speri.comment: the political economy blog

Inequality Redux IX

The illusion of pursuing equality through a hollowed-out state

Craig Berry, Deputy Director at SPERI


Craig BerryThis post considers whether, despite growing public concern about the rise and implications of inequality, the British political economy is capable any longer of pursuing equality as a public good in any meaningful way.  The idea of the state as an entity through which we can collectively shape socio-economic reality has been delegitimised and state institutions have been hollowed-out.  Perversely, this has allowed right-wing political forces to reclaim the mantle of equality; without a positive understanding of the state, the left has little response.

Inequality remains the great social and political challenge of our time’.  This is the somewhat surprising view of the Conservative Party’s chief whip, Michael Gove.  But Gove is not threatened by this realisation because, he argues, conservatives are ‘warriors for the dispossessed’.  He was speaking at the launch of ‘Good Right’, a new Conservative grouping led by Tim Montgomerie, whose aim is to demonstrate how conservative values support ‘a society where everyone has a chance, everyone has a stake and where no one is left behind’.

For Montgomerie et al, the problem with conservatism does not lie in its philosophy, but rather in ‘how conservative parties and movements think of themselves and how they present themselves to the world’.  You need to scroll to the very bottom of Good Right’s mission statement to find its core diagnosis: ‘A society that recognises parents, teachers and job creators as the agents of social progress will prosper.  One that tries to replace them with the state (the socialist danger) will stagnate.’

For Good Right, it is not capitalism that acts to dispossess the poor; rather, it is the state (a belief that sustains Gove’s ruinous ‘free schools’ agenda).  Moreover, the grouping proclaims that it stands for a ‘conservatism that doesn’t just want to reduce the state but knows how to make the government work for the people’ (emphasis added).  So it accepts austerity, but also seemingly the neoliberal notion that the state is little more than a set of purely technocratic instruments – in effect, the servant of individual utility-maximisers, rather than the embodiment of individuals’ collective enterprise.

The right defines the problem of inequality as dispossession by the state.  But the real problem is the dispossession of the state from our collective imaginary.  Without the idea of the state as the means by which human beings can act collectively to alter and improve their environment, politics is increasingly empty.  It is the very fact that it has already succeeded in destroying the means by which inequality might be substantively addressed that allows the right to claim the cause of inequality as its own.

This is not to question the progressive sincerity of Montgomerie et al – I think they genuinely believe that supposedly ‘socialist’ policies diminish the amount of wealth available to trickle down to the poor.  But it does render their apparent egalitarianism largely meaningless. Fundamentally, inequality is the characteristic of a group – one can only be unequal relative to someone else.  But our public discourse no longer permits us to reflect on our status in these terms; instead, we are atomised.

The hollowing-out of the state – indeed even the idea of the state – is evident most obviously in welfare reform.  Benefit recipients are routinely described as a burden on the state (despite the fact that most are in employment).  More importantly, this attitude is increasingly reflected in welfare practice, as entitlements are cut and recipients made to conform to expectations to find work irrespective of suitability and job quality.

Welfare is fundamentally a form of social security, an insurance against a range of socio-economic risks, both knowable and unknowable.  This definition tells us something quite important about how inequality is understood.  The right despises the welfare state because it draws on the idea – flawed, of course, in its judgement – that the state can engineer equality through redistribution.  But this is not the only way to think about things and it is not how the left traditionally sees the welfare state at all.  From this perspective, it exists not to produce equality, but rather reflects the fact we are equal to begin with.

Gove’s reference to those on the wrong side of inequality as ‘the dispossessed’ is particularly revealing.  Ensuring people are able to become possessors, or asset-owners, has become one of the key objectives of economic statecraft under both Conservative and Labour governments in recent decades.  The coalition has therefore continued New Labour’s asset-based welfare policies, most notably in the various guises of ‘Help to Buy’, designed to help young people buy a home.  I have written elsewhere about what such policies mean for the principle and practice of citizenship.  Just as the retrenchment of traditional welfare is based on the notion that you have a responsibility to work if you want to retain the citizenship-derived right of financial security, so too asset-based welfare is based on the notion that you have the right to become a possessor, because the very act of possessing is deemed to represent responsible citizenship.

This is especially the case given the illusion of home-ownership for most people: we do not really possess our homes at all, but rather mortgage them from the banking sector.  This is why asset-based welfare is so attractive to conservatives (even the cuddly ones): to possess something is to be disciplined by it.  Herein lies the dark side of the right’s embrace of inequality.  It manages to put the blame for inequality back on individuals.  The right offers a path to asset-ownership as a way to overcome inequality – any inequality that remains is the fault of those that refuse to take the path.

Defining the enemy as the state, and its allegedly endemic tendency to dispossess, fuels the radical tax-cutting agenda of the coalition government, despite its ostensible commitment to austerity.  As well as reducing income tax, with cuts surreptitiously targeted on high earners, the coalition has steadily reduced the amount of tax payable on forms of wealth such as savings and pensions.  It has extended the use of tax-free ISA allowances and significantly relaxed most of the tax restrictions on early access to pension pots.  If they are re-elected, the Conservatives plan to make tax-free the first £1,000 of interest ‘earned’ on any savings – and Labour has said it would not reverse this policy if it gets in instead.

As such, we are confronted with a narrative in which the state is not only demonised, but unacknowledged altogether.  The idea that our savings, or our pensions, are precisely that – ours – is a dangerous simplification.  We must recognise that the state has an intrinsic role in sustaining the highly complex financial ecosystem that allows people to save and invest – and we can do so without arguing that personal wealth is entirely illegitimate.  Similarly, despite the veneration of business that pervades British political culture, the ‘private sector’ would be unthinkable without the innumerable functions of the state that enable private enterprise to operate.  Even so, British industrial policy is characterised by timidity.

This is not to say that traditional leftist concerns such as redistributive taxation, and certainly not a planned economy, are the answers to inequality.  A broader approach to addressing inequality would, as a first step, reject its premise.  We are already equal.  Once this is accepted, then the vast disparities of power that mean that far too many people exercise virtually no control over their own lives, whilst a handful of individuals determine how society is structured, are immediately rendered unjustifiable.  A second step would be to recognise that the state, enshrining our equality as citizens, is the only entity able to challenge such disparities, whatever form they take.  Here, it is the state as concept that matters – the embodiment of a collective endeavour to seek to shape socio-economic reality – rather than any particular institutional configuration.

The great tragedy of New Labour (with which the current leadership has not fully come to terms) was that, although it maintained the party’s traditional attachment to equality, it marginalised the accompanying concept of the state and thus was only ever spitting against the wind.

New Labour also has to take as much responsibility as the right for the failings of welfare reform and asset-based welfare.  On the understanding of equality and inequality advanced here in this post, there is nothing egalitarian about inviting people to participate in socio-economic structures over which they have no meaningful influence.

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Categories: British growth crisis, Inequality, SPERI Comment, Welfare | Tags: , , , | Leave a comment

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