Inequality – high and rising (2015)

Book Review from the July 2015 issue of the Socialist Standard

'Inequality and the 1%'. Danny Dorling. Verso. 2014.

Dorling is a social geographer, some of whose books have been reviewed in these pages previously. This is his latest work, focused on examining inequality, mainly in Britain but with reference to other comparable countries too. In particular, Dorling looks at trends in wealth and related phenomena, focusing on the position in society of the top 1 per cent, who have got richer and richer in recent decades.

He examines statistical data and trends on inequality with regard to categories such as childhood, work, wealth and health, and much of what he uncovers is unlikely to come as much of a surprise to readers of this magazine. Some of the statistics bear repeating all the same:

-        After tax, the proportion of UK income received by the top 1 per cent each year is now around 24 percent;
-        The top 1 percent own 53 percent of the personally tradable wealth;
-        The richest 1 percent in the UK now have wealth that is equivalent to the bottom 30 per cent put together with everything they own, and this effect is worsening;
-        The national minimum wage would be £18.83 if it had kept pace with rises in FTSE100 Chief Executive ‘salaries’ (as opposed to £6.19 when this was written);
-        While most people have had real pay cuts since the onset of the financial crisis, the accumulated wealth of the richest has grown in recent years by around 11 percent per annum.

Dorling makes many of the same arguments as Oliver James in Affluenza and Pickett and Wilkinson in The Spirit Level, namely that more equal societies tend to be happier and healthier on a range of measures, and that countries like the UK and US are heading for ever greater disasters because of it.

For all the positives to this book – and there are many – Dorling, like these other writers, has a tendency to assume that the right sort of governments and attendant economic and social policies can make a massive difference. But at best they can only tinker around at the margins, and since the real globalization of capital in recent decades, their ability to do even this has all but disappeared. He calls the type of tax and banking reform that he alludes to as a ‘slow revolution’ that is needed, but also concedes towards the end of the book ‘it may be that a slow revolution is not enough’. We would suggest that the history of the last two centuries of capitalism illustrates this point precisely.

In essence, the rich do not get rich because of historical accidents that some governments fail to act upon and reverse – they get richer because accumulating and reinvesting capital is the lifeblood of the market system and when the flow gets clotted (like in the 1970s) the people who really own and control society will act to remove that clot, so that capital can flow freely again. This has happened across the world, and is presently in the process of happening in countries like Greece. Capital normally flows to where profit rates are most lucrative – this is the economic logic of the system. And capital accumulates from the exploitation of the rest of us – and it does so primarily to the owners of capital.

The reason we live in an unequal society dominated by the richest 1 percent is because while we have socially co-ordinated production and distribution carried on by billions of people across the planet, creating and doing all the things we need to survive, the wealth they produce (and the wealth invested to produce it) is owned by this tiny minority. And this minority has a supreme economic incentive to keep things running that way, ie in their direction, which is the natural direction of flow.

This means there is only one way to get rid of inequality in the modern world and that is to abolish its source – the class-divided profit system we call capitalism. Otherwise it would mean more doomed attempts at trying to defy economic gravity – and on that front, we’ve seen more than enough already. In fact, it was repeated failures to humanize capitalism by the social democrats and reformers that has led us to where we are now.

DAP