Markets and Morality

Populists have hijacked the concept of ‘inequality’ for their own political aims

Jeremy Corbyn’s rise in popularity has gone hand-in-hand with an increased focus on inequality – a word that, these days, has fully negative connotations.

According to the Momentum brigade, “neoliberalism” has created an impenetrable divide between the “haves” and the “have-nots”, the fat cat boss versus the company’s janitorial staff, the tech entrepreneur versus the small shop owner, the venture capitalist versus the junior doctor.

The inequality between the two groups is eroding society, they say, as the haves keep all the goods and wealth to themselves, and the have-nots struggle to make ends meet.

It’s a compelling story, apart from the critical point that it’s a deliberate misunderstanding of inequality.

If you look at the real world, you’ll notice that most people, regardless of their politics, are generally not opposed to inequality. In fact, the concept of “difference” is a core pillar of many of our virtues, like meritocracy, ambition, and diversity.

We may want equality of opportunity, but we accept that innate skill, hard work, and personal choices lead some people to succeed in certain fields more than others, whether as Olympic athletes, award-winning authors, or top neurosurgeons.

Even when it comes to income inequality, most people understand that we are driven by different motivations. For some, this is money; for many others, it is passion, interest, knowledge, and family.

In other words, you cannot sustain a free and democratic society if equality of outcome is the priority.

So why the uproar?

When people refer to inequality, their complaints are often rooted in the poverty debate. While living standards for those at the bottom is, without question, one of the most important and urgent problems facing society, inequality and poverty cannot be used as synonyms.

They are wholly different issues, and poverty requires radically different antidotes to the ones that would be used to address inequality.

For example, increases in real incomes in the 80s and 90s went hand-in-hand with increases in inequality. This was partly because supply-side reforms, which helped raise incomes across the board, were a big benefit to the relatively well-off.

These reforms could have been abandoned for the sake of maintaining greater equality, but that would have left the poor worse off too.

Furthermore, the welfare safety net is reliant on high wages, which are taxed and redistributed to provide incomes and services for those in need. While the debates rage on about what the size of the welfare state should be, the merits of a basic income, and the efficiencies of state-run services, no one can reasonably question that these provisions are funded by those at the top.

As my colleague Christopher Snowdon has previously pointed out, “income inequality in Britain is average by European standards and lower than average by global standards”, because of its tax and redistribution policies.

Capitalism has the best track record for lifting people out of poverty. The past few decades alone have seen millions benefit. But by hijacking the concept of inequality, Britain’s populists have found a stick with which to beat an ideology they despise, under the guise of helping the poor. It would be a travesty, for the poor especially, if they were allowed to succeed.


This article was first published in City AM.

Kate is Associate Director of the IEA. Kate oversees the IEA’s Media Centre and digital platforms, creating and commissioning content for the website, social media, and ieaTV. Kate regularly features across the national media, including appearances on BBC News, Sky News, Channel 4, Channel 5, ITV and BBC’s Question Time.

5 thoughts on “Populists have hijacked the concept of ‘inequality’ for their own political aims”

  1. Posted 23/01/2018 at 22:45 | Permalink

    I do sometimes wonder whether we should start referring to income inequality as income diversity, I expect it would make the head of your average middle class leftie explode.

  2. Posted 24/01/2018 at 16:25 | Permalink

    ‘the welfare safety net is reliant on high wages’. As a matter of fact, most welfare spending, once you exclude pensions, actually goes to people in low paid, insecure employment. The problem here is that many very wealthy people in the UK don’t feel they should pay tax, and the Conservative ambition to have a ‘low tax, low welfare’ society fuels that ambition. We do have low welfare spending, once you exclude the considerable costs of the private service providers from the bill. Because of the fall in value of ordinary wages – which have been stagnant now for some years – and the rise in the cost of living, many people simply need welfare support as well as their wage to meet their essential living costs. My point is that wage inequality is creating social and economic problems. If people were paid a wage that was sufficient to meet their basic needs, then many would not need welfare support. If we also tackled tax avoidance and offshore banking, and sent ut the clear message that tax isn’t merely optional: that people who have gained a lot from society need to put something back into it, then the Treasury wouldn’t be struggling with low contributions. If we lift low wages, more people would also be able to contribute tax.

    Inequality is linked with poverty directly, as businesses pay as little as possible in order to sustain and increase profit. Another link is via austerity, which has been targeted disproportionately at those with the least income – underemployed, unemployed, low paid and disabled people, for example, who have seen substantial cuts to their income. At the same time, wealthier earners have seen generous handouts in the form of tax cuts. You can see where I’m going with this, I’m sure

  3. Posted 24/01/2018 at 17:50 | Permalink

    I am not sure that ‘populists’ is the correct nomenclature here. Populists are associated within the mainstream media as that section of the population that has ignored and overturned the advice and counsel of those who are so much wiser and more experienced than them within society, preferring instead to follow their own reasoning. Brexit is the obvious example as none other than George Osborne has declared that he wrote his book ” to tackle the issue of “populist nationalism”.”

    Given this general trend among ‘populists’ to ignore opinions that do not make sense to them in favour of a more reality based outlook upon life, (which Kate has herself noted, “If you look at the real world, you’ll notice that most people, regardless of their politics, are generally not opposed to inequality.”) it is highly unlikely that they will have adopted the stance outlined within this argument.

    This is because the ‘neoliberal’ stance that is described as deliberately conflating equality and equity is a product of cultural Marxism as perpetuated by Western Universities through critical theory over the last twenty-five or so years.

    Such things are likely to be far outside the everyday experience of ‘populists’ as George Osborne sees them.

    These ideas are more likely to have taken root within the minds of people exposed to recent left-wing political theories, inculcated through academia and reinforced by constant endorsement from many sections of the media. This is more likely to be the group referred to by the ‘populists’ as the ‘elites’ – those whom they ignored during Brexit because they did not speak for people who live outside metropolitan or university bubbles.

    Is it possible that Kate Andrews just does not want to have her perfectly sound ideas associated with the outlook and attitudes of ‘populists’, preferring instead to see herself as an ‘elite’? 🙂

  4. Posted 26/01/2018 at 14:53 | Permalink

    “no one can reasonably question that these provisions are funded by those at the top.”

    Really? Please don’t drag out the fig leaf % statistic of what the top funds, you know, the one that doesn’t mention the average rate of tax they pay, or the size of the income on which it’s based. We know the one.

    These provisions are actually funded by those of us in the middle. Those at the most egregious top are not only the beneficiaries of a corporate governance gravy train now off its rails, they are also the most adept at ensuring they keep all of it for themselves. Trying to excuse the obscenities of the 1% by your sunny sleight of hand ignores the ugly truth about inequality you don’t seem willing to see. I too am relaxed about people becoming filthy rich, *provided*they*pay*their*taxes*

  5. Posted 06/12/2019 at 15:30 | Permalink

    Wow. ‘Cultural Marxism’ is an antisemitic trope. It’s remarkable what people scrape up in their justification of crass inequality, created through policies that punish poor people and reward wealthy people.

    The argument that capitalism/ neoliberalism has ‘pulled people out of poverty’ or that it is the best way to generate wider affluence is not supported with empirical evidence. Over this past decade, we have seen the re-emergence and entrenchment of absolute poverty. At some point it will be necessary to acknowledge that neoliberalism has failed. Those you label ‘populists’ already know it has. You can carry on living in denial and using the myth of meritocracy to explain away the huge social problems we face if you wish, but sooner or later you will see just how closely ‘meritocracy’ and eugenic ideas are closely related, and economic Darwinism

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