Acceptable equality

Tim asks: what is the correct level of equality? What Gini coefficient should the left be happy with?
This is an awkward question for that part of the left that frets about pattered conceptions of equality.
But many of us don't think of equality as an aesthetic principle, a pretty pattern to be imposed by the state.
Instead, what troubles us is the origin of inequalities.
A thought experiment will illustrate. Imagine a society with a Gini coefficient of 0.5 - roughly the UK's pre-tax, pre-benefit level.
Such inequality could be the result of a minority getting rich by robbing and oppressing the majority that lives in penury. Or it could, in theory, be the outcome of a wealthy society of entrepreneurs some of whom have gotten temporarily lucky and others of whom - whilst living comfortably - are either having a temporary bad patch or just starting up.
We'd all - left and right - agree that the latter is much more acceptable than the former.
For me, there are three sorts of inequality in particular we object to:
1. Those that result from inequalities of power, that allow some to be exploited. I find it more offensive that an incompetent manager can earn £50,000 a year by bullying his staff and hiding his incompetence than that a footballer or trader can earn £50,000 a week.
2. Inherited wealth. Much very old wealth is due to inequalities of power; enclosures, expropriation of native people, slavery, grotesque exploitation. There's an obvious case for redistributing this.
People who inherit any wealth are lucky - just as people are lucky to inherit a talent. But the difference is that someone who inherits a talent can only make money by contributing to society. Someone who inherits wealth gets something for nothing.
What's more, it's possible that people have a right to the income they earn - it's the self-ownership principle. But it's much less likely (pdf) that they have a right to inherit money.
3. Inequalities resulting from market failure. The most important of these failures is the lack of a pre-birth insurance market.
Take Thierry Henry. His wealth is as legitimately earned as you'll see - it comes from his vanquishing evil. But there's still a case for taxing it.
Imagine loads of people like Thierry waiting to be born. They know they'll be born into poor (by western standards) homes with poor prospects. But one or two will have the talent to earn great money. But, before being born, they don't know which precise individuals will have these talents.
I reckon that in this position, the Thierrys would agree to insure each other, so that the talented ones will pay tax to raise the living standards and prospects of the untalented ones. They'd pool their luck.
This generates a tax on even legitimate earnings.
Of course, I don't know precisely what tax rates it would generate - it's just arrogance to pretend otherwise.
I'd rather ask another question of the left. Can you imagine a feasible society in which inequalities are acceptable, and no reason for state action?
I suspect the difference between me and the managerialist left is that I (just about) can. It'd be a society of worker ownership, basic income, abolition of the right of inheritance and taxes that replicate insurance. With background institutions like these, inequalities of income (providing they don't translate into inequalities of power) would be tolerable.

Comments

[dearieme]

I've noticed before that you have something of an obsession with "enclosures". Can you tell us how a bunch of landowners re-arranging their hedging leads to whatever horror you assume it does?

[Scratch]

They weren't landowners, the land enclosed was the common property of the peasantry.

It was barefaced theft.

[Alex]

Chris, I think you'd better read this.

http://www.aleph.se/andart/archives/2007/02/how_power_corrupts.html

[chris]

Alex - absolutely everyone should read that.

[dearieme]

"the land enclosed was the common property of the peasantry": bollocks. Go and read about it.

[Scratch]

They didn't enclose common land?

And there was me thinking they did.

[guest]

Landownership is morally dubious anyway. Why should a private individual be allowed to collect unearned revenues from something that's freely supplied by Nature?

Many of the "Asian tigers" tax landownership fairly heavily - in Hong Kong all land is publically owned. Incidentally, these countries do not seem to have a serious inequality problem.

[dearieme]

Of course they enclosed common land: each commoner got a share of the enclosed land or other compensation for loss of his common rights. No doubt there was some theft during all this - by tenants, squatters and landowners - but the notion that, as a standard matter, people's common grazing and foraging rights were simply seized is just tosh. Try Mingay "Parliamentary Enclosure in England". Example p128: Heacham, Norfolk, each commoner was compensated with two acres of middling land and 1.5 acres of good.

[Jon]

Dearieme -- some of the land enclosed was privately owned; some was common land.

Guest -- "unearned" begs the question, but why *shouldn't* a private individual be allowed to collect revenue from something freely supplied by Nature? Anyone for burden tennis?

[Shuggy]

"Landownership is morally dubious anyway. Why should a private individual be allowed to collect unearned revenues from something that's freely supplied by Nature?"

Paging John Locke...

Chris, I'm interested in your hostility to inheritance. How meaningful would *any* ownership be if you can't pass it on to your children? Or to a cat and dog home? Wouldn't this have a substantial impact on incentives? You say it is possible for people to have a right to the income they earn, in which case they can, presumably, consume it as they wish in their own lifetime. So if they squander it on slow horses and fast women, this is ok but if they live more frugally and pass it on to their children, this is intolerable?

[Jon]

John can't come to the phone right now, he's busy gathering acorns.

[dearieme]

Jon, I agree that much of the land enclosed was private land: hence my early remark about landowners rearranging their hedges. (Though there was more to it than that since they often bought out their tithes as well and built roads too.) My later remarks were about the strange notions some people entertain about the fate of common land (even if they have very little idea what common land was.)

[AJE]

"we should regard as the most desirable order of society one which we would choose if we knew that our initial position in it would be decided purely by chance"
FA Hayek

[stuart]

Surely shuggy is right. We may not have the right to inherit wealth but our parents have the right to spend it as they choose.

[jf]

"Can you imagine a feasible society in which inequalities are acceptable, and no reason for state action?
I suspect the difference between me and the managerialist left is that I (just about) can."

So could you please flesh out this "feasible society?" You got knowledge, let'er go.

[Phil]

Coming at it from a different angle, I'm wondering who this "managerialist left" is. I think New Labour's ideological relationship to the British Left is similar to Mao's relationship to Marx: first you add the managerialism (or the dictatorship), then you take away the redistribution (or the state socialism) - and presto, your knife's got a new blade *and* a replacement handle.

[Sam]

I'm not sure I understand "abolition of the right of inheritance". If I can't give my property to someone, how is it my property?

[tom s.]

dearieme - you are making some very bold claims and I am suspicious. You are, I guess, claiming that EP Thompson was wrong to say the following:

"In village after village, enclosure destroyed the scratch-as-scratch can subsistence economy of the poor. The cottage without legal proof of rights was rarely compensated. The cottager who was able to establish his claim was left with a parcel of land inadequate for subsistence and a disproportionate share of the very high enclosure cost.
Enclosure (when all the sophistications are allowed for) was a plain enough case of class robbery, played according to fair rules of property and law laid down by a parliament of property-owners and lawyers. Recent scholarship suggests that the rules of the game were kept to more fairly than was suggested by the Hammonds in their great "The Village Labourer": even very small property-owners received reasonable treatment, many enclosure commissioners acted conscientiously, and so on. But, in making these useful qualifications, it is possible to overlook the larger fact that what was at issue was a redefinition of the nature of agrarian property itself".

I don't expect you to agree with Thompson, of course. But you can hardly argue that he knew what he was writing about and that he paints a very different picture to the one you paint.

[Alex Gregory]

"Can you imagine a feasible society in which inequalities are acceptable, and no reason for state action? I suspect the difference between me and the managerialist left is that I (just about) can"

Reiterating Phil, I tend to wonder if you're attacking straw men here. I doubt anyone, no matter how statist, believes that there is no limit to state competency.

[dearieme]

If he was following the Hammonds, he was following agit-prop, not history.
"The cottage without legal proof of rights was rarely compensated." But in fact the commissioners tended to take pains to see whether there were established rights even if they weren't documented. The classic technique was to ask the oldest folk in the village whether the occupiers of such-and-such cottage had always had undisputed use of the common and if so what their stint was. If the ancients said that no-one in their memory had disputed that right, then it would be accepted. If they replied that no, it was a bloody disgrace that they used the common but the squire had too much influence on the manor court and wouldn't protect the commoners' rights, then the squatters would no longer be allowed to go on stealing the commoners' property rights.
Or consider Mingay pp44-45 "Enclosure of the Cumbrian Commons was welcomed even by small subsistence farmers who wanted the conversion to legal certainty of their existing customary rights" - a specific example contra Thompson's windy generalisations.

[tom s.]

My point was not to provide specific evidence to argue the point, or to argue my quotes against yours, but to point out that Thompson, whose attention to specific detail in "The Making of the English Working Class" and throughout his whole career is remarkable, came to a conclusion quite different from Mingay. So the "windy generalisation" accusation is really beside the point.

It's depressing really. I mean, we could argue book against book, quote against quote, your happy Cumbrian farmers against my 1799 Cheshunt Park commoners threatening to not rest until "whe have spilt the bloud of every one that wishes to rob the Inosent unborn." But I'm not sure it gets us anywhere does it?

[dearieme]

Depressing? Ooh, no. Consider "The cottager who was able to establish his claim was left with a parcel of land inadequate for subsistence and a disproportionate share of the very high enclosure cost." The first part is suggestio falsi: he's implying that a commoner might previously have been able to subsist on his common rights. Bollocks. In Heacham, as referred to above, the commoner's rights were summer grazing for two large cattle, plus the gathering of fuel. That's not enough to subsist on: naughty, naughty E.P. The second part is reasonable on the face of it: small fields need proportionately more fencing/hedging than large, other things being equal. But must they be equal? Mingay shows a nice example where the cottagers' new fields were located abutting onto their crofts at the back of their cottages, to reduce the cost to them of new fencing. Naughty E.P.: that's called supressio veri. If an amateur like me can catch him out so easily, what might a professional do to him? Tally-ho!

[tom s.]

Well, if you really think that E.P. Thompson's argument and knowledge is actually present in my tiny extract posted, then you may just perhaps have a case. But of course it isn't and I'm sure you know that.

Your counter example of two-cows-in-summer Heacham would only make sense if Thompson implied in any way that his observation was universal and the several pages previous to my quote are devoted to exactly the opposite - to emphasizing the diversity of experience among field labourers in the early part of the industrial revolution. But I'm not about to retype that.

As for "what might a professional do". Well, of course, a professional wouldn't think he or she had caught out Thompson on the basis of a tiny blog comment extract. Professionals would read Thompson, and then many of them would call his book one of the most important historical works of his time.

If you really think he had as little to say as you seem to and that you've caught him out, well I'll read your comments with less interest from here on than in the past.