I blog this with some misgivings as it touches on matters (of economic policy) about which I lack both confidence and the necessary expertise. But here goes, anyway. Two things I came across this morning. One:
[T]he overall wealth of Australia's wealthiest young entrepreneurs grew 15 per cent; in a time where average wages grew about 4 per cent, and much lower outside the mining sector.
Even in America, where the economy is in far worse shape than ours, it's a great time to be rich. America's top executives each earned about $US10 million in the past year, up 12 per cent on the previous year, a year in which unemployment hovered near 10 per cent and wages didn't grow.
Two:
Between 1979 and 2007, the income gap between the richest 1 percent of Americans and the poorest 40 percent more than tripled. Today, the richest 10 percent of Americans control two-thirds of the nation's wealth, while, according to recently released census data, average Americans saw their real incomes decline by 2.3 percent in 2010. Though our economy grew in 2009 and 2010, 88 percent of the increase in real national income went to corporate profits, one study found. Only 1 percent went to wages and salaries for working people.
Now, I don't know if these figures are accurate, and they're about Australia and the US, not this country; yet I couldn't help finding myself thrown back by them to the article I read yesterday by Hopi Sen presenting Labour's current predicament with crystalline clarity and cogency. My seeing a connection between those statistics of growing inequality and the questions Hopi raises rests, I should say, on the presumption that for the UK as well there will be figures that show levels of inequality in our society that are unpalatable and unjust.
The questions that interest me, in the light of the above, are put by Hopi as follows:
What is a progressive social democratic party actually for, if it is not able to spend more money than in the past?
.....
What is the role of the progressive state when you are at the rough upper bound of state spending as a proportion of GDP that a market economy seems to find politically and economically acceptable? What is the progressive case in a fiscally conservative time?
If I have understood Hopi right, the political horizon here is one where the possibility of more state spending without increasing taxation has run out for the time being, and increasing taxation is on the wrong side of the boundary he alludes to in speaking of what 'a market economy seems to find politically and economically acceptable'. Referring to a left approach to this predicament, he writes:
[That] solution is higher taxes on banks, capitalism, wealth, privilege and Rupert Murdoch. We can use the funds gained to improve public services. All of this will be painless for those we seek to serve. This policy programme offers an analysis of the problem, and a clear solution. However, we tested this approach several times in the 1980s and early 90s, and it seemed relatively ineffective, electorally speaking.
OK, so what is a progressive social democratic party for? One thing, it strikes me, it could be for is to make inroads on the scale of the inequalities I started out by invoking. But, on the other hand, one might reckon that this objective, involving high levels of redistributive taxation, is not electorally viable - as indicated by the experience of the 1980s and early 1990s. But does that mean, then, that with times as they are, the Labour Party faces a choice between at least one of the things a progressive social democratic party is for and electoral success? Must it abandon its social-democratic soul in order to win elections? I don't ask these questions rhetorically. I'm interested in knowing the answers to them. All I will say further is that if in a time of crisis like the present one, when there seems to be a widespread public perception that the untrammelled pursuit of vast wealth by a relatively few is now costing everyone else dear, a progressive democratic appeal to greater fairness can't make its way effectively across some majority of the voting population, then we on the left are in an even worse condition than we may previously have realized.
