Why equality matters.

Author:Jones, Daniel Stedman

Whatever is my right as a man is also the right of another; and it becomes my duty to guarantee as well as to possess.

Tom Paine, Rights of Man, 1791

Labour's devastating electoral defeat reveals that social democracy remains in crisis. The hope that economic crisis had changed politics has so far proven misplaced. Instead, flawed and limited neo-liberal assumptions about equality, freedom and power are more entrenched than ever. This is to be witnessed in Osborne's frighteningly assured shrinking of the state. Yet, neo-liberalism is still not properly understood and, in its disarray, social democracy is struggling to mount a coherent response.

In the twentieth century, the New Deal and Attlee Labour Government succeeded by uniting progressive liberalism and social democracy around the ideal of a more equal society. Socialism was almost completely absent in the US. Despite its disproportionate totemic significance, Labour success owed little to clause IV. Rather, reformers convinced the public that they had the solutions to depression and the aftermath of war. Similarly, domestically at least, the Democratic Party and Labour Party in the 1960s briefly connected social and cultural change to the politics of hope.

In both countries, egalitarianism ran through policies--universal education and healthcare, civil rights, housing, and strong trade unions--of liberal, conservative and social democratic politicians alike. The belief that an active state should guarantee the basic conditions of life for all so that each is free to lead a fulfilling life unified people across the political spectrum. Crucially, liberty was understood positively as empowerment of the individual, often through collective means.

This view of equality and freedom has been lost. In its place, American neo-liberals of the Chicago School of Economics and the Virginia School of Political Economy successfully promoted a version of freedom both deceptive in its simplicity and limited in its content. Milton Friedman, Gary Becker, George Stigler and James Buchanan constructed an all-encompassing economic approach to human behaviour based on 'maximising behaviour, market equilibrium and stable preferences' (Becker, 1976, 6). At the heart of this economic vision, an old idea of liberty based on freedom from interference was resurrected. Gone was the enabling ideal of freedom that underlay the welfare state: liberation from economic insecurity.

American neo-liberals attacked the pillars of twentieth-century social democracy --economic planning, civil administration, the very idea of a 'public interest', government regulation--and insisted that only a Madisonian 'checks and balances' constitution coupled with the expansion of the market mechanism into hitherto untouched areas would guarantee individual liberty. These writers believed that the rising tide generated by private profit lifts all boats. The magic of the market was its power to improve everyone's standard of living even as inequality increased. Inequality therefore did not matter. It was essential to competition, which increased efficiency, productivity, and, ultimately, wealth.

For progressive politics to be successful again, it must articulate why this view is wrong. It must recover its commitment, not just to tackling inequality, but to a more equal society. But it must articulate a relevant and coherent case for equality in the twenty-first century, not the last (1). What follows is a political and historical argument for a renewal of politics based on the spread of an equality which does matter: the development of a person's capacity for freedom. While it rejects certain assumptions that underlie neo-liberal logic, it also draws on insights revealed in neo-liberal thought which offer clues for how progressives can fight back. Most importantly, the legacy of neo-liberal thought whereby substantive equality and freedom have come to be viewed as in conflict must end. No coherent alternative political case can be made that fails to bring these fundamental values back together.

The problem

Graphic inequality is everywhere visible in twenty-first century Britain. Poverty and homelessness are increasing. Concentrated wealth prices the vast majority 'the many' of the 'squeezed middle' as well as the very poor--out of owning their own homes. Food banks have arisen to cope with the effects of stagnant incomes, the inexorable rise of the cost of living, and the enduring need for subsistence. According to the World Bank, Britain's GDP per capita stands at $45,603.30 (2014), still considerably below its peak in 2008 of $48,319.90 (World Bank, 2015). Median household income, at 22,880 [pounds sterling] in 2012/2013, is stubbornly low by comparison with other developed countries, and is skewed by the wealth in London and the South East (see DWP, 2014, 22). Zero-hours contracts have signalled a large increase in the working poor who are employed for poverty wages. Manufacturing has collapsed since the 1980s. Inequalities that have never disappeared in educational, social and cultural advantage have been reinforced.

Britain is not alone. The rise in inequality, whether measured by the Gini Coefficient, by wages themselves, or by income ratios within industries or firms, is now a trend across many developed democracies. Most clearly, in the United States, wages for most people have hardly shifted in real terms since 1980, despite a brief resurgence during the Clinton-era boom (2). In Europe, with no fiscal union and no will on the part of wealthier countries to countenance cash transfers, the eurozone area has also witnessed savage inequalities between the German-led North and the poorer South. The Grexit crisis is just the most acute manifestation of this regional inequality.

Inequality dominates the debate. Thomas Piketty's Capital in the Twenty-First Century (2014) (drawn from his work with Oxford economist Tony Atkinson and Berkeley-based economist Emmanuel Saez) questioned the rising tide. Despite the best attempts of right-wing critics to discredit it, it has reframed discussion around the inequalities caused by global capitalism and markets so that distributional questions are once again placed front and centre (see also O'Neill, Pearce and Piketty, 2014). But inequality resonates because of the economic facts since 1980 and concern about its effects is not confined to the left. Former head of Thatcher's Policy Unit Ferdinand Mount's The New Few (Mount, 2011) castigated a modern Britain increasingly dominated by oligarchs and plutocrats. Since the 2015 election, Cameron has attempted to remake the Conservatives as the 'party of working people' and Osborne has disingenuously sought to introduce a 'living wage'.

The debate on inequality is not yet wholly constructive. As David Lipsey points out, universal political concern with social mobility reveals deep unease with a society felt, perceptibly, to be moving backwards (Lipsey, 2014). But the almost universally-held solution for inequality, equality of opportunity evidenced by greater social mobility, obscures more than it reveals. Equality of opportunity is slippery. It risks being platitudinous. Inequality angers everyone in some measure. But tough questions in need of answers--how much, for whom and how to balance competing interests--are much less easily resolved. Like 'hard-working families', equality of opportunity is a cliche of modern politics but what does it mean?

Equality of opportunity is usually juxtaposed with equality of outcome. It presupposes that individuals can start in the same position in life. Whatever a person might achieve is then held to be dependent on how hard they work. But this meritocratic vision is illusory. Given the infinite variety of human talents and experience, it is clearly impossible for all to have an equal chance at doing well at all things. The fundamentally unequal distribution of ability and wealth, and resources, mean that the best equipped are those most able to succeed when offered a chance.

More importantly, most accounts of equality of opportunity are incomplete because they evade the problem that all lives are worthy of dignity, respect and a decent standard of living. Equality of opportunity hides difficult political choices that must be made if everyone is to have the power and freedom to live a decent life. Virtually all politicians pay lip service to equality of opportunity but, as Tony Crosland put it in The Future of Socialism:

I do not believe that [a] society [based on equal opportunity] in any way resembles the true ideal of most Conservatives. Consider its most obvious implications--completely free, competitive entry into industry: an end to all nepotism and favouritism: a diminution, if not the virtual elimination, of inheritance: the abolition of fees in public schools: and generally the extrusion of all hereditary influences in our society--and contrast this with actual Conservative policies in these various spheres, and with their emotional attachment to precisely the traditional and hereditary features of British life. (Crosland, 1956, 174)

Pursuit of equal opportunity, even of a sparse kind, would have serious policy implications, certainly, which almost no neo-liberal conservative could endorse. On the other hand, as in the post-war period, some progressive conservatives, and certainly many floating voters, will be attracted by a compelling vision of a more equal society if it respects individual freedom.

If an effective response is to be mounted against growing inequality, it is essential to understand the reasons why it has grown. It needs to be explained why equality is important and what sort of equality really matters. The focus on inequality is insufficient by itself and the proposed solutions, equal opportunity and social mobility, are imprecisely defined so that they disguise all manner of political difference.

Before considering what sort of equality might provide a foundation for...

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