Top 5% own 60% of financial wealth

Submitted by Matthew on 7 February, 2018 - 2:52
The super rich

Editorial from Solidarity 461

The top 5% in Britain own 60% of all financial wealth, that is, of the wealth that brings power. Wealth inequality has been increasing since the Thatcher years, and has jumped again in the last ten years.

The Gini coefficient is a measure of inequality which ranges from 0 for complete equality to 1 for one person having the whole amount and the rest nothing. For financial wealth in Britain, the Gini figure was 81% between 2006 and 2010; between 2010 and 2016 (which is when the latest official figures, published on 1 February, go up to), the Gini went up to 91%.

The overall figure for wealth inequality is bad enough, with the top 10% owning 44%. But that is misleading. It gives the wealth many workers may have, in the form of a house, a car, and a modest pension pot, equal weight with the society-mastering wealth of the plutocrats. The overall figure, in fact, has remained steady because of the new law, from October 2012, mandating “auto-enrolment” of employees in private pension schemes, which has led to more employees paying into small pension pots.

The general tendency for wealth inequality to spiral is worldwide, and was documented in December 2017 by a big World Inequality Report produced by the French economist Thomas Piketty and his co-workers. The tendency is endemic to the capitalist system of production for private profit. It was checked for a while between World War Two and the late 1970s by the relative strength of labour movements in that period. Since then it has spiralled again.

The distance between the top one per cent and the rest of us continued to increase during the New Labour years, 1997-2010, even though the minimum wage and pension credits slightly eased income inequality at the lower end. The increase in wealth inequality goes together with escalating privatisation, marketisation, commodification, and squeezes on universal public services like the NHS. It goes together with an increase in the extent to which access to the means of enjoyment and even of life and health depends on your financial clout.

Conservatives brand socialism as a “religion of envy”. It is not that at all. In a socialist society, A will be a better dancer than B, who in turn will sing better than C, who will be a better mathematician than D, who will be a better cook than E, who will have the good luck to live somewhere with a better view than F... Socialist citizens will be less envious of those differences than are people in a capitalist society, indoctrinated to “get ahead” and to compete to outdo each other.

Socialists object not to diversity but to the overwhelming power which wealth in a capitalist society gives to the rich people at the top to impose drabness, insecurity, and draining, regulated, alienated toil on the big majority. Across the world, resentment against that insecurity, drabness, and toil is currently, in many countries, being channelled and exploited by right-wing nationalist demagogues, who offer a false sense of security in the form of reaffirmed “national identity” and scapegoating of migrants and other peoples.

In Britain, the Corbyn surge gives us a chance to break through to a real alternative: to a society based on solidarity, social ownership of the banks and industry, and democratic control of big economic decisions. It can do that only if the new ferment in the labour movement becomes also a ferment in which explicit and full-scale socialist ideas are openly explored and debated, and in which the movement educates itself again in those ideas.

Supporters of Solidarity will be doing our best to push that along by promoting and seeking discussion on our new booklet, Socialism Makes Sense.