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COULSON Rebecca September 2016

Rebecca Lowe Coulson is a freelance writer, and was Parliamentary Candidate for the City of Durham at the 2015 General Election.

Let’s imagine it’s your birthday. Let’s also imagine that your sister has recognised this by baking the most amazing cheese pie (you’re the typecaster if you’re thinking this is a sexist example; your brother’s busy dancing Les Sylphides, and your mother’s been deployed to Estonia). The problem is you’ve invited all 73 of your friends round for drinks, and the pie won’t stretch to more than 10 acceptable slices – 20 bites, perhaps, which’ll leave them with cravings. Or 30 piles of crumbs, which’ll wreck their party clothes.

Your options are obvious: throw the pie away; hide it; or sneakily distribute the ten slices, based on favouritism or randomised allocation. These options seem unsatisfactory, however. You’re left feeling down. On your birthday. Unless… maybe your sister has time for supplementary baking? That’s the great thing about pie – you can usually find more of it. And another four or five pies would suffice: some of your friends are lactose intolerant, some are dieting, and some’ll have had a big lunch. That’s the great thing about people: they don’t all want or need some of your pie.

Too often, our pie thoughts are flawed. We tend to think a zero-sum specimen can represent a society: “I want a bigger slice of the pie!” you shout, on learning the contents of a colleague’s pay packet. And that the pie’s division tells us everything about the society’s economic welfare. And that how we feel its division should be amended shows how good we are. We assume everyone should receive equal slices, regardless of how much pie there is, and how much of it they want or need.

First, we must accept that assessing the reality of these things is difficult, and that attempts can contribute to contentious public debate. Contrary to popular anxiety, the large-scale trend of pie division – or income inequality – in the UK over the past 30 years is usually seen as flat. There are immediate positive reasons to counter assumptions, too. In 2016, median gross weekly earnings increased at the joint highest rate since the 2008 downturn, with the earnings of those at the bottom growing the fastest. Median equivalised household disposable income was higher than the pre-downturn figure for the first time. And, although it’s assumed that the least well off are hit hardest during periods of general economic hardship, that has not – in terms of household disposable income – been so following the recent recession. The incomes of the richest have not returned to pre-downturn rates; the poorest haven’t seen their incomes fall below 2008 levels.

As well as telling us nothing about the rates of those people’s respective incomes, however, these big-picture views also risk overlooking more nuanced inequalities – comparisons between different ratios within the distribution, or those regarding variables like location, gender, and age. We just don’t learn enough about the amount and quality of the pie that the individual pie-eaters are eating.

Britain’s poorest continue to spend disproportionately on necessities including food and housing, for instance. And recent attention afforded to the retired, not least in the uprating of pensions, skews the impression of overall steadiness. Also, measures aside from income – such as wealth; and, particularly, consumption, which describes how people actually behave, rather than their potential to do so – might tell us more.

But to return to why focusing on the neatness of the slices is insufficient in itself, conceiving of equality as a single monolithic good is unhelpful. Few would disagree that a society would be suffering from a bad form of inequality if its citizens were marginalised by the state on account of characteristics such as gender or race. When it comes to regarding income or wealth levels, however, we are considering equality largely in relation to the distribution of goods. The shop shouldn’t refuse to sell you cheese because you’re a woman, yet that doesn’t mean all women should be expected to eat the same amount of cheese every day. It must be better to live somewhere with some degree of income disparity, but acceptable standards of living, and the freedom required for people – treated as equals – to pursue their own ends. We should also acknowledge that increases in wealth and income at the top often drive up standards for everyone else.

It’s important, therefore, to confront the misconception that income equality necessarily equates to high overall living standards: inequality and poverty are different. Equal pie doesn’t equate to sufficient pie, any more than unequal pie equates to insufficient. We can all conceive – or think of examples – of countries where income is distributed relatively evenly, but people live without basic freedoms and necessities. We must allow neither an emphasis on equality, nor improvements in average standards, to distract us from ensuring the welfare of those at the bottom.

Regardless of the outstanding local and global progress over the past half century in reducing absolute poverty, there’s work to be done here and elsewhere. Most agree that the state has a responsibility to address societal problems, but anyone suggesting the answer to responding to the needs of the least well off is simply to increase government intervention should be aware of the effect that this already has. In terms of original income, the gap between the UK’s richest and poorest is around twelve times; once cash benefits and direct taxation have been taken into account, that decreases to five.

And it was the state that drove up the incomes of the poorest following the recession: targeted benefits rose in line with (relatively high) inflation, while a realistic adjustment of real pay allowed for the employment growth that characterises the UK’s recent economic success. We should also remember the loss of freedom, and extensive cost, that redistributive mechanisms can cause those tasked with provision – sometimes people only a little better off than those they are helping.

Strong arguments for interfering further, or differently, with the pie, therefore, should be based primarily on fundamental need, rather than some ideological attachment to redistribution. If we believe that state power is predicated on the consent of the governed, who partake in ordered society to gain protection they cannot provide for themselves, then our liberal economy must include a safety net. And while a needs-based net could be just as comprehensive as the one founded on the classic ideal of providing as much as possible for the least well off, its intention would be more justifiable.

But none of this is to suggest we should ignore the slicing of the pie. Regardless of conclusions about equality’s intrinsic value, or how successfully approaches aiming to smooth the distribution of goods meet individuals’ needs, other questions remain regarding distributional equality’s instrumental value – in fostering social goods such as happiness, for instance. An overblown focus on economic equality for equality’s sake not only risks obscuring the truth about our country’s welfare, it also distracts us from other concerns.

11 comments for: Rebecca Lowe Coulson: Why government should focus on reducing poverty – not increasing equality

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