Thanks for reading.
It’s easy to frame conceptual debates about fairness and equality as a binary choice between two extremes - unbridled capitalism on one hand, or equal-outcome communism on the other. Of course, we all know that the details of real-world policy choices are debated in the middle ground. Connecting the dots between theory and practice is challenging. This week’s newsletter takes a look at a recent example of this problem.
Will Snell
Chief Executive Fairness Foundation
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Lost in the moral maze
Last week’s episode of the Moral Maze on BBC Radio 4 focused on inequality, asking whether the gap between the rich and poor in the UK is fair.
It posed some important and timely questions. Is it morally acceptable for millions of people in a rich country like the UK to rely on charity to feed and clothe their children? Given huge levels of wealth inequality, should the rich pay more to help the poor, or is it unfair (and bad for economic growth) to increase taxes on those who have earned it? Is wealth inherently immoral?
The panel (Anne McElvoy and Tim Stanley broadly on the right, Ash Sarkar and Giles Fraser broadly on the left) grappled with these questions in conversation with four expert witnesses (similarly balanced between left-wing and right-wing perspectives).
As you might expect, the discussion covered a lot of ground. And predictable fault lines emerged. There was broad agreement about the urgent need to tackle poverty, especially in the context of the rising cost of living. But there was no consensus about whether inequality was part of the problem or, by contrast, was an inevitable and even desirable feature of an economy that rewards ‘merit’ in pursuit of growth and prosperity.
The usual critiques were made of inequality. It is inherently immoral; extreme wealth is morally corrosive; inequality creates divided and dysfunctional societies in which people’s social status are a function of their economic position; the wealth of some is in some ways a root cause of the poverty of others. None of these arguments were persuasive to the expert witnesses and panellists on the right (although it was conceded that it has become too easy to accumulate and hold onto wealth, that it should not be possible to use wealth to buy political influence, and that people should be morally equal even if they are not economically equal).
All in all, it was a reasonable discussion, but it concluded predictably, without consensus. Everyone recognises that poverty is a blight on society and that there is an overwhelming moral case to tackle it, to say nothing of the economic, social and political arguments. But the question of whether or not we should tackle inequality divides people along entrenched fault lines.
Asking a different question might elicit a different answer. Instead of asking whether inequality itself is unfair, why not ask whether it is fair that people have dramatically different life chances and opportunities, because of the unequal circumstances into which they are born?
Framing inequality in terms of its impact on opportunity is a powerful way of persuading those on the right of politics that action needs to be taken to reduce inequality. Boris Johnson said in his party conference speech last year that “it is our mission as conservatives to promote opportunity”.
In 2020, More in Common’s report, Britain’s Choice, concluded that people can come together around the goal of building a fair society: “most believe that the economy does not afford enough opportunity for those who work hard and want to get ahead… [and] integrate a belief in personal responsibility [with] the need to do more to reduce inequality.”
We found this to be true when we ran our own polling in April. A particularly striking finding was the strong consensus about the need to reduce inequality in order to build a society of fairer opportunities, with 83 per cent of the British public wanting to reduce inequality in British society. Even Conservative voters preferred reducing inequality to letting the market dictate outcomes by a factor of more than two to one.
Talking about opportunity helps us to move on from the tired two-tone debate about free markets versus equal outcomes. Bear in mind that we’re not talking here about timid attempts to promote opportunity by tinkering around the edges. We’re talking about taking radical steps to reduce inequality, based on the recognition that this is the only way to give everyone fair opportunities in life. This means, for example, fixing broken markets in terms of low-paid and insecure work and the cost of living (food and fuel but also housing, childcare, social care and so on).
People from across the political divide can agree that current levels of inequality are too high because they prevent people from having fair opportunities. Let’s shout the argument out loud and let’s win it.
Poll of the week
What are the best arguments that you have seen for reducing inequality?
Lots of people have made lots of arguments over the years for reducing inequality. Some have been more successful than others, especially at convincing people with different opinions and perspectives. What are the best examples that you have seen, and why?
Last week we asked how we can have a more grown-up conversation about tax. Thank you for so many detailed suggestions. Rather than attempting to summarise them, you can read them in full here.
- More openness in where tax comes from
- Revolutionise economics teaching - even the experts (see Bank of England interest rises against inflation) haven't yet caught up with a circular / wellbeing economy or Doughnut Economy by Kate Raworth. The doughnut is a simple concept and easily grasped visually - perhaps local councillors / trade unions should receive training? Gary Stevenson is using YouTube to try and teach the difference between income tax and wealth tax @garyseconomics on Twitter
- We need to look at countries that have a fairer society, where people are supported from cradle to grave and where they understand the importance of fair taxation in order to achieve a fair society. All political parties need to embrace the principals of fair taxation and stop trying to win elections by offering low taxes.
- Clear communication about the demographics of tax payments, different rates of tax on earned and unearned income, together with illustrations of how evasion/avoidance of tax works for some.
- Opposition parties and objective media have a much bigger role to play. They need to: provide objective information about taxation and the benefits it brings to everyone; hold government to account by challenging false claims and rhetoric about taxation (why are low taxes "better" for us? why is it acceptable for people to evade or avoid tax?); ensure that more attention is given to the potential for other fair taxes such as wealth taxes. Education is important but don't just teach about the technical /practical aspects of tax - also consider who should pay, and why, by introducing ideas about fairness.
- A ten percent tax on every penny we earn across the board above a UBI of £10k
- We need to have a complete rethink about how we rebuild real community connectivity and collective action and thinking, much of this was destroyed in the 1980s when the 'Greed is Good' mantra crept into conceptual thinking, the individual was promoted over society in particular from Mrs T. PM and the media at the time. Ever since then our society has become more and more self-obsessed and less collective overall, this is driven by rampant unfettered global capitalism that promotes and vastly benefits from this greed, fear-of-missing-out, nothing is ever enough culture and the ever-changing unnecessary products production creating perpetual shopping addiction. There needs to be far more spatial education from early ages on all levels including a wide range of reading materials and subjects, encouraging critical thinking, objective analysis, philosophical and conceptual thinking, current affairs education with political and public debating included in this, understanding of the importance of actual facts and knowing how to find these, researching full accounts of information from the original true sources and the importance of not using and believing unsubstantiated accounts and claims from unreliable media and sources. Importantly young people need early financial management education for life skills and fair taxation must be part of this; building a committed understanding on the importance of this and why, we need to look not just at these shores, other countries examples should be studied too so that good and bad practise can be examined and understood. One of the problems in the UK over our EU membership and the vicious referendum campaign is that most people received no or very little education in what the EU really is, in what being a member meant and what the functions of all it's jurisdictions and departments did. In most areas of the country that received huge EU funding for important infrastructure improvements the public had little knowledge or understanding of this or the details. In contrast in many other EU member countries they have education in what the EU stands for and what the roles and activities are of it's component bodies, also of the rights and the protections and democratic processes therein. One of the really difficult current issues is how do we tackle this awful obsession with the super-rich and their lifestyles, our media is full of this and the desire to ape their lifestyles is fast-filtering into the mindset of the public? There has to be a turnaround to examine how these individuals obtained their wealth including the huge corporations that they founded, own or benefit from; this examination should include taxes paid, are they full, fair and sufficient or is there evidence of tax avoidance or evasion and use off offshore tax havens; are employees in their companies and contracted out services paid proper living wage salaries with good terms and conditions of employment and welfare standards or are they on paltry salaries needing state benefits top-ups to live? What other companies or industries do these super-rich individuals or corporations invest in are these of good governance and financial and taxation responsible organisations? How in future can we prevent our Government and the Cabinet in particular being stuffed with hugely wealthy individuals that have promoted low taxation over generations that benefits mainly themselves and their backers and lobbyists?
- Make financial education part of the national curriculum.
- Publishing a simple guide to common forms of taxation. Where the money comes from & how it is spent, (where known). Also a guide to tax loopholes, why they were created, who created them, why do they still exist, who benefits? Information on anachronisms & anomalies like the so-called "non-dom" status. More information concerning British tax havens. Information comparing the tax burdens placed on giant corporations in G20 & comparable countries.
- I know far too little about the tax system, but still have to engage HMRC in internet combat to submit my return each year. Could the HMRC website include a meaningful tax payer’s guide to the basics of the system?
- Develop a campaign of eye catching and simple stats and facts and encourage mass sharing on social media - for example the lovely one in the article today about the % / numbers who don’t earn enough to pay tax
- Simple eye catching slogans and figures in social media campaign that aims to raise awareness of headline figures that will challenge the myths and false assumptions
- We try to persuade Gary Stevenson to work with us and/or at least we promote his videos e.g. https://www.youtube.com/watch?v=EiblHqbpXHs&t=611s
- Rather than just talking about it, show clear graphs of the inequality of income tax, VAT, and other taxes (eg on fuel).
- Transparency and a full, believable and accurate explanation of how the system works. This needs to be in layman’s language
- This government is intent upon increasing the tax that the poorest pay in order to give tax breaks to corporations and the wealthy. Currently the poorest in society pay the greatest proportion of their income in tax this is not acceptable in any civilised society
- I agree that the wealthy and the corporations should shoulder increased taxation as they can afford it.
- Better education. Better information from the experts in this field.
- Tax the rich wealthy and the privilege in society more, it just has to be. Tax the rich shareholders in investments more for those who have second and more homes in the UK and those who live in reduced tax bands say in the Channel Islands. The ones who own large properties there and those who have non dom status in other global locations. It is not fair that the rest of the proletariat, disabled and others not working have to pay especially now with the introduction of the extra NI contributions being implemented.
Reads of the week
“The transition to a net zero economy raises questions about when costs should be paid, and by whom.” The Social Market Foundation and Intergenerational Foundation have published a joint report on future generations and the net zero transition, arguing that policy assumptions about future generations and net zero should be open to public debate.
“Instead of angry debates and Twitter pile-ons, the public want a ‘live and let live’ approach to trans people, and case-by-case solutions, not blanket policies”. More In Common have published new polling data about public attitudes to gender identity.
“Two or three kids in a class of 30 are self-harming because they are so anxious about their living situation, about whether their parents can pay the bills or whether they are going to be able to have a shower that night.” Shocking findings from the Childhood Trust about the impact of the cost-of-living crisis on the mental health of British children.
“If you’re drinking with your manager [after work] and another person is going home after work, who is going to get the promotion?” A survey from the Chartered Management Institute finds that Black and Asian workers are held back at work by bias.
Fairness Foundation updates
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