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How Does Equality Impact Fairness?

Richard Wilkinson.

Richard Wilkinson is Emeritus Professor of Social Epidemiology at the University of Nottingham.  He is the co-author, with Kate Pickett, of the seminal book 'The Spirit Level'.  Much of his work has focused on health inequalities and the effects of income inequality on population health.  We started our conversation, given our theme this month, with the question of what, for him, is meant by the word "fairness".  

"It’s not a matter of defining it abstractly. For me, it’s looking to see what makes a difference in society, it’s an empirical question and our research has shown that large income differences between rich and poor in a society are damaging in all sorts of ways. There are a whole bunch of different ways: death rates tend to be higher, so life expectancy shortens, there seems to be more mental illness, more people in prison, higher homicide rates, poorer community life, lower levels of child wellbeing. A whole raft of things.

They have a common thread though. They are all problems that tend to be worse at the bottom end of the social ladder. It’s those kinds of problems that are worse in societies with bigger income differences between rich and poor.

The Pope recently said in his Encyclical, that economic growth is inconsistent with addressing the climate crisis. I wondered from both a fairness perspective and a climate, planetary boundaries perspective, can economic growth ever be fair?

I wouldn’t use the word ‘fair’ about it. If it uses more resources and leads to higher carbon emissions or indeed stops us reducing carbon emissions dramatically then obviously it’s very bad for the planet. We have to make perhaps 90% reductions in carbon emissions which would be very difficult with any economic growth. But of course many people will define economic growth in ways that don’t necessarily involve more resource use. So far we haven’t seen any carbon neutral economic growth.

CoverYou’ve just published, or recently published a booklet called ‘A Convenient Truth’ in which you talk about and call for something called ‘economic democracy’. I wonder if you could tell us what you mean by that?

It comes up as a way of dealing with the very wide income differences in our societies. They are hugely much larger than they were for instance in the 1960s or 70s, and if you look at the 20th century you get high inequalities until around the 1930s and then they come tumbling down. Income differences go on reducing until probably some time in the late 1970s and then you get the modern widening of income differences again until our societies are as unequal now as they were in the 1920s.

Some of that is a matter of reducing top tax rates, they are hugely much lower than they used to be. But the most important component is that income differences before tax have widened dramatically. Incomes at the top have taken off and run away from the rest of us: the bonus culture, the huge incomes that CEOs and bankers and people in the financial sector have been paying themselves. What used to be true is that trade union strength was a counter to the unfettered greed of people at the top, but now unions are much weaker than they used to be and the way of recreating a democratic constraint on incomes at the top are all forms of economic democracy, by which I mean employee representatives on company boards, but also more employee owned companies, more co-operatives, things like that.

About half the member countries of the European Union have at least some legislation requiring employee representatives on company boards. That seems to make companies more efficient. It also reduces pay differences quite substantially. Britain needs that kind of legislation. We should strengthen it over time by demanding an increasing proportion of employee representatives on company boards, but we also need policies to grow the employee-owned sector and co-operatives: tax incentives, various other ways of trying to expand that sector.

Our long-term aim should be to deal with the anti-social behaviour of large, powerful, multi-national corporations which run rings round national governments and often make us all feel quite manipulated. The answer to that is democratisation. There are good studies that suggest that productivity is higher in more democratic companies and there are also indications that they perform better in environmental and ethical ways. Some people suggest that an employee buyout can turn a company from being a piece of property, the group of employees that comprise the company being owned by external shareholders, can turn that from being a piece of property into a community. It really changes working relationships when people are not working for external financial interest.

Richard Wilkinson.

The Equality Trust (founded by Wilkinson along with Bill Kerry and The Spirit Level co-author Kate Pickett) started out quite similarly to Transition, taking a position of being very non-party political, very under the radar. But ‘The Convenient Truth’ is published with the Fabian Society. Does that represent a change in your approach?

The Equality Trust has recently become a charity and the director, I think, is very concerned to make sure he keeps absolutely to the letter the rules for being a charity. But my reason for publishing ‘A Convenient Truth’ with the Fabian Society is I thought that was the best way of getting it into the Labour Party. Fabians certainly used to be influential in the Labour Party, I suspect that’s less true now. Maybe under Corbyn it will be different.

CoverSpeaking of Corbyn, one of the interesting things that’s been coming out of that is there are people in the Labour Party who have been saying that to really stress equality and fairness would make Labour unelectable, whereas he’s saying no, that’s where we need to go. I wonder if you have a sense of, if you had a government that were to adopt in full the findings of ‘The Spirit Level’ for example, would that make them more electable or less?

It’s very hard to predict, because we’re so influenced by the manipulative power of mass media. Some of it is owned by extremely wealthy individuals which is inconsistent with democracy. Part of any democratic constitution, I think, is that you need a well-informed public. Democracy only functions well with a well-informed public and that means having a more democratically owned and controlled media.

There is such a widespread disillusionment, anger, mistrust of politicians, more and more people not voting, saying that there’s no difference between the parties and increasing signs that people who step outside the party framework can do well. We had this in terms of mayors of London with Ken Livingstone and then Boris Johnson both seen as rather independent minded people. Clearly the following for Corbyn reflects an enthusiasm in sections of the population that haven't been particularly interested in the Labour Party before.

There are so many things that someone like Corbyn could do. There was a suggestion in the paper that he might abolish the Party Whip which would mean, presumably, that MPs would start to say more what they believed in and became less puppets of their party views. I think people would be very attracted by that. If he handled Prime Minister’s Questions very differently it might also be very different. It might also be true that a lot of the things that he is standing for, polls suggest seem to have majority approval.

For instance, over 80% of the population seem to think that income differences are too large. That comes from the British Social Attitudes survey. He also wants to nationalise the railways. Opinion polls say there’s majority support for that. It depends very much on his willingness to speak out on these issues, really to defend them rather than be afraid of the media, afraid of the electorate, as much of the Labour Party’s leadership has been before. 

In the European context we’ve seen Podemos, Syriza and other pro-equality parties doing well, but we’ve also seen the savaging of Greece by the EU and the ECB. If you want a fairer world, who should you vote for in an EU referendum?

There’s an enormous need for more international agreements. Not only to deal with climate change but also to deal with the tax havens and tax avoidance and also to deal with the enormous undemocratic power of multinationals, many of which are, in economic terms, bigger than very many countries’ national economies.

The EU, although it hasn’t often been backing the side of any of these issues that I would like, we do need those international co-operative measures to deal with these growing problems: climate change, tax avoidance and the problem of multi-nationals. I think we must be in bigger units and the problem is simply to get them to do more of the things that we need doing. We need to win them over to a more progressive agenda, if you like.

Is the message of ‘The Spirit Level’ the same in a contracting economy as it is in a growing economy?

Whichever we have and whichever phase of the business, we need small income differences. You were talking about the electability of someone like Corbyn earlier, but there is a big shift going on in world opinion. We had statements from the Pope, from Obama, from Ban Ki Moon, from Christine Lagarde, all talking about how inequality is the most important issue now in our societies, recognising how damaging it is. Even economists now at OECD and the World Bank recognising that it’s economically damaging as well.

Greater equality not only reduces issues like violence and strengthens community life, but it also is important in moving towards sustainability because one of the big drivers of consumerism which I think is perhaps the biggest obstacle to policies for reducing carbon emissions, is about status competition. The data is fairly clear now from research showing that in more unequal societies, those societies with bigger income differences, status matters more. We judge each other in those societies more by where we are in the job hierarchy and incomes and so on.

So we all get more worried about status and of course how we show what we’re worth is through our expenditure. In a way, people sometimes think of consumerism as a way of showing that you’re all-possessive, acquisitive, materialistic, but actually consumerism is a very alien form of social communication. If I wanted a bigger, better car, live in a smart part of town and wore clothes and so on with the right labels on, that’s an attempt to communicate my worth to other people. We can see in the data that those forces are stronger in more unequal societies.

You write in ‘A Convenient Truth’ that ‘we typically lived in societies with an extraordinary degree of equality.’ What went wrong?

Inequality starts to grow really from early agriculture. During the biggest part of human existence, when I say human existence I mean in our modern anatomical form with brains our current size, we lived in hunting and gathering societies which were extraordinarily equal, based on food sharing and gift exchange and so on. Not because people had a different psychology then, because any attempts at dominance and to be bossy or whatever was met by what anthropologists call 'counter-dominant strategies'. So if you were anti-social, difficult, domineering, you would be teased, ostracised, whatever, to bring you into line. There’s a very nice book on that by Christopher Bohm called ‘Moral Origins’, well worth reading, about how those societies worked.

But although people know that agriculture coincides with or initiates the rise in inequality, there’s less agreement on what the link is and how it works. Something to do with more complicated and denser societies, denser populations. But there are other reasons as well. In a sense, agricultural production is no longer a communal activity as big game hunting was in hunting and gathering societies, so what is produced becomes a matter of individual endeavour, individual work. Of course, that’s remained true through the long history of agricultural development, so - the product is mine because it’s what I worked to grow. But in modern societies, production is a communal activity now. We all work co-operatively and all our contributions are necessary. We each produce for other people to consume, playing different roles in often very complicated productive processes. There are reasons to think that maybe economic development, industrialisation moving beyond agriculture may have changed some of the rationality of inequality, what underlies inequality.

Modern companies involve bringing together the skills of knowledgeable, highly trained people. It’s no longer a matter of an educated boss who knows what the company’s got to do and a lot of unskilled workers who are often kept in ignorance about that. The fact that modern production has that character means that you need more workplace democracy, and indeed how much control people have in the workplace seems to be one of the important determinants of workplace health.

Richard Wilkinson. The focus that the Transition movement takes is starting with communities and starting at the bottom. I wonder if you had any thoughts on how Transition groups who are starting to develop new economies and start new social enterprises around food and energy and housing and all kinds of different things should be mindful of enshrining fairness and equality in from the outset.

When local businesses are started it’s very important to try and start them along democratic lines, preferably as co-operatives. It’s also important to pay the Living Wage. The Living Wage is properly defined, not as the Chancellor recently defined it, and to try and keep income differences small. As I said earlier, the big rise in inequality has been runaway top incomes. Income differences in the biggest 350 or so American companies were about 1:30, 1:40 in roundabout 1980. They are now more like 300:1 or 400:1, i.e. they’re ten times as big as they used to be. Encouraging democracy in our economic activity, making sure that people on the bottom are paid adequately, and that people don’t have the power to take more than their share of incomes at the top.

It’s a while now since ‘The Spirit Level’ came out. I wonder how you regard the impact that it’s had over that time?

It’s hard to know. Clearly there has been enormous change to people’s attitudes to inequality. Our book would not have been so successful if it had come out before the financial crash and the financial crash led people to think more fundamentally about where our societies were going and where we wanted them to go. Whether we have made an important contribution to that growing concern with inequality or whether we have simply benefited from it is something we’ll never know. But we certainly know that some of the world leaders have read it from the things they’ve said, so it may well have been influential.

One of the ways in which it has been influential which is also relevant to local activity is in initiating the fairness commissions. In a number of big cities in Britain, perhaps as many as 20 of our major cities have started Fairness Commissions to try and recommend ways of reducing income differences locally. One thing they all agree on is the importance of paying the Living Wage and to reduce income differences of companies that supply the local authorities and most of those local authorities have committed themselves to paying the Living Wage. Probably tens of thousands of people are now paid a bit more than they would have been. I know that the initiative based in Islington for setting up those commissions was stimulated by ‘The Spirit Level’. I’ve spoken to them, I think almost all of them.

So we can’t really be sure what the scale of the influence is, but it’s part of a very welcome process of growing awareness.

It really is worth emphasising the connection between consumerism and inequality. That people in more unequal societies seem to work longer hours because money becomes even more important in how you show your worth, and people get into debt more: as income differences get larger, aspirational incomes grow. People feel they need more to keep up. You can see that quite clearly in the data. In a number of ways, more equal countries seem to do better in environmental terms. One of them is that because community life is stronger, people are more aware of the common good, if you like the good of humanity which is absolutely key to doing anything about the scale of the problem of climate change and carbon emissions.

One of the important effects of having closer community life in more equal societies and as a result people being more aware of the common good is that surveys of business leaders’ opinions show that in more equal countries business leaders rate national agreements on climate change as more important than business leaders in more unequal countries, where they just feel that that’s not their job, they have to look after themselves. Recycling is higher in more equal countries. So a range of things suggesting that more equal countries do better in environmental terms.

[Here is the full podcast of our conversation].  

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