As the Guardian reports this morning, and I am not going to even seek to précis this:
The UK's six richest people control as much wealth as the poorest 13 million, according to research by the Equality Trust. They are businessmen Gopichand and Srichand Hinduja (£12.8bn); Sir Jim Ratcliffe, boss of Ineos chemicals (£9.2bn); hedge fund manager Michael Platt (£6.1bn); and property developers David and Simon Reuben (£5.7bn each).
Their combined fortune of £39.4bn jars very heavily with news that at least 135,000 children in Britain will spend Christmas homeless — the worst it has been in 12 years. Polly Neate from Shelter said: “Day in, day out we see the devastating impact the housing emergency is having on children across the country. They are being uprooted from friends; living in cold, cramped B&Bs and going to bed at night scared by the sound of strangers outside.”
But as I noted from conversations in the City yesterday, the concern there is people moving home because of taxation when the concern should be people haing homes at all.
I tweeted last night on this theme, noting:
It is said that F Scott Fitzgerald once said to Ernest Hemingway “Ernest, the rich are different from us”, to which it is said Hemingway replied “Yes, they have more money”.
And that is the difference. But the human need remains the same. What I struggle with is the incomprehension of this reality by some, for whom the money blinds them to all else.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
On the road that links the market town where I live with another large market town, three new mansions have been built on ex farm land.
Some people are making obscene amounts of money somewhere to afford such projects (automatic gates, drive ways and all).
Mark Blyth the economist stated. “the hamptons are not a defensible position”.
Just think on that statement if you will for a moment. If things keep going as they are, it will only get worse. Boris and co trashes everything for power, then tries to glue the institutions he needs to govern back again, just like humpty dumpty. The problem is he cannot do that. So eternal chaos reigns, people get poorer, rely on debt to fund their life styles.
They are doing this because the state cannot deal with the very people who hold power. They are setting up a fascist system, where the media, and all institutions merge. So we have a authoritarian system being set up. Why? Because this is the establishment’s reaction to the public.
They are like aging rock stars, they are poorer and their youth is gone so they spend and spend. To keep up their lifestyle they borrow, and when there is no money left, the debt collectors come. People on the left then say to them say i told you so. What it does point to is massive instability of the state, of the economy and no trust by the people . Surely in that context Byth is right “the hamptons are not a defensible position”
I have listened to Mark a lot. and i think he is right on the money when he explains what may happen to the economy. In 2017 he told the audience do not vote for a known liar, It is just plain stupid. We all know this but people do it because of their prejudices, ignoring evidence, and just believing stuff regardless. I have met and known people who lie ad nauseum, as some of you may have done. The only way to have any sanity is to dump them, get rid because as human beings they are just rubbish.
This is the same for Boris Johnson, he lies for a living, he lies to himself. We all know lies do catch up with people who relay them. So i cannot see Boris not lasting long. He certainly will not last 5 years as Prime Minister. Just look at his track record since he become PM in July.
Please note i am not say boris will win the election, far from it. I think there will be hung parliament or more likely a labour win
https://www.youtube.com/watch?v=rGvZil0qWPg
https://soundcloud.com/markandcarrie
https://www.theguardian.com/commentisfree/2019/dec/04/boris-johnson-brexit-britain-politics-media-business
Have you seen the latest Economist magazine headline, Richard, – “Inequality Illusions”! They seem to be implying that far too much fuss is being made about inequality. They claim that the top 1% share of income is no higher than in the 1990’s and that the claimed growing imbalance between the returns to Capital and Labour is mitigated by workers receiving a share of corporate profits in their pension funds. With regards to wealth, they suggest that it is “fiendishly difficult to estimate”.
It’s difficult to figure out where they are going with this, their arguments are couched a bit tentatively, but their leader does finish by saying that rather than an emphasis on inequality what we need is a revolution to re-invigourate competition currently constrained by needless regulation.
I wonder if this is the real Conservative Manifesto?
The reality is seen in what has happened to incomes over the last decade
And what The Economist does not appreciate is that inequality is not statistics, it is perceptions, and even more, the reality of people’s lives
They wholly miss the point
If you argue inequality does not matter the first thing to wonder is when the person making the claim had their empathy bypass operation
Which “needless” regulations would they be seeking to abolish to unleash unconstrained competition? Protections for workers or consumers or investors, or protections for the wider public such as environmental protections or protections of the market, or something else?
Be careful what you wish for. Don’t be terribly surprised if, once the regulations are abolished, more people start doing the things that were previously prohibited.
“Of all the preposterous assumptions of humanity over humanity, nothing exceeds most of the criticisms made on the habits of the poor by the well-housed, well- warmed, and well-fed.” Herman Melville
@A. Pessimist,
The self-serving antics of The Economist highlight the continuing validity and relevance of, at least, three perceptive observations of the late, great JK Galbraith:
“Faced with the choice between changing one’s mind and proving that there is no need to do so, almost everyone gets busy on the proof.”
“The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.”
and
“Let’s begin with capitalism, a word that has gone largely out of fashion. The approved reference now is to the market system. This shift minimizes – indeed, deletes – the role of wealth in the economic and social system. And it sheds the adverse connotation going back to Marx. Instead of the owners of capital or their attendants in control, we have the admirably impersonal role of market forces. It would be hard to think of a change in terminology more in the interest of those to whom money accords power. They have now a functional anonymity.”
Slightly off thread, moderate if necessary – but from the Guardian this morning; I loved the cartoon.
https://www.theguardian.com/commentisfree/2019/dec/03/you-know-youre-not-legally-required-to-like-jeremy-corbyn-in-order-to-vote-for-him-right?utm_term=RWRpdG9yaWFsX01vcm5pbmdCcmllZmluZ1VLLTE5MTIwMw%3D%3D&utm_source=esp&utm_medium=Email&utm_campaign=MorningBriefingUK&CMP=morningbriefinguk_email
🙂
A quick illumination: those six people could club together and give each of the 135000 homeless kids their very own (average price) house for Christmas…
I should point out that Shelter has its head offices in Europe’s most expensive big city. We are hoping to move to somewhere more affordable in due course, and if anyone wishes to donate to our moving fund please visit our website to do so.
Why not come to the North East? The council cannot afford to maintain public buildings so they are up for sale. For example you can buy the town hall in Stanhope Co Durham for less than 300k. Those that can in the community would support such a move.
And those town halls were quite probably built by public subscription – as was commonplace once
The argument that the increasing imbalance in returns between capital and labour have been mitigated by the returns received in their pensions and therefore their share in the profits just does not ring true. Over the last few decades their has been a decline in defined benefit schemes whereby the risk is on the employer to fund the retirement of their worker, and therefore to the detriment of the bottom line, to defined contribution schemes where the risk as to the sufficiency of money available to fund that same worker in retirement falls on that worker, to the advantage of the bottom line.
This concentration of wealth at the top is no surprise. Thomas Piketty in his book Capital in the Twenty-First Century outlines this very convincingly. The trend to increased inequality globally is a major phenomenon and needs to be drastically reversed. The need for humanity to escape the consequences of greed should be the primary objective of every government. Whether this is countering climate change, poverty or sheer exploitation and alienation of the the world’s population. This is not just a problem for the UK though the rise here is very disturbing.
I think people are missing the point slightly. If a person has a job and i mean one with full hours. They are at the whims of the boss, the manager and the system they are working in. So you get a nasty manager, who could not careless about his/ her workers. So they dump on the workers and this has a knock effect. The said worker/s know they cannot do nothing so they just get on with it but all the while resentment builds and builds and builds, then bamp. You get Corbyn, Brexit, trump, eu immigrants and the rise of the far right.
The public hear about the plight of the hungry and see them going with no food. So they think well that house looks nice, they got a mobile phone, a tv, two mobile phone. So they ignore kids growing hungry and think fleckeless. Let them starve, if they are that hungry they can sell their furniture, tv, books and the spiral of anger at the poor grows ever more intense. It is the same for the homeless, they are seen as lazy, dropping out of the system or worst they are secretly rich and drive home in a rolls.
The Worker also know its their future and this adds the resentment of their plight. People who work are mostly living from hand to mouth, credit card to pay check. For a lot of people they have the illusion of wealth. They have the car, the house, the latest phone, but all on credit.
The world they inhabit is one of stress and anger, they feel powerless and have no hope. So when the labour party comes along, and changes itself to help the above. No one believe them anymore or they the worker feels it is pie in the sky. Nothing will change they say. How is labour going to pay for it all? The tories go on about how there is no money left in 2010, this lie was not challenged by labour, or the media, so it has sunk into the minds of the public.
The tories say government is like a household, the public goes yeah i get it. So taxes are explained as paying for services, which makes the worker feel like there is some justification for all their money being paid. When you tell them taxes are not used to fund services. They go WHAT, you are nuts, go away. It is because of this lack of understanding all parties try to justify their spending pledges and the ones with the biggest pledges get hammered.
Nothing is said of the national debt and why it has grown, that is kept quiet. Corbyn’s interview with Andrew Neil shed some light on the roll of government and its spending. He has alluded to the role of the bank of england and the so called reserves. When Neil said the UK government does not have £60 bn, he was wrong, but that is another story.
The point though is people do not have the time or the interest to learn about economics or how the government creates money. They want something simple, like get brexit done. When you tell them it cannot happen they just switch off. So the people vote for their own demise (just like the germans did) and plunge into an ever deepening morosis.
The danger here is they are going for a far right government and are willing to vote them in because they tick the right boxes.
‘…. to which it is said Hemingway replied “Yes, they have more money”. ‘
The point being that Money becomes different things – and fulfills different functions – depending upon how much of it one has.
At small amounts, it is subject to the economic principle of scarcity and has primarily an exchange role. It pays for food, accomodation, clothes and basic health and social care. in a world where almost everything (even a smile from a nurse) is commodified, ever greater amounts of exchange-value money is required.
At much higher levels, it becomes a ‘social relation’ and serves as a proxy for privelege and power.
Indeed
But they’re still the same human beings underneath
Another problem is that most of this wealth is made via planetary destruction. Aluminium smelting in Russia in the case of the Reubens.
And I wonder why we allow hedge funds. Here’s Platt on how we choses his traders.
“I look for the type of guy in London who gets up at seven o’clock on Sunday morning when his kids are still in bed and logs on to a poker site so that he can pick off the US drunks coming home on Saturday night.”
Shocking.
It should never be ok to exploit someone because they are drunk or compromised in any way.
Too right I find wealth incomprehensible, at least in this sense.
When I was (really) poor I wanted to have money so i could buy food for myself and family without going overdrawn. I.e. I wanted money to live.
When, for a couple of years, I was earning enough to start losing my personal allowance, I realised I probably earned enough. I choose to take more holidays rather than pay tax at 62% marginal rate, I.e. I wanted quality of life rather than extra money. (Sorry that may have been selfish).
If somehow I had accrued millions, let alone hundreds of millions, or billions, how could I not start giving most of it away. I can’t improve my life any more with the money but I could improve others and reduce others suffering. I.e. to let others live and improve their quality of life.
Therefore I find Billionaires incomprehensible. How can their love of mammon be so great?
The “incomprehension”, both inadvertent and deliberate, about how wealth is accumulated and its accumulation is protected is probably more pervasive than you suggest. And while I’ve seconded A. Pessmist’s take on The Economist’s antics (above), it is only fair to point that some key remedial policy changes are advocated at the end of its leader.
“The rich world’s housing markets are starving young workers of cash and opportunity; more building is needed in the places that offer attractive jobs. America’s economy needs a revolution in antitrust enforcement to reinvigorate competition. And regardless of trends in inequality, too many high-income workers, including doctors, lawyers and bankers, are protected from competition by needless regulation and licensing, and senseless restrictions on high-skilled immigration, both of which should be loosened.” (The Economist, 28/11/19)
Economists conveniently describe all of these detrimental activities as “rent-seeking”. Home owners in desirable locations seeking to maintain the economic rents accumulated in the market value of their houses by opposing any nearby developments that would increase housing supply and might reduce house prices. Big corporates overcharging for what have become utility goods and services, gobbling up or squashing smaller competitors who might disrupt their business models, casualising labour and dodging taxes. Professionals and specialists building and extending barriers to entry to protect their capture of economic rents.
All of this is rent-seeking. It is more accurately the sustained capture and the protection of this capture of economic rents. But that is just economic jargon and mumbo jumbo to most people. Call it out for what it is: offically authorised and officially condoned theft from the vast majority of citizens. The term “robber baron” was perfectly accurately deployed when Sherman, Teddy Roossevelt, Clayton and Woodrow Wilson transformed US capitalism between 1880 and 1920 – FDR continued the restructuring in the 30s and 40s. Ed Miliband, drawing on the efforts of US academics and policy wonks with whom he consorted to resurrect these century-old policies in the modern era, sought to advance the notion of ‘predistribution’ – to prevent the accumulation of economic rents (ill-gotten gains or the proceeds of theft) rather than taxing them after the event. But it secured no traction.
We need to name our world. It is theft, pure and simple. And we need both theft prevention and the confiscation of the proceeds of this theft via taxation.
Thank you Paul Hunt. Very pertinent and incisive. ‘Rigged economy’. Neoliberalism cannot produce an economy which does anything other than OTHER THAN facilitate and protect ‘rentierism’. Since only labour-power creates new value, rent represents a claim to a proportion of the social surplus, it allows accumulation. Whether in an off-shore tax haven or onshore in the City of London, the accumulation of wealth or money thus denies it its ability to have social value.
‘Call it out for what it is: officially authorised and officially condoned theft from the vast majority of citizens. ‘ Since 2010 when the Lib Dems made David Cameron a ‘minority’ government by refusing point-blank to consider supporting Gordon Brown’s party and immediately entered a coalition with the Conservatives, over £20 billion has been collected from Brits and accumulated by the top 0.01% in Britain alone. (FWIW, Miliband has since resigning as Labour leader admitted that ‘predistribution is an economic distortion’ necessitated by the country’s unwillingness to tax wealth fairly).