the capacity of trade unions to engage in effective action through traditional means. The most damaging effect of this was that unions found it almost impossible to penetrate new areas of employment in outsourced services and privatized care homes and child care although ‘non-​traditional’ unions with no financial resources to be confiscated are now making an impact in these areas. Privatization of public services had a massive impact on the effectiveness and membership of unions. The globalization and the transfer of so much of industrial production to Asia and other places in the Global South –​to many of the states in the high middle-​income group, which are so important for understanding how to engage with inequality in a context of climate crisis –​also mattered a great deal. It was the combination of all these things that so weakened union power and worker’s ability to make a greater claim on the product of labour power. Both Hsu and Hopkins pay considerable attention to the ability of development capital to dominate land use planning and the accumulation of wealth through the secondary circuit of capital accumulation, which is based on speculation in the value of already existing buildings and the land on which they are built. In the UK the 1949 Town and Country Planning Act was designed precisely to retain land values for the public sector but this approach now has no force whatsoever. Labour-​controlled local authorities in Britain have collaborated completely with speculative development in recent years on the grounds of ‘necessary pragmatism’.

The middle class The category of the ‘middle class’ is extremely important for our understanding of the relationship between inequality and class and the consequent implications of this for class action. In the nineteenth-​century UK, the term was applied not to any category of people who sold their labour power for a living but rather to the newish category of industrial capitalists who could be distinguished from the traditional land owning and rentier nobility and gentry. There was a massive social and economic intersection of these categories. Dukes engaged in capitalist industry. Engineering entrepreneurs became peers of the realm and acquired great landed estates. The public school system brought their male and later female children together in a common programme of cultural integration. We do not think of great entrepreneurial capitalists –​Bill Gates, for e­ xample –​when we talk about the middle class in the twenty-​first century. Rather we mean a disparate set of people who stand somewhere in the middle in relation to household income and wealth. That said to use statistical distributions as indicators of social position is not enough. Many highly paid managers and professionals in the top decile of both income and wealth will strongly assert that they too are middle class.

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Generally middle-​class status –​note the use of the term status –​is a function of some combination of income/​wealth, education, and occupation. Interestingly in the UK, the world’s oldest industrial nation, the majority of people still identify themselves as working class (Evans and Mellon, 2016: 4) but this is an outlier with most people in most OECD countries regarding themselves as middle class. Ramos notes that The majority of the people in OECD countries –​on average around two-​ thirds of the population –​think of themselves as part of the middle class. Such self-​identification is highest in Nordic countries (except Finland), the Netherlands, Luxembourg and Switzerland, where four out of five people think they are part of the middle class. In contrast, just two out of five people or less identify with the middle class in Portugal, Brazil, Chile and the United Kingdom. 2019: 18 The OECD study makes a useful distinction between their operationalization of ‘middle-​income households’ defined as having incomes between 75 and 200 per cent of the median national income who make up 61 per cent of the households in OECD countries and those who self-​identify as middle class, which on average is about 66 per cent in OECD countries. There are important national variations but it is clear that however we define the middle class it makes up the majority of the population in most places in the richer world. In ‘emerging’ economies the OECD figures suggest that the middle-​income group is smaller and ranges from about one-​ third of the population in South Africa to half in Russia (2019: 18). The OECD explain why the squeezing of the middle class matters for the political and economic management of capitalism by states and elites: Our analysis delivers a bleak picture and a call for action. The middle class is at the core of a cohesive, thriving society. We need to address their concerns regarding living costs, fairness and uncertainty. … By shedding light on the situation of a group that has traditionally been the main driver of economic growth and a pillar of social stability, this report makes a key contribution to the OECD argument and vision for inclusive growth. We hope it will continue building a strong case for policy action, help countries develop policies that alleviate the pressures on middle-​class households and create economies that fulfil the ‘middle class dream’ once again. Ramos, 2019: 5 What constitutes ‘the middle class dream’? This is first the achievement of both objective and subjective personal ‘ontological security’ in terms of income, housing, and access to public services of a good standard, especially with ageing populations adequate health and social care. It also relates to how people look forward down

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the generations to their children and grandchildren. Here the prospect of social mobility matters. Leisering and Walker explain why: Social mobility is crucial to modernity. It is a functional pre-​requisite of change in social structures … Mobility is also a powerful means by which people drive forward their ambitions in life. Irrespective of the actual mobility that occurs, the idea of mobility is fundamental to the legitimation of Western Societies.The promise of mobility allows ‘open societies’ to maintain a system of firmly established inequalities. The optimism about macro-​dynamics, the belief in social progress, translates at the micro-​level into the belied in individual progress. 1998: 4–​5 Ramos et al. (2019) document comprehensively how at both the macro and micro dynamic level this is not how things are now. Rather we see the emergence of what Aldridge (2001) has a identified as: ‘… new, highly prosperous, largely private sector employed “superclass” within the middle class, which stands in increasing contrast with the traditional middle class’. This category includes both the concierge servants of the 1 per cent working in law and financial services –​many in both domains managing tax avoidance for themselves and their masters/​mistresses –​ and a significant group of managers both in what remains of industry but also in the higher echelons of new public sector management where the gap between senior managers and managed professionals has very substantially widened. Now social mobility seems to be understood in terms of gaining access to this superclass although some may aspire to the 1 per cent. In income terms this superclass seems located in the top 5 per cent but not top 1 per cent of household incomes.12 The key word in all of this is legitimacy. The OECD is deeply and rightly worried about how the erosion both of middle-​class relative living standards and sense of possibility for mobility threatens the political stability of a capitalist social order. Indeed it does. How these discontents will translate into political action and political change depends on the response of those engaged in politics itself.

Social exclusion versus inequality Before the financial crash of 2008 it was not inequality that was the focus of policy in high-​income states but social exclusion. Inequality is an issue across most of the social order. Exclusion is an issue for part of the social order, for categories of people, households, and neighbourhoods which have become differentially worse off than the social norm to an extent where a quantitative difference of degree has become a qualitative difference of kind. For a full discussion of the conceptual framing of social exclusion and for a review of policies directed towards replacing it with inclusion see Byrne (2005). The key difference between social exclusion and inequality as issues is that the former applied to a minority, a large minority but a minority nevertheless, whereas the latter is an issue for a large majority. In essence

Conceptualizing inequality  39

in its most general application social exclusion was something that happened to a dispossessed working class. Other groups were differentially and even differently excluded. For example, the disabled experience exclusion in a severe form. But the main issue in relation to social exclusion was the condition of a large section of the population who had been placed in a condition of insecurity and deprived in part of some of the rights of citizenship as these had been understood in the best days of industrial/​welfare capitalism. In particular secure employment at reasonable remuneration had gone to be replaced by what is now conventionally termed precarity –​the situation of being precarious. There were strong and weak versions of the concept of exclusion. The weak version was simply the latest assertion that the dispossessed had in effect done it to themselves because in multiple ways they were deficient in qualities which were necessary for inclusion –​access to at least a median standard of living and way of life. There were poorly educated, possessed redundant skills, had too much linking social capital tying them to family and neighbourhood as opposed to bridging social capital, which would enable them to break the ties that held them back. In contrast the strong version of the concept recognized that exclusion was something done by others to the excluded through deindustrialization, privatization of public services, subordination of planning and local governance to the interests of development capital, and above all else a disregard for the values and identities of working-​class communities. Exclusion was something that served the immediate interests of capital and capitalists, however much it created a risky potential both for anomic disorder and potential political strife. Well sow the wind, reap the whirlwind. The turn across many countries towards populist politicians and/​or complete disengagement from politics –​they are all the same –​they –​and have no interest in us –​is now general. This is the era of what Crouch (2000) calls the politics of post-​democracy dominated by business interests and neo-​liberal ideology –​even if expressed with a smiley face as in the inane politics of the third way. Although there is a populism of the left and even a populism which is left on collectivism whilst right on social liberalism,13 the dominant populisms are right in relation to identity politics. The key indicator of the failure of inclusion in political terms in post-​industrial capitalism was the no vote in the Brexit referendum in the UK across so many strongly traditionally Labour voting areas. However, social exclusion of the dispossessed working class is not enough to explain current political crises. The middle mass is also affected by profound inequality and a moving away of the rich and their lackeys. That is why the current concern is with inequality rather than social exclusion. This concern has been expressed in relation to economic circumstances and prospective futures, first in relation to exclusion both as a contemporary and ongoing situation, and then in relation to the ability to live the (middle class) dream and anticipate that your children will be able to live it too. But perhaps the key to understanding what is really happening is through considering inequality in power. Weber addressed power implicitly through his discussion of party but power was what he was dealing with.

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Callaghan and Wistow (2006) discuss what is meant by power in terms of a synthesis of the approaches of Lukes (2005) and Bourdieu in terms of his general framework of habitus and field. Lukes in his original essay (2005) distinguished three forms of power. First, there is straightforward domination by force. Second, power can be expressed through dominant values, beliefs, and political practices, which limit the agenda of policy and the implementation of policy so that only issues which are of interest to the powerful and perceived of as safe in their terms are actually discussed and dealt with. Third, there is power which is embodied we might say in the socio-​cultural framing of the system. Lukes noted emphatically that we must understand power as something which may or may not be enacted. Power exists outside and before its manifestation. The synthesis with Bourdieu as presented by these authors turns to a discussion of the way forms of habitus and field within a given policy domain –​in their case health –​structure the consequences of social actions within a framing, which can be described in relation to Luke’s three dimensions of power: Actors deploy their capital to maximize their position in an ever-​changing field and the particular distribution of power is the outcome of their interplay … The operation of habitus within a field is evidence of this distribution in that it points to values which are simply accepted; in addition, its analysis explains how actors contribute to the transformation or preservation of power relations. 2005: 587 Callaghan and Wistow were examining participation in health policy processes where a crucial element is the deployment of cultural capital as a source of authoritative power by professionals. When we come to how power is enacted in relation to inequality things seem somewhat simpler. Mills (1956) identified a power elite who increasingly shape the whole political process, not least through the role particularly but not only in the USA of campaign funding. If we look at the second dimension of power contemporary arguments around the 2020 US Democratic Party primaries and hence Presidential candidate nomination and the simultaneous contest for the leadership positions in the UK illustrate how the terms of debate are defined by ‘necessary pragmatism’, that is, what the system as at present constituted will allow. In the 2019 UK General Election the supposed expertise of the Institute for Fiscal Studies, a body which while independent of funding from the global super-​rich, unlike say the Institute of Economic Affairs (IFS), is dominated by a neo-​classical and hence neo-​liberal understanding of economics and economic reality, was seen as setting the limits of the possible. Although many heterodox economists and other social scientists rejected the IFS’s claim to authority the Labour Party leadership did not challenge the IFS’s fundamental role as a defender of what is against what might be. One domain of inequality where there has been explicit attention to power, albeit only at the level of the individual, is health. Whitehead et al. (2016) note

Conceptualizing inequality  41

that most discussion of this had been in relation to the degree of control, which here is synonymous with power, has been about work. They review how the relationship between degree of control and health outcome has been theorized in relation to the degree of control people have in the living environment. They frame this in relation to the micro, meso, and macro levels. Their discussion of macro is largely related to social expression of gender inequalities in whole societies but the meso level is identified as the level of community and place. This resonates very much with the consequences of the dispossession of working-​class communities in the transition to post-​industrialism. This was not just a matter of material immiseration. People in these places, particularly in the coal mining areas of the UK, lost their connection with real power as the Labour Party in common with social-​democratic parties across Europe severed their connections with the organized labour movement. The health consequences of this were obvious. The reversal of life expectancy among working-​class men in Russia and other post-​ Soviet nations has something in common with this sense of displacement albeit not so much from power as from a security of place. Workers in state industries in China who lost their ‘iron rice bowls’ on closure and privatization were in a similar position. The imposition of austerity across Europe after the 2008 crash when national governments and the European Union bailed out banks at the expense of the general public was informed by the use of power in both of Luke’s second and third dimensions. Blyth (2013a, 2013b) describes how neo-​classical economists and politicians/​policy makers (frequently wearing both hats) asserted the need to rebalance budgets and impose massive cuts in both living standards and the scope and quality of public services. Varoukis (2017) describes in detail how the actors from the International Monetary Fund (IMF), European Union (EU), and European Central Bank inflicted an extreme form of austerity on Greece against the policies of the Syriza government, which had been elected to reject it.14 In the twenty-​first century in the aftermath of the financial crash we see the enactment of power to the benefit of finance capital. Likewise the fossil fuel industries and those reliant on consumption of carbon have enormous corporate influence over governance at every level just as real estate capital has over planning at the crucial level of local land use determination. Ultimately policy is about power. We will keep returning to this central point noting that: No theory, no promises, no morality, no amount of good will, no religion will restrain power … Only power restrains power. Burnham, 1943 So inequality in power –​which itself is above all else a derivative of economic inequality in the most categorical sense –​is what matters in getting things done and just as importantly stopping them being done. In neo-​liberal capitalism the power to prevent matters enormously and that power belongs to capital and capitalists.

42  Conceptualizing inequality

Notes 1 Likewise qualitative descriptions should be understood as traces with qualitative narratives being accounts of trajectories. 2 In the complexity frame of reference effects can be considered to be system states (see Byrne, 2011). So inequality can be regarded as a symptomatic trace of an effect in relation to system transformation. 3 Although there was a real racist backlash from the Trump administration and supporters federally and at state levels. 4 Gender is not wholly a matter of biological determination and can in many states now be a matter of self-​identification. That said for the overwhelming majority of people gender is based on biological sex although how gender is expressed and experienced is a primarily social process. 5 Legislation introduced by the Labour Minister Barbara Castle in the 1970s allowed my mother to redeem the 15 years of pension rights she lost on marriage. 6 Although in this account differentiation between a managerial technocratic elite and the working class is drawn far too broadly to include everyone with a higher education and does not pay anything like enough attention to historical wealth forms and the realities of capital ownership. 7 Inheritance is a route through which widows and daughters can become very wealthy apart from the existence of self-​made women as well as self-​made men. 8 The land league in Ireland, founded by Michael Davitt, a returned proletarian who had been a peasant, was actually a good example of peasants with a class consciousness who acted on that consciousness against rentier landlords. Davitt also founded the Irish Congress of Trade Unions. 9 He redresses this omission in his later book which we will discuss in Chapter 5. 10 He does this with reference to the discipline of political science but it is politics in general that matters. 11 Bernie Sanders and other ‘Democratic Socialists of America’ have deployed crowd funding very effectively against the rich and crowd funding is also a means of organizing the mass of people. 12 Hence the emphasis in the UK about access to Oxford and Cambridge and to a lesser extent other elite Universities and in the USA about access to the Ivy league. It is not that these places offer better teaching –​frankly in my informed opinion they don’t. Rather contacts are made and elite status is badged by attendance. 13 Notably Law and Justice in Poland. 14 Varoukis distinguishes between the way political and business elites distinguish between outsiders like him in his role of academic critic and insiders who actually get things done. Reading his book might lead one to conclude that there is a third category in the Leninist mode: useful (sacrificial) idiot. His friendly relations with right wing politicians and praise for those who made austerity happen in terms of their personalities might suggest he belonged in that category. The Left Block in Syriza were probably right to go for broke and breaking the Euro.

Bibliography Aldridge, S. (2001) Social Mobility: A Discussion Paper. London: Performance and Innovation Unit, Cabinet Office. Byrne, D.S. (2002) Interpreting Quantitative Data. London: Sage.

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Byrne, D.S. (2005) Social Exclusion. London: McGraw Hill. Byrne. D.S. (2011) ‘What is an effect? Coming at Causality Backwards’ in Williams, M. and Vogt, W. Paul Innovation in Social Research Methods. Sage: London 80–​94. Byrne, D.S. and Callaghan, G. (2014) Complexity and the Social Sciences: The State of the Art. London: Routledge. Byrne, D.S. (2019) Class after Industry. London: Palgrave Macmillan. Blyth, M. (2013a) Austerity:The History of a Dangerous Idea. Oxford: Oxford University Press. Blyth, M. (2013b) ‘Austerity as ideology: a reply to my critics’. Comparative European Politics 11, 737–​751. Burnham, J. (1943) The Machiavellians: Defenders of Freedom. New York: John Day Co. Callaghan, G. and Wistow, G. (2006) ‘Publics, Patients, Citizens, Consumers? Power and Decision Making in Primary Health Care’. Public Administration 84(3), 583–​601. Clark, G. and Jacks, D.S. (2007) ‘Coal and the Industrial Revolution’. European Review of Economic History 11(1), 39–​72. Crouch, C. (2000) Coping with Postdemocracy. London: Fabian Society. Evans, G. and J. Mellon (2016), ‘Social Class: Identity, Awareness and Political Attitudes: Why Are We Still Working Class?’ British Social Attitudes, 33, www.bsa.natcen.ac.uk/​media/​ 39094/​bsa33_​social-​class_​v5.pdf (accessed 16 October 2020). Hopkins, J. (2014) ‘The Politics of Piketty’. British Journal of Sociology 65(4), 679–​695. Hsu, Shi-​ Ling, The Rise and Rise of the One Percent: Considering Legal Causes of Inequality (5th November 2014). FSU College of Law, Public Law Research Paper No. 698; FSU College of Law, Law, Business & Economics Paper No. 14-​11. Available at SSRN: https://​ssrn.com/​abstract=2477991 or http://​dx.doi.org/​10.2139/​ssrn.2477991 (accessed 16 October 2020). Kabeer, N. and Santos, R. (2017) Intersecting Inequalities and the Sustainable Development Goals: Insights from Brazil. Working Paper 14 International Inequalities Institution. London: LSE. Leisering, L. and Walker, A. (1998) ‘New Realities:The Dynamics of Modernity’, in Leisering, L. and Walker, A. (eds), The Dynamics of Modern Society. Bristol: Policy Press. Lind, M. (2020) The New Class War. London: Atlantic Books. Lukes, S. (2005) Power: A Radical View (second edition). London: Macmillan. Mills, C.W. (1956) The Power Elite. Oxford: Oxford University Press. Piketty, T. (2017) Capital in the 21st Century. London: Harvard University Press. Piketty, T. (2020) Capital and Ideology. London: Belknap Press. Polanyi, K. (1944) Origins of Our Time: the Great Transformation. New York: Farrar and Rinehart. Powell, A. (2019) Women and the Economy. House of Commons Briefing Paper CBP06838. London: House of Commons Library. Ragin, C. (1987) The Comparative Method. Berkley: University of California Press. Ramos, G. (2019) Under Pressure:The Squeezed Middle Class. Paris: OECD Publishing. Roantree, B. and Vera, K. (2018) The Rise of Women’s Employment in the UK. London: Institute of Fiscal Studies. Savage, M. (2014) ‘Piketty’s Challenge for Sociology’, British Journal of Sociology 65(4), 591–​606. Stewart, F. (2002) ‘Horizontal Inequalities: A Neglected Dimension of Development’, Working Paper No. 81. Oxford: University of Oxford. Thompson, E.P. (1975) Whigs and Hunters:The Origin of the Black Act. London: Allen Lane. Thompson, E.P. (1978) The Poverty of Theory. London: Merlin. Varoukis,V. (2017) Adults in the Room. London: Bodley Head.

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Walby, S. (2007) ‘Complexity Theory, Systems Theory, and Multiple Intersecting Social Inequalities’. Philosophy of the Social Sciences 37(4), 449–​470. Whitehead, M., Pennington, A., Orton, L. Navak, S., Petticrew, M., Sowden, A. and White M. (2016) ‘How Could Differences in “Control over Destiny” Lead to Socio-​Economic Inequalities in Health? A Synthesis of Theories and Pathways in the Living Environment’. Health and Place 39(1), 51–​61.

3 DESCRIBING INEQUALITY

The purpose of this chapter is to review how we can generate descriptive accounts of inequality. Chapter 2 dealt with establishing the conceptual nature of inequality as it is understood both in social science and in everyday discourse. It also began to develop a discussion of accounts for inequality, that is causal accounts which seek to explain why inequality in its various forms and across multiple dimensions and why it actually exists and is increasing. That causal account was framed in realist terms at the level of the generative real in relation to the intrinsic nature of capitalism and at the level of the experienced actual in relation to the specific forms of capitalism in post-​industrial and increasingly post-​welfare states. Here the focus moves through conceptualization to operationalization, measurement, and qualitative description, the various ways in which we can give an account of, re-​present, inequality. This will be done with a focus on the dimensions of inequality in income and wealth –​ the determinants in a Weberian frame of life chances, of inequality in health, the expression of the interaction of the biological and the social in the actual status of our bodies and minds, and inequalities in well-​being, in the ways in which we feel about ourselves in the social world in which we live. The emphasis will be on describing inequality as dynamic rather than descriptions at a single point in time. Trajectories matter for individuals, households, places at whatever geographical level, for any set of entities/​cases for which we want to understand inequality. Byrne (2019) describes the interaction of lives and social orders in terms of different levels of dynamic change embedded within each other. Leisering and Walker in their argument for social science to pay proper attention to The Dynamics of Modern Society (1998) identify the beginnings of an intellectual revolution, one that blends insight from across the social sciences, merges quantitative and qualitative methodologies,

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combines micro and macro views of society and exploits the power of international comparison. 1998: xiv Leisering and Walker focused on longitudinal panel data sets describing individuals and households and these are immensely useful. Any data set which describes the same cases through time is longitudinal. Spatial time ordered data, for example that derived from population censuses (particularly if they have small area data sets), gives us quantitative narratives for places at multiple levels of granularity. There is a potential for the use of administrative data sets in exploring case trajectories, particularly if these are linked in some way by a common case identifier. We can construct descriptions of trajectories in qualitative as well as quantitative fashions. Byrne and Doyle (2005) used ‘very slow movies’ –​sets of photographic images of the same location at different points in time over a fifty-​year period –​both to illustrate their account of post-​industrial transformation and as a stimulus for discussions in focus groups. Most of the examples in this chapter will be drawn from the UK but there will be a discussion both of data sources and qualitative material from other high-​ income and high middle-​income countries and a review of what data sources, both quantitative and qualitative, are available from them.

Counting inequality We know about first through our own daily lived experience. Lived experience, important though that is particularly when our range of vision is so greatly extended by our access to the media in all its forms, does not give us a systematic picture across the whole social order. To get that picture at whatever scale from the global system to geographic inequality in a locality we need to count. What we count and how we count matters a great deal. The what and how framing for counting is a way of summarizing the process of operationalization because the measures we generate whenever we count are made things, made in the realist perspective from something –​reality itself usually (not always) has a voice in their construction –​but made by us. They exist in the realist hierarchy at the level of the empirical. Operationalization is very important. The extent of our coverage in terms of range, whether in censuses or surveys, also matters. We must always when looking at descriptions of a population consider the adequacy of the coverage whether by total count or by sampling. Finally we have to pay very close attention to the case for which the count is generated.This matters because much of our data comes from individuals but descriptions of individuals based only on their own attributes are limited in assessing inequalities in income and wealth. We all live in households. Those households may be single person, although like many people in post-​industrial capitalism, the present author lives in a single-​person household ‘together but apart from’ a partner who maintains a two-​person household with her resident adult son. The resources we have are not absolutely pooled but we share a

Describing inequality  47

great deal. Coping with this increasingly common form of relationship is very difficult and not addressed at all in conventional social accounting. The commonest form of household in high and high middle-​income countries has two adults in it. These may or may not have children, dependent or otherwise, but the two-​adult-​person household is modal.The exact implications of this depend on legal status and the rights associated with that status. So for married couples in the UK and many other places household wealth is considered to be a joint resource and, with important exceptions relating to the residence of dependent children, is allocated equally on divorce. Some non-​marital relationships can lead to the same outcome on dissolution depending on case-​based circumstances. All indirect taxes and direct property taxes are levied on households. Historically in the UK, and still in many other states, the incomes of married couples were pooled for income taxation purposes but they are now separated.1 People pool their incomes in various ways when they live together and organize their spending largely on a household basis. They also accumulate wealth as a household, obviously for housing but also through pensions. Pension pots can be counted as wealth to be split on divorce and include survivors’ benefits where one half of a couple is entitled to continuing support from part of their partner’s pension after the partner’s death. Households are a crucial case when it comes to understanding inequality. So are extended family relations, notably inheritance patterns, social networks, and the characteristics of the neighbourhoods and localities in which we live. Fortunately we often have data for all of these, particularly on households! We also have a range of spatial data covering approximations to neighbourhoods, for example sets related to the Indices of Multiple Deprivations (IMDs) in England and Scotland. The Scottish Index of Multiple Deprivation (SIMD) looks at the extent to which an area is deprived across seven domains: income, employment, education, health, access to services, crime, and housing. The spatial aspect of inequality is important because it has causal effects on so many aspects of life. Spatial data has different levels of granularity. For the IMDs and their components we can get down to quite small areas. There is useful data on well-​being at the level of local authorities. When it comes to getting a spatial take on income and wealth we cannot usually get in detail below the level of regions, given the size of the samples which are the basis of the data, but the SIMD income domain data does give us an insight at a much smaller scale. What we lack is data on extended social relationships outwith the household itself. To begin let us dispense, if not entirely, then mostly, with one conventional operationalization of inequalities in terms of ordered categories –​the use of occupationally based specifications of location in a social hierarchy. Occupational data describes individuals and just individuals. This approach has a long history, dating in the UK back to 1911 when Stevenson, a medical statistician in the General Register Office first formulated a scheme for differentiating social classes in official statistics, particularly statistics describing morbidity and mortality. This was refined in the 1920s and it is important to note that Stevenson himself described it in terms which resonate much more with Weber’s concept of status rather than class. For

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him, the main distinguishing element was ‘culture’. Until 1971 the occupationally determined scale was described in terms of a rank depending on ‘standing in the community’. Again we can see this as being about status. There have been numerous refinements and developments of occupationally based class schemes, all justified by a long-​ standing recognition that in industrialised societies, occupations are the most powerful single indicator of levels of material reward, social standing and life chances … occupations are central to understanding social stratification. Connelly et al., 2016: 1 Occupational assignment is necessarily to an individual but for income and even more importantly wealth it is not individuals who are the socially significant cases but rather households. Very strong claims are made for occupationally based classifications as the best way to describe social stratification. Connelly et al. summarize these (and seem to agree with them). To most social stratification researchers, occupation-​based socio-​economic measures do not simply act as a proxy where income data themselves are unavailable, they are measures designed to help us better understand fundamental forms of social relations and inequalities to which income is merely epiphenomenal. ibid. The assertion that income is merely epiphenomenal to occupation is extraordinary. To dismiss income from a class definitional scheme, which usually asserts some sort of Weberian provenance is absurd. Wealth of course does not even enter into the discussion for those who rely on occupation to assign class. The basis for this dismissal is the assertion that incomes vary over time but that occupation remains stable throughout a life course. The stability of occupations in societies which have undergone the ‘great if partial transformation’ from industrial to post-​industrial capitalism is fragile at best. And households are ignored completely. DiPrete and McManus identify the problem in clear terms: The link between individual occupational mobility and household income mobility has always been somewhat problematic. But the reality of a weakening empirical connection between these two phenomena following a quarter century of rapid change in post-​industrial societies underscores the current need for a direct approach that can identify dominant patterns and cross-​national variation in the relative importance of labor (sic) market, state, and family mechanisms that affect income. 2000: 344

Describing inequality  49

First, the significant unit of economic resource for people is the household to which they belong. It is the resources of our household which locate us in relation to market determined life chances, to what Weber meant by class.These resources may be unequally distributed within the household, particularly in relation to gender, but we need up-​to-​date empirical research to establish the extent of that. When we look at qualitative work for the middle people in two earning households, and especially households with two full-​time workers, this does not seem to be the case. When we turn to considering social mobility we must recognize that this is not just about individuals but also about households. Both have trajectories through time. People in households move through time in relation to economic resources. The emphasis on the mobility of both individuals and households is necessary because through time individuals move through households just as through time households move through locations in the pattern of resource distribution. So if we are going to explore social mobility in relation to economic resources then we need to do so by recognizing this complex set of mutually interwoven trajectories. The second issue is the changing nature of employment relations in post-​ industrial capitalism. We can see this implications of this very clearly if we consider the changing nature of the work relationships of what Goldthorpe has called ‘the service class’ differentiated from a working class and an intermediate class (Goldthorpe and McKnight, 2004). In a book published in 2017 (!) Evans and Tilley asserted that: ‘Compared with the working class, middle class workers occupy relatively secure salaried positions, often with occupational pensions and other benefits’ (2017: 4). Duh! Tell that to the enormous cohort of adjunct academics on temporary, part-​time, even zero hours contracts, in university systems worldwide, to those even in the UK’s pre-​1992 Universities’ Pension scheme who have seen their benefits cut, tell it to the workers in the private sector with –​or now increasingly without –​occupational pension schemes, from which employers regularly took ‘contribution holidays’ and where final salary schemes have almost all be replaced by defined contribution arrangements which place people at the mercy of speculative capitalism, tell it to the marines, not the deck department! As we have seen the middle mass are being hit and hit hard. The OECD know it even if Evans and Tilley do not. And now we have COVID-​19.

Inequality in incomes and wealth Let us turn towards measures of economic inequality in terms of income and wealth dealing with both in relation to households rather than individuals. We have to think about income in a range of different ways. First, there is the market income –​income before any state benefits are paid and income and national insurance taxes withdrawn. Then there is gross income –​market income plus state cash benefits. Then there is post-​tax/​disposable income after usually the payment of direct taxes on incomes. It is post-​personal-​tax income that people receive as individuals and pool in households. Income in general comes from a mix of earnings, income derived from ownership of wealth in whatever form, and state cash benefit

50  Describing inequality

transfers. Pensions are complicated. State social insurance-​based pensions are a state cash benefit. Many occupational pensions in the public sector are not based on assets accumulated in a pension fund but are funded by a mix of state subsidy and from the contributions of those still employed. It is important to recognize that there is an argument to the effect that the liability for paying such pensions, and for paying non-​means-​tested universal old-​age pensions, should be counted as part of national debt, which means that those entitled to receive them ‘own’ a claim on public resources. Funded occupational pension schemes represent pension pots and along with the notional value of state-​funded transfer-​based occupational pension rights are counted as pension wealth in UK government statistics. There are also means-​tested benefits available to the elderly. We will return to the wealth aspect of pensions in our general discussion of measuring wealth. Then we can think of incomes net of tax and social insurance contributions. These are taxes levied directly upon incomes, but of course these are not the only taxes paid out of income. We also have to consider property taxes which are levied directly and taxes on consumption, indirect taxes, which households have to pay. The conventional measure of the general level of income inequality in nation-​ states –​the Gini coefficient –​is usually calculated for market incomes, that is, incomes before taxation/​social security contributions and the distribution of cash benefits, and for disposable incomes, that is incomes after taxation and the distribution of cash benefits but not taking account of the impact of indirect taxes. So far so good but there is a major complication. Rates of owner occupation vary considerably. OECD data updated for 20192 shows that rates vary from more than 90 per cent owned outright in Rumania to less than 40 per cent owned in any way in Switzerland. The UK figure is over 60 per cent owned in any way, about equally divided between owned outright and owned with a mortgage, although of course the value of the mortgage set against the value of the housing asset varies from sometimes negative equity –​ the mortgage is greater than the value of the dwelling –​to very small amounts as loans are paid off in a normal repayment mortgage. Anyone who lives in a dwelling they own derives a real income from it equivalent to the rent that would be paid if they rented it to someone else. This income used to be taxed in the UK under Schedule A until 1963 although on the basis of very outdated property valuations so it was by then trivial. It is still taxed in Switzerland, which is an important factor in the low level of owner occupation in that very wealthy country. The general principle that any expenditure incurred in obtaining an income is allowed as a charge against tax owed on that income is why tax relief against income was allowed for mortgage interest payments. This continued to be allowed in the UK as a tax relief applicable to all income for most purchasers until 2000. The real net income derived from living in a house that you own is not counted in as income in almost all assessments of income. The consequence is that real income inequality is considerably greater than it seems for either market or disposable income calculations.

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Let me illustrate by an ­example –​myself. I own two properties and live between them. The total value of these is about £320,000. I could if I rented them out get a total rent of about £1,000 per month. I would have allowable expenses –​leasehold and service charges on a small flat on Tyneside and repair and maintenance charges on both properties. This would increase my overall net income by about 25 per cent. As a landlord I would pay tax on that income. As an owner occupier I don’t. This anomaly is the crucial explanation for the growth of owner occupation in most high-​income countries over the last fifty years. It has enormous implications in relation to wealth to which we shall return because it has subsidized the acquisition of large inheritable assets for many middle-​income households. The significance of it cannot be stressed hard enough or often enough. No account is taken of this form of real income in the construction of most income data. How is income data constructed? There are two sources. Most of the data which is used to construct measures of inequality comes from social surveys managed on a household sample basis by national statistical agencies. There are social science-​ oriented surveys which do collect income data –​for example, Understanding Society,3 which has the advantage of being a longitudinal panel study which enables us to explore the trajectories of individuals and households through time. Another source is administrative data generated by taxation agencies. This only covers incomes which are taxed but many individuals and households do not have incomes which meet a tax threshold and the most affluent use both legal tax avoidance and illegal tax evasion to reduce the amount of income declared for taxation. The UK data is generated by the Living Cost and Food Survey conducted on an annual basis.4 The response rate to this survey is less than 50 per cent for eligible households and has been declining over the years from more than 70 per cent for the closest equivalent in the 1970s. The survey requires respondents not only to reply to an extensive questionnaire but also to complete a diary describing purchases. Very careful attention is paid to the issues posed by the difference between the sample as designed and as achieved. Weighting procedures are applied in an effort to compensate for the problems posed by non-​response. However, the problem always remains that we cannot really know the differences between respondents and non-​ respondents and there is a reasonable belief that surveys tend to miss both the poor and disorganized and the very affluent.The sample was originally of roughly 10,000 cases with a response rate of about 45 per cent. This is the data we have and we need to use it. The data generated is micro data describing the individual cases of interest. Most high-​and high middle-​income countries have data sets of this kind. International comparisons are made by the OECD, Eurostat, and UN data sources. Our sources of data on wealth are likewise derived from either surveys or administrative data. Administrative data is generally weak because in most countries, again with the interesting and important exception of Switzerland, wealth is not taxed on the basis of a stock held but only on transfers, primarily through inheritance. Again the best data is provided by focused social surveys, in Great Britain (because it doesn’t cover Northern Ireland) by the biennial Wealth and Assets Survey.5

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The study is conducted on the basis of two cohorts with one contacted in the first year and followed up in the next year with a new cohort added. The crucial response rate is that for first contact, which most recently was in the mid-​40 per cent range. This is a general problem with surveys now with response rates falling below 50 per cent and all the issues already described for assessing income also apply to this study although it is substantially larger with a sample of 16,000 in the most recent wave. Again this generates important micro data. Despite considerable efforts made in the design and management of this sort of survey, again through weighting and imputation, survey data sets of this kind are generally understood to under-​represent households with very large assets. They do not address at all the assets held by members of households which are located in other tax regimes and much of the beneficial ownership of very large wealth is located in tax havens. Neither do they address the way in which very wealthy families use discretionary trusts to avoid taxation. There is a literature on this issue of coverage, which is summarized in Chakraborty et al. (2019) who ask the question: Is the Top Tail of the Wealth Distribution the Missing Link between the Household Finance and Consumption Survey and National Accounts? The anomaly is that National Accounts aggregate data generally gives totals for wealth which exceed that produced by aggregating sums from the micro household level data generated by surveys of the kind of the Wealth and Assets survey. Chakraborty et al. on the basis of an econometric review and re-​assessment of data from a range of countries –​but not the UK –​answer their question thus: ‘The answer is a qualified “yes but partially” ’ (2019: 58) although as their study takes no account of wealth held beneficially but extra-​ territorially in tax havens we might withdraw the word partially. All these necessary qualifications taken into account the UK wealth and assets survey does tell us a lot about economic positions and economic power. It is also another source of information on household income, although in this instance only gross incomes, but it does record the sources of incomes.6 There are various ways in which wealth is classified. First, we can distinguish between marketable and non-​marketable wealth –​between wealth which can be converted into money and that which cannot. Physical wealth –​things, for example, cars, furniture, art objects etc. –​can be sold. Houses can be sold. Pension pots cannot although typically for many there is a lump cash sum which does come as money and now in the UK people can cash in private pension pots. In many countries, for example the USA and Australia, private pension pots are accumulated in investment accounts and can be translated into cash. The entitlement to a contributory-​based state pension can also be regarded as non-​marketable wealth although it is not usually included in wealth and assets by surveys whereas any form of occupational or other private pension provision is included. Wealth and Asset surveys typically classify wealth as physical wealth, housing wealth, pension wealth, and wealth held in the form of financial assets, that is, bank deposits, bonds, and equities. In Chapter 4 we will come back again as in Chapter 1 to ways of thinking about wealth not through scalar measurement or formal classification by type but in relation to what

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wealth is for.The key is the difference between wealth which is held for ontological security and wealth which is a source of power over others. There are important summary measures used to describe the distribution of income or wealth across a whole range. The most generally employed is the Gini coefficient, which has a value of 0 if the distribution is completely equal and a value of 1 if all is held by a single case. Others used are ratios of the income/​wealth of the top decile to the bottom decile or of the top quintile to the bottom quintile. The OECD Income Distribution Data Base is very useful for international comparisons here.7 Old EU states other than the UK, Italy, and Spain typically have disposable income Ginis of less than 0.3 as do Switzerland, Poland, the Czech Republic and Slovenia. The UK at 0.357 is the highest in Europe apart from the poorer EU accession states. Russia has a Gini of 0.33. The USA is at 0.39. Brazil is at 0.47, South Africa at 0.62, India at 0.495, Turkey at 0.404 and China at 0.514 (all most recent figures available). For wealth if we look at the share of wealth held by the top 10 per cent this varies from 72 per cent in the USA to 41 per cent in Japan. It most countries it is in the range 40–​55 per cent with the UK at 52 per cent and Denmark, which is egalitarian for incomes having a figure of 64 per cent. These internal variations are interesting. Post-​Soviet countries in Europe generally have quite high income equality on a par with Scandinavia. Russia is more equal than the UK. High middle-​income countries, Russia excepted, generally have high income inequality. Wealth inequality usually follows the pattern of income inequality with the marked exception of Denmark.There are variations in inequality which seem to be broadly associated with the degree of commitment to a neo-​liberal policy programme in high-​income countries and with the stage of development of high middle-​income countries, particularly those which retain significant rural populations.

Inequalities in health and well-​being Plainly there is nothing more closely indicative of a person’s life chances than their state of health, down to the absolutely fundamental fact of being alive rather than dead. There is an extensive literature on health inequalities. Asada (2005) distinguishes between univariate and bivariate measures of health inequality and equity.8 Univariate measures focus solely on the measure of health itself. Bivariate measures relate the health measure to some other distributional pattern usually one related to social class but there also can be bivariate patterning by gender, ethnicity, or any other social dimension. Let us begin with the simplest way to define health –​in terms of being alive or being dead. Life expectancy can be measured. In all high-​income and high middle-​income countries life expectancy at birth is now close to life expectancy for almost all people, in marked contrast to the pattern before the great health transformation when death rates for infants and children were very high.We can look at crude life expectancy measured simply by recording ages at death as is done in death certificates. However, simply living is different from living a healthy life. Another measure now widely employed is health life

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expectancy (also called disability-​free life expectancy). Eurostat developed this as a basis for collecting survey data on health.9 Data is collected asking people if they have any condition which limits their ability to function at a normal level. Across the EU in 2018, the number of healthy life years at birth was estimated at 64.2 years for women and 63.7 years for men, approximately 76.7 per cent and 81.4 per cent of the total life expectancy for women and men.The UK Office for National Statistics (ONS, 2020a) explored the relationship between both life expectancy and healthy life expectancy in relation to the Index of Multiple Deprivation measure for the Lower Super Output Area in which people lived at the time of death or data collection on health state. Only males living in the least deprived 40% of areas in England were expected to live more than 65 years of their life in ‘Good’ health, while those in the most deprived 60% of areas were expected to live less than 65 years in ‘Good’ health. Those in the most deprived 30% of areas were expected to live less than 60 years in good health. … Females in the five least deprived deciles were expected to live more than 65 years in ‘Good’ health, while those in the three most deprived deciles were expected to live less than 60 years in ‘Good’ health. ONS, 2020a: 7 and 9 The gap is larger for healthy life expectancy than for life expectancy itself. Data on life expectancy is collected from death certificates. Data on health state is collected from the Annual Population Survey (see ONS, 2018a) and adjusted by the Sullivan Method described in Jagger et al. (2014). Note that much of the database for these approaches is based on self-​reporting of health state, which is often described as qualitative data in contrast to that established by clinical diagnosis. Plainly health inequalities are ordered hierarchically. The original data collection on social class in the UK was intended precisely to explore gradients in a bivariate fashion. Health inequalities are class related and if we think in terms of power then very much related to and even determinant of people’s capacity to exercise control over their lives in any way. When we think about health inequality in countries which have supposedly universal health care systems like the National Health Services in the nations of the UK, then we need to think about how the resources of those health services themselves have an impact on inequality. Health services are either preventive or curative although there is of course an overlap in relation to testing programmes, for example, the Scottish programme of testing for bowel cancer. Prevention is the province of public health, generally underfunded in relation to curative interventions which is causing enormous problems as I write locked down in response to the COVID-​19 pandemic. There is a literature on differential use of universal health care services, which suggests that poorer people make less use of them because of lack of confidence in engaging with them. One relationship of great significance, particularly because the relevant clinical provision is always underfunded in comparison with

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clinical provision for physical illness, is the strong relationship between class and mental illness. Two causal processes have been proposed for this. One is downward drift, that is, mental illness pushed people down the class structure during their life course. The other is stress and lack of esteem for lower social classes as causal to mental illness. The reality is almost certainly that both operate at all times. Health and class are always lived together. The concept of well-​being was originally developed by economists who were challenging the view that the economic elements which go to make up gross domestic product (GDP) were an appropriate description of the actual real lived experience of satisfaction in affluent societies. Kuznetts who developed the notion of GDP was highly critical of the way in which the elements measured in it were subsequently taken to comprise a full and adequate description of the real condition of a society saying: ‘The welfare of a nation can scarcely be inferred from a measurement of national income’ (1934: 7). The EU in 2007 even organized a conference on the theme of ‘Beyond GDP’. There are a range of reasons for the challenge to mere production measures. A crucial one in the era of impending climate catastrophe is that elements which add to GDP include in very large measure the direct and indirect carbon consumption which is the driver of global warming. They also include other forms of ecological damage and destruction. The other key reason is that there is a prevailing sense in wider culture in many high-​income societies that things are not getting better but are actually worse than they were before. Rising economic inequality is plainly an important driver for this but there is a more general sense of malaise. For example, in the UK in 2019 twice as many survey respondents agree with the statement that the country’s best years were behind us (34 per cent) as asserted that the country’s best years are still to come –​17 per cent (ONS, 2020b). We might regard the distinction between economic well-​ being as measured by GDP and general social well-​being as a First World problem. Certainly high middle-​income countries, the locales of the massive reduction in overall global poverty through the last fifty years, have often taken the view that they need all the growth they can get although ecological issues in China are having a considerable impact on the general direction of policy. There are various ways in which well-​ being can be conceptualized and a plethora of ways in which it can be measured. Neo-​classical economists generally frame the notion in relation to expressed preferences and the degree to which these can be realized given an individual (or more properly household)’s resources. The broad basis of the main alternative approach is to frame well-​being in terms of mental state and described as ‘subjective’.10 There are many ways in which well-​ being has been measured –​see D’Acci (2010), Forgeard et al. (2011) and Quick and Devlin (2018) for reviews of these. Those who want a ‘hard’ –​that is generally agreed measure which can stand against GDP –​are often associated with the social indicators movement originally developed precisely to add the social to the economic in the description of the system state of nation-​states. The OECD review For Good Measure (Stiglitz et al., 2018) provides an extensive review of work in this tradition. The UK ONS established a Measuring National Well-​being programme

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in 2010, which draws on a range of national surveys to explore changes in well-​ being over time.11 The New Economics Foundation (2018) was commissioned by ONS to develop a way of measuring inequality in well-​being. This focused primarily on the notion of a threshold level.Van Praag (2011) argued that there are two components to be considered as causal for the well-​being of an individual. First, there are their own characteristics and then account must be taken of the characteristics of their reference group. The notion of reference group is well established in the sociological literature –​see for example Runciman (1966) and the updating of his approach in Rose (2006). The essential idea is straightforward. People’s sense of well-​being is in part determined by those with whom they compare themselves. There is some research on the link between class and well-​being but it generally uses occupational class specification with all the problems that causes. Richards and Paskov (2016) found a relationship between occupational class and negative psychological well-​being but asserted that this disappeared when they controlled for the employment status of their cases. However, as they themselves say there is a clear class gradient for employment status with employment far more likely for higher occupationally defined social classes. Partialing out in correlational/​regression style work reifies the variable rather than treating the case as an entity. Here the problem is understanding the class status of cases solely through only one of the variate traces describing that status. Lipps and Oesch (2018) found that in Germany where there have been moves in a neo-​liberal direction in economic and social protection policies there is a continuing (described from panel data) class gap in life satisfaction, which is twice as high as in Switzerland where unemployment is much lower and social protection is better.

Interaction/​intersectional: a complex realist take on individual and household data on inequality Variate traces describing either the current position of an individual/​household or the trajectory of an individual/​household do not have unique and specific causal powers. Rather they are trace measurements which describe the present position and past trajectory of the case in the possibility space. The generative mechanisms setting the range of possible locations for those cases in that possibility space are fundamental things like capitalism, patriarchy, and racism. The focus here is on capitalism and the manifestation of its consequences in class structures and trajectories –​both trajectories of individuals/​households and the trajectories of whole social systems. If we are concerned with inequality for any social entity, whether individual or collective, then we need to consider all the manifestations of inequality –​ which are expressed in terms of income, wealth, health, and well-​being. All of these in turn have recursive powers. If we think of this using the language of statistics then it is all about interactions. In the language of social theory it is all about intersections.

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Spatial inequalities: patterns and consequences Social life is conducted in places. Certainly the most affluent can live almost independent of any specific location and of the tax regime of any location. For most of us where we live matters. It matters in terms of the impact of the everyday environment, meaning all of physical, biological, and social, on us. It matters in terms of our access to publicly provided resources most of which, other than cash benefits and even those sometimes, are distributed on a spatial basis. So if places are unequal then that matters. And places are unequal. In urban areas there is significant social sorting generally by class in consequence of the implications of purchasing power in the housing market, but also by ethnic or quasi ethnic criteria although in high-​income countries the USA is an outlier, or even far outlier, in relation to that mode of segregation. That sorting is at the level of neighbourhood but there are also important spatial inequalities at the level of locality and region which derive in very considerable part from the impact of deindustrialization. The smallest scale of space through which social inequality is expressed is the neighbourhood. In Scotland this can be operationalized as the data zone. There are 6,796 data zones with an average population of 760. Population is roughly equal by data zone. A set of data derived from the 2011 census and various administrative records is used to construct a set of indicators across seven domains: employment, income, crime, housing, health, education, and access (transport difficulties). The health domain as an example includes data describing standardized mortality ratio, hospital stays related to alcohol misuse, hospital stays related to drug misuse, comparative illness factor, emergency stays in hospital, proportion of population being prescribed drugs for anxiety, depression, or psychosis, and proportion of live singleton births of low birth weight.12 Data at the zone level, or indeed data at any spatial level, is aggregate data since it is based on summing values describing cases, usually individuals or households, within the space. At the same time it is micro data if we take the case to be the specific spatial level itself. Data about individual small areas is itself useful but it becomes much more useful if we use some classifying procedure to sort the small areas into kinds and map the location and distribution of them within a higher spatial level. Byrne (2019) did this comparing the Northern half of the Tyneside conurbation at 1971 and 2011. The biggest change was the massive decline in the zones comprised of good social housing occupied by employed skilled workers and their families and the development of a new mixed owner occupation/​privately rented zone, which was not deprived but occupied by young professionals. The remaining social housing zones were now relatively deprived. Hamnett (2003) carried out a similar study of London and the title of his book indicates what he found, Unequal City: London in the Global Arena, although at that point, before the financial collapse of 2008 and subsequent austerity let alone before COVID-​19, he found the city to be not radically polarized but rather there was a replacement of the former skilled working class zones of residence by areas occupied by professionals, para professionals and

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other white-​collar workers who in many cases will have been the children of the previous generation of skilled manual workers. The SIMD data is presented in terms of ranks for the domains and it is interesting to look at the 2020 data for Edinburgh, the least deprived of Scotland’s major urban areas with just 24 per cent of its zones in the worst 40 per cent by rank on overall SIMD. Edinburgh City contains the bulk of the population of the city region. A hierarchical cluster analysis using all domains except access (since Edinburgh is a relatively compact city with good public transport) generated two clusters. The median overall SIMD rank for the first cluster containing 58 per cent of the city’s zones was 6,394 when the least deprived zone in Scotland is ranked 6,976. In contrast the median for the other cluster containing 42 per cent of the city’s zones was 2,402 when the most deprived zone in Scotland is ranked 1. The difference was massively statistically significant.13 So places are unequal internally and the city region is the right level for exploration of this kind of internal differentiation. Other geographical levels are worth looking at in relation to inequality. In high-​ income and some high middle-​income countries, which have undergone deindustrialization, there are strong regional level differences, but the variation within a region is always greater than variation among regions and the same goes for city regions as components of administrative regions. There is good data from Eurostat and OECD on regional level variations in inequality. The Centre for Regional Economic and Social Research at Sheffield Hallam University in the UK has documented the regional impact of deindustrialization across the UK (Beatty and Fothergill, 2016). The UK 2070 Commission chaired by the former head of the UK Civil Service Lord Kerslake was focused on developing a strategy for reducing inter-​regional inequality across the UK and we will return to its proposals when discussing spatial planning but the report includes much useful descriptive data. There are very considerable aggregate level inequalities within the UK as in all countries. For example, wealth per household varies from £679,000 in London the wealthiest region to £323,000 in the north-​east of England, the least wealthy region. London’s disposable income per capita is £22,250. For the north-​east of England it is £14,800. London’s standardized mortality rate is 7.1. Scotland’s is 8.9. London is the most internally unequal region by Gini for disposable income with a figure of 0.386 whereas both the north-​east and south-​west are more internally equal both at 0.282. Regions matter and so do localities because they are levels at which policy operates.

Qualitative approaches to inequality Qualitative approaches in this sense refers to studies which attempt to understand inequality through exploring the ways in which people themselves understand it. The traditional range of qualitative social research covers ethnography, qualitative interviewing, focus groups, documentary research, and visual methods. The products of the research take the form of texts, sometimes of images. These are interpreted in order to generate accounts. The focus is very often precisely on

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meaning. Here we will also consider survey research products, which deal with the meaning of inequality and attempt to access meaning even if the products of the research take a numerical form. The key sociological concept, which informs our understanding of the meaning of inequality, is that of relative deprivation in relation to reference groups. People make comparisons with others –​their reference groups. Relative deprivation describes their feelings in relation to those others when they understand themselves to be less favourably situated. An interesting illustration of this is given in Hecht’s (2017) interview based study of 30 respondents who were all in the top 1 per cent of UK incomes and many of whom were also in the top 1 per cent by wealth. Some of her respondents made the point that while they were indeed high-​income earners many of those with whom they associated had much higher incomes and their social world included people who were so wealthy that they did not really need to work. They looked up, not down although sometimes they did make comparisons with others below them, particularly public sector professionals and para professionals, doing essential jobs. This was a London-​based study and the sources of high incomes were in finance and law. In contrast Kantola and Kuusela (2019) interviewed 28 Finnish entrepreneurs who had built up companies from scratch in a range of industries.14 The Finns live in a society which retains a high level of welfare provision and where social norms are very much influenced by the egalitarian character of Lutheran Protestantism. Although many of the Finns maintained that they lived with a middle-​class lifestyle, some were moving towards what Veblen described as the conspicuous consumption of the super-​rich. This seemed more common among the UK respondents. What both sets of informants had in common was what amounted to a labour theory of value justification for their earnings: ‘… top incomes are seen as legitimate if they consist of a share of “value” created for shareholders, investors or clients’ (Hecht, 2017: 4). The UK respondents justified this in relation to the market price paid for them as value creators but none seemed to notice that their argument gels exactly with Marx’s concept of relative surplus value! Another interesting and useful focus of qualitative research on inequality has addressed people’s thinking about what is adequate in terms particularly of income in order to sustain a decent standard of living and what incomes are too high to be acceptable. There is a long established history of research on what is needed for an adequate minimum income (Veit Wilson, 1998; Davis et al., 2018) but more recently there has been work done not just on basic adequacy but on what is acceptable as a mid-​level normal and what level of income is regarded as unacceptably high. Burak (2013) carried out a survey research based study of US public attitudes towards very high incomes and found that 61 per cent of his respondents supported a cap on income compensation even when high earners were described as exceptionally productive or hard working. Interestingly Burak focused on restraining high incomes by a limit to the gross incomes rather than looking at high rates of marginal taxation as a way of reducing disposable incomes, although he does note that historically very high marginal tax rates have had the same effect.

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Davis et al. (2020) used focus groups to establish whether public consensus could establish a riches line. They found considerable consensus around a descriptive riches line –​what was meant by being wealthy –​but not around a normative riches line –​whether there was a level of affluence above which people have too much. This is an interesting and informative study but it was conducted in London where housing wealth depends often not on current income but on when a property was purchased. Allowing anecdote to be the singular of data I will record that when I lived in E8 in Hackney as a graduate student fifty years ago and was looking for a job I was asked to apply for one at a London Polytechnic but before the closing date I had already got a job back in the north-​east of England at Durham University. My landlord who I got on with very well advised me very strongly to buy a house in the street if I got the London job. If I had got the job and bought the house, which I could have afforded on a starting teaching salary, my property wealth would be nearly five times more than it is now at £1.4 million pounds. My use value of property wealth acquired in the north-​east of England and split on one divorce is just as high if not higher than the use value of a four-​bedroomed housed in Upper Clapton but the market value is very much less. Davis et al.’s respondents identified a level of adequate comfort –​securely comfortable –​but did so in relation to London.This would require high incomes and assets although it did include private health care and paying for some services –​cleaner and gardener. In much of the UK particularly in relation to housing this could be achieved at a lower income level. There were some interesting findings in relation to power and taxation: In all groups, participants talked about how those on higher living standards enjoy more power and (political) influence. These discussions related mainly to super rich, who were said to be able to influence others beyond their circle, and to a lesser extent the wealthy. The (securely) comfortable were hardly ever mentioned as enjoying disproportionate influence and power. … Another theme was that the wealthy, and in particular the super rich, were discussed as having the power to avoid the scrutiny, or the spirit, of the law. In particular, groups mentioned the possibility for them to move their money to offshore accounts and avoid tax. This was said to be very different for those with less economic resources who were described as relatively powerless and with no choice but to pay their taxes. Further, the super rich were also mentioned as being able to get away with criminal behaviour. For instance, they were said to have the power ‘to be naughty’ and destroy things (such as a restaurant), engage in corruption, ‘dodgy dealings’ and get away with conflicts of interest; for instance combining business and government. The super rich were said to have more influence, ‘whether you like it or not. Davis et al., 2020: 30 It is particularly noticeable that the securely comfortable were not seen as having power despite the way in which this middle group is a key focus for political parties and is often seen as the source of electorally obtained power.

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Conclusion The focus in this chapter has been on how inequality is described both by measures along various dimensions in which people, households and places can be unequal and in qualitative terms how people understand that inequality themselves. In the next chapter we will turn to exploring what inequality in income and wealth in particular actually means for how people live their lives now and how they will live their lives in the future.

Notes 1 This has been massively advantageous to households containing two incomes where at least one is high and is an important driver of increasing disposable income inequality across households. 2 http://​oe.cd/​ahd (accessed 26 October 2020). 3 www.understandingsociety.ac.uk/​(accessed 16 October 2020). 4 Full technical details are given at www.ons.gov.uk/​peoplepopulationandcommunity/​ personalandhouseholdfinances/​incomeandwealth/​methodologies/​livingcostsandfood survey (accessed 16 October 2020). 5 Full technical details are given at www.ons.gov.uk/​peoplepopulationandcommunity/​ personalandhouseholdfinances/ ​ d ebt/ ​ m ethodologies/​ wealthandassetssurveyqmi (accessed 16 October 2020). 6 Lustig (2018) provides a good overview of how income, wealth, and consumption are measured on a comparative and multinational basis. 7 www.oecd.org/​ social/​ income-​distribution-​database.htm (accessed 16 October 2020). 8 Inequality describes the actual nature of the distribution. Inequity incorporates normative judgements as to what the distribution should be. 9 https://​ec.europa.eu/​eurostat/​statistics-​explained/​index.php?title=Glossary:Healthy_​ life_​years_​(HLY) (accessed 16 October 2020). 10 On face value this is fair enough since wellbeing is plainly about how people feel but economists are inclined to see their approaches as scientific and objective because they lead to measurements of ‘facts’. This kind of scientistic arrogance always has to be named for what it is. 11 www.ons.gov.uk/​peoplepopulationandcommunity/​wellbeing/​datasets/​measuringnatio nalwellbeingdomainsandmeasures (accessed 16 October 2020). 12 Full details are given in SIMD Technical Notes 16, which is available online at www.gov. scot/​SIMD. 13 This is population rather than sample data so any difference is real but statistical significance can be used as a measure of degree of difference. 14 They were able to identify these people from the publicly available records of tax paid in relation to income. In general in Scandinavia individual tax records are public documents.

Bibliography Alonge, O. and Peters, D.H. (2015) ‘Utility and Limitations of Measures of Health Inequities:A Theoretical Perspective’. Global Health Action, 8(1), 27591. Asada, Y. (2005) ‘A Framework for Measuring Health Inequity’. Journal of Epidemiology and Community Health 59, 700–​705.

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Beatty, C. and Fothergill, S. (2016) The Uneven Impact of Welfare Reform. http://​shura.shu. ac.uk/​15883/​ (accessed 12 November 2020). Burak, E. (2013) ‘The Social Maximum: American Attitudes Toward Extremely High Incomes’. Research in Social Stratification and Mobility 31, 97–​114. Byrne, D.S. (2019) Class after Industry. London: Palgrave. Byrne, D.S. and Doyle, A. (2005) 'The Visual and the Verbal –​the Interaction of Images and Discussion in Exploring Cultural Change' in Knowles, C. and Sweetman, P. (eds), Using Visual Methods. London: Routledge. Chakraborty, R., Kavonius, I.K., Pérez-​Duarte, S. & Vermeulen, P. (2019) ‘Is the Top Tail of the Wealth Distribution the Missing Link between the Household Finance and Consumption Survey and National Accounts?' Journal of Official Statistics 35(1), 31–​65. Connelly, R., Gayle, V. and Lambert, P.S. (2016) ‘A Review of Occupation-​Based Social Classifications for Social Survey Research’, Methodological Innovations 9, 1–​14. D’Acci L., (2010).‘Measuring Well-​Being and Progress’. Social Indicators Research 104(1), 47–​65. Davis A., Hirsch D., Padley M., et al. (2018) A Minimum Income Standard for the UK 2008-​ 2018: continuity and change. Inspiring Social Change. Joseph Rowntree Foundation. Davis, A., Hecht, K., Burchardt, T., Gough, I., Hirsch, D., Rowlingson, K., and Summers, K. (2020) Living on Different Incomes in London: Can public consensus identify a ‘riches line’? London: LSE CASE Report 127. Diprete, T.A. and McManus, P.A. (2000) 'Family Change, Employment Transitions, and the Welfare State: Household Income Dynamics in the United States and Germany'. American Sociological Review 65, 343–​370. Dolan, P. and Peasgood, T. (2008) ‘Measuring Well-​Being for Public Policy: Preferences or Experiences?’ The Journal of Legal Studies 37(2), s5–​s31. Evans, G. and Tilley, J. (2017) The New Politics of Class. Oxford: Oxford University Press. Forgeard, M.J.C., Jayawickreme, E., Kern, M. and Seligman, M.E.P. (2011). ‘Doing the Right Thing: Measuring Wellbeing for Public Policy’. International Journal of Wellbeing 1(1), 79–​106. Goldthorpe, John H. and McKnight, Abigail (2004) The Economic Basis of Social Class. CASEpaper (80). Centre for Analysis of Social Exclusion, London School of Economics and Political Science, London, UK. Hamnett, C. (2003) Unequal City: London in the Global Arena. London: Routledge. Hecht, K. (2017) A Relational Analysis of Top Incomes and Wealth: Economic Evaluation, Relative (Dis)advantage and the Service to Capital. Working Paper 11 LSE Inequalities Institute London. House of Commons Health Committee (2009) Health Inequalities. London: House of Commons. Jagger, C.,Van Oyen, H. and Robine, J.M. (2014) Health Expectancy Calculation by the Sullivan Method: A Practical Guide, 4th Edition. Newcastle: Newcastle University Institute for Ageing. Kantola, A. and Kuusela, H. (2019) ‘Wealth Elite Moralities: Wealthy Entrepreneurs’ Moral Boundaries’. Sociology 53(2), 368–​384. Kuznets, S. (1934), ‘National Income, 1929–​1932’. 73rd US Congress, 2nd session, Senate document no. 124, page 7. Leisering, L. and Walker, A. (1998) ‘New Realities:The Dynamics of Modernity’ in Leisering, L. and Walker, A. (eds), The Dynamics of Modern Society. Bristol: Policy Press, Lipps, O. and Oesch, D. (2018) ‘The Working Class Left Behind? The Class Gap in Life Satisfaction in Germany and Switzerland over the Last Decades’, European Societies, DOI:10.1080/​14616696.2018.1448106

Describing inequality  63

Lustig, N. (2018) ‘Measuring the Distribution of Household Income, Consumption and Wealth’ in Stiglitz. J.E., Fitoussi, J.P., and Durand, M. For Good Measure. New York: The New Press, 49–​84. ONS (2018a) Measuring National Well-​being: Quality of Life in the UK, 2018. London: Office for National Statistics. ONS (2018b) Health state life expectancies, UK QMI. London: Office for National Statistics. ONS (2020a) Health State Life Expectancies, UK: 2016 to 2018. London: Office for National Statistics. ONS (2020b) Personal and Economic Well-​Being in the UK: February 2020. London: Office for National Statistics. ONS (2020c) Health State Life Expectancies by National Deprivation Deciles, England: 2016 to 2018. London: Office for National Statistics. Quick, A. and Devlin, S. (2018) Measuring Wellbeing Inequality. London: New Economics Foundation. Shildrick, T. and MacDonald, R. (2013) ‘Poverty Talk: How People Experiencing Poverty Deny Their Poverty and Why They Blame “The Poor” ’. The Sociological Review 61(2), 285–​303. Richards, L. and Paskov, M. (2016) ‘Social Class, Employment Status and Inequality in Psychological Well-​Being in the UK: Cross-​Sectional and Fixed Effects Analyses Over Two Decades’. Social Science & Medicine 167, 45–​53. Rose, David (September 2006) ‘Social Comparisons and Social Order: Issues Relating to a Possible Restudy of W.G. Runciman’s Relative Deprivation and Social Justice’, ISER Working Paper 2006-​48. Colchester: University of Essex. Runciman, G. (1966) Relative Deprvation and Social Justice. Berkley: University of California Press. Saunders, P. (1990) A Nation of Home Owners. London: Unwin Hyman. Scottish Government (2016) Scottish Index of Multiple Deprivation –​SIMD 16 Technical Notes. Edinburgh. Stiglitz, J.E.K, Fitoussi, J.P. and Durand, M. (2018) For Good Measure. Paris: OECD. Unger, R. (2015) Speech at the Royal Society of Arts 2015. www.thersa.org/​events/​2013/​ 11/​freedom-​equality-​and-​a-​future-​political-​economy-​the-​structural-​change-​we-​need (accessed 16 October 2020). Van Praag, B. (2011) ‘Well-​Being Inequality and Reference Groups: An Agenda for New Research’. Journal of Economic Inequality 9, 111–​127. Veit-​Wilson, J. (1998), Setting Adequacy Standards: How governments define minimum incomes. Bristol: The Policy Press. Whitehead, M., Pennington, A., Orton, L., Nayak, S., Petticrew, M., Sowden, A. and White, (2016) ‘How Could Differences in ‘Control Over Destiny’ Lead to Socio-​Economic Inequalities In Health? A Synthesis of Theories and Pathways in the Living Environment.’ Health and Place 39, 51–​61.

4 INCOME, WEALTH, AND INEQUALITY

This chapter will deal with the nature of both income and wealth. Understanding the nature of income and wealth requires more than a review of their possible sources. That matters but so does what income and wealth mean in relation to the way people live their lives, not only at one point in time but also through the life course. It is usual to separate income and wealth in conceptual discussion but they have reflexive implications for each other. Wealth is a source of income in that a stock of wealth can generate an income for the possessor of that stock.We generally think about this in terms of interest on bank deposits, rents from properties owned and not occupied by the owner, or profit distribution from shareholdings. We also have to think of pension pots as wealth, although they are not necessarily marketable, but they do generate incomes. And so do dwellings –​obviously in the case of owned properties which are rented out but also in kind from the dwellings we own and live in ourselves. Pension incomes from pension pots or related pension rights such as state non-​funded occupational pensions derive from wealth.We might even pursue this necessary logic and see social insurance pensions as derived from wealth. The 1979 UK Royal Commission on the Distribution of Incomes and Wealth (The Diamond Commission) did treat those rights as a form of wealth and we might regard them (and non-​funded state occupational pensions) as a form of national debt on which the recipients of the pensions have a claim for incomes. Incomes are also sources of wealth. For most people the only forms of wealth which are created from normal incomes are pensions and owned dwellings. It is plain that the greater the income the more the possibility of accumulating wealth from it.The commonest form of income in capitalism, industrial and post-​industrial, is a wage/​salary paid in return for labour power but there are other forms. Self-​ employment –​that is the direct selling of labour power to consumers without the intervention of an employing capitalist –​is increasingly important in post-​industrial capitalisms. Self-​employment rates in 2018 ranged from nearly 50 per cent of the

Income, wealth, and inequality  65

workforce in Columbia (an outlier) through over 30 per cent in Mexico, Chile, Brazil and Greece; more than 20 per cent in Italy and Poland; an average of 15 per cent in EU countries and the UK; to less than 10 per cent in Sweden, Denmark, and Finland; and just 6 per cent in the USA.1 The self-​employed are a diverse category. There are high-​income professionals in legal and accountancy practices. There are skilled workers working on an own account, or sometimes owned private company, based particularly in the construction industry both directly in repair and maintenance and on construction sites. There are workers in gig economy jobs, Uber and delivery drivers in particular, who should be employees but have been forced into phony self-​employment although there is emerging resistance to this. The UK Department of Business, Energy, Industry and Skills (BEIS) found that there were 4.6 million self-​employed workers in the UK in 2016, nearly 800,000 more than in 2008 before the financial crash.The proportion part-​time was higher than for employed workers and median weekly earnings were half those for employees. Even those working full time had median annual incomes of £17,200 compared with employee median full incomes of £22,500. The categories of employee (or worker as an additional category under EU rules) and self-​employed cover different kinds of experiences in relation to incomes. Workers can be on minimal wages which are so low, as for many in the UK, that they are subsidized from general taxation and that can also apply to some of the self-​employed. In addition to those workers we know something about from survey or administrative data there is a very large set of people whose labour is in the informal economy. The International Labour Organization (2018) found that more than two-​thirds of men and women globally earn their living in the informal economy. The criteria the International Labour Organization (ILO) uses to distinguish formal from informal employment are laid out in detail (2018: 7–​8). The overall level of informal employment in Russia is about 15 per cent, in South Africa is 35 per cent, in Mexico 53.4 per cent, in Brazil 46 per cent, in China 54 per cent, in Japan 19 per cent, in South Korea 32 per cent, in the USA 19 per cent, in India 88 per cent (78 per cent in other than agriculture), in Poland 38 per cent, in the UK 14 per cent (the highest figure in Northern Europe), in Greece 37 per cent, in Italy 19 per cent, and in Spain 27 per cent. There are important urban rural differences in China where 36 per cent of urban employment is informal but 82 per cent of rural whereas in India urban is 76 per cent and rural is 93 per cent. There are important gender differences in all countries (for details see ILO, 2018). We cannot ignore informal workers but there are less of them as a proportion of all workers in high-​income and high middle-​income countries. It is important to note that urban China if counted alone and separated from rural China would be a high-​income country. Most households depend on earnings either from employment of self-​ employment but sometimes from a mixture of both. One extremely important development in social protection (social security) systems through the transition from industrial to post-​industrial capitalism has been the emergence of social

66  Income, wealth, and inequality

assistance/​tax credit schemes (which amount to the same thing in effect as both are generally means tested), which subsidize the low wages of employed workers.These are most fully developed in the UK in the form of Universal Credit. Kenworthy (2015) reviewed how these sort of schemes work in practice in relation to their overall macroeconomic impact on wages. We must also consider how the forms of conditionality associated with them work as disciplinary mechanisms in regulating workers. In the UK under the Universal Credit rules not only the usually employed worker in a couple household with dependent children over the age of five (or no dependent children) is subject to conditionality and work seeking requirements, for the main worker if they work less than 35 hours per week at the national minimum wage. Workers with varying forms of disability unless these are extremely severe are placed on work related activity status, which requires engagement with a job coach whose task it is to get them into work. The consequence is very often what in France in the 1990s was called a chômage d’exclusion, that is, a cycling from low-​paid work to unemployment and back to low-​paid work. This has particularly negative consequences in that most active labour market engagement schemes are targeted at the long term rather than irregularly unemployed. Behind all this of course is in part the weakness of trade unions in neo-​liberal regimes. Countries with a high percentage of workers in unions have higher wage structures and less inequality overall. In high-​income and high middle-​income countries payment for the sale of labour power is not the only source of income for households. In the UK 73 per cent of total gross household income came from employment including self-​employment but 14 per cent came from state support, 8 per cent from non-​state pensions, and 5 per cent from other sources in 2018–​19. And 49 per cent of Benefit Units –​essentially similar to households but based on regulations for benefit claims –​received no state benefits. 29 per cent received less that £10,000, 12 per cent received between £10,000 and £15,000, and 10 per cent received more than £15,000. Benefits are either income related, which means they are subject to a means test (including a test of assets) or non-​income related, which means no means test. Almost 100 per cent of households containing people over pensionable age receive non-​income related state pensions but 12 per cent of pensioner couples and 35 per cent of single pensioners also receive income-​related benefits. More than 80 per cent of households containing children receive non-​income related benefits (child benefits) but more than 10 per cent of couples with children and more than half of single parents receive income related benefits. Cash benefits add income to households. Taxes take income away. While direct payroll taxes are generally covered in calculating net disposable income other taxes and in particular indirect taxes are not included. Since indirect taxes bear harder on lower income households and they pay a larger proportion of their incomes in them2 (see Byrne and Ruane, 2017) this is an important omission in the ways in which we assess inequality in a nation-​state. The impact of the combination of cash benefits and direct taxes on incomes is best assessed by comparing the Gini coefficients for market income before taxes and transfers and disposable income

Income, wealth, and inequality  67

after taxes and transfers. This is done in Table 4.1. The OECD regularly reviews the effects of income redistribution through taxes and transfers, most recently in 2019. Across the OECD the combination of personal income taxes and social security contributions reduced about a quarter of market income inequality for the working-​age population although there was a wide range of impacts. In general redistribution through taxes and transfers declined from the mid-​1990s to the time of the 2008 crisis although the impact of that on employment halted the trend. The main factor in the decline in cash transfers was caused by less redistributive insurance transfers. Where these had been replaced by means-​tested assistance-​ based transfers these did not generally compensate.The pattern for personal income taxes tended to be a reduction in their size but somewhat more progressivity often associated with the introduction of phased in tax rates for lower incomes. Interestingly Switzerland is the most equal state in relation to market incomes. Scandinavia and Northern Europe other than the UK have the most substantial redistribution through taxes and cash benefits but Poland, the Czech Republic, and Hungary are close to them.The Anglo-​Saxon countries and Southern Europe have less redistribution and Russia and Japan are in this category. Brazil has some redistribution as does China, but the extent of redistribution in Mexico and India is minimal. A simple inspection of the differences between Market Ginis and Disposable Income Ginis provides a rough and ready way of categorizing forms of capitalism in relation to welfare consequences.What these measures do not cover is the extent of redistribution, which is a consequence of the delivery of services in kind. This is important. As Bambra (2007) noted Esping-​Andersen’s failure to consider the implications of the UK NHS led him to very seriously misclassify the UK in terms of the scale of welfare state provision across society. Because incomes (and wealth) are measured in monetary terms it is conventional to treat them in measurement terms as continuous (scalar) data. That is to say we think of an income of £20,000 as one-​fifth of an income of £100,000 and that income as half of an income of £200,000. If we are thinking of disposable (post tax and benefits) incomes we might think that we could just express the social implications of these incomes as strict ratios –​the first household is one-​fifth as well situated in Weberian (life chance) terms as the second and the second half as well as the last. However, that is not how incomes work in practice. People often talk about their income as ‘enough to get by’.There is a literature on this in relation to how government’s define ‘adequacy standards’ for benefit payments or setting of minimum wages (supplement in the UK by a revival of the Speenhamland system of subsidizing inadequate incomes from tax revenues). The living wage movement engages in the same process.Veit-​Wilson (1998) presents a very useful discussion of how governments define what he calls ‘minimum income standards’ in relation to some combination of normative and political framing of what people need to survive in relative rather than absolute terms in their own state. Plainly any such specification has to take account of price structures in a given society and incomes defined say in exchange rate (US dollar) terms have very different social implications in different countries and even, especially in relation to housing costs, within the same

68  Income, wealth, and inequality TABLE 4.1  Market and disposable income Gini coefficients

Country

Gini market income

Gini disposable income

UK Germany Denmark Sweden Netherlands Belgium France Switzerland Italy Poland Hungary Czech Republic Greece Spain Russia USA Australia New Zealand South Africa Brazil China Japan Mexico India

0.506 0.5 0.447 0.434 0.445 0.485 0.519 0.386 0.516 0.447 0.478 0.435 0.528 0.507 0.446 0.505 0.454 0.462 0.715 0.575 0.548 0.504 0.473 0.508

0.357 0.289 0.261 0.282 0.285 0.263 0.292 0.296 0.334 0.275 0.249 0.249 0.319 0.333 0.33 0.39 0.325 0.349 0.62 0.47 0.51 0.339 0.458 0.495

Source: https://​stats.oecd.org/​Index.aspx?DataSetCode=IDD (accessed 16 October 2020).

country. Another technical point that needs making is that measures of household income are often ‘equivalized’, that is, adjusted to take account of the composition of the household in terms of the number of people in it. In Chapter 3, we reviewed what qualitative research tells us about what people think of as an ‘adequate’/​‘getting by’ income. Income above this level allows for more elaborate expenditure. In 2019 the median-​equivalized household income in the UK was £29,600. An equivalized household income of £20,000 would place the household in the middle of the third lowest decile. One of £100,000 would place the household towards the top of the highest decile in the top 2 per cent. Housing costs incurred make a very large difference to what people actually have available and for owner occupiers these are function of both location and length of time in the tenure. There is also the matter of transferred wealth since high-​ income households tend to have higher income parents and often receive substantial help to enter owner occupation. In the north-​east of England, a relatively low-​cost housing market albeit with substantial internal variation, a couple with a gross household income of £100,000 could afford private day school education

Income, wealth, and inequality  69

for two children. With a different set of housing costs in a more expensive market, particularly London, they might not. Note the emphasis on couple incomes. Two incomes matter a great deal. Just as we need to think socially about income not just in terms of a scalar variable with exact ratio properties so we need to think about wealth in a rather more nuanced way than in terms of simple amount. Why do people accumulate wealth? One very important reason is security –​what Saunders (1990) called ontological security.3 Martha is able to tell her husband who is terrified that they will be destitute after as he is about to retire from work that they have property –​four houses in a row –​to yield an income because she put half a crown away every time they had sex and used that to buy them. He regrets that he played away because if he hadn’t, as well as the row of houses he could have had the pub at the end. Martha says she bought that for the milkman. People want to feel safe in their world and also have something to pass on to children to help them feel safe. The major forms of wealth which create ontological security are owner-​occupied housing and pension pots. Thomas Hardy, reflecting on changes through the nineteenth century in the Wessex (Dorset) in which his novels were set noted that when farm labourers owned their own cottages they were in a much stronger position against farmers but when they lived in tied accommodation they were very vulnerable. Pitmen on urban Tyneside who lived in dwellings rented from private landlords unlike those in Durham pit villages who lived in colliery-​owned housing were notoriously much more militant because before they went on strike they saved up to pay their rent during the strike whereas those in colliery housing could be and were evicted. Of course, decent social housing at affordable rents can and certainly did afford ontological security but it did not lead to the accumulation of an asset. A very common reason for purchase of UK council houses under right to buy was to have something to pass on to children. On inheritance by multiple heirs these were usually sold to split the proceeds and often have been purchased on a buy to let basis. The other reason why people accumulate wealth is best understood by a Marxist conception of class relations. Wealth gives access to the product of the labour power of others through profits, rents and interest. Of course, these things overlap. Ontological security achieved through a funded pension comes from assets which yield profits, interest, or rents. However, there is a real difference between a retired wage or salary earning pensioner and the real rich. We can see this in the data. A cluster analysis of household data from the 2015–​16 UK Wealth and Assets Survey yielded five clusters. In summary the clusters were: • Cluster One: Low Income and Wealth 5,684 cases (30.7 per cent) Median Wealth £45.8K, Median Income £19.6K per cent of Total Wealth held 2.9, % of Total Gross Income received 17.2. • Cluster Two: Low Middle Income and Wealth 5,145 cases (27.8 per cent) Median Wealth £323.4K Median Income £28.7K per cent of Total Wealth held 13.9, per cent of Total Gross Income received 22.3

70  Income, wealth, and inequality

• Cluster Three: Middle Income and Wealth 5,653 cases (30.5 per cent) Median Wealth £827.6K Median Income £41.0K per cent of Total Wealth held 40.6, per cent of Total Gross Income received 34.7. • Cluster Four: High Income and Wealth 1,820 cases (9.8 per cent) Median Wealth £1,974.9K Median Income £70.5K per cent of Total Wealth held 32.0, per cent of Total Gross Income received 19.9. • Cluster Five: Very High Income and Wealth 211 cases (1.1 per cent) Median Wealth £5,014.0K Median Income £151.5K per cent of Total Wealth held 10.5, per cent of Total Gross Income received 5.9. Both wealth and income were unequally distributed but wealth much more so than income. Clusters 4 and 5 with less than 11 per cent of cases received nearly 26 per cent of gross income but held more than 40 per cent of wealth. The high wealth and income and very high wealth and income clusters held more than 55 per cent of financial wealth, more than 40 per cent of pension wealth and nearly 40 per cent of property wealth whereas the bottom two clusters (nearly 60 per cent of cases) held less than 10 per cent of financial wealth, less than 15 per cent of pension wealth, and less than 20 per cent of property wealth. The top two clusters received more than 60 per cent of unearned income from investment and rent and more than 40 per cent of private and occupational pension income. Financial wealth was particularly important for the very wealthy cluster where it was of the same order as property and pension wealth whereas these categories far exceeded financial wealth for all other clusters. This cluster containing 1 per cent of cases held nearly 14 per cent of financial wealth. This distribution suggests that the top two clusters, and particularly the very high wealth and income cluster, hold wealth as income generating/​expropriating assets in addition to wealth as ontological security whereas for the middle and high middle clusters most wealth is held in relation to ontological security. That corresponds to a Marxist understanding of class. Cohen et al. in a study of the top 10 per cent of income earners in four European countries –​Sweden, the UK, Ireland, and Spain –​noted in quantitative terms that: Despite overall income gains among the top 10% since 2008, much of this increase has been disproportionately concentrated within the top 1% … The top 10% encompasses billionaires, corporate executives, doctors, partners at city firms, civil servants, and headteachers. Studying it as a single unit does not reveal enough about its internal diversity. The report opens the ‘black box’ of the top decile to explore the range of experiences amongst those in the top 10%, especially in relation to those who do not belong to the top 1. 2020: 17 This difference between the merely affluent and the rich was also noted in the qualitative findings of this study.While those in the top 10 per cent recognized their affluence they compared themselves in reference group terms with the top 1 per

Income, wealth, and inequality  71

cent and felt relatively deprived. The results of the cluster analysis indicate a clear economic basal explanation for this. A note on methods is appropriate here. Class position for the complex systems that comprise individuals, households or any other entity, for example, neighbourhood of interest should not be described by any single measure. To do that is to move towards the reification of variables asserting that single measured variables have causal powers in relation to the complex systems from which they have been abstracted. Measures of variates are necessary but they represent traces of the position of the cases in the possibility space (see Byrne, 2002). It is far more useful to use classifying procedures whether based on cluster analyses or learning algorithms to generate typologies which have considerable heuristic value in exploring stratification and inequality through generating ordinal rankings of sets of cases based on multiple theoretically/​practically useful selections of classifying variate traces. This is very well illustrated by comparing these compound cluster memberships with occupational data. More than 70 per cent of the respondents in the high-​and very high-​income and wealth clusters were in professional and managerial categories but those two clusters contained just 4 per cent of that category. More than 50 per cent of professional and managerial respondents were in the low middle-​income and wealth cluster and nearly 30 per cent were in the lowest income and wealth cluster. So much for claims that income and wealth are mere epiphenomena of occupation.

Inequality through the life course –​in the past and in the future There is an extensive literature on the difference between inequality measured at a point in time and how inequality works out across the life course particularly in relation to incomes. The principal argument is that life course inequality is less than cross-​sectional inequality although the most extensive study, albeit one based on simulations rather than long runs of either administrative data or cohort longitudinal studies, notes that for 24 OECD countries examined the bulk of earnings inequality is permanent in nature, higher earnings inequality in a given year tends to be associated with higher intra-​generational mobility, and that much of the sustained character of this pattern is due to mobility in and out of work and around low-​paid work at the bottom of the income distribution (Garnero et al., 2019). On average across countries only 20% of earnings inequality in a given year evens out over the life cycle as a result of mobility. This suggests that the bulk of earnings inequality at a given time is permanent. Ibid.: 26 Alongside this primarily econometric literature is a related set of studies, which pay attention to the significance of the age cohorts to which people belong as determined by their time of birth.This is summarized in Marshall (2006) who points out in clearly sociological fashion that lives are lived dynamically through social

72  Income, wealth, and inequality TABLE 4.2 Two generations

Name

Earliest birth

Latest birth

The Greatest Generation The Silent Generation Baby Boomer Generation Generation X (Baby Bust) Xennials Millennials Generation Y, Gen Next iGen/​Gen Z Gen Alpha

1910 1925 1946 1965 1975 1980 1995 2013

1924 1945 1964 1979 1985 1994/​2000 in UK 2012 2025

structures, which are themselves dynamic. A complexity take on social structures is that they are relatively stable for long time periods but that changes in them are of kind rather than incremental. It is notable that the notion of generational cohorts is now part of popular culture. So we have in recent times (see Table 4.2). My parents belonged to ‘the greatest generation’ (a term largely used in the USA –​ in the UK people who fought harder and longer were less assertive). I am a baby boomer and a real one born 1947. My oldest child is Generation X –​born 1970. My youngest is GenZ born 1997 by North American standards but regards herself as a millennial in cultural tastes.What matters in relation to inequality is the different economic experiences of these waves, and these differ in different countries. In the USA, Australia, New Zealand, and most of Northern and Western Europe baby boomers were the fortunate generation in relation to stability of employment, good welfare provision, and relative ability to acquire housing and pension assets. Southern EU Europe caught up relatively quickly and some post-​communist states did something similar, notably the Visegrad states of central Europe and the Baltic states. These generational terms are not really applicable to most of the world and particularly to the Global South where the transformational structural changes have been a consequence of globalization and the opening up of economies, particularly in China. In the world’s high-​income countries, a very notable generational shift has been the way in which generations subsequent to the baby boomers have not had the same stability and security of employment and ability to acquire housing and pension assets. There are important characteristic shifts across generations, notably in relation to educational experience. Just 13 per cent of my generation in the UK have a university degree –​in many cases acquired in adult life through the Open University. By the mid-​2010s the proportion of my younger daughter’s generation entering higher education was more than 30 per cent. These patterns are general. OECD figures for 20184 show that there are radical differences in the proportions of 25-​to 34-​year-​olds with a tertiary education compared with 55-​to 64-​year-​ olds, most radical in South Korea where the proportions are 70 per cent compared with 22 per cent but for the UK they are 51 per cent compared with 37 per cent.5 However, despite constant assertions by policymakers that higher education was a route to good employment and security this has not necessarily been the case.

Income, wealth, and inequality  73

Generally a higher education does improve economic position but I note that my older daughter, an economics graduate born in 1970, has had an employment trajectory similar to her grandmother’s who entered the UK civil service by competitive examination at age 16 in 1931 although subsequently getting a teaching qualification post-​war.6 There is a considerable literature which focuses on intergenerational inequality. This became an issue in the USA and New Zealand when neo-​liberals began to challenge the costs of state insurance pensions and, it has to be said correctly, identify their funding as in part a form of national debt.7 Willetts (2010) made much of the contrast of experiences of the baby boomer generation and subsequent generations and the Resolution Foundation8 with which he is associated has done substantial, and useful, work on intergenerational patterns including an audit (Bangham et al., 2019) and a study of international comparisons (Rahman and Tomlinson, 2018). A House of Lords Committee (2019) investigated these differences and the UK ONS has developed statistical accounts of them in response to their request (2019). The Resolution Foundation’s intergenerational audit noted in particular that the cohort born between 1956 and 1965 got 48 per cent of the total increase in UK wealth over the period 2006–​2016 but comprised just 17 per cent of the adult population. There plainly has been a shift in the situation of successive generations in high-​income countries and this is important in relation to the increasing insecurity of middle-​income groups, both for themselves and in relation to the prospects for their children. It is important to emphasize that all studies note that intra-​generational inequality is considerably greater than intergenerational inequality. This is particularly marked in relation to wealth and that is associated not only with pension assets as a source of retirement incomes but with housing assets. A key feature of intergenerational trends is the increasing difficulty for younger generations in gaining access to owner occupation as a tenure, coupled with the reality that even if they get to own a dwelling in a period with very low inflation the mortgage debts they incur will not be eroded over time as was the case in the past. The term ‘generation rent’ is used to refer to millennials in particular. The proportion of income devoted to housing costs for households headed by people in the age group 3–​34 years has doubled in all UK regions between 1979–​81 and 2015–​18 and in London takes 30 per cent (Bangham et al., 2019: 69). Higher housing costs and the difficulty of accessing owner occupation have had important effects of the ability of households to move and contribute to issues in relation to job mobility. An important corrective to the notion that generation in and of itself has causal powers in relation to inequality is outlined by Christophers (2018a) who argues, correctly, that Intergenerational inequalities emerge largely through (original emphasis) structural, and especially class based, inequality, and there therefore [to be] understood as epiphenomenal manifestations thereof. 2018a: 106

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This matters because increasing inequality is by no means simply a matter of the political power of the elderly based on their great political engagement –​real though that is, nor of the relative returns to assets as opposed to labour power, the core of Piketty’s argument. Indeed the latter is largely a product of the exercise of political power by the owners of assets rather than anything inherent in a given economic system. However, the differentiation within preceding generations matters because as Christopher notes, with an emphasis on housing, perhaps the most important thing about intergenerational inequality is the way in which unequal assets are passed between successive generations. Traditionally, particularly among those influenced by Bourdieu, the focus studies of intergenerational transmission of assets has been more on cultural capital and educational experience but the transmission of tangible wealth matters a great deal. So inequalities in one generation are passed on to another. Many baby boomers, and actually often their parents –​my mother for example, acquired housing assets and saw the real value of their mortgage debts massively eroded by inflation. My first house cost me twice my salary. By the time I sold it some 12 years later the original debt was one quarter of my salary. This was partly a function of increments in salary but mostly down to inflation. I sold my mother’s house on inheriting it for a sum equivalent to four years of a primary school teacher’s salary and this was a quick sale in a post-​industrial town. The equivalent dwelling in suburban London would have cost more than 15 times a primary school teacher’s salary.9 So inheritance matters a lot in relation to inequality. Traditionally class-​based analyses of the implications of inheritance have focused on the inheritance of the kind of wealth, which enables ownership of the means of production, and that matters a great deal, but the lived experience of inheritance for the great majority of people relates to the inheritance of wealth, which gives access to ontological security rather than exploitative wealth. The importance of inheritance in the twenty-​first century is well summed up in by Bangham et al. : ‘… inheritance from family may have more of an impact on your lifetime living standards than how much you earn, with implications for intra-​generational inequality’ (2019: 18 and repeated 143). Inheritance is not the only mode through which wealth is transferred across the generations. Gifts are important and a common gift is assistance with the deposit required for a dwelling purchase –​in the UK now mostly 25 per cent of the purchase price. A survey by Aldermore10 showed A quarter (23%) of prospective first time buyers plan on using the ‘Bank of Mum and Dad’ to help fund their deposit Of those planning on using the ‘Bank of Mum and Dad’, the majority (54%) will use their parents’ cash savings A quarter (24%) will receive equity released from their parents’ property to help fund their deposit for a first home One in five (19%) say their parents will move house, downsizing in order to support their child

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A common form of wealth transfer is that parents share inherited wealth from their own parents with their children and grandparents of course often leave legacies down the generations. The ONS (2018) study of intergenerational transfers in Great Britain shows unequivocally that to those who have shall be given is the general pattern particularly in relation to the distribution of individuals by income. Although transfers are made to individuals, they become available to households as a resource, particularly in relation to housing. Discussions of wealth in relation to inequality have focused almost entirely on the distribution of private wealth but there is also public wealth. Enclosure was the first form of expropriation of public wealth –​which hangs the man and flogs the woman who steals the goose from off the common, but leaves the greater villain loose, who steals the common from the goose. In Scotland the claiming of ownership of clan lands by traditional nobles and the expulsion of clan members through the highland clearances remains a crucial component of popular culture. In Ireland colonization had transferred land ownership to the ascendancy, but their lack of legitimacy meant that they had to wait for the Famine to clear land and even then lost out due to the success of the Land League so land was transferred to some occupiers creating a class of gombeen Kulaks, not what Michael Davit had intended. The UK has seen some of the most developed transfer of public assets –​public wealth –​to the private sector of any high-​income country. Whitfield (2020) gives a full description of the looting of the public sector globally and the way in which international trade agreements have been formulated so as to restrict the powers of states when they confront the profit motives of capital. He defines privatization thus: Privatization is the restructuring, transformation, sale, management, private and for non-​profit provision of public goods and services, government functions, land and property, nature, bio-​ diversity, and de-​ carbonization and climate change mitigation. It inter-​woven with and co-​dependent on financialization, marketization, individualization. 2020: kindle location 970 The best summary term for this is accumulation by dispossession through the re-​ commodification of the public sector. A particular egregious example is what has been done with public land in the UK. Christophers (2018b) shows that half of all public land in Britain –​some two million hectares comprising 10 per cent of all British land, worth £400 billion has been transferred to the private sector often at knock-​down prices. Wilks (2013) demonstrates that globally 132 of the world’s most valuable 500 corporations were formerly public sector bodies and that these generate more than half of all non-​US profits. Mostly privatization has delivered the public sector and public workforces into the hands of corporate capital. The main exception was the ‘right to buy’ process for UK council housing which transferred some 2.5 million dwellings worth £86 billion to their occupiers at very substantial

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discounts depending on their length of tenancy. Council housing’s great financial advantage was ‘the municipalization of capital gains’ in which increases in the value of the dwellings coupled with the erosion through inflation of the real value of the debt incurred in constructing them meant that good new housing could be let at rents considerably below the rent necessary to meet construction and management costs because the older housing in the stock was paying rents well above construction debt and management costs. In effect tenants pooled the advantages that had accrued to individual owner occupiers. The only form of privatization that played to wealth as ontological security as opposed to wealth as exploitation was right to buy but it is notable that much of the stock transferred to residents, a majority of it in London, is now in the hands of private landlords and rented out for profit. Whitfield’s insistence on the link of privatization to financialization and the secondary circuit of capital accumulation, accumulation not through new production but through speculation in the value of existing land incorporating assets, is absolutely right. Direct examples include the way in which Urban Development Corporations (UDCs) were able to seize public land from local authorities and sell it to commercial developers, well below commercial values. Of course, the link with the secondary circuit of capital through the financialization of property debts, including housing mortgages, was the primary reason for the financial crisis of 2008. In their mad rush to achieve short-​term development the UDCs were major agents of deindustrialization in the UK’s maritime cities, sterilizing irreplaceable deep water facing sites with for example outlet parks to sell remaindered clothing and household items. The main discussion of the role of taxation –​and of the benefit systems which are intrinsically linked to taxation not least because exemption from elements of tax is one of the most important ways in which cash is given to people and corporations –​will be developed in Chapter 6 dealing with the role of states in relation to inequality. However, some preliminary comments are appropriate here. Of key significance is the different social functions of forms of wealth –​ontological security versus a basis for exploitation of others –​and of income being enough to be comfortable as opposed to enough to engage in massive conspicuous consumption. We may all have to consume less to deal with impending climate catastrophe but some of us are going to have consume a lot less. The political significance of the distinction between wealth as ontological security and wealth as the basis for exploitation relates to the ways in which wealth can be taxed in relation to democratic politics in high-​income countries although it will also have implications in high middle-​income countries. The key complexity framing take on the material reviewed here is the importance of the interaction of the dynamic trajectories among individuals, the households in which they live, the state systems of taxation/​benefits and the overall socio-​ economic-​political structures constituting the social order. All of these are dynamic and all the elements are complex systems in and of themselves with causal powers operating in all directions among the interwoven whole set at all levels. Mills put the task of social sciences as a whole well:

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Know that the problems of social science, when adequately formulated, must include both troubles and issues, both biography and history, and the range of their intricate relations.Within that range the life of the individual and the making of societies occur; and within that range the sociological imagination has its chance to make a difference in the quality of human life in our time. 1959: 226 Byrne (2019) discussed how class is lived. Class is the main driver of inequality and we can equally assert that inequality is lived as the manifestation of class relations. Leisering and Walker make the very important point that this is not just a matter of work relations, crucial though they are. It is also a function of how state actions intersect with life courses: The modern individual and the modern state, far from being adversarial, now mutually reinforce each other. The individual as an autonomous agent is the result of processes of social inclusion and of widening participation secured by law and state policies … the welfare state is a key force in creating the life course, that is in shaping the temporal order of individual lives. 1998: 8; original emphasis We need to say household as well as individual but this is right. Life courses are recorded backward as we can describe them from longitudinal data sets and biographical testimony but lived forwards. Heinz and Kruger emphasis not only stocktaking, reflection on the past, but also planning –​planning to adapt to change.We all plan ourselves.What also matters is how the institutions which can shape structures plan –​to confront both inequality and climate crisis and how we, individual and collective active citizens, might have a role in shaping that planning. How we might ­exercise power. The life course is a major institution of integration and tension between individual and society that provides the social and temporal contexts for biographical planning and stocktaking11 as well as for ways of adapting to change in public and private time and space. Heinz and Kruger, 2001 The most important thing to draw from the materials reviewed in this chapter is that what matters most in determining the future trajectory of any social system is power. Plainly income matters in relation to the ability to consume but what really matters for power is inequality in wealth. There is a difference between wealth which facilitates ontological security and wealth which is a source of power both over others through the expropriation of part of the product of their labour power and in political terms through the influence of the wealthy in shaping the future trajectory of a society, not least through control over the media. This is particularly evident in the contemporary USA where corporations have the legal right

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to engage in political funding, but it is general not just in relation to elections but through the enormous impact lobbyists have on legislative and policy processes. Organized labour is much weaker than organized capital and disorganized labour has virtually no lobbying power whatsoever. We must remember that the power of wealth extends into the academy. Although there are challenges to them, much of it funded through Transparify12 by George Soros, a super wealthy individual with a public conscience, there are set of so called think tanks whose funding sources are concealed but in reality comes from the global rich and super rich. The UK’s Institute of Economic Affairs (IEA) has been promoting the illogical notion of pure market efficiency for decades and has had a profound influence along with other market ideologues on the character of disciplinary education in economics, an influence which has not only been malign in its impact in relation to intellectual culture and policies, but is why neo-​ classical economics is as much use as a chocolate fireguard in confronting the real issues facing the world today.13 The only counters to the power of the rich come from labour at the point of production and through the democratic process if that contains parties who organize to confront that power, which has not been the case with European Social Democrats for decades. Confrontation at the point of production was much easier in industrial capitalism because workers could see what they produced and what it was sold for. They could see exploitation in operation and organize against it. Capitalists were visible. As Alex Glasgow wrote: ‘you could see them at the races and hate them to their faces’ –​pitmen and their wives went to the races. He wrote that when industrial capital was becoming delocalized. It is harder to conceptualize exploitation when you work in a decommodified sector such as the clinical core of the UK NHS but privatization changes things. However, the ability of workers to confront has been massively reduced by anti-​trade union legislation, particularly in relation to organizing low-​paid workers in sectors like care and hospitality. This matters. On the political front parties of the Centre-​Left have seen their role as Unger put it: ‘content to appear on the stage of contemporary history as humanisers of the inevitable’ (2015). This is often justified by ‘necessary pragmatism’ –​the excuse of every collaborator throughout the ages who was not brazenly in it for the money. This political failure is crucial to understanding why inequality has increased. We will return to the formal politics of inequality in Chapter 8.

Notes 1 Explanations for the very low figure in the USA, which contradicts the cultural norm of self-​reliance, include the high cost of health insurance for non-​employees and the US middle class’s concern with planning for retirement. https://​data.oecd.org/​emp/​self-​ employment-​rate.htm (accessed 16 October 2020). 2 They argue that what matters is not the proportion of income paid in indirect taxes but the proportion of expenditure. This seems fatuous when considering social inequalities.

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3 For a lewd but very funny folk song about this see: https://​mainlynorfolk.info/​folk/​ songs/​yorkshirecouple.html (accessed 6 October 2020). 4 https://​data.oecd.org/​eduatt/​population-​with-​tertiary-​education.htm (accessed 16 October 2020) 5 Many of the older generation will have acquired third level qualification through part time job-​related study, for example, in engineering. 6 This was actually downward for her in occupational terms as my birth knocked her out of her executive grade in the Inland Revenue. My older daughter similarly moved from a senior local government post to teaching on becoming a mother. 7 Although ignoring the fact that social security contributions are not general taxation but are a hypothecated revenue stream precisely focused on pensions to a far greater extent than benefits for those of working age. 8 Although plainly Conservative in orientation the Resolution Foundation is fully transparent as to funding sources. 9 Contemporaries of my mother who moved to London where teaching posts were very easy to get in 1950 bought similar houses, for example, in Harrow, and funded very affluent retirements back in the NE on selling them in the 1990s. 10 www.aldermore.co.uk/​about-​us/​newsroom/​2019/​03/​aldermores-​first-​time-​buyer-​ index- ​ reveals- ​ t he- ​ l engths- ​ p arents- ​ a re- ​ g oing- ​ t o- ​ h elp-​ t heir-​ c hildren-​ g et-​ o n-​ t he-​ housing-​ladder/​ (accessed 16 October 2020). 11 The reference to stocktaking is particularly apposite. People reflect on their lives as they have lived them and those reflections are very important in shaping future actions. 12 www.transparify.org/​(accessed 16 October 2020). 13 Srnicek and Williams note how Hayek’s initiative in founding the Mount Pellerin Society laid the groundwork for: ‘… a war of position in the battle for ideas.’ (2016: 55) and enabled the neo-​classical framework for economics to provide an underpinning for the neo-​liberal turn in politics.The set of think tanks associated with this programme are mouthpieces of global capital and the super rich.

Bibliography Bambra, C. (2007) ‘Going Beyond The Three Worlds of Welfare Capitalism: Regime Theory and Public Health Research’. Journal of Epidemiology and Community Health 61(12), 1098–​1102.. Bangham, G. et al. (2019) Intergenerational Audit. London: Resolution Foundation. Byrne, D.S. (2002) Interpreting Quantitative Data. London: Sage. Byrne, D.S. (2019) Class After Industry. London: Palgrave Macmillan. Byrne, D.S. and Ruane, S. (2017) Paying for theWelfare State in the 21st Century. Bristol: Policy Press. Cohen, S., Hernando, M.G., Mitchell, G., Pelling, L., Ruiz-​Huerta Carbonell, J., San Vincente Feduchi, J., Velasco, G., Sohl, L. and Svensson, M. (2020) Inequality and the Top 10% in Europe. Brussels: Foundation for European Progressive Studies. Diamond, J. Royal Commission on the Distribution of Incomes and Wealth. No 1 Initial report on the standing reference (Cmnd. 6171), HMSO, 1975. No 2 Income from companies and its distribution (Cmnd. 6172), HMSO, 1975. No 3 Higher incomes from employment (Cmnd. 6383), HMSO, 1976. No 4 Second report on the standing reference (Cmnd. 6626), HMSO, 1976. No 5 Third report on the standing reference (Cmnd. 6999), HMSO, 1977. No 6 Lower income (Cmnd. 7175), HMSO, 1978. No 7 Fourth report on the standing reference (Cmnd. 7595), HMSO, 1979.

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No 8 Fifth report on the standing reference (Cmnd. 7679), HMSO, 1979. Christophers, B. (2018a) ‘Intergenerational Inequality? Labour, Capital, and Housing Through the Ages’. Antipode 50(1), 101–​121. Christophers, B (2018b) The New Enclosure: The Appropriation of Public Land in Neoliberal Britain. London:Verso. Garnero, A., Hijzen, A. and Martin, S. (2019) ‘More Unequal, But More Mobile? Earnings Inequality and Mobility in OECD Countries’. Labour Economics 56, 26–​35. Heinz, W.R. and Kruger, H. (2001) ‘Life Course: Innovations and Challenges for Social Research’. Current Sociology 49(2), 29–​45. House of Lords Select Committee on Intergenerational Fairness and Provision (2019) Tacking Intergenerational Unfairness. HL Paper 329. International Labour Organization (2018) Women and Men in the Informal Economy: A Statistical Picture, Third Edition. Geneva: International Labour Organization. Kenworthy, L. (2015) ‘Do Employment-​Conditional Earnings Subsidies Work?’ Kenworthy, L. and Pontusson, J. (2005) ‘Rising Inequality and the Politics of Redistribution in Affluent Countries’. Perspectives on Politics 3(3), 449–​471. Leisering, L. and Walker, A. (1998) ‘New Realities:The Dynamics of Modernity’ in Leisering, L. and Walker, A. (eds), The Dynamics of Modern Society. Bristol: Policy Press. Mills, C.W. (1959) The Sociological Imagination. Oxford: Oxford University Press. Marshall,V.W. (2006) The Life Course Perspective: An Overview in Relation to the Policy Research Initiative. Ottowa: Social Development Canada. Office for National Statistics (ONS) (2018) Intergenerational Transfers: The Distribution of Inheritances, Gifts and Loans, Great Britain: 2014 to 2016. London: ONS. Office for National Statistics (ONS) (2019) Generational income: The Effects of Taxes and Benefits. London: ONS. Rahman, F. and Tomlinson, D. (2018) Cross Countries. London: Resolution Foundation. Saunders, P. (1990) A Nation of Home Owners. London: Unwin Hyman. Srnick, N. and Williams, A. (2016) Inventing the Future –​Postcapitalism and a World Without Work. London:Verso. Unger, R. (2015) Speech at the Royal Society of Arts 2015. Veit-​Wilson, J. (1998) Setting Adequacy Standards. Bristol: Policy Press. Whitfield, D. (2020) Public Alternative to the Privatization of Life. London: Spokesman. Wilks, S. (2013) The Political Power of the Business Corporation. Cheltenham: Edward Elgar. Willetts, D. (2010) The Pinch. London: Atlantic Books.

5 INEQUALITY AND CAPITALISM(S) IN THE TWENTY-​FIRST CENTURY

The relationship between the intrinsic nature of capitalism as a socio-​political economic system and inequality is central to the analysis in this book. Likewise emphasis has been placed on the dynamic nature of social systems and the way in which the important changes in them are qualitative changes of kind rather than incremental quantitative changes of degree. There are three major changes of kind, which have created the social systems which exist in high-​income and high middle-​income countries in the early twenty-​first century. These are: • •

•

In high-​income countries, the transition from an industrial to post-​industrial character. In formerly communist states, the transition from avowedly anti-​capitalist (in principle at least) to either capitalist or capitalist while still ruled by communist party social forms. Capitalist while ruled by communist party states are China and Vietnam and both retain a considerable degree of state control over the economy. In many high middle-​income states the transition from relatively small and/​or locally focused industrial systems to major globally orientated industrial systems with large industrial workforces –​the major driver of higher real incomes and the elimination of so much poverty in high middle-​income countries in the Far East and Global South.

All of these national systems are embedded within a world system, which is market capitalist in form and has few boundaries not only to trade in material commodities but also to flows of income and wealth. However, policy is largely organized at a national level –​although member states of the European Union do derive important elements of policy from that supra-​national entity. Moreover transnational trade agreement and the World Trade Organization have powers which transcend in principle if not always in practice the policy scope for individual states.

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These agreements can include court/​arbitration regulation, which limits the legislative scope of states themselves.1 Nonetheless whilst the world system is capitalist, national systems demonstrate different forms of capitalismS. Westergaard (1978) identified the necessary limits which bounded the scope of social policies, including policies of income redistribution and by implication wealth redistribution, within a capitalist system. The key element is that the ownership of resources –​of wealth –​ must command a real income derived from that ownership.The size of that income and the organization of social action on either a commodified (generates profits, rents or interest) or non-​commodified form (does not generate an expropriated surplus) can vary considerably, but in capitalism capital of whatever form gets a return to ownership. So there are different forms of national capitalism but all exist somewhere within the bounded possibility space limits set by the essential character of capitalism in general. The bulk of the illustrative material presented in the first four chapters has been drawn from high-​income countries especially the UK as a limiting case for the transition from welfare industrial to neo-​liberal post-​industrial capitalism. This chapter explores the political economy underlying inequality in those states but also in high middle-​income countries, now the major zones of global industrial production. The illustrative examples will be China –​enormously significant in all respects and Brazil as a country with a history of leftist government replaced by a rightist neo-​liberal and climate change denying regime and of great significance in relation to the environment.

Austerity, neo-​liberal governance, and financialization/​ deindustrialization –​the triple whammy for the high-​income world Deindustrialization in high-​income countries has, to varying degrees –​much more in the UK than in Germany –​led a decline in the political and social power of industrial capital, the economic power of most industrial workers in export-​ oriented industries has been massively reduced, and interlinked financial and real estate capital have become much more powerful. Even major industrial corporate is now mostly financially oriented. Aalbers calls this the quaternary circuit of capital: Financialization not only implies the Financialization of existing economies –​ i.e. the restructuring of existing economies into producer and consumer markets that are heavily tied to financial markets –​but also the rise of financial markets for their own good; that is the rise of financial markets not for the facilitation of other markets but for the trade in money, credit, securities etc. Or, in the words of Cox (1992: 29), finance is increasingly becoming ‘decoupled from production to become an independent power, an autocrat over the real economy. Aalbers ebook location 1181, 2016

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Aalbers argues that the rules of capital accumulation have been rewritten with control over capital shifting from corporate boardrooms taking production decisions to financial markets since even non-​financial firms have become enmeshed with financial markets. This is why Castells identified this as ‘the mother of all accumulations’ (1996: 473). This is a Western-​centred account but it holds in the high-​income world. Finance and real estate are intimately linked in high-​income countries.What Lefbvre (1991) called the secondary circuit of accumulation is not the construction of buildings and other components of the built environment. Construction is an industry generating real commodities. The secondary circuit is speculation in the value of the elements of the built environment including that very large part of it which is already in existence and speculation in the value of land in the urban systems of the world.2 Real estate capital is enormously important in the high-​income world and becoming important in high middle-​income countries, notably China. Stein (2019: 2) notes that real estate capital makes up 60 per cent of the world’s wealth by monetary value and that 75 per cent of that wealth is in housing. Note that the values which fix this wealth are not use values but exchange values –​prices fixed in speculative markets, which are irrelevant to the actual use value of the accommodation other than the non-​trivial matter of where you live being a positional good –​a badge of the kind of person/​household you are. The role of real estate capital as a driver of deindustrialization and promoter of urban inequality in high-​income states will be reviewed in Chapter 7. Here we simply need to note that finance and real estate are the forms of capital which have most power in those states now. This is truly remarkable because while in the 1990s finance capital was seen, particularly in the UK, as the wonderful economic driver, which would replace lost industrial production, in 2008 to put it elegantly the entire global financial system went to hell in a handcart. Elliott and Atkinson (2007) outline the background to this in detail noting that the Anglo-​Saxon economies in particular have been running large trading balance deficits with the industrial producers from high middle-​income countries, especially China, and funding these by borrowing from these same high middle-​income countries. In 2008 the financialization of housing debt and the creation of derivative instruments, which magnified the impact of mortgage defaults in the USA, led to a global financial crash and banks had to be rescued wholesale at enormous cost. Gordon Brown who was widely praised by the financial and establishment press for leading this rescue was in fact one of the architects of the crisis since the Labour Government from 1997 onwards made no effort whatsoever to introduce effective regulation of the financial sector. Brown seemed to believe the financial sector’s own propaganda that it was the major present and future source of tax revenues that could fund redistributive tax/​benefit policies but of course the cost of rescuing the banks meant that the sector has been a massive drain on the public finances rather than a contributor to them. The UK under the regime of first the coalition government and then a Conservative government was the limiting case for the governance response to the

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financial crisis –​that is to transfer blame from the banks and speculators to the level of public expenditure and to initiate an era of austerity. The crisis was generated by the private sector but it is being paid for by the public sector, that is by you and me. Blyth, 2013: 22 Governments have emerged from 2009 with gaping holes in national finances, which are to be filled not through the impact of tax increases on corporations, financial interests and the well off, that is the authors of the crisis story, but by increasing taxes on middle and low income groups and by making swingeing cuts in public expenditure, primarily social welfare. Farnsworth and Irving, 2011: 20 COVID-​19 has led to a de facto abandonment of austerity but it still remains the neo-​liberal answer to the fundamental weakness of post-​industrial capitalism. Piketty in his most recent book sums up how this related to inequality: Inequality is neither economic nor technological: it is political … the market and competition, profits and wages, capital and debt –​none of these things exist as such. All are social and historical constructions which depend entirely on the legal, fiscal, educational and political systems that people choose to adopt and the conceptual definitions they choose to work with. These choices are shaped by the relative political and ideological power of contending groups and discourses. Importantly, this relative power is not exclusively material; it is also intellectual and ideological. 2020: 7 So inequality is a product of political choices in context. Context may limit those choices for the present but the presentation of austerity as the only proper response to the financial crisis was not inevitable. Keynesian economists argued consistently that the approach reified the fallacy of composition –​the equation of an economy with the budgetary realities of a household.There was an alternative within the historical toolset of welfare capitalism but the neo-​liberal elite would have none of it. Austerity had an impact on inequality in multiple ways. First, it led to major cuts in the real incomes, which people receive in kind in welfare states.3 If health care is provided free as in the UK then a cut in health budgets in real terms4 means that people get less. This is most apparent in cold surgery for conditions which cause pain and/​or limit well-​being –​hip and knee replacements, cataract treatment and so on –​but it extends into treatment for life-​threatening conditions. Second, the neo-​ liberal programme of privatization continued. Public capital projects continued to be funded through the egregious Private Finance Initiative (PFI), which can be summed up in the health context as: one hospital for the price of three.5 Third, austerity had a major impact on public sector employment. In OECD countries 22

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per cent of all employment was in the public sector in 2019 (World Bank, 2020) compared with 23 per cent in industry. The impact took two forms. The first was a cut in the scale of public sector employment. The second was a worsening of the remuneration and conditions of service of public sector employees. Typically, in high-​income deindustrialized countries, a higher percentage of public sector workers are unionized than is the case for the private sector. In the UK in 2018 just over half of public sector workers were in unions compared with less than 14 per cent of private sector workers.This pattern is repeated generally. Most state employment is now located in the delivery of welfare, health, and education services and state administration. The scale of public sector enterprises in mining, manufacturing, and transport has been massively reduced by privatization and closure over forty years. In the 1960s the UK had more than 2.5 million workers in public corporations. Now (2020) there are less than half a million following the privatization of the Post Office. Nationalization of banks after the 2008 crash led to an increase for a short time but most have now been returned to the private sector. The cuts in services in kind have hit all but the most affluent households who can afford to purchase private education and healthcare. In 2015 about 10 per cent of the UK population as individuals had private health insurance. The bulk of this was paid for by employers but this kind of payment is usual only for managerial level employees. Seven per cent of children are privately educated and fees have tripled in real terms since the 1980s. Although there are some bursaries the great bulk of students in private schools come from very affluent families. The cuts in public service employment, remuneration, and terms and condition of service have affected a lot of middle-​income households. The public sector workforce is predominantly female (60 per cent +) including many professionals and semi-​professionals and couples in which the male is a private sector worker and the female works in the public sector are common. Material circumstances are, to say it again because it needs saying, primarily a function of household incomes and public sector cuts have hit lots of households. As Streeck puts it what lies behind this is the long-​term decline in the growth performance of advanced capitalist economies and their subsequent inability to honour the promises of economic and human progress on which their legitimacy depended. 2013: 2 The radical change in public finances across the industrial/​post-​industrial transition has been the growth in public debt as a proportion of GDP. There was a massive growth in aggregate debt (including personal debts and corporate debt). Across OECD countries public debt grew from about 40 per cent of GDP in the 1980s to more than 90 per cent at the time of the crash (Streeck, 2013: 3). Growth in debt did level off in the 1990s but has increased again rapidly since the financial crisis. He dismisses scornfully the arguments of public choice theory to the effect that this growth reflects the pressures of mass political demands mediated through democratic processes:

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Summing up, the rise of public debt –​the arrival of the debt state –​was part of a neoliberal revolution in the post-​war political economy. At a time when democratic-​redistributive intervention in capitalist markets became ineffectual on many fronts, it is unlikely that increasing public debt can be explained by voters and workers exercising superior political power. Indeed, rather than electorates extracting unearned incomes from the economy, growing government indebtedness in OECD nations was accompanied by a lasting decline in both living conditions and the distributional position of popular majorities, which in turn was associated with a secular decay in the power resources … of redistributive democracy. Streeck, 2013: 6 Streeck describes states in high-​income countries as ‘consolidation states’ (2013: 16) in which the priority of governments in the capitalist democracies is to restructure their public finances with the objective of providing safe investments for holders of financial assets. Streeck’s interpretation of the ‘politics of austerity’ is as a politics of public debt, with both national and supra-​national actors –​the European Union –​ enforcing general austerity. This is a: ‘… distributional conflict between creditors and citizens; [original emphasis] (Streeck, 2013: 14). An interesting outlier and exception to the general pattern is Poland, a high-​ income post-​communist state where neo-​liberal market-​oriented politics prevailed in the immediate post-​communist period.6 However, the emergence and electoral success of Law and Justice –​a party which combines social conservatism and authoritarianism with strongly collectivist and welfare supporting social policies –​changed this radically. While income inequality increased very considerably from 1992 to 2007 (Brzezinski, 2017) since then it has stabilized. Law and Justice introduced the 500+ child support programme. Originally this was a universal payment for all second and subsequent children with a means test for the first child but in 2019 it was extended to all children. The policy is also pro-​natalist and is meant to get more Poles born and to reverse the considerable decline in fertility with Poland’s total fertility rate (TFR) now standing at 1.39. It costs 1.5 per cent of GDP. In many ways Poland looks like an illiberal social democratic state. Pensions, particularly old age pensions, substantially reduce market inequality and there are considerable in kind transfers to education and health. State spending takes 42 per cent of GDP and more than half of this goes on social expenditures. Poland’s tax revenues derive in large part from regressive consumption taxes especially value-​added tax (VAT) and personal income taxes contribute only 4.6 per cent of tax revenue in contrast to 13.2 per cent from social security contributions.VAT alone delivers 36 per cent (Goraus and Inchause, 2016). Social insurance contributions have a regressive effect on household incomes for those of working age. Most recently Law and Justice has very considerably increased the minimum wage. Income inequality is on the level of the UK with the top 1 per cent of income earners taking 12.3 per cent of income. In contrast wealth inequality is relatively low by high-​income country standards

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with the top 10 per cent owning 37 per cent of wealth although the bottom half own just 1 per cent. Seventy-​six per cent of household wealth is in the form of housing (Narodowy Bank Polski, 2017). Brzezinski (2017) considers that the relative inability of households to accumulate wealth during the communist period and the consequent lack of intergenerational wealth transfers explains Poland’s wealth structure. Plainly the privatization of state housing, as in so many other states, is important in relation to wealth possession. Previously Law and Justice were very pro-​coal and hence held back in relation to climate change issues but there are signs that this is changing. Coal has enormous cultural significance in Silesia, Poland’s industrial heartland, but imported coal is now half the cost of domestic production. Poland still relies largely on coal-​fired power stations for electricity but there is EU pressure against this and recent administrative reorganization of ministries after the 2019 Sejm elections has weakened the position of the coal block. On COVID Poland responded by a closure of borders but its relatively underfunded health system has been placed under considerable pressure. And then came COVID-​19. Faced with a pandemic governments have abandoned fiscal constraint. In the UK governments (including devolved governments) have spent some £14.5 billion on direct health services but tax cuts and guarantees of 80 per cent of furloughed workers’ wages and of the profits of the self-​employed add £100 billion to the cost.7 Public borrowing will rise to nearly 14 per cent of GDP, nearly 40 per cent more than in the year following the financial crash, which was the previous highest figure (Institute for Governance/​Office for Budget Responsibility, 2020). The IMF produced a more conservative estimate of UK borrowing but warned that while this kind of increase in debt is necessary to confront the epidemic, the world economy will contract sharply during the pandemic and through its aftermath. The pattern of governance in this period will determine how inequality will change and what will happen in relation to global warming and climate crisis. There has been very different performances by state health services and those like the UK’s and Poland’s with a history of underfunding and in the UK case New Public Sector Management drives towards privatization have not done well under the strain. Crouch (2011) shows that whilst neo-​liberalism as a political doctrine purports to be about the freedom of markets in the interests of optimum welfare it really serves the interests of globally dominant trans-​national corporations, including financial actors, which are ‘too big to fail’ and possess enormous power in determining the course of politics and policy. The electoral failure and often collapse of social-​democratic and labour parties across Europe reflects the way in which they have endorsed the inevitability of corporate interests prevailing in all circumstances. Blair’s ‘Third Way’ typified this kind of politics described by Byrne (2005) as ‘neo-​liberalism with a smiley face’. Piketty (2020: 869) describes how the electoral ‘left’ (my quotation marks) has become the party of the ‘Brahmin left’ (his) –​that is the party of the more educated elite.

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The decomposition of the post-​war left right system and in particular the fact that the disadvantaged classes gradually withdrew their confidence from the parties to which they had given their support in the period 1950-​1980 can be explained by the fact that those parties failed to adapt to the challenges of the past half century. … With the unprecedented growth of higher education, little by little the electoral left became the party of the highly educated (the ‘Brahmin left’) whilst the electoral right remained the party of the highly paid and wealthy (the merchant right), though less so over time. Piketty, 2020: 869 Although it contains a great deal of truth this broad assertion requires some qualification. There has been unprecedent growth in higher education but that has been associated with a differentiation of the meaning of third level qualifications, partly by discipline but more by institution attended. Piketty recognizes this in his discussion of the distinction between Grande Ecole and mere university qualifications in France. The UK university system, although nominally composed of institutions with the same status and awarding degrees of equivalent quality, is very highly differentiated internally. Piketty deals with identity politics largely in relation to immigration and Islam but there is more to it than that. Gender, ethnicity, and sexual orientation have all served as the basis of political claims in relation to left politics in Britain.8 These claims have often been advanced without any reference to intersectional implication in relation to class. Labour supported the independent taxation of each member of a couple for feminist reasons when this was introduced in 1988. This is only advantageous for high-​income couples and has contributed to the increasing inequality of disposable household incomes. There is a strong tendency to equate racial realities in the UK with the post-​chattel slavery predicated on one drop of blood racial identity in the USA although the actual context is very different and the largest other than White ethnic minorities in the UK are South Asian and not Afro-​Caribbean or African. Inter-​marriage with British and Irish people is very common, particularly for Afro-​Caribbeans. There is a strong relationship between other than White ethnicity and class position but it is not absolute and ethnic identity claims for political privilege are frequently made with no reference to class at all. The same is true for gender. The turn to prioritizing other identities over class has been part of the background to the collapse of the association between class position and voting.

Inequality and the social world of China Contemporary China is in some ways two countries –​the rural and the urban –​but with a crucial link between them through the workers with rural Hukou –​residence registrations –​who work in urban areas. China’s overall Gini coefficient in 2013 was 0.47 but if urban and rural Ginis are calculated separately the urban Gini was 0.36 and the rural Gini was 0.40 (Knight, 2017: 310). China has two systems which

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are merging but that merger is incomplete.This has many historical precedents.The UK in the 1840s comprised a peasant periphery in Ireland with urban and industrial development in most of England and lowland Scotland. Both urban and rural inequality in China increased between 2002 and 2013 but the price adjusted ratio of urban to rural incomes fell from 2.17 to 1.76 (ibid.). This was associated with the development of non-​agricultural enterprises in rural areas. Wealth inequality in China is increasing. In the Maoist period all wealth was nominally held by the state but economic reform has transformed the situation. Knight (2017: 313) reports a wealth Gini of 0.62 in 2013. As he notes this is not at all remarkable by international standards but wealth inequality in China has increased very rapidly. In contrast with the narrowing of rural and urban incomes the rural–​urban wealth gap has widened. Much of urban wealth is in the form of privatized housing and much of the increase in wealth has been associated with house price inflation. Again China is in no way exceptional in the significance of housing for distributed wealth and the way housing possession leads to increasing wealth inequality. At the same time in China there is also super wealth. Knight reports that mainland China has 470 dollar-​billionaires, many of whom are Communist Party members. Over the period 2002–​2013, The distribution of household wealth by wealth per capita decile shows a widening inequality throughout but especially near the top of the distribution. At the national level, the share of the richest decile rose from 37 to 48% of the distribution, and the shares of each of the other nine deciles fell, The ratio of the highest to the lowest decile was 32 times in 2002 and no less than 91 times in 2013. The ratio of the tenth to the ninth decile rose from 2.0 to 2.9. Knight, 2017: 313 So in China just as in high-​income countries, there appears to be not only a super-​ rich super elite but an important category who are simply rich and getting relatively richer. Xie and Jin using data from 2012 found that: The richest 1 percent owned more than one-​third of the total national household wealth, while the poorest 25 percent owned less than 2 percent. Housing assets, which accounted for over 70 percent, were the largest component of household wealth. Finally, the urban-​rural divide and regional disparities played important roles in household wealth distribution, and institutional factors significantly affected household wealth holdings, wealth growth rate, and wealth mobility. 2015: 203 Increasing inequality has been generally understood in China as a necessary price to pay for the rapid and very high growth in general real incomes. Xie (2016) regards this as a due to a combination of state propaganda and the actual lived experience

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of the mass of people. It is evident that China has developed a very different class structure through this period of rapid growth, including the development of what in status terms is best described as a middle class. A McKinsey study, which defined middle class in household income terms as having a household income mid-​way between that of Brazil and Italy, commented that: As recently as 2000, only 4% of urban households in China was middle class; by 2012, that share had soared to 68%.And by 2022, we expect China’s middle class to number 630 million –​that is, 76% of urban Chinese households and 45% of the entire population. China is fast becoming a middle-​class nation. Central to this huge surge in numbers of middle-​class Chinese has been the country’s industrialization and urbanization. China’s middle-​class expansion is largely happening in cities –​and will continue to do so. Today, urbanites account for 52% of the entire Chinese population; by 2022, their share is likely to be 63%. There will be 170 million new urban residents between now and 2022. The average urban income per capita is roughly triple that in the countryside. Barton, 2018: 2 McKinsey estimated that the whole urban middle class would account for 76 per cent of the urban population by 2022 with a reversal of proportions between mass and upper middle. This was of course all before COVID-​19. The urban–​r ural distinction matters in relation to class in China although it is becoming blurred. In 2018 around 26.1 per cent of the workforce were employed in the agricultural sector, 27.6 per cent in the industrial sector and 46.3 per cent in the service sector. The proportion in the industrial sector, the sector which produces the exports that make China such a major economic actor remained relatively constant over the ten years 2008–​2018 but the proportions in agriculture and services reversed with a major growth in the service sector. In 2018 (China Labor Bulletin, 2020c –​source of all data following), there were 291 million workers with rural Hukou working in urban areas in China –​36 per cent of the labour force. Some are second generation children of the previous wave who do not have a Hukou for their place of residence. As the data suggests, 117 million are short-​distance migrants, often working in their county of origin, 174 million are long-​distance migrants. Three-​quarters of all migrant workers work in their own province. Forty per cent of migrant workers working in their own province are employed in their home area. Migrant workers are over-​represented in production with 18 per cent working in construction compared with 7 per cent of all Chinese workers and 28 per cent working in manufacturing. Only a third had a labour contract and less than 30 per cent have unemployment, accident, or medical insurance. More than 60 per cent rent their accommodation. Rural children and the urban children of parents with rural Hukou are at a substantial disadvantage in relation to education and in particular access to education which has higher value in the labour market. These migrants are overwhelmingly Han

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Chinese but have a status resembling that of migrant worker immigrants in high-​ income countries. Things have changed considerably in recent years. But for a long time while urban industrial and state workers had an ‘iron rice bowl’ from their danwei –​ employing organization –​which provided pensions, health cover, and housing, peasants in rural areas had no such provision and were reliant on family. Many industrial workers lost their secure status during the period of industrial transformation and the cessation of a system of reliance on the employer for social provisions of all kinds –​characteristic also of communist Europe and the USSR –​led to the introduction of a system of social insurance although danweis still provide a good deal of cover, particularly for state employees. One key aspect of the transformation has been the privatization of housing, mostly by the sale of publicly owned dwellings to occupants at considerable discounts. Most households with an urban Hukou are owner occupiers. In order to cope with the implications of the shift from state employment based social protection the Chinese state began a piecemeal introduction of income maintenance, health, and housing benefits, originally for the urban population only. The social security system was based on individual employment contracts that would make employers, rather than the state, primarily responsible for contributions to pensions, unemployment, medical, work-​related injury, and maternity insurance although there was also an employee contribution element. A housing fund was established to help state employees buy their own home. Full details of social security and health insurance provision are given by the Hong Kong based China Labour Bulletin9 (2019) The insurance-​based system has now been supplemented by a social assistance system –​the Dibao (Yang, 2018). The Dibao is the largest social assistance scheme in the world and is based around a guaranteed minimum basic income. It was extended to rural areas in 2007. In 2016 there were 14.8 million urban and 45.9 million rural recipients with the cost for urban recipients being 687.9 million yen and for rural recipients 1,014.5 million yen. The insurance benefits –​pensions and unemployment and sickness benefits and health cover –​are paid from the insurance funds. Dibao is paid for by a mix of central and local funding. Central funding of the programme has increased but the minimum income thresholds and subsidy amounts are set locally at the county level in light of local fiscal capacity and price structures. As many as 508.5 million people have potential access to the insurance-​based retirement pension –​more than a third of China’s population. There are substantial issues in relation to both the insurance and assistance schemes. The requirement of employers to contribute to the scheme is not well enforced and there have been major industrial disputes when employees have discovered that their employers have not been contributing. Central and regional governments have both regularly reduced the level of employers’ contribution in response to pressure from employers and economic circumstances. Although income cover for pensions for those in the best employment position is good the health care cover does not meet the full amount of health care costs and is generally paid in arrears so people have to pay for treatment up front. There are issues surrounding corruption

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at the local level, particularly in relation to the payment of the Dibao. Finally, there are very substantial funding issues which reflect the different fiscal base of Chinese regions and localities. As always there is differentiation between holders of urban Hukou and urban resident workers and their families who hold a rural Hukou. A complexity frame of reference is appropriate at this point. China has undergone a great transformation over forty years from the era of the cultural revolution to now. That revolution has combined a number of driving factors. First, there was the absolute policy transformation initiated by the Communist Party leadership in relation to the organization of the economy away from central direction towards a mixed economy and capitalist system of industrial production coupled with the de-​ collectivization of rural land and the transfer of land to the cultivators. Second, there was the massive transfer of rural young adults to the cities and to work in industry, construction, and services on an absolute scale greater than the rural–​urban transfer in Europe in the whole of the nineteenth century. Third, there was the general globalization of the world economic system. China became a key actor in a world market capitalist economy.This transformation was a phase shift. It came with costs. Many state employees in state industries lost their jobs and associated social protection. The state’s response was the introduction of elements of social protection of income, health, and the transfer of urban housing to occupiers at discounts. There was a cushioning of urban change, which meant that China moved towards the kind of social provision which had developed in European industrial capitalism in response to socialist pressures in the late nineteenth century. In the countryside the traditional reliance for social protection on families and communities began to break down, not least through the movement of young people to urban areas but also in consequence of the one child policy in operation since 1979. China responded through the introduction of both rural pensions on an insurance basis and the Dibao, which is a form of general social assistance relief of poverty. China accommodated the pressures of social change both by a version of Bismarkian social insurance and a system of poor relief but both incur costs. And then there is demography.The one-​child policy has had an enormous effect on China’s population structure. The total fertility ratio fell from more than five before the 1979 one child policy to 1.6 in 2016. Although the policy has been relaxed and all couples are allowed to have two children without penalty there is no sign of an increase in fertility.10 In China the consequences of this are called: 4-​2-​1 –​ four grandparents, two parents, one child. China used the labour of those born in the 1960s and 1970s –​the Chinese baby boom –​as a resource for the massive economic development, which has transformed China from a poor country to one on the brink of being high income and has virtually eliminated absolute poverty. However, it has a real labour shortage problem and a dependency ratio issue developing towards mid-​century. Currently retirement age for men is 60 and for women in enterprises is 50 and 55 for state employees. Life expectancy in 2017 was nearly 77 and very close to that in the USA although below European levels. There have been discussions about raising the retirement age as has been done elsewhere but this has not yet been done. In China as in the high-​income world female

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labour force participation is high –​at about 65 per cent in 2010 –​but this has fallen since the 1990s. One factor in the failure of the retraction of the one child policy to shift fertility may well be the discrimination Chinese female workers face when becoming pregnant. Although there is maternity cover in principle in the insurance system this is not always available. In any event China has a demographic issue on a large scale. China’s total tax collection amounts to 28.2 per cent of GDP (Klem et al., 2018 and all subsequent tax figures). This is not much below the USA at 31.2 per cent, well above India at 21.2 per cent, and much below France at 53.5 per cent. However, the sources of this revenue are different. China gets only 1.2 per cent of GDP from personal income taxes compared with an OECD average of 8.4 per cent. Taxes on corporate income at 3.8 per cent are at the high end compared with OECD average but not exceptionally so. Social contributions (social insurance from employees and employers) at 6.5 per cent are much more important than personal income taxes. The income tax yield is low because the great bulk of people do not pay it at all since the threshold for payment is twice the average wage. The tax is steeply progressive in bands from 3 to 45 per cent but since the starting point is high and so few pay the highest rates it has almost no redistributive impact. Indirect taxes on goods and services yield 8.9 per cent, more than a third of tax revenue, and as indirect taxes are inherently regressive. Property taxes in China are collected locally but are levied only on transactions, not on a regular basis on property values. They amount to 9.4 per cent of total tax revenues. Li (2016) reviewed the redistributive effects of the tax and social security system in China. Li concluded that in 2013 the impact of taxes and fees was to increase the market Gini for China from 0.51740 by just 0.05 per cent but the impact of public transfers reduced it by 8.82 per cent and private transfers brought it down by another 5.93 per cent. Personal income tax taken alone had a small redistributive effect but because social security contributions from workers were flat rate –​paid regardless of income once over the contribution threshold –​they had a regressive effect. As always in contemporary China it is important to distinguish between the urban and rural contexts while remembering the role of rural Hukou holders in urban areas. In urban areas public transfers reduced the Market Gini by 21 per cent almost entirely in consequence of the retirement pension. In rural areas public transfers reduced the Market Gini by 6.1 per cent from a variety of sources with agricultural subsidies being the largest followed by pensions but none being large. In contrast private transfers in rural areas reduced the Market Gini by 12.2 per cent in contrast with 1.9 per cent in urban areas. Remittances plainly are important in rural China as they always have been when rural populations move to urban and industrial locales. China is a highly centralized country in principle but the expenditure and taxation picture is very different in practice. China is the most decentralized country in the world in terms of subnational spending shares. Local governments account for 85 percent of

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general government budgetary spending. Taking into account off-​budget expenditures financed through local government financing vehicles (LGFVs) raises this ratio to 89 percent of total government spending (Figure 4). While the central government retains some control over subnational spending, notably through the use of binding expenditure laws and mandates, this ratio is higher than even the most decentralized federations, even though China is constitutionally a unitary state. Wingender, 2018 Consumption tax revenues other than domestic VAT all go to the Central government and central only taxes constitute 10 per cent of tax revenue. Domestic VAT and personal and corporate income tax revenues are split –​ 50/​50 for VAT, 60 central/​40 sub-​national for the income taxes. Shared taxes constitute 56 per cent of tax revenue. Sub-​ national taxes comprise 34 per cent of tax revenue of which more than 60 per cent is social security contributions. The high level of local sourcing of revenue, including revenue shared with central government, means that the level of funding available for social protection, health and education spending is very variable across regions in China. This has a considerable impact of the level of in-​kind service provision. Sub-​national governments have often resorted to borrowing to fund expenditure and the Central government has resorted to a series of ad hoc devices over time including redistributing funding from affluent Eastern coastal regions to poorer regions. The IMF concluded that comprehensive fiscal reform was necessary to increase social spending and even it out across China. There is a State Council intergovernmental fiscal reform plan but more is needed. The IMF recommendations recognize the need to rebalance rural and urban China and address the issues for rural Hukou holders in urban areas. They propose centralization of social security and recommend the introduction of a local value-​based property tax.They also propose increases in equalization grants. It is plain that the biggest issue –​pre COVID19 –​ remain the demographic structure and the situation of the rural migrants to urban areas who have done so much to drive China’s progress to relative prosperity. China in public health terms, after initially trying to cover up the issue, handled COVID-​ 19 very well but the impact on its economic base is still unclear. What is plain is that China’s masses expect more than can be delivered with the current system of state service provision and that they will need and want more as the population ages and as rural Hukou holders demand equal treatment, not least in terms of the prospects for their children. A key missing element in the Chinese workplace context is a system of effective trade unions.The All-​China Trade Federation Trade Union (ACFTU) is the world’s largest union with over 330 million members. Historically it has acted very much in the Leninist tradition not as an independent force representing workers in wage, condition, and benefit disputes but rather as a transmission belt relating workers

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to the Communist Party and state. However, there are important signs of change which are outlined in China Labour Bulletin (2020a). The Chinese Communist Party’s central leadership is well aware of the problems of legitimacy arising from inequalities engendered by the economic transformation. The massive anti-​poverty campaign around the Dibao is one element in this. Another but less developed is the varying response to paramount leader Xi Jinping’s call for the ACFTU to in effect behave like a proper union and start fighting for workers. This includes a commitment to extending unionization into non-​unionized areas of work. In some localities China Labour Bulletin found real hard initiatives being developed in practice. In some work on the anti-​poverty campaign was taking priority. In others little was being done and there even seemed to be evasion of the demand to extend unionization into, for example, transport and logistics. Interestingly in rather forthright responses from some local union officials it emerged that for building workers’ wages were not the issue but rather access to health coverage and related social rights. The findings of China Labour Project’s trade union investigation supported the findings of academic studies in relation to Chinese attitudes to the legitimacy of government. Zhou and Jin (2018) explored the relationship between inequality at a regional level and trust in levels of government. Their study did demonstrate that higher inequality was related to lower trust but as is generally reported in studies, people had high levels of trust in central government and the central party but decreasing levels of trust the lower the level of government/​party identified. The trade union investigation reported instances of local government blocking trade union interventions in relation to labour disputes. Local government has been very much the agent in many disputes relating to both urban and rural land almost invariably siding with developers against residents. There is evidence of corruption in relation to this but there is also a fiscal driver, which as we shall see exists in the UK as well. Local governments want development to enhance revenue. Zhou and Jin were testing the ‘social volcano’ hypothesis that inequality in China will lead to serious unrest. The evidence is that the CCP is aware of the issue and is responding in a statist reformist fashion in an effort to address exactly inequality and discontent. China’s reforms are directed towards addressing issues for lower income people. Egawa (2013) raises the possibility of income inequality causing a middle-​income trap in Asia. He estimated that: ‘… the population of the middle-​income class1 in 10 Asian countries [including China] grew from 170 million in 2000 to 1.64 billion in 2011, and would become 2.4 billion (73 percent of total population) in 2020’ (2013: 1). His is a thorough analysis in traditional econometric mode but of course in 2020 the real issue is likely to be the impact of global depression after COVID-​19 on incomes across the producer high middle-​income countries. The Chinese government and CCP are well aware of the implications of climate crisis and of ecological issues in general which are manifested for the urban population by very high levels of air pollution. This may reflect the background of higher cadres in China who tend have University qualifications in science and technology.

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Sandalow (2019) concluded in his extensive review of Chinese climate policy that the Chinese government was taking significant steps to address climate change: In their public statements, President Xi Jinping and other Chinese leaders send the message that climate change is real, that they are serious about addressing it and that doing so is part of China’s development strategy. Calls for low-​carbon development are common, including President Xi’s call for a ‘green, low-​carbon, circular and sustainable way of life’. President Xi has said that ‘addressing climate change and implementation of sustainable development is not what we are asked to do, but what we really want to do and we will do well’. He notes that many policies have multiple objectives including in particular the improvement of urban air quality and the general character of the urban environment.11 There are contradictions in the way the Chinese governance system works in relation to climate policy. Promotion policy for officials still tends to prioritize GDP targets over environmental goals although there are some signs of change. Domestically there is still considerable commitment to coal and coal-​ derived energy plant construction and Chinese corporations globally are engaged in further coal power plant construction. That said there is strong evidence that the Chinese public are aware of climate crisis, government makes public education about it a priority, and the nature of state administration means that things are being done. However, there is not much evidence of coordination of climate and inequality policy. President Xi has identified inequality, corruption, and climate change as the three major issues facing Chinese governance but how policies relate to each other is not always clear. That said there is an acceptance of the reality of all three and the response to COVID-​19 demonstrates that the Chinese government can respond to crisis and can draw on wholly genuine popular support when it does so.

Beyond China –​Brazil –​another high middle-​income state The total population of high middle-​income states in 2018 was 2.656 billion. More than half –​52 per cent –​of this total were in the Peoples’ Republic of China. The next largest state by population was Brazil with 0.208 billion –​8 per cent of the upper middle-​income population total. Brazil is an important case to consider in relation to both inequality because there was a considerable reduction in inequality under Workers Party Federal governments which may go into reverse under the Bolsonaro administration, and because of Brazil as the largest Amazonian state’s significance in relation to global warming and climate crisis. Lustig (2016) using data from around 2010 noted that the two global regions which had seen considerable reductions in inequality and absolute poverty were Latin America, Caribbean, and South Asia. She examined the impact of tax, cash transfers, both direct and indirect taxation, and transfers in kind in health and education expenditure on the

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modification of market inequality in Brazil, Chile, Colombia, Indonesia, Mexico, Peru, and South Africa. In many respects Brazil was the outlier in her set of seven as summed social spending under her headings amounted to 25 per cent of GDP comparable with the level for the OECD countries as a whole and well above the 14 per cent average for her seven cases. Brazil’s state revenues amounted to some 42 per cent of GDP (7 per cent of this from state corporation revenues) in contrast with an average of 25 per cent across her seven cases. South Africa’s proportion of GDP as tax revenue was the same as Brazil’s (26 per cent) but Brazil took in substantial social security contributions (9 per cent) and South Africa did not. Nine per cent of Brazil’s social spending was on contributory pensions, a figure comparable with the OECD average. Brazil has some important similarities with China and three very considerable differences. It is a large country with very considerable internal geographical variation in terms of incomes and with a massive migration from poor rural areas to more affluent urban areas. However, it has significant ethnic differentiation, not in terms of language but rather primarily in consequence of its status as a post-​chattel slavery society although that works out very differently from the USA.12 Also it is a federal state with considerable powers vested in state and municipal governments, not a unitary state like China. Finally, it has democratic elections and competing political parties. Although there were some social improvements after the military regime ended under the Cardoso presidency –​supposedly centre-​left –​particularly in educational access and Cardoso always asserted that inequality was the central social problem in Brazil, real change came with the election of Lula as the Workers Party president. Of particular importance was the introduction of Bolsa Familia, a conditional income support for poor households funded by the federal government but administered by municipalities. This is very similar in style to the Dibao system in China and in 2015 benefitted 13 million families. There was a general leftwards shift in Brazil under Lula but some things did not change. In particular a large part of state spending was on contributory pensions which Lustig (2015) notes had if anything a slightly negative effect on income inequality. Moreover, there was a continuing issue of corruption in Brazilian politics in general which was targeted at the Workers Party although by no means confined to that party. During Rousso’s (Lula’s successor) presidency there was a post financial crash economic crisis and Brazil lost 8 per cent of its GDP. Investigations into corruption led to Rousso’s impeachment and dismissal from office and Lula’s imprisonment (very much disputed as to validity of charge). There was also a serious crime wave with Brazil’s murder rate exceeding that of Mexico and although routine policing is primarily a state/​municipal responsibility this rebounded on the federal government. The consequence was that the right-​winger ex-​military officer Bolsonaro won the election and appointed Fuentes, a Chicago Boy (economics graduate from the University of Chicago) as finance minister. The first move was to increase the retirement age for contribution-​based pensions from 56 to 65 years for men and from 53 to 62 years for women. This is common in countries with increasing life

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expectancy and Brazil’s is now 75.5 years from birth. There was substantial privatization. Bolsonaro was accused of intending to cancel Bolsa Familia although he did not state that he would. However, under austerity the programme has in effect ground to a halt with a waiting list of 1.5 million families and cash-​strapped municipalities having to cope with emergency payments. Bolsonaro is a notorious and vehement climate crisis denier. Brazil is actually a relatively small contributor to production and consumption-​based CO2 at 2.6 metric tons per capita compared with China at 7.2 or the Russian Federation at 11.9 but the issue is the deforestation of Amazonia. Fearnside (2018) estimates that the rate of deforestation could triple. Ecological and climate crisis issue have played a minimal role in Brazilian electoral politics although the potential impact of climate crisis on Brazil, and particularly on the poor North East which continued to vote for the Workers Party candidate against Bolsonaro is likely to be severe. And then came COVID. Fuentes has been side lined in recent policy announcements and developments in response to the economic impact of COVID. Brazil has the highest, and probably under-​reported, level of COVID cases in Latin America. Bolsonaro dismissed COVID as a little flu and has opposed lockdowns although many cities have introduced them. However, the character of economic policy has moved in a much more statist direction with a halt to privatizations and a commitment to large-​scale public expenditure on infrastructure projects. The Brazilian military, which has always had a statist view of the economy, seems now to be more influential than the neo-​liberal finance minister. That said many of the infrastructure projects will involve increased deforestation in the Amazon and an assault on one of the world’s most important carbon sinks. The character of governance has moved against environmental concerns and towards an emphasis on production. Bolsonaro is another Trump in many respects but is beholden to military elements who are not neo-​liberal but corporatist in relation to economic policy.

Conclusion The crucial difference between high-​income and high middle-​income countries is that globalization has benefitted the latter set while it has had negative social impacts in the former industrial world. Although globalization and the opening of the economy has increased inequality in China, the massive increase in real incomes which through the remitted earnings of rural migrants has reached from the cities into rural areas has meant that the social significance of this whilst not trivial has not been crucial. In Brazil the fact that a deal of the impact of globalization happened when first a centre-​left and then left governments were in office meant that inequality was reduced, not least through social protection measures. In China and Poland social protection operated enterprises has been replaced by insurance-​based income maintenance and tax-​funded welfare measures. In all of these states there has been the development of policies which subsidize the incomes

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of families with those in China and Brazil being classic conditional poverty reducing means-​tested benefit systems. States and governments have adjusted to transformational changes, effectively in China and in Poland under Law and Justice governments, less effectively in Brazil. It is wrong to see what has happened purely in economic terms. What is needed is a political economy approach in which the role of power, and especially state power, is taken into account along with the role of political processes. Piketty is quite right to insist on the significance of ideology, not only in relation to the role of –​to use Althusser’s one useful contribution to social science –​ideological state apparatuses but also of the promoters of material interests through control over the media and in particular the role of conventional neo-​classical economics13 in providing a pseudo-​scientific cover for privatization and austerity. We also have to pay very careful attention to the role of particular institutional arrangements and practices at all levels of governance.What is required to understand these things is a social-​political-​economic frame of understanding underpinned by a general grasp of how complex social systems work in practice. And then came COVID –​absolutely a contextual disturbance in the global socio-​political-​economic system which stemmed from the relationship of that system to the natural systems in which it is embedded and enmeshed. Previous pandemics on the scale of COVID, the Russian Flu of the mid-​nineteenth century and the Spanish Flu of 1918-​19, although they killed more people both relatively and absolutely, did not have the system-​disturbing effects of COVID. There were not so demographically devastating as the Black Death, which was a key driver of the transition in Europe from feudalism to capitalism. They happened in periods when deaths from infections remained the primary cause of overall mortality. They happened when bio-​mechanical medical science and practice was not making claims to be potentially able to cure the great majority of human illnesses of whatever kind. They happened when states had not taken on commitments to the delivery of curative health services to their populations and when the success or failure of health systems was a crucial parameter against which the managerial competency of politicians was evaluated. Now all of those things apply. COVID has demonstrated that in the contemporary socio-​political-​economic and cultural context, neo-​liberal market capitalism is wholly unable to respond to a sudden onset crisis and that states have to turn to massive intervention including massive borrowing in order to keep the show on the road. We do not yet know what the relationship will be between COVID and inequality although in terms of one of the less often regarded dimensions of inequality –​age –​it has differentially killed the elderly, in the UK not just because of biological reality but because of an inane and indeed criminal policy of discharging COVID patients into care homes. There is evidence of ethnic inequalities and inter-​sectionally inequality in relation to level of deprivation. How it is has worked out is yet to be seen. What cannot be denied is that it government controlling markets, which is required to deal with crises, not government dancing to the material interests and power of those who own the systems key economic components.

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Notes 1 Whitfield (2020) gives a full account of these transnational powers. 2 The value of agricultural land is determined by the value of the agricultural products that can be produced on it. There are super rents for, for example, premier cru vineyards which produce wines which are positional goods but the overwhelming bulk of agricultural production is traded in competitive markets and is consumed as a direct commodity. 3 Esping-​Andersen’s failure to take account of this element of welfare, notably in the form of the UK NHS, renders his classification of welfare capitalisms wrong. 4 The Coalition government contended that health expenditure was immune from cuts. It was not. 5 Now suspended as it turns out to be more one hospital for the price of four in the longer term. PFI is a major political scandal. 6 Poles often called this the period of the ‘Marriotski’ as IMF, OECD, and other neo-​liberal advisors jetted in, stayed at the Warsaw Marriot Hotel, and told the Poles what to do. 7 Increased income maintenance payments through Universal Credit do not yet seem to have been costed. 8 Northern Irish politics are primarily about Irish (Catholic mostly) versus British (Protestant) identities. 9 This organization is a major source of useful information on China. 10 My Chinese students on the Durham Master’s in Social Research when asked about this generally agreed that they themselves would have only one child so they could focus resources on it in the way their parents had focused on them. 11 My Chinese students were very concerned about ecological matters and always mentioned air pollution as a major issue. 12 Lustig notes the systematically lower income status of both the descendants of African slaves and indigenous people across Latin America: ‘Per capita pre-​fiscal income of the white population is between sixty percent and two times higher than the Afro-​ descendants or indigenous population’s income. Inequality between ethnic or racial groups accounts for between 1 percent of total inequality in Uruguay to 9.1 percent in Brazil.’ (2015: 4). 13 Which is neither social because it does not address the reality of social structures nor a science because it is based on abstract models which are asserted to correspond to reality without any empirical testing of the validity of that correspondence.

Bibliography Aalbers, M.B. (2016) The Financialization of Housing. London: Routledge. Barton, D. (2018), The Rise of the Middle Class in China and Its Impact on the Chinese and World Economies. www.chinausfocus.com /​2022 /​wp-​content/​uploads/​Part+02-​ Chapter+07.pdf. Blyth, M. (2013) Austerity:The History of a Dangerous Idea. Oxford: Oxford University Press. Byrne, D.S. (2005) Social Exclusion. Maidenhead: Open University Press. Castells, M. (1996) The Rise of the Network Society. Oxford: Blackwell. Brzezinski, M. (2017) Is High Inequality and Issue in Poland. Warsaw: IBS Policy Paper Institute for Structural Research. China Labour Bulletin (2019) China’s Social Security System. Hong Kong. China Labour Bulletin (2020a) Holding China’s Trade Unions to Account:An In-​Depth Investigation into the All-​China Federation of Trade Union’s Reform Initiative. Hong Kong. China Labour Bulletin (2020b) The State of Labour Relations in China, 2019. Hong Kong.

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China Labour Bulletin (2020c) Migrant Workers and their Children Hong Kong Cox, R.W. (1992) ‘Global Perestroika’ in Miliband, R. and Panitch, L. (eds) Socialist Register 1992 –​the New World Order. London: Merlin Press. Crouch, C. (2000) Coping with Post-​Democracy. London: Fabian Society. Crouch, C. (2011) The Strange Non-​Death of Neo-​Liberalism. Cambridge: Polity. Dorfman, M.C., Holzmann, R., O’Keefe, P., Wang, D., Sin, Y, and Hinz, R. (2013) China’s Pension System: A Vision. Washington: World Bank. Egawa, A. (2013) Will Income Inequality Cause a Middle Income Trap in Asia. Breugal Working Paper 2013/​6. Elliott, L. and Atkinson, D. (2007) Fantasy Island. London: Constable. Farnsworth, K. and Irving, Z. (eds) (2011) Social Policy in Times of Austerity. Bristol: Policy Press. Farnsworth, K. and Irving, Z. (eds) (2015) Social Policy in Times of Austerity. Bristol: Policy Press. Fearnside, P. (2018) ‘Why Brazil’s New President Poses an Unprecedented Threat to the Amazon’. Yale Environment 360. https://​e360.yale.edu/​features/​why-​brazils-​new-​ president-​poses-​an-​unprecedented-​threat-​to-​the-​amazon Gao, Q. (2008) ‘The Chinese Social Benefit System in Transition’. Annals of the New York Academy of Sciences 1136, 342–​347. Golan, J., Sicular, T. and Umapathi, N. (2017) ‘Unconditional Cash Transfers in China: Who Benefits from the Rural Minimum Living Standard Guarantee (Dibao) Program?’ World Development 93, 316–​336. Gorause, K. and Inchauste, G. (2017) The Distributional Impact of Transfers and Taxes in Poland –​Policy Research Working Paper 7787. Washington: World Bank Poverty and Equality Practice Group. Klemm, A., Coelho, I., Duncan, A. and Liu, L. (2018) The People’s Republic of China –​Technical Assistance Report –​Tax Policy and Employment Creation. IMF Country Report No. 18/​92. Washington: IMF. Knight, J. (2017) ‘China’s Evolving Inequality’. Journal of Chinese Economic and Business Studies 15(4), 307–​323, Lefebvre, H. (1991) The Production of Space. Blackwell: Oxford. Li, S. (2016) Redistributive Effects of Social Security System in China. China Institute of Income Distribution, Beijing Normal University. Lustig, N. (2015) ‘Fiscal Policy and Ethno-​Racial Inequality in Bolivia, Brazil, Guatemala and Uruguay’. Working Paper No. 22. New Orleans: Tulane University CEQ-​IDB. Lustig, N. (2016) ‘Inequality and Fiscal Redistribution in Middle Income Countries: Brazil, Chile, Colombia, Indonesia, Mexico, Peru and South Africa’. Journal of Global Development 7(1), 17–​60. Majid, N. (2015) The Great Employment Transformation in China. Employment Policy Department Working Paper No. 195. Geneva: ILO. Narodowy Bank Polski (2917) Household Wealth and Debt in Poland. Warsaw. Piketty, T. (2020) Capital and Ideology. Cambridge, MA: Belknap Press. Pun, N. and Lu H. (2018) Unfinished Proletarianization: Self, Anger, and Class Action among the Second Generation of Peasant-​Workers in Present-​Day China. Modern China 36(5), 493 –​519. Sandalow, D. (2019) Guide to Chinese Climate Policy. New York: Columbia SIPA Center on Global Energy Policy. Stein, S. (2019) Capital City. London:Verso. Streeck, W. (2013) The Politics of Public Debt: Neoliberalism, Capitalist Development, and the Restructuring of the State. MPlfG Discussion Paper 13/​7. Cologne: Max Planck Institute for the Study of Society.

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Westergaard, J. (1978) ‘Social Policy and Class Inequality: Some Notes On Welfare State Limits’, in Milliband, R. and Saville, J. (eds), The Socialist Register 1978. London: Merlin Press, pp. 71–​99. Wingender, P. (2018) Intergovernmental Fiscal Reform in China WP/​18/​88. Washington: IMF. World Bank (2020) Public Sector Employment as a Share of Total Employment. Washington: World Bank. Xie, Y. and Jin, Y. (2015) ‘Household wealth in China’. Chinese Sociological Review 47(3), 203–​229. Xie,Y. (2016) ‘Understanding Inequality in China’. Chinese Journal of Sociology 2(3), 327–​347. Yang, L. (2018) The Social Assistance Reform in China. New York: United Nations. Zhou, J.Y. and Jin, S. (2018) ‘Inequality and Political Trust in China’. The China Quarterly 236, 1033–​1062.

6 THE ROLE OF THE STATE IN RELATION TO INEQUALITY IN A CONTEXT OF CLIMATE CRISIS –​HOW THIS WORKS OUT FOR INCOMES AND WEALTH

States have agentic power. They get things done through the exercise of that power, power which derives from their perceived legitimacy in the eyes of the mass of their populations. States are not single specific actors. They exist at multiple levels –​national, regional, and local –​even when they are unitary rather than federal. They have parallel and competing institutional strands in the form of ministries focused on different areas of economic and social activity. Although states and their components have a legal existence –​like private corporations they are legal entities with power to act in legal processes –​they are not real in themselves but only become real in action through people taking decisions and acting on them. That said in complexity terms they are not pure momentary phenomena of the micro-​emergent agency of human agents. The actions of human agents matter but they happen within institutional structures which, whilst themselves the product of human agency through the past, have constraining powers. Those structures can be ruptured and remade but they usually persist. China underwent a profound revolutionary transformation under Mao and a subsequent radical reformation under his successors but the structures of the communist party and of the Chinese state, structures which for the state in some key features have a history of millennia, remain in place and constrain the limits of action. At the same time they also enable. Policies are transformed into practice through action within the structures of states.1 State structures may have to be radically reconfigured to contend with inequality and climate crisis but there will always be a path dependency. What can be done to make the future will depend on what already exists. We have to get to where we are going from where we are now. In this chapter state activities, which have consequences for incomes and wealth, will be examined in relation both to what they are doing about inequality in a context of climate crisis and what they should be doing. These systems are:

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•

•

The inherently inter-​related systems of taxation and cash benefit redistribution –​the primary forms through which cash incomes are modified from market incomes by state action. Interventions in the labour market including specification of minimum wages and maintaining or eliminating the legal rights of trade unions to act in defence of remuneration and conditions. State action is usually seen as the great redresser of market inequalities but taken across the whole range of state activities this is not necessarily the case now and if neo-​liberalism continues to determine policy will be even less so in the future. The first thing to address in transforming this situation is taxation.

Taxation and benefits The tax and benefit systems are intrinsically interwoven because it together they determine the actual disposable incomes of households. However, the way in which these systems work is complex and discussion of them generally takes too little account of the role of social insurance contributions as a tax. This is often not recognized because although there is a worker’s contribution taken from remuneration there is also an employer’s contribution which does not appear as a payment by the worker. This is a charge for the employment of labour and must be recognized as part of the labour share of the social product. Social insurance was developed in Bismarkian Germany to defuse the potential threat of radical social transformation, the programme then of the German Social Democratic Party. It has been an essential part of the state repertoire in industrial societies ever since –​note the creation of social insurance in China as that country became part of a globalized industrial system –​and has continued into the post-​industrial world. Although the systems of taxation and cash benefits are usually administered by separate government departments they have to be considered as one not just because of their combined significance for household disposable incomes but because they have important macroeconomic consequences in relation to demand. Let us begin with an outline of the general structure of tax systems by presenting a typology of taxes: •

•

Taxes on income: • Taxes on the incomes of individuals and hence households –​there is real issue in relation to the nature of the unit of taxation –​individual or household. • Personal income taxes levied on either individuals (mostly) or on the combined household income of a couple in some tax systems. • Social insurance contributions –​levied from the labour share of individual incomes and including both their own contributions and those of employers. Taxes on the incomes of corporate bodies • Generally some form of corporation tax levied on profits.

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• •

•

•

Other specific taxes which can take the form of rents as with the UK’s petroleum revenue tax before abolished in 2016. Taxes on wealth in general • Usually some form of inheritance and/​or gift transfer tax where wealth is taxed when it is transferred between wealth holders. • Capital gains tax on the increase in the value of assets over a time period –​ sometimes regarded as a tax on income but really a tax on appreciation in capital value when that appreciation is realized in a market. • A general net wealth tax on stocks of wealth as applied in Switzerland. • Stamp duty style taxes applied when certain forms of wealth are transferred to other owners including transfers of real property –​property which incorporates a land element. • The possibility of taxes on transfers of ownership in financial markets often referred to as Tobin taxes. Taxes on real property based on notional rental value • Some form of business rate as in UK • Domestic property taxes as with Council Tax in the UK –​these are not taxes on wealth as they are paid by the tenant rather than the owner of the property unless the property is owner-​occupied. • Taxes on changes in the value of the land consequent on state permission for a change of use as with betterment levy introduced in the UK 1947 Town and Country Planning Act.This vests the ownership of the effect of a planning change in the state and tax treats the value of land as a function of the rents which can be charged for its use. Taxes on consumption –​these are taxes that are paid by the ultimate consumer of a good or service. • Value-​added tax (VAT) –​a general consumption tax applied at variable rates to categories of goods and services and charged through the whole production and distribution process but paid in full by the end user. • Specialist taxes applied to particular goods or services usually on petroleum products, alcohol, tobacco etc. again paid in full by the end user.

Personal income taxes if progressive in both principle and practice are generally redistributive and reduce market inequality to the degree that they are collected and not avoided.2 However, there is often a lower rate of tax charged on unearned income than on earned income although in the past the tax on unearned incomes was often higher. The USA is an extreme example of the differential treatment of unearned income. Capital income includes dividends, capital gains from the sale of assets,3 interest on bonds and other financial assets, and profits from businesses a person owns. Because the very wealthy hold most of the financial assets in the United States, capital income represents a much greater share of their total income, and much of that capital income is taxed at special low rates. Thornton and Hendricks, 2019: 6

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Social insurance payments are only levied on earned incomes and usually have a cap level above which they are not collected or collected at a lower rate. They tend to be regressive. Thornton and Hendricks note that in the USA social insurance and Medicare take from earned income has increased from 11.7 per cent in 1975 to 15.3 per cent in 2019 and that this is not applied to earned incomes over $132,800. The newly elected Joe Biden’s tax policies are directed to a limited degree at correcting this imbalance. They would impose no tax increases on anyone with an income of less than $400,000, 1.8 per cent of US tax payers who receive 25 per cent of all taxable income. Since it is an increase only in marginal tax rates the impact will not be large on anyone with an income of less than $1million and it is the very high-​income earners who will take the big hit. Biden is also proposing to make those with incomes of more than $1 million treat capital gains as ordinary income, which will increase the tax rate on it from 15 to 39.6 per cent, the new top income tax rate, which would be marginally increased. Other proposals include limiting the value of any allowance against tax, fiscal welfare, to 28 per cent of value. To set this in context the 100 wealthiest US billionaires have seen their wealth increase by $334 billion during 2020. Trump paid for his tax cuts to the wealthy, including the wealthy backers of Republican candidates, by cutting the rate of inflation allowed against basic tax rates, which would transfer much of the cost to the real middle class. All these proposals have to be got through Congress where there could be real difficulties for Biden but they are a shift, albeit a small shift, in the right direction. In the UK National Insurance contributions start below the minimum level of income for income tax and are applied only at 2 per cent on any income over £50,000 in contrast to 12 per cent on incomes from £9,500 (the threshold) to that figure.4 Taxes on real property can be progressive but if capped in terms of property value, as with UK Council Tax, are regressive. Taxes on wealth have the potential to be enormously progressive. Consumption taxes are generally regressive in relation to incomes.5 A useful additional important distinction is between taxes collected and taxes paid. Firms often assert that their contribution to the overall tax revenue is reflected in all taxes paid by them to the revenue but the great bulk of this is income tax collected from employees, social insurance contributions, and VAT payments on goods and services sold, that is, taxes collected. Only taxes on profit etc. are taxes paid. It is also useful to note the terms tax base –​the whole set of entities on which taxes can effectively be levied and tax revenue, actual taxes collected. Consumption taxes are important in relation to climate crisis since they can both reduce general expenditure and target expenditures on particular consumption processes which cause global warming. Likewise it is useful to outline the general structure of cash benefit systems in a similar typology. •

Social insurance benefits based on employee/​employer contributions and contribution records. All except old age pensions may have time limits imposed on eligibility for receipt alongside other forms of condition.

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• • •

•

Old age pensions –​by far the most important component. Unemployment benefits Sickness benefits –​these are different from statutory sick pay schemes where the cost falls on the employer • Industrial injury benefits • Maternity benefits –​again different from statutory maternity pay where the cost falls on the employer. Social assistance benefits –​here the condition is the low level of income assessed by some form of means test. Other forms of conditionality, usually relating to employment seeking activity, are imposed on those of working age as with Universal Credit in the UK. These can be modified for those with health/​disability issues. • Income benefits as with the Dibao and Bossa Familia. • Assistance with housing costs –​usually only with rent. • Remission of some forms of taxation –​usually local property tax.

Assistance benefits may be paid as supplements to social insurance benefits. They may be at least partially consolidated as with Universal Credit in the UK, which brings together income support and assistance with housing costs. •

•

Tax remissions –​these are part of what Titmuss (1958) called the fiscal welfare state since the effect of not charging a tax is to increase the disposable income of a household. • Any addition to a basic personal allowance against tax liability including; • Child allowances • Married couple allowances • Any special allowance, for example, in relation to a disability or extreme old age • Allowance of contributions to a personal/​occupational pension • Not charging any tax on a component of income for social purposes:6 • Not taxing the income that owner occupiers get from living in their own property. • Not taxing the capital gain on the sale of main residence. • Tax allowances against contributions to personal pensions. • Exemption of employers’ social insurance contributions when these are paid into a pension scheme. • and many more in different tax systems. Universal benefits paid as demo-​g rants • Unconditional child benefits/​family allowances paid regardless of household income. • Universal basic incomes –​more a matter of proposal than reality but potentially very important. • Bus or transport passes for special groups –​usually pensioners.

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Social insurance derived pensions in high-​income and some high middle-​income countries can be regressive. This is because they are paid to all eligible retirees many of whom (like the present author) have relatively high occupational or personal pension incomes. The other insurance-​based benefits and all forms of social assistance generally reduce inequality. Fiscal, that is, tax remission/​expenditure benefits are generally regressive in their impact on the distribution of disposable incomes, particularly if the real housing income of owner occupiers is taken into account. Since they push up the point at which higher rates of income tax apply they are particularly advantageous to higher rate tax payers. The impact of universal demogrant benefits is dependent on whether or not they are taxed as part of personal incomes.

Reforming the tax structure to confront inequality and address climate crisis Before COVID-​19 right-​wing and even centre political parties were urging tax cuts for the rich and there has been a plethora of indulgences in relation to tax for the affluent and for corporations. Virtually no real success has been achieved even within the European Union in preventing states operating by trying to steal the tax base of other states through low levels of taxation.7 Sweeney (2020) writing from the Irish Republic, the ‘leprechaun economy’ of the Irish Republic, where GDP exceeds GNI by 20 per cent as a consequence of the use of Ireland as a tax shelter, has proposed a mechanism for coordinating corporation taxes across the EU in order to prevent a race to the bottom. Country by country reporting and taxing of revenues is also a mechanism to prevent this. There have been efforts to confront the massive tax avoidance industry run by lawyers, accountants, and banks but there has been limited adoption of a general anti-​avoidance principle into law and minimal real criminalization of the whole process of tax avoidance. Let us be absolutely clear. Changing the pattern of taxation is vital both for redressing inequality and confronting climate change. In the 1970s the top rate of UK personal income tax was 75 per cent on incomes of £23,000 (£133,000 in 2020 value) with an unearned income surcharge. There has been a continuing salami slicing of higher rates of tax to the point where rates common for thirty years after the Second World War are now regarded as impossible. ‘Left’ parties have abandoned that part of their programme, which was to educate people to understand capitalism on the basis of their own lived experience. Nye Bevan famously described the Tories as lower than vermin but it would be a very bold Labour politician who said that today although it is worth noting that activists in the revived Democratic Socialists of America are not so timid. So the first step in a politics of tax reform is public education encouraging hostility to those with very high lightly taxed incomes and who engage in tax avoidance –​that is both people and corporations. The second is the development and enforcement of effective anti-​avoidance legislation based on the criminalization of avoidance intended solely to reduce

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tax liability. Those who develop such schemes should be charged with conspiracy, which attracts severe legal penalties. The tax avoidance industry, a key location of the concierge class of the merely very affluent who serve both their own class and the super rich, must be brought down. People have to go to gaol. Legislation is not enough. It has to be enforced. This requires two things. First, a staffed up tax inspectorate (or equivalent in any other country) which has high status and where trained staff are legally forbidden from leaving when trained to turn poacher for tax avoiders instead of gamekeepers for the public revenue. Second, as in Scandinavian countries tax returns should be available for public inspection so that the public can see who is paying what and inform on avoiders. Informing on benefit cheats is seen as a public duty. The same should go for tax. The proposals advanced in detail by the Tax Justice Network8 provide informed discussion, detail, and examples of developed legislation. The Laffer curve is taken generally (by neo-​classical economists) to demonstrate that if you increase higher rate taxes then you collect less tax because there will be more avoidance. If the penalty for criminalized tax avoidance is being flogged around the town at the tail of cart,9 avoidance is detected, and the penalties are imposed then things will be very different. Laffer took no account of behavioural changes in response to detection and enforcement of penalties. The use of international transfers of income to avoid tax should involve particularly severe penalties.

The politics and practice of taxing incomes To make a reform of personal taxation in high-​ income countries politically attractive then the distinction between social insurance and income tax has to be broken down and replaced by a progressive single tax on incomes levied least at the same rates for earned and unearned incomes. This tax should incorporate the employee’s or self-​employed person’s contribution element. In the UK National Insurance-​based benefits, other than the state retirement pension, have been so eroded in terms of duration and are so meagre in terms of amount, that this reform is long overdue. Brys et al. (2016) noted that when the link between benefits and contributions is weak social security contributions bear heavily on earned incomes and particularly on the earned incomes of low earners. Dealing with employers’ contributions is not so straightforward. These do not have a cut off in the UK and so are less regressive. In the 1960s the Wilson government in the UK used a selective employment tax to favour industrial over service employment and that has interesting possibilities. It might be useful to make that element progressive as well. The UK state retirement pension should be replaced by a demogrant old age pension, which is part of taxable income. In some other high-​income countries insurance-​based benefits are much more generous and that shift would be more complicated both politically and administratively. In upper middle-​income countries, and in particular China, which have seen the relatively recent introduction of social insurance then again things are more complicated although China’s demographic difficulties mean that sustaining old age pensions from insurance payments

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levied only on workers will be a major issue. Consolidation of income tax and National Insurance payments in the UK would be easy. Elsewhere it would more complicated. There remains three major problems in making personal income taxes more progressive and hence equalizing. First, what should be the unit of taxation? If inequality is to be reduced the unit of taxation should be the household –​in contemporary terms overwhelmingly comprised of couples who live at the same address. Separation of the taxation of couples in the UK was upper-​class feminists very generous gift to themselves. Restoring joint taxation would be possible, in association with the consolidation of National Income and Income Tax, without increasing the tax burden of more than 80 per cent of households dependent on the way in which tax rates were fixed. Ideally a politics of hitting the top decile hard, the top 5 per cent very hard and the top 1 per cent very hard indeed might work. The second issue is more difficult and derives from the radical shift in wealth distribution, which has emerged consequent primarily on the massive growth in owner occupation not only in high-​income countries but also in high middle-​ income countries, especially urban China. The main forms of wealth possessed by most people, particularly the crucially important middle-​income groups, are pensions and owned dwellings. Taxing the wealth derived from pensions is relatively straightforward and can be achieved by simple redistributive measures, which remove special treatment of both income saved towards pensions and pension income as unearned income in contrast to earned incomes. The first is to make tax allowances for pension pot accumulation of whatever form only available at the basic rate of personal income tax paid by the great majority of people. This would hit the top quintile of income earners somewhat and hit harder the higher the marginal rate of personal income tax paid. The second is simply to tax pensions as received by a progressive personal income tax ideally one which has consolidated unconditional social insurance payments into it. Taxing incomes from housing wealth is much trickier politically although not that tricky in administrative terms. There is a general and wholly proper principle in taxation that any cost incurred in generating an income of any kind is allowable as a chargeable allowance against tax charged on that income. Hence people buying their own dwellings were allowed to charge the mortgage interest payments made against the original Schedule A tax levied on the real income, which they derived from living in the property they owned. This was abolished in the UK in 1963 but tax payers continued to be able to charge mortgage interest on their dwelling against their overall income tax liability until 2000.10 Switzerland still taxes this real income. This enormous tax advantage of owner occupation has massively distorted not only the housing market but the whole pattern of saving and investment in all post-​industrial high-​income countries and is beginning to have the same effect in high middle-​income countries. Wilcox and Williams (2017) put the value of this concession in the UK in 2016–​17 at £18.2 billion, which would have added 3 per cent to the total tax revenue.

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In order to tax the real net income (tax relief should be given not only on mortgage interest but also on repair and maintenance as with landlords) owner occupiers derive from living in their dwelling a system of valuation –​regularly updated –​is required. In countries where there is a property tax this already exists. It would also be necessary for any tax on net wealth. What would be the real effects including political effects of such a tax? It would lead to a fall in house prices particularly in locales where those prices bear no real relationship to the incomes which people actually earn. This would bring house prices back towards a level that reflects the use value of the dwelling rather than the exchange value in a grossly exaggerated speculative market.11 For the purpose most people most of the time use housing wealth, that is to sell one property and buy another,12 any fall in value is largely meaningless since it affects both selling price and purchase price. It would be an issue for people who sell to trade down and/​or to move to a cheaper area on retirement but their gains have been purely a product of where they live rather than of any effort on their part and they would just have to suck it up. In the UK this is a function particularly of London and its immediate surrounding parts of the South East and East Regions. These are also the locales of residence of younger middle-​income households who have little prospect of buying –​generation rent –​so the political impact would go in both directions. An often deployed argument against taxing owner-​occupied housing in any way but most often in relation to the imposition of a progressive local property tax is that this would impose penalties on those who are housing rich but income poor. The main arguments against this in relation to taxing imputed rents are first that the housing rich are generally also income rich and second that this would be part of a progressive income tax system, which would take account of the tax burden on low incomes. The socio-​ economic impact would be very considerable indeed. It would reconfigure the housing market towards much greater access to owner occupation and rationalize the relationship between renting and buying. This would have substantial real income equalizing effects and would make geographical mobility much simpler. The tax implications would be redistributive particularly if local property taxes were made properly progressive and not capped and allowed as a charge at the basic rate of personal income tax against total personal income up to a ceiling level which exempted 90 per cent of the potential tax payers. This would benefit owner occupiers and tenants but not landlords since it is tenants who pay local property taxes and would receive the benefit. Taxing the imputed rents of owner occupiers might seem politically impossible but it is being discussed, for example, by Bentley (2018) writing for Civitas generally considered a right-​of-​centre think tank. Switzerland actually does it and an OECD paper argued: If housing is considered an investment, such investments should be taxed in the same way as those in other assets. This means taxing imputed rental income, less depreciation allowances, while allowing for interest rate deductibility (i.e. taxation of net imputed rental income). However … only a few

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countries tax imputed rents and those that do often substantially under-​estimate the rental value. Andrews et al., 2011: 43 The focus of capital investment in high and now in high middle-​income countries on property and especially housing property has distorted economies towards continuing investment in the secondary circuit of capital accumulation, which is intimately associated with the quaternary circuit of speculative financial instruments. It was this inter-​linkage which triggered the financial crisis of 2008 and consequent ideologically imposed austerity. However, this is not the only problem because continued housing development on an irrational rent-​seeking basis has profound ecological consequences. The world is now urbanized and all aspects of state policy need to be directed towards reducing the carbon coast of that urbanization. The current treatment of housing taxation does not do that. The third general problem is the scale of tax allowances –​of elements of the fiscal welfare state –​which are almost invariably more beneficial to the more affluent. The scope of tax allowances can be so extensive when they are counted as public expenditure that the differences in social protection expenditure between European less neo-​liberal and Anglo-​Saxon neo-​liberal and proud of it states becomes far less. Adema et al. (2011) asked, Is the European Welfare State really more expensive? Accounting for both the tax system and the role of private social benefits reveals that total social spending as a share of GDP is similar in countries which are often thought to have very different levels of social spending. Total net social spending in Austria, Canada, Denmark, Finland, Italy, Japan, the Netherlands, Portugal, the United Kingdom and the United States only differ by a few percentage points of GDP. 2011: 9–​10 Tax allowances generally benefit the better off and the high-​income countries which make the most use of them are the most unequal. The taxing of benefit income both directly and through consumption taxes is a claw back, which reduces the real cost of the provision of cash benefits. We have to understand systems in terms of their overall causal effects. That is particularly important when we are looking at how tax/​benefit systems contribute to inequality in household disposable income. Tax remission expenditures are becoming more visible in policy discussion but are seldom part of general political debate. Sinfield (2018a, 2018b) has continued to assert the importance of the fiscal welfare state in any discussion of social policy and in particular discussions of how incomes are modified by state action as a whole. His general conclusion is represented by this statement to a Scottish Government Committee examining taxation in Scotland:

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The Institute for Fiscal Studies (IFS) has carried out one detailed analysis for the UK that allowed an estimate of the total impact of reliefs. By these reliefs the top ten per cent of taxpayers reduced their 2004-​05 tax bill by nearly £12 billion over and above the basic personal allowance -​some 70% of that extra tax relief identified in the study. The top one-​tenth of the top one per cent –​some 47,000 people –​were estimated to benefit annually by nearly £50,000 each. With a pre-​tax income 31 times the average, they gained from tax reliefs 86 times the average, enabling those at the very top to ‘race away’ from the rest of us even further and at considerable public cost. Sinfield, 2018a Morel at al. (2016) reviewed the general impact of fiscal welfare across Europe.Their discussion has particular value because they examine how tax expenditures –​their specified term is ‘social tax expenditures’ –​operate in relation to the ways in which policies are formulated and implemented in reality –​something which scarcely appears in general political debate. They are part of that hidden political process described by Crouch (2000) as the real locale of decision making where interests, generally corporate business interests, play a massive role in determining political outcomes. Tax allowances fit well with a privatization agenda and enhance private as against public power. The lobbying power of private providers who benefit from fiscal welfare –​for example, private pension funds and fund managers –​is considerable. In countries where fiscal welfare contributes to service provision, especially in health care, there is particularly strong political influence. Morel et al. also note that fiscal welfare –​social tax expenditures –​gels well with the logic of austerity. Tax breaks are often invisible in relation to public expenditure totals, despite best efforts even by National Audit Offices to make them visible. Hence, they do not appear as ‘over-​spending’. The distributional impact of fiscal welfare has become much more biased towards very high-​income earners precisely because they benefit more the higher the income and high incomes have moved away from the incomes of the middle mass. This is the reason there is a political opening to deal with them. Sinfield (2018b: 6) notes that the UK Treasury Committee found that half of the pensions tax relief went to the top 10 per cent of income taxpayers while the bottom half got just over 10 per cent (Treasury Committee, 2018: 33, chart 5.1, 2016/​17). Likewise the failure to tax the imputed rents of owner occupiers –​a key part of fiscal welfare –​is the more valuable the more valuable the property occupied. An OECD report asserted that tax bases should be broadened first by removing or reducing tax expenditures that disproportionately benefit high income groups’ to promote inclusive growth. Scaling back tax expenditures that are not well-​targeted at redistributive objectives may help achieve both greater efficiency and a narrower distribution of disposable income. Brys et al., 2016: 51

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The politics and practice of taxing wealth The first place to look when considering taxing wealth is to corporations –​the inanimate legal entities which operate the economic processes of global capitalism and extract surplus value in the form of profits and rents through that role. These entities are great tax evaders, evaders not just of the taxes they should pay but also of the taxes they should collect. They do this through their ability to operate transnationally through a myriad of subsidiary but legally separate companies with profits and VAT liabilities channelled to low tax regimes.The argument made by tax reformers –​most succinctly and clearly by Shasxon (2015) –​is that corporations should pay taxes based on the scale of their operations in any given nation-​state and by implication that they should collect taxes and pay them on the basis of the tax codes where they operate. For corporation tax this requires country by country reporting in the preparation of accounts and tax returns. Shaxson explains why corporations should be taxed: If the corporate income tax were abolished … the corporate structure would become a gigantic tax shelter for the wealthy. They would form shell corporations then claim that their earnings are the income of the corporation, and thus not subject to the income tax. In fact, when the corporate income tax was introduced in many high income countries just before or during the First World War, it was designed to prevent exactly this kind of behaviour. 2015: 5 On a small scale people have set up private limited companies and instead of working for wages have contracted the companies to others –​for example, the BBC13 funded by a most regressive general tax –​the TV licence –​pushed people into this arrangement partly to avoid paying national insurance contributions. Partners and children can be appointed as directors and paid directors fees, thereby splitting income and reducing tax liability. Likewise dividends attract a lower rate of tax than earned incomes and have no liability for social security charges. These dodges are far from small scale in their total impact but corporate evasion is on a far bigger scale. This is now part of public debate but the problem is that states engage in tax reduction competition in order to attract businesses. Ireland’s ‘leprechaun’ economy has a GDP which is 120 per cent of gross national income because brass plate companies own intellectual property rights and aircraft and log profits in Ireland’s low corporation tax regime. Luxemburg replaced its rust belt industrial system with a financial services sector that loots the VAT revenues of the rest of Europe. This creates a massive disadvantage in the retail sector against companies and small businesses, which have a physical presence and pay national rates of VAT. The death of the high street is a real consequence of these developments.

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Corporation tax taxes the income of corporations. There has been no serious discussion of taxing the stocks of wealth that they hold. However, when attention is turned to the real people who hold wealth then there is increasing interest in taxing that wealth. The first necessary element in any reform of taxation directed towards reducing inequality is to ensure that incomes derived from the ownership of wealth are taxed at least at the same rate as incomes derived from the sale of labour power, and preferably as used to be done for unearned incomes in the past, at higher progressive rates. How do we tax stocks of personal and household wealth? The first necessary consideration is to recognize the difference between wealth held as a source of ontological security and wealth held as the basis for exploitation. Of course, these are fuzzy sets. Most occupational pension pots are held for ontological security but very large pension pots move into the domain of exploitation. In the UK in 2020 the total allowable accumulation in a pension pot before incurring tax penalties is just over £1 million. On a simple annuity level this would pay a pension of £45,000 to a 65-​year-​old man although additional features such as inflation protection and surviving spouse benefits would reduce this substantially. That income post tax and not counting the state retirement pension would give an individual a disposable income higher than the median household income. The cap, however, keeps things in reasonable bounds.With housing wealth there is a difference between owner-​occupied housing and housing rented out to others. Housing rented to others or even kept empty can be held as an asset with a view to simple capital gain. For owner-​occupied housing wealth, there is no form of cap either on the imputed rental income, which is wholly exempt or on the capital gains exemption for primary residence. The only cap is a massively regressive UK ceiling of valuation for Council Tax (property tax) at £320,000. In London the resident of a two-​bedroomed ex council flat pays the same as a billionaire in a mansion in Belgravia.The key thing must be to have wealth taxes on a progressive scale and with a starting point somewhere around the 80th to 90th decile in wealth terms. There are different ways in which wealth stocks are taxed. The first is taxes applied when the wealth is transferred from one owner to another. The oldest of these in the UK is stamp duty, which is a charge made originally for the application of a stamp on a document which was historically a significant source of government revenue. In Dublin’s vastly overheated housing market of the early 2000s they were a crucial part of Irish government income and the collapse of the property market cut the yield dramatically. With regard to security transactions stamp duty serves something of the same purpose as a Tobin tax (in the general meaning of that term as tax on all transactions rather than just on currency deals as Tobin originally proposed). Financial intermediaries are exempt from stamp duty on their operations. There is a strong argument for a general financial transactions tax to reduce the enormous degree of short-​term trading in what after 2008 is plainly a socially dysfunctional market in financial instruments. Murphy (2020) has proposed a general and progressive financial transfers tax essentially to modify behaviour as well as raise revenue:

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a FTT of a type previously very rarely used. It would be imposed on financial flows through all bank accounts in an economy, without exception. The charge would be on both debits and credits, with the deliberate intent of reducing scope for evasion. And the tax should be designed to be significant in overall amount, acting as a possible replacement for other taxes such as payroll and social-​security charges, for example, which are such an impediment to employment now. … This FTT should be significantly progressive. As the flows through the bank accounts under the control of a person increased, so would the charge. Those with average or low incomes would expect very low rates to be levied upon them. It would even be simple to make the rate negative for some, as a means of delivering income support. In contrast, those with very large financial flows would expect significant charges. 2020: 2 This is the main social rationale although any tax income generated would be a bonus. Inheritance taxes are levied on estates after death and were first introduced in the UK in the 1890s. They apply to estates above a given value level, currently £325,000, but allocation of unused threshold to a surviving spouse’s estate on their death and leaving a primary residence to children or grandchildren can increase this to £1 million. The tax is at a flat rate of 40 per cent. Just 5 per cent of deaths led to an estate with inheritance tax liability in 2017–​18.14 Gifts given seven years before death are exempt from inheritance tax with a sliding scale of tax up to full over that period. Inheritance tax receipts in 2017–​18 were £5.2 billion but reliefs granted against inheritance tax liability on liable estates totalled more than £16 billion with £11 billion of this being spousal/​partner relief. The classic way in which great landed estates have avoided the original intention, particularly of Lloyd George in his radical budget of 1909, to break up land ownership and power is through discretionary trusts.15 In the UK agricultural land has been exempt from local taxation since the 1920s, but it is not now usually liable for capital gains taxation and can be exempt from inheritance tax. This is promoted as assistance to smaller owner-​ occupier farmers passing on farms to a child but massively benefits big landowners. A different way of approaching taxing capital transfers is some form of capital acquisition tax as employed in the Republic of Ireland. This taxes not only inheritances but the sum of any gift transfers over a threshold during a tax year.The tax is levied (2020) at 33 per cent and has different thresholds of application. For a child this is €335,000, for a partner, for a close relative €33,500, and for any other recipient €16,250. Inheritances to a spouse or partner or in some other cases are exempt.This kind of tax has many attractions and is a way of preventing disposition of estates before death escaping taxation. Lloyd George’s ‘People’s budget’ of 1910 proposed a tax of 20 per cent on increased value of land on sales, a precursor to post-​war Labour’s Development Land Charge, which originally taxed any gain in land value obtained by a change

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in use designation under planning proposals at 100 per cent. The Tory government abolished this in the 1950s and although subsequent Labour governments attempted to reintroduce a version of it, it was finally abolished by the Thatcher government in the 1980s.This means that public bodies can no longer acquire land at existing use value for public purposes and has massively distorted land markets since value derived from permitted use is now dominant as opposed to any rational base for valuation in relation to current use. Generally capital gains on the sale of an asset are either liable for a lower rate of taxation or wholly exempt as with capital gains on the sale of a primary residence. Most discussion of capital gains taxation treats capital gains as income. There is a rationale for this in the case of those who derive their incomes from trading in capital assets. However, a capital gain adds to the stock of wealth.This is particularly important in relation to imposing a capital gains tax on the sale of owner-​occupied properties where the commonest reason for a sale is to buy another property. Actually an easier way of dealing with this would be to impose a progressive stamp duty on house sales over a given high value –​differentiating between ordinary levels of wealth held by most people for ontological security and wealth held above that level. This is what has been done in relation to pension pots and could also apply to inheritance taxes. The other way wealth can be taxed is by a recurrent tax on net wealth held.This is still done in Switzerland and was done in France as a solidarity tax. Piketty has called for a graduated wealth tax of 5 per cent on those worth €2 million or more and up to 90 per cent on those worth more than €2 billion. Summers (2019: 115) noted that while in the UK total private wealth in the UK has doubled to a value of six times total GDP, taxes on wealth remain only at 2 per cent of GDP. He makes an excellent point in relation to the politics of taxing wealth: The main obstacle to taxing wealth may not be that large behavioural responses will occur, but rather that the reforms stall from the outset because policy makers become convinced that they would occur Politicians are vulnerable to sources proclaiming that if taxes on wealth were increased then the rich would leave the country, or would invest less, or would cease their entrepreneurial activity. 2019: 119; emphasis in original Summers draws a very useful distinction between real responses which would have an effect on the real economy and artificial responses which amount to increased tax dodging by whatever means. We might add that those whose wealth derives from speculation in financial activities would be no loss. Indeed breaking their hold on the real economy would be a very good thing. As for those whose wealth is in land, well that cannot be taken abroad anyhow. Some form of progressive net wealth tax is absolutely necessary if we are to be serious about confronting inequality.16

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Taxing real property Common law and some other legal systems distinguish between ‘real property’, which is land and anything including buildings affixed to it and personal property which is everything else. The term survives in common usage as ‘real estate’. Land has long been taxed. The English Poor Law was based on a local system of land taxation through the Poor Rate, which was collected on the basis of land valuation. A land value tax is not a tax on real property. It only covers the value of the land itself and not of any properties built upon it. Land value represents both actual and potential use value of the land taken alone. Wightman (2009) gives a good account of the history, logic, and potential of the idea. Current property taxation in Britain takes the form of council tax and business rates. In both the valuation is of the entire real property. Business rates represent a form of corporate (or other owner form) taxation. Council tax is a tax on residential occupiers and is grossly regressive in its impact.Wightman shows how the land value can be easily determined by valuation in simple terms assessed by the difference between the total replacement of structure element in insurance cover and the whole value of the real property. A land value tax would play a very useful role in reconfiguring the gross disparities in the UK space economy and yield much more revenue than contemporary council tax in more affluent areas. One considerable advantage of local real property taxes is that they are rate determined and collected by local governments although business rates in Britain are now determined and collected centrally. This means that they give local governments an income stream separate from that allocated by central government and hence a measures of fiscal independence. In the UK central or devolved governments have often capped council tax, in Scotland by manipulating central grants so that any council tax increase would be cancelled out. This has now been stopped but enabled the SNP Holyrood government to pass austerity blame onto local authorities controlled by other parties although now that the SNP controls Glasgow things have changed. Land value taxes should be levied on owners, whether occupier or landlord of tenants. That makes them a specific wealth tax in addition to any overall net wealth tax. There is an issue of double taxation to be considered but the advantage of land value taxes is that with a proper and frequent valuation they are about identifiable ‘immeubles’ which can be got at by a taxation system. The post-​war Labour government’s Development Land Charge originally taxed any gain in land value obtained by a change in use designation under planning proposals at 100 per cent. The Tory government abolished this in the 1950s and although subsequent Labour governments attempted to reintroduce a versions of it, it was finally abolished by the Thatcher government in the 1980s. This means that public bodies can no longer acquire land at existing use value for public purposes and has massively distorted land markets since value derived from permitted use is now dominant as opposed to any rational base for valuation in relation to current use.The issue of land and control over not only development uses but development

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gains is of great importance in relation to climate crisis and we will return to a discussion of this issue in the next chapter. Looking at taxing wealth as a whole there are two outcomes, inter-​related but useful to consider separately, which taxes might seek to achieve in relation to equality. One is to redress general income inequalities through taxing the incomes that derive from wealth on a progressive basis as part of a general progressive preferably household income tax. The other is to redress the balance of power between ownership of wealth and sale of labour power by redistributing wealth itself. Higher taxes on unearned income are a move in this direction but to achieve any meaningful wealth redistribution there must be progressive taxes on wealth stocks as such.

Consumption taxes Consumption taxes are often referred to as indirect taxes because they are not levied directly from tax payers but rather are incurred in the course of purchases of goods or services. Their impact on inequality is clear: ‘All studies agree that consumption taxes have a significant regressive impact on the distribution of household disposable income’ (Warren, 2008: 4). In broad terms consumption taxes fall into two categories –​general consumption taxes levied across the board except for certain exempted categories, and specific taxes on particular types of goods –​often referred to as excise duties. The commonest form of general consumption tax is VAT where the tax is calculated at every stage towards final purchase and collected with payback as the goods pass forward. Ultimately VAT is paid by the final purchaser. Most high-​income countries other than the USA use VAT.17 In 2018 consumption taxes generated 30 per cent of tax revenue in OECD countries.The bulk of this came from VAT at 20.8 per cent. There had been a general decline in the contribution of specific taxes from 17.7 per cent in 1975 to 9.8 per cent. Warren (2008) found that from 30 OECD countries, in 11 consumption taxes yielded more revenue than personal income tax and social security contributions taken together and in 20 they yielded more than personal income tax taken alone. The impact of consumption taxes on income distribution is very considerable. Byrne and Ruane (2017) found that in the UK where consumption taxes in 2016 raised 29 per cent of total tax revenue whereas personal income tax net of tax credits (a tax expenditure on benefits) raised 27 per cent all household income deciles except the poorest 10 per cent paid much the same proportion of total all taxes –​direct and indirect –​ from their income although the most affluent decile paid slightly less proportionately than middle-​income deciles. Because of the impact of consumption taxes the poorest decile paid considerably more than any other decile. For most deciles there was a roughly flat proportionate impact of all taxes paid from gross household income (market income plus cash benefits received) of between 31 per cent and 36 per cent for deciles 2–​10 but decile 1 –​the poorest –​paid 47 per cent. The proportion of gross income paid in all taxes had fallen for all deciles except 1 and 2 since 1977. This shows the increasing importance of consumption taxes through the transition from industrial to post-​industrial status in the UK.

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So consumption taxes increase inequality –​no argument. This is a problem because the best tools that a tax system can use to challenge global warming are consumption taxes –​since of course it is consumption that causes global warming in the first place. Poor people consume all or more of their gross income –​expenditure often exceeds 100 per cent of either gross or disposable income. In contrast the highest income deciles spend about 70 per cent of their disposable income.18 This is a particular issue in relation to carbon taxes or more general greenhouse gas emission taxes. Feng et al. (2009) suggested that a tax on all gas emissions which cause global warming would have slightly less regressive effects than just a carbon tax targeting CO2 alone. Burke et al. (2020) reviewed the distributional impact of a UK carbon tax. They pointed out that a tax of at least £50 per ton would be necessary for the UK to achieve net zero carbon emission by 2050. The pattern of carbon emission is interesting: UK households in the highest income decile will on average emit 3.7 times more CO2 than Decile One and earn 9.4 times as much money. Burke et al., 2020: 3 Burke et al. conclude that –​as always we must say –​the devil is in the details in relation to the distributional impact of a carbon tax and much depends on how compensatory fiscal and benefit measures are developed in relation to it. We will return to this issue in our discussion in Chapter 7 of the distribution of incomes in kind but it is worth noting that whereas taxes on domestic energy consumption bear hard on lower income households this is not the case for taxes on transportation energy consumption. Kosanen (2012) concluded from her study that Taxes on electricity and heating tend to be regressive in most [EU] countries, while taxes on transport fuel and vehicles are not necessarily so. In fact, they seem to be sufficiently progressive in most European countries that they offset the regressivity of other energy taxes. 2012: 17 We must note ahead of our discussions of the politics of inequality that the gilet jaune protests in France were triggered by an increase in taxes on vehicle fuels justified on ecological grounds. However, this was done at the same time as the reduction of taxes on high incomes and wealth. One of the demands of the protestors was for a reintroduction of the solidarity tax on wealth and the movement was very hostile to neo-​liberalism in general and tax breaks for the most affluent in particular. Abram et al. in their review of what is required for a just transition to carbon neutrality spell out the issue well: In many ways, Covid-​19 constitutes a ‘test run’ for how governments respond to transitional risks, with temporary emergency policies disproportionately affecting certain economic sectors, many of which will also bear the costs

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of long-​term decarbonisation policies (e.g. aviation and coal mining), while the benefits of remote, low-​carbon working arrangements flow primarily to already socio-​economically advantaged groups. Indeed, for these advantaged individuals and communities, this process of inclusive decarbonisation might include the necessity to ‘live with less’; a perhaps uncomfortable narrative that must sit alongside more popularised calls to increase accessibility and affordability of resources and services for the comparatively vulnerable. 2020: 2 Carbon taxes although paid by producers will almost inevitably have an impact on consumers through higher prices despite not being a direct tax on consumption. Specific consumption taxes –​excise-​type duties –​were originally seen as source of general revenue and although reduced in importance remain significant. However, increasingly they have also taken on the function of behavioural adjustment, particularly in relation to smoking and alcohol consumption with proposed taxes on sugar-​laden soft drinks in the pipeline and in force in Mexico. They are generally regressive because the poorer income groups in many countries smoke more. It is possible to make consumption taxes progressive by removing a flat rate and substituting it with a progressive tax. So for example Scotland’s minimum price per unit for alcoholic drinks is regressive whereas a progressive sales tax depending on price would not be. There are moves with a climate crisis orientation, for example levying much higher road taxes on larger cars in relation to their energy efficiency and lower or zero on electric or hybrid vehicles. An absolutely fundamental point to be made now and repeated repeatedly is that a major issue with the tax/​benefit system and with expenditures on services in kind is that they have generally –​with exceptions like the creation of the UK Welfare State in 1945 –​been addressed in a piecemeal and incremental fashion. This will not do either in terms of achieving the political legitimacy to make radical change or in terms of systematic achievement of necessary policy objectives.

Cash benefits There has already been an extensive discussion of the impact of cash benefits on inequality. Here we will address first the overall impact in general and then look at cash benefits which are tax-​funded subsidies to low wages and then the very important –​particularly post COVID-​19 –​possibility of universal demogrant adult basic incomes. It would seem on the face of it that cash state benefits would generally be redistributive and therefore reduce inequalities but as we have seen not only in high income but also in some high middle-​income countries (Brazil) some may actually be regressive in their impact. Means-​tested cash benefits are always progressive in relation to gross income but the impact of taxation and especially consumption taxes generally acts to reduce the benefit in income after all taxes are taken into account. They almost always come with severe regulatory conditionality as with Universal Credit in the UK which

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for ordinary households of working age in the UK who do not have members with severe disabilities might best be described as a combination of household means test and workhouse in your own home administered by information technology. A particular important development is the payment of cash subsidies to low-​paid workers under Universal Credit. This continued the revival since 1972 of the Speenhamland-​type systems originally abolished in the UK by the New Poor Law of 1834 as it became a primarily industrial society. There are various ways in which tax revenues are used to fund low wages. In some countries this is done by remission of employers’ social insurance contributions. In others, for example in Finland for older long-​term unemployed workers, the subsidy is targeted on a particular group. It may be done by subsidizing or exempting from charges associated with the cost of working, notably child care costs. It may be done by tax credit (i.e., tax remission and/​or payments through the tax system). It may be part of a general means-​tested system particularly in relation to remission of rental charges. Universal Credit in the UK tries to do it all19 by paying cash to replace earlier tax credits, paying for child care and paying cash subsidies. This process began in 1972 when social housing (mainly at that time municipal housing) rents were substantially raised and the universal previous rents which for non-​workers could be paid from means-​tested assistance were much increased but a system of rent rebates was introduced to compensate low-​income households including those containing workers. Universal Credit is a system designed to bring all these elements together and at the same time imposing work seeking conditionality on all adults of working age in a household in relation to the age of dependent children, but in effect total conditionality when children are of school age. The role of housewife/​husband/​parent at home has been abolished for people of working age who draw on Universal Credit. One radical proposal in relation to benefit systems has been for a universal basic income (UBI) paid to all adults without any means test, that is as a demogrant. UBI has supporters across the political spectrum, from the left like Ohlin Wright (2005) who argued for it as a socialist project since it would give workers a shield against exploitation to a range of new industrial entrepreneur/​capitalists who see it as a way of coping with the employment impact of new technologies and automation. Rushkoff (2018) described UBI as ‘Silicon Valley’s latest scam’ and meant to ensure the continuation of consumption on IT capitalism’s terms in a post-​industrial future. There have been extensive discussions and modelling of the impact of UBI and some small-​scale experiments. The largest equivalent in form to a UBI is the US state of Alaska’s permanent fund dividend paid annually from revenues of the Alaska Permanent Fund, a state-​level sovereign wealth entity drawing on oil lease revenue, to all qualifying residents. Studies of the impact of the fund have found that it does somewhat reduce overall employment engagement but mainly by mothers of young children and working students who work fewer hours. However, it does increase overall employment particularly in services through a classic economic multiplier effect. People spend the money and that creates jobs.

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Proposals for UBI were highly speculative before the impact of COVID-​19. However, most high-​income and high middle-​income states who have implemented lockdowns as a response to pandemic have provided wage substitution benefits in a form which has much in common with UBI. The UK paid 80 per cent of the wage/​salaries of furloughed (laid off but with employment maintained with employer) workers up to a total sum cap of £2,500 per month. The scheme has a tapered run down towards October when it ends with employers becoming liable for part of the costs on a progressive basis towards that time. Similar schemes operate in many EU countries. In the USA, there has been an extension of unemployment benefit and a one off payment of $1,200 to low-​income families. Emmerson and Stockton (2020) show that the most generous estimate of UK costs by the Office of Budgetary Responsibility forecasts total COVID-​related expenditure and tax loss to total £120 billion or 5 per cent of National Income. This is on the low side for G7 countries and contrasts with 21 per cent in Japan and 15 per cent in the USA. However, it is extremely substantial although accurately described by Emmerson and Stockton as moderate in comparison to other states. Previous discussion of UBI was about something which would become a permanent feature of the social systems of high-​income post-​industrial states. COVID has triggered an immediate implementation not of UBI but of state guarantee of workers’ incomes on a time limited basis but the role of the state in propping up incomes has changed. While a general and permanent UBI would be a radical departure we can see how it might be introduced on partial basis through more generous child benefits which met all child rearing costs, abolition of student loans, and restoration of maintenance grants for students in both further and higher education, payment of training salaries to young workers undertaking courses of vocational training as part of employment in approved vocational areas,20 and partial unconditional retirement pensions for workers reducing their working hours in the run up to permanent retirement.There could actually be a salary for child care paid to parents of either sex who do not work during a child’s early years which would be a state-​funded extension of current parental leave scheme. In any event UBI is on the policy agenda in a different way now.

How states act on the labour share of the social product In many states there is a statutory defined minimum wage level. This applies in 20 EU members states and in the UK. In the USA, there is a federal minimum wage but states and municipalities can specify higher levels. The federal level in January 2020 was $7.25 but in Seattle this rises to $16.39 for employees of any company having more than 500 employees globally and $15.75 minimum compensation (which may or may not incorporate tips and healthcare) for employees of smaller operations.The UK statutory minimum wage (described as a living wage but below the level generally agreed to be true living wage) is £8.72 ($10.95 as of April 2020) for employees over the age of 24 but less for younger workers. When minimum

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wages were introduced there was an argument that they would reduce the volume of employment but Dube (2019) in a comprehensive review carried out for the UK government concluded: Overall, existing research therefore points to a muted effect of minimum wages on employment, while suggesting that minimum wages significantly increase the earnings of low paid workers. Especially for the set of studies that consider broad groups of workers, the overall evidence base suggests an employment impact of close to zero. These ex post evaluations point to a much more modest impact on employment than often assumed in prospective simulation studies. Dube, 2019: 4 In principle by increasing low wages minimum wages operate to decrease inequality. There is an interaction with both the benefit and tax systems in that higher wages reduce the amount of tax-​funded benefits paid to low-​paid workers and increase the tax and social security contributions paid by those employers. Minimum wages, like statutory sick pay in the UK, transfer costs to employers. The extent to which they do so is not just a matter of regulation but the degree to which the law is enforced and employers who break it suffer penalties. The UK Low Pay Commission (2019) estimated that 439,000 people in 2018 were being paid below the statutory minimum wage to which they were entitled and 369,000 were getting less than the supposed statutory living wage which should be paid to employees over the age of 26. The commission estimated that six million people were earning less than the real living wage required to meet essential needs. A statutory living wage at a decent level (as seems to be the case in some US cities) is one way of reducing inequality. The traditional way has been for workers to defend their share of the social product through trade union action but across the Anglo-​Saxon high-​income countries the ability of unions to act has been massively curtailed. In the UK the Thatcher government outlawed secondary action by workers who were not part of the dispute (solidarity in other words) and progressively made it more difficult for unions to call official strikes. The essence of the Taff Vale judgement of 1901, which had made unions liable for the loss of profits by an employer during industrial action, was reimposed by legislation. The Labour Party was originally created precisely to reverse Taff Vale. The form of penalties now is different but the effect is the same. Unions who engage in or support action outwith the very restrictive framework of anti-​union laws suffer severe financial penalties. This has led to the emergence of a new set of grass roots unions with no legal form who have been successful in a number of disputes particularly in relation to the pay of outsourced cleaners in the public sector and universities. The Blair and Brown Labour governments between 1997 and 2010 did nothing to reverse the anti-​union legislation. It is notable that the RMT –​the rail workers main union incorporating what is left of the UK’s merchant non-​officer seafarers21 –​was expelled from the Labour Party which it had helped to found. It has been notably

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militant and rail workers are among the highest paid manual workers at any equivalent grade in the UK. The evidence is unequivocal.Trade union action can achieve what Blanchflower et al. (2007) called a membership wage premium.They noted that in the UK at that time the public sector wage premium was greater than that in the private sector but both were real. In many countries now the public sector is the major locale for union membership and we will return to the significance of this in Chapter 7.

The interwoven systems which determine who gets what tax systems are simply particular forms of class systems. O’Connor 1973, 2002: 206 The disposable incomes of households are determined (as always in the sense of setting limits to the boundary of the possibility space in which the households are located) by all of the remuneration system –​including very importantly deferred remuneration in the form of pensions which are part of the wage labour contract –​ the tax systems which take income away, and the benefit systems which give income to households. These systems are determined –​to repeat it but it needs repeating with that word meaning the setting of boundaries for possibility –​by the underlying generative mechanisms of post-​industrial capitalism as these manifest in the actual character of particular times and places. How taxes work out reflects class interests expressed as class power and the same is absolutely true for benefits. Taxes and benefits are essentially one system since they are both functions of states and moreover a very important part of the distribution of benefits is through tax expenditures.The employment system intersects with tax/​benefits in multiple ways –​ through the state subsidizing of low wages, through the specification of minimum wage levels which reduce the need for benefits, through social insurance systems as the classic social protection from in industrial societies. The state as legislator and enforcer of law sets the overall context in which remuneration levels are set and is one of the key actors in determining the relative social share of labour and capital. Another crucial factor is that of the state as employer in labour markets where in high-​income countries state employment is typically at least as large and frequently larger than industrial employment. Let us be clear. The neo-​liberal state in general has acted to reduce the labour share of disposable income, including that part of the labour share which goes to households in the middle and upper deciles of income range but are not in the top decile. The share of that decile and even more of the top 5 per cent and 1 per cent has increased very considerably in relative terms. In liberal democracies this poses a major challenge to the legitimacy of the social order. It is a challenge to capitalism because one of the great promises of capitalism is that everybody will see some gain from its operations and people interpret that in relative terms.This is the problem of the high-​income and increasingly post-​industrial states. The high middle-​income countries, and in particular China which contains half the population of that set,

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are managing inequality in ways which have much in common with the way high-​ income countries managed it through the first three quarters of the twentieth century but they have real problems themselves, not least and crucially in China in demographic terms. And we are in the Capitalocene when our ecological future is itself in inherent contradiction with capitalism’s logic of accumulation. In the next chapter these issues will be taken on in relation to services, service employment, and how states plan at all levels.

Notes 1 One of the great failures of the neo-​classical programme in economics is the ignoring of the significance of social structures in general and institutional structures in particular. Hence the necessary, and long overdue, turn towards the development of institutional economics. 2 The effect of tax allowances can make what looks like a progressive personal income tax much less so since allowances raise the thresholds at which higher rates of tax are paid. 3 I prefer to treat capital gains on asset sales as increments to wealth but that is because I want to see a hard wealth tax. Otherwise they are best regarded as income. 4 Employer rates are 13.8 per cent on all income above the threshold level. 5 There is a truly inane argument to the effect that they should be assessed in relation to consumption expenditure rather than income. This is rubbish. 6 The UK National Audit Office (2020) distinguished between structural reliefs in the UK tax system, for example the personal allowance, and tax expenditures, for example tax relief on contributions to pension schemes. There were 828 of the former but HMRC provided cost estimates for just 85 costing £271 billion.There were 362 of the latter and HMRC provided cost estimates of just 111 costing £155 billion. 7 No so surprising when Juncker, President of the European Commission from 2014–​ 2019 as first Finance Minister and then Prime Minister of Luxemburg had organized that mini state’s finances around wholesale tax robbery of the rest of Europe. 8 www.taxjustice.net/​(accessed 16 October 2020). 9 Corporal punishment is perhaps extreme. Imprisonment is not. 10 There was a cap on the allowable amount of mortgage and for a time before total abolition the tax relief was only allowed at the standard rate. 11 British Columbia has recently introduced taxes of this kind on property held by non-​ residents and for speculative purposes and the City of Vancouver has a local empty property tax. The combined effect of these has been a considerable reduction in house prices at the top of the housing market with a flow down effect generally. London absolutely needs something on the same lines. 12 Since inherited housing wealth is often used for property purchase, including transfer to grandchildren to ‘help them get a foot on the ladder’ the effects would be the same there. 13 John Humphrys to his credit would have none of it and operated as a sole trader with personal tax liability. 14 Barrister Patrick Cannon has an excellent website on inheritance tax statistics at: www. patrickcannon.net/​insights/​2019-​uk-​inheritance-​tax-​statistics/​ (accessed 27 October 2020). 15 A truly radical move would be to nationalize discretionary trusts and transfer all their assets say to the National Health Service to pay off all capital debt relating to that essential provision.

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16 Advani et al. (2020) argue for the necessity for a wealth tax in the initial report of The UK Wealth Tax Commission (2020). www.ukwealth.tax/​ (accessed 5 November 2020). This report and its supporting studies are useful if rather timid in their approach. 17 The USA has a set of sales taxes including federal, state, and municipal taxes, levied on the final purchaser alone. For a good general overview of consumption taxes see Bird (2009). 18 Which is one reason why they accumulate wealth. 19 Almost all since means tested remission of council tax is separate and handled by local authorities. 20 The abolition of bursaries for nursing students in England has been particularly stupid. 21 The UK merchant fleet was until the 1960s a major employer of UK based workers. In 1939 it had 33 per cent of world tonnage. In 2010 the British flagged vessels were 3 per cent of the world total although a substantial tonnage is flagged out –​that is registered with other states including Bermuda and the Isle of Man. The British Fleet always employed colonial and other seamen on ‘lascar’ contracts but now the bulk of ordinary crew are so employed and paid at much lower wages than would apply if British citizens. Merchant Navy officers have a long history of unionization and now belong to a transnational union Nautilus which seeks to confront the global character of the industry.

Bibliography Abram, S., Atkins, E., Dietzel, A., Hammond, M., Jenkins, K., Kiamba, L., Kirshner, J., Kreienkamp, J., Pegram, T. and Vining, B. (2020). ‘Just Transition: Pathways to Socially Inclusive Decarbonisation’. COP26 Universities Network Briefing. Adema, W., P. Fron and M. Ladaique (2011), ‘Is the European Welfare State Really More Expensive?: Indicators on Social Spending, 1980–​2012’. OECD Social, Employment and Migration WBorking Papers, No. 124. Paris: OECD. Advanit, A., Chamberlain, E. and Summers, A. (2020) Is It Time for a UK Wealth Tax? London: LSE International Inequalities Institute. Andrews, D., Sanchez, A.C., and Johannson, A. (2011) Housing Markets and Structural Policies in OECD countries. Paris: OECD. Arindrajit D. (2019) ‘Review of the International Evidence Impacts of Minimum Wages: [for UK government]’. National Bureau of Economic Research and IZA Institute of Labor Economics. Bentley, D. (2018) Imputed Rents: Forgotten but Not Gone. London: Civitas. http://​civitas.org. uk/​2018/​11/​23/​imputed-​rents-​forgotten-​but-​not-​gone/​ (accessed 16 October 2020). Bird, R.M. (2009) Taxing Consumption. Washington: World Bank. Blanchflower, D.G. and Bryson, A. (2007) The Wage Impact of Trade Unions in the UK Public and Private Sectors, IZA Discussion Papers, No. 3055, Institute for the Study of Labor (IZA), Bonn. Brys, B. et al. (2016), ‘Tax Design for Inclusive Economic Growth’. OECD Taxation Working Papers, No. 26. Paris: OECD. Burke, J., Fankhauser, S., Kazaglis, A., Kessler, L., Khandelwal, N., Bolk J., O’Boyle, P. and Owen, A. (2020) Distributional Impacts of a Carbon Tax in the UK: Report 2 –​Analysis by Income Decile. London: Grantham Research Institute on Climate Change and the Environment and Centre for Climate Change Economics and Policy, London School of Economics and Political Science, and Vivid Economics. Byrne, D.S. and Ruane, S. (2017) Paying for the Welfare State in the 21st Century. Bristol: Policy Press. Crouch, C. (2000) Coping with Postdemocracy. London: Fabian Society.

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Dube, A. (2019) Impact of Minimum Wages: Review of the international evidence. Amherst, MA: University of Massachusetts Amherst National Bureau of Economic Research and IZA Institute of Labor Economics. Ebbinghaus, B., Göbel, C. and Koos, S. (2011) ‘Social capital, “Ghent” and Workplace Contexts Matter: Comparing Union Membership in Europe’. European Journal of Industrial Relations 17(2), 107–​124. Emmerson, C. and Stockton, I. (2020) How Does the Size of the UK’s Fiscal Response to Coronavirus Compare with Other Countries’? London: Institute for Fiscal Studies. www.ifs. org.uk/​publications/​14845 (accessed 16 October 2020). Eurofound (2019) Minimum Wages in 2019: Annual Review. Publications Office of the European Union, Luxembourg. Feng, K., Hubacek, K., Guan, D., Contestabile, M., Minx, J. and Barrett, J. (2010) ‘Distributional Effects of Climate Change Taxation: The Case of the UK’. Environmental Science and Technology 44, 3670–​3676. Gentilini, U., Almenfi, M. and Orton, I. (2020) Social Protection and Jobs Responses to COVID-​ 19: A Real-​Time Review of Country Measures ‘Living paper’, version 3. Washington: World Bank. Kosonen, K. (2012) ‘Regressivity in Environmental Taxation: Myth or Reality?’ in J. Milne and M.S. Andersen (eds), Handbook of Research on Environmental Taxation. Cheltenham: Edward Elgar, 161–​174. Kuishuang, F., Klaushubacek, D., Contestabile, Minx, J. and Barrett, J. (2010) ‘Distributional Effects of Climate Change Taxation: The Case of the UK’. Environmental Science and Technology 44, 3670–​3676. Low Pay Commission (2019) Non-​compliance and enforcement of the National Minimum Wage. London: Low Pay Commission. Morel, N., Touzet, C. and Zemmour, M. (2016) Fiscal Welfare in Europe: A State of the Art. Paris: Sciences PO. Murphy, R. (2020) The Financial Transactions Tax We Need in the Age of the Corona Virus. Social Europe www.socialeurope.eu/​the-​financial-​transactions-​tax-​we-​need-​in-​the-​age-​of-​ coronavirus (accessed 5 November 2020). Murphy, M. and McGann, M. (2020) Renewing welfare through universal entitlement: lessons from Covid-​19. www.socialeurope.eu/​renewing-​welfare-​through-​universal-​entitlement-​ lessons-​from-​covid-​19 (accessed 26 February 2021). O’Connor, J. (1973) The Fiscal Crisis of the State. New York: Saint Martin’s Press. O’Connor, J. (2002) The Fiscal Crisis of the State (with a new introduction by the author). New Brunswick, NJ: Transaction Publishers. Perret, S. (2018) Designing Tax Policies to Promote More Inclusive Growth –​Expert Group Meeting on ‘Addressing Inequalities and Challenges to Social Inclusion Through Fiscal, Wage and Social Protection Policies’, UN Headquarters, 25 June 2018. Rushkoff, D. (2018) Universal Basic Income is Silicon Valley’s latest Scam. https://​medium. com/​s/​free-​money/​universal-​basic-​income-​is-​silicon-​valleys-​latest-​scam-​fd3e130b69a0 (accessed 26 February 2021). Shaxson, N. (2015) Ten Reasons to Defend the Corporate Income Tax. London: Tax Justice Network. Sinfield,A. (2018a) Submission from Adrian Sinfield –​Response to the Scottish Finance Committee Call for Evidence: A Scottish Approach to Taxation. Edinburgh: Scottish Government. Sinfield, A (2018b) Building Social Policies in Fiscal Welfare. Paper to Social Policy Association Annual Conference 2018.

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Summers, A. (2019) ‘Taxing Wealth: An Overview’ in Bradshaw, J. (ed) Lets Talk about Tax. London: Child Poverty Action Group, 115–​122. Sweeney, P. (2020) An Effective Corporation Tax System for the EU. Social Europe: www. socialeurope.eu/​an-​effective-​corporation-​tax-​system-​for-​the-​eu (accessed 5 November 2020). Thornton, A. and Hendricks, G. (2019) Ending Special Tax Treatment for the Very Wealthy. Washington DC: Center for American Progress. Titmuss, R. (1958) ‘The Social Division of Welfare’ in Essays on the Welfare State. London: Allen and Unwin, 17–​30. Treasury Committee (2018) Household Finances: Income, Saving and Debt, HC 565, 26 July. Warren, N. (2008) A Review of Studies on the Distributional Impact of Consumption Taxes in OECD Countries. OECD Social, Employment and Migration Working Papers No. 64. Paris: OECD. Wightman, A. (2009) A Land Value Tax for Scotland. Report for Green MSPs Scottish Parliament Edinburgh. Wilcox, S. and Williams, P (2017) Help with Housing Costs. Coventry: Chartered Institute of Housing, 106–​111. Wright, E.O. (2005) Basic Income as a Socialist Project. Paper presented at the annual US-​BIG Congress, 4–​6th March, 205. Wray, L.W. (2015) Modern Monetary Theory –​A Primer on Macroeconomics for Sovereign Monetary Systems. London: Palgrave Macmillan.

7 THE ROLE OF THE STATE IN RELATION TO INEQUALITY IN A CONTEXT OF CLIMATE CRISIS –​THE ‘SOCIAL WAGE’ AND SPATIAL PLANNING

This chapter will continue the review of how states operate in relation to inequality in a context of climate crisis and post COVID-​19. The focus will be on two domains of state activity. The first is the provision of services in the form of health services, education, social care, transport, environmental provision, and so on. A widely deployed term to describe this provision is ‘the social wage’ as it constitutes income received in kind by individuals and households. For most of the social wage the provision provides individuals and households with something they would have been otherwise required to purchase from their cash incomes. This is true of curative health services, education, social care, and other services which are received by individuals or households. Other forms of provision deliver public goods like public health or environmental elements which cannot be assigned to particular recipients. Most of the discussion here will be on the services which can be considered as contributing to the real incomes of households since how these work out is part of the way in which inequality is constituted in any society. The second is the role of the state in relation to spatial planning. Spatial planning is the process through which states and systems of governance (because non-​state actors and particularly development capital are intimately involved) shape the nature of the spaces where people live and hence the future of urban and rural systems. This is a process which has enormous causal power for the way in which inequality is lived. It is one of the crucial ways in which governance shapes the future.This is matters for inequality but is even more important in ecological terms and for confronting climate crisis.

Inequality and the social wage The social wage provides income to people outside the wage labour relation. Esping-​Andersen’s (1990) influential categorization of forms of welfare capitalism

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took no account of the role of services in kind as forms of income separate from the wage labour relation (see Bambra, 2007). So first we will examine how services modify real incomes with real incomes defined as the UK’s ONS does as being composed of disposable incomes comprising the sum of market income and state benefits after taxation (both direct and indirect) and the value of the services received by households. There is a real issue in assigning the value of these services. If they are provided by decommodified labour, as with most health services and education, they are valued in national accounting at much less than if they were provided for profit. Weeks (2019) shows that non-​market services are valued at much less than those provided on a market basis where they are valued at prices paid by consumers. If we valued, for example, free state-​provided health care at the cost paid for the same care directly to a private provider it would cost much more and hence constitute more income in kind.1 This is a matter of the difference between use value and exchange value but in any event the estimates of the value of services in kind are what we have to work with so let us see what taking them into account means for the distribution of income. In the UK the ONS publishes an annual estimate of Effects of Taxes and Benefits on UK Household Income (2019). This takes into account the value of services in kind received by UK households. The micro-​data from the Living Costs and Food Survey is available but it is useful to examine the aggregate date by household income decile, which is used to support the published document. This is presented for each of ‘all households’, ‘non-​retired households’, and ‘retired households’ along with a table showing the general attributes of households by kind. For non-​retired households the value of income in kind was greater than the value of cash benefits for all deciles and greater than the pre-​tax value of employment and self-​employment incomes for deciles one and two. For those bottom decile cash benefits were more important than income from work and almost as important for the second lowest decile. Only with decile three did income from work become more than half of final income. For retired households where state retirement pensions are a crucial part of income forming at least half of all income for the bottom six deciles and being a fifth of income even in the top decile, incomes in kind were greater than cash benefits (albeit by a small amount) for the first decile only. For non-​retired households in deciles one to five education was more important as income in kind than health. These were roughly equal in decile six. For deciles seven to ten, health was the most important income in kind. For retired household health was always the most important income in kind. Health and education taken together formed by far the biggest component of income in kind. In terms of absolute amounts in-​kind incomes are rather evenly distributed across income deciles for both non-​retired and retired households as shown by Figures 7.1 and 7.2. Health value for non-​ retired households is rather evenly distributed across deciles. Education value is much higher in deciles one to four and much lower in deciles nine and ten. This is likely to be due to the prevalence of households with school-​age children in lower deciles and the combination of this and the use of

132  Social wage and spatial planning Decile 1

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FIGURE 7.1 Value

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Total In Kind

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Final Income

Total In Kind

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FIGURE 7.2 Value

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of incomes in kind and final income: retired households

Source: The major components of income in kind for first non-​retired and then retired households are shown in Figures 7.3 and 7.4.

private education by households in the higher deciles. It is important to note that public expenditure on third level education will be very much under-​represented in allocation to higher income deciles since students tend to live away from the parental household. The value of health care is rather evenly distributed with the value of public funding of adult social care being somewhat higher in the middle deciles.This latter

Social wage and spatial planning  133 Decile 1

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FIGURE 7.3 Value

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of health and education in kind: non-​retired households Decile

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National Health Service

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National Health Service

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National Health Service

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Adult Social Care

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Adult Social Care

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FIGURE 7.4 Value

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Adult Social Care

National Health Service

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of in-​kind income health and adult social care: retired households

reflects the way high-​income and asset households are required to pay themselves for adult social care but is interesting that the lowest two deciles also don’t receive much of this service set. So it is services which are most equally distributed in the UK, which reflects the continuing significance in particular of the National Health Services2 –​the most important creation of the radical post-​war Labour government in the lives of most people. Murphy and McGann (2020) present an interesting argument that in the post-​COVID era we should turn our attention away from market systems

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and perhaps from UBI to focus instead on universal basic services (UBS) in kind entirely separated from market systems. In the UK in terms of the fundamentals of health care the NHS provide a model for this. Interestingly Cohen et al. in their study of top 10 per cent income earners in Europe found that Interviewees generally felt that they had succeeded in their careers and believed they had merited their success through hard work, even if family circumstances had provided educational and job opportunities. However, they did support, almost overwhelmingly, investment in public services that would provide a fairer society, so that everyone had the same chances they had as children and that everyone could achieve greater economic security and, ultimately, live better lives. 2020: 18 There seems to be general support for the UBS concept.

Equality of opportunity There is one aspect of educational provision which has enormous saliency in relation to the aspirations which people have for their children and that is the possibility that the acquisition of educational qualifications will allow their children to move up the social ladder (note this metaphor) and improve their relative position. In other words, education can be a driver of social mobility. Leisering and Walker explain the social significance of the general idea that social mobility is possible in modern social structures: Individual mobility is crucial to modernity. It is a functional prerequisite of change in social structures. Mobility is also a powerful means by which people drive forward their ambitions in life. Irrespective of the actual mobility that occurs, the idea of mobility is fundamental to the legitimization of Western societies.The promise of mobility allows ‘open societies’ to maintain a system of firmly established structural inequalities. The optimism about macro-​ dynamics, the belief in social progress, translates at the micro-​level into the belief in individual progress. 1998: 4–​5 Full-​time education is not the only route to social mobility. In industrial capitalism many skilled workers used part-​time technical education, which provided qualifications that gave them access to managerial and professional positions. Although this was primarily a male route, promotion in the UK civil service could take unmarried women up the structure as with my own mother. And of course entrepreneurial activity is always a possibility.3 However, in contemporary high-​ income and even high middle-​income countries the acquisition of educational

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qualifications through full-​time study is seen as the most important route to upward movement. It is important to distinguish between absolute and relative social mobility. Absolute mobility describes a social structure in which more individuals are located in what are conventionally seen as higher status4 occupations. The occupational structure of industrial capitalist states and particularly of welfare capitalist states changed considerably in the years between 1945 and 1980. There was a massive expansion of the number and proportion of roles which had higher status, particularly in the professional and semi-​professional occupations in the public sector.This expansion has stopped and with deindustrialization there has been a very considerable decline in the number of the occupational roles of the historically important industrial middle class. Now what matters is relative social mobility, which can best be understood as the chances that children will not just move up from lower status but that the children of higher status households will move down.While high status role sets were expanding upward mobility did not require matching downward mobility. Now it does. Needless to say parents in high-​status and high-​income roles do not want their children to move down the occupational structure and do everything they can to prevent this. In the UK and particularly in England (although also in Edinburgh) one mode for doing this is paying for private school education. Boliver and Byrne (2013) describe the history of the development of UK private education, much of which developed from the privatization of the direct grant schools, which had been part of the state system. In the UK about 6 per cent of school-​age children are in private schools. Green et al. (2017) demonstrate how the high level of fees means that unsubsidized access to this sector requires high household incomes. Nearly 80 per cent of children at private schools have at least one parent who is in the professional or managerial occupational category. For households in the top 5 per cent of household incomes sending children to private schools is almost the norm. The sector has a rhetoric of providing access to the children of the squeezed middle but in absolute impact terms this is best described as guff. State schools themselves are highly differentiated with their character other than for the significant set of Catholic secondary schools,5 depending very much on the social pattern of their catchment area. House prices depend on school catchments. There remain some selective grammar schools in the state system in some areas but the main factor is the different quality of the state education. That said private education, which facilitates access to an elite university, particularly Oxbridge where 42 per cent of students came from the 6 per cent who were privately educated, matters not so much in terms of content of formal education but rather through access to networks, to linking social capital. It is important to remember that equality of opportunity means equal opportunity to become unequal. As Leisering and Walker (1998) point out a belief in social mobility is a crucial source of legitimacy in unequal social orders. To a considerable degree in post-​industrial capitalism, it is a myth even in absolute terms.

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For a full account of all of this see Calder (2016). Raymond Williams as ever put it well: Another alternative to solidarity which has had some effect is the idea of individual opportunity –​of the ladder. … many working-​class leaders, men [sic] in fact who have used the ladder, have been dazzled by this alternative to solidarity.Yet the ladder is the perfect symbol of the bourgeois idea of society, because while it undoubtedly offers the opportunity to climb, it is a device which can only be used individually: you go up the ladder alone. … The actual process of reform, in so far as it has not been governed by working-​ class pressure, has been in large part, the giving of increased opportunity to climb. Many indeed have scrambled up, and gone off to play on the other side … My own view is that the ladder version of society is objectionable in two related respects: first, that it weakens the principle of common betterment, which ought to be an absolute value; second that it sweetens the poison of hierarchy, in particular by offering the hierarchy of merit as a thing different in kind from the hierarchy of money or birth. Williams, 1963: 317–​318

Inequality in health The World Health Organization (WHO) maintains a Global Health Expenditure Database, which gives information about how health services are paid for in terms of funding source. In all the high-​income countries except for the USA, private expenditure is less than a third of total expenditure and in most it is less than a quarter. In the USA private expenditure (which includes health benefits as part of an employment contract) is half. In the high middle-​income countries it is between 40 and 60 per cent. In all countries except the USA, private expenditure is less than a third of total expenditure and in most it is less than a quarter. In the USA, private expenditure (which includes health benefits as part of an employment contract) is half. In the high middle-​income countries it is between 40 and 60 per cent. In all countries in the table except the USA, there is a system of universal health coverage but the degree of quality of that coverage is not always high. In the UK there is generally universal coverage but private coverage buys not better treatment but faster access to treatments not for life-​threatening but for life-​limiting conditions6 such as hip and knee replacements and cataract surgery. In contrast in China, Russia, Poland, Brazil, and South Africa as well as the USA the private system provides better quality of treatment. China has an intermediate category of provision with VIP private payment wards in public hospitals, which provide not just privacy but better treatment. Poland and Russia as former Soviet-​style societies resemble China. Where blat (connections) and bribery bought better treatment in the communist era, now the private sectors are better than the basic public sectors, which in Poland in particular have been a victim of austerity as public policy has focused on financial

Social wage and spatial planning  137 TABLE 7.1  Health expenditure details

Country

Health expenditure % of domestic health as % GDP expenditure: government

% of domestic health expenditure: private

Brazil China South Africa United States of America United Kingdom Sweden Germany France Poland Russia

9 5 8 17 10 11 11 11 7 5

58 43 44* 50 21 16 22 23 31 43

42 57 54 50 79 84 78 77 69 57

• 2% non-​domestic health expenditure

support to families. In China as always there are substantial differences not only between rural and urban areas but also for rural immigrant residents in cities who do not possess the local Hukou and are disadvantaged in access to public health care. Table 7.1 gives details of health provision and expenditure. In terms of health inequalities considered in relation to access to treatment,7 high middle-​income countries and the USA (which spends by far the most on health as percentage of GDP) resemble the European and Australasian high-​ income countries as they were before the implementation of developed welfare capitalist regimes. We saw this when we examined the pattern of state benefits with China and Brazil having implemented basic social assistance income guarantee systems –​the Dibao and Bolsa Familia –​along with state insurance schemes for working income loss and retirement pensions –​as say the UK had done by the 1930s albeit on less generous scales! However, while these systems certainly address absolute poverty they do not address relative inequality. The same is true for health care where money buys better. The severe and horribly mismanaged COVID pandemic in Brazil is demonstrating this clearly. In contrast China’s efficient state system management –​and ability after initial cover up of crisis to respond through functioning state systems –​has led to a very different outcome. The USA resembles Brazil much more than it resembles an efficient still somewhat welfare capitalist state like Germany.The UK, which has moved not so much in terms of formal provision as in endorsement of a neo-​liberal market rationale coupled with new public sector management for governance, seems to have had the worst of both worlds. The key point is that in the USA and high middle-​ income countries market income and wealth inequalities in terms of ability to buy health care over and above basic provision reproduce inequality even when there are underlying systems of universal care.

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Inequality in education As with health inequality in education is very much a consequence first of the ability in some countries, the UK and Brazil being notable examples, of the ability of more affluent households to purchase better schooling over and above/​or outwith state provision. Second, in the UK and USA in particular it reflects the way the character of a locale of residence affects the character of local school systems. The particular character of the UK system has already been discussed in relation to ‘equality of opportunity’. Here the focus will be on high middle-​ income countries. Brazil spends 5.9 per cent of GDP on all state education provision. This is higher than the OECD average (5.2 per cent) but an OECD report (2019) notes that spending on primary and secondary schooling is well below the OECD average for those sectors. Since the fall of the military dictatorship there has been a massive expansion in education provision. There is a pre-​school state system for children aged four and five. Education at the primary and lower secondary level covers nine years. Beyond that there are higher secondary schools which have a three-​year programme. There is a system of vocational education with about 20 per cent of higher secondary school students attending technical schools. Together these three levels now constitute the compulsory (in principle but not in practice) system: Brazilian education is characterized by wide disparities in resources, access, and quality based on geographic location, socioeconomic status, and ethnicity. To name some examples, the lower-​secondary graduation rate in the metropolis of Sao Paolo stood at 93 percent in 2015, but did not exceed 63 percent in the underdeveloped state of Alagoas. Upper-​secondary completion rates ranged from 66 percent in cities to 43 percent in rural areas. Higher education attendance was as high as 47 percent among the richest segments of Brazilian society, but only 5 percent among the poorest. Whites have completed 2.5 more mean years of education than indigenous peoples. Private schools, which tend to outperform public schools in terms of learning outcomes, cost as much in fees as poor households earn in total income and are therefore mostly reserved for privileged elites. Monroy et al., 2019 Historically a key issue is that public universities, elite federal and state, which provide free higher education and are entered by competitive examination were monopolized by students from private schools, which educated just 14 per cent of the current age cohort. Before Bolsonaro when the Workers’ Party held power there was an attempt to redress this by insisting that federal universities admitted at least half of their students from state schools and some state public universities had followed suit. There is also a policy for the federal universities of quotas in relation to ethnicity for under-​represented groups.The desire for access to higher education from the children of middle-​and low-​income families has led to the development

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of many private universities which now comprise 88 per cent of the sector, with 70 per cent of this set being ‘for profit’.They mostly have lower status.There are federal student loan programmes and tax exemptions for private sector Higher Education institutions which offer tuition assistance to students from low-​income families. The election of Bolsonaro who was originally committed to a neo-​liberal programme of austerity has led to radical changes. Funding for federal universities has been cut and although this was in principle presented as a way of shifting resources towards schools this has not happened in practice. ‘Some observers have suggested that defunding education caters to the desires of segments of Brazil’s white upper classes to block “the access of the upwardly mobile, often nonwhite poor into elite spaces” ’ (emphasis in original) (Monroy et al., 2019). China like Brazil has seen a massive educational expansion in the last thirty years. Currently the system consists of non-​compulsory pre-​schools (82 per cent enrolment) and nine compulsory school years in elementary and junior high schools. Senior high schools have a three-​year programme. They are divided into academic and vocational and are entered after the zhongkhao exam at the end of junior high school. Test results are used to allocate students to schools with the elite schools requiring higher scores and with lower scoring students directed to the vocational schools. Ninety-​five per cent of students go on to the higher secondary level. There is a significant private sector of schooling with 35 per cent of schools being private but these educate 10 per cent of lower secondary pupils only and smaller proportions of primary and upper secondary pupils. Many are schools established to meet the education needs of the children of rural workers resident in urban areas but without the urban Hukou and are of lower standard than the state schools. There are international schools originally for the children of expats but now there is a segment which cater to the children of affluent Chinese parents. Admission to university is by the very competitive gaokao examination with access to high-​status public universities being extremely competitive and with universities typically operating greater access for students from their own administrative area. In a comprehensive recent study Luo et al. conclude: The expansion of Chinese higher education provides more access to higher education than ever; however, the lower tiers of social groups are still excluded from access to elite higher education.They are more likely to attend the low-​ tier of HEIs for an inferior-​quality education at a much higher cost. Even worse, the economic return of higher education for them is little, if not negative. This is of great importance, as China strives to ‘great achievement’ in higher education, and the public would like to know who have been paying for the progress and what has been paid. This paper, in a modest way, gives an answer to the key questions. Although the case of China is not exceptional in the world –​many countries of Latin America and parts of Eastern Europe have similar issues –​it is exceptional in the sense that China is a developing country that takes higher education as a development strategy, and in the

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sense that the expansion of higher education in China occurs with such unprecedented speed and magnitude. 2018: 1027–​1028 Many of the most affluent families in China send their children to overseas universities, principally in the USA, UK, Canada, Australia, and New Zealand.8 There are various reasons for this including avoiding the pressure of the gaokao but the value of English in a globalized world is important. It is notable that in both Brazil and China there is graduate unemployment/​ underemployment while there is a shortage of technician level skilled workers but this is a common phenomenon in high and high middle-​income countries. As with health in both cases, and in the UK as a high-​income country, we find that basic state provision provides a variable floor, with urban/​rural differences being enormously important in both Brazil and China. This is the general pattern although few examples are as extreme as the use of bribery until recently in the Russian Federation where parents paid often very large sums to get their children into elite state universities. There has been a complete revision of the university admission system in an effort to put a stop to this. Above the basic floor market incomes enable access to better provision and in relation to education the transmission of advantage on an intergenerational basis. There are other areas of state services where this is also true. In the UK this is particularly the case for both residential and domiciliary elderly social care. Services ameliorate income and wealth derived differences but they do not eliminate them.

Services are also jobs Globally public sector employment provides about 15 per cent of all employment and most of this is in the formal sector. There is wide variation. So in Brazil in 2017 public sector employment was 12.3 per cent of total employment while in Denmark it was 29 per cent. In high-​income countries the figure is typically over 20 per cent other than in the USA where it is 13.5 per cent. This reflects the role of public services in welfare capitalist states with high employment in the UK, for example, in the non-​privatized clinical core of the NHS. One important factor is that generally the bulk of public sector jobs are held by women, in France 63 per cent. In high-​income and many high middle-​income countries where it is usual for men and women in a couple to both work this means that public sector incomes are an important component of many household incomes. In the UK in 2018 66 per cent of public sector jobs were held by women and public sector women workers were 30 per cent of all women workers. The Public Services International Research Unit noted that not only does the public sector as a whole employ many people directly but it also first through purchases from the private sector and then through the multiplier effect of the consumer spending of both public sector workers and the workers in private sector public sector suppliers generates much of all employment.

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Public spending supports 40% of all jobs: 15% in the form of public employees, but a further 25% in the private sector supplying goods and services for governments and employees; and including employment in public service utilities, public spending and public services support 50% of the jobs in the economy –​twice as many in the private sector as in the public sector. The Public Services International Research Unit, 2014: 23 Moreover, public sector workers pay taxes. Indeed since those directly employed overwhelmingly have only labour income and hence higher paid public sector workers pay more tax than many high-​income individuals in the private sector who obtain income from wealth.We will return to the significance of public sector employment in reviewing the contemporary politics of inequality.

Inequality and urban planning One of the major powers of states in all high-​income and high middle-​income countries is control over what can be done with land. In an urbanized world and all high-​and high middle-​income countries are now predominantly urban this power relates to the use of land when it is no longer used for agriculture. In China only 20 per cent of the population were urban in 1980. By 2018 that figure had risen to 60 per cent. Of course, the proportion of land in urban use is far less than the proportion of the population living in urban areas. In England, the world’s first majority of population urban nation, where more than 80 per cent of the population is urban, urban land takes up just 10 per cent of all land and for the UK as a whole the proportion is 7 per cent. However, urban land is vastly more valuable than the most valuable agricultural land. The average price for arable land in England is £21,000 per hectare. One-​third of a hectare in Chelsea in London with outline planning permission for residential development is currently on sale for £50 million –​that is nearly 7,000 times as much.Thirteen hectares in Hampshire is currently on the market for £20 million –​that is at £1.5 million per hectare or more than more than 700 times its value as agricultural land. Land prices are a function of two things –​location, which explains the Chelsea price, and permissible development use, which explains the Hampshire price.The value of agricultural land when planning permission is given for it to be used for residential development increases by hundreds of times.There is a good argument to the effect that the profits of large speculative housing building firms derive primarily for acquiring land banks of agricultural land and then getting planning permission for development rather than from the profits incurred in the actual construction of the houses.This is why there is an argument for a land value tax and a very strong argument for a development levy when local states give permission for a change of use. The control over land use is an enormously important power of the state, primarily at the level local states, that is, municipalities but with typically reserve powers held by national states. It is not only the conversion of agricultural land into residential land that can command enormous gains. In industrial cities the conversion

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of land formerly used for industrial purposes –​brown field rather than green field –​into residential or non-​industrial commercial use can generate similar gains. The Westferry Print Works on the Isle of Dogs in London –​historically a dockland area where vast numbers of dockers were employed –​offers a prime example. The current owner already had planning permission for residential development but sought to double the number of units by building high rise. This was turned down by the local authority and the national planning inspectorate but approved by the relevant government minister just before a local regulation change would have placed a £30 million tax bill for infrastructure on the developer. The whole tale is a clear story of influence and power by the rich in relation to development. Behind all this there is something which is central to any understanding of the nature of post-​industrial capitalism. That is the enormous importance of the interlinked secondary –​real estate and quaternary –​finance –​circuits of accumulation.These now dominate the actual processes of governance at every level. Westferry is a classic example. It lies in the core of a previously industrial zone, which was a major employment base of London as an industrial city.The actual site was originally in an industrial use –​printing newspapers –​which provided industrial employment. The planning history of the area is that local democratic control was taken away by the Tory government in 1981 and handed to an appointed board –​the London Docklands Development Corporation (LDDC). The purpose of this body was to take industrial land and convert it to residential and commercial uses. The Isle of Dogs became Canary Wharf –​a key location extending the City of London and financial services into the formerly working class industrial East End. There is an extensive literature on the implications of the financialization of the world economy9 and on the interlinking of finance and real estate speculation. This played a central role in in the global financial collapse of 2008. The transformation of the Isle of Dogs from a place where industrial workers worked and working-​ class people lived into a zone of financial activity and high-​priced residences is not quite complete but Westferry is almost the final element in the shift. East London’s planning policies in the 1950s and 1960s had been largely focused on improving the lives of ordinary people through housing improvement and better services. The Greater London Council, which was abolished as the LDDC was created, had attempted to develop an industrial strategy to replace dock jobs lost to containerization with alternative industrial employment but the value creation rationale of real estate and financial speculation, value which is wholly imaginary and adds nothing to the real social product, prevailed. Labour and Social Democratic parties used to plan cities for people. Now they plan them for capital. Stein (2019) delivers a persuasive account of how this has worked out in the USA and deploys the useful expression ‘the real estate state’: The real estate state is a feature of government at all levels, from the hyper-​local to the global. It is most firmly grafted onto municipal governments, however, because that is where much of the capitalist state’s physical planning is done. City planners therefore sit uncomfortably at the center of this maelstrom.

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Planners manage the levers of urban change and make crucial decisions about land use, transportation, housing, the environment and more. Though most people have no idea what they actually do, planners have an immense impact on both capitalists and workers in cities and suburbs. In most places, planners are tasked with the contradictory goals of inflating real estate values while safeguarding residents’ best interests. Capitalism never made planning easy –​ organized money could always thwart the best laid plans –​but today’s urban planners face an existential crisis: if the city is an investment strategy are they just wealth managers? 2019: 5–​6 ‘Real estate rules OK!’ That could be painted on the walls of cities and towns from Sunderland to Shanghai. Qiu Xiaolong, in his 8th Inspector Chen Book (2013) deals with murders which derive from the embarrassment caused by the downfall of a prominent local government cadre in charge of urban housing who argues in a newspaper article against a fall in Shanghai housing prices. An internet campaign focusing on the presence of a very expensive brand of cigarettes in the photo accompanying the article exposes his luxurious lifestyle and corruption. He was putting the party line because since Deng Xiaoping’s ‘four modernizations’ local government cadres have been judged on the increase in local GDP, most of which in Shanghai is down to housing price rises. As the internet blog Qiu uses to illustrate his narrative puts it since it takes 3 million yuan to buy an apartment of one hundred square metres at present Chinese income levels a peasant would have to have worked every day since the Ming dynasty, a manual worker every day since the Opium wars, a white-​collar worker every day since 1950, and ‘a hooker would have to fuck ten thousand times from the age of sixteen until the Chinese retirement age for women of 55 to be able to afford this’. It is not just in global cities that this is happening. Planning procedures in core industrial city regions follow the same logic. In 1999 Newcastle the City Council decided to develop a planning strategy of Going for Growth, which involved the demolition of large areas of working-​class housing –​both social housing and housing which had been built for private renting but much of which was now owner-​occupied and had been improved with facilities through grant aid schemes in the 1960s and 1970s. This scheme was designed explicitly to change the social composition of working-​class areas in the East and West Ends of the city, through the importation of more middle-​class households. None of the housing affected was of a standard which would have justified clearance as slums. Middle-​class households, very much drawn from what is now ‘the squeezed middle’, were moving to areas across the city boundary into North Tyneside and Northumberland. The planning focus was on getting in a population which would pay local council tax (property tax) and make fewer demands on services. This scheme was a forerunner of the £2.2 billion Pathfinder programme, which marked down large inner city working class areas for demolition and rebuilding as the basis for ‘reviving the local housing markets’. There was massive criticism of and resistance to Pathfinder –​especially

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from local people whose houses were confiscated with compensation paid, which was always inadequate for purchasing a property in the replacement development. Pathfinder was a Labour party programme, and the successor coalition government cancelled it. Chinese city’s urban clearance schemes have had a similar character. The Scotswood area stood empty for fourteen years but is now the basis of a £256 million redevelopment scheme over twenty-​five years, although the post-​COVID prospects for this kind of thing are to say the least uncertain. In any event only 15 per cent of the properties will be for rental or shared ownership. It was not just that working-​class housing areas, and especially areas of social housing, became available to capitalist developers essentially to do with what they will. Irreplaceable areas of industrial land, particularly in ports deep water fronting industrial sites, were sterilized by housing or commercial development. The Tyne Wear Development Corporation, the Urban Development Corporation for that city region, took the Northumberland Dock, which had been reserved under the previously democratically established structure plan for maritime industries in a context where first oil land then offshore renewables needed such sites, and used it for a waterpark, some housing, and a shopping village selling factory seconds. Planning has been an active driver of deindustrialization. An excellent full up-​to-​date account of how planning works for real-​estate capital is provided by Colenutt (2020). Colenutt does several important things. He runs through the details of how working-​class spaces in London, places both of residence and work, have been seized by development capital not only with state legal collaboration but also with very substantial tax-​funded state subsidies. Drawing on his experience of working in Northampton, in the East Midlands region of England but within London’s commuting zone and in effect part of the Greater South East, he shows how housing development works against the interests not only of dispossessed former industrial workers but also for households which very much belong to the ‘squeezed middle’. In relation to governance he gives a full account of the role of real estate capital’s enormous lobbying power and intersection with actual government at all levels, both local and national. Capital is very much integrated with policy making and policy implementation and in current conditions it is always capital’s interests which prevail. It is important to emphasize that Labour local government and Labour national government have been very much implicated in these processes. They may be seeking ‘to ameliorate the inevitable’ although they seem to have had minimal success in doing so, but they are certainly not trying to make things be different. So with the changing character of post-​industrial capitalism social democratic planning, which it has to be said produced enormous gains for the working-​class inhabitants of industrial cities in the form of better housing, better services, and much improved urban health, has now become the servant of development capital. We will return to the implications of this in the next chapter. To conclude this one there are two issues worth exploring. The first is the ecological consequence of continued urban growth driven not by the concentration of productive workers into industrial conurbations but by the drive to realize value through real estate

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speculation and the transformation of agricultural land into building land with consequent massive increases in nominal value. While building on former industrial –​brown as opposed to greenfield sites –​has consequences for employment and urban culture, it does not change the ecological status of the land.10 Continued urban sprawl does. In an era of impending food crises taking land out of agricultural use is a real issue.11 Rogers and Power (2000) wrote an interesting book following on from Rogers’ Reith Lectures for the BBC –​Cities for a Small Country in which they argued for high-​density low-​rise urban housing as an ecological necessity –​ exactly the kind of housing which was demolished under ‘Going for Growth’ and the Pathfinder programme. Rogers was actually associated with the early Going for Growth proposals but in the light of community opposition and having the wit to recognize the contradiction between the sensible and constructive arguments in the book with Powers and the nature of that programme, he withdrew. The capital logic of unrestricted urban growth in post-​industrial capitalism is a major driver of global warming and towards climate catastrophe. The mantra of growth is generally bad but urban growth with the direct CO2 costs of construction materials and the subsequent use costs of urban sprawl is one of the most insidious components of growth in relation to climate crisis. Finally, let me present a complexity informed take on urban planning. The planning system, a major control sub-​ system of the urban system, has been transformed by the way capitalism in high-​income countries and for many urban areas in high middle-​income countries is now driven by the inter-​related logics of the secondary –​real estate, and quaternary –​finance, systems of accumulation. This is by no means simply a matter of the logic of capital separate from the actions of people. We need historical materialism, not crude dialectical materialism. As Piketty (2020) recognized ideological shaping of knowledge plays a very important role in these shifts, in this case the ideological shaping towards market solutions of the professional expertise of planners. We also have to remember that from the 1980s onwards, including under the Blair and Brown New ‘Labour’ governments in the UK, there was a constant mantra towards those in local governments who tried to oppose this shift of ‘TINA’ –​there is no alternative. More recently it has been described as ‘necessary pragmatism’ –​a take on the line of ameliorating the inevitable. Post-​industrial capitalism is a different system from industrial capitalism. Although the core logic of capital accumulation remains the same, the forms through which this is manifested have changed. There is nothing new about the importance of real estate and finance in capitalism.These have always mattered.The change is that now they matter most. In terms of value added in the UK real estate contributed 14 per cent for the UK and was the largest single sector. Manufacturing contributed 10 per cent. For London which with 13 per cent of the UK’s population contributed 22 per cent of gross value added, the real estate sector contributed 16 per cent and manufacturing contributed 2 per cent. So planning matters and the issue is can it be made to work differently towards equality and confronting climate crisis. After COVID perhaps there is a window of opportunity.That is what we will consider in Chapter 8.

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Notes 1 An important consequence of this is that the labour output of directly employed (and hence non-​commodified) workers is undervalued and hence their labour productivity is also undervalued. 2 Health is now a devolved power so there are four in the UK: England, Scotland, Wales, and Northern Ireland.The English health service is the most affected by privatization but the others are not immune. 3 An anecdote from my youth about the probably apocryphal public toilet attendant in Tyne Dock who was dismissed from his job (at which he was entirely competent) because he was illiterate: He started selling fruit and vegetables from a barrow and went on to build up an enormous wholesale business. When he came to make a will he told the solicitor who presented him with a copy that he was illiterate and it would have to be read to him. Solicitor: what would you be if you could read and write? Millionaire: a toilet attendant in Tyne Dock. 4 Status is right because this does not necessarily mean higher income. Many contemporary graduates earn less in relative terms than their skilled worker grandfather (note gender). 5 Catholic schools which in the UK are part of the state system, ‘Rome on the rates’, typically have catchment areas about five times the size of their state equivalent. Parental choice means residential location is not absolute in terms of access to a school but it is the main factor by far. 6 Although austerity has led to a post-​code lottery where some procedures are no longer available from the NHS in particular areas. These include for example varicose vein operations and fertility treatment. 7 This is an input measure set. Health outcome data –​life expectancy and even healthier life expectancy –​describe outcomes. 8 COVID is causing enormous problems for UK and Australasian universities because it is stopping Chinese recruitment. 9 See Aalbers (2016), Blakely (2019) and Flaherty (2015, 2018). 10 Although derelict industrial sites when left ‘waste’ can become wildlife hotspots. 11 This was a major issue in the immediate post-​Second World War period in the UK when memories of having to fight much of the country’s food through U boat attacks on convoys were still strong.

Bibliography Aalbers, M.B. (2016) The Financialization of Housing. London: Routledge. Bambra, C. (2007) ‘Going beyond the Three Worlds of Welfare Capitalism: Regime Theory and Public Health Research’. Journal of Epidemiology and Community Health 61(12), 1098–​1102. Blakely, G. (2019) Stolen. London: Penguin. Boliver, V. and Byrne, D. (2013) ‘Social Mobility: The Politics, The Reality, The Alternative’, Soundings: a Journal of Politics and Culture, Winter 55. Calder, G. (2016) How Inequality Runs in Families –​Unfair Advantage and the Limits of Social Mobility. Bristol: Policy Press. Cohen, S., Hernando, M.G., Mitchell, G., Pelling, L., Ruiz-​Huerta Carbonell, J., San Vincente Feduchi, J., Velasco, G., Sohl, L. and Svensson, M. (2020) Inequality and the Top 10% in Europe. Brussels: Foundation for European Progressive Studies.

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Colenutt, B. (2020) The Property Lobb: the Hidden Reality Behind the Housing Crisis. Bristol: Policy Press. Esping-​Andersen, G. (1990). The Three Worlds of Welfare Capitalism. Princeton, NJ: Princeton University Press. Flaherty, E. (2015) ‘Top Incomes Under Finance-​Driven Capitalism, 1990–​2010: Power Resources and Regulatory Orders’. Socio-​Economic Review 13(3), 417–​447. Flaherty, E. (2018) 'Complex Inequalities in the Age of Financialisation: Piketty, Marx, and Class-​Biased Power Resources', In: Langman, L. and Smith, D.A. (eds) Twenty-​First Century Inequality & Capitalism: Piketty, Marx and Beyond. Leiden: Brill. Green, F., Anders, J. Henderson, M. and Henseke, G. (2017) Who Chooses Private Schooling in Britain and Why? Centre for Learning and Life Chances in Knowledge Economies and Societies at: www.llakes.ac.uk (accessed 16 October 2020). Leisering, L. and Walker, A. (1998) ‘New Realities: the Dynamics of Modernity’, in Leisering, L. and Walker, A. (eds), The Dynamics of Modern Society. Bristol: Policy Press. Luo, Y., Guo, F. and Shi, J. (2018) ‘Expansion and Inequality of Higher Education in China: How Likely Would Chinese Poor Students Get to Success?’ Higher Education Research & Development, 37(5), 1015–​1034. Monroy, C., McNally, R. and Trines, S. (2019) Education in Brazil World Education News and Reviews https://​wenr.wes.org/​2019/​11/​education-​in-​brazil (accessed 16 October 2020). OECD (2019) Brazil: Education at a Glance. Paris: OECD. Office for National Statistics (ONS) (2019) Effects of Taxes and Benefits on UK Household Income. www.ons.gov.uk/​peoplepopulationandcommunity/​personalandhouseholdfinances/​ incomeandwealth/ ​ b ulletins/ ​ t heeffectsoftaxesandbenefitsonhouseholdincome/​ previousReleases (accessed 16 October 2020). Piketty, T. (2020) Capital and Ideology. Cambridge, MA: Belknap Press. Public Services International Research Unit (2014) Why We Need Public Spending. www. world-​psi.org/​en/​why-​we-​need-​public-​spending-​updated (accessed 16 October 2020). Qiu, X. (2013) Enigma of China. London: Macmillan. Rogers, R. and Power, A. (2000) Cities for a Small Country. London: Faber and Faber. Stein, S. (2019) Capital City. London:Verso. Weeks, J. (2019) Measuring Productivity. Progressive Economy Forum https://​ progressiveeconomyforum.com/​blog/​measuring-​productivity/​ (accessed 16 October 2020). Williams, R. (1963) Culture and Society. New York: Columbia University Press.

8 THE FORMAL POLITICS OF INEQUALITY What kind of governance systems do we need to confront inequality in a context of climate change and after COVID?

Governance is the domain in which policies get developed and implemented. It is where things actually get done. There is a great deal of work in the fields of political science/​political economy, which presents a coherent and convincing critique of the neo-​liberal character of contemporary governance in high-​income and high middle-​income countries. Of course, the extent of development of that character varies. The neo-​liberal turn has gone far farther in the Anglo-​Saxon democracies, particularly in the UK, than in Nordic democracies or some of the post-​Soviet societies, notably Poland where a collectivist populism has actually rejected much of it. In no way can China be described as a neo-​liberal polity. Brazil in contrast to Poland is turning from radical collectivism, at least in principle, towards a harsh neo-​liberalism although COVID seems to be steering that country towards a right-​ wing corporatism, which is something different from neo-​liberalism. Interestingly the clever international civil servants of global capitalism in the OECD, IMF, and World Bank seem to be turning their backs on full blooded neo-​liberalism even before COVID because they recognized the threat that developing inequality poses to the social order of market capitalism. In this book there has been a good deal of presentation of the critiques of the neo-​liberal state in terms of its efforts to impose a market logic, which would have been unrecognizable to Marshall or Pigou on all aspects of the social world. This logic has been asserted with no reference to transaction costs in markets, to the implications of returns to scale in the delivery of services, and with no recognition of the kind of understanding of imperfect competition developed by Joan Robinson in the 1930s. That critique will not be repeated here but will be taken as a given. Rather the purpose of this chapter will be to specify what kind of governance systems, at all levels and including the intersections of governance with markets and of at least equal importance with civil society that is needed if we are to ‘confront inequality in a context of climate change and after COVID’.

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After COVID matters because of the pandemic impact and quite probable endemic continuation of COVID as a threat to human health and source of ‘excess deaths’ has had a major disruptive impact on governance systems and challenged fundamentally their ability to act according to the neo-​liberal playbook, despite the best efforts of the UK Conservative government to do so. It has shown up the inadequacies of market-​oriented systems for the delivery of health care and the utter inappropriateness of market forms for the management of effective public health systems. All this has been made worse by the cumulative impact of austerity. There is a real opening for an alternative if there are political actors capable of grasping the opportunity to develop it, although the capacity for example of Starmer’s Labour front bench in the UK –​New Labour light –​to do so seems very limited. Collectivism as the central mode of economic planning should be back on the agenda but whether it will be depends on if people make that happen. That issue will be the subject of Chapter 10. Anyhow it is governance which has the capacity to get things done and the level of governance which matters first is national. Lieven (2020) argues, absolutely persuasively, that it is nation-​states that must act to avert climate catastrophe. For someone much of whose academic career has been as a Professor of War Studies it is interesting that he identifies the real threat facing the great powers of the world today as climate change, not each other. He also notes that the fundamental problem preventing meaningful action against climate catastrophe is:‘… the lack of motivation and mobilization of elites all over the world and of voters in the West’ (2020: xiv). He goes on to point out that the level of necessary sacrifices by ordinary people that will be required, sacrifices on the scale of those imposed on the UK’s civilian population during the Second World War, can only be demanded as part of a system of national solidarity in which the rich have to pay their fair share and in which the state guarantees the basic living standards of the population as a whole through social welfare and universal health care. 2020: xix In other words, we need collectivism towards equality and massive state intervention in the economy. What is required is a planned economy in which the economic sphere is subordinate to governance and to socio-​ecological imperatives. How do we get that? We have a lot to do. Although the metaphor was deployed by Conservatives in the 1980s, notably by the mad monk himself Keith Joseph, to describe the way one nation Conservatives had gone along with the general collectivist tendency post–​Second World War, we have actually been subjected to a neo-​liberal, individualist ratchet for some forty years in the UK and USA with a slightly shorter period of the ratchet being turned in other states. A ratchet is a toothed wheel with a catch –​a pawl –​which is set so that once a turn is made it cannot be reversed. However, most ratchets allow for the pawl be loosened by knocking it out of the current position. We need to knock out the pawl and turn

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the wheel back to a dominance of democracy and the state over the market and over the political power of the most affluent. The response to COVID has seen states in general act outwith market imperatives, although in the UK that has often taken the form of contracts being awarded to the government’s friends in business with no competitive tendering. However, political and economic elites want to return to business as usual when (we should say if) COVID is brought under control. The current UK Conservative government, having seriously mishandled the COVID crisis through side lining the NHS in favour of the private sector, is now intent on using a no deal Brexit to ratchet the UK towards US-​style small government. Governments have generally intervened in economies on behalf of capital, most notably on behalf of finance capital after the crash of 2008 in order to rescue investment banks and bankers in the financial sector from the consequences of their own greed and folly. Quantitative easing, the creation of money, contradicts everything that Josephs and Thatcher stood for in monetary policy, controlling the money supply to control inflation. There has not been devastating consumer price inflation because inflation has been confined to the assets held by the rich in the form of property and financial instruments. This has increased the money, if not real, value of their assets and hence of their market wealth. What is required is not this kind of socialism for the rich and austerity for everybody else but something completely different.

Complex government of complexity from all directions Complexity thinking has been taken up widely in discussion of governance, sometimes constructively and sometimes not. Typical of the latter is the approach adopted by Colander and Kupers (2014). The subtitle of their book is Solving Society’s Problems from the Bottom Up.The foundation of this can be found in Hayek’s lecture on being awarded the Nobel Prize in Economics. It resonates with the kind of complexity thinking, which asserts that all complex systems are the product of micro-​emergence, created inherently from the interactions of micro agents without any history or pre-​existing structures which themselves have agentic powers. This reinforces the rejection of the role of the state typical of ‘liberals’ like Hayek and Berlin. States must always be laissez-​faire. Colander and Kupers argue for what they call ‘laissez-​faire activism’ with the state playing merely a supportive and subordinate role to bottom-​up initiatives, which will emerge if institutional structures allow them to develop: We show how a small change in the ecostructure especially when applied at the formative embryonic stage of emerging institutions can fundamentally change society from the bottom up, without massive state intervention. … The goal of the policy we are advocating is to encourage the development of an institutional environment that is friendly to bottom-​up policy solutions so that new socially focused enterprises can emerge and develop. 2014: 2160

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There is a similar take on how to engage with complex governance and the complex social in Scoones and Stirling’s The Politics of Uncertainty (2020) although those authors do make a turn to democratic process rather than to market solutions.They argue that uncertainties must be understood as complex constructions of knowledge, materiality, experience, embodiment and practice. What burgeoning uncertainties require lies less in escalating efforts at control, but more in a new –​more collective, mutualistic and convivial –​politics of responsibility and care. If hopes of much-​needed progressive transformation are to be realised, then currently blinkered understandings of uncertainty need to be met with renewed democratic struggle. 2020 –​foreword blurb This resonates with the extreme version of actor network theory (ANT) ontology with uncertainty understood in terms of knowledge construction –​the customary ANT transformation of accounts of how reality works into accounts of how we know it –​substituting epistemology for ontology. Scones and Stirling are right to include the significance of power: ‘Given diverse uncertainties, there is no single assumed endpoint; no one version of modernity and progress, and so directions chosen in the pursuit of sustainability and development depend on political and social choice’ (2020: 2). However, directions taken depend on starting points and on one great failing of ANT is that while it recognizes the agentic power of instruments in the construction of knowledge it does not recognize how institutional structures and histories have profound context setting power for the development of the future. Control is very important.There should be arguments about the purposes toward which control is directed and the maximum possible participation in deciding what should be done but actions will only be meaningful if they are managed through institutional structures. Those structures will require remaking but without them nothing will happen. So we have two kinds of micro-​emergent misdirection. One turns to market power with some state action. The other to frankly a largely rhetorical assertion of the need for things to come from the bottom up. What is wrong with this is not the recognition that important initiatives can develop from below but the insistence that this is the only direction in which initiative and development can flow when addressing fundamental issues like climate change.1 There is also the customary emphasis in this kind of simplistic complexity on the fundamental power of small changes. In an interesting set of proposals for addressing regional inequalities in the UK the UK 2070 Commission (2020) chaired by Kerslake, the former head of the UK Civil Service asserted, ‘Make no small plans’. The commission recommended the devolution of power and resources to sub-​national levels, particularly to local authorities organized in consortia, to address the problems which were not just a matter of economic inequality but were manifest in the way the English post-​industrial regions in the EU referendum had demonstrated a distrust

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in the legitimacy of Westminster government and establishment elites. There is a great deal to be said for administration and power at sub-​national levels but this is a matter of state action, not market action. Confronting both climate change and inequality will require very big changes in many areas. Of course, all this will happen, or should happen and God help us if it doesn’t, in an ecological and institutional context and in relation to a path dependency. Context and path dependency are two of the central frames for understanding the complex social and central to the complex realist programme which informs this text. But government will be a lead actor in association with Civil Society and the owners of capital must be made to use the Geordie expression ‘To Do As They Are Telt’.

The right mode of governance to do what needs doing There is a historical example available as to how nation-​states should confront inequality in a context of climate crisis.That is the way the UK was managed during the Second World War. This was done primarily by the Labour ministers in the coalition government.2 Devine (1988) outlined how this approach could inform a democratic version of economic planning. Hayek had insisted that planning would always be inefficient because it failed to draw on the tacit knowledge of entrepreneurial actors in the market. For Devine the real significance of tacit knowledge is that for a socially efficient use of resources what is needed is a system that enables everyone’s tacit knowledge, not just that of entrepreneurs, to inform decisions. 1988: ix For Devine subsidiarity is essential to enable the self-​governing associations to ‘… control both the state and the economy, the former directly, and the latter both directly and indirectly, through the state’ (ibid.). The principal mode through which something very like this was achieve in Britain under the direction of Labour ministers in the Second World War was negotiated coordination down to the very immediate level of shop floor production. There are two major problems in achieving this in governance today. First, the whole systems of governance have been ratcheted to give capitalist interests very direct power within the state itself. This has many aspects. For example, the long-​standing historic separation between public and private careers has been broken down in the UK beginning in the Thatcher years, and continuing ever since especially in the New Labour period. This is not just a matter of bringing in the likes of the tax dodger Philip Green to advise –​a truly bizarre example. More importantly private sector people have been brought into senior executive positions in both central and local government and a career pattern has developed where senior executives move between both repeatedly. In the UK Civil Service each department and Her Majesty’s Revenue and Customs (HMRC) has a departmental board chaired by the Secretary of State and including not only career civil servants but non-​executive board members,

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primarily from the commercial private sector, with experience of managing complex organizations. In other words the explicit logic is that the civil service needs private sector expertise to be able to not just to manage its operations but to provide crucial inputs into its strategic direction. There are private sector secondees or career movers at all senior policy making and management levels in both central and local government. In the UK the Victorians insisted on a separation of public sector and private sector careers to prevent special interests determining public sector decisions. In the neo-​liberal era with massive privatization we might regard this as particularly necessary but there is a history of local authority chief executives passing through employment with Capita, a major provider of privatized services in a range of areas to both central and local government, and returning to government. Another crucial locale for private sector engagement in governance is in a series of boards operating at local levels. For example in England Local Economic Partnerships (LEPs) have a central role in economic management. Some of them, with a significant representation from manufacturing, are rather good at it but many are dominated by people representing real estate development and finance capital, along with legal and accountancy firm concierge elements. The absurd move to take the delivery of state primary and secondary and further education outwith the control of elected local authorities with the development of rapacious academy chains and corporate boards for Further Education (FE) is another example of transferring governance power to the private sector. These are all public resources and it is necessary to take them back. There is a role for capital interests in coordination and management in governance but a real distinction has to be drawn between interests of productive capital in manufacturing and what Fitch called FIRE in his account of The Assassination of New York (1993), the Finance, Insurance, and Real Estate Capital from the secondary and quaternary circuits of capital. These sectors are parasitic and have no productive role. The second issue is the nature of productive activity in post-​industrial economies. Britain’s managed economy in the Second World War was an industrial economy managed towards production for war needs and the reproduction of the labour power necessary for that production along with the legitimation of the nature of authority through general social provisions, for example, in food and clothing rationing and high levels of progressive taxation. A post-​industrial economy appears to be different but that view is wrong if we recognize that the social production in spheres like health, education, and social care is real production of absolutely necessary real services. This is massively undervalued in national accounts because it not valued properly in terms of the outputs and outcomes that these services achieve.3 The only clear cost services are the general administration of the state and social security along of course with the armed forces unless these are engaged in useful peacetime roles. The high priests of capital in the McKinsey Institute have recognized this in urging for the Prioritizing of Health (2020) as a key production sector in post-​industrial capitalism. For them it has to be run by corporate capital although they can see the advantages of single payer funding of the core elements –​tax revenues offer a stable income stream. Health coupled with Social Care has

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become, to use an old expression, a commanding height of the economy and the argument for it being publicly owned and controlled is not only that that will be the most cost-​effective mode –​more bang for buck –​but that a publicly owned universal system is the best way to achieve equality in terms standard of service. Corporate provision would be more costly and less efficient because of transaction costs and the cost of profits, and the inability to plan the system as a whole. Corporate systems always include a buy above the basic element, which would promote health inequality by allowing the affluent to purchase a better standard particularly but not exclusively in social care. Green New Deal style policies can combine a shifting of production towards CO2 challenging industrial production alongside state run infrastructure projects which move in the same direction. The elements in Labour’s Green New Deal as outlined in the 2019 Manifesto would have if implemented done much to achieve this. These included a National Sustainable Investment Board, incorporating the costs of negative climate and environmental impacts into all fiscal decisions, the establishment of a National Transformation fund with £400 billion available with £250 billion of this allocated to a public Green Transformation fund, and changing Treasury Investment rules to ensure that all public spending is compatible with climate and environmental targets. The change in accounting practices to make climate externalities a cost and shape spending towards climate targets is particularly important. Labour proposed to change the character of the financial sector by creating a National Investment Bank alongside a network of Regional Development Banks, which would lend to productive enterprise, and a Post Bank (like the former National Giro), which would lend to small enterprises, co-​ops, and community projects. There was also a proposal to increase regulation of the financial sector generally, although not as far as the Glass–​Seagal insistence on the complete separation of functional banking from speculation in purely financial assets. Finally there was a proposal to delist from the London Stock Exchange any company failing to operate in a way which contributed to tackling climate crisis.4 These proposals are at the level of what is required to implement a Green New Deal, which would revive the UK’s industrial system and create a lot of good jobs. The change in public costing rules is of special importance in relation to these moves. President Biden has promised that a key element in his government programme will be a Green New Deal. He will recommit the USA to the Paris Climate agreement and asserts that he will make confronting climate crisis a key part of both domestic and foreign policy. This will include committing to carbon neutrality by 2050. Interestingly in his campaign materials he identified climate change as a major national security issues. Quite a lot of those materials focussed on China and in particular the way in which China has exported coal-​based CO2 generation to other states including through China’s Silk Road programme. All that said the world’s most powerful climate change denier is on the way out and Biden is using the vocabulary of New Deal as a green programme in a society where that has enormous resonance.

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Devine is right to endorse subsidiarity and participation –​real rather than the nothing more than tokenistic forms which have generally been allowed to ordinary people. The language of stake holding is a form of management speak but there is a point to the term. Those who have an interest need to have a say. Government has to engage both with the economic system, where the economically powerful have far too much say with trade unions largely written out, not least under New Labour, and with civil society. There are elements in the UK’s current form of governance, which would open up relationships at the right sort of level and in a constructive fashion if they were organized so that voices other than senior state actors and capital had a real say. In England there are Local Strategic Partnerships (LSPs) operating at the Local Authority Level and Local Economic Partnerships (LEPs) operating at something like a city region level. The official definitions of each are: A local strategic partnership (LSP) is a single body that: brings together at a local level the different parts of the public sector as well as the private, business, community and voluntary sectors so that different initiatives and services support each other and work together; is a non-​statutory, non-​executive organisation; operates at a level which enables strategic decisions to be taken and is close enough to individual neighbourhoods to allow actions to be determined at community level; and should be aligned with local authority boundaries. Local Strategic Partnerships Government Guidance Summary: Guidance 09 A Local Enterprise Partnership (LEP) is a locally-​owned partnership between local authorities and businesses. A LEP plays a central role in deciding local economic priorities and undertaking activities to drive economic growth and create local jobs. There are 38 Local Enterprise Partnerships currently operating within England and are members of the LEP Network. A LEP is overseen by a Board which is led by a business Chair and its board members are local leaders of industry (including SMEs), educational institutions, and from the public sector. www.lepnetwork.net/​(accessed 26 February 2021) LEPs are powerful. LSPs are tokenistic. What is needed is a consolidation of the function of both into an LSP taking over economic as well as social functions. This is best done at the level of city region taking in a substantial representation from civil society and organized labour and being chaired by an elected politician. That would introduce some level of democratic legitimacy and accountability. A body of this kind would correspond at each of a locality and city region level with what Devine meant by a ‘Chamber of Interests’. Central to the activities of both would be economic, service, and land use planning so they would incorporate control over health, social care, education, and in particular technical education, and environmental services as well as being bound by directives in relation to confronting climate crisis and challenging inequality.

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Planning is the key means by which action towards the future state of the socio-​ political-​economic-​ecological systems within which human life is conducted can be organized towards the achievement of a desirable condition of greater equality and less climate disaster. It is also of course the mode of governance which is essential for confronting pandemics like COVID. There are many tools for good planning including scenario construction, for example, for anticipating what is necessary to confront a pandemic but planning is only one phase of the process. Geddes, who invented urban planning, said that what is necessary is to survey –​ see what is, plan –​decide what should be, and implement –​get things done to make that future be the future that happens. The above scheme of local and city regional LSPs would be a way in which that process might be set in train but they would have to have power over the economic and social systems. The suggestions here are for England, not even the whole UK, although localization in Scotland, a grossly overcentralized country under the rule of the Scottish Nationalist Party (SNP), would be a good thing. The detail is specific but the levels of social spatial administrative geography are broadly appropriate for any high-​income or high middle-​income state. Putting planning in front and centre requires that the ratchet be broken. The UK ran as a planned economy with direction mediated by negotiation during the Second World War with the key controlling department being the Ministry of Labour and National Service under Ernie Bevin. Labour was the most important resource but the Ministry of Production served as a coordinating department relating labour supply to war production under the Ministries of Supply, Aircraft Production and the Admiralty. The next period in which there was a serious attempt to develop planning was in the Wilson government after 1964 through the Department of Economic Affairs (DEA) charged with long-​term planning of the economy and industry. The Treasury would manage revenue raising and financial management of government itself. The Department of Economic Affairs (DEA) prepared a National Plan published in September 1965. This built on an existing system for regional economic planning, which had persisted in one form or another since 1945 although the names of the relevant bodies changed. The DEA did not last, in large part due to hostility from the Treasury-​dominated civil service.5 One argument from the Treasury was that it was too difficult to separate government expenditure into current and capital. Every English local authority maintained separate current and capital accounts and always presented the current consequences of capital expenditure in relation to interest and capital repayment. This distinction is fundamental. It allows for investments towards the future to be separated out from current service provision. The DEA’s planning approach was not directive on the war-​time pattern but rather indicative and modelled on the French experience in which government-​ provided guidelines and incentives but capital investment and related decisions were left to a combination of the private sector and the management of what was then in both France and the UK the very considerable body of public corporations, particularly in energy and transport. One of the major administrative shifts, particularly

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in the UK, through the period of the transition from industrial to post-​industrial capitalism has been the wholesale privatization of public corporations. Economic planning is one of the two major domains of state planning.The other is the broad area of land use planning. Of course these are massively intersecting domains. The Structure Plans established under the 1968 Town and Country Planning Act in the UK combined broad specifications of land use with strategic economic direction, particularly directed at creation of employment.These endured in weakened form until abolished in 2004. The abolition of the Greater London Council and of the city region metropolitan councils in England diminished the status of structure plans and the emphasis shifted to land use plans developed by lower-​level local authorities. Originally sustainable development was not a function of these but through the 1990s sustainability did become one focus albeit usually subordinated to growth (see Counsell, 1998). The GLC and the Metropolitan Councils were Labour controlled and did regard the reduction of inequality, not least by attempting to replace lost industrial jobs, as a priority. However, crucial planning functions and even more importantly land holdings were transferred to appointed Urban Development Corporations (UDCs) by the Thatcher government. The UDCs worked to facilitate real estate capital in service-​oriented development, the extreme example being the transformation of much of London’s docklands into the office and high-​value residential accommodation. Although the rhetoric of neo-​liberal governance has always asserted the primacy of the market and argued for a minimal role for the state, the reality has been that the state has been a key actor enabling real estate capital at every level. The state, both national and local, has very much functioned as ‘the executive committee of the bourgeoisie’ (Marx). It has planned for capital accumulation.The role of the property lobby in this is outlined by Colenutt (2020).6 The content of plans like The South East of Scotland Strategic Development Plan (2016) shows that growth rather than sustainability and confronting inequality remain central. In England strategic economic planning has become a function of the Local Economic Partnerships. The North East Strategic Economic Plan (2019) is subtitled ‘creating more and better jobs’. Between 2014 and 2024, we want to grow the number of jobs in the region by 100,000, with at least 70% of the new jobs being better jobs, defined as those in managerial, professional and technical roles.We have made good progress against this ambition. As of September 2018, there were 64,600 more jobs than in 2014, 77% of these being better jobs. 2019: 3 The territory of the North East LEP was 60 years ago one of the most industrial places the world has ever seen. By 2018 figures production industries (including Construction) provided 15 per cent of jobs and 25 per cent% of value added. Real estate and financial services provided 4 per cent of jobs and 22 per cent of value added. The NE LEP is led by people with a background in innovative manufacturing and its intentions in relation to jobs are undeniably good but even before the

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impact of COVID this was a very weak economy and much of the energy industry has been fossil fuel related even after the virtually complete demise of deep coal mining. The plan has no real orientation towards confronting climate crisis and see only employment as in any way contributing to a reduction in inequality. People just have to get better jobs. The emphasis in these plans is on growth.To a considerable extent the imperatives are the same as in China during the period of unrestrained commitment to the four modernizations. Growth is seen as unequivocally good –​the overall orientation of the Capitalocene.The emphasis on job creation and on the quality of jobs created is again not unlike recent developments in urban China. The spatial plans which used forty years ago to be dominated by the needs of real commodity production now focus on real estate residential and retail development. There is tokenistic reference to constraining car borne transport. Rogers and Power’s commitment to sustainable urban growth in a small country is not taken up. There is continued expansion of housing areas into Edge City style terrain with much of this built on good agricultural land. After all a lot of the profits of development capital are made by changing the use status of land from agriculture to residential or commercial. The public get no tax yield from this, only the possibility of some development gain as ‘affordable housing’ –​which is generally cut back to ensure developers’ profits –​and some provision for necessary community facilities. Central government as with the Westferry development case will override local government to enable major developers to avoid even this. The economic shock of COVID renders many these plans to put it mildly moot. Things may change but there are two routes here as in other domains of governance. One is to planning. The other is to what Klein (2007) has called ‘Disaster Capitalism’, that is a turn even further to corporate dominance of governance in the interests of the rich.

How to change governance towards coping with inequality in a context of climate crisis To change governance there has to be a radical, phase, shift in all of structures, processes, and culture.To begin with culture: senior administrators and policymakers in civil services of all kinds have been educated for forty years through an indoctrination in neo-​classical economic thinking. The amazing thing is that this has little practical bearing on what they actually do. We do not have a free market capitalism, even in English-​speaking countries where that ideal state is most asserted and supposedly worked towards. Instead, we have a system of corporate dominated capitalism with a market ideology but nothing remotely resembling perfect competition in practice. This is the world in which administrators actually work –​a world of engagement with corporate pressure from lobbyists and their political allies –​many on substantial consultancy or related retainers, with private sector personnel embedded in the actual civil service itself, and with their own careers moving between the public and corporate worlds. It is striking how the personnel

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of organizations like the OECD seem much more open minded and analytical in contrast with the senior echelons of many civil services. There are examples of people who seem to be able to think more broadly, although often like Kerslake, the former head of the UK Civil Service, they do so after retirement. Perhaps it is harsh to regard them as irredeemable –​they are constrained by structures.7 There is another set of people partly marked by generation, partly by training who have a different cultural framing. In the UK civil service the analytical professions are Researcher (usually social), Statistician, Operational Researcher, and Economist.8 The people in these categories have a wide set of backgrounds but interestingly an appreciation of the significance of complexity framings for policy solutions is often something they have in common. One area in which complexity-​ informed work is essential is in policy and practice evaluation –​in establishing what works, where it works, when it works and how it works.The Centre for Evaluating Complexity Across the NEXUS9 (CECAN) has drafted an annex to the Magenta Book (CECAN, 2020) –​the UK Treasury guide to policy evaluation –​which is complexity framed. This has been received with enthusiasm by analysts in central and local government and evaluators in general. There is a generation of local government administrators and health administrators, particularly but not exclusively in public health, who are deploying practical complexity as a way of understanding the jobs they have to in the here and now and in planning towards the future. They are people who would be comfortable in shaping policy against inequality and to confront climate crisis and doing so in a way which would work. So a different language for framing problems is now current. To change the language is to change the culture. That is a positive sign. In the next chapter the thorny issue of how the language of public understanding, the discourses and narratives of governance as presented to and interpreted by people in general, will be central to the discussion.10 There have been interesting developments in the UK government structure around the edges of the core civil service. The Office for Budgetary Responsibility (OBR) has taken on a role of projecting forward the implications not just of normal policy but also of assessing the likely impact of COVID on the economy and labour market. Although the National Audit Office (NAO) –​under the direction of the Comptroller and Auditor General, an officer of the House of Commons11 –​ primarily looks back at what has been done and how it has been done, it has also developed a tendency to draw conclusions from this retrospective examination to inform action towards the future. The board and senior staff of this body mostly have accountancy backgrounds. Accountants do seem to be prepared to use their examination of what has happened to think about what should happen. However, Treasury and equivalent Ministry of Finance dominance of governance in other countries poses a major structural problem. The wholly false narrative of austerity, that austerity post the crash of 2008 was a consequence of overspending on services rather than a response to the rescue of the banks –​and unnecessary even for that purpose –​seems to be still embedded the mentality and the structures of departments of this kind and even more of central banks. Both finance ministries and central banks are committed to the logic of what Streeck calls ‘the consolidation

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state’, which organizes public finances to provide secure investment opportunities for the holders of financial assets. The politics of public debt may be conceived in terms of a distributional conflict between creditors and citizens … Both have claims on public funds in the form of contractual-​commercial and political-​social rights, respectively. In a democracy, citizens have the possibility of electing a government responsive to them but ‘irresponsible’ from the viewpoint of financial markets, in the extreme case a government that expropriates its creditors by annulling its debt. As accumulated debt increases, and investors are required to be more careful about where they put their money, creditors will seek guarantees that expropriation will not happen to them; in effect, that their claims will always be given priority over those of citizens, for example of pensioners demanding the pension that the state and employers promised them when they were workers. 2013: 14 What is needed in terms of organization of ministries is a separation off of the overall strategic planning function to a department, which might be named ‘Department with Responsibility for Future Generations’. The legislative basis for this kind of ministry could be established by an extension of the thinking behind the Government of Wales Well Being of Future Generations Act (2015). This requires public bodies in Wales to think about the long-​term impact of their decisions, to work better with people, communities and each other, and to prevent persistent problems such as poverty, health inequalities, and climate change. There is a Commissioner for Future Generations charged with ensuring that all public bodies in Wales work in accord with the principles of this legislation but that is a stand on one side role rather than being a central director of governance as a whole. Central Banks should be brought back under the direct control of government and made responsible to the same principles. Inflation is not an issue in the twenty-​first century for high-​income and most high middle-​income countries. The same principle should operate at every subordinate level of governance in terms of general orientation and commitment. The issue of regional and local spatial inequalities is very real, not just in terms of the consequences of those inequalities for people, but particularly as a limitation on the capacity of poorer areas to address their problems from their own resources. The ‘Basic Law’, which serves as a constitutional basis for Germany, both identifies the country as a federal republic –​ that is asserts that it cannot be a single nation-​state in which the lander have no right to legal existence –​and provides a redistributive mechanism for allocating resources so that poorer lander are able to carry out their responsibilities at the level of the country as a whole.This has had particular force after Die Wende –​the reunification of East and West Germany. The UK has the very crude Barnett Formula –​ massively advantageous to Scotland as opposed to Wales and the English North –​ alongside resource allocation formulae within each nation directing resources to

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local authorities. There has been a major shift forcing local authorities to rely more on council tax levied on private households. This is a grossly regressive tax since it includes a very low ceiling cap on dwelling value. Local authorities now receive just 31 per cent of their funding from Central Government Grants, which include an element directed towards equalizing. The formula has been repeatedly re-​adjusted by politicians for electoral targeting. Local authorities have been targeted by central government under first the coalition and then Conservative governments since 2010. Central government grants –​including retained business rates which were previously set by and collected by local authorities –​were cut by 38 per cent in real-​terms between 2009/​10 and 2018/​19, from £34.6 billion to £24.8 billion. Local authorities have lost the ability to raise council tax by more than 2 per cent (briefly 3 per cent but now back to 2 per cent) without a referendum. The assault on the local in England has been particularly severe but there was something very similar in Scotland. Despite devolution UK public finances are not devolved to any great degree12 and there are severe constraints on any sub-​national level of democratic autonomy. Plainly to achieve the kind of governance engagement required there would have to be very considerable increases in constitutionally guaranteed autonomy and a proper needs oriented fiscal redistribution to achieve national minimum standards. Any raising of standards above that would have to be determined by local fiscal policies subject to local electoral democratic control. The main tax resource for sub-​national governance should be progressive levies on real property. There is a case for nation/​region income and purchase taxes but not at lower levels. However, tourism taxes levied, for example, on AirBnB are an attractive idea. One domain which should remain national is Income Maintenance as a whole since that is most efficiently administered at a national level and should reflect national conceptions of adequacy for incomes. Major devolution and local government reform is not at all unprecedented, even in the UK. The question is can political support be raised for it at every level? That requires many changes but perhaps the key one is a change in the process of governance, in the way things are done. Levels of political engagement are not high. Turnout of registered voters in UK general elections is less than 70 per cent. In 2015 according to the UK Electoral Commission the Register was 85 per cent complete –​that 85 per cent of those eligible were registered to vote.This means that less than 60 per cent of those who could vote by age and citizenship in general elections do so. The turnout in local elections is pathetically low. In 2018 in England in no form of local authority did turnout reach 40 per cent of those registered. The UK is in the middle range of turnout in national general elections in Europe. In France although 69 per cent voted in the most recent Presidential election less than 50 per cent voted in the elections for the national assembly. In the 2014 referendum on Scottish Independence the turnout was 85 per cent of registered voters. This contrasts with a turnout of 56 per cent in the Scottish Parliamentary elections. It is plain that people are more prepared to vote when they believe that their vote makes a real difference. That said electoral politics do not allow people to engage with the processes of governance and administration.

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In systems like the UK’s they simply elect politicians on the basis of whatever –​ manifesto, long-​term commitments, family history (although this is weakening).The executive ministers in a national government or their equivalent at lower levels have directive power in relation to policies and nominal management responsibility for the successful execution of policies in terms of general governance and services.The power of capital to engage with governance at all levels is evident. The power of ‘the popular masses’ is not. The usual mantra for engaging people with governance is ‘participation’. However, the reality of participation is minimal. Arnstein’s (1969) ladder of participation had eight levels with three categories.The category of citizen power included the rungs of partnership, delegated power, and citizen control. That of tokenism had the rungs of placation,13 consultation, and informing. Non-​participation had the rungs of therapy and manipulation. White (1996), writing in relation to development practices, presented the following categories: Nominal participation is often used by more powerful actors to give legitimacy to development plans. Less powerful people become involved in it through a desire for inclusion. But it is little more than a display, and does not result in change. Instrumental participation sees community participation being used as a means towards a stated end –​often the efficient use of the skills and knowledge of community members in project implementation. Representative participation involves giving community members a voice in the decision-​making and implementation process of projects or policies that affect them. For the more powerful, representative participation increases the chances of their intervention being sustainable; for the less powerful, it may offer a chance for leverage. Transformative participation results in the empowerment of those involved, and as a result alters the structures and institutions that lead to marginalisation and exclusion. In governance in high-​income and high middle-​income countries there is great deal of representative participation, not by ‘community members’ but rather by those acting in the interests of corporate capital. In so far as there is transformative participation it is again participation by elites acting for capital, particularly in relation to any modification of the regulation of finance, real estate development, and taxation. This is the nature of governance in ‘Post-​Democracy’. Devine’s call for the engagement of the tacit knowledge of the wider public in democratic planning required a very different mode. Anyone, like the present author, who has experience working in community development knows that not everybody engages with initiatives which have a direct impact on their lives but enough do. There are people who come forward and act. North Tyneside community development project’s (CDP) account of their work around organizing for change (1978a, b) shows that clearly. It also shows how traditional governance

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kept them outside the processes of real decision making. There is deal of frankly vacuous rhetoric about participation in governance but for it to be real there have to be structures in which it is embedded from the go and modes through which participants are assigned to membership of decision-​making bodies with real powers. They have to represent interests over and beyond the interests of capital. Organized labour in the UK still has local Trades Union Councils and they certainly could elect representatives for that interest.There are in some places coalitions of community groups and that form could be generalized and again elect representatives. One problem evident in the membership of Local Strategic Partnerships is that currently only ‘problem areas’ are represented in a very minimal way on those boards. There would have to be a general representation of all areas separate and distinct from local government elected representatives who would operate in a parallel domain in relation to implementation as their major task. Specification of details is not appropriate here. What matters is that there is a clear recognition that the processes we have do not work and must be changed. What is required is a wholescale shift in the nature of governance.This is not unprecedented. The extension of real representative democracy was a gradualist accumulating shift change but we need a rapid one and we need it now. The governance system is not fit for purpose in dealing with inequality and climate crisis. It needs to be remade.

Notes 1 Inequality is not referenced in this book. 2 There is a current tendency to almost deify Churchill in relation to the conduct of that war. It is important to remember that he was booted out of office and never again won more votes in an election than the Labour Party (who lost the 1951 election despite receiving an absolute majority of British votes). In particular the armed forces voted the ‘great war leader’ out on his arse. Labour ran the home front well. Churchill who thought military genius was an inheritable quality lurched from strategic disaster to strategic disaster and the troops knew it. 3 The current approach is that suggested by the Atkinson Review (2005) but this undervalues in comparison with profit generating valuation in the private sector. 4 This was by far the most radical Green agenda ever presented in a Manifesto by a major political party. The English and Scottish Green Parties who had no prospect of winning seats under the UK First Past the Post systems for Westminster elections put up candidates against Labour. This cost Labour eleven seats which went to the Tories and one which went to the SNP. 5 See Clifford (1997) for a full account. 6 The role of lobbyists at every level of governance up to the transnational (European Union) is enormously important and a key driver of neo-​liberal policies. 7 Kerslake has had a purely public service career in local and central government. He is a local authority financial manager by background before moving up to local authority Chief Executive. Other than his personal consultancy company his post retirement roles as declared in the House of Lords’ Register of Interests all have a public or voluntary sector character. He has a serious interest in governance reform.

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8 Young economists working in the public sector are much less committed to the neo-​ classical/​neo-​liberal paradigm than their elders or private sector peers. 9 The nexus is the complex of environment, agriculture, food, energy, and water. 10 One real practical problem is that particularly in the context of austerity the time and energy of many good senior managers in health and local government is taken up with doing their best to keep the show on the road. Wistow et al. (2017) show how coping with the crises caused by increasingly common extreme weather events was not high on the priorities of managers faced with coping with austerity. When crises happened response was not good. COVID demonstrates this to a massive degree. 11 The staff of the NAO are House of Commons staff, not civil servants responsible to the government of the day. 12 Scotland has been given more tax raising powers but not the power to apply higher Scottish rates of tax to incomes from wealth, let alone introduce meaningful wealth taxes. In any event Scotland remains very dependent on UK resources and runs a substantial fiscal deficit year on year. 13 I would change placation to placation/​infuriation since a common response by community groups and activists to the experience of participation, particularly in planning, is anger and disgust.

Bibliography Arnstein, S. (1969) ‘A Ladder of Citizen Participation’. Journal of the American Institute of Planners 35(4), 216–​224. Atkinson, A. (Chair) (2005) Atkinson Review: Final Report –​Measurement of Government Output and Productivity for the National Accounts. London: Palgrave Macmillan. CECAN (2020) www.cecan.ac.uk/​news/​handling-​complexity-​in-​policy-​evaluation-​ magenta-​book-​2020-​supplementary-​guide/​ (accessed 17 October 2020). Clifford, C. (1997) ‘The Rise and Fall of the Department of Economic Affairs 1964–​69: British Government and Indicative Planning’. Contemporary British History 11(2), 94–​116. Colander, D. and Kupers, R. (2014) Complexity and the Art of Public Policy. Oxford: Princeton University Press. Colenutt, B. (2020) The Property Lobby. Bristol: Policy Press. Counsell D. (1998) Sustainable Development and Structure Plans in England and Wales: A Review of Current Practice. Journal of Environmental Planning and Management 41(2), 177–​194. Crouch, C. (2000) Coping with Post-​Democracy. London: Fabian Society. Crouch, C. (2011) The Strange Non-​death of Neo-​Liberalism. Cambridge: Polity Press. Devine, P., (1988) Democracy and Economic Planning. Cambridge: Polity Press. Fitch, R. (1993) The Assassination of New York. London:Verso. Healey P. and Shaw T. (1994) ‘Changing Meanings of ‘Environment’ in the British Planning System’. Transaction of the Institute of British Geographer, NS, 9, 425–​438. Institute for Government (2020) Local Government Funding in England. www. instituteforgovernment.org.uk/​explainers/​local-​government-​funding-​england (accessed 19 October 2020). Klein, M. (2007) Shock Doctrine:The Rise of Disaster Capitalism. Toronto: Random House. Lieven, A. (2020) Climate Change and the Nation State. London: Penguin. McKinsey Global Institute (2020) Prioritizing Health: A Prescription for Prosperity www. mckinsey.com/​industries/​healthcare-​systems-​and-​services/​our-​insights/​prioritizing-​ health-​a-​prescription-​for-​prosperity (accessed 17 October 2020).

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North East Local Economic Partnership (2019) The North East Strategic Economic Plan. Newcastle. North Tyneside CDP (1978a) North Shields: Organising for Change in a Working Class Area. Final Report,Volume 3, Newcastle-​Upon-​Tyne Polytechnic, Newcastle-​Upon-​Tyne. North Tyneside CDP (1978b) Organising for Change in a Working Class Areas:The Action Groups. Final Report,Volume 4, Newcastle-​Upon-​Tyne Polytechnic, Newcastle-​Upon-​Tyne. Scoones, I. and Stirling, A. (2020) The Politics of Uncertainty: Challenges of Transformation. London: Routledge. SES Plan (2016) Proposed Strategic Development Plan. Edinburgh. Streeck, W. (2013) The Politics of Public Debt: Neoliberalism, Capitalist Development, and the Restructuring of the State. MPlfG Discussion Paper 13/​7 Cologne: Max Planck Institute for the Study of Society. UK2070 Commission (2020) Make No Little Plans –​Acting At Scale For A Fairer And Stronger Future. http://​uk2070.org.uk/​2020/​02/​26/​uk2070-​final-​report-​published/​ (accessed 17 October 2020). White, S. (1996) ‘Depoliticizing Development’, Development in Practice 6(1), 6–​15. Wistow, J., Curtis, S. and Bone, A. (2017) ‘Implementing Extreme Weather Event Advice and Guidance in English Public Health Systems’. Journal of Public Health 39(3), 498–​505.

9 THE NEW POLITICS OF EQUALITY

Chapter 8 looked at the nature of states and governance in high-​income and high middle-​income countries with a particular focus on the styles of neo-​liberal governance illustrated by practice in the UK. Here the attention shifts to how actions outside the formal structures of governance by collectivities might be organized in order to make a difference. I refer back to Lieven’s important injunction in relation to climate crisis when he identifies the major problem preventing meaningful action as ‘… the lack of motivation and mobilization of elites all over the world and of voters in the West’ (2020: xiv). For voters, and voting matters, we might substitute people as a whole. What is required to address climate catastrophe are sacrifices by the mass of people on the scale of those imposed on the UK’s civilian population during the Second World War and to reiterate as Lieven (2020) says these will only happen in a context of national solidarity with the rich paying their fair share and with something very like universal basic services, especially in health. That is why there must be mass popular demands for equality alongside action on climate crisis and to be blunt as Lieven is these demands must be articulated within the social and political structures of nation-​states. Only through changing the politics and governance of nations will any meaningful transnational action become possible. There is nothing new about political programmes directed towards equality. Framing equality as an essential consequence of the elimination of exploitation and hence equality of life was the programme of socialist politics from the mid-​ nineteenth century across Europe and societies influenced by Europe. Demands in relation to gender equality began in the nineteenth century. Indeed equality in general and equality in relation to gender as a political programme begin with the French Revolution and with responses to it of early feminists like Wollstonecraft. The Rights of Man were also the Rights of Women. Issues in relation to ethnic

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inequalities were also part of the politics of modernity, both in anti-​slavery and anti-​colonial struggles. However, there is an important difference between politics founded around class and politics founded around ascribed identities. Classes are open. Sure, class action can operate to sustain double closure to use Parkin’s (1979) useful term. Class action can be directed upwards against exploiters and downwards against excluded groups. The South African Communist Party in the 1920s was associated with a strike on the Rand, which was directed against the employment of Black Miners.1 The ‘White Australia’ policy was driven in large part by resistance from unionized workers against the importation of semi-​slave indentured labour into the Queensland sugar plantations. Capital has always used reserve armies of labour drawn from ethnic minorities to undercut organized workers. This was a historical function of the Irish in Britain, although the Irish were rapidly recruited into unions. The key point is that in principle class is open even if that principle is not always observed and exclusion of women from ‘male preserve’ jobs was absolutely prevalent until the late twentieth century. In contrast ascribed identities –​and remember ascription is a social process which operates in spatial and temporal context –​are not necessarily open. While demands for equality of treatment regardless of identity are absolutely justified, they do not challenge the fundamental logics of capital accumulation in the Capitalocene. Class-​based actions can do so. Lieven is not wrong when he states: the contemporary left’s emphasis on individual liberation, identity, selfhood and victimhood rather than duty,2 on the benefits of immigration and diversity, rather than community, are also not assets when it comes to asking people to make sacrifices for a common good. 2020: viii Of course reservations about what duty is are entirely in order.The British working class were entirely justified in their suspicions of patriotic duty, after the massive losses they suffered in the First World War ‘for King and Country’.3 Their reaction in the Second World War was against fascism as illustrated by the armed forces’ votes abrupt dismissal of Churchill in the 1945 election. It is also important to admit others to community on the basis of agreement about common objectives. Piketty’s ‘left Brahmins’ emphasis on identity rather than class and on victimhood rather than fighting for a political alternative has very damaging implications for the possibility of effective action. Srnick and Williams are right when they identify the character of Folk politics and the implications of this turn: Folk Politics –​a collective and historically constructed common political common sense that has become out of joint with the actual mechanisms of power … The classic images of universal emancipation and global change have been transformed into a prioritization of the suffering of the particular and the authenticity of the local. 2020: 10 and 11

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Winlow et al.’s The Rise of the Right: English Nationalism and the Transformation of the Working Class (2017) provides a background context to the Brexit vote and the electoral defeat of British Labour in 2019. That study focused on a small minority of working-​class people associated with the English Defence League but although these are an outlier group the discontents they expressed are very general. People who find the English Defence League repugnant –​a bunch of nasty nutters is a common label –​still feel that the UK the Labour Party has abandoned them in favour of identity groups and that ‘left’ politicians regard them with disdain and take their support for granted. Woke will not do as a political programme addressing basic issues. The character of the general population has been changed by the massive extension of secondary and higher education, almost universally in high-​income countries and increasingly so in high middle-​income countries. There are important generational differences. The extreme is South Korea where 70 per cent of 25-​to 34-​year-​olds have a tertiary education compared with 22 per cent of 55-​to 64-​ year-​olds (2018 figures). The OECD average is 45 per cent in the younger age group and 28 per cent for the older one. For the UK the figures are 51 per cent for the younger group and 37 per cent for the older. It is important to note that the nature of tertiary education has changed through the industrial to post-​industrial transition. Many of the older age group have technical or business (engineering and accountancy, for example) qualifications gained through part time study while working. For the younger age group the route is almost always through full-​time study.4 All sorts of social divisions are generally associated with generational and educational differences. However, the changes are not simply a matter of young versus old. Curtice et al. (2019) note in relation to attitudes to homosexual relations that whereas in 1983 only 18 per cent of respondents regarded this as acceptable by 2018 the figure was 66 per cent seeing nothing wrong with them. This change in attitudes to homosexuality, and other areas of personal morality are not simply a consequence of younger generations with more liberal views replacing older, more religious generations as they die out: the views of both older generations and religious groups have also become more accepting. 2019: 10 The biggest single social change in my lifetime in the UK has been the profound legal and cultural acceptance of different non-​heterosexual identities. Alongside that has been the acceptance of equality in all respects for women although practice here lags behind principle. However, there are no marriage bars now like the one which cost my mother her civil service executive level job in 1946. Of course, and this needs saying constantly, different responsibilities in relation to motherhood and child care continue to constrain women’s equality in so many respects but things have changed.5 Ethnic identities remain contentious although it is notable that in the UK despite the efforts of some extreme elements in the EU referendum debate,

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the argument against immigration was more about the impact on jobs, earnings, and access to social provision of immigrants from EU accession states, overwhelmingly white hence the importance of the category ‘other white’ in UK statistical collections, not of ethnically distinctive groups of colour. To put all this in the complex realist frame of reference, the context has changed and context always sets the limits to the possibility space for future social trajectories. In the discussion of forms of governance and the cultures of governance in Chapter 8 the neo-​liberal dominance of contemporary governance, a consequence of constant ratcheting since the 1970s, was identified. Crouch (2020) gives a coherent summary of the contemporary status of the neo-​liberal programme and its implications for democracy noting how it led to the imposition of policies by EU elites on Greece and Italy after the 2008 crash, which had been explicitly rejected by the electorates of those countries. Former bankers were for a time imposed as Prime Ministers. To use the complex realist mode we are at a crucial bifurcation point in relation to the future trajectories of at least those high-​income (all) and high middle-​income (most) states, which continue to have democratic institutions and multi-​party systems. China is the massively important exception and here what matters is how elites, that is the leadership of the Communist Party of China (CCP), perceive risks and act on them. That said the CCP leadership are not isolated from popular feeling and the necessity to confront both inequality and climate catastrophe although for the moment neither political parties as such nor institutions in civil society have the salience they have in democracies. So what about both parties and collective actors in civil society? What role will they play in shaping the trajectory between possible futures at this point of bifurcation –​one in which neo-​liberal elites create what would at best be a version of disaster capitalism for the Capitalocene and at worst the end of human civilization as we know it, and the other in which we achieve democratic control over governance and use democratic planning to confront inequality and climate catastrophe?

Parties and/​or agents of civil society? The traditional vehicles through which inequality has been confronted in democratic capitalism have been political parties of the left, Labour, and Social Democratic (including the brief period of Euro-​Communist) in the electoral domain and trade unions at the point of production in the economic domain. Crouch (2020) notes that Christian Democratic Parties in post-​war Europe pursued a similar if more muted agenda. Although the intellectual origins were different, like the Christian Democrats the UK Liberal Party and One Nation Conservatives (Harold Macmillan being a prime example) operated in a similar fashion to the formal left for much of the ‘fortunate third quarter’ of the twentieth century as did the US Democrats and even for a time liberal US Republicans. They supported the logic of welfare capitalism in which the state operated to constrain capital’s excesses and allowed trade unions to function against employers in order to maximize the labour share of the social product. That was the way of things in industrial capitalism. Post-​industrial

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capitalism is different. Formal political parties have endorsed the neo-​liberal programme under such banners as Blair’s ‘Third Way’ –​neo-​liberalism with a smiley face. They have at best sought ‘to ameliorate the inevitable’ (Unger, 2015) leading, in interaction with their commitment to identity at the expense of class politics, to their massive electoral decline. This matters enormously for the practical politics of inequality. In contrast the politics of climate catastrophe have been largely conducted in the everyday by organizations outside the formal structures of governance which have operated in the domain of civil society. Green parties try to straddle these two but have a weak record either when part of government as with the German Greens or when acting to support without a formal coalition like the Scottish Greens.6 Greens are really pressure groups and some of their programmes, notably hostility to nuclear power of any kind, and hostility to genetic modification of crops, are quasi-​ religious anti-​science principles.This is an obstruction to serious policy engagement with climate catastrophe. Left parties have often been constrained in confronting climate catastrophe by specific industrial interests in unions which support them but the most important, that with coal mining unions, is a historic relic given the neo-​liberal assault on miners and deep mining to destroy the shock troops of the labour movement.7 The industrial policy components of UK Labour’s 2019 manifesto addressed the material and cultural interests of the skilled manual and technical working class very well in terms of the formulation of a Green New Deal. President Joe Biden played well to this in his campaign materials, which focused on making the USA a world leader in green industrial production. Material matters but so does cultural. People want incomes but they also want to feel that what they do in their job matters for the society of which they are part.8 There is also a real satisfaction in a job well done –​seeing where you have been and how you made a difference, provided you do not experience gross exploitation in doing that work. Crouch considers that: There is a barrier to fruitful cooperation between parties and civil society movements in their mutual dislike. The former see the latter as disruptive, likely to raise issues that will be unpopular with voters and ‘wasting’ political resources that could be more fruitfully used in election campaigns. Movements, in their turn, see party people as traitors who systematically let down or, at best, compromise the causes they adopt. 2020: 151 That is true but there is a further problem. National and trans-​national social movements are almost always led by and have a membership drawn from people who are distanced from the issues that affect in particular the ‘dispossessed working class’ (see Byrne, 2005). They also are rather separated by lifestyle interests and commitments from the squeezed middle. They are generally woke. Of course there are poor people and middle people in social movements but the predominant social movement style and orientation can be off putting, to say the least, to many others.

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Here a comparison of the ‘Occupy’ movement and ‘Extinction Rebellion’ is useful. Occupy focused on inequality and attracted considerable broad sympathy, particular in the slogan of the 99 per cent versus the 1 per cent.9 That can be seen as a general challenge to economic elites in the interest of most people. Extinction rebellion did not put climate catastrophe for the human race entirely front and centre, but rather confused the implications of climate catastrophe with broad ecological issues. By focusing on disruption to force changes in the behaviour of the ordinary mass of people, and especially by the absurd attempt to disrupt public transport systems in London, they labelled themselves as a self-​r ighteous elite of activists who had the authority to impose their views on a majority. Issues can become very easily confused. The Gilets Jaune movement in France was a response not only to the imposition of an increased ecologically justified carbon tax on motor fuel but also to the simultaneous reduction of taxes on corporations. This followed on Macron’s 2017 abolition of an admittedly meagre solidarity tax on wealth. Many rural and urban periphrique households depend on at least one car and often two in order to be able to work.This is a usual across high-​ income countries. A common refrain among the Gilets Jaune was yes, we need to do something about climate change but why is it us who has to pay? It is a mistake to see social movements only in terms of those engaged at a national and trans-​national level. Rather it is important to understand local campaign actions also as social movements, albeit that many such campaigns are single issue focused and exist only for the active lifetime of that issue. However, many such local action groups are organized around the local manifestation of general issues of inequality or around development proposals which contribute to climate catastrophe. The impact of austerity on services which constitute the social wage drives such local actions, particularly in relation to health service provision. It is not only inequality of provision which moves people to act. It is also inequality of power. There have been numerous campaigns against aspects of privatization or quasi privatization. In England municipal tenants have resisted the transfer of their dwellings from local authority control to quasi private management –​which has generally resulted in an inferior service and massive increases in the salaries of senior managers. Parents have campaigned vigorously against the transfer of schools from local democratic control, which incorporates an element of parent and teacher representation on school governing bodies, to academies run by self-​perpetuating management without local representation again with massive increases in remuneration for those running the Academy system. Many planning protests far from being nimbyism –​Not In My Backyard –​are driven not only by ecological issues as with anti-​fracking action but also by the subordination of what should be local democratic planning to the interests of development real estate capital. Civil society is not just composed of social movements. All organizations which bring people together outside the sphere of formal politics are part of civil society. This includes for example youth organizations, sports clubs, gardening clubs, music societies and choirs, natural history societies, civic societies concerned with architectural conservation –​keep going and keep adding. An essential characteristic of

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such organizations is that they are voluntary –​people belong to them because they want to. A lot actually deliver services on the basis of volunteering –​people do things for others in their community.The role of voluntary organizations in Britain during the Second World War was very considerable both in civilian life including in Air Raid Precautions and even as an armed citizen’s militia –​the Home Guard. The formidable Women’s Voluntary Service was a key arm of service delivery across the country. Trade unions are absolutely part of civil society and in industrial capitalism local cross union groups –​in the UK the local Trades Union Councils –​were important coordinators of support in industrial disputes. They have now amended their constitution and role to incorporate other local action centred organizations. In times of crisis ‘the voluntary sector’ –​that is the organizations which rely on volunteers to get things done, have always been crucial for effective action.This was true in the Second World War and recent experience of responses to extreme weather events where for example mountain rescue teams –​all volunteers –​have played a crucial role, shows that this is still the case. Even in the context of a pandemic disease, COVID-​19 voluntary action was vital for delivery of supplies to people who were isolating. Food banks are a key response to material poverty in high-​income countries and are volunteer run. There is an increasing tension in many parts of the voluntary sector, particularly in large national and international charities, between volunteers and the professional staff and senior management. This has been particularly severe in some ‘condition’ societies, particularly those where many of the volunteers are also carers for people with the condition. Nonetheless the role of voluntary service to the community is a vital one in any functioning civil society. There is a definite overlap between voluntary action and social movements. This is evident in relation to ecological issues. Natural history societies and bird/​animal protection groups have been important in campaigns against ecological damage. Organized youth groups have protested against austerity-​induced cuts to youth services and facilities. Support groups for and organizations of people with mental illness have been especially active in relation to issues of health care cuts and service change. Feminist and gay organizations have played a crucial role in relation to health services essential for them –​well women, HIV services, and so on. States use these elements of civil society all the time. They ‘consult’ with them regularly but it always important to remember the definition of ‘consult’ given in Ambrose Bierce’s Devil’s Dictionary: To consult –​to get people to disagree with a decision that has already been made. Consultation with corporate power and with wealth by states almost always has meaningful consequences. Consultation with other ‘stakeholders’ seldom does.There is a formal rhetoric of consultation in much of contemporary governance, particularly in the UK, but the substance in terms of determining policy strategy and tactical practice is minimal. In the neo-​liberal era the ordinary membership of formal political parties also has minimal say in policy determination. The UK Labour Party, formerly at least in principle a party with considerable internal democracy, had the real internal channels by which local parties could have a say in national policy and some sort of control over local elected politicians eliminated in the Blair era. The party’s current

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General Secretary is on record as opposed to any meaningful internal party democracy. There was always a tension between elected politicians and party members but annual conferences did take real political decisions, notably in 1945 with the programme of nationalization against the wishes of much of the party leadership. This gap is particularly extreme at the level of the local state where Labour-​controlled councils have generally collaborated with real estate capital against local party resistance, outlined for London by Hatherley (2020). There has been minimal resistance to the implementation of austerity through cuts in services by elected local ‘left’ politicians. Interestingly the US system of primaries for all federal and many state level plus senior city elections for office opens up the possibility of radical challenges to sitting legislators and elected executive and judicial office holders. This in principle, and now in practice with the development of crowd funding, allows challenges and has been used by the left in the Democratic Party, particularly by those associated with Democratic Socialists of America. This is why the left in UK Labour argues for mandatory reselection of MPs. It is important to recognize that political parties are also voluntary organizations and that many of the members are just as dissatisfied with the way in which elected representatives and party officials ignore them as are members of grass roots organizations in general. Not all apparently grassroots organizations represent real popular interests. The useful term ‘astroturf ’ has been coined to describe organizations which claim to be grass roots but actually are organized and funded by elite interests. A range of think tanks operate on this basis. In an era where many get their information from internet sources in general and social media in particular this kind of elite-​ funded engagement extends into the running of puppet bots with multiple persona –​supposed people who do not exist –​contributing to online discussion and representation of what is actually happening –​fake news. This extends to running fake persona identities to support left and green positions in offensive and absurd ways in order to discredit those positions.

So what is to be done? There are local voluntary organizations which focus on attempting to organize against climate catastrophe linked in the Transition Movement, which has some 2,600 members worldwide.The normal form of these organizations is in ‘Transition Town’ groups, which emphasize localism, bottom-​up initiatives, and attempts to change communal action. The movement began in Totnes in Devon in 2006 as a development of a permaculture gardening class. There is a literature on these initiatives. Crabtree (2017) addresses them by ‘Focusing around the elephant in the room’, the elephant being the power in determining local policy and planning in particular of real estate property capital. This is the problem. The idea of organizing urban places towards transition is a good one but it is pretty much to put it in the Tyneside vernacular pissing to windward unless there is some real grip on power and currently transition towns organizations have none whatsoever.10 Instead as is general in the state’s relationship with voluntary organizations we find a rhetoric

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of resilience which means: ‘… offloading onto individuals or communities to deal with the consequences of decisions, factors and forces over which they have little [mostly no Byrne] control’ (Crabtree, 2017: 885). The transition movement suffers from its folk politics character. In practice its actions are subject to the harsh criticism made by Srnick and Williams: Given the nature of global capitalism, any post-​capitalist project will require an ambitious, mediated, complex and global approach –​that folk-​political approaches are incapable of providing. 2020: 12 So the crucial task is to identify the kinds of action which are necessary and the scales –​often multiple for an action –​on which they can be undertaken. In summary we can say that the following matter and should be campaigned for at every level but with a particular focus as identified: • • • • • •

Radical reform of the tax system –​national Restoration of trade union rights –​national Restoration of effective powers to sub-​national and particularly city region governance –​national Orientation of all land use and service planning to confront inequality and climate catastrophe –​national, city regional, and municipal Reverse privatization of key infrastructure and service provision –​national and in federal systems at the provincial equivalent level. Making the interests of future generations on the Welsh model the key principle of governance at every level.

And then came COVID-​19! The underlying reason for the pandemic must be found in capitalism. The most relevant factors have to do with the global alteration of ecosystems, which is also associated with the eco-​social and climatic crisis that we are experiencing. … If we integrate and interpret all of this, we see that what lies behind is neoliberal capitalism and its inherent logic of accumulation, economic growth, profit, and inequality, which crashes against planetary biophysical limits in a ‘full’ world Benach, 2020: 3 Complex systems at all levels generally run along in much the same condition with small variations in form but can change radically. The transformation of industrial societies into post-​industrial in high-​income countries and of pre-​industrial into industrial in high middle-​income countries are transformations of kind which resulted from the accumulation of multiple sub-​system changes combined with changes in the global surrounding system and a cumulative not so much tipping

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point as eventual shift from quantity incremental change into qualitative change of kind. However, systems can be disrupted by external interventions in them. The classic examples of this have often been Gaia striking back through a pandemic disease like the Black Death in fourteenth-​century Europe. It is important to recognize that it is not just the virulence and infectivity of the disease which matters but the context of the system into which it intrudes. The Black Death was both virulent and highly infectious in the sanitary conditions of the medieval world. It engendered a system transformation through massive mortality and a new demographic structure. More recent outbreaks of plague in very different sanitary contexts have had no system changing impact. COVID-​19 is highly infectious but not particularly virulent. It seems to resemble the Russian flu of 1889, which killed about a million people worldwide and is considerably less virulent than the Spanish flu of 1918–​19, which killed at least fifty million people worldwide. Neither of those, both of which killed substantial numbers of younger people, caused the social disruption of COVID-​19. Why? In both those instances deaths from infectious diseases, particularly forms of pneumonia, which is how both of them and COVID-​19 mostly kill, were a common aspect of daily life. Moreover, governance systems had not taken on the health care responsibilities which are general in high-​income and high middle-​ income countries in the early twenty-​first century. We do not now expect to die from infections, despite the impact of human immunodeficiency virus (HIV), which led to many deaths from opportunistic infections, and we assign responsibility to governance systems if they fail to keep us alive. So there have been major lockdown interventions which it is anticipated will have a long-​term impact on overall economic activity. Garret (2007) reviewed the impact of the Spanish flu on the then agrarian and industrial economy of the USA. He concluded that the available evidence suggests that the impact was short term in its effects, even given the difficulties of disentangling them from those of the First World War. But that was in an agrarian and industrial society. In a post-​industrial society where much of value added and employment is located in hospitality broadly defined, 9 per cent of UK employment and 5 per cent of gross value added, the impact of the lockdown, which may continue to be imposed on localities to deal with flare-​ups of COVID-​19 is very considerable. This has a particular impact on young people as half the hospitality industry’s workforce is aged less than thirty. Nearly half of all workers in shut down sectors are under thirty-​five (PWC July 2020). In a service-​oriented economy the impact of a pandemic not particularly virulent disease has been system changing and there is little prospect of the system reverting to its original form. Globalization means that this transformative effect will spill over into the industrial systems of high middle-​income countries, particularly China, since recession or even depression in high-​income countries will lead to a massive reduction in demand for the industrial products of those economies. One of the competing paths out of COVID-​19 is disaster capitalism promoted by Dominic Cummings and the British Conservative government who are using

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the opportunity to hand over the central role in public health monitoring to a private–​public partnership and have thrown money at wholly ineffective private tracing while effective local authority public health tracing systems were ignored and starved of funds.The private hospital system had all of its costs covered.The other is a coherent commitment to future generations in terms of equality and confronting climate crisis. The second is the only right course. COVID-​19 has caused a crisis in public belief in the legitimacy of governance broadly defined. It is vital that this becomes the wellspring of a broad popular politics of transformation. As Benach puts it: ‘We must take advantage of this Pandemic to Make a Radical Social Change’ (2020: 1). Currently the political and media response to the governance of COVID-​19 has been in terms of competing managerial efficiency in a world which is supposed to be going on much as it has been. To use a common trope of new public sector management against the neo-​liberal programme which underpinned this disdainful approach: ‘Status Quo is Not an Option.’ So for example the scientistic deployment of algorithmic based models both in relation to COVID itself and in relation to its consequences, as with the UK wide issue of assessing school examination results, has been widely criticized. There have been major rapid reversals of policy decisions. Oppositions have made much of these failures although the hard reality is that if in office themselves and governing within the current frame of the possible, it is very difficult to see how they would have done anything differently.The problem is plain. How do we break that commitment to the current frame of the possible? How can the discourse be changed? We have a crisis to hand and let us take the advice of one of the intellectual architects of neo-​liberalism as to what to do with it: ‘Only a crisis, actual or perceived, produces real change.’ (Friedman, 2020: xiv). A complex realist take on inequality ‘in a context of climate crisis and after COVID’ allows us to envisage how to make good change happen. How can that take inform real action?

Turn too the young McKinsey through the McKinsey Global Institute produced a report –​Dobbs et al. (2016) –​with the revealing title: Poorer than Their Parents: Flat or Falling Incomes in Advanced Economies. This is a decent and comprehensive treatment of the implications of the falling share of labour in post-​industrial capitalism. It even goes so far as to acknowledge that Sweden’s trade unions have played a key role in making that historic bastion of Nordic social democracy something of an exception to the general tendency. Dobbs et al. (2016) are not optimistic about the future. They see tendencies relating to automation (which is likely to affect many white-​collar and professional roles as well as blue collar labour in manufacturing) and globalization as increasing the tendency of new generations to be worse off than their parents. If anything they somewhat underestimate the potential for this to spread beyond historically low-​paid occupational groups and manufacturing into a range of service occupations. The title says it all. For the first time not only in

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living memory but since the harsh impact of the early industrial revolution younger generations in advanced capitalist societies will be worse off than their parents and even in terms of security and housing than their grandparents. They will be relatively deprived in relation to their most crucial comparators. This shift will have profound consequences. Not only is contemporary capitalism in high-​income countries post-​industrial. It is also an economic context in which capitalists are finding it very hard to know where to put their money. We are in an era of ‘secular stagnation’ with falling economic growth, exacerbated by COVID-​19 to economic decline. Labour as a social category is weak and people are forced into jobs below their qualifications and which are far poorer in terms of remuneration and conditions that was the social norm for many in the later phase of industrial capitalism, This is why so much money has been invested in technologies and initiatives like Uber, which make no profits at all. It is also why there is such sustained pressure for the privatization of the core elements of universal basic services –​health, education, social care. There are projections from the US Federal Reserve, which seem a massive change in work patterns and availability with a third working from home, a third back at work and a third unemployed. All the signs are that as with the aftermath of the crash of 2008 governments and central banks will commit resources to sustaining the financial system at the expense of austerity and, this time, massive unemployment. That would be disaster capitalism. The young will suffer especially if this happens, and it will if the alternative does not become the absolute political and social commitment. In the Financial Times Thomas and Strauss (2020) show how as the UK’s furlough scheme winds down there will be massive job losses in white-​collar and middle management roles, to add to the existing job losses largely in pink collar roles in hospitality. These cuts will have a massive impact on new entrants into the labour market. In a time of job cuts new entrants are competing with unemployed people who have experience as a basis for being employed. In the Great Depression of the 1930s the UK Communist Party played a key role in organization like the National Unemployed Workers Movement (the NUWM), which drew on the organizational skills of unemployed shop stewards and industrial militants.11 Unemployment looks very likely to replace the underemployment in terms of both hours and skill/​qualification levels, which has been a common experience of young adults in the ‘full employment’ post the 2008 financial crash. Whatever the many faults of the British Communist Party in the inter-​war years, its ordinary members understood the nature of the capitalism they confronted and worked against it. They played a crucial role in the defeat of British fascism on the streets. Contemporary right-​wing populism has had no success when it has tried to take control of the streets but it has provided a political location not only for the supposed elderly conservatives of my own real baby boomer generation but also for many of the dispossessed young. In the 1930s and through the Second World War the left had a clear narrative –​ capitalism is the problem and we need to deal with it. There were two strands to that narrative –​revolutionary, we need to seize power and overthrow it;

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reformist –​we need to gain power through elections and transform it by undermining its essential logic. The UK Labour Party’s combination of endorsement of the social reforms demanded by the Beveridge Report, a commitment to full employment which strengthened workers against employers, and nationalization of ‘the commanding heights of the economy’ won a landslide in an election against the country’s wartime leader and started a programme of change.That programme ran out of steam although it continued as the socio-​political norm until the election of the Thatcher government in 1979 and the breaking of the reformist ratchet. There is an absolute need for a new narrative of radical reformism as the basis for a political programme confronting inequality in a context of climate crisis and after COVID. Developing such a narrative will be addressed in Chapter 10, which concludes this book.

Notes 1 Although it always dismissed racist slogans and rapidly moved to a multi-​racial workers basis. 2 I belong, mostly, to Britain’s largest post-​colonial and immigrant population –​the Irish descended. The mostly matters. I am 5/​8th Irish and 40 per cent of Britain’s population have some Irish blood. Integration is part of the story and as Tyneside Irish I belong to a group almost entirely assimilated and where class always counted most from the mid nineteenth century. The Arab descended population of my home town, thanks to the good sense of the founder of the UK’s Seaman’s Union recruited on equal terms and equal pay, (against the opposition of US seamen), are just as integrated primarily through massive inter-​marriage as there were almost no Yemeni women, and have played an important part in class politics. Intermarriage –​or now often parenting without formal marriage –​ matters. There are more children under the age of ten in the UK identified (by their mothers mostly) as ‘mixed’ than as black. 3 My maternal grandmother lost a husband –​my grandfather –​several cousins and an uncle to that war, the cousins and uncle all volunteers and the husband in the course of his job as a merchant seaman. My paternal grandmother lost a brother, also a volunteer. 4 As someone with a long experience of teaching in both full time tertiary education at a high status University and engagement with part time non-​vocational adult education, I must observe that given the utilitarian and/​or over specialized character of much University education, working class enthusiasts for adult education generally had a much more rounded and open attitude to their learning. 5 The current ferocious arguments about transgender statuses are in many respects a derivative of the arguments about gender equality. Many feminists consider that simple assertion by men that they are women on the basis of short periods lived in that role without any real gender reassignment is not appropriate for the possession of a female identity. Interestingly there is no comparable debate about women who transition to men of whom there are many. The numbers involved are trivial in overall terms compared to the whole population but the issue has become typical of extreme identity politics. 6 Greens have a role when there is proportional representation but they are a mere nuisance in first past the post systems as when the English and Scottish Greens cost Labour twelve Westminster seats in 2019 despite Labour having the most substantial Green manifesto ever of any party with a prospect of power.

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7 I write as the first of four generations in my family since we stopped being landless Irish labourers not to have worked down a Durham pit. I also fought strongly to defend coal generation of power against nuclear for years, actively supported the 1984 (and previous) miners’ strikes, and fought against the closure of the UK deep mined coal industry. I even acted as examiner for the essay competition run by the Durham Miners’ Association for attendance at its summer school. I remain a vehement defender of mining culture and am horrified by the abandonment of the former mining communities to the neo-​liberal and austerity agendas. The Macmillan and Wilson governments closed pits for reasons of profitability but tried, with some considerable success, to diversify industrial structures and provide alternative employment. What is left of coal in the West is largely strip mining which has none of the political or cultural character of deep mining (Poland is an exception although even there deep mines are being closed). China’s enormous mining industry operates in a very different way. 8 Pitmen always used to know that industrial capitalism depended on them. UK seamen knew that they did many things but in particular fed the nation through imports. The historic motto of the Blacksmiths’ Guild in the City of Newcastle asserted that: ‘By Hammer and Hand do all Things Stand’ –​that sensibility is vital. 9 A weakness of activist and defiant social actions is that they attract a significant if small minority of people with obsessions, personality disorders, and extreme behaviour. Of course formal political parties attract many self-​interested corrupt crooks. 10 Transition Sunderland (www.transitionsunderland.org/​) is a typical example. There is some good stuff on their website but in practice they do little other than promote organic gardening. Organic methods will not feed an urban world’s population although there are real needs for change towards sustainability in agriculture –​and as for ‘no dig’ –​tried it in my own large vegetable garden and it doesn’t work although green manuring does. During the Second World War in Britain the ‘Dig for Victory’ campaign encouraged people to grow and rear (bees, chickens, and rabbits) as much of their own food as possible. One of the profound ironies of the present is that local authorities are constantly selling of the allotment garden sites, many of which were developed in that campaign, because the exchange value of them in the land market is far greater than the use value by citizen gardeners. Gardening is a popular working class hobby in the UK particularly among older people who have some leisure time in retirement to do it. Certainly organizing against allotment sales in a period when there is an ever increasing demand for them is a good thing to do but it will only have any real impact if it is made part of a political programme against the capitalocene and those who are likely to profit from disaster capitalism in the coming crisis, This can only be done if the issue is identified clearly as a class issue and made part of a general programme of class action. 11 The CP had very little control over the activities of the NUWM, which did what it thought was right for its members. Many joined up as volunteers on the outbreak of the Second World War defying the instructions of the Comintern and the British Communist Party.

Bibliography Antonucci, L., Horvath, L., Kutiyski,Y. and Krouwel, A. (2017) ‘The Malaise of the Squeezed Middle –​Challenging the Narrative of “The Left Behind” Brexiter’. Competition and Change 21(3), 211–​229. Benach, J. (2021) ‘We Must Take Advantage of This Pandemic to Make a Radical Social Change: The Coronavirus as a Global Health, Inequality, and Eco-​ Social Problem’. International Journal of Health Services 51(1), 50–​54.

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Byrne, D.S. (2005) Social Exclusion. London: McGraw Hill. Crabtree, L. (2017) ‘Transitioning Around the Elephant in the Room’. City 21(6), 883–​893. Crouch, C. (2020) Post-​Democracy After the Crises. Cambridge: Policy. Curtice, J., Clery, E., Perry, J., Phillips M. and Rahim, N. (eds.) (2019) British Social Attitudes: The 36th Report. The National Centre for Social Research. Dobbs, R., Mdgaykar, A., Manyika, J., Woetzel, J., Bughin, J., Labaye, E., Huisman, L. Kashyap, P. (2016) Poorer than Their Parents: Flat or Falling Incomes in Advanced Economies. McKinsey Global Institute www.mckinsey.com/​featured-​insights/​employment-​and-​ growth/​poorer-​than-​their-​parents-​a-​new-​perspective-​on-​income-​inequality (accessed 23 November 2020). Friedman, M. (2020) Capitalism and Freedom: Fortieth Anniversary Edition. Chicago, IL: University of Chicago Press, ix. Garrett,T.A. (2007) Economic Effects of the 1918 Influenza Pandemic. St. Louis: Federal Reserve Bank of St. Louis. Hatherley, O. (2020) Red Metropolis –​Socialism and the Government of London. London: Repeater Books. Lieven, A. (2020) Climate Change and the Nation State. London: Penguin. Parkin, F. (1979) Marxism and Class Theory. London: Tavistock. PWC (2020) COVID-​19: UK Economic Update London. Srnicek, N. and Williams, A. (2020) Inventing the Future: Postcapitlalism and a World Without Work. London:Verso. Thomas, D. and Strauss, D. (2020) ‘UK Faces White-​Collar Crisis as Pandemic Ends Decades of Job Security’. Financial Times, 20 August 2020. Unger, R. (2015) Speech at the Royal Society of Arts 2015. Winlow, S., Hall, S. and Treadwell, J. (2017) The Rise of the Right: English Nationalism and the Transformation of the Working Class. Bristol: Policy Press.

10 THE FUTURES THAT ARE POSSIBLE FOR US

The complexity frame of reference tells us that the trajectory of any complex systems when they are in a condition where internal and external causal factors, and the interactions among all of these, are such that a phase shift, transformation, radical reconfiguration of the system, must occur –​the systems is at a crisis point –​ then there is not a single future possible but multiple futures. The possibility space for the global social system and the nation-​states which as Lieven (2020) asserts are the crucial subsystems of that global system where policy change can make a difference contains at least two futures. There are others of course. Disputes over resources, especially water and food, might lead to a global nuclear holocaust.There might be a massive positive feedback through methane emissions from the permafrost and undersea methane hydrates. In those scenarios we might face the world of Nevil Shute’s On the Beach (1957) with the human race confined to Australia and awaiting death from radiation, Harlan Ellison’s A Boy and His Dog (1969) with survivors ruthlessly hunting each other down in a radio-​active desert, or Waterworld (1995) with a seaborn remnant of humanity desperately searching for dry land. I am not going to anticipate those extremes, although they might happen. Rather I am going to begin this chapter by using near future science fiction scenarios which deal with radical social changes but do so in relation to outcomes in which something like our contemporary social world continues to exist but transformed into a very different state. So what are the futures? The two authors I am going to deploy here to explore that question are Cory Doctorow and Kim Stanley Robinson. Both have written books which describe a relatively near future –​for Robinson Pacific Edge (in 2020a) and New York 2140 (2017) and for Doctorow Walkaway (2017) but they have also written series which actually deal with the transition process towards the future. The three books in Robinson’s ‘Science in the Capital’ series –​Forty Signs of Rain (2004), Fifty Degrees Below (2005), and Sixty Days and Counting (2007) –​record the

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way in which scientific civil servants –​scientists on secondment to agencies of the US federal government –​work in relation to the impact of climate crisis, which manifests through extreme rainfall and the turning off of the Gulf Stream with consequent intensely cold weather in Europe and the eastern USA and Canada. These are books about real science and real governance. The responses are from governance, not just government, because key players in the geo-​engineering project, which restarts the gulf stream are the massive reinsurance corporations which form part of the useful financial system. The series concludes in the first days of the presidency of a man who is everything Trump is not –​a Vietnam veteran, a liberal, and collectivist Democrat, an intelligent and informed person who engages with scientists (going so far as to marry his science advisor), and someone who recognizes what he needs to do and tries to do it. Doctorow’s ‘transition’ books are Little Brother (2008) and Homeland (2013).1 The first is set in the aftermath of a terrorist attack on the San Francisco/​Oakland Bay Bridge and BART system. Homeland Security suspends the Bill of Rights and attempt to lock down the city, including internet communications.The young adult characters subvert this using X Boxes. The second follows the pattern of their lives. These books reflect the development of the surveillance state and particularly in the second the relationship between corporate power and that state. A background theme is the immiseration of the US middle class. The main protagonist Marcus sees his parents lose their jobs and having to consolidate on much reduced incomes. One interesting theme is the extent to which student debt is radicalizing the US young. Doctorow notes that student debt cannot even be eliminated by bankruptcy because of the lobby power in Washington of the debt holders. Whilst Robinson’s transition series is in many ways optimistic –​good scientific civil servants and good politicians can confront climate crisis –​Doctorow’s is more pessimistic although the willingness of young adults to resist is positive and in the second book there is a plot element about the campaign and election of a radical state senator. Both authors recognize the significance of the existing institutional and political systems for getting things done. For Doctorow the street and the dark net matter but so does political campaigning. For Robinson getting science to guide policy is the key thing. Robinson’s afterwards books –​books which describe society after a transition –​ are Pacific Edge (in 2020a) and New York 2140 (2017). The first –​the last in a set describing developments in Orange County, California, and beginning with The Wild Shore (1984) in which the USA has been defeated in a nuclear war by the USSR. The society of The Wild Shore in some way resembles that of Ursula LeGuin’s Always Coming Home (1985), which describes a far future California in which intelligent machines have developed beyond human control and people live in a lifestyle of enough and comfort but rather in the way of pre Spanish and US conquest Native American Californians. In The Wild Shore there are external powers to contend with. The Gold Coast (1988) is set in a California of technological advance, exuberant consumption, and impending ecological catastrophe. Pacific Edge (1990) is an optimistic account in which there has been a more or less

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effective confrontation with capital in general and fossil fuel capital in particular based on the development of national and international laws which resemble the anti-​trust legislation of the early twentieth century in the USA. People live well within constraints although there are still political issues and disputes. One strand in the novel is about a local government development/​planning dispute in relation to the future of a remaining fragment of California wild ecology.The development of computer-​based manufacturing of material goods through 3D printing is one basis for social adequacy. New York 2140 (2017) is set in a flooded New York in which many people live in social cooperatives on the higher floors of flooded buildings while the rich, who work in the financial markets, live up town and in Yonkers in drier areas. As now in global cities many of the residential units in the affluent dry areas are held unoccupied as stores of wealth by the global elite. The book is to a considerable extent driven by the logic of the conflicts between real estate/​financial capital and the social requirements of a decent way of living. In inter-​chapter elucidations it gives a first rate account of the way the merely financial economy, Castells’ (1996) ‘mother of all accumulations’ has come to dominate the real economy where things with a use value are produced. This was demonstrated by the way the USA and other governments rescued finance with no penalties during the 2008 crash whereas industrial General Motors was nationalized and then sold back with no cost to the public. The cost of rescuing finance was greater than the cost of the New Deal and the Marshall plan combined in real terms but led to austerity in public services.Two subsequent ‘pulses’ of flooding and rising sea levels led to similar socialism for the rich and austerity for everybody else. Downtown Manhattan has become a set of flooded real estate with the surviving towers existing outside the market economy but the markets see value re-​emerging in this space, just as value re-​emerged in brown field post-​industrial sites, and are coming hunting for rents to be extracted and revenue streams to serve as the foundation of ever more complex derivative financial instruments. The core of the narrative is kind of low-​key political thriller in which residents of one block using a sunken treasure from the American revolutionary war as a basis for taking on the financial and political powers that be. The crisis caused by a hurricane on the lines of Katrina hitting a partly submerged New York provides an opportunity for a radical New Deal/​Progressive style reassertion of the power of democratic politics over capital and capitalists. One element in triggering this massive realignment of power is a strike by a part of the general public against charges on income including rents, mortgage payments, and the repayment of student loans (which according to one character nobody repays anyhow). These payments by the mass of people are crucial for finance capital because they are the income streams from rentier capital which underpins the whole imaginary edifice of financial capital and markets. So the hurricane and the strike, which is global, interact to engender system transforming change including high income taxes, wealth taxes and a very high tax on wealth transfers outwith the national economy. Tax revenues are used to fund something which looks very like universal

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basic services (UBS). Robinson’s heroic protagonists include a community lawyer/​ housing activist who is a radical street-​level bureaucrat and who without funding overturns the New York Democratic machine’s choice in a primary and becomes a federal representative. There is a lot of action in state institutions, with another protagonist being a senior police officer who is a resident in the key housing co-​op and who hunts down links between private security and finance capital.The ending here is optimistic. Doctorow’s Walkaway (2017) is set in a near future North American dystopia in which the ability to make real commodities by massively upgraded computer fabrication has created a post-​scarcity economy. However, this is an economy in which the capital of fabrication is owned. In the ‘default’ world employment has become scarce and insecure. Many live on a dole form of minimal basis income. The book begins with a ‘communist party’ in which a renegade daughter of a zotta (super rich) family is in effect DJ at an abandoned fabrication plant and is making all sorts of goods to distribute free.The cops descend and she and two others run for the woods –​go walkaway into the wilderness where there are collectivities using fabrication to create communities with alternative lifestyles who reject the mundane and the default logics of debt, work, and capital dominance. There is subplot about allowing people to download consciousness and identity into IT form but the key theme is the contest between those who want to use post-​scarcity to create an egalitarian commonwealth and the owners of property who have the coercive force of the state on their side and deploy it, as property has always deployed coercion throughout history, to defend their claim on the social product. A key point is that ordinary workers are now really marginal to the process of production. It ends well with a geek version of a Ghandian overthrow of the system but there is some grim stuff on the way. Doctorow’s book is a fictional imagination of what Srnick and Williams argue for in their book Inventing the Future: Postcapitalism and a World without Work (2016). The culminating revolution is a revolution of a moral order with geek overtones. The political and institutional sphere of the default is not really a zone of contestation at all, unlike in Robinson’s books and in Doctorow’s own Homeland (2013). Robinson’s latest book The Ministry For the Future (2020b)2 is exactly about that political and institutional sphere albeit, and this is an issue, at the level almost entirely of international agencies rather than national and local governance. In this scenario the 2024 Annual Conference of the Parties to the Paris Agreement Under the United Nations Framework Convention on Climate Change use their power to establish subsidiary bodies to create a permanent agency ‘to advocate for the world’s future generations of citizens whose rights as defined in the Universal Declaration of Human Rights are as valid as our own.’ The body was also charged with defending the rights of all living creatures who cannot speak for themselves. This becomes known as ‘the Ministry for the Future’. However, it has no executive powers over governments although it has a ‘black wing’ to do dirty deeds up to and including assassinations. A key trigger event is a heat wave in India which kills millions and leads both to a radical restricting of the Indian political system

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and to India committing to confronting climate change beginning with a geo-​ engineering effort, which is successful, to replicate the cooling impact of a volcanic eruption. There is a lot of geo-​engineering in the book. The main achievement of the Ministry for the Future is persuading the main World Central Banks to create carbon coins, a digital currency distributed on proof of carbon sequestration. This is a carrot to persuade fossil fuel corporations and oil states to deploy their capital towards carbon burn reduction. The coins are backed by hundred-​year bonds underwritten by the central banks. This gives a means by which carbon capital interests can change and in effect gives carbon capital an out.3 There are a lot of other elements including the move towards rewilding half of the planet to give other living beings space outwith human actions. One key element is the reduction in human births to below replacement level on a global scale. Carbon coins are blockchained and become in effect a global currency alongside the US dollar. This results in all money and financial flows becoming transparent, which enables nation-​states to introduce taxes both on financial market transactions and on stocks of wealth. The focus in this book is on carbon burning reduction towards a reversal of atmospheric CO2 and the restoration of wild ecologies for other species. There is a background of greater equality but inequality as such is not so front and centre. All seems to be going well at the end of the book. Robinson and Doctorow are absolutely entitled to their optimism of the will and their scenarios offer us a way of envisaging the near future possible system states over and beyond what can be generated by highly abstracted mathematical modelling. In both The Ministry for the Future and Walkaway the scenarios conclude with developments towards a positive outcome. But a negative outcome is just as likely depending on social actions. In both these books a key driver is a major from the bottom-​up social refusal to accept authority. Robinson repeats his debt strike trope and has a mass millions strong influx of people who lack urban Hukous into Beijing. Doctorow has troops, both state and private security, refusing to fire on passive resistors. Now such things have been part of revolutionary change. French troops refused to fire on crowds in 1789. Mass crowds led to revolutionary change in Russia in February 1917, although October was more of an admittedly popular coup d’état. However, to have real transformative change while the very bottom and the very top matter, there has to be a lot going on at the intermediate levels, particularly at levels of the institutional organization of political actors and within all forms of governance.

And then came COVID-​19 In world historic terms the COVID-​19 pandemic is not that big a deal. It mostly kills old people (like the present author) and might even from the point of view of the viability of pension schemes be regarded as a good thing by reducing the burden of non-​productive dependents. It does have long-​term implications for a minority of cases but on the whole is not something which will lead to a real reduction of the productive workforce or the future workforce of children. Before

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the health transformation and the introduction globally of health care systems both as a central aspect of state activity4 and as a major element in all economic activity, it would have passed without all that much notice being taken other than by actuaries and statisticians. Now things are different and a relatively mild (in historic terms) trans-​specific pandemic disease has led to a radical re-​orientation of government activity globally but particularly in high income and high middle-​income states. Governance systems have been hit by a massive systemic destabilizing outside causal impact. There are two components of this. First, there have been changes in health systems, which can in turn be subdivided into public health measures designed to control spread of the disease, health care measures directed towards treatment of it, and efforts to develop a vaccine in order to eliminate it as a continuing health problem. Second, there have been programmes designed to maintain the economic base both through subsidies to capital and a massive programme of wage substitution for workers who have become effectively unemployed (furlough is a temporary layoff) as part of disease control measures. In some states, notably the UK, neo-​liberal policy makers have taken advantage of the epidemic to hand aspects of public health, notably test and trace, to the private sector with massive contracts awarded outwith usual tendering procedures. Their performance has been appalling. The level of COVID-​driven intervention has been much more up front in terms of public perception than the government interventions to rescue finance capital in 2008 but that cost more. In the UK direct bailout costs were £133 billion alongside a free guarantee of £1 trillion worth of bank deposits and obligations. The UK Office for Budget Responsibility has estimated that the direct costs of COVID economic interventions will be about £100 billion in the financial year 2020–​21. This compares with an annual expenditure of £180 billion on health care. There have been £350 billion advanced in loans to businesses and it is uncertain how much will be repaid and when. In both instances, the financial crisis and COVID, this has been funded by ‘shaking the magic money tree’ that is by quantitative easing (creating money) and increasing borrowing. We can think of this in terms either of Keynes or of modern monetary theory but either way in practice, although not in political debate,5 conventional monetary theory is dead and governments faced with crises have responded by spending. There is a clear path dependency. The UK has gone from being perhaps the most socialized capitalist system up until the 1970s (taking account of nationalized ­industries in coal, transport, and energy and the enormous and devalorized National Health Service along with the massive municipal housing tenure), a long way towards a neo-​liberal model for the provision of state-​funded services. Capital is very happy to be paid by either the state or consumers and state payments funded from taxes are a very reliable income stream. Klein’s account of disaster capitalism (2007) explains how private providers and their political allies use a crisis to expand capital’s role. However, there are also judgements made and the combination of dithering, mind boggling administrative incompetence, and evident assigning of contracts to friends and political supporters has provoked considerable public distaste. That said these

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things have become so commonplace that people tend to shrug and while angry feel nothing can be done. What is required to make a change is the spelling out of a political alternative and the development of a policy programme which will implement that alternative. Here a recent editorial in the UK left periodical Tribune makes important points. It begins by offering an explanation, founded particularly in the British experience, of how the apparent turn to a left alternative represented by the Labour Party manifestos of 2017 and 2019 was subverted by the ‘centre left’: In truth, the centre-​left did not need compelling answers to social crises in order to avoid implosion. It had long abandoned the idea that governments should be protagonists in the economy; instead, the market should decide and the state’s role was simply to ameliorate its gravest injustices.This was the ideological transition from social democracy to social liberalism. To develop this form of politics, the centre-​left did not just rely on a political party. It mobilised supporting institutions –​from vast media operations to liberal business interests, moderate trade unions, consultancies, and NGOs –​whose interests lay not in replacing the status quo but in playing a role within it. When socialist insurgencies threatened its position, it was this powerful network within civil society which bailed the centre-​left out. Burtenshaw, 2020: 6 The general tenor of this is correct but what Burtenshaw doesn’t mention is the way the centre-​left (really centre right) was deeply embedded in levels of governance, particularly local governance, which had operated to impose first privatization as a general agenda and then implemented austerity whilst collaborating with real estate capital in a desperate search for revenue and ‘growth’ in local economies.The COVID crisis has an impact on all of these elements. First, there is clear evidence that privatization, first in social care in care homes and increasingly in domiciliary services, and then through the substitution of private providers for core public health services, has contributed to the severity of the crisis. Second, the magic money tree has been well and truly shaken, not for the first time but now in a very public fashion, in an attempt by government to spend its way through the crisis.The narrative of austerity should be well and truly off the agenda but it has to be taken off the agenda by political actors calling it out. Finally economies are heading for major recession and probably depression. Urban centres and the hospitality industry are particularly affected. In many core cities a very substantial part of local business tax revenue comes from that sector and it is for the moment down and out and unlikely to recover. The current culture of political administration in the UK has been shaped by the ratcheting towards privatization and against public spending on direct services which began with Thatcher and was continued as ‘the Third Way’ by Blair and Brown. Austerity, with political elites, including the ‘centre-​left’ failing to challenge the flat lie that it was excessive public expenditure rather than the need to rescue finance capital from its own excesses, which had led to increasing fiscal deficits,

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reinforced the trend. The UK is extreme among European welfare capitalisms in using the crisis to reinforce privatization on the disaster capital model but in general there seems to be little sense that political elites as opposed to a developing strand of political outsiders recognize that COVID is part of the Capitalocene and that this immediate crisis should open up governance and shift the ways in which things are done. In marked contrast in China the political elite have first, after early cover ups, used state power and state services to get COVID under control and at the same time have committed to making the country carbon neutral by 2060. Whatever criticisms can be made of the Chinese Communist elite, and there are plenty in relation to democratic rights, suppression of minorities, and the rule of law, they are scientifically informed, know problems when they see them, and are rather effective when a policy trajectory has been established in getting things done. They are well aware of the issues posed by inequality and progress has been made, although there is a serious need for a radical revision of the tax system but on climate change when the General Secretary of the Communist Party of China makes a commitment at the General Assembly of the United Nations then things will happen. When Xi Jinping talks the talk cadres start to walk the walk. In high-​income and high middle-​income countries with democratic political structures there is a good deal of talking the talk, other than in Trump’s federal level USA, but much less sign of walking the walk, although President elect Biden has committed to reverse Trump era climate policies. This is in considerable part due to the electoral cycle and the failure of either inequality or climate crisis to become central issues. Parties have tended to compete on relative managerial competence in relation to service delivery or on specific national issues. The 2019 UK election was all about Brexit for example. Emergent parties of the left have raised challenges to the neo-​liberal programme but Syriza in Greece became the party which implemented EU imposed austerity and Podemos in Spain is working in coalition with the traditional socialists. Burtonshaw makes an important distinction between ‘socialism’ and ‘progressivism’: Socialism is the project to socialise society’s wealth by building a coalition of working people to take on the concentrated power of ownership. Its potency comes from an ability to unite people across cultural divides on the basis of their common class interests. For decades, the Left has abandoned socialism for progressivism –​the attempt to unite people across class divides on the basis of shared social views. Progressivism is not, and will never be, a threat to the system. Its function is to recuperate demands for change within the boundaries of capitalism. 2020: 8 In relation to inequality this holds absolutely but in the era of the Capitalocene it also holds for confronting climate crisis. Something like a socialist organization of the whole social order is necessary for that, not the command economy of the Soviet system but a system in which capital is subordinated to social objectives. Devine’s (1988) programme provides a good model.

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COVID as an economic crisis brings class interests front and centre. For the moment schemes like the UK’s furlough operation have mitigated the effect in high-​income states. However, it is evident that even high-​income states will find it difficult to sustain the public expenditure costs of this form of wage substitution. Lily et al. (2020) using figures from the UK Office for Budget Responsibility has identified an increase in public borrowing by the UK government of £317.4 billion in the financial year 2020–​21. Of this £192.3 billion is specifically down to COVID-​related expenditure. The state has covered about two-​thirds of the total cost of COVID to the private sector. In addition to this direct expenditure reduced economic activity in consequence of lock downs etc. has led to a reduction in tax revenues and increase in benefit expenditure. In detail support to businesses has cost £55.8 billion, support to households has cost £83.7 billion, and support to public services has cost £52.8 billion. Loss of tax revenue totals £107.5 billion and increased benefit expenditure has been £24.5 billion. There has been a plus element of £5.2 billion since interest rates have fallen and borrowing is somewhat less expensive. Cut and deferred taxes could add another £13.7 billion to the bill. Total UK government expenditure in 2019–​20 was £874.4 billion so COVID has been a very large hit. Tax receipts fell by 11 per cent in real terms as compared with 2019–​20. After the 2008 crash receipts fell by just 2.8 per cent. The UK government replaced 57 per cent of lost household income, which was on a level with Germany, Spain, and Italy but France replaced 77 per cent. However, the furlough scheme with incomes replaced by the state at 80 per cent (subject to a cap) is due to be replaced by a payment to employers to cover 22 per cent of costs. Already across OECD countries 50 million jobs have been lost, which is ten times the impact on employment of the 2008 financial crisis. In general job support and unemployment payments across OECD countries have been simplified in relation to access, extended in relation to coverage particularly to temporary workers, and been made more generous. Jung and Parkes (2020) estimate that the UK government’s plan for job retention will protect only 230,000 out of two million viable jobs –​jobs that will return if economic activity returns to pre COVID levels. The core flaw of the current set up is that it benefits only workers sitting within in a narrow wage corridor.We estimate that only workers on monthly wages between £625 and £987 would benefit (see Annex I for a detailed description on how this wage corridor is derived). …This narrow corridor jeopardises the success of the new schemes. This is because people with monthly wages below the lower bound do not qualify for the JRB. And for those above the upper bound, the JRB received by the employer is too small to make it economical to hold on to workers on a part-​time basis. … hospitality, wholesale & retail, administrative services and manufacturing make up more than half of the viable jobs not saved by the current design of the scheme. Jung, C. and Parkes, H.: 2 and 5

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The Centre for Economics and Business Research (CEBR) (2020) notes that the impact will not only be on employment. The housing system has already been hit although there have been suspensions of evictions and mortgage arrears repossessions: the crisis will have different impacts on renters and those with a mortgage. The private rental sector could be particularly exposed with 47% of private renters under the age of 35 and studies showing that those under 30 are much more likely to have already lost their job or be on reduced hours.[1]‌ Given that the average privately renting household in England already spends more than a third of their income on rent further goes to show that even a temporary reduction in incomes could lead to tenants becoming unable to pay their rent, making the private rented sector the catalyst of the impending housing crash. CEBR, 2020 The general assumption –​perhaps hope is a better word –​is that COVID will be controlled, probably by an effective vaccine, and economic activity will recover. Only extreme right-​wing think tanks in the US are proposing that COVID will be allowed to run without lockdown restrictions and that there will in consequence be a cull of the unproductive elderly which will lead to a reduction in state expenditure on pensions and health and social care. The issue is whether any short to medium term future with COVID precautions still operating will allow restoration of the kind of economic and urban systems which have become the norm in high and high middle-​income countries? The first impact has been on health systems which have been fundamentally disrupted by the pandemic.6 In the near future the impact will be on employment. Contrary to assertions by some commentators in the 1990s rather than a collapse of employment in post-​industrial high income countries since then there has been a very large increase in the labour force, driven in part by increasing active labour market engagement by women. Much of that work been ‘poor work’ in terms of all of remuneration, conditions and sense of satisfaction and worth –​or some combination thereof,7 and many formerly clearly ‘middle class’ occupations have become proletarianized by a combination of high supply of qualified personnel and ‘new public management’ attacks on professional terms and conditions. Graduate non-​g raduate level employment –​graduates working in call centres for ­example –​has been common. Now we face graduate unemployment on a large scale. So what now? Yet again we find the former high priests of the small state and market rule changing their tune. The IMF has called for increased public investment as a key element in resolving the economic crisis: Our new Fiscal Monitor shows that increasing public investment in advanced and emerging market economies could help revive economic activity from the sharpest and deepest global economic collapse in contemporary history.

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It could also create millions of jobs directly in the short term and millions more indirectly over a longer period. Increasing public investment by 1 percent of GDP could strengthen confidence in the recovery and boost GDP by 2.7 percent, private investment by 10 percent, and employment by 1.2 percent if investments are of high quality and if existing public and private debt burdens do not weaken the response of the private sector to the stimulus … Public investment can play a central role in the recovery, with the potential to generate, directly, between 2 and 8 jobs for every million dollars spent on traditional infrastructure, and between 5 and 14 jobs for every million spent on research and development, green electricity, and efficient buildings. IMF, 2020a: emphasis in original So the IMF is calling for a Green New Deal. This is pure Keynesianism and makes general sense, particularly as they note that borrowing costs are currently very low. However, although austerity seems to be dead it is possible that what will emerge is a disaster capitalism post-​austerity regime in which whilst there is attention to climate crisis, inequality will not be addressed. One important and explicit counter to this is a demand for the restoration of universal basic services at a proper level. This applies obviously for health but many of the traditional services delivered by local authorities –​libraries, museums, parks, recreation, support for arts, support for important third sector work in social care and social support –​have been at best cut to the bone and in many cases simply eliminated in England where local authority budgets have been cut by 30 per cent in real terms since 2010. Not only do these deliver services people want but they generate a lot of employment at a range of levels. In the context of COVID there have been political demands for National Care Services on the lines of the National Health Service. In much of the UK residential care has been almost wholly privatized and this has been extended into domiciliary care.The integration of health and social care has long been recognized as essential in dealing with the needs of an ageing population. The development of such a system would create a lot of good meaningful employment. The way in which local politicians of the ‘centre-​left’ have collaborated with cuts, at best ‘ameliorating the inevitable’ has been an important driver of the general disillusionment with political systems, parties and politicians themselves. A commitment to a Green New Deal and Universal Basis Services would provide a real alternative to the pre COVID trajectory of post-​industrial and post-​welfare capitalism. As Lieven (2020) put it, to have action elites in non-​democratic societies have to act to confront climate crisis. That means China and Russia and it appears that the Chinese elite may indeed be acting. However, the other necessary actions have to come from voters in democratic states. Biden’s election to the US presidency was crucial. The USA is responsible for 15 per cent of all greenhouse gas emissions exceeded only by China with 28 per cent. The European Union (including UK for this) generates about 10 per cent. Other important democracies with large emissions are India with 6.5 per cent, Japan with 3 per cent, and Brazil with 2.3 per cent. The Russian Federation generates nearly 5 per cent. For the democracies the

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issue is how can action be achieved. Robinson used a clearly climate related catastrophe –​a massive heat wave in India –​as a trigger event. Can COVID produce the same result not by being directly related to climate change but by demonstrating the incapacity of governance systems? It is notable that both Robinson and Doctorow rely on mass essentially passive insurgencies as the tipping causes for transformative change. Historically such insurgencies have had an effect against authoritarian regimes but their capacity in post-​ democratic capitalism, where remember the forms and processes of democracy are maintained, is open to question. Extinction Rebellion has many of the characteristics of the May Events in 1968 in France and they did not lead to any kind of radical social change. This is not to dismiss street level action. Demonstrations by organizations of the unemployed in the 1930s, notably the UK National Unemployed Workers’ Movement (NUWM), did put real pressure on benefit systems. However, they never succeeded in challenging the overall structure of political institutions. It took the Second World War and the election of Labour in 1945 to do that. The innovative technologically focused investor Cathie Wood in an interview with Forbes (5 October 2020) stated that over the next five years she expects technological change to disrupt banking, transportation, energy and health care with consequent large scale job losses. It is notable that Wood’s researchers have identified 3D computer printing as a future source of innovation and transformation of production. Clever and well-​informed capitalists can sound a lot like Doctorow or Srnicek and Williams although the conclusions they draw are very different. Wood has also asserted that COVID will open up a whole new range of possibilities for companies at the forefront of technological innovation. She is right. This is a time when change will happen. The question is what change? Another major US investor billionaire, Jeremy Grantham, who has committed to spending the great bulk of his $1 billion fortune on confronting climate crisis, has called for a second Marshall Plan as the core of US foreign and economic policy. A reprise of the massive post–​Second World War programme centred around a massive public works programme could bring back the kind of growth that characterized the good decades up to the 1980s. Grantham plainly wants green growth along with increased equality but there is a serious issue as to whether any overall growth is possible if climate crisis is to be confronted.

Programmes for making things more equal while addressing climate crisis There is a plethora of policy proposals which address either or both of inequality and climate crisis.8 Key phrases deployed in these include both ‘just transition’ and ‘sustainable development’. Neither of these are contentious at first sight but ‘sustainable development’ can incorporate the idea of ‘green growth’ rather than meaning development which leaves the overall level of global economic activity either at its present level or reduced. Reconfiguring production away from greenhouse gas generation, natural resource depletion, and destruction of natural ecologies is highly

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desirable but as a substitution rather than mere addition. Sabato and Fronteddu outline the ILO position on just transition and how to achieve it: In order to achieve such an outcome, the transition should be guided by the principles of distributional and procedural justice … From a distributional point of view, both the opportunities the transition will create and the costs it will entail should be shared in a fair way, taking into account and addressing current and potential inequalities at different levels: between individuals, social groups, sectors of the economy, communities, regions and countries. From a procedural point of view, the participation of citizens and of all stakeholders in the decision-​making process and in policy implementation should be ensured. 2020: 2–​3 This requires programmes to be: • •

• • • •

‘context sensitive’, that is, take account of the varying conditions existing in different nation-​states; coherent and address policy development across macroeconomic management, specific economic sectoral programmes, promotion of enterprises, skill training, occupational safety and health, social protection, active labour market interventions, rights, and social dialogue among states, employers, and trade unions; capacity building particularly in relation to ability to evaluate the impact of policies; designed so that policies can be integrated across domains of governance and the interface with both the economy and civil society; based on social consensus; and founded around massive mobilization of financial resources both public and private.

This is traditional corporatism and looks to be designed with reference to the corporatist elements underpinning the EU Social Charter, particularly in relation to labour markets. Much of it is perfectly sensible but there is no recognition of the global context being that of the Capitalocene and of the inherent conflicts with neo-​liberal capitalism, and possibly capitalism of any kind, necessary to address both inequality and climate crisis. This is a programme for industrial capitalism. The problem is that the most important forms of capital are now not industrial but financial and real estate and, with exceptions like South Korea and Germany, those interests dominate the political sphere. The fundamental problem is not so much describing what should be done as working out how to develop the political forces and governance forms to get it done. To develop the political climate in which the actions necessary to confront climate crisis can be taken it is absolutely necessary to confront increasing inequality.

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Green New Deals, if operating in labour markets with effective trade unions and high adequate minimum wages, will contribute to that but they are by no means enough.There also needs to be substantial progressive redistributive taxation which will generate the income to deliver high level universal basic services. Progressive taxation in and of itself reduces inequality. High-​level universal basic services deliver equal incomes in kind in relation to need. They also provide meaningful employment, which not only provides incomes but gives workers a sense of satisfaction as contributors to social well-​being. The expression ‘Tax and Spend’ has been used to criticize radical redistribution. It should be regarded not just as necessary but as right. The ILO wanted: ‘… the participation of all citizens and stakeholders in the decision making process and policy implementation’. The desirability of citizen participation is absolute. When it comes to stakeholders then some current enormously powerful stakeholders need to be expelled from these processes. Speculative finance capital and real estate capital interests should have no role in governance. Industrial capital and functional finance capital, retail banking separated from speculation by something like Glass–​Seagal legislation, do have a proper role but one which must, as in the UK in the Second World War, be subordinated to political direction. COVID has given us a crisis on a manageable scale, despite the best efforts of the UK government to mismanage it in contrast to say Taiwan, ahead of the much more severe catastrophe coming from global warming. It has shown that it takes governance through regulation and planning to deal with crises and that this only works when states at all levels are seen as legitimate. Confronting inequality is the basis on which that legitimacy can be asserted. In any crisis in a complex social system it is not a matter of what will happen but what will be made to happen (O’Connor, 1981). That is where we are now and we need to work in the ways proposed here to have the best of the possible worlds we might have by the middle of twenty-​first century.

Notes 1 Doctorow’s Attack Surface (2020) is in this narrative set but is focused on surveillance by state and para state agencies. 2 Published in October 2020 just as I was writing this chapter. Serendipity or what! 3 It is an excellent idea. 4 In the USA even before Obamacare much health expenditure was state funded through Medicare. 5 UK Labour under the leadership of Starmer is desperately concerned with appearing fiscally prudent. Even the supposedly radical McDonnell, shadow chancellor under Corbyn in Labour’s brief socialist period, took and continues to take the same line. 6 An effective vaccine would change things but COVID is a corona virus like the common cold and at best it is likely that vaccines would work as do annual flu vaccines and have limited duration of effectiveness since new strains emerge regularly. There could and indeed should be a reorganization of health care systems with the reintroduction of something like the fever hospitals of the late nineteenth and early twentieth centuries. These

The futures that are possible for us  195

were separate reserve institutions apart from general hospitals so highly infectious patients could be kept separate from the general sick and treated to the best of the then current medical science, which meant in practice good nursing care. Many of the excess deaths due to the COVID pandemic are not caused by COVID but by cardio-​vascular and cancer conditions which have not been diagnosed and treated. There are also of course an enormous number of untreated cold surgery conditions, hip and knee replacements and cataract surgery, which have not been done and which whilst not life threatening should be treated for healthy life expectancy. 7 Care work is poorly remunerated and has bad conditions but the job itself is socially of very great value. It is a shit job but not a bullshit job. Graeber (2018) presents an analysis of contemporary finance dominated capitalism as resembling feudalism with many jobs serving no productive purpose whatsoever. This has considerable force, not least in relation to the jobs which serve markets in systems like health which should be provided on a non-​market basis. 8 See for example Pearson (2020) and Pettifor (2019).

Bibliography Burtenshaw, R. (2020) ‘Threads of Progress’. Tribune Summer 2020. Castells, M. (1996) The Rise of the Network Society. Oxford: Blackwell. Centre for Economic and Business Research (2020) ‘The coronavirus crisis is about to spill over into the UK’s housing market –​but not all regions will be hit equally hard’. https://​ cebr.com/​reports/​the-​coronavirus-​crisis-​is-​about-​to-​spill-​over-​into-​the-​uks-​housing-​ market-​but-​not-​all-​regions-​will-​be-​hit-​equally-​hard/​ (accessed 17 October 2020). Devine, P. (1988) Democracy and Economic Planning: The Political Economy of a Self-​Governing Society. Cambridge: Polity Press. Doctorow, C. (2008) Little Brother. New York: Tor Books. Doctorow, C. (2013) Homeland. New York: Tor Books. Doctorow, C. (2017) Walkaway. New York: Tor Books. Doctorow, C. (2020) Attack Surface. New York: Tor Books. Ellison, H. (1969) ‘A boy and his dog’ in The Beast that Shouted Love at the End of the World. New York: Avon. Graeber, D. (2018) Bullshit Jobs –​A Theory. London: Penguin. International Monetary Fund (2020) Blog ‘Public Investment for Recovery’. https://​blogs. imf.org/​2020/​10/​05/​public-​investment-​for-​the-​recovery/​?utm_​medium=email&utm_​ source=govdelivery (accessed 17 October 2020). Jung, C. and Parkes, H. (2020) The Narrow Corridor. London: Institute for Public Policy Research. Klein, M. (2007) Shock Doctrine. London: Allen Lane. LeGuin, U. (1985) Always Coming Home. New York: Bantam Spectra. Lieven, A. (2020) Climate Change and the Nation State. London: Penguin. Lily, A., Tetlow, G., Davies, O. and Pope, T. (2020) The Cost of Covid-​19. London: Institute for Government. O’Connor, J. (1981) ‘The meaning of crisis’. International Journal of Urban and Regional Research 5(3), 301–​329. OECD (2020) Job Retention Schemes during COVID. Paris: OECD. Pettifor, A. (2019) The Case for the Green New Deal. London:Verso. Pearson, G. (2020) Remaking the Real Economy. Bristol: Policy Press. Robinson, K.S. (2004) Forty Signs of Rain. London: Harper Collins.

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Robinson, K.S. (2005) Fifty Degrees Below. London: Harper Collins. Robinson, K.S. (2007) Sixty Days and Counting. London: Harper Collins. Robinson, K.S. (2017) New York 2140. New York: Orbit. Robinson, K.S. (2020a) Three Californias. New York: Tor Books containing The Wild Shore (1984), The Gold Coast (1988) and Pacific Edge (1990). Robinson, K.S. (2020b) The Ministry for the Future. London: Hachette. Sabato, S. and Fronteddu, B. (2020) A Socially Just Transition through the European Green Deal. Brussels: European Trade Union Institute. Shute, N. (1957) On the Beach. London: Heinmann. Srnick, N. and Williams, A. (2016) Inventing the Future –​Postcapitalism and a World Without Work. London:Verso. Waterworld (1995) Film from Universal Studios Los Angeles.

INDEX

Note: Page numbers in italic denote figures and in bold denote tables, end of chapter notes are denoted by a letter n between page number and note number. Aalbers, M.B. 82–​83 Abram, S. 120–​121 actor network theory (ANT) 151 Adema, W. 112 adult social care 132–​133, 133, 140, 153–​154, 187, 191 Alaska Permanent Fund 122 Aldermore 74 Aldridge, S. 38 All-​China Trade Federation Trade Union (ACFTU) 94–​95 Amazonia 98 Andrews, D. 111–​112 anti-​discrimination legislation 26, 31 Arnstein, S. 162 Asada,Y. 53 Atkinson, D. 83 austerity 9, 41, 83–​86, 139, 149 Australia 29, 68 Bambra, C. 67 Bangham, G. 74 Barnett Formula, UK 160–​161 Barton, D. 90 Belgium 68 Benach, J. 174 benefit systems see cash benefit systems Bentley, D. 111 Bevan, Nye 108 Beveridge Report, UK 178

Biden, Joe 10, 106, 154, 170, 188, 191 Black Death 4, 15, 99, 175 ‘black elephant’ concept 12, 15 Blair and Brown governments, UK 83, 87, 124, 145, 170, 187 Blanchflower, D.G. 125 Blyth, M. 84 Boliver,V. 135 Bolsa Familia programme, Brazil 97, 98, 107, 137 Bolsonaro, Jair 96, 97–​98, 139 Bourdieu, Pierre 40, 74 Brazil 29, 96–​98; Bolsa Familia programme 97, 98, 107, 137; climate crisis and 98, 191; COVID-​19 pandemic and 98, 137, 148; education 138–​139, 140; Gini coefficient 53, 68; health care 136, 137, 137; informal employment 65; neo-​ liberalism in 98, 139, 148; public sector employment 140; redistribution policies 67; self-​employment 65 Brexit referendum, UK 39, 150, 151–​152, 168–​169, 188 Brown, Gordon 83 Brys, B. 109, 113 Brzezinski, M. 87 Burak, E. 59 Burke, J. 120 Burnham, J. 41 Burtenshaw, R. 187, 188

198 Index

Callaghan, G. 40 Callaghan, Gill 2, 30 Canary Wharf, London 142 capital gains taxes 105, 106, 115, 116–​117 capitalism: Marx on 32–​33; welfare 6, 8, 9, 10, 84, 130–​131, 140; see also class; post-​ industrial capitalism Capitalocene 5, 7–​8, 31 carbon dioxide emissions 1, 2, 120–​121, 191 carbon taxes 120–​121 Cardoso, Fernando Henrique 97 Cartwright, Nancy 20 cash benefit systems 65–​66, 76, 104, 106–​108, 121–​123; Bolsa Familia programme, Brazil 97, 98, 107, 137; COVID-​19 pandemic and 123; Dibao system, China 91–​92, 95, 107, 137; social insurance schemes 2, 50, 86, 91, 93, 104, 106–​107, 108, 109–​110; state pensions 2, 50, 52, 64, 66, 73, 106–​107, 108, 109–​110; tax credits 122; universal basic income (UBI) 107, 122–​123, 134; universal benefits 107; Universal Credit, UK 66, 107, 121–​122 Castells, M. 83, 183 Centre for Economics and Business Research (CEBR) 190 Centre for Evaluating Complexity Across the NEXUS (CECAN) 159 Chakraborty, R. 52 Chandler, D. 13 Chile 65 China 8, 10, 41, 55, 88–​96, 103, 125–​126, 158, 169, 188; class structure 89–​90; climate crisis and 95–​96, 154, 191; COVID-​19 pandemic and 94, 96; Dibao system 91–​92, 95, 107, 137; education 139–​140; finance capital 83; Gini coefficient 53, 68; health care 136–​137, 137; Hukou system 88, 90–​91, 92, 93, 94, 137, 139; informal employment 65; one-​child policy 92–​93; real estate capital 83, 143; redistribution policies 67; social insurance scheme 91, 93, 104, 109–​110; taxation 93–​94, 109–​110; trade unions 94–​95; urban population 141 Christophers, B 73–​74, 75 Churchill, Winston 163n2, 167 civil society 169–​172, 173–​174 Clark, G. 32 class 26, 31–​36, 77; China 89–​90; class consciousness 33; health inequality and 53–​55; intersectionality 30; mental illness and 54–​55; middle classes 9–​10,

36–​38, 49, 90; occupationally based classifications of 47–​48; power and 39–​41; social exclusion 38–​39; wealth and 69–​71; well-​being and 56 climate crisis 1, 2, 3, 4, 5, 191; Brazil and 98, 191; carbon taxes 120–​121; China and 95–​96, 154, 191; Green New Deal policies 154, 170, 191, 194; need for complex governance 10–​15; programmes for addressing 192–​194; USA and 154, 191 coal/​coal mining 32–​33, 87, 96, 154, 158, 170, 179n7 Cohen, S. 70, 134 Colander, D. 150 Colenutt, B. 144, 157 colonialism 29 Columbia 64–​65 complexity 2–​6; need for complex governance 10–​15, 150–​152, 159 Connelly, R. 48 Conservative Party/​governments, UK 13, 36, 83–​84, 117, 118, 124, 149, 150, 152, 157, 161, 169, 175–​176, 179n7, 187 consolidation states 86, 159–​160 conspicuous consumption 59, 76 consumption 2, 4, 59, 76 consumption taxes 47, 50, 66, 86, 93, 94, 105, 106, 112, 119–​121 corporate income taxes 93, 94, 104–​105, 108, 114–​115 Council Tax, UK 105, 106, 115, 118 COVID-​19 pandemic: Brazil and 98, 137, 148; China and 94, 96; disaster capitalism and 158, 169, 175–​176, 186, 188, 191; employment and 177, 189; governance and 3–​4, 99, 149, 158, 174–​176, 185–​192; government expenditure 87, 123, 186, 189; health care and 87, 186, 194n6; neo-​liberalism and 15, 84, 87, 99, 149, 175–​176; vaccines 194n6; voluntary action 172; wage substitution benefits 87, 123, 189 Crabtree, L. 173–​174 Crouch, C. 7, 8, 39, 87, 113, 169, 170 Cummings, Dominic 13, 175–​176 Curtice, J. 168 Czech Republic 53, 67, 68 Darwin, Charles 4 Davis, A. 60 deforestation 98 deindustrialization 35, 58, 76, 82–​83, 144

Index  199

Deng Xiaoping 143 Denmark 53, 65, 68, 140 describing inequality 45–​61; counting inequality 46–​49; health inequality 53–​55; income and wealth inequality 49–​53, 59–​60; intersectionality 56; occupationally based class schemes 47–​48; qualitative approaches 58–​60; spatial inequalities 57–​58; well-​being inequality 55–​56 Development Land Charge, UK 116–​117, 118 Devine, P 14–​15, 152, 155, 162, 188 Diamond Commission, UK 64 Dibao system, China 91–​92, 95, 107, 137 DiPrete, T.A. 48 disability-​free life expectancy 53–​54 disaster capitalism 158, 169, 175–​176, 186, 188, 191 Dobbs, R. 176 Doctorow, Cory 181, 182, 184, 185, 192 Doyle, A. 46 Dube, A. 124 economic planning 156–​157 education 138–​140; equality of opportunity 134–​136; higher 72–​73, 88, 138–​140, 168; as income in kind 131–​132, 133; private 84, 132, 135; private sector governance 153; social mobility and 134–​136 Egawa, A. 95 election turnout 161 Elliott, L. 83 Ellison, Harlan 181 Emmerson, C. 123 employment: changing nature of employment relations 49; COVID-​ 19 pandemic and 177, 189; gender inequalities 27–​29, 168; informal 65; minimum wages 67, 123–​124; public sector 84–​85, 140–​141; self-​employment 64–​65; trade unions 6, 35, 36, 66, 78, 85, 94–​95, 124–​125, 155 enclosure 75 equality of opportunity 9, 134–​136 Esping-​Andersen, G. 67, 130–​131 ethnicity 26, 29–​31, 88, 168–​169 EU referendum, UK 39, 150, 151–​152, 168–​169, 188 European Union 41, 53, 54, 55, 65, 86, 108, 169, 188, 191, 193 Eurostat 53, 58 Evans, G. 33, 49

exploitation 32–​33; wealth as 69–​71, 75, 76 Extinction Rebellion 171, 192 Farnsworth, K. 84 Fearnside, P. 98 Feng, K. 120 fertility rates: China 92–​93; Poland 86 Fifty Degrees Below (Robinson) 181–​182 finance capital/​financialization 32, 41, 76, 82–​83, 142 financial crisis (2008) 41, 65, 76, 83–​84, 85, 87, 97, 112, 142, 150, 183, 189 financial transfers tax 105, 115–​116 Finland 59, 65, 122 fiscal welfare 50, 107, 112–​113, 122 Fitch, R. 153 folk politics 167, 174 Forty Signs of Rain (Robinson) 181–​182 France 66, 68, 88, 93, 117, 120, 137, 156, 161, 171, 189 Fronteddu, B. 193 Gaia hypothesis 15 Garrett, T.A. 175 Geddes, Patrick 156 gender 26, 27–​29, 30, 31, 88, 168 generational cohorts 72, 72, 73 Germany 56, 68, 82, 104, 137, 137, 160, 189, 193 gift transfer taxes 105, 116 gig economy 65 Gilets Jaune movement 120, 171 Gini coefficient 50, 53, 66–​67, 68, 88, 93 Glasgow, Alex 78 global elites, concerns about inequality 8–​10, 148 Global Health Expenditure Database 136 globalization 10, 36, 92, 98, 175 Goldman, William 15 Goldthorpe, John H. 49 governance 6–​7, 148–​163, 169; changing 158–​163; COVID-​19 pandemic and 3–​4, 99, 149, 158, 174–​176, 185–​192; economic planning 156–​157; Green New Deal policies 154, 170, 191, 194; land use planning 157–​158; need for complex 10–​15, 150–​152, 159; private sector engagement in 152–​153; public engagement 161–​163; in Second World War 14, 149, 152, 153, 156, 163n2 Grantham, Jeremy 192 Greece 41, 65, 68, 169, 188 Green, F. 135

200 Index

Green New Deal policies 154, 170, 191, 194 Green parties 14, 163n3, 170, 178n6 greenhouse gas emissions 1, 2, 120–​121, 191 Gulbenkian Commission 4 habitus and field 40 Hamnett, C. 57–​58 Hatherley, O. 173 Hayek, F. 12, 79n13, 150, 152 health 40–​41; measures of inequality 53–​55 health care systems 136–​137; austerity and 9, 84; COVID-​19 pandemic and 87, 186, 194n6; expenditure 136, 137; as income in kind 131, 132–​134, 133; as key production sector 153–​154; measures of inequality 54–​55; National Health Service, UK 6, 15, 54, 67, 78, 133–​134, 133, 140, 150; private treatment 85, 136, 137; public health 15, 54 healthy life expectancy 53–​54 Hecht, K. 59 Heinz, W.R. 77 Hendricks, G. 105–​106 higher education 72–​73, 88, 138–​140, 168 high-​income countries, defined 1 Ho, Peter 12 Homeland (Doctorow) 182 Hopkins, J. 35, 36 horizontal model of inequality 30–​31 households: as unit of measurement 46–​47, 48–​49; as unit of taxation 110 housing assets 1–​2, 9, 50–​51, 60, 69, 73, 74, 75–​76, 87, 110–​112 housing costs 67–​69, 73 Hsu, Shi-​Ling 35–​36 Hukou system, China 88, 90–​91, 92, 93, 94, 137, 139 Hungary 67, 68 identity politics 10, 39, 88 income taxes: corporate 93, 94, 104–​105, 108, 114–​115; personal 47, 50, 67, 86, 93, 94, 104, 105–​106, 108, 109–​110, 119 incomes 1, 64–​69; adequate minimum 59–​60, 67–​68; China 89–​90, 91, 95; cluster analysis 69–​71; housing costs and 67–​69, 73; impacts of taxation on 59, 66–​67, 68; life course inequality 71–​73; measurement of 67–​69; measures of inequality 49–​53; from pensions 64, 66; qualitative research 59–​60; redistribution policies 10, 67, 82, 83, 93; from state

benefits 65–​66; from wages/​salaries 64–​65; from wealth 64, 70; see also social wage India 53, 65, 67, 68, 93, 191 Indices of Multiple Deprivations (IMDs), UK 47, 54, 58 indigenous populations 29 indirect taxes 47, 50, 66, 86, 93, 94, 105, 106, 112, 119–​121 informal employment 65 inheritance of wealth 2, 69, 74–​75 inheritance taxes 105, 116 in-​kind incomes see social wage Institute for Fiscal Studies (IFS) 40, 113 Institute of Economic Affairs (IEA) 40, 78 instrumental participation 162 intergenerational inequality 9, 73–​75 International Labour Organization (ILO) 65, 193, 194 International Monetary Fund (IMF) 9, 41, 87, 94, 148, 190–​191 intersectionality 25–​26, 30–​31, 56 Ireland 26, 29, 31, 75, 108, 114, 115, 116 Irving, Z. 84 Isle of Dogs, London 142 Israel 31 Italy 65, 68, 169, 189 Jacks, D.S. 32 Japan 53, 65, 67, 68, 123, 191 Jin, S. 95 Jin,Y. 89 Joseph, Keith 149, 150 Jung, C. 189 Kabeer, N. 30–​31 Kantola, A. 59 Kenworthy, L. 66 Kerslake, Lord 58, 151–​152, 159, 163n7 Klein, N. 158, 186 Knight, J. 88–​89 Kosonen, K. 120 Kruger, H. 77 Kupers, R. 150 Kuusela, H. 59 Kuznets, S. 55 labour markets 123–​125; changing nature of employment relations 49; COVID-​ 19 pandemic and 177, 189; gender inequalities 27–​29; informal employment 65; minimum wages 67, 123–​124; public sector employment 84–​85, 140–​141;

Index  201

self-​employment 64–​65; trade unions 6, 35, 36, 66, 78, 85, 94–​95, 124–​125, 155 Labour Party/​governments, UK 13, 40, 41, 83, 108, 109, 116–​117, 118, 124–​125, 133, 144, 145, 149, 152, 154, 155, 156, 157, 163n2, 163n3, 168, 170, 172–​173, 178, 178n6, 179n7, 187 labour share of social product 123–​125 labour theory of value 2, 32–​33, 59 Laffer curve 109 land use planning 36, 41, 141–​145, 157–​158 land value taxes 105, 116–​117, 118, 141 Law and Justice, Poland 86–​87 Lefebvre, H. 83 LeGuin, Ursula 182 Leisering, L. 38, 45–​46, 77, 134, 135 Lewes, George 4 Li, S. 93 Lieven, A. 149, 166, 167, 181, 191 life expectancy 53–​54; China 92 Lily, A. 189 Lind, M. 30 Lipps, O. 56 Little Brother (Doctorow) 182 Living Cost and Food Survey 51, 131 Lloyd George, David 116–​117 Local Economic Partnerships (LEPs), England 6, 153, 155, 157–​158 Local Strategic Partnerships (LSPs), England 6, 155, 156, 163 London Docklands Development Corporation (LDDC) 142 Lovelock, James 15 Low Pay Commission, UK 124 Lukes, S. 40 Lula da Silva, Luiz Inácio 97 Luo,Y. 139–​140 Lustig, N. 96–​97, 100n12 Luxemburg 114 Marshall,V.W. 71–​72 Marx, Karl 32–​33 McConnell, A. 12 McGann, M. 133–​134 McKinsey Global Institute 11, 90, 153, 176 McKnight, Abigail 49 McManus, P.A. 48 measurement of inequality 45–​58; counting inequality 46–​49; health inequality 53–​ 55; income and wealth inequality 49–​53; intersectionality 56; occupationally based class schemes 47–​48; spatial inequalities 57–​58; well-​being inequality 55–​56

Measuring National Well-​being programme, UK 55–​56 Mellon, J. 33 mental illness 54–​55 Mexico 65, 67, 68, 121 middle classes 9–​10, 36–​38, 49, 90 migrant workers, China 90–​91, 94 Milanovic, B. 10 Mills, C.W. 40, 76–​77 minimum wages 67, 123–​124 Ministry For the Future,The (Robinson) 184–​185 Monroy, C. 138 Moore, J. 7 Morel, N. 113 Morin, E. 4 mortgages 50, 73, 74, 83, 110 Mulgan, Geoff 13 Murphy, M. 133–​134 Murphy, R. 115–​116 National Audit Office (NAO), UK 113, 126n6, 159 National Health Service, UK 6, 15, 54, 67, 78, 133–​134, 133, 140, 150 National Insurance, UK 106, 109, 110, 114 National Unemployed Workers Movement (NUWM), UK 177, 192 ‘necessary pragmatism’ 36, 40, 78, 145 neo-​liberalism 6, 7–​10, 11, 73, 82–​88, 125, 148, 169; austerity 9, 41, 83–​86, 139, 149; in Brazil 98, 139, 148; COVID-​19 pandemic and 15, 84, 87, 99, 149, 175–​176; deindustrialization 35, 58, 76, 82–​83, 144; disaster capitalism 158, 169, 175–​176, 186, 188, 191; employment relations 49; finance capital/​ financialization 32, 41, 76, 82–​83, 142; identity politics and 30, 39, 88; new public sector management 11, 14, 15, 38, 87, 137, 176; populism and 10, 39, 148; post-​democracy 39; power and 40–​41, 60, 77–​78; private sector engagement in governance 152–​153; privatization 8, 15, 36, 75–​76, 84, 85, 87, 113, 152, 156–​157, 187, 188; public sector employment and 84–​85; real estate capital 41, 83, 141–​145, 157–​158; secondary circuit of accumulation 36, 76, 83; speculation 36, 76, 83, 142; trade unions and 6, 35, 36, 66, 78, 85, 124–​125, 155 Netherlands 68 New Economics Foundation 56

202 Index

new politics of equality 166–​178; actions to take 173–​174; civil society 169–​172, 173–​174; COVID-​19 pandemic and 174–​176; political parties 169–​170, 172–​173; social movements 170–​171, 172; transition movement 173–​174, 179n10; voluntary sector 172, 173–​174; young and 176–​178 new public sector management 11, 14, 15, 38, 87, 137, 176 New York 2140 (Robinson) 181, 183–​184 New Zealand 68, 73 Newcastle, UK 143–​144 nominal participation 162 occupationally based class schemes 47–​48 ‘Occupy’ movement 171 O’Connor, J. 125 Oesch, D. 56 Office for Budgetary Responsibility (OBR), UK 159, 186, 189 Office for National Statistics (ONS), UK 54, 55–​56, 73, 75, 131 one-​child policy, China 92–​93 ontological security 1–​2, 21n2, 37–​38, 69–​70, 76 Organization for Economic Cooperation and Development (OECD) 9–​10, 37, 38, 50, 53, 55, 58, 67, 71, 72, 84–​85, 93, 111–​112, 113, 119, 138, 148, 159, 168, 189 Pacific Edge (Robinson) 181, 182–​183 Palestinians 31 Paris Climate Agreement 154, 184 Parkes, H. 189 Parkin, F. 167 participation 161–​163 Paskov, M. 56 Patel, R. 7 Pathfinder programme, UK 143–​144, 145 patriarchy 27, 30 pensions: changing nature of 49; China 91–​92; income from 64, 66; intergenerational inequality 73; state 2, 50, 52, 64, 66, 73, 106–​107, 108, 109–​110; taxation of 110, 115; as wealth 1–​2, 47, 50, 52, 64, 110, 115 Piketty, T. 30, 34–​35, 74, 84, 87–​88, 99, 117, 145, 167 planning, economic 156–​157 planning, spatial 36, 41, 141–​145, 157–​158 Poland 10, 53, 65, 67, 68, 86–​87, 136–​137, 137, 148

Polanyi, K. 35 political economy analyses: Brazil 96–​98; China 88–​96; high-​income countries 82–​88; Poland 86–​87 political engagement 161–​163 populism 10, 39, 148 post-​democracy 39 post-​industrial capitalism 7–​10, 26, 82–​88; austerity 9, 41, 83–​86, 139, 149; deindustrialization 35, 58, 76, 82–​83, 144; disaster capitalism 158, 169, 175–​176, 186, 188, 191; employment relations 49; finance capital/​financialization 32, 41, 76, 82–​83, 142; populism 10, 39, 148; power and 39–​41, 60, 77–​78; private sector engagement in governance 152–​153; privatization 8, 15, 36, 75–​76, 84, 85, 87, 113, 152, 156–​157, 187, 188; public sector employment and 84–​85; real estate capital 41, 83, 141–​145, 157–​158; secondary circuit of accumulation 36, 76, 83; speculation 36, 76, 83, 142; trade unions and 6, 35, 36, 66, 78, 85, 124–​125, 155; see also class post-​modernism 12–​13 Powell, A. 27 power: inequality in 39–​41, 60, 77–​78; taxation and 60 Power, A. 144, 158 Private Finance Initiative (PFI) 84 privatization 8, 15, 36, 75–​76, 84, 85, 87, 113, 152, 156–​157, 187, 188 property taxes 47, 50, 93, 94, 105, 111, 115, 118–​119, 161 property wealth see housing assets public assets 75–​76 public corporations 85, 156–​157 public debt 85–​86, 87, 160, 189; see also austerity public engagement 161–​163 public health 15, 54 public sector employment 84–​85, 140–​141 Public Services International Research Unit 140–​141 Qiu Xiaolong 143 qualitative research on inequality 58–​60 Ragin, C. 25 Ramos, G. 37, 38 real estate capital 41, 83, 141–​145, 157–​158 realism, defined 3, 5 redistribution policies 10, 67, 82, 83, 93 reference groups 56, 59, 70–​71

Index  203

representative participation 162 resilience 13, 173–​174 Resolution Foundation 73 retirement ages: Brazil 97–​98; China 92 Richards, L. 56 right to buy policy 69, 75–​76 Rittel, H.W. 11 Roantree, B. 28 Robinson, Joan 8, 148 Robinson, Kim Stanley 181–​185, 192 Rogers, R. 144, 158 Rousseff, Dilma 97 Ruane, Sally 119 Rumsfeld, Donald 13 Rushkoff, D. 122 Russia 37, 41, 53, 65, 67, 68, 136, 137, 191 Russian flu 4, 99, 175 Sabato, S. 193 Sandalow, D. 96 Santos, R. 30–​31 Saunders, P. 69 Savage, M. 34–​35 Scoones, I. 151 Scottish Index of Multiple Deprivation (SIMD) 47, 58 Second World War 14, 149, 152, 153, 156, 163n2, 167, 172, 179n10 secondary circuit of accumulation 36, 76, 83 security, ontological 1–​2, 21n2, 37–​38, 69–​70, 76 self-​employment 64–​65 sexual orientation 26, 31, 88, 168 Shaxson, N. 114 Shute, Nevil 181 Sinfield, A. 112–​113 Sixty Days and Counting (Robinson) 181–​182 slavery 29 Slovenia 53 Smith, Adam 2 social care 132–​133, 133, 140, 153–​154, 187, 191 social class see class social exclusion 38–​41 social insurance schemes 2, 50, 86, 91, 93, 104, 106–​107, 108, 109–​110; see also state pensions social mobility 9, 38, 49, 134–​136 social movements 170–​171, 172, 192 social wage 130–​141, 132, 133; adult social care 132–​133, 133, 140; education 131–​132, 133, 134–​136, 138–​140;

equality of opportunity 134–​136; health care 131, 132–​134, 133, 136–​137, 137 Soros, George 78 South Africa 29, 37, 53, 65, 68, 136, 137 South Korea 65, 72, 193 Spain 65, 68, 188, 189 Spanish flu 4, 99, 175 spatial inequalities, measures of 57–​58 spatial planning 36, 41, 141–​145, 157–​158 speculation 36, 76, 83, 142 Speenhamland-​type systems 67, 122 Spufford, F. 15 Srnicek, N. 79n13, 167, 174, 184 stamp duty style taxes 105, 115, 117 state pensions 2, 50, 52, 64, 66, 73, 106–​107, 108, 109–​110 Stears, M. 13, 14 Stein, S. 83, 142–​143 Stirling, A. 151 Stockton, I. 123 Strauss, D. 177 Streeck, W . 85–​86, 159–​160 subsidiarity 15, 152, 155 Summers, A. 117 Sweden 65, 68, 137, 176 Sweeney, P. 108 Switzerland 50, 51, 53, 56, 67, 68, 110, 117 Taff Vale judgement, UK 124 taxation 76, 104–​106, 108–​121; avoidance 38, 51, 108–​109; capital gains taxes 105, 106, 115, 116–​117; carbon taxes 120–​121; China 93–​94, 109–​110; consumption taxes 47, 50, 66, 86, 93, 94, 105, 106, 112, 119–​121; corporate income taxes 93, 94, 104–​105, 108, 114–​115; COVID-​19 pandemic and 189; financial transfers tax 105, 115–​116; gift transfer taxes 105, 116; household as unit of 110; of housing assets 50–​51, 110–​112; impacts on incomes 59, 66–​67, 68; indirect taxes 47, 50, 66, 86, 93, 94, 105, 106, 112, 119–​121; inheritance taxes 105, 116; land value taxes 105, 116–​117, 118, 141; of pension assets 110, 115; personal income taxes 47, 50, 86, 93, 94, 104, 105–​106, 108, 109–​110, 119; Poland 86; power and 60; property taxes 47, 50, 93, 94, 105, 111, 115, 118–​119, 161; remissions/​allowances 50, 107, 112–​113, 122; social insurance contributions 2, 50, 86, 91, 93, 104, 106, 109–​110; stamp duty style taxes 105, 115, 117; tax credits 122; Tobin taxes 105, 115; tourism taxes 161;

204 Index

value-​added tax (VAT) 86, 94, 105, 106, 114, 119 Thatcher government, UK 36, 117, 118, 124, 150, 152, 157, 187 Thomas, D. 177 Thompson, E.P. 33–​34 Thornton, A. 105–​106 Tilley, J. 49 Titmuss, R. 107 Tobin taxes 105, 115 tourism taxes 161 Town and Country Planning Acts, UK 36, 105, 157 trade unions 6, 35, 36, 66, 78, 85, 124–​125, 155; China 94–​95 Trades Union Councils, UK 163 transformative participation 162 transition movement 173–​174, 179n10 Transparify 78 Turkey 53 UK 2070 Commission 58, 151–​152 Understanding Society survey 51 Unger, R. 78, 170 United States: anti-​discrimination legislation 26; benefit systems 122, 123; campaign funding 36, 40, 77–​78; climate crisis and 154, 191; education 138; ethnic inequalities 29; Gini coefficient 53; Green New Deal policies 154, 170; health expenditure 136, 137, 137; incomes 68; informal employment 65; intergenerational inequality 73; minimum wages 123; populism 10; public sector employment 140; self-​ employment 65; spatial planning 142–​143; taxation 93, 105–​106 universal basic income (UBI) 107, 122–​123, 134 universal basic services (UBS) 21n2, 134, 191 universal benefits 107 Universal Credit, UK 66, 107, 121–​122 university education 72–​73, 88, 138–​140, 168 upper middle-​income countries, defined 1 Urban Development Corporations (UDCs), UK 76, 144, 157 urban planning 141–​145 value-​added tax (VAT) 86, 94, 105, 106, 114, 119 Van Praag, B. 56 Veit-​Wilson, J. 67

Vera, K. 28 vertical model of inequality 30–​31 voluntary sector 172, 173–​174 Walby, S. 30 Walkaway (Doctorow) 181, 184, 185 Walker, A. 38, 45–​46, 77, 134, 135 Wallace-​Wells, D 11 Warren, N. 119 wealth 64, 69–​71; China 89; class and 69–​71; cluster analysis 69–​71; as exploitation 69–​71, 75, 76; housing assets 1–​2, 9, 50–​51, 60, 69, 73, 74, 75–​76, 87, 110–​112; income from 64, 70; inheritance of 2, 69, 74–​75; intergenerational inequality 9, 73–​75; measures of inequality 49–​53; as ontological security 1–​2, 37–​38, 69–​70, 76; pension assets 1–​2, 47, 50, 52, 64, 110, 115; Poland 86–​87; power and 77–​78; privatization of public assets 75–​76; qualitative research 59–​60 Wealth and Assets Survey, UK 51–​52, 69–​71 wealth taxes 105, 114–​117; capital gains taxes 105, 106, 115, 116–​117; financial transfers tax 105, 115–​116; gift transfer taxes 105, 116; inheritance taxes 105, 116; land value taxes 105, 116–​117, 118, 141; net wealth tax 105, 117; pension assets 110, 115; stamp duty style taxes 105, 115, 117; Tobin taxes 105, 115 Webber, M. 11 Weber, Max 26, 31–​32, 34, 39 Weeks, J. 131 welfare capitalism 6, 8, 9, 10, 84, 130–​131, 140 Well Being of Future Generations Act, Wales 160 well-​being inequality, measures of 55–​56 Westergaard, S. 82 Westferry Print Works, London 142 White, S. 162 Whitehead, M . 40–​41 Whitfield, D. 75, 76 wicked problems 11–​12 Wightman, A. 118 Wilcox, S. 110 Wild Shore,The (Robinson) 182 Wilks, S. 75 Willetts, D. 73 Williams, A. 79n13, 167, 174, 184 Williams, P. 110 Williams, Raymond 136 Wilson government, UK 109, 156, 179n7

Index  205

Wingender, P. 93–​94 Winlow, S. 168 Wistow, G. 40 Wollstonecraft, M. 166 Wood, Cathie 192 Workers Party, Brazil 96, 97, 98, 138 World Bank 9, 148 World Economic Forum 9

World Health Organization (WHO) 136 Wright, E.O. 122 Xi Jinping 95, 96, 188 Xie,Y. 89–​90 Zhou, J.Y. 95