Inequality under fire from the right
As Donald Trump takes back the reins of power in the US, we look at how economic inequality is unsettling the ideological boundaries of recent decades
This post is written by Jack Jeffrey, Researcher at the Fairness Foundation
In his popular book The Righteous Mind, Jonathan Haidt distinguishes between two competing versions of fairness. On the left, fairness implies equality, whereas on the right it means proportionality (people should be rewarded in proportion to what they contribute, even if that means unequal outcomes). Beneath the turmoil and dispute of modern politics, Haidt contends that differences in moral intuition are why agreement, or even compromise, between right and left feels almost impossible.
Traditional political cleavages remain relevant. In Britain, like in most other Western countries, these binaries help elites and citizens orient themselves to politics. But they have made us blind to the subtle and nuanced ways in which these categories are being challenged and reshaped by decades of stagnation and decline.
From public services starved of resources to a sclerotic economy, Britain is ill at ease with itself. The promise of rising living standards and shared prosperity has been replaced by an unprecedented contraction in real wage growth not seen since the 19th Century.
According to much-cited Resolution Foundation research, if wages had continued to grow as they did before the financial crash of 2008, real UK average weekly earnings would be around £11,000 per year higher than they currently are. Alongside this, living costs have become much more expensive. In 1980, the average household spent 9% of their income on housing costs. By the early 2020s that had doubled. Finland is the only other OECD country that spends more on housing.
The intuitions that Haidt argues underwrite political choice are converging against a status quo that satisfies neither a preference for equality or proportionality. Instead, Britain, as it stands, works to reward extraction. As Brett Christophers has powerfully outlined, the key mechanism by which this happens is through rentierism – the control and generation of income (‘rents’) from scarce assets.
The British economy is now dominated by sectors that derive their profits primarily from owning rather than doing. Rent-seeking doesn’t fully encapsulate the spectrum of extractive activities. Corporate leaders have leveraged their influence to diminish worker compensation and job stability. Financial manipulation, including the skimming of trading profits and creative accounting, has enriched top executives and shareholders. And markets have become increasingly monopolistic, creating barriers to genuine competition.
As a consequence, Britain has been trapped in a vicious cycle of low growth and high inequality. In part due to policies that have supported the inflation of assets, the period between 2011 and 2019 saw a 48% increase in the absolute gap between the total wealth of those in the bottom 10% in the wealth distribution and those in the top 10%, and a 49% increase in the absolute gap between the total wealth of the middle 10% in the wealth distribution and the top 10%.
These breathtaking divergences, as well as growing over time, are also high by international standards; the size of the absolute gap between the wealthiest 10% in the UK and the bottom 40% is second only to the US, among OECD countries.
A growing chorus of conservative thinkers are beginning to question the economic orthodoxy that created this situation. In a recent paper for the right-leaning thinktank Onward, Nick Timothy MP and Gavin Rice argue that “a multi-decade economic consensus has run out of road”. They suggest that “the overall ‘deal’ facing British workers has become increasingly unfair. Poor growth performance and barriers to home ownership mean hard work and merit are no longer the guarantees of reward they once were.”
This, they argue, is a product of policy assumptions that prioritise maximal economic efficiency over flourishing workers, families and communities. Conservatives instead “should favour production over extraction, investment over rent-seeking, rising living standards for all, not the ever greater accrual of wealth to the richest global elites”.
Influenced by US conservatives like Oren Cass (a former advisor to Mitt Romney), this analysis rejects hyper-globalisation in favour of a national political economy that provides dignified work and economic security. Trump’s ‘America First’ rhetoric and protectionist trade policies are anything but coherent, and the coalition of voters that swept him to victory is unstable, but the MAGA movement has, some would say cynically, tapped into the economic anxieties and frustrations of ordinary workers let down by deindustrialisation and outsourcing. For Cass, and others like J.D. Vance, the ‘fusionist’ consensus – an attempt to integrate and reconcile economic libertarianism with conventional religious values – has failed because it is based on the ridiculous idea that the instinct to preserve could be miraculously combined with a limitlessly free market.
Dogmatic market fundamentalism has laid claim to the term ‘conservative’. But that view is in significant tension with other conservative commitments. Not least a deep concern, contra Haidt, with large economic imbalances.
As David Lay Williams brilliantly outlines in The Greatest of All Plagues, the conservative canon is riddled with thinkers that have registered objections to inequality. Plato identified inequality as a central problem of politics. He warned that it would undermine “civic friendship and harmony”, proposing that the wealthiest have “no more than four times the property of the poorest citizen”.
The 17th century philosopher Thomas Hobbes, greatly admired by conservatives like Michael Oakeshott, argued that a prudent sovereign should redistribute wealth to prevent disorder. And Adam Smith, ordinarily associated with unrestrained capitalism, complained that inequality was morally corrupting, encouraging the “disposition to admire, and almost to worship, the rich and the powerful, and to despise, or at least to neglect, persons of poor and mean condition”.
Free market evangelists have treated economic egalitarianism as an invention of the political left. But Williams’s book suggests that this is simply wrong. If anything, it is the casual dismissal of inequality that constitutes a break by thinkers like Milton Friedman from a rich conservative tradition that emphasises prudence, loyalty and stewardship.
In trying to rescue conservatism from market fundamentalism, conservatives like Nick Timothy could, like his left-wing counterparts, be creating the conditions for a fairer, more secure country, one that is less disfigured by what Plato called “the greatest of all plagues”.
This post is written by Jack Jeffrey, Researcher at the Fairness Foundation
UPCOMING EVENT
Tuesday 4 February, 18:30–19:45 GMT
Bush House 8th Floor (North Side), 30 Aldwych, London, WC2B 4BG (view map)
Speakers:
Claire Ainsley, Director of the Project on Center-Left Renewal, the Progressive Policy Institute and former Executive Director for Policy for Sir Keir Starmer
Professor Ben Ansell, Professor of Comparative Democratic Institutions, Nuffield College Oxford and author of Why Politics Fails
The Rt Hon Liam Byrne MP, Member of Parliament for Birmingham Hodge Hill and author of The Inequality of Wealth
Peter Hyman, Former Senior Advisor to Sir Keir Starmer
Hamida Ali, Head of Policy and Programmes, Future Governance Forum
Professor Bobby Duffy, Director of the Policy Institute at King’s College London (chair)
President Trump is in power once more. His victory is complete but the business of understanding just what happened has only just begun as we seek lessons – and warnings – for UK politics and this year’s European elections.
Why were the Democrats defeated? Is America’s surging inequality the root cause of President Trump’s victory? What connections can we draw between growing inequality and the populists’ clarion call for a “revolt against elites”?
Join the Policy Institute and the Fairness Foundation as we convene some of the leading thinkers and analysts who have studied the American campaign up close for a discussion about what is fuelling populist politics in America, what we can learn from what happened – and how the UK government should respond.