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PART I - 1800–1939
- Stewart Lansley
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- The Richer, the Poorer
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- Bristol University Press
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- 13 May 2022
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- 25 November 2021, pp 7-8
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20 - I’m not Mother Teresa
- Stewart Lansley
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- The Richer, the Poorer
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- 13 May 2022
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- 25 November 2021, pp 177-187
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Summary
In May 2003, shareholders gathered at the Queen Elizabeth II Conference Centre in Central London for the annual general meeting of one of Britain's largest companies, the pharmaceutical giant GlaxoSmithKline (GSK). While company AGMs are usually formal and self-congratulatory events with anodyne speeches and luxury biscuits, this one was full of acrimony. For hours, shareholders and directors were locked in a bitter row over the pay of the company's chief executive, Jean-Pierre Garnier. A fraction over half of shareholders voted against the deal. In response to the revolt, a riled Garnier, who lived in Philadelphia rather than the UK, declared, “I’m not Mother Teresa”.
An orgy of self-enrichment
The explosion in corporate rewards that began in the 1980s continued from the millennium. This was despite the evidence that rewards were largely unrelated to corporate performance, and the way other countries such as Sweden, France and especially Japan (where group cohesion is more highly valued than individual reward) operated successful economies with lower levels of top pay. In July 2005, Richard Desmond, the proprietor of the Express newspaper titles, paid himself a ‘chairman's remuneration’ of L52 million. Just nine months earlier the global steel magnate Lakshmi Mittal, Indian born but resident in the UK, chief executive of the world's largest steel-making company, ArcelorMittal, paid himself a L1.1 billion dividend. It was then the highest private dividend ever received.
The record did not last for long. A year later, the swashbuckling and controversial high-street deal maker Philip Green topped it with a dividend of L1.2 billion from his Arcadia group of shops from Miss Selfridge to Top Shop. This was the equivalent of the annual pay of 54,000 people on average earnings. The company was used as a kind of private fiefdom by Green. Set up in his wife Tina's name, the payment went to her. Living in the tax haven of Monaco, she paid no tax on the giant payout.
‘The past decade of Labour government has proved a golden age for the rich’, concluded the Sunday Times. In the opening years of the millennium, the average earnings of the chief executives of FTSE 100 companies rose eight times as fast as those for all full-time employees.
9 - The rediscovery of poverty
- Stewart Lansley
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- The Richer, the Poorer
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- Bristol University Press
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- 13 May 2022
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- 25 November 2021, pp 83-89
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Summary
The question marks being raised about the persistence of poverty had, initially, little impact. But this was about to change. In 1957, Peter Townsend moved to the London School of Economics (LSE) in the department run by Richard Titmuss. At his modest three-bedroom house in Ealing, where he lived with his wife Kay and daughter Ann, frequent guests included an elderly Richard Tawney, colleagues like Townsend and Labour politicians such as Richard Crossman. Titmuss had an unparalleled influence over the course of British social policy. He is one of few social scientists to have an English Heritage blue plaque marking his former home. A few months before he died in April 1973 at the age of 65, he was still able to fill lecture halls to overflowing.
Those working with Titmuss became part of a group of LSE academics known as the ‘Titmice’. Applied sociologists and close friends, their work soon began to get under the skin of politicians and administrators. At the LSE, Townsend started work on a novel approach to the measurement of poverty with another of the ‘Titmice’, Brian Abel-Smith. Reputedly twenty-seventh in line to the throne, Abel-Smith was an unlikely champion of the poor. While the studies by Charles Booth and Seebohm Rowntree were based on their own local surveys, the Abel-Smith and Townsend study used the government's Family Expenditure Survey, with its host of information about incomes and other aspects of household lifestyles. The Central Statistical Office had already used this source for some groundbreaking analysis of the distributional impact of public spending on household income.
The poor and the poorest
Townsend and Abel-Smith set out to compare poverty rates in 1953 and 1960. The authors had, fleetingly, considered calling their report Poor, Poorer, Poorest, but decided that would be too flippant. The study, finally titled The Poor and the Poorest, found that in 1960, 14 per cent of the population –7.5 million Britons –were living in poverty. Their measure of where the poverty line should be drawn was not based on a minimal subsistence standard, nor was it linked to prevailing living standards, and was essentially expedient.
List of figures
- Stewart Lansley
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- The Richer, the Poorer
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- 13 May 2022
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- 25 November 2021, pp xiii-xiii
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22 - The good, the bad and the ugly
- Stewart Lansley
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- The Richer, the Poorer
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- 13 May 2022
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- 25 November 2021, pp 198-206
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Summary
The pioneers of the discipline of economics had warned of the dangers of a rush to enrichment. Adam Smith spoke of the consequences of the love of quick money by ‘the prodigals’. In a modern-day equivalent, the former World Bank economist Branko Milanović has distinguished between ‘good’ and ‘bad’ inequality.
Some of the personal wealth boom of recent decades has been associated with ‘good inequality’, the product of wealth and job-creating entrepreneurial activity and innovation which harms no one and adds to the common good. ‘Bad inequality’ arises from the exercise of disproportionate and unmerited power that brings negative consequences for wider society, such as through Wilfredo Pareto's ‘appropriation of existing wealth’. Such inequality has always been a feature of capitalism, but became less prevalent in the postwar years before making a spectacular comeback. The wealth ‘megashift’ of the last thirty years is less a justified reward for promoting an innovative leap forward than a large windfall gain stemming from the new licence to get rich. The methods used for modern-day enrichment –the engineering of corporate balance sheets, growing monopolisation, the monetisation of social need, the selling off of socially-owned wealth and the overpricing of financial products, along with tax avoidance and wealth concealment –are a far cry from the culture of productive entrepreneurialism central to classical economic theory and advocated by Mrs Thatcher and Tony Blair.
From the millennium, the corporate buyout juggernaut gathered pace, with the total value of UK deals at twenty times that of the early 1980s. The multi-billion-pound deals of the time include the 1999 acquisition of Amoco by British Petroleum and the bitterly fought and titanic Vodafone takeover of Mannesmann in 2000. In 2004, Royal Dutch acquired Shell, and in 2007, a consortium led by RBS landed the $100 billion takeover of the Dutch bank ABN Amro, a deal which helped sink RBS just a year later. Such deals delivered breathtaking fees and bonuses for those involved. ‘Where are the customers’ yachts?’, runs the Wall Street adage. The investment banks masterminding the Vodafone-Mannesmann takeover earned advisory fees in excess of L400 million. The boom in buyouts helped to create giant conglomerates with the monopoly power to exert new pressure on small suppliers, and was a key driver of worsening pay and staff conditions.
PART II - 1940–59
- Stewart Lansley
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- The Richer, the Poorer
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- Bristol University Press
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- 13 May 2022
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- 25 November 2021, pp 49-50
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PART IV - 1980–96
- Stewart Lansley
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- The Richer, the Poorer
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- Bristol University Press
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- 25 November 2021, pp 113-114
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Afterword: COVID-19 and ‘the polo season’
- Stewart Lansley
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- The Richer, the Poorer
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- Bristol University Press
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- 13 May 2022
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- 25 November 2021, pp 248-252
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Summary
At least initially, COVID-19 had a galvanising impact on the national mood. A pandemic is one of Walter Scheidel's ‘Four Horsemen’, associated historically with a shift towards equalisation. While earlier jolts, including the 2008 crisis and a decade of austerity, had largely failed to ignite a ‘1945 moment’, the sacrifices from COVID-19 certainly created, at least initially, a momentum for change. ‘The present crisis seems destined again to change the face of Britain, unleashing demands for social, political and economic reform unprecedented in our memories’, declared the former editor of the Daily Telegraph Max Hastings. ‘The polo season, figuratively speaking, is over.’
An initial and important side-effect of COVID-19 was a change in the terms of the debate about how society should function. The pandemic exposed the flaws in Britain's social protection system, while within a matter of weeks, views on who the most valuable workers are and which activities count were being overturned. Simon Henderson, the headmaster of Eton, told the Times: ‘Many of those who work in the lowest-paid roles are in fact the key to our survival, and these people who have been undervalued for so long have shown astonishing dedication when we have needed them the most. That can't just be forgotten.’ British Vogue, on its July covers, featured not models but a train driver, a midwife and a supermarket shop assistant.
As the pandemic took hold, key pillars of neoliberal orthodoxy began to crumble. New questions emerged about the nature and purpose of economic activity. The epidemic challenged a decade of fiscal conservatism, while a new consensus emerged that despite the growing national budget deficit, there should be no return to austerity. The midst of a pandemic ‘is no time for Britain's government to worry about a spiralling deficit’, declared the Financial Times. Despite the Conservative Party's dislike of the state, the Johnson government responded with a series of widely welcomed measures, from the furlough scheme aimed at preserving jobs to a slightly more generous universal credit. Unlike the 1930s and 2010, ministers accepted the need to improve the protective role of the state and cushion the impact of the virus on households.
1 - Hierarchical discipline
- Stewart Lansley
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- The Richer, the Poorer
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- Bristol University Press
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- 13 May 2022
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- 25 November 2021, pp 9-16
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It was the high summer of 1939. In July, weeks away from the outbreak of war, a thousand people gathered at Holland House in Kensington in West London to celebrate the eighteenth birthday of the debutante Rosalind Cubitt. Rosalind was the granddaughter of Alice Keppel, the mistress of Edward VII. Her mother, Sonia Keppel, had married Roland Cubitt, later the 3rd Baron Ashcombe, heir to the giant global building firm. Camilla Parker Bowles, who later married Charles, the prince of Wales, is Rosalind's daughter.
Set in seventy acres of landscaped gardens and parkland, the sixteenthcentury Holland House was one of Britain's pre-eminent private mansions, long the centre of political and society intrigue, and once described as a ‘temple of luxury’. Loaned for the occasion by its owner the 6th Earl of Ilchester, the palace played host to one of the most memorable parties of ‘the season’, when Britain's wealthiest classes came together in a whirl of social and sporting events. The guest list was a roll call of the leading members of Britain's wealthy elite. King George VI and Queen Elizabeth together with Queen Eva of Spain and the playwright Noël Coward mingled with the country's political and literary figures, foreign ambassadors, press barons, financiers and popular entertainers.
Despite the wider privations and the deepening shadow of war, what one insider dubbed the ‘ornamental class’ showed no inclination for restraint. Across Britain, the champagne continued to flow at lavish social gatherings and traditional aristocratic pastimes –polo, fox hunting and shooting. ‘Chips’ Channon, Conservative MP and part of a small, privileged orbit which circled many of the most exclusive social and political events of the time, described the summer of 1939 in his diary as ‘a feverish season when night after night we went to balls and fetes, each one more splendid and sumptuous than the others’.
Britain's social elite was not just immensely rich, it continued to possess ‘power utterly disproportionate to its numbers’. It was a group that included an eclectic mix of aristocratic grandees, scions of the Victorian commercial, industrial and trading barons, names like Lord Vesty and Lord Pilkington and members of banking dynasties such as the Barings and Schroders.
14 - Zapping labour
- Stewart Lansley
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- The Richer, the Poorer
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- Bristol University Press
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- 13 May 2022
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- 25 November 2021, pp 124-132
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By 1980, Britain was facing a further surge in inflation and in unemployment. If the flagging capitalist patient was to be revived, Mrs Thatcher believed, the medicine had to be taken, and in multiple doses. As they were unimportant, the side-effects on inequality and poverty could be ignored. There was a new emphasis on the ‘micro’ over the ‘macro’, while a new ‘supply-side economics’ promised to raise economic efficiency. Faster deindustrialisation aimed to push Britain more quickly down the road of a finance-and service-driven economy, a new war on unions and business regulation set out to empower boardrooms, while spending on the welfare state was to be reined back.
Inflation –at 17 per cent by the end of 1979 –had to be dealt with, but became the overriding goal, while the post-war commitment to full employment was dropped. The UK and US governments greatly tightened the mild fiscal and monetary restraint introduced by the Callaghan and Carter administrations. Monetarism –the belief that controlling the supply of money was the key to economic stability –was seen as a way of imposing economic discipline, but was applied with what one commentator called ‘a wilful application of fuel on fire’. The medicine worked eventually. Inflation took until 1986 to fall below 5 per cent, but not without subjecting the patient to a series of deeply unpleasant, prolonged and predictable side-effects. Moreover, although there was eventual control over the price of goods and services, this was not the case with an equally damaging asset price inflation.
The unforgiving cocktail of change plunged the UK (and US) economies into their second recession in a decade. It also brought bad news for companies, at least initially. At its trough in 1981, the aggregate valuation of the top 100 UK companies was lower than it had been, adjusted for inflation, at the time of Dunkirk. The radical economist Andrew Glyn used to joke to his Oxford students that British capitalists had been more optimistic about the future of UK companies on the eve of the expected invasion of Britain by Hitler than they were during the early years of Margaret Thatcher's government.
The most visible effect of full-blooded monetarism was on the length of the dole queue. In 1981, unemployment broke through the three million barrier for the first time since the 1930s.
4 - A roller-coaster ride
- Stewart Lansley
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- The Richer, the Poorer
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- Bristol University Press
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- 13 May 2022
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- 25 November 2021, pp 36-48
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Despite a short-lived boom, the early post-war years brought economic turbulence and recession. There was not a single year from 1921 to 1938 when the dole queue fell below one million. With large numbers of exserviceman still unemployed eighteen months after the war and in an ‘ugly mood’, and establishment and middle class fears of the spread of Bolshevism, the cabinet was warned repeatedly of the risk of unrest.
In January 1919, sixty thousand strikers in Glasgow, many wearing their war medals, clashed with police, with a panicked London cabinet sending in troops. Marches against unemployment were also broken up, often with violence, by foot and mounted police. A central issue in Glasgow was the length of the working week, with demobbed soldiers calling for shorter hours so that work could be shared. Strikers claimed that manufacturers wanted to maintain a local pool –‘a reserve army’ –of obedient available labour. The strikers had some success, while one of the organisers –the seaman's leader, Manny Shinwell, later a member of Clement Attlee's 1945 cabinet –was jailed for five months for inciting riot. The ‘Red Clydesiders’, as the strikers became known, won ten out of fifteen Glasgow constituencies for the Independent Labour Party in the 1922 general election.
The War and its sacrifices raised expectations about the obligations of the state to wider society. While Lloyd George formed a coalition government in 1919, the new parliament was light on members committed to social reform, with an influx of ‘new money’ businessmen (they were all men) committed to the status quo. They included sixty-one insurance directors, 138 manufacturers, 115 landowners and twenty-eight bankers. ‘A lot of hard faced men who look as if they had done very well out of the war’, is how Stanley Baldwin, a moderately wealthy Worcestershire ironmaster and the new financial secretary to the treasury, famously described the new House of Commons. Baldwin, who became prime minister on three separate occasions, donated a fifth of his firm's profits towards paying off Britain's War Debt a move that was far from widely followed.
Contents
- Stewart Lansley
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- The Richer, the Poorer
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- 13 May 2022
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- 25 November 2021, pp xi-xii
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17 - Money worship
- Stewart Lansley
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- The Richer, the Poorer
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- 25 November 2021, pp 152-160
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The deal that most came to symbolise the extractive processes at work was the dramatic buy-out of RJR Nabisco, the giant US tobacco and food conglomerate. The $25 billion 1988 bidding war, a nail-biting and highstakes game of corporate poker, involved a river of money so great that it greatly distorted the American money supply figures. The fees enjoyed by the two top executives –$53 million and $46 million respectively –were stratospheric even by Wall Street standards.
In the UK, the takeover deals of the time were often hatched in private clubs and restaurants. The Savoy Grill in the Strand, a favoured haunt of the rich and the famous, became known in business circles as the ‘Deal Makers’ Arms’. While some deals improved overall corporate performance, they too often extracted, and sometimes destroyed, rather than built value. A lucrative game of corporate pass the parcel became the source of personal enrichment for a generation of financiers whose route to wealth bypassed the entrepreneurialism that is the backbone of a wealth-creating economy. Companies were cracked open like piggy banks to extract the spoils. As the author of Barbarians at the Gate –the story of RJR Nabisco –put it, ‘This was wealth created by tearing apart companies rather than building them up, by firing or downsizing companies rather than by hiring them.’ ‘There is no historical precedent for such regressive redistribution within one generation without either legal title or economic disaster’, concluded one study.
Tomorrow's money today
The actions of the new tycoons and their accomplices brought another wave of upheaval to staff, small businesses and communities. The journalist Paul Johnson, former editor of the New Statesman, on the left in his early career and never a man to mince his words, described the rampaging dealmakers of the time as ‘typical of the rottenness that is poisoning British society’. What drove the deals was not a crusade to re-energise industry. The future viability of the companies targeted, the welfare of their employees and the ‘national’ or ‘social interest’ had no place in the calculations. Lord White used to boast that he had never set foot on the shop floor of any of the companies that he bought. The name of the game, as James Hanson acknowledged, was to get hold of ‘tomorrow's money today’.
2 - Britain’s gilded age
- Stewart Lansley
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- The Richer, the Poorer
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- 13 May 2022
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- 25 November 2021, pp 17-26
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A vast gulf in living standards prevailed through and beyond the Victorian era. ‘There is ignorance, and coarse brutality, and sullen hopelessness, and haggard wretchedness, far beyond what there ought to be in the midst of such beauties and blessings’, declared Elizur Wright, an American businessman and social reformer. Visiting Britain on a fact-finding journey a decade after the Poor Law Amendment Act, Wright was unimpressed by the rich classes. Meeting the elderly and influential romantic poet, William Wordsworth, who had drifted from the radicalism of his younger days, Wright argued firmly against the poet's belief that America, like Britain, should have ‘a class of gentlemen … born to such large property that they could devote themselves entirely to literary pursuits, and be above sordid interests’. ‘The longer I stay here’, declared Wright, ‘the more this class of independent hereditary gentlemen seems to me like a perpetual devouring curse of locusts.’
While the data sources are imperfect, the evidence is that the UK income gap widened through the first six decades of the nineteenth century. Real wages rose slowly in the last decades of the Victorian era, while the income gap narrowed slightly. Industrial capitalism produced vast wealth, but only for the few, creating a wealth gap that was even greater than that for incomes. In 1859, the wealthiest sixty-seven estates accounted for 22 per cent of all property left in that year. On the death of Queen Victoria in 1901, the top 1 per cent owned an estimated 70 per cent of all private property –land, property and financial assets –while the top tenth owned 93 per cent. The vast majority owned more or less nothing.
Extractive capitalism
Victorian political ideology embraced the same survival-of-the-fittest social Darwinism that helped to drive the runaway personal fortunes being amassed across the Atlantic, even if wealth in the United States was then slightly less unequally distributed than in the UK. For some, the towering riches being accumulated were a just reward ‘for the United States becoming the richest and mightiest nation’. For others, the new tycoons were dismissed as ‘robber barons’ for their ruthless industrial tactics and the harsh conditions they imposed on workers.
11 - Consolidation or advance?
- Stewart Lansley
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- The Richer, the Poorer
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- Bristol University Press
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- 13 May 2022
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- 25 November 2021, pp 98-104
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Summary
Labour had several items of unfinished business from the 1960s. One of them was inequality. Its 1974 manifesto called for ‘a fundamental and irreversible shift in the balance of power and wealth in favour of working people and their families and to eliminate poverty wherever it exists in Britain’. It was some promise. There were echoes here of the 1945 manifesto, which had challenged the way business elites acted like ‘totalitarian oligarchies within our democratic state’ without ‘any responsibility to the nation’.
For three decades, social democracy –and its European counterpart, Christian democracy –had been a powerful progressive political force. Living standards had risen and welfare states been built, if of varying strengths. In the UK, tax revenue had risen to nearly 40 per cent of national income by the mid-1970s compared with 8–10 per cent in the pre-1914 years. Labour was now proposing a further step along the social democratic path with a new and highly ambitious goal, to make further strides towards greater equality.
A doomed species?
Progress towards this goal had already been made. The post-war years had seen a further, if gentle, dilution of top fortunes that had begun as a trickle in earlier decades. Changing social values had also brought a check on expectations among the ‘old gang’. The earlier era, when huge fortunes could be made in commerce and business, were yet to be replaced by the voracious financial dealmaking that was to come not that much later. There were fewer examples of the pre-war displays of extravagance and the open flaunting of wealth. ‘Ostentation was becoming vulgar’, wrote Crosland in 1956. In 1963, at the Royal Variety Show, John Lennon asked people in the cheaper seats to clap and the rest to ‘rattle your jewellery’. The landed gentry continued to bemoan their plight. ‘The wealthy, especially those who had inherited their wealth, appeared to be a doomed species, scheduled for extinction’, declared the wealth historian William Rubinstein, a signed-up member of the laissez-faire fan club.
While in the nineteenth century the wealth boom at the top came with impoverishment at the bottom, many of the mechanisms that had been driving greater equality also brought lower rates of poverty, if a long way from its elimination.
5 - The future belongs to us
- Stewart Lansley
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- The Richer, the Poorer
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- Bristol University Press
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- 13 May 2022
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- 25 November 2021, pp 51-58
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The war years were to have a profound effect on the destiny of the generation that lived through them. The lingering memories of the bruising years of the depression and the personal costs of war were critical factors in the political and social earthquake that was to come. Both put the public's patience with their lot, the hierarchical structures that defined life chances and the sense of entitlement of the rich under severe strain.
A patrician last fling
The top social tier had a strong sense of what was to come. Despite its grandeur, Rosalind Cubitt's party in the summer of 1939 was infused with foreboding. The occasion turned out to be the last of the full-blown debutant parties, a patrician last fling. Henry Channon called it ‘a sunset glow before the storm’.
Traditional high society pastimes, from polo to fox hunting, petered out. Restrictions on foreign currency limited overseas excursions, if fuelling a lively and lucrative currency black market. With cooks, butlers, gardeners and maids called up or redeployed to vital civilian tasks, a major preoccupation of the wealthy classes was the loss of servants. Grandee houses still required a small army of servants and a sizeable fortune to run them. In 1939, at the grand Londonderry House at the south end of Park Lane, there was a staff of forty-four. The Duke of Bedford owned two fully staffed townhouses in London's Belgrave Square and kept more than fifty servants at Woburn. ‘The whole social edifice came crashing down’, described two historians, ‘for the abrupt disappearance of servants made the old style of life no longer possible, regardless of the level of affluence.’
Many of the wealthy played their part in the war effort, just as they had in 1914–18. More historic homes that had not already been sold off were requisitioned for use as barracks, hospitals or schools for those displaced from urban centres. The new central controls on trade, prices, investment and profits eroded the incomes of some of the financial elites. Rent levels were pegged, and with no buyers, the prices of property and art and furniture collections fell sharply. Then there was the deepening shadow of the Inland Revenue.
8 - A shallow consensus
- Stewart Lansley
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- The Richer, the Poorer
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- 25 November 2021, pp 74-80
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Part of the reason for these flaws was that although the much-heralded postwar consensus was real, it was also shallow. The official committee established by the wartime cabinet to examine the Beveridge report argued that the proposals would, by abandoning the principle of deterrence on which social relief had always been based, encourage fecklessness. The committee also expressed doubts about the need for family allowances and argued that, if needed, they should be paid in kind not cash. Similar issues have continued to dog the progress of social reform.
The ‘people’ versus the ‘old gang’
David Cannadine has described the 1945 election as ‘a contest between “the people” and the “old gang” ‘. This was especially stark among the armed forces. As the American critic Edmund Wilson noted when mingling among British troops in Greece, there was an almost ‘complete class line-up’ between troops and officers. He could find ‘no English soldier who had not voted for Labour and only one officer who had’.
The old gang –the traditional upper classes, City grandees and the new industrial rich, along with some members of the professional classes –did not sign up to the new welfare priorities. While the post-war reforms enjoyed widespread public support, they were, added Cannadine, widely viewed by the wealthy classes as an attack on ‘aristocrats, the rich, bankers, doctors, newspaper owners and shareholders’. In her 1948 political satire Tory Heaven, Marghanita Laski portrayed a totalitarian Tory government enforcing the unwritten rules of the British class system, and its hierarchy of privileges, through a strict system of social classification –A, B, C, D and E. Breaches of the rules meant being downgraded by the ‘Degrading Court’ to a lower class. In Frederick Raphael's novel of a group graduating from Cambridge in the 1950s, The Glittering Prizes, one of the key aristocratic characters, Lady Frances, describes the Attlee government as ‘the greatest tragedy in our history since Henry the Eighth’. Some leading academics also opposed the levels of redistribution accompanying the reforms. Lionel Robbins, a leading anti-collectivist economist at the London School of Economics described them as ‘quite indefensible’, arguing they involved a ‘discrimination against enterprise and ability such as has never before existed … in any large scale civilized community’.
7 - Brave new world
- Stewart Lansley
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- The Richer, the Poorer
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- 13 May 2022
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- 25 November 2021, pp 65-73
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In October 1951, the Daily Herald carried the headline: ‘Poverty is Almost Down and Out.’ The Herald was reporting the results of the third survey of poverty by the now eighty-year-old Seebohm Rowntree. This was the first analysis of the anti-poverty effectiveness of the post-war reforms. The survey results, published just ten days before a general election, found that the proportion of York's working-class households in poverty stood at 4.6 per cent in 1950, a dramatic fall compared with the 1936 survey. ‘To a great extent’, wrote Rowntree's co-researcher George Russell Lavers, ‘poverty has been overcome by the welfare state’.
Although the survey was less rigorous than Rowntree's earlier work, the findings had an important influence on the politics of social policy. They showed ‘a remarkable improvement, no less than the virtual abolition of the sheerest want’, according to a leader in the Times. Labour had hung onto power in 1950 with a slender majority of five. They lost the 1951 election, despite trying to make capital out of Rowntree's findings and enjoying 48.8 per cent of the vote to the Conservative's 48 per cent. With a majority of seventeen, the seventy-seven-year old Winston Churchill, shaken by his 1945 defeat, returned to Number 10.
A Plimsoll Line for incomes
That poverty had finally been tamed was the central social story of the time. Apart from a few residual problems that could be solved by policy tweaks, Britain, it was widely believed, had turned its back on the squalor, deprivation and insecurity of the past. Part of Anthony Crosland's argument in his important and influential 1956 social democratic tract The Future of Socialism, and its claim that capitalism ‘had been almost transformed out of existence’ was that ‘primary poverty had been largely eliminated’. It was a view widely shared across the Labour party. As Barbara Castle, a leading figure on the party's left, put it, ‘The poverty and unemployment which we came into existence to fight have been largely conquered.’
With economic recovery initially slow in coming, heightened national debt and a new set of social priorities, the immediate post-war years were ones of continuing austerity and rationing.
Introduction: Knighthoods for the rich, penalties for the poor
- Stewart Lansley
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- The Richer, the Poorer
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- 13 May 2022
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- 25 November 2021, pp 1-6
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Summary
In February 2019, a campaigning American entrepreneur, Yarron Brook, arrived for his third successive annual speaking tour of Britain. Chair of the California-based, pro-market and anti-state Ayn Rand Institute, and the coauthor of Equal is Unfair: America's Misguided Fight against Income Inequality, Brook was a determined critic of the global calls for more equal societies. During these visits, he spoke to thousands of students at universities and top public schools, from Harrow to Westminster, on the virtues of free markets and the merits of inequality. To a crowded lecture room of sixth formers and teachers at Eton College, he outlined Ayn Rand's philosophy of unbridled capitalism spelled out in her 1957 fantasy novel of godlike tycoons, Atlas Shrugged. The 2008 global meltdown, he explained, was caused, not by out-of-control financiers but by “too much statism”. The rich, he declared, “deserve their wealth” and “everything we are told about inequality is wrong”.
While Brook was lecturing Britain's most privileged young people, official statistics showed almost one in three children –4.2 million –to be in poverty, a figure close to record post-war levels. Over the previous four decades, Britain had moved from being one of the most equal to one of the most unequal of rich nations, while the poorest fifth of Britons are now poorer than the comparable group in many countries with lower overall inequality.
While Brook's pro-rich ideology went against the grain of a growing national and global concern about inequality, his views were shared in influential political circles. A year after the 2008 global financial crisis, Lord Griffiths, a former adviser to Mrs Thatcher and the vice-chair of Goldman Sachs International, told an audience at London's St Paul's Cathedral that the public has to “tolerate inequality as the price to be paid for prosperity”. When he was London mayor, and just a few years before he moved into Downing Street, Boris Johnson, giving the third Margaret Thatcher lecture, told his audience that the top 10 per cent should be feted with “automatic knighthoods”.
Frontmatter
- Stewart Lansley
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- Book:
- The Richer, the Poorer
- Published by:
- Bristol University Press
- Published online:
- 13 May 2022
- Print publication:
- 25 November 2021, pp i-iv
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- Chapter
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