Tuesday, 28 August 2012

Wealth inequality: the invisible quintile A couple of articles have been published lately (BBC, Atlantic) based on some fascinating 2011 research by Michael Norton and Dan Ariely which looked at Americans’ perceptions of wealth and inequality (pre-pub copy available here). They invited respondents on a ‘nationally representative online panel’ to say how much wealth they think is concentrated in each percentile from the poorest to the most wealthy. They found that respondents ‘dramatically underestimated the current level of wealth inequality.’ The average estimate was nine per cent for the bottom two quintiles combined, and 59 per cent for the top 20 per cent. This contrasts starkly with the reality which is that the bottom 40 per cent of the population holds 0.3 per cent of the wealth, while the top quintile holds 84 per cent of the wealth. This echoes UK findings. According to this Equality Trust paper, three quarters of us misperceive our economic position within British society. Norton and Ariely asked respondents how they would like to see wealth distributed ideally: ‘Respondents constructed ideal wealth distributions that were far more equitable than even their erroneously low estimates of the actual distribution.’ The black bars in this chart from the Atlantic show that people’s ‘ideal’ proportion of wealth for the highest quintile was only slightly more than half the estimated proportion, and much less than half the actual. (The 'actual' in the left hand columns is invisible because it is so small). The researchers then invented somewhere called 'Equalden' (modelled on Sweden) with a more equitable distribution of wealth, and asked people whether they preferred it to the US actual distribution. Yes indeed, 92 per cent of respondents did, and there was no significant difference in gender or income level among participants. Nor, strikingly, was there a significant difference between those who professed Republican sympathies and Democrats. Notoriously, both the US and the UK have been getting more unequal for a long time. If nothing else, the debate around this research has to give a boost to the equality movement, because it implies that even those whose behaviour suggests they think they benefit from inequality, would prefer a more equal society. But. As one commentator put it: 'Americans' ignorance about wealth (and, probably, income) distribution is encouraging in the sense that it offers hope that most voters might opt for government policies more conducive to equality if only they knew how unequal things were. But it's dismaying in the sense that people who occupy a position of relative privilege seem to go out of their way to avoid acknowledging it.' Maybe all it needs is for the right calibre of politicians to convert this knowledge into lasting change: is that too much to ask?
Happy-clappy community engagement and the politics of disadvantage Two years and five months ago I attended the (opposition) Conservative Party launch of an idea called the big society. I must admit it took me a few days to appreciate what it meant. Since then I’ve heard people whose views I might once have respected, express enthusiasm for – even regret for the apparent passing of – this devious and snide attempt to theorise the demolition of the public, the suffocation of community action (manifestly not its liberation) and the justification for disempowering gestures of philanthropy. Today - thank you Patrick Butler - we have a bitter-sweet example of just what big society amounts to. Patrick reports on how Children North East, a long-established organisation with a sound reputation for serving disadvantaged young people against the odds, found that the erosion of public funding for what they do stopped, abruptly, at the pockets of the charity’s staff: They put their hands in their pocket and paid for the children's lunches themselves. The staff set up what in effect was a mini-food bank scheme. They bought ‘a little extra’ in their weekly family shopping trip, and used it to stock up the charity's new ‘pantry’. The article quotes tellingly from the blog of the charity's chief exec, Jeremy Cripps: So here we have a Government without the humanity to care for very vulnerable people until they are deported by giving them even a minimal amount of money to feed their children; a local authority providing shelter for those families but forced to cut back on its spending by the Government; passing that cut on to a charity which too has to economise; the buck passes to the charity's staff who cannot stand by and do nothing while in daily contact with children in basic need of food; so they take it upon themselves to make sure children do not go hungry. The problem I have is not that this could be any kind of surprise to anybody who has been paying attention. What bothers me is that the emergence of circumstances like these has been accompanied by a degree of encouragement among people in the new community engagement industry, who have been happy to promote a form of community development that ignores the politics of disadvantage: lots of jolly emphasis on happy-clappy ‘community’ but no recognition of the manifest and rampant social injustices that try to make philanthropy (and by extension, depoliticised community involvement) an acceptable substitute for social responsibilities. I have suggested before that the assimilation of selective-value community development into public policy could effectively neuter the movement and marginalise the voices of anyone who protests against political injustices that cause great need. Further, it seems to me that collusion in such policies amounts to subscribing to the demonisation of the poor. That is inexcusable.

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