Enough. Why It’s Time to Abolish the Super-Rich. By Luke Hildyard. Pluto Press. 2024
Luke Hildyard, director of the think-tank the High Pay Centre, shows that the super-rich (the top 1 percent) don’t need most of their income and refutes all the arguments that they deserve it all. He also shows that, if they were reduced to being merely rich (a maximum income of £187,000 a year), then there would be enough money available for other uses, in particular improving the standard of living of others. This, he says, could be done both by redistribution (taxation) and by what he calls ‘pre-distribution’ (preventing too much income going to them in the first place). An average figure of around £2,500 a year per adult for everyone else is floated at one point. The money is definitely there but could it be diverted in the way he wants?
He favours the money going mostly to those currently with the lowest incomes. In fact, he sees the amount available being enough to ‘eliminate poverty pay at a stroke’. This would be done by raising the minimum wage, which, by reducing profits, would prevent so much income flowing to the super-rich.
But that’s not how the capitalist system works. It runs on profits and any reduction in profits would reduce the incentive and the amount to invest and risk proving an economic slowdown if not a recession. On the other hand, the aim of capitalist production is not the consumption of the rich owners of productive resources. It is the accumulation of profits as more and more capital invested for profit. In this sense, a disproportionate amount of profits going to the super-rich to spend on a personal super-luxurious lifestyle (yachts, private jets, bunkers, 40-bedroom mansions, lavish parties, etc) is a drag on capital accumulation. This in fact is what Hildyard argues in chapter 3 on ‘The Economic Case for Equality’, though a better title would have been ‘The Capitalist Case for Less Income Inequality’ since that’s what in effect he is arguing for.
Two other ‘pre-distributive’ measures that he advocates are worker-directors and profit-sharing. He thinks that workers on the board is likely to mean less exorbitant executive salaries. Maybe, but that wouldn’t mean that the money saved would go to increase wages. Profit-sharing is a snare which, besides tying workers to their employers, also means that they have an unpredictable income from year to year rather than a secure contracted amount.
As to the money raised by taxing the consumption income of the super-rich, this could in theory be used to provide improved public services and amenities but, capitalism not being geared to meeting people’s needs, is more likely to be used to reduce taxes on businesses or spent on capitalist priorities such as the armed forces.
Capitalism is based on the exclusion of the vast majority of the population from the ownership of productive resources, thereby obliging them to get a living by working for the tiny minority which does own them. Inequality in the ownership of productive resources is thus built into the system. This results in inequality in incomes too since profits are shared by a small number, giving each a high income. As capital accumulates, through the reinvestment under the pressure of competition of most profits, so does the wealth and income of the owners. The tendency, then, is for the rich as a whole to get richer. Reformist measures to redistribute wealth and income are up against this tendency which wins out in the long run.
Despite its naive reformism, the book is very readable and, as you would expect from the director of a think-tank devoted full-time to the issue, is well researched and referenced and so a useful source of information on the inequality of income and wealth ownership built into capitalism.
Adam Buick
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