The Guardian view on UK inequalities: following the US threatens democracy
Serious questions need to be asked about why Nigel Farage’s Brexit party is riding high in the polls and why so many people seem to want to buy his snake oil ahead of the elections to the European parliament. Yet no one in government is posing them. It seems obvious that countries where voters feel excluded both politically and economically will be susceptible to conspiracy thinking. As a country we ought to be grateful that Sir Angus Deaton, Nobel laureate in economics, has stepped forward to warn that the UK risks replicating the United States’ extreme inequality – and reaping the political whirlwind.
In a speech on Tuesday night in London, the Princeton economist rightly said that US capitalism is not delivering for most citizens. Even while per capita GDP has risen, real wages for US men without a four-year college degree have been falling for half a century. Less educated Americans are dying by their own hands, from suicide, from alcoholic liver disease, and from drug overdoses. Life expectancy in the US has fallen for three years in a row, the first time such a reversal has happened for a century.
A political system that no longer works will spread only despair. No wonder two-thirds of Americans without a degree say there is no point in voting as elections are rigged in favour of big business and the rich. Sir Angus points out that Britain has experienced a decade of stagnant wages and that “the sense of not being represented at Westminster is much the same as the sense of not being represented in Washington”. For the first time in 35 years, the health of people in the UK, as measured by the most basic feature – length of life – has stopped improving. In modern Britain, where you are born, where you live, where you go to school and where you work directly affects where you get to in life. As the Social Mobility Commission reported a couple of weeks ago, those from betteroff backgrounds are almost 80% more likely to be in a professional job than their working-class peers.
But the problem is rooted in the structure of the economy rather than that of education: that is why so many graduates work in jobs that used not to require degrees. As the eminent sociologist John Goldthorpe has remarked, social mobility might look after itself if policymakers “focus[ed] their efforts on reducing social inequalities of condition and on creating rising demand within the economy for personnel in high-level managerial and professional roles”.
History is studded with elites who were dazzingly successful in extracting virtually all the surplus the economy created. Powerful interests moulded politics and society to enlarge their share of the pie. Greed was limited only by the need to let the producers survive. One lesson from the past might be that only a catastrophe – war, revolution, pandemic or famine – might stop this grasping enrichment. Yet for most of the last century, when capitalism seemed broken, democracy was able to repair it.
To do this today will require a different ministerial mindset. At present the cabinet brushes off embarrassing talk of rising poverty and hopes something will turn up. How else to explain why fiscal austerity continued to make the poor poorer and the rich richer in 2018? Britain risks reproducing the US experience in allowing greater consolidation of corporate power, reducing labour’s share of GDP, undermining working conditions, and changing laws to favour business over workers. As wealth concentrates, so does the political influence of the rich. Populist sentiment thrives when “taking” rather than “making” appears a source of affluence and capitalism is seen to enrich the few at the expense of the many. Brexit and Donald Trump’s campaign were forged in such fires. Safeguarding democracy requires vigilance and action to regulate inequality and the market economy. Else it will be lost.