Class, inequality and the state at the Fabian conference

Carl Packman reports back on the class, inequality and the state session at the Fabian Society New Year Conference.


While the excitement about what Ed Balls actually said, what he actually meant, and how frustrated we should actually be was taking place, I sat in on a session that picked up on a word many have been reluctant to talk about at Fabian conferences in the past – that word is class.

Stewart Lansley, author of the new book The Cost of Inequality, mentioned that a kind of thinking that underpinned new right economics of the fifties and sixties seemed to send the New Labour leadership woozy with lust, predicated upon a “stiff dose of inequality”, hoping that it would open up enterprise and we’d all, in the end, be thankful for this often uncomfortable experiment.

The lesson that ought to be learnt today was that it did not work. Thirty years after this experiment and we have a much more divided society, far more fragile economy and are very prone to crisis.

However, as a counterpoint, in the 1960s – widely regarded as the Keyensian era – things were far better, and on the subject of boom and bust there were only two very mild recessions, doing relatively little damage, opposed to the recessions of the present day.

The point, however, is the question of whether this thinking is applicable today? That is to say, can we simply do as they did in the sixties and expect to see good results in the here and now?

Certainly something needs to change, and that is demonstrated by the current context. If wages fall behind output, Lansley points out, you take demand out of the economy, and therefore you have societies that don’t consume. Inequality bolsters bust and more equal societies are attractive because it is a solution to economic unfairness.

As Lansley concluded, “equality needs to be an instrument of economic policy” – it is that important.

Owen Jones, during the panel, was equally on the ball. He mentioned that, at a time of austerity, the pay of the richest 1000 went up by a fifth. On this point he found it most offensive that Ed Balls is preparing to “accept” all of the coalition’s spending cuts, including the pay freeze for public sector workers (which, he reminds us, amounts to a public sector pay cut, given how fast inflation is rising).

The meat of his five minutes was to say that in the 2010 election, five million voters were lost for Labour, and the Tories only enjoyed a gain of one million votes. The worrying thing was that this shows many people simply sat on their hands. The encouraging thing is that Labour need not feel obliged to follow suit of what the Tories are doing. But, it should be noted, they are anyway.

Baroness Ruth Lister did respond to this point, in a way that proves very interesting. She acknowledges the “diminshing public support for egalitarian politics”, but adds that we do not have to “simply reflect back” public opinion. In this sense, we are allowed to challenge it, too.

We might consider, here, something Caroline Lucas said in the question time session that preceded the one above. She said that Labour, with their vast majority in the Blair/Brown years, had the opportunity to change and challenge this “diminishing support”. But, alas, it was an opportunity lost, instead preferring the pockets of the rich than the nobility of the correct side of history.

Chuka Umunna, also in the question time session, said that he felt it a challenge to simultaneously send a “Labour” message to his constituents, in the full knowledge that, by and large, what underlies their politics is the concern that while they themselves are working hard, the people down the street are getting their food and flat paid for by the taxpayer.

This lousy analysis could have been challenged by New Labour, but they had other ideas.

The post-war era, to which Stewart Lansley looks back on with delight, were far more successful, in terms of productivity, growth and lowering unemployment, but those days are gone. However the priniples are transferrable.

As Owen said, while it is hard times for the majority, it is boom time at the house of the upper echelons. This will not do. Focus on equality – meaning real equality, and not the way in which it is used as a soundbite by politicians seeking to woo by deception – is the very solution to a very severe problem.

See also:

• Inequality must be ended to prevent another financial crisis – Stewart Lansley, January 11th 2012

• To end inequality without redistribution of wealth, we should pay a living wageDuncan Exley, December 8th 2011

• Unless pay gaps are reduced, we’ll end up with Victorian levels of inequality – Shamik Das, November 22nd 2011

• Cable gets it on pay and inequality – unlike the greedy IoD – Larissa Hansford, September 19th 2011

• Income inequality fell in Labour’s final year – Will Straw, May 19th 2011

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