The Wealth Gap, Infrastructure And Christmas

The Wealth Gap

I increasingly feel that this is an important problem not just in the UK but probably for most of the developed world. An article on a statistical analysis from reputable sources in the USA triggered what follows below. The article stated that, for the first time in countless years, the number of households in the USA classified as middle class was below 50% and that that percentage had been shrinking for the last 40 years.

Now, I assume that the only viable economic system we have been able to find is based on capitalism. To paraphrase Churchill's view on democracy, it's the least bad system. Socialism embraces capitalism, albeit with a rather different attitude to the distribution of the profits of capitalism than the agendas of more right-wing political parties. The only economic alternative to capitalism that we have been able to come up with is economic communism and that has been tried and seen to fail in a number of countries. So we are lumbered with capitalism as an economic basis. Some, admittedly, would like to see capitalism disappear entirely but then they need to come up with a viable alternative.

Naked capitalism, however, capitalism red in tooth and claw as Tennyson would have it, clearly contains within it the seeds of its own destruction. Left entirely to its own devices, it will produce an economically feudal society of the sort that provoked the French revolution and thus ensure its overthrow. Consciousness of this has instigated controls of various sorts, especially tax and laws on working conditions and wages, in different countries to mitigate its most destructive aspects. An important question then is whether, currently and in a new global market, these controls are sufficient.

The large and increasing wealth gap becoming apparent suggests to me that they aren't. America, land of opportunity, etc, has owed a great deal of its economic stability to a large and thriving middle class. That class, it seems, is rapidly disappearing, with a very small percentage moving economically upwards and a rather larger percentage moving downwards. The same is true of the UK. In the UK, as in most European countries, the outstanding need is to revive the economy, which in large part means more inhabit

ants spending more. That, of course, presumes that they have money to spend and austerity measures mean increasingly that they don't. Numerous economic commentators have stressed that the incipient UK economic recovery is very fragile, unsurprisingly in the circumstances. It is unlikely that David Cameron's head will be severed on a block in the Tower of London but he would appear to be leading the country into a situation where, in less forgiving times, that could have happened.

So what's to be done? In the wake of the banking crisis there was a very understandable reaction to want to crucify bankers, or at least to chop their huge bonuses. Whilst that measure would undoubtedly have given great emotional satisfaction to many it would have been difficult to implement, easy to circumvent and could have unwanted side-effects; so it didn't happen. To the chagrin of a great deal of the population, it turned out that the only practical thing to be done with the investment bankers who had gambled wildly and ruined many people's lives was to let them have another go at it, albeit with reduced funds to gamble with. So what can curb the bonuses widely viewed as outrageous, or indeed the same in kind for many at the top of the capitalist ladder? What measure could reduce the wealth gap?

I believe a law is necessary, along the following lines, that specifically addresses the wealth gap. It needn't be a permanent law; it could run for, say, 5 or 10 years. What it would state, for any company of a given size, say 30 employees or above, is something like that any salary increases, bonuses or benefits in kind would have to reduce the wealth gap between the average remuneration of the top 10% beneficiaries and the bottom 20 %. (Those percentages are off the top of my head; they may well need refining.) It would be possible to add a minimum percentage reduction but that might not be necessary, even just a penny difference might do it, since clearly the middle ground would have to benefit also. The point is that a company would still be free to offer whatever largesse it chose to its upper echelons but would at the same time have to offer more, spread more thinly, obviously, to its lowest echelons. It shouldn't need poiting out that a small bonus to a low-paid employee will have a vastly different and much more positive economic effect than a large bonus paid to a highly paid employee. And since the lower echelons would be far more numerous, even without the percentage difference I have suggested, that would put a severe brake on what could be distributed at the high level. But the company would still have a choice in deciding what, overall, it could afford to distibute or wanted to divest.

Anyway, that's my solution. I can't see any reasonable objection that companies could make to it on practical grounds and it might even save capitalism from itself.

Infrastructure

I am convinced that the French have a better grasp of what constitutes infrastructure and how to manage it than we Brits do. Infrastructure is a word that trips easily off the tongue but is difficult in practice to define, as I discovered in my IT career, where similar considerations apply. It's easy to define it as elements on which the whole of society depends and enumerate such items as transport, communications, energy, healthcare, etc, but far less easy to define specific items within all these. The point is that infrastructure in general is better managed centrally in any country; and centrally implies government. It's clear that government should control all the above entities but which should it run directly?

France seems to have a clear view of this. It's answer is that the government should run almost all of it. The big exception is healthcare, which is entirely privately run but very closely controlled by the government. I think the French have got that largely right, with the exception of telephony. Telephony is unwarrantedly expensive in France through lack of competition but everything else works better.

The French also have a better alternative, I think, to public/private combinations. The British PFI initiatives have almost all been disastrous for the public sector. In France, the government builds infrastructure and may or may not let the private sector maintain it. As regards roads, for instance, the government pays to construct motorways but lets the private sector maintain them. In return for maintenance, the private motorway operators charge tolls. However, there is always an alternative to using a motorway so the tolls must be perceived as reasonable and the condition of the motorway has to be good if people are to decide to use it. This leaves the private companies with the conundrum of how much to spend on maintenance and how much to charge for tolls. There is never a question of how much should be spent on these roads, as there is in Britain. The private owners either get it right or go bust.

This view on infratsructure devolves right down to quite small items, such as cinemas and libraries. The French consider access to culture as a right that makes cinemas and libraries part of infrastructure. So, our little village had a new library, termed a media centre, built for it a couple of years ago. The government underwrote a lot of the cost of building it but won't incur the cost of running or maintaining it. If the village wants it, it must find volunteers to run it or pay people to do that. So the library is run by volunteers. The same goes for the cinema in nearby Buis. This has been completely renovated, largely with government funds, but is run by volunteers. The message is: if you want such amenities, the government will pay a large part of the cost of creating them but you have to prove you want them by covering the running costs.

This clear, cohesive view on what constitutes infrastructure and how it should be managed strikes me as a great strength, albeit with a few blindspots such as telephony. In the UK, by contrast, there seems to be no clear view. Infrastructure, however defined, may or may not be built by government and may or may not be run by it. The criteria for decision seem to be random questions of how much money is available at the time, who has it, and who wants it. Cinemas are certainly not regarded as infrsatructure in the UK, perhaps understandably as there is no right to access to culture in the UK. On the other hand, Post Offices in the UK arguably constitute part of the infrastructure of small villages and yet are not regarded as such. The result is piecemeal, opportunistic, privatisation and often, more importantly, privation. The current UK government certainly has no view on infrastructure other than wanting to be rid of it. Future governments may take a different view but what I think is needed in the UK, and has been lacking for decades, is a clear cohesive view that would lead to cohesive solutions rather than chaos to be exploited by private profiteers.

Christmas

Christmas has been looming for weeks but started to happen for real in the village this Sunday. A Father Christmas had been hired for the village kids, for whom donkey rides across the bridge were also organised. Patrique in the Bar du Pont asked our ad hoc choir to sing some carols, as we duly did. I've remarked before that carol singing is not a tradition here but the carols were well received, with many in the audience joining in. Patrique had also arranged for Roberto to come, offering tartiflette or plates of seafood to follow the carol singing. I had seafood, oysters, prawns, crab and whelks, which was very good although it did nothing to counter the midday chill. The same happened last year when I took a photo of my son Carl sitting outside the Bar in front of just such a dish, looking only slightly less cold than the seafood.