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.
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