Danny Dorling’s lecture had such a distinctive informality and directness that we believe it will give the substance and vigour of his talk more faithfully if we publish his words as they were spoken, rather than seek to edit and transpose them.
This, then, is in principle a verbatim transcript of Danny’s lecture. We have brought his graphs, maps, and illustrations together separately, but these are noted and cross-referenced in the text itself for easy finding.
He began by introducing himself as a “geographer”, which meant that he works through differences between places and this involves maps. One map in the lecture – not included in the supplement of graphs – showed (as he said) “the world shaped by Quakers”. This emphasised “influence” in Europe, the Americas and Africa, with less in Australasia and the East.
After this short introduction he spoke as follows:-
A brief word about words – because words can frighten people. Let’s take this word “socialist”, which I have avoided using quite often because I didn’t want to frighten people. My view about these words is that the words change over time – they mean different organisations, different things….. some words become historical events, and then we tend to celebrate them “weren’t they good, wasn’t it good they did that”. But if something is still seen as a threat by some people, then it is often used as an insult, and this week (May 2012) the word “socialist” and the word “communist” were interestingly used as an insult for Vince Cable and Nick Clegg, which was quite amazing but I think it’s interesting to look at.
I think the words we should look at, and the things we should see as insults – it’s not good to insult people but what to my mind is really bad about people is when people behave in ways which are selfish, very individualistic.
Key dates: this is just a little quiz for you, if you get bored as I’m talking about the geography and the numbers. You have to think what links 1492, 1544, 1607, then I have a gap, then 1755 and 1789. It will be revealed towards the end.
Now you have to prepare yourselves for some graphs and some statistics, I’m afraid – let me give you a run-down of what you are about to see: I’m going to talk to you about different ways of measuring inequality, Gini coefficients, and then the 1% – the richest 1%. (The Gini coefficient measures the inequality among values of a frequency distribution (for example levels of income). A Gini coefficient of zero expresses perfect equality where all values are the same (for example, where everyone has an exactly equal income). A Gini coefficient of one (100 on the percentile scale) expresses maximal inequality among values (for example where only one person has all the income).
I’m going to talk to you about how long people live and inequality, I’m going to talk about people’s mental health and inequality, and I’m going to show you some maps of Prozac and inheritance tax – I think they’re connected. Trends in inequality in different countries – which to my mind is some of the most important information we need to know – different things have happened in different places recently, and we tend to be told that what is happening at the moment is inevitable, that it’s happening everywhere – this is one of the key things you have to recognise isn’t the case. I’m going to talk a bit about the 1970s, when I think an argument was lost. Dukes, people with titles, students…. Once we’ve got through that lot you know we’re getting near the end.
I have to mention The Spirit Level at this point – a brilliant book, to my mind. I was extremely lucky – the only reason I have been able to produce these things in the last few years is that I was one of three people asked to read the proofs of The Spirit Level while it was in preparation. I’m not particularly clever, I don’t have foresight, I just got to read it a year before the rest of you. It’s a fascinating story of discovery and is about how, when we compare different countries, in those countries where the gaps in income between people are greatest, many many things go wrong, many things tend to be worse, whereas in those affluent countries where the gap is smaller, those things tend to go much better.
People get very confused about the gap – what Richard Wilkinson (a former Salter Lecturer) and Kate Pickett did was look at the quintile ratio – the best-off fifth compared to the worst-off fifth. But most of you – I’m generalising, and you may not be like most people – but most people, when you say “quintile ratio”, they nod, but it’s passed straight through their head. It gets even worse when you say “Gini coefficient”, which is the way economists, and some statisticians, like to measure inequality. It’s a very strange statistic to do with the area between the diagonal line and the Lorenz curve.
But – we’re saved, because we have a wonderful new measure of inequality, called the 1%. You’ll have heard of the 1% – this is the 1% who have the most, the 1% richest. And this measure of inequality is, just how much do this 1% have? If you have a perfectly equal society, the 1% would only have 1%, the same as everybody else. In the United Kingdom, the 1% have approaching 18% of all income – 18 times the average income. The only large country which is worse than this – and I’m going to try to convince you that this is a bad thing – is the United States, where the top 1% have 20% of all income, which is 20 times the average income.
I’ve been trying to think of ways of describing this – and one way is to think about having a hundred children, and all of these children have pocket money, and one child gets £20 a week, leaving only £80 to be shared among the other ninety-nine.
If you want to talk about inequality now, you don’t have to use the Gini Coefficient or use any ratios – you can just show how much the top 1% have – and it correlates very very highly and helps to explain the problem. The top 1% aren’t the whole problem – the 1% just beneath them are a problem too.
So from now on, in the graphs I’m just going to show how much the top 1% have. In all of this, I’m not arguing for perfect equality – I’m not arguing that the top 1% should have 1% – what I’m arguing for is to control how much the top 1% have and not to let them fly away with as much as they want. Would you again think about those children, and one quite greedy child, who’s very good at arguing with their parents and getting that £20 a week pocket-money – it’s not in that child’s interest, let alone in anybody else’s. The argument that I want to put forward is that in general, greater equality is better, becoming a bit more equal than you were the year before is better.
For Britain, just trying to move towards becoming the average country in the OECD for inequality for me would be good enough. That’s what I’m arguing for, not perfect equality – just not being the second most unequal rich country all the time. For many reasons. The correlation shown in Fig. 1 (Please refer to graphs, Fig 1, Income Inequality and health) is the weakest of all the correlations in The Spirit Level – the one for which the authors have received most criticism, because all the other correlations (people take more drugs, there are more teenage pregnancies, etc.) are very strong. The weakest correlation is in life expectancy – but even then we can see that in general, we can see that the less the 1% have, the better we can pool our needs, the better society is organised – the longer, on average, people live.
There’s an exception, and the exception is Denmark. It’s very sad for the people of Denmark, but very useful for scientists, that Denmark shows that it’s not always true. Just controlling the top 1% won’t necessarily mean that you live longer. Denmark is there because for some reason, not completely understood, in the past Danes smoked a lot more than other Europeans. So becoming more equal alone won’t make you live longer – you also have to not smoke. The good news for Danes is that young Danes really have stopped smoking.
Let’s just show you one more of these relationships (Fig. 2 Inequality and mental illness) Again, along the bottom you have how much the top 1% have. The big circle is the United States, all those other circles are mainly European countries, and along the y-axis, along the side, you’ve got the proportion of people who are diagnosed in WHO surveys as suffering from a serious mental health problem. And again you’ll see this general relationship – in societies which are more unequal, where the top 1% take more, people are more stressed, find things harder, are more likely to suffer anxiety and depression.
My view about the top 1% statistic is that it’s really indicative of a badly-run society in general and many things go wrong in a society where the best-off people take more and more and more. It isn’t just that inequality causes these problems – it’s that high inequality is symptomatic of much else going wrong. One example in terms of health is that in a country like Britain, you’re most likely to find General Practitioners living away from areas where people are ill – there’s an inverse correlation. One of the reasons why there is an inverse correlation, even though we have an NHS, is that GPs tend to be drawn from more affluent families and tend not to be used to living in the areas where more people are ill. In more equal countries, where the differences between areas are far less, your doctors are more likely to live near the people who need their services. There are many other examples I can give you as to why things begin to go wrong in a more unequal society. I promised you a map of Prozac use and inheritance tax (See Fig 3 Maps of where money is and the Prozac is taken (Britain 2008)).
I do like drawing strange maps where we stretch things – these maps are of Britain, they really are; one is stretched so that every area is drawn in proportion to the number of people who live there. The yellows and reds are areas where 15% of people pay inheritance tax – most people don’t have that much money. There are eighty grey areas on that map where nobody in the year of dying paid inheritance tax, because nobody had enough money. The green map on the right records the numbers of people who are receiving anti-depressants through prescription on the NHS. It’s highest in the Welsh valleys, but very closely matched by areas around Glasgow. I just want you to contrast those two things.
Okay – the 1%, and isn’t it inevitable that the 1% have more and more of what we have. This may be the most useful thing I’m going to tell you today, because I’m amazed how this isn’t widely known. In the last couple of years economists have created a data set of top incomes in the world where they have taken the best data they can find – from tax records mainly – of how much the top 10%, 1%, ½% of people in each country have received each year, going back sometimes 100 years. I’m going to show you a few of these graphs.(See Fig 4: In the 1970s different choices were made in each country of the rich world – some chose inequality.)
The black dots on the graph are the United Kingdom. Our data wasn’t particularly brilliant in the 1930s – you can see that one black dot showing that we were pretty unequal in the 1930s; we were even more unequal in the 1920s. The 1920s and 30s were the times of Downton Abbey, households of servants and that kind of thing, where the most common job for women was to work in service. That inequality fell and fell and fell through the 30s. A lot of it actually fell before the Second World War – the good news is that you do not need a war to become more equal. Equality increased in Britain – the black line keeps going down in the 1950s, 60s and 70s. Then we reached a turning point in the late 1970s, and after that inequality goes up and up and up, the top 1% taking more and more and more. Currently, those dots are out of date, because the most amazing thing has happened in the last couple of years: average income in Britain has gone down, the incomes of the poorest have gone down even faster because of the welfare benefit cuts, and the incomes of the top 1% have gone up – the FTSE Chief Executive getting a 50% pay rise, and so on. So those black dots are shooting up.
The grey dots in that graph are a country not too far away, that’s France, and you’ll see that it has gone in a different direction. It wasn’t just the election last week, it’s much more than that – elections don’t actually matter that much, I do agree with Ian about people getting much more involved, but there’s something else going on much more deeply – somehow the French have decided to control the top 1%, to stop them taking more than 8% of all income in various ways, in a way that people in Britain didn’t.
Figure 5 is the most complicated of the graphs – but it’s for those of you who do like graphs (See Fig 5: GDP, inequality, voting, health. Graphs from Injustice: why social inequality persists, 2011)). It’s to illustrate the problems in Britain. The top left-hand graph is GDP going down in different continents, just to show you the collapse in the 1970s. Since the 70s all these countries go in different directions. The second graph on the top shows the share of the income of the top 1% getting richer. The line beneath is after tax. In 1974 the top 1 % – the bankers, the surgeons, the media celebrities, the football stars – they took 6%, just six times the average income, and after tax just 4%. That wasn’t a fantasy – we really did do that well. Before that, there was a time when there was nearly full employment – people could switch jobs if they didn’t like their job, and young people were employed – that time also existed, it wasn’t a dream. The two graphs at the bottom of Fig 5, which I don’t have enough time to go into, are the polarisation of the Conservative vote (the south of the country began to vote more and more Conservative, the north didn’t, as inequality increased); and health inequalities, which tend to match inequality of income,
A few more countries for you, though not necessarily detailed on the graphs. One of the ways to become more equal is to have equality imposed upon you. In Germany, if you track the income share from the 1920s, you will see that in the 1930s there is a sudden and sharp increase in inequality. Sudden and very sharp increases are a very bad thing – they can lead to very bad politics. After the Second World War, Germany is split up, no city is allowed to become dominant, it is occupied, in a sense it had equality imposed upon it.
A more dramatic country is Japan, which was much more unequal in the 1930s – an almost feudal society – then there was a massive plummeting of inequality coinciding with war, because after the war, the Americans imposed equality upon Japan – it was called land reform; they took the land from the aristocracy and gave it out equally – not because the Americans were wanting to do an experiment about what happens if you impose equality on a country: the Americans were scared of Communism, and so to avoid Japan having a revolution, they shared out the land, they shared out the goods. One interesting result of this is that the people who now live longest on the planet are the Japanese, which is unlikely to have occurred on its own if the Americans hadn’t done that. There is a slight recent increase in inequality in Japan, so the top 1% have now got 8% of all income. If you go to Japan, people will talk about how terrible this is, and if you are Japanese it is terrible – but compared to Britain, it’s nothing.
Dukes – I promised you some Dukes. I have a strange obsession with Dukes because they have a weird geography – they’re named after places but they don’t live there. They’re dying out as well – there are only half as many as there were a hundred years ago! The point about the Dukes’ slide is that losing a war doesn’t necessarily make you more equal. We lost a war in 1066 and you could argue that in a way the continuation of the system that came in in 1066 and the fact that Britain hasn’t suffered an invasion or lost a war since – is one of the reasons why inequality is so high in this country.
But my point is to show you that things are different in different countries. It may be historical circumstance which means that you’re a very equal or very unequal country, but it isn’t globalisation – it isn’t inevitable. It isn’t the market; it isn’t that you have to let your bankers have more and more money, that there’s no other option.
My last two countries are not Finland or Norway or Iceland – the normal suspects – they are the Netherlands and Switzerland. They managed to make the right decisions in the 1970s as far as I’m concerned. Now Switzerland. Switzerland still has bankers – but it pays them half as much as our bankers, and they choose to carry on living in Zurich and Geneva and not come here. You can still have a banking system that can work.
The Netherlands has industry – the Netherlands is a fairly successful country. It’s more successful, in a way, than Britain. But it has a different culture. My favourite example of this difference in culture – I challenge you to come up with a Chief Executive Officer in Britain who would say something similar to this. This is the CEO of Shell a few years ago who said, “If you paid me twice as much, I wouldn’t have worked any harder; if you paid me half as much I wouldn’t have worked any less.”
Why can somewhere so near – it’s not Utopia – be wasting half as much money on the top 1% and getting more out of them? It’s about controlling this money.
One reason I get upset about the amount of money here is that every percentage the top 1% have is like a penny on income tax – it’s an enormous amount of money. I’ve got a quote now to calm me down for getting so annoyed about the top 1%. These kinds of quotes are becoming more and more common in academia. Patrick Dunleavy isn’t a particularly angry kind of academic, so I think it’s interesting to read the kind of things that are going on now:
“In the UK, a parallel but more isolated push is evident in the coalition’s decision to use government debt problems as the thinnest of veils for raising university fees to the highest levels in the western world, removing direct state subsidies from most university teaching. Deliberately picking a ‘strategic’ fight with the weakest of the state-dependent ‘vested interests’ (in this case young people) is a classic ‘shock doctrine’ tactic. And Cameron, Clegg and Cable clearly appreciate that privatising university finances will have long-run implications. If the changeover sticks, it will inevitably create a future electorate in England where the same high personal debt burdens as in the US sustain a public opinion believing in ‘self-reliance’ and calling for the state’s share of GDP to be pushed down” Patrick Dunleavy page 6 of Political Insight Dunleavy, P. (2011). “The backlash against the State.” Political Insight 2(1): 4-9.
My point in quoting this is to say, when you get used to things like allowing the top 1% to get richer and richer, it’s also possible to get used to ideas like getting 17-year-olds to sign up to a hire-purchase agreement where they spend £27000 which they don’t have buying higher education. No other country in Western Europe does this. If any of you want to join me and encourage a 17-year-old to go to the European Court of Human Rights and ask if it’s legal….? Well, but that’s how we do higher education now in this country.
Many many things begin to go wrong when you accept higher inequality. In more equal countries, students still go to university at the expense of the state rather than at the expense of their future or their families.
I’ve got to say something about cuts, given the cuts that are going on at the moment. This is a series of graphs showing figures which come from a radical organisation which is almost the exact opposite of the Quaker Socialist Society – the radical organisation which produced these figures is the International Monetary Fund, and these are the International Monetary Fund’s estimates of the spending of the British government.
What percentage of GDP has the British government spent in the past, in 2002, and what percentage of GDP will it be spending in 2015?
What you’re seeing (See Fig. 6 How Big A Cut Is This?) in 2002 until 2005 is massive overspending – 2008, 2009, 2010 you see huge increase in spending by Labour – and then you see that really reasonable reduction in spending that we’ve all been moaning about. Now what I want you to do is to compare that with other countries. This is something that just isn’t done in Britain that often. People just look at that and say, that was high spending, and that isn’t, and that’s a cut – I do think it was high spending, by the way.
The increase you see in 2003, 2004 and 2005 was the additional cost of the Iraq War, when there was no need to spend that money. But that big increase in 2008 and 2009 was the banking bail-out – and without that, the cash-points would have stopped working. Those cuts might look smooth and not too bad, but those cuts are as a percentage of GDP. GDP is itself falling, Expenditure is falling, while expenditure on unemployment and so on is having to rise, which is why many more cuts are being made.
But to get an idea about whether this graph is good or bad, you can’t tell by the figure on its own, you have to compare it with something else, and if you compare it with the United States, it doesn’t look that bad. The United States spends less as a percentage of GDP on public goods. The United States has the same percentage size bailout – trillions of dollars more, but the same shape – but the United States is about to do something different, depending quite a lot on the election this autumn. It is about to spend more of its GDP on public goods than we are. (See Fig. 7 Public Expenditure (% GDP- Gross Domestic Product) International Monetary Fund database 2010)
The reason why U.S. spending is lower, by the way, is that the United States doesn’t have an NHS.
Well, there’s Greece (also Fig. 7). You can look at the Greek line and say, that’s terrible, look how much they were spending, they were being profligate, no wonder they’re in trouble.
If we were able to see Germany, where public spending was approaching 50% of GDP, suddenly the Greeks wouldn’t look so bad – and of course German GDP is an enormous amount of money.
But let’s skip through some more countries, not on the printed graph. There’s Ireland, a truly awful situation (May 2012) – and then a whole lot of much more normal, more equal countries – and my favourite, Denmark. In the light of all these, if we then look back at the United Kingdom and think, how do they get away on TV night after night? If they knew that we know how much is spent here, compared with what is normally spent in other European countries, by their governments, for the good of the people?
The reason why spending is low is because the United Kingdom is one of the most unequal of the rich countries in the world. Of the 25 richest countries in the world, only three are more unequal: Singapore, the United States (which has a higher infant mortality rate, a lower life expectancy, two million people in prison) and Portugal (because of an aristocracy) – then the United Kingdom, and then Israel, which is a more equal country by income than the United Kingdom.
What I find most interesting about these kinds of comparisons is people’s reactions to this. If you go to the United States and say, apart from Singapore you are the most unequal country in the rich world, people say “Well, that’s just the way we are.” If you say, you have 30 million people on food stamps and it’s not normal, they say “that’s just the way we are.” If you go to Norway and say, congratulations, you have the lowest rate of child poverty in the world, the reaction I get is “It’s too high, it’s not good enough, it’s an embarrassment.”
If you go to a normal audience in Britain (and I don’t think Quaker Socialists are necessarily a normal audience!) and you say that a quarter of children are living in poverty, the “normal” reaction is “Well their parents shouldn’t have been so irresponsible as to have them.” There’s this huge problem of sentiment. The more unequal a country is, the more unequal it gets, the more vicious and nasty people’s individual opinions become – it becomes circular, and it’s very very hard to deal with.
Remember the graphs of going from 1970 (See Fig. 4) when we were so much more equal, to now. This has changed people’s behaviour in a very short space of time.
There are seven things about equality that I want to end on. One very big problem about inequality is that the people who study it talk endlessly, as I have done, about the problems of inequality. What we tend not to do is talk about what is good about less inequality, about becoming a bit more equal – partly because of the anger you often feel when you talk about inequality. But I think it’s good to talk about what happens when equality increases, when people come together. I wrote a guide about this called A No-Nonsense Guide to Equality, early this year, and these are some examples from this guide. There has been some work done in America suggesting that many world religions began at a time of inequality. People were affected by inequality, by injustices, by occupations, and one of the effects of that was to create religions which often preached the equality of human beings and corresponding behaviour to each other.
A completely different example. What’s often said in defence of inequality is that you have to let a few tall poppies rise – inequality is just rewarding a few people who are highly creative or highly able. There is more and more evidence suggesting that you don’t tend to get great creativity when you have a time of great inequality. You might have a few rich people buying certain forms of modern art, but that may not be the sort of modern art that gets remembered in the future. This is somebody else’s work – but Leonardo da Vinci, who was the son of a peasant woman, wasn’t able to do what he did only because of sponsorship, but because his sponsor brought him into the household and treated him like an equal.
A much more recent example: people produce better work, academics produce better work in more equal societies, particularly in Sweden and Finland. The highest number of patents per head is not in the United States, it’s in Japan. My favourite example is that in Italian football teams, where they pay their players more equally, the football team as a whole appears to do better.
There are great dangers in having huge and widening inequalities. Currently in the United States the average black family has 19 times less wealth than the average white family. Society begins to break down when you have those kinds of differences. The examples I already have in my mind when talking about this are the reactions to natural disasters. Contrast how people behaved, and how the government behaved, in Hurricane Katrina in New Orleans, and then in the tsunami in Japan.
If you’re getting depressed about this, please don’t get depressed about inequality. We’re living through a very strange time in Britain. The last time we were as unequal as now was in the 1920s and that was short-lived and it was overcome. Most people in the world are living in situations where equality is increasing. The biggest increase in equality has been for women. It’s still not high enough, but the changing position of women is like the end of a form of slavery in the last two or three generations.
My most cheery statistic of all is the infant mortality rate in the world, which in the last two years fell from 42/1000 babies dying in the first year of their life to 40/1000. A 5% drop in mortality – almost all attributable to the increased power of women in the mainly poor regions of the world. The population rose more slowly; women choose to have fewer children when they are more equal. We currently have 7 billion people on the planet; just within my lifetime, if I’m very lucky, it’s going to stop rising and plateau at about 9½ billion: the first time the population is going to stop rising since the Black Death, and all because of greater equality.
Full employment – why can we not have full employment? Why is it not possible to employ a million young people under the age of 25?
One argument why it isn’t possible is that we are wasting so much money. Our pay bill in Britain is now much higher than it was when we had full employment. If we just take the top 10% and look at the increase in their pay, from the 1970s to now the increase has been, in the pay of people like GPs, people running banks, people selling insurance in London, the increase in pay compared with average wages has been so high that if you were to move the pay disparities back to 1970s level, you would be paying a GP now £50,000 a year now rather than £100,000. If you moved the pay disparities back to 1970s level, the best-off 1% are still the best-off, but they are getting six months’ average income. The amount of money you save on the pay bill isn’t just enough to employ every young person who’s unemployed, full-time for a year – it’s enough to do that ten times over. You can’t have full employment or anything like it when you’re paying a few people enormous amounts of money because you just run out of money to pay them. This is a general argument – you can look at something like a university, which can employ huge numbers of young graduates to talk to young undergraduates, but it can’t do that if it wastes the money at the top of the university. It runs out of money.
And my favourite one of all – when you have greater equality, it’s much easier to walk to school.
Robert Frank, a very mainstream American economist, has helped to explain that as inequalities increase, it becomes more and more important if you just want your child to go to an average school, to spend more and more money on housing, and then to start to drive your child to school, past the schools that you are afraid of.
If you want to live in a society where you don’t have to worry about where you live and spend as much money as possible on your house, where your children can go to the nearest school and be friends with other people, you need to live in a more equal society.
I think all affluent societies have a function where you need to control people who are driven by greed. Some people are, unfortunately, driven by greed. They become very good at running businesses but if they’re not controlled, they become richer and richer and richer. Most people do not have an insatiable wish to become richer and richer and richer. We’ve had many methods of controlling the greedy – sometimes they work, sometimes they don’t work, they work better in some countries than in others.
My final point, about violence, is a bit disconnected but I think it matters.
There has been recent work showing that overall human beings are becoming less violent, but at the same time the murder rate has been going up in places like Britain, because a small group of people become more violent and that level of violence can be affected by inequality. Levels of violence are higher in more unequal countries, more unequal countries are more likely to go to war and to ask for a coalition to come with them; more equal countries are more likely to resist war. My favourite Prime Minister of Great Britain is the man who kept us out of the Vietnam War. Nobody ever celebrates Harold Wilson for keeping us out of the Vietnam War – I think part of the reason he could do it is because it was a time of greater social equality, because we had more in common with each other.
It’s too easy to despair about the world, and what’s going wrong. There are good reasons why we find things hard to deal with, and one good reason is just how much the world has changed in recent generations.
In 1492 we (here, as far as we were concerned) discovered the New World. The effect of that discovery was to upset completely the systems of belief and also trade and finance, and silver – the repercussions have gone on and on and on. It’s sixteen generations since that New World was discovered – if you’re saying how come we can’t cope with the situation we’re in, part of the reason is that it’s only been sixteen generations. I think there’s great scope for optimism, I think you can look at the rest of the world, you can look at our past, you can look at people’s ideals and what they say, and you can say that it is patently possible to be more equal and that to be more equal is very beneficial. However, you have to get rational argument and debate away from silly name-calling – one set of people in the top 1% of power calling another set of people in the top 1% “socialists and communists”. Because otherwise you will not enlighten people in general about what the options are, and the top 1% will control what you do, and how much they have, rather than you controlling them for the common good of everybody.
Quiz answers: 1492, discovery of the “New World”, 1544 (Henry VII, devalued coinage, encouraged enclosure), 1607 (Midland revolt)… 1755 (Lisbon earthquake), 1789 (French revolution)…