The Percentage Game: Berfrois Interviews Danny Dorling
by Bharat Azad
Eight years have passed since the rate of housing foreclosures in the less affluent parts of cities like Cleveland and Detroit leapt up at an alarming rate. It’s been seven years since the rate of housing foreclosures in the affluent suburbs of states like California, Arizona and Florida began to rise at a similar rate. It’s been six years since Lehman Brothers filed for bankruptcy.
Around five years ago, Mervyn King said, “To paraphrase a great wartime leader, never in the field of financial endeavour has so much money been owed by so few to so many. And, one might add, so far with little real reform.” Three years ago, the Occupy movement began taking over public spaces as a call for economic justice. A year ago, John Lanchester wrote that “another global crisis is coming, as sure as Christmas.”
I missed one date out. It was almost exactly seven years ago that Simon Jenkins called Danny Dorling the “geographer royal by appointment to the left.” Dorling has written a new book, Inequality and the 1%. The book is a detailed exposition of the state of income inequality in Britain (and the world more generally). Dorling’s book is entertaining, meticulous and often surprising. There is a semi-veiled optimism throughout. Dorling not only details the need for a ‘slow revolution’ against the 1%, but gives us some indication of its first glimmerings.
Tell us about your reasons for writing this book. The Occupy movement popularised the ‘We are the 99%’ slogan. What did you want to contribute to the growing debate over this income inequality ratio?
One reason is very nerdy. It’s because Occupy did happen to stumble upon the right ratio. Often today, people say it is really the 0.1% we should worry about. But it is actually the 1%. The 0.1% do most of the damage, but they are aided by the rest of the 1% who are rewarded for their aiding – to put this all very metaphorically. It is not as if they are that well-coordinated, but the rest of the 1% have seen their incomes and wealth rise too. In contrast the ‘9%’ (the rest of the top 10%) have not – I wrote about this in the Journal of the Royal Statistical Society in 2013: Download PDF; or see hereThe book is, in effect, a lengthier version of that academic paper.
During the 1979-90 period the 1% ruled, aided by the 9% – that is no longer the case. My evidence for ‘who rules’ is ‘who gains’. Or, as The Wire made famous, “follow the money” to find the power (I didn’t put that Lester Freamon quote in the Austere Academic Journal).
There are also a lot of geographical lessons to be learnt about the 1% in other countries – where we can see the alternatives to such extreme greed working.
What do you make of the other significant works to have come out in the last few years by the likes of David Harvey, David Graeber and Thomas Picketty?
I admire all three, but especially Piketty – the least radical and hence far better known. I’d add Richard Wilkinson and Kate Pickett’s book The Spirit Level to that group. Their strongly-argued book is having a slow, long-term effect. And, of course, Owen Jones’s Chavs, which had a very quick, very big impact.
There are calls from a lot of areas, even relatively unlikely ones, calling for higher taxes and greater equality. Yet why is so little being done?
It is good that we think so little is being done. As long as we think that what is being done is not enough, there is agitation and a chance for much more to happen. A lot has happened, but I don’t tend to dwell on that side of things in the book.
We could and should celebrate inequality falling among the 99% despite the 1% getting richer. We have no new Bob Diamond. There has been some restraint at the very top of banking, but none around the £1million annual salary level (the best-off 1,500 bankers are on far more and that is where the slight beginnings of restraint are to be found). George Osborne has introduced Capital Gains Tax on property value rises, but only after May 2015. Our national mood has changed. Even our comedy! People are now shamed when outed as tax dodgers. However, the last time inequality peaked, back in 1913, no one noticed it had peaked until at least the 1930s. It may be almost peaking now – or things may get much, much worse – hence it’s good we think that nothing has been done.
If 5.5% of Scots had voted ‘yes’ rather than ‘no’ then you wouldn’t be able to ask the question. We are getting very close to much more being done – the main issues in Scotland were really inequality and fairness.
You mention in the book that the number of people in the top 1% is fixed – someone has to get out of it for another to get in. Can you tell us more about this?
The population of the UK is 64.1 million. The 1% is thus 641,000 people. Or about 330,000 adults. The 0.01% are 3,300 adults; and so on.
In the UK, average (median) household income is lower than in France and Germany. And their housing costs are less, so the average family in the UK is worse off. It is hard not to equate that to the 1% taking more and more (by charging higher rents for example).
In fact, it is more complex than I said in the book.
In the 1980s, you were doing okay if you were in the 10%. Incomes of the 9% (the 10% not including the 1%, as it were) rose from 2.5 times the median income in 1979 to 3 times the median income in 1990. Now, if you are not in the 1% you are seeing your living standards fall. In 30 years’ time, if this were to carry on, only the 0.1% will feel safe. Another 30 years and it’s just those 3,300 adults (as it was, in effect, in the 1880s). I can see hardly any chance of us letting that happen. It would be like voting for Bladerunner.
Illustration from Popular Science Monthly, Vol. 88, No. 3, March 1916
Right-wingers use the phrase ‘hard-working people’ a great deal. The idea seems to be that if you work hard, you too can potentially enter the ranks of the top 1%. Is this really true since 2008? Doesn’t the fact that the number in the 1% is fixed kill this Tory myth?
Yes. It was so much easier (ten times easier) in the 1980s. Work hard, stamp a few others down on your way up and you too could be in the 10%. Of course, 90% couldn’t. However, today it’s getting close to ‘impossible’ for most people, no matter how hard they might work. You really need to steal a lot of oil in Russia and then move to Mayfair to do it quickly. Have a look at the top of the Sunday Times rich list, for example.
The portrait of the 1% in your book is one of sociopathic, power-hungry narcissists with a striking lack of empathy. This may seem antagonistic, but you also write that we “may be making a mistake when we blame them [the 1%] for being greedy. Many of them may not be able to help it. The very rich desperately need the help of the better-adjusted majority.” What can we, the 99%, do to help?
I should have been a little more careful in the book. The 1% contains a disproportionately large number of sociopathic people. There will, though, be just as many if not more in the 99%, but they tend to end up in prison. The 0.1%, who earn over £1 million a year, are far worse in the sociopathic stakes. However, the good news is that their children tend to be far nicer than they are, tending not to hold onto the wealth or to make more. I don’t think Piketty gets this.
Now, it’s right to say that the majority of the 1% are greedy. Most, as far as I can see, don’t think they are being greedy because their behaviour does not appear as greedy when compared to the behaviour of the 0.1%. We have to explain this to them and ‘we’ is not a very broad church – I am within the 4% to 2% range (if this book sold as well as Piketty’s, I’d be in the 2%) although my wealth is -£100,000 (net, minus a mortgage).
What is your riposte to the more libertarian argument that, to paraphrase Peter Mandelson, we should be intensely relaxed about people getting filthy rich? And that to do otherwise would be to curtail their freedom. And that they’ll simply move abroad if we raise taxes on them.
Mandelson did add, “as long as they pay their taxes.” However, his government failed to ensure we had normal European income tax rates.
If they go abroad it is hard to see what the loss is, in fact it’s the quickest way to calm our housing market down. Also, we’ll lose the most selfish ones first. I’m surprised that more people don’t ask what level of emigration of the very rich would be ideal. Perhaps down to the average European concentration of the very wealthy?
You have written a great deal about property in the past. London is currently in the midst of a savage property bubble with daily news stories about increasingly ridiculous sums of rent being asked for sub-standard properties, more people getting evicted, more private developments being built and suchlike. This seems destined to end in more than just tears. What can be done to fix this?
Numerous things can be done to fix it. Almost any of them would have a great effect as the bubble is so fragile and is based on ‘sentiment’. In fact, the bigger the bubble gets the more it could burst without needing any help. But really, even the feeblest of policies – more council tax bands, rent regulation – might be enough to help prices begin to steadily fall.
However, a slight fall in prices results in a massive fall in Tory votes. Hence the government’s policy to keep prices high and, if possible, gently rising.
Related to the above, you have mentioned that one way to get the housing crisis fixed is to get MPs to rent on the private market. How would you see this working?
Increase their salaries, say to the level of the 5%, and take away all housing benefits from them. The 5% can’t buy a ‘nice’ house in London; they’d have to rent such a house (a 3 bed in zone 3). Those who just get into the 1% have a household income of £160,000 a year – they can get a mortgage for that nice house (£500,000 being the average London price). It would suddenly be in the interests of MPs for house prices to fall.
At the end of the book, you sound a note of cautious optimism about the ‘slow revolution’ against the 1%. Are you optimistic that it may end in a comforting whimper, or will it be a calamitous bang?
A bang comes in other forms. Perhaps another banking crisis like 2008, or a ‘Yes’ vote in Scotland resulting in a run on the pound. Bangs are very possible, but also very unpredictable. I don’t foresee a bang like a general strike, but nothing is impossible.
Where this has happened before in history, it’s tended to end with a whimper. The richest country in the world before England became rich was the United Provinces, now the Netherlands. Today, they are a very equal European country. Sweden once had an empire. Venice was once the centre of world wealth. All gradually become more normal.
The alternative for the UK is to move to a new extreme: US or Singaporean rates of inequality. But there are no other examples of more extreme societies in the rich world.
How are your arguments being received across the political spectrum? Have you encountered any robust rebuttals to the issues your book presents?
The HardTalk interview is about the most robust I have had. That was from a member of the top half of the 1%.
Politicians really hate talking about inequality and so tend not to attack. The Green Party, the Scottish National Party and the National Health Action Party have all been very positive. Even UKIP, but I’m convinced they’re lying!
If Labour are well advised they’ll play this as their main election theme. They just need to say they are “not envious … they are disappointed with the 1%.” Disappointed is a word that the right can’t cope with. It reminds them of the classic, “You have let the school down, you have let your family down, but most of all you have let yourself down.”
Most of the 1% don’t think they have enough. That is a sad state to be in, not one to be envied. But it’s hard for Ed Miliband and his wife Justine (now in the 1% as a couple) to make this case. Or even Yvette Cooper and Ed Balls (just about in the 1%).
Obama was not in the 1% when he came to power. But almost all his advisors were.
About the Author:
Bharat Azad is an occasional writer based in London with a very wide range of interests including a love for Proust, Manchester United and scouring Google for ‘good hip hop nights’.