The left must move beyond ‘just’ inequality

By David Binder

Labour and the Left

The issue of economic inequality has once again been thrust into the spotlight by French economist Thomas Picketty’s new book ‘Capital in the Twenty-First century.’ Whilst his research has been discussed at great length elsewhere (the Washington Centre for Equitable Growth has produced a useful summary of some reviews) it is worthwhile to step back and consider the virtues of pursuing policies aiming to reduce economic inequality. In other words, is economic inequality in itself always a bad thing?

Those on the left would very much answer to the affirmative it seems, Liam Byrne (part of Labour’s shadow Business, Innovation and Skills team) for example wrote last week in the Evening Standard that we risked entering a ‘new era of inequality’ and that the ‘prize of globalisation was not equally being shared.’ Others however might argue that if it produces economic growth and boosts income for the poorest, even if those who are richer see their incomes grow more, then inequality is something to be encouraged, not scorned. As a response, the question the Left needs to answer is; why does increasing economic inequality matter so much?

More specifically, is there a causal link between rising economic inequality and higher rates of deprivation and does inequality cause decreasing incomes for the poorest in society? More subjectively, are the profits of the private sector being shared fairly between all it’s stakeholders? Unless convincing answers to this question are properly articulated to the population at large, cries of rising inequality will fall on deaf public ears.

Merely sticking to a ‘politics of envy’ type of argument put forward by some is fundamentally unhelpful in this discussion. In other words, jealous discourse along the lines of ‘he/she earns more than me and that’s unfair’ illustrate more about our flawed western consumerist mind-set than about the negative consequences of economic inequality. In saying this, there is of course an important discussion around the social and cultural value we place on certain vocations, but that is beyond the scope of this article.

Back to the issue at hand, empirical evidence advocating answers to the above questions to the affirmative don’t make it into public discourse often enough in my view. Indeed, given its long-standing tradition of promoting lower inequality and advocating that for its place at the front and centre of any national economic policy, it is primarily the left’s job to make sure such arguments are coherently made and connect with the general public. As obvious as it might sound, it’s easy to forget that it’s this public who vote governments in and out, and if the left wants to see inequality reducing policies see the light of day in 2015 and beyond it’s the electorate they ultimately need to convince.

As it is, many believe that the upcoming 2015 general election is due to be the closest in recent history. This is massively relevant for the Labour Party as this, combined with the Conservatives massive lead on running the economy and the priority the public place on it compared to any other issue (apart from Immigration), surely make it in the Labour’s interest to make a powerful case for why economic inequality matters for the whole of UK society.

Labour certainly has plenty of evidence to play with here, from falling incomes for those on middle incomes, increases in absolute poverty, rising prices and the impact of the upcoming benefits cuts on the poorest to mention a few. As if these factors weren’t enough of an incentive, the Institute for Fiscal Studies predicts that due to recent policy decisions regarding benefits reductions coming into effect, recent inequality decreases seen in this current parliament are being reversed. If Labour can weave all these ingredients into a convincing and accurate political narrative regarding economic inequality and its effects, it will connect with the ‘average man and woman on the street’ and perhaps help win over an electorate who at present simply do not trust Labour on running the economy.

Whilst the evidence may be available, some will argue that the powers behind many of the major UK media players mean that arguments along this line will never gain mainstream appeal. Further, observers of the previous New Labour administration and its continuing influence in the current Labour leadership may be questioning whether the party are truly serious about getting tough on these issues, or whether they are willing to cast aside such concerns in order to win the ‘Middle England’ vote. Add to this the conspicuous lack of policy coming from the reds (despite being only months away from the May 2015 General Election) and one could be forgiven for fearing that Labour will simply try and win by default.

Wouldn’t it be great to see Labour more actively engaging with the key economic issues at hand and coming up with sustainable and fair solutions to challenges arguably not seen for a generation?

As May 2015 looms, the stakes – economically, politically and socially could not be higher.

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