Consumption inequality is rising

In the last thirty years, consumption inequality has risen as fast as income inequality.

It has been a common belief that, while income inequality has risen rapidly in the west generally, and the United States specifically, inequality of consumption has travelled a much milder trajectory. Many reasons have been given for this effect, which was seen in a number of studies and generally assumed to be true.

Some argued that the divergence between the two was due to the unsustainable bubble of consumer credit; while the rich were getting richer faster than the poor were getting less poor, both ended up with mobile phones and flatscreen TVs, but the latter bought them with borrowed money. This, of course, leads those like Edwina Currie to argue that poor people aren't really poor because they have nice things.

Another interesting point raised off the back of the figures was the claim that it was entirely understandable, since the marginal utility of money declines pretty quickly. Thus, the explanation goes, income growth at the top end doesn't increase consumption all that much, since there isn't much to spend that money on. If this is true, then consumption inequality would indeed rise slower than income inequality in countries where absolute poverty is rare.

Now, though, it seems that both these arguments may come from faulty premises. A new paper from the American National Bureau of Economic Research argues that actually, consumption inequality has been rising at much the same rate as income inequality.

The authors write (£):

There is now mounting evidence that the [consumer expenditure survey, the source of many of the claims of divergence] is plagued by serious non-classical measurement error, which hinders the extent to which definitive conclusions can be made about the extent to which consumption inequality has evolved over the last three decades. . . 

Consumption inequality within the U.S. between 1980 and 2010 has increased by nearly the same amount as income inequality

And conclude:

Across every other measure of consumption we analyzed, consumption inequality increased substantially.

Of course, the same questions apply to consumption inequality as do to income inequality: why does it actually matter? So long as everyone can consume the essentials, does the difference between them and the rich have any effect?

The answer is one that Adam Smith hit upon over two centuries ago (although you are unlikely to find the libertarian Adam Smith Institute quoting it): what the rich can afford has a material effect on what is essential.

In The Wealth of Nations, published 1776, Smith wrote:

A linen shirt, for example, is, strictly speaking, not a necessary of life. The Greeks and Romans lived, I suppose, very comfortably, though they had no linen. But in the present times, through the greater part of Europe, a creditable day-labourer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty, which, it is presumed, nobody can well fall into without extreme bad conduct.

Custom, in the same manner, has rendered leather shoes a necessary of life in England. The poorest creditable person, of either sex, would be ashamed to appear in public without them. In Scotland, custom has rendered them a necessary of life to the lowest order of men; but not to the same order of women, who may, without any discredit, walk about barefooted.

In France, they are necessaries neither to men nor to women; the lowest rank of both sexes appearing there publicly, without any discredit, sometimes in wooden shoes, and sometimes barefooted. Under necessaries, therefore, I comprehend, not only those things which nature, but those things which the established rules of decency have rendered necessary to the lowest rank of people.

Cartoonist Ruben Bolling sums the argument up in eight panels.

To Smith's list we can reasonably add mobile phones (required for much shift work), computers (essential for jobseeking) and, in much of the country, cars. Consumption inequality adds to this list from the top end even as the bottom end remains unable to afford it.

Hat tip to Matt Yglesias for the paper.

A Tajik migrant texts in Moscow. Mobiles are an essential tool worldwide (Getty)

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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The World Cup you’ve never heard of, where the teams have no state

At the Conifa world cup – this year hosted by the Autonomous Republic of Abkhazia – ethnic groups, diaspora communities and disputed territories will battle for footballing glory.

Football's European Championship and the Olympics are set to dominate the back pages over the next few months. How will Team GB fare in Rio? Will the zika virus stop the tournament even going ahead? Will the WAGS prove to be a distraction for the Three Lions? And can Roy Hodgson guide England to a long-awaited trophy?

But before the sprinters are in their blocks or a ball has been kicked, there's a world cup taking place.

Only this world cup is, well, a bit different. There's no Brazil, no damaged metatarsals to speak of, and no Germany to break hearts in a penalty shootout.  There’s been no sign of football’s rotten underbelly rearing its head at this world cup either. No murmurs of the ugly corruption which has plagued Fifa in recent years. Nor any suggestion that handbags have been exchanged for hosting rights.

This biennial, unsung world cup is not being overseen by Fifa however, but rather by Conifa (Confederation of Independent Football Associations), the governing body for those nations discredited by Fifa. Among its member nations are ethnic groups, diaspora communities or disputed territories with varying degrees of autonomy. Due to their contested status, many of the nations are unable to gain recognition from Fifa. As a consequence they cannot compete in tournaments sanctioned by the best-known footballing governing body, and that’s where Conifa provides a raison d’être.

“We give a voice to the unheard”, says Conifa’s General Secretary, Sascha Düerkop, whose world cup kicks off in the Autonomous Republic of Abkhazia at the end of this week.

“We are proud to give our members a forum where they can put themselves on the map.

“From that we hope to give back in the long run and invest in the football infrastructure in our member nations to help them grow.”

The two week footballing celebration starts with an opening ceremony before Kurdistan and Székely Land kick off the tournament. It follows on from 2014’s maiden competition which saw The County of Nice avenging a group stage defeat to Ellan Vannin from the Isle of Man, to take the spoils in the final via a penalty shoot-out.  There were some blowout scores of note however, with South Ossetia smashing Darfur 20-0 and Kurdistan beating the Tamils 9-0 at the event which took place in Östersund, Sweden. Neither of the finalists will be returning to the tournament – throwing down the gauntlet to another twelve teams. 

This, the second Conifa world cup, is testament to the ever-expanding global footprint of the tournament. Abkhazia will welcome sides from four continents – including Western Armenia, the Chagos Islands, United Koreans in Japan and Somaliland.

Despite the “minor” status of the countries taking part, a smattering of professional talent lends credibility to the event. Panjab can call on the experience of ex-Accrington Stanley man Rikki Bains at the heart of their defence, and the coaching savoir-faire of former Tranmere star Reuben Hazell from the dugout. Morten Gamst Pedersen, who turned out for Blackburn Rovers over 300 times and was once a Norwegian international, will lead the Sapmi people. The hosts complete the list of teams to aiming to get their hands on silverware along with Padania, Northern Cyprus, and Raetia.

A quick glance down said list, and it’s hard to ignore the fact that most of the nations competing have strong political associations – be that through war, genocide, displacement or discrimination. The Chagos Islands is one such example. An archipelago in the Indian Ocean, Chagos’ indigenous population was uprooted by the British government in the 1960s to make way for one of the United States' most strategically important military bases – Diego Garcia.

Ever since, they've been campaigning for the right to return. Their side, based in Crawley, has crowdfunded the trip to the tournament. Yet most of its members have never stepped foot on the islands they call home, and which they will now represent. Kurdistan’s efforts to establish an independent state have been well-highlighted, even more so given the last few years of conflict in the Middle East. The hosts too, broke away from Georgia in the 1990s and depend on the financial clout of Russia to prop up their government.

Despite that, Düerkop insists that the event is one which focuses on action on the pitch rather than off it. 

“Many of the nations are politically interested, but we are non-political,” he says. 

“Some of our members are less well-known in the modern world. They have been forgotten, excluded from the global community or simply are ‘unpopular’ for their political positions.

“We are humanitarians and the sides play football to show their existence – nothing more, nothing less.”

The unknown and almost novel status of the tournament flatters to deceive as Conifa’s world cup boasts a broadcast deal, two large stadiums and a plush opening ceremony. Its aim in the long run, however, is to develop into a global competition, and one which is content to sit below Fifa.

“We are happy to be the second biggest football organisation,” admits Düerkop.

“In the future we hope to have women’s and youth tournaments as well as futsal and beach soccer.”

“Our aim is to advertise the beauty and uniqueness of each nation.”

“But the most important purpose is to give those nations that are not members of the global football community a home.”

George Weah, the first African winner of Fifa World Player of the Year award remarked how “football gives a suffering people joy”.

And after speaking to Düerkop there’s certainly a feeling that for those on the game’s periphery, Conifa’s world cup has an allure which offers a shared sense of belonging.

It certainly seems light years away from the glitz and glamour of WAGs and corruption scandals. And that's because it is.

But maybe in a small way, this little-known tournament might restore some of beauty lost by the once “beautiful game”.