Relative poverty, wealth and power

Even if  most people or even all people were in absolute terms better off as a consequence “free trade”,  that does not mean that their general situation has improved in power terms.

Wealth is not merely an advantage for what it can directly buy but also for the power it brings. The poor are doubly disadvantaged by their poverty by their restricted ability to purchase what they want  and their subordination to those who can purchase anything they desire. Consequently, the ordinary man or woman may well be happier and freer in a society which is materially poorer overall but which is less oppressive through the absence of great differences in wealth. Charles Darwin in the Voyage of the Beagle describes a port in South America which suffered an earthquake while the Beagle was there in harbour. The town attached to the port was virtually destroyed and its inhabitants  were reduced at least temporarily to the same material level. Darwin noted the happiness, almost gaiety, of the population after this happened.

The example of Britain is instructive when it comes to relative wealth. Until the 1970s inequalities in wealth were narrowing. Despite all the puffing of the “trickle down” of wealth which supposedly results from Thatcherite “free market” practices, wealth  distribution has not changed dramatically over the past quarter century of “free market” policies by successive British governments.

A Royal Commission (1976-79) on the distribution of income and wealth found that in 1976 the top 1 per cent of the population owned 25% of all personal wealth, the top ten percent raked in 60% and the bottom eighty per cent  had a measly 23% (Penguin Dictionary of Sociologyp72). The Inland Revenue figures for wealth distribution in 2002are show  the top 1 per cent own 23% of national  wealth  and the bottom fifty per cent of the population have a staggeringly small 6% (Office of  National Statistics (ONS) website –  published 2004). Those figures,  eye-opening as they are, conceal the fact that wealth inequality in 2002 would be much greater than 1976 were it not for the increase in home ownership and the rise in house prices.

Another ONS report (2005) entitled “The long shadow of childhood” (TLSOC) based on research by the London School of Economics  concludes that there has been remarkably little change in social mobility in Britain over the past 30 years. The study was based on census records between 1971 and 2001.  TLSOC also demonstrated how the social and economic status of children is very much tied to that of the parents. For example, more than two thirds of those with parents in professional or  managerial jobs managed to take a degree: of those with  semi-skilled/unskilled parents, 14 per cent had a degree.

Thinbgs have not improved since 2005 and may have got worse. An Organisation for Economic Co-operation and Development  report in  2010 found that  amongst industrialised nations Britain  had greater wealth inequality and  less social mobility than all but all but a few nations. For example,  ‘The researchers found that in Britain people whose fathers have a university degree earn on average 62% more than the children of men whose education ended at upper-secondary level. In Europe, only in Portugal is that gap wider.

While there was little difference between the qualifications of the children of graduates and non-graduates, this did not translate into higher wages.

“Britain does not fit the normal analysis here. It is about average in terms of educational social mobility. People can attain a tertiary education but it is doing a lot worse in terms of wage mobility,” Duval said. “What you see is a gap between education mobility and wage mobility.”

Many experts said the findings showed that Britain was still a stratified society, in which different classes are brought up to follow different rules about how to think, talk and behave.

“I think there are two lessons here. One is the extent of hoarding of opportunities by the middle classes in Britain. These kick away the ladder for the poor,” said Richard Reeves of the thinktank Demos. “The other is that we have to begin to measure the so-called soft skills of networking and communications … I think we have to understand why the middle classes put so much time and effort to teach their kids how to speak properly and look someone in the eye when they shake their hand. They know it’s worth something.”‘

Man does not live by bread alone 

Even if the “free traders'” claims of an overall increase in the wealth of a society were true, there would still be strong arguments against the policy because a society is more than its crude economic relationships.

Human beings do not like too much uncertainty. A certain amount of stress is good for them, but only so much. Like masochists and physical pain, human beings are comfortable with stress only in so far as they feel it is within their control. Manifestly, for many people the uncertainty they experience is utterly outside their control. This widespread insecurity  leads not merely to individual suffering but damages the social fabric by generally diminishing  confidence in the future and the ability to cope in the here and now.

 A 2005 study (Molly Watson Western Mail 31 9 2005) by a Cardiff University Department of Psychology team led by Prof Aylward Mansel suggests  that the general level of happiness in the Depression  was greater than it is now (the team analysed  data  from surveys of assessing happiness and contentment from the past 70 years.)  This conclusion might seem absurd to most people living today who, if they have any conception of the Depression, it is one of a dire time packed with the most horrendous stress. Yet the findings of the report have a certain plausibility because in the 1930s there was undoubtedly a greater sense of social solidarity,  especially amongst the working class, than there is now and civil society was far stronger then – the working class not only lived in close-knit communities which offered  support to those who fell on hard times, but they were woven into supportive institutions such as the co-operative movement and  unions. They were anything but socially isolated whereas today  people are often isolated. Social involvement, the Cardiff University study found, was the single most important cause of happiness or unhappiness. One must be cautious with such studies because  however scrupulous the researchers a degree of subjectivity is inevitable. Nonetheless the equation of isolation with unhappiness will, I think, strike a strong chord with most.

There is also the question of a people’s self-confidence. If a nation’s visible and everyday manufactures are predominantly foreign, it tends to produce a sense of dependence in the individual. A man looks around and can find next to nothing he can identify as produced either in his own country or made by companies owned by his countrymen. Not unnaturally he begins to lose confidence in the ability of his own country to stand alone. Peoples throughout history have allowed themselves to be conquered simply because they believed themselves to be generally inferior to those who confronted them and slaves have been routinely controlled by owners who deliberately attempted to reinforce their sense of inferiority.

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