I am exercised by the distinction between caring about poverty and caring about inequality. We might characterise this as the distinction between ‘look after the weak’ and ‘soak the rich’! There is now a literature about how getting richer only helps people feel better off up to a certain point, while for rich countries, being better off does not make a difference.
It is then argued, in books such as the Spirit Level, by Wilkinson and Picket, that it is reducing inequality which is the key to making us better off in rich countries. But I am not convinced by their argument.
Partly, this is because the statistical relationships that they derive are not very powerful. In particular there is a very weak discussion on the direction of causation between, for example, trust levels and inequality. If these links cannot be made strongly then a policy of reducing inequality will be expensive and completely ineffectual.
What is especially frustrating is that instinctively it seems reasonable that inqualities of various kinds would become more important as societies become richer. What is important is to understand how much more important and what it means for the functioning of a stable society and its ability to provide satisfactory lives for its citizens. It does not help to be told that successful societies can be forged in the community of war – this does not seem to be a good policy option!
By contrast, I do not think we pay enough attention to the causes and consequences of poverty, which at the same time has become a mainstream industry for policy makers, public sector staff and think tanks. From the foundations of social democracy, reducing poverty has been a central aim. What is so extraordinary is that so little appears to have been achieved. The Public Services Trust 2020, of whose investigation into the future of public services I am a Commissioner, has detailed the failures of our services on a number of levels.
It seems to me that one root of this is a failure to distinguish between services that are essentially for all, (and for which all bear a responsibility to use wisely and to understand their costs and benefits) and those for which those who pay and those who benefit are never the same. It is in the interest of the producers of these services to confuse these differences – even if they do not mean to.
Until we debate these distinctions more clearly, we risk continuing to go round in circles in these debates.