The Staggers

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Wanted: a new purpose for British capitalism

How can Britain avoid going down the US path where for the last generation the majority of the gains

By Gavin Kelly Published 16 February 2011 17:47

If this year's question is "When will growth resume?", next year's will surely be "How do we make sure that growth benefits the great majority of working people?".

For much of the 20th century, that second question would not have been necessary. The link between growth and living standards held strong -- it was the golden thread of the social contract, binding together the shared efforts of labour, capital and government in a win-win deal for all sides.

But today, across many advanced economies, that thread is badly frayed, while in others it has already severed. The US has seen a generation of flat or falling real incomes among the bottom half of earners. From 1970 to 2010 the link between economic growth and typical wages ruptured -- the "great decoupling", as Lane Kenworthy has called it. GDP continued to grow but it didn't trickle down.

In the 37 years from 1973 to 2010, the annual incomes of the bottom 90 per cent of US families rose by only 10 per cent in real terms. Median US household income was $64,000 in 2007. Had it kept pace with growth in GDP, it would have grown to $90,000. As the table below shows, the richest 1 per cent of the population has captured a truly staggering proportion of the gains from all income growth – two-thirds of the total gain during the Bush years.

The result of these extraordinary growth rates is that the richest 1 per cent of American society now receives over 20 per cent of total income, with the richest 10 per cent getting roughly 50 per cent of all income (see below).

Perhaps we can comfort ourselves with the notion that the US is unique? No. In Canada, median earnings have also flatlined for 30 years. In Germany real monthly incomes fell between 2000 and 2009. And in the five years that preceded the 2008-2009 recession, while UK GDP growth averaged above 2 per cent, median wages were near flat at the same time as they carried on steadily rising at the top (see below; sources: ONS, ASHE, Resolution Foundation).

So this can't just be put down to a momentary living standards squeeze arising from the fallout from the recession or the deficit - though that is certainly also taking place. The problem started earlier, will last longer, and runs deeper. It is a mega-trend in some, not all, advanced capitalist economies that towers over other questions of social and economic policy that dominate the daily news.

Marginal interests

In the US, unlike the UK, this issue at least shapes mainstream political debate. It is a theme that Barack Obama took up when confronting the captains of industry last week: "We can't go back to the kind of economy where gains in productivity just didn't translate into rising incomes and opportunity for the middle class." Behind the scenes, Gene Sperling, President Obama's newly appointed director of the US National Economic Council, has invoked the spirit of JFK, calling for a new "rising-tide economics" to underpin a return to an era of shared prosperity.

Fine sentiment. But there are few signs from the US, and even less in the UK of fresh thinking on how to shift the distribution of the gains from growth. The truth is that no one really knows the answer, few politicians are focused on it, and the economics profession has until recently largely ignored it.

Which brings us to the much-talked-of "growth plan" that the coalition is working on for the Budget. What are the prospects of it really tackling the problem of living standards? Bleak – at least if the past is anything to go by. When the call goes out in Whitehall for ideas on growth, the response is typically a half-hearted effort to pull together a package of incremental measures – a tweak in the tax treatment of investment, another review of red tape, a new public investment bank or fund (with few resources), a call for stronger links between universities and regional economies.

All of these are wearily familiar. Some of them may help growth at the margins. None begins to match up to the problem – nor do they directly address the issue of who gains from growth. No one in Whitehall even thinks it's their job to worry about this.

So, in addition to the usual business support measures, what would a "rising tide" economics need to consider if it is to try and ensure that growth feeds through into rising incomes and a more stable recovery?

First, there would need to be a much more ambitious drive on jobs and skills. That means employment creation, including the use of government job guarantees. There is no prospect of steadily rising real wages emerging out of a slack and detoriating jobs market; so, steady progress on the long road back to full employment – which as of today feels like a pipe dream – is a vital precondition.

But, as the pre-recession years vividly demonstrated, high employment on its own won't suffice. We also need a deliberate effort to tilt the balance to help labour secure sustainable wage growth. Once steady employment growth is re-established, this will demand a more aggressive approach to raising the minimum wage more steeply year on year; as well as government action rather than words on expanding the reach of the "living wage". And there has to be a new model of skills policy, jettisoning the old approach of pumping out an ever greater supply of paper qualifications in favour of using sticks and carrots to encourage employers to increase their demand for skilled labour.

How to restart growth

Second, there is a need to be unfashionable. That means focusing on the performance of some of the less eye-catching sectors of the economy – where so many low-to-middle-income earners actually work – rather than just showering attention on fashionable "industries of the future" as politicians of all parties like to term them.

Of course, low-carbon energy, digital and the creative sectors are absolutely vital, and the government should intervene more aggressively to secure their success in the UK. But more important to the immediate lives of much of working Britain are the high-employment, low-productivity, "pedestrian" sectors of our economy which account for roughly 25 per cent of GDP – such as retail, hospitality and personal care – where poverty wages are widespread, opportunities for progression within jobs are limited, and management is often poor.

Third, a "rising-tide" economics would involve stretching the growth agenda beyond the confines of traditional "industrial policy" into future choices on public services. Why so? Because tightly constrained public spending should be prioritised for services such childcare and elderly care that, with proper reform, could play a far greater role supporting more people, especially woman, to enter into and stay in work.

As millions of households have long figured out for themselves, when individual earnings are stagnant then the only way of lifting household living standards (without relying on increasing debt) is through more dual-earner couples, as well as helping people to stay in work for longer as they get older. Indeed, it is an irony that the single most potent pro-growth, pro-living-standards measure that the coalition has introduced to date – the abolition of the default retirement rule, which will enable far more people to continue working as they grow older if they choose to – hasn't been presented in this light.

Finally, there is a pressing need to capitalise on the new, if belated, zeitgeist among the high priests of the global economics profession concerning the toxic consequences of rising inequality. This does not stem from the usual left-leaning economists, but from leading financial gurus – including Raghuram Rajan and Ken Rogoff, both former chief economists of the IMF – who are motivated by the need to secure viable conditions for steady economic growth in a post-crisis world.

Translated into the UK context, this interest in greater economic equality very quickly runs up against the reality of our income-tax system, where the 40p rate already kicks in at a relatively low (and falling) income level and there is no appetite from any quarter for raising the 50p rate on the highest incomes. As a result, all roads point to the need for fresh and fearless thinking on taxing wealth and top-end housing – not least as wealth inequalities far exceed those in income.

As things stand, over the short term, the government will remain on the defensive about the lack of a plausible plan for restarting growth. Eventually – however slowly – growth will bounce back and that hurdle will be cleared. Yet the real economic test – indeed, the wider test for the very legitimacy of the British model of capitalism – is the far higher hurdle that follows. Will the proceeds of growth once again be widely shared, or will we go down the American path to an increasingly divisive future in which the majority of workers receive little or no gain from rising national prosperity?

Gavin Kelly is chief executive of the Resolution Foundation.

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36 comments

Tue, 2012-07-17 10:35 — Elethe (not verified)

British capitalism has been declining for more than a century now. Since the Second World War and loss of empire the decline of Britain’s power has continued at a headlong rate.

The sluggishness of the ruling class, due to centuries of superiority and domination over a great part of the world, has led to a situation where the British capitalists are incapable of stemming the tide of decay and disintegration which has overtaken them.

Fri, 2011-02-18 21:58 — Mrs.Josephine Hyde-Hartley (not verified)

I daresay; unless everyone concerned or interested stops and thinks about why Jesus said; “The foxes have holes and the birds of the air have nests, but the Son of Man has nowhere to lay His head.” we may as well go down the American path to an increasingly divisive future in which the majority of workers receive little or no gain from rising national prosperity.

Without a better model to work, or at least a more realistic one it seems the body corporate effect might ever more be viewed as a preposterous, pretentious, pretext designed to have us all believe it's tantamount to the very heavenly firm that is God's dominion itself (commonly known I believe as this wonderful jungle that is the charity world).

Thu, 2012-02-09 08:11 — Federico

New capitalism = capitalize profits, socialize losses and toss the masses a bigger crumb but convince them to blow most of it on meaningless consumption.
Result: under new capitalism the masses are conned twice. They make good the losses from their taxes and they create more profit by their mindless consumption. http://www.weddings101.org/

Thu, 2011-02-17 16:25 — Stuart (not verified)

@ ill fares the land

Exactly what are the differences between a Ford KA and a Ferrari? Both get you from A to B. These days the KA is very reliable, safe and enjoyable to drive. What does the Ferrari have except for a bigger engine (but both will drive very happily at 70) and a flasher badge?

I'll take your arguments one at a time:

Shorter life expectancy: the poor still live longer than the richest did 50 years ago. The main difference is due to lifestyle choice: too many cigarettes and fatty foods. In a free society people are free to treat their own body as they choose.

Property owenership: true in the south-east of England, particularly London. But caused by inability to build enough houses due to planning laws - the fault of government not the free market. Plus huge amounts of empty land held by city councils with noone living in it -another fault of government. People on modest to low incomes outside of London and the south-east can afford to buy.

Less social mobility: but why has this fallen? Perhaps because of the poor state of our comprehensive schools due to the introduction of faddish pupil-centred teaching methods. Again the problem is not the free market.

I am sorry but what do you mean by being able to control your own destiny if you do not mean products? What can the poor not do? Flights have never been cheaper. Museums and libraries are free at the point of use - paid for by the evil capitalists. The seaside is free as are parks and mountains. Cars are cheap compared to the past. Access to knowledge is astonishing today due to technological change. Exactly what freedom are people missing? Determine your own destiny!? For most of human history we have been chained by the desperate need not to starve or freeze to death everyday. We that are alive today in the evil capitalist west are the luckiest people in human history with more chances to do whatever it is that makes us happy than anyone has ever had. Read some history and gain some perpective.

Thu, 2011-02-17 18:12 — Alex Gilbert (not verified)

Excellent article. I would also point readers to the work of Porritt, Lovins and, most recently and pertinently, Jackson ("Prosperity Without Growth").

Significant overlaps with this admirable work ...

Fri, 2011-02-18 15:21 — Stuart (not verified)

@ ill fares the land

I'm afraid I do not agree with you. The standard of living the Romans enjoyed was probably not beaten in the western world until, perhaps 1700. There was no upward curve during much of the period encompassing the dark ages and the middle ages. A good example to look at would be the extremely sad state of Africa today. They have access to most of the technology and knowledge that we do but their living standards are far below. There is nothing inevitable about historical development. Look at North Korea vs South Korea if you want an example of a controlled economy versus an open economy.

I obviously am both stupid and ignorant, what are the important differences between a KA and a Ferrari?

@ Livers

Technological change is available to everyone in the world, but not everyone is rich, so there must be something else besides understanding of technology. I would say it is due to free markets and property rights.

As I've said I believe a substantial chunk of that increase in income inequality has been due to the effect of inflation which can tend to be avoided by people who are richer. On the other hand surely it is consumption not income that is important? I find it difficult to get worked up about Wayne Rooney's pay when I can do almost all the things he does but just at a much lower price. We work to consume, so levels of consumption are important not income. Would we be better off in a poor society where everyone is equal or a rich society where some people are rich and some poorer, but the poor are still rich compared to the equal society? I would prefer the unequal society personally.

@ Mr. Devine

I think there are three problems that cause this:

1) Property prices in the UK being so high - due mainly to planning laws and the greenbelt. Germany, for example, builds on several percent more of their land than we do. If we want cheaper housing costs we unfortunately need to build more houses often on land we would prefer to leave green and pleasant. We also need to utilise brown field sites better. A land value tax would do an excellent job of making people either develop the land or sell it. Also would allow the lowering of taxes on transactions between people, such as income tax, which are probably economically worse than land taxes. Aside from housing costs most of our other costs are fairly low (except for taxes of course!)

2) Inflation - if we print money then the value of the money has to fall, in 1931 an ounce of gold cost £4, now it costs £800. This increase is due to our devalued currency. Commodities will increase in price if more pounds are printed, so the price of gas, petrol, electricity etc rise. Inflation is a terrible scourge of people with a low and middle income.

3) Keeping up with the next-door-neighbours. We want the same stuff (or better) as everyone else does so if they have more we want more. That seems to be a personal human trait which individuals should really have the strength to deal with themselves.

Working 9to5 five days a week with regular holidays and a comfortable standard of living is hardly the worst thing in the world.

Wed, 2011-02-16 18:14 — jeff.mowatt

The zeitgeist of new economics is people-centered and well below radar for more than a decade.

Wed, 2011-02-16 18:19 — DK (not verified)

A good article, and I'm glad it mentioned the need to raise taxes on the wealthy. Equality is also served by nationalised, heavily subsidised, and therefore affordable essential public services. Preserving the NHS should be a priority, and Labour should be arguing for the renationalisation of the railways and massive investment in public transportation, as well as in schools--both initiatives that not only help lower earners live well, but also provide decent, secure jobs. The grossly unfair anti-union legislation also needs to be changed, and, of course, higher education must continue to be supported by direct government spending rather than loans. Basically, the ills this article bemoans can be addressed by what was a perfectly mainstream leftwing agenda in both the UK the US before Thatcher-Reagan. The debate needs to turn.

Wed, 2011-02-16 18:25 — Peter (not verified)

The most obvious example of productivity gain is in the world of British ICT software developers. After the onslaught of offshoring to reduce wages, those that survived the cull are producing roughly 10x the output from 1997, with better tools, open source and framework. Yet because nobody understands intellectual property concerns, basically the innovators are handing new recipes over to their wealthier patrons. We will look back and see the barbarity, at some point. As it stands it is very difficult to take your own innovation and make profit from it. Nobody seems to get the knowledge economy least of all the Labour government, and how high-skill can be exploited.

Wed, 2011-02-16 18:28 — stevem1

The answer - strong unions. If the unions had not been all but destroyed this wouls not have happened.

Wed, 2011-02-16 18:42 — Peter (not verified)

Strongly disagree that unions would help. In the knowledge economy more flexibility is required not less. Freelancers were targeted by Labour (IR35), perhaps to encourage Unionisation. But I would never join a union. The answer to wealth distribution is more freelancing, not less. Introduction of IR35 was great way to reward the already-wealthy.

Sat, 2011-02-19 04:20 — south pacific

Old capitalism = capitalize profits, take some of the losses and toss the masses a few crumbs.

New capitalism = capitalize profits, socialize losses and toss the masses a bigger crumb but convince them to blow most of it on meaningless consumption.

Result: under new capitalism the masses are conned twice.
They make good the losses from their taxes
and they create more profit by their mindless consumption.

Sat, 2011-02-19 04:32 — south pacific

@ Stuart

On inflation.

I agree printing money lead to inflation. More money in circulation chasing the same number goods and services as before. It pushes up prices.

Price increases. If you have to pay more for the same goods the value of money you have is diminished.

Wed, 2011-02-16 19:13 — swatantra

I'm afraid the rich will always be with us, however much we rail against them. They have much better tax lawyers than we do.

Sat, 2011-02-19 04:49 — south pacific

@ Stuart

The British government abandoned the gold standard after WWI.

So did other countries because with the exception of the US they were virtually bankrupt due to the war costs.

Loans repayments and reparations were paid with money that had diminished in value.

Good for the payer less good for the recipient.

Gold is considered a store of wealth.

As a metal it has limited value and use.

Its value lies in what you can get in exchange for it. Such as currency or goods and services.

Thu, 2011-02-17 20:36 — thinkov

give me a pay rise this year for fuck sake

I'm constantly being told to tighten my threadbare belt

I'm dying here

lend us a pony

Thu, 2011-02-17 20:59 — triedeinsursE

@Stuart
17 February 2011 at 15:25

A really good post Stuart, and very well written.

Wed, 2011-02-16 20:40 — Arturo Bandini (not verified)

Wanted: a new purpose for British capitalism, or, as Will Self so effectively put it on QT, "What is the plan, guys?".

He didn't have graphs, though.

Sweet.

Sat, 2011-02-19 10:53 — Tommy Danger (not verified)

The selfish trait in humans derives from the natural instinct for survival. Capitalism is simply a higher, more developed manifestation of this instinct. Therefore, how can we ever attain a state of universal equality?

Wed, 2011-02-16 21:25 — MultiJoe

This article talks as if the capitalist system is not designed by and for the rich. The post-war golden age was the exception to capitalism's usual tendancies, not the standard. As long as there is a capitalist 'ruling' class which influences policy-making, wage repression, job cuts and increased working hours will continue to be the defining aspects of our economy as that is what will produce the capitalist class the most money. In order to achive any real social equality, our economicc system needs to be changed from top to bottom (socialism)..

Wed, 2011-02-16 21:28 — Gideon Polya

The purpose of a "society" is surely the common good, but the increasing proportion of the cake taken by the wealthy since the 1960s is justified by the claim that capitalism is superior to socialism in wealth creation.

Man-made climate change has changed the equation even if the politicians, media, voters and Capitalist Establishment of the Western Murdochracies and Lobbyocracies haven't yet got the message.

Thus top climate scientists argue for drastic economic decarbonization if the world is to avoid a disastrous 2C temperature rise (EU policy). According to Professor Schellnhuber (Potsdam Institute, Germany) the World must achieve zero (0) carbon dioxide (CO2) emissions by 2050 and (all men being equal with equal shares in atmospheric pollution) that means that high per capita polluters such as the US and Australia must reach zero by 2020 with the UK and Germany obliged to cease by about 2030.

A partial solution is a rapid implementation of 100% renewable energy. For an example of how this can be done by 2020 in Australia see the Beyond Zero Emissions (BZE) Zero Carbon Australia Stationary Energy Plan (ZCA2020 report): http://www.beyondzeroemissions.org/about/bze-brand .

The Capitalist Establishments have failed to act - indeed leading climate economist Sir Nicholas Stern has described man-made global warming as "the biggest market failure the world has ever seen". Further, the Capitalist Establishmnents have used their billions to prevent not just action but even public understanding of the problem.

Solar energy (whether direct as in concentrated solar thermal or indirect as in wind) is free and implementation of a carbon-free economy will require implementation of intra-national and international per capita equity in greenhouse gas (GHG) pollution and government implementation of 100% renewable energy and biochar utilization to rapidly return atmospheric CO2 to 300 pppm from the current disastrous 392 ppm (see 300.org: https://sites.google.com/site/300orgsite/300-org )- science-dictated Green Socialism.

Thu, 2011-02-17 21:47 — ill fares the land (not verified)

@Stuart

The article is not a comment on where human history has taken us, and is not about whether we have a greater quality of life compared to that of previous generations - which, if you study history, is an upward curve anyway and thus a totally redundant point. The question is whether the gap between rich and poor is widening, which it has been time and time again empirically proven to be doing and continues to do so daily. So perhaps rather than simply voicing your self serving opinion why not try to adress the issue at hand? At no point have I even bothered to question whether life is better than it was-what my issue is is that the poor have less potential to access the freedoms and quality of life afforded to the rich in today's society

And by the way, if you can't tell the difference between a ford ka and a ferarri, you're either stupid or ignorant.

Thu, 2011-02-17 22:17 — Livers (not verified)

@stuart

You are right to point at all the technologies and innovations that emerged throughout the 20th century.

However, you are mistaking the commoditisation of products with the distribution of wealth.

Wed, 2011-02-16 22:03 — Fruininut

The disparity between the rich and the poor is caused by the fear and greed of the rich... !

Note: if we try to fix this then Europe will look worse than it did in 1945.

Fri, 2011-02-18 16:59 — Humboldt (not verified)

@Stuart;

Re Korea: You're comparing the more prosperous and populous half of Korea to the historically poor - and the tremendous state-led Western investment in South Korea clearly invalidates that comparison.

Re Roman standards of living.
Complete Classicist nonsense; standards of living declined in the Roman metropole but increased elsewhere - largely because the economic needs of the North African coast or Gallic regions were no longer being substituted to feed Rome. In the Middle East, Francia and Iberia, standards of living continued to increase although availability of luxury goods declined. The myth of the 'Dark Ages' was born in the Thirteenth century and there it should remain.

Most panacea Marketist examples - Chile, the East Asian countries, Portugal and the USA, have huge levels of state-intervention which Austrian School quacks are simply disinclined to ever discuss. Ignorance is bliss I suppose.

Wed, 2011-02-16 22:58 — Scotty

Yet even the poorest are not poor in the real sense - everyone can get food, lodgings, clothes to a high standard -
Compared to some countries overseas we are all rich here in uk.
Thanks to capitalism.

Wed, 2011-02-16 23:48 — Mrs Nobody

We are not all rich here - read again the article above. Or go and talk to the poor and there are many poor. Lodgings are not easy to come by, least of all in the SE, and they are very expensive and often small, damp and dingy.

Yes the majority of the world is poorer than the West and why? Because western nations have exploited them and their resources for the past 250 years. The net result of capitalism has been poverty for the majority and extreme wealth for a few.

If you want to thank capitalism thank it for poverty.

Thu, 2011-02-17 01:00 — Stuart (not verified)

There are interesting points about the growth or not of real wages but they disguise a lot of truth. People on low wages in the UK can expect to have: access to a huge variety of high quality food at cheap prices, technology such as fridges, freezers, televisions, computers etc that our ancestors could not have dreamed of. Our homes are centrally heated, with running hot and cold water, an unbelieveable luxury. We have access to absurdly cheap books and the best films and sport the world can produce.

Capitalism has created the greatest society in human history. At exactly what point in history was it better to live than today? The 1200s? 1500s? 1900s? 1950s? No it's today. Our standards of living are astonishingly high. Income may not have grown as much as we might like for the poorer sections but their consumption has. The difference between a cheap Ford KA and a Ferrari are mostly cosmetic. The difference in quality of life between rich and poor has never been smaller.

And in answer to why real incomes of the poor and medium income earners has grown relatively slowly compared to the rich perhaps we should look at what happened in 1971 when Richard Nixon removed America, and the whole world, from the gold standard, allowing the advent of the enormous inflation we have seen over the last 40 years and that has eroded what should have been even greater gains in prosperity than have happened. Inflation helps the rich and penalises the poor. Perhaps Keynes shouldn;t be such a hero of the left after all.

Thu, 2011-02-17 04:12 — Gideon Polya

Well said Mrs Nobody: "If you want to thank capitalism thank it for poverty." 18 million people die avoidably each year in the Developing World (excluding China) from capitalism-imposed deprivation. World 1950-2005 avoidable deaths from deprivation total 1.3 billion, of whom 1.2 billion were from the non-European world (see "Body Count. Global avoidable mortality since 1950": http://globalavoidablemortality.blogspot.com/ ).

We are running out of time to deal with the Climate Emergency, noting that unaddressed man-made climate change will kill an estimated 10 billion people this century (see "Climate Genocide": https://sites.google.com/site/climategenocide/). Greed-based capitalism has failed horribly and must be urgently replaced by science-informed eco-socialism, green socialism and climate socialism: http://bellaciao.org/en/spip.php?article20579 .

Sat, 2011-02-19 15:36 — Stuart (not verified)

@ John Global

Britain did leave the gold standard during WW1 and returned in the 1920s at the wrong rate. Britain left again in 1931. After WW2 Britain was part of the Bretton-Woods agreement, which meant that we set the value of the pound against the dollar. The dollar was set against gold (at $32 to an ounce I think). Indirectly Britain was part of a gold standard (which we had to devalue against several times). Nixon removed the final dollar links with gold in 1971. I agree with everything else you said though.

@ Humbolt

That is simply not true about North and South Korea. Try this article:
http://www.economist.com/node/17800091
Even if it was true the difference now is enormous. People in North Korea are starving, the biggest problem in South Korea is probably obesity!
My point was not that life was fantastic in classical times, but that increases in properity are not inevitable due to the progression of time. I doubt a peasant in 1300 in England was better off that a peasant in 100BC.

Every country interferes in the economy, noone disputes this fact. Prosperous countries tend to have strong property rights and high economic freedoms.

Thu, 2011-02-17 04:37 — Larry (not verified)

Answer:
The path to the answer lies in a deeper understand of the true effect of copyright's role in censorship and innovation.

Fri, 2011-02-18 11:30 — Mike Thomas (not verified)

What I see here is as the economy has moved into new sectors, scarcity has driven up salaries of those that work in them.

This means that in the older and mature sectors of the economy, the demand for labour has fallen yet the supply has increased and wages have fallen as a result.

Where we have failed is to improve our education system to keep up and produce the workers that industry needs to fill gaps.

Manual and unskilled work is disappeared because it is a race to the bottom.

Skilled work is much in demand and supply has been constrained.

If you want to remediate poverty wages, you do not do this by income distribution. That is penalising people who have shown labour mobility and work in the industry we need for our future.

Instead, reduce the supply of labour and diverting it into areas of scarcity. However, open immigration policy have tended to have increase the supply of labour into the lower skilled sections of the economy.

Why?

Because welfare pays better than work.

And dare I say it? Education.

We have been teaching our children the wrong things for at least two generations and this is the result.

Thu, 2011-02-17 09:59 — Paul Hillyard (not verified)

Violence, the threat of violence and wars have been the main ways that power and prosperity have trickled down to the mass of the population.

Every bit of power and prosperity have been fought for, from the civil war, napoleonic wars, chartism, both world wars, and since 1945 the haunting of communism.

These have been the main catalysts of prosperity not the ballot box.

Capitalism won't trickle it down automatically.

Thu, 2011-02-17 10:52 — punkscience (not verified)

First line FAIL:

"If this year's question is "When will growth resume?""

This year's question is "why is the growth obssession still given column inches?"

The answer to which is clearly that reporting on the true consequences of the limits to growth won't sell pseudo-progressive magazines.

Thu, 2011-02-17 11:29 — ill fares the land (not verified)

Stuart,

The difference between a Ford KA and a Ferrari are vast, just as are the differences between the poor and rich in British society today. It's all about engineering. There is one system that fits the poor (bloated, slow, beaurocratic state owned services) and another for the rich (fast privatised service on demand). The two things offer similar ends occasionally but the speed and efficiency of each system is completely different. To say the gap in quality of life rich and poor is close is absurd and runs against almost every socio-economic study in the subject over the last 20-30 years; shorter life expectancy, less social mobility, the impossibility of property ownership...access to things the rich call 'freedom'. Being able to purchase and consume products is not the the same thing as having a similar quality of life - it's about being able to determine your own destiny, something the free west is destroying day by day.

Capitalising gains and socialising losses is the most obnoxious step the'free market' has taken so far - inequality is the only guaranteed outcome.

Fri, 2011-02-18 12:13 — Mr. Divine (not verified)

@Stuart; I agree with you with many ways especially about the car and the choice we have with our diets. I think the main problem for people is how to obtain a comfortable standard of living without having to work 40 hours a week. That's what pisses people off the most.
there has to be an alternativ to the 9 to 5 grind.