Inequality, opportunity and meritocracy
The website of the GMB union helpfully records that Mr John Sunderland, the President of the Confederation of British Industry (CBI), "The Voice of Business", big (and small) business’s lobby and club, has an annual income of £2.3 million plus a pension pot of £14 million (paid by his companies, not by the CBI). But is Mr Sunderland typical in this respect, and if so what are the implications for equality and inequality in our society?
The independent Incomes Data Services (IDS) website says that average annual earnings for full-time male employees in the UK stood at £31,515 a year in April 2005, according to the latest Annual Survey of Hours and Earnings (ASHE). "Top pay in the FTSE 100 companies reached a landmark in 2005 with the average total earnings of lead executives breaching the £2 million ceiling"; and as this is an average, it’s a fair inference that a goodly number of them were earning, or at any rate receiving, substantially more than £2,000,000 — and that’s just for a year. So the CBI’s Mr Sunderland may well not be in the very top bracket. By the same token, a good many full-time male employees, with average annual earnings of £31,515, must be earning substantially less than that unimpressive sum (£606 a week, compared with those FTSE 100 bosses’ £38,462 a week), just as others are obviously earning substantially more. And it’s not hard to imagine the feelings of those ordinary people whose pension rights have been plundered by the companies which have employed them or are supposed to have insured them and who face a life in retirement of hardship, if not penury, when they hear of Mr Sunderland’s £14 million pension pot.
In today’s Guardian (13 Dec 05), George Monbiot remarks on the not very altruistic policy aims of Mr Sunderland’s CBI:
In the submission it made to the chancellor’s pre-budget report, it demanded that the government spend less on everything except business. The state should cut its planned spending on health, social security and local authorities, and use some of the savings to protect and enhance its "support and advisory services for trade and businesses". Our higher-education budget should be used to supply free research for corporations. The regional development agencies should "expand their activities to support more extensive business-to-business networking and collaboration". Further road taxes should be abandoned, and the climate-change levy "should be frozen", but the government should help businesses by building more roads and airports. This is what the CBI means by free enterprise.
An assessment by the Institute for Public Policy Research (August 2004) showed that Britain became more unequal under Tony Blair. Despite its association with the Labour Party, the IPPR concluded, among other things:
- Since 1997, the richest have continued to get richer. The richest 1 percent of the population has increased its share of national income from around 6 per cent in 1980 to 13 per cent in 1999.
- Inequality in disposable income (after taxes and benefits are accounted for), appears to have slightly increased since 1997 after significant increases in the 1980s.
- Wealth distribution is more unequal than income distribution, and has continued to get more unequal in the last decade. Between 1990 and 2000 the percentage of wealth held by the wealthiest 10 per cent of the population increased from 47 per cent to 54 per cent.
- Working-age adults without children constitute an ‘unfavoured group’, who have not benefited from government policy. In 1994 they constituted 25 per cent of people in poverty. By 2002/03 this had increased to 31 per cent.
(IPPR, August 2004. Source: "Ideology and ethics of Tony Blair")
Blair "set out his faith" in the Guardian on 14 May 2001:
New Labour’s big idea is the development of human potential, the belief that there is talent and ability and caring in each individual that often lies unnurtured or discouraged," he said….Mr Blair invoked the experience of his own communist-turned-Conservative father to explain why he had rejected both Thatcherism and traditional socialism in order to embrace a meritocratic vision of equal opportunity for all. [My emphasis.]
In an entry of April 2002 in this blog (with apologies for quoting myself, but it remains relevant), I wrote:
The Sunday Times on 7 April  recalled Tony Blair’s words at the beginning of his second term: "As a nation we are wasting too much of the talents of too many of the people. Our mission … must be this: to break down the barriers that hold people back, to create real upward mobility, a society that is open and genuinely based on merit and the equal worth of all." Unfortunately, the last six words of this passage are in bleak conflict with the rest of it: the sabre-toothed meritocracy which he is shamelessly advocating ("real upward mobility… genuinely based on merit") flatly denies "the equal worth of all", sending the weak and vulnerable to the wall. The "equality of opportunity" which is here by implication sanctified as society’s guiding principle is a deeply Tory concept, unless accompanied by a firm commitment to equality of outcomes: far too revolutionary a concept, alas, for New Labour. Of course no-one, even the most Utopian, advocates total equality of wealth and income for all; but if there’s to be any justice and humanity in the way society is ordered – real respect for "the equal worth of all" – it’s essential that the state should intervene actively in the economy to minimise the gross inequalities which ‘equality of opportunity’, market forces, flexibility in the labour market, and the rest of the capitalist shibboleths automatically produce.
Mr Blair and New Labour (and no doubt the fat cats of the CBI) contentedly let it be implied that a commitment to ‘equality of opportunity’ is the same thing as a commitment to equality, whereas without vigorous corrective action by the state, it’s the opposite — a license for the strong, the unscrupulous and the lucky to enrich themselves at the expense of the weak, the conscientious and the unfortunate. By the same token, Mr Blair and New Labour actively seek to promote Britain as a ‘meritocracy’, as if such a system represented a just society of a kind that should commend itself to a left-of-centre party. This is an ignorant perversion of the meaning of a meritocracy, a word invented by Professor Michael Young in his 1958 book The Rise of the Meritocracy. In the Guardian of 29 June 2001 Michael Young himself wrote as follows (no apologies for quoting him at some length):
I have been sadly disappointed by my 1958 book, The Rise of the Meritocracy. I coined a word which has gone into general circulation, especially in the United States, and most recently found a prominent place in the speeches of Mr Blair. The book was a satire meant to be a warning (which needless to say has not been heeded) against what might happen to Britain between 1958 and the imagined final revolt against the meritocracy in 2033. Much that was predicted has already come about. It is highly unlikely the prime minister has read the book, but he has caught on to the word without realising the dangers of what he is advocating.
Underpinning my argument was a non-controversial historical analysis of what had been happening to society for more than a century before 1958, and most emphatically since the 1870s, when schooling was made compulsory and competitive entry to the civil service became the rule. Until that time status was generally ascribed by birth. But irrespective of people’s birth, status has gradually become more achievable.
It is good sense to appoint individual people to jobs on their merit. It is the opposite when those who are judged to have merit of a particular kind harden into a new social class without room in it for others. Ability of a conventional kind, which used to be distributed between the classes more or less at random, has become much more highly concentrated by the engine of education. A social revolution has been accomplished by harnessing schools and universities to the task of sieving people according to education’s narrow band of values. With an amazing battery of certificates and degrees at its disposal, education has put its seal of approval on a minority, and its seal of disapproval on the many who fail to shine from the time they are relegated to the bottom streams at the age of seven or before. The new class has the means at hand, and largely under its control, by which it reproduces itself.
The more controversial prediction and the warning followed from the historical analysis. I expected that the poor and the disadvantaged would be done down, and in fact they have been. If branded at school they are more vulnerable for later unemployment. They can easily become demoralised by being looked down on so woundingly by people who have done well for themselves. It is hard indeed in a society that makes so much of merit to be judged as having none. No underclass has ever been left as morally naked as that. They have been deprived by educational selection of many of those who would have been their natural leaders, the able spokesmen and spokeswomen from the working class who continued to identify with the class from which they came. Their leaders were a standing opposition to the rich and the powerful in the never-ending competition in parliament and industry between the haves and the have-nots. With the coming of the meritocracy, the now leaderless masses were partially disfranchised; as time has gone by, more and more of them have been disengaged, and disaffected to the extent of not even bothering to vote. They no longer have their own people to represent them….
In the new social environment, the rich and the powerful have been doing mighty well for themselves. They have been freed from the old kinds of criticism from people who had to be listened to. This once helped keep them in check – it has been the opposite under the Blair government.
The business meritocracy is in vogue. If meritocrats believe, as more and more of them are encouraged to, that their advancement comes from their own merits, they can feel they deserve whatever they can get. They can be insufferably smug, much more so than the people who knew they had achieved advancement not on their own merit but because they were, as somebody’s son or daughter, the beneficiaries of nepotism. The newcomers can actually believe they have morality on their side. So assured have the elite become that there is almost no block on the rewards they arrogate to themselves. The old restraints of the business world have been lifted and, as the book also predicted, all manner of new ways for people to feather their own nests have been invented and exploited. Salaries and fees have shot up. Generous share option schemes have proliferated. Top bonuses and golden handshakes have multiplied. As a result, general inequality has been becoming more grievous with every year that passes, and without a bleat from the leaders of the party who once spoke up so trenchantly and characteristically for greater equality.
Michael Young, as secretary of the policy committee of the Labour party, was responsible for drafting Let Us Face the Future, Labour’s manifesto for the 1945 general election and the blueprint for the astonishing achievements of the Attlee government. He died at the age of 86 in 2002. His Guardian article of the previous year reflects accurately his eloquence, vision and bitter disappointment. It is well worth reading in full.
In the same year and the same newspaper as those of Michael Young’s philippic on the abuse and misunderstanding of his warnings of the dangers of a meritocracy, Tony Blair (as quoted earlier) neatly summed up the political ignorance which equates equality of opportunity with equality, and fails to understand the injustices and gross inequalities of a meritocracy, when he explained —
…why he had rejected both Thatcherism and traditional socialism in order to embrace a meritocratic vision of equal opportunity for all.
No wonder David Cameron’s fresh-faced and well fed New Tories see shining opportunities for helping our New Labour prime minister to get his policy proposals through parliament against the appalled objections of his own party.
What sort of equality are you asking for, equality of pay, education, housing? Are we to have a grimly uniform society where everyone is equal? I’m keen to know what you ultimately wish for.
Brian replies: In my earlier blog post, quoted in this one, I wrote that:
‘Of course no-one, even the most Utopian, advocates total equality of wealth and income for all; but if there’s to be any justice and humanity in the way society is ordered – real respect for “the equal worth of all” [the phrase approvingly used by Tony Blair] – it’s essential that the state should intervene actively in the economy to minimise the gross inequalities which ‘equality of opportunity’, market forces, flexibility in the labour market, and the rest of the capitalist shibboleths automatically produce.’
It seems to me that gross and blatant inequality, whether of income, wealth, educational and cultural access, health, life expectancy, everyday living conditions, personal security, or any of the other elements that together constitute an ability to enjoy the right to the pursuit of happiness, disfigures the society in which it occurs: creates tensions and divisions which threaten social peace and stability: condemns its victims to material and cultural deprivation: and leads to all the other evils so accurately predicted by Michael Young in the Guardian article from which I quote extensively in my post. The unavoidable corollary of this is that we should pay at least as much attention to the greatest possible equality of outcomes as we do to equality of opportunity. Whether we speak of aiming at the greatest practicable degree of equality in all fields, or of pre-empting or eliminating as far as may be practicable the inequalities which flow from equality of opportunity, the principle is the same. My charge is that Tony Blair, in his effective dismissal of equality of outcomes and his commitment to equality of opportunity and a meritocracy, doesn’t understand any of this, and that his position belongs on the right of the political spectrum and not on the left. As Anthony Crosland argued long ago, the concept of equality is central to the modern interpretation of socialism. But then, to be fair, our Labour prime minister doesn’t claim to be a socialist. Fortunately some of his ministerial colleagues are more enlightened, and in some limited respects have acted accordingly since 1997.
A reasoned and worthy reply but, as a somewhat simplistic person, I was wondering what practical measures and policies you would espouse to increase equality?
Brian replies: Forgive me, but an adequate reply to your question would need a book, not a comment. Action to promote equality (and to remove unnecessary inequality) is needed all the time in every sphere of government activity: there’s no snake oil or magic bullet. But a good symbolic start would be to increase the marginal rate of income tax on all incomes over, say, £100,000 a year, scrap many of the current allowances that benefit mainly top earners, and greatly increase the levels below which no income tax is payable at all. (Actually there are cogent if counter-intuitive arguments for a flat rate tax with no allowances at all but with a starting-point set high enough to exclude many more from any tax obligation and the rate set at a level that would actually be sharply progressive, i.e. redistributive and pro-equality, in its effects: see e.g. http://tinyurl.com/cy55m.) We might also consider legislation to impose a maximum percentage gap between the highest and lowest salaries (including benefits in kind) paid to employees, including managers at all levels, by companies above a certain size. But this is about more than simply incomes (or even incomes and wealth): it’s about the huge inequalities in quality of life, education, culture, and ability to realise one’s maximum potential (which is where it overlaps with ‘equality of opportunity’, fine if it’s allied to pro-active measures to limit and minimise inequality of outcomes). There are many desirable measures to address the problems of climate change that would have the incidental effect of reducing inequality. Removing the charitable status of private schools (public schools so-called) would be a good first step towards greater educational equality, although much more is needed there. No huge effort of imagination is needed to think of numerous other ways of moving towards the objective, if the will is there.
I agree with substantially with all you say above, and have said in similar pieces, but could you clarify what you mean by one phrase you (and others, elsewhere) have used: “equality of outcomes”? A lot seems to turn on the definition. Are we to envisage, for example, everyone being educated to the level of their ability; or subsequently achieving the same measure of prosperity, or of success in their chosen jobs or careers; or rising to the same level of wealth or responsibility; or that we all become Prime Minister, Chairman of the Governors of the Bank of England, Archbishop of Canterbury, or Chairman of the C.B.I. (presumably for just two minutes, since room at the top is limited; choose one only)? Bear in mind that individuals differ not only in intelligence, however one defines and measures it, but in officer-like qualities which certainly are at least partly inculcated by background and experience (and are therefore latent or repressed in much of the citizenry in our present imperfect society), like initiative, drive, perseverance, responsibility, and ability both to persuade and to cooperate.
I haven’t mentioned the moral attributes without which the above o.-l.q.s are dangerous to others. It struck me over forty years ago that the master-mind of the Great Train Robbery could have been a captain of industry, the C.I.G.S., or a successful reorganiser of the civil service, given the right influences in his formative years.
Brian replies: I think I have dealt with this in earlier replies and in the main post. Obviously equality of outcomes doesn’t mean that everyone gets to have the same top jobs or the same incomes as everyone else. You invite me to “bear in mind that individuals differ not only in intelligence, however one defines and measures it, but in officer-like qualities which certainly are at least partly inculcated by background and experience”, etc., but that’s exactly the point. Untrammelled equality of opportunity, unmodified by state intervention to reduce its most extreme and negative consequences, will result in gross inequalities of outcome (in every sense – quality of life, income, wealth, culture in the broadest sense, health, and so on and so forth) so extreme as eventually to tear society apart, because of the very inequalities of talent, intelligence, energy, luck, unscrupulousness, cunning, greed, ambition, generosity, kindness, altruism, etc. that are inherent in the human species and which you kindly remind me about. Re-read the long extract from Michael Young’s article in my original post (or, better still, the full article) — he puts it more clearly and persuasively than I can do.
I’m afraid that I have said as much about this as I can usefully say, and must now devote myself to trying to pack for a brief excursion to Spain over Christmas during which this column will be temporarily closed….
Just in case you ever get to read this: yes, actually I’m on your side. I agree in particular with Michael Young’s pessimistic analysis, and will try to get access to the original article. It shocks me that a young person in the financial world can make so much by shifting numbers representing sums of money around on a computer, that they could live on comfortably for the rest of their lives on the prudently-invested savings from a few years’ work; indeed, it shocks me that anyone should have a post-tax salary over ten times the average pre-tax income, since no-one is that indispensable, creative, skilled, or talented. The system seems geared to perpetuate itself, with the complacent approval of those best placed to effect changes, including senior members of the present government and their advisers, while the latent talents of millions go unrecognised and unfulfilled. Britain is rapidly becoming indistinguishable from America in many unappealing ways. My quibble was merely with the fuzziness surrounding the word ‘outcome’.