Give working people more money because they will spend it

It's not about fairness, it's about the economy, stupid.

To date, the history of our current financial crisis has concentrated minds on the distribution of wealth in a way that we haven’t really seen for a generation. Filled with materialistic expectations, the withdrawal of credit and government subsidies from society has brought home some harsh realities. We can’t afford the lifestyle we have come to think we are entitled to. Wealthy people, once seen as social leaders, are increasingly treated as though they somehow stole what they earned.

Most of the time the redistribution of wealth is put in political terms – it ignores who had the original idea for a company or product or who put the money up in the first place to fund it. Instead, agitators argue that workers, because it is their toil that creates the goods and services, should get an equal participation in profits. Ironically, this is probably the right answer but the wrong reason – people should be given more money so that they can spend it.

The World Bank recently released numbers on the distribution of Corrado Gini’s index of income and wealth distribution. The Gini Index ranges from 1 to 100 and seeks to measure financial inequality in a society; a value of 100 means that a single person has all the money whilst as it declines money is more and more equally distributed.

Some interesting trends are showing up. For instance, in Latin America wealth inequality, although at a high level, is declining as a phenomenon. Crises like that seen in Argentina are working to redistribute wealth whilst in Brazil the new-found economic prosperity is becoming shared by a greater and greater proportion of society.  Africa, notably South Africa, displays disturbingly high levels of wealth concentration in the hands of a few.

Although we have a tendency to pillory ourselves here the UK, we actually come out quite well with a score of just under 26 – you would have to go to parts of Eastern Europe to find other countries with the kinds of equality that we possess. In fact, equality of wealth distribution has improved markedly between 1995 and 2010 when the latest data is available and embraces the financial crisis.

What is most disturbing though is the United States. The Gini index for the US has shown a marked and continuous increase of inequality, an effect that has been occurring since the 1970’s, and a phenomenon that has accelerated as the recovery from the financial crisis has gathered pace.

Economic commentators often talk about "the wealth effect", the confidence-boosting mental state that allows ordinary people to look at their total assets and give themselves the psychological comfort to stop hoarding money and start spending it. To this end the Federal Reserve in the US and western central banks have been complicit in propping up the stock and housing markets through ultra-accommodative monetary policies that placate the electorate through the illusion of financial affluence.  They will go about their day without necessarily calling for higher levels of taxation or the forced redistribution of wealth in the face of obvious inequalities. This has by and large worked to date but we are now entering a phase of prolonged sub-potential growth combined with rising wealth inequality in the US that will have long-range effects economically, socially and politically.

The problem arises from the fact that if you give wealthy people more money they don’t necessarily spend it – it becomes dormant and redundant. Give a poor person an extra £10 and they will spend it on food or new clothes, propelling consumption, but give an ultra-high net worth person another million pounds and more than likely it will lie in the bank largely unnoticed and more importantly unused. So in many respects the inequality of the distribution of wealth is not so much about "fairness" or venality, but more that the concentration of too much money into too few hands leads to economic stagnation adding to an already sub-par economic atmosphere.

Photograph: Getty Images

Head of Fixed Income and Macro, Old Mutual Global Investors

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What it’s like to fall victim to the Mail Online’s aggregation machine

I recently travelled to Iraq at my own expense to write a piece about war graves. Within five hours of the story's publication by the Times, huge chunks of it appeared on Mail Online – under someone else's byline.

I recently returned from a trip to Iraq, and wrote an article for the Times on the desecration of Commonwealth war cemeteries in the southern cities of Amara and Basra. It appeared in Monday’s paper, and began:

“‘Their name liveth for evermore’, the engraving reads, but the words ring hollow. The stone on which they appear lies shattered in a foreign field that should forever be England, but patently is anything but.”

By 6am, less than five hours after the Times put it online, a remarkably similar story had appeared on Mail Online, the world’s biggest and most successful English-language website with 200 million unique visitors a month.

It began: “Despite being etched with the immortal line: ‘Their name liveth for evermore’, the truth could not be further from the sentiment for the memorials in the Commonwealth War Cemetery in Amara.”

The article ran under the byline of someone called Euan McLelland, who describes himself on his personal website as a “driven, proactive and reliable multi-media reporter”. Alas, he was not driven or proactive enough to visit Iraq himself. His story was lifted straight from mine – every fact, every quote, every observation, the only significant difference being the introduction of a few errors and some lyrical flights of fancy. McLelland’s journalistic research extended to discovering the name of a Victoria Cross winner buried in one of the cemeteries – then getting it wrong.

Within the trade, lifting quotes and other material without proper acknowledgement is called plagiarism. In the wider world it is called theft. As a freelance, I had financed my trip to Iraq (though I should eventually recoup my expenses of nearly £1,000). I had arranged a guide and transport. I had expended considerable time and energy on the travel and research, and had taken the risk of visiting a notoriously unstable country. Yet McLelland had seen fit not only to filch my work but put his name on it. In doing so, he also precluded the possibility of me selling the story to any other publication.

I’m being unfair, of course. McLelland is merely a lackey. His job is to repackage and regurgitate. He has no time to do what proper journalists do – investigate, find things out, speak to real people, check facts. As the astute media blog SubScribe pointed out, on the same day that he “exposed” the state of Iraq’s cemeteries McLelland also wrote stories about the junior doctors’ strike, British special forces fighting Isis in Iraq, a policeman’s killer enjoying supervised outings from prison, methods of teaching children to read, the development of odourless garlic, a book by Lee Rigby’s mother serialised in the rival Mirror, and Michael Gove’s warning of an immigration free-for-all if Britain brexits. That’s some workload.

Last year James King published a damning insider’s account of working at Mail Online for the website Gawker. “I saw basic journalism standards and ethics casually and routinely ignored. I saw other publications’ work lifted wholesale. I watched editors...publish information they knew to be inaccurate,” he wrote. “The Mail’s editorial model depends on little more than dishonesty, theft of copyrighted material, and sensationalism so absurd that it crosses into fabrication.”

Mail Online strenuously denied the charges, but there is plenty of evidence to support them. In 2014, for example, it was famously forced to apologise to George Clooney for publishing what the actor described as a bogus, baseless and “premeditated lie” about his future mother-in-law opposing his marriage to Amal Alamuddin.

That same year it had to pay a “sizeable amount” to a freelance journalist named Jonathan Krohn for stealing his exclusive account in the Sunday Telegraph of being besieged with the Yazidis on northern Iraq’s Mount Sinjar by Islamic State fighters. It had to compensate another freelance, Ali Kefford, for ripping off her exclusive interview for the Mirror with Sarah West, the first female commander of a Navy warship.

Incensed by the theft of my own story, I emailed Martin Clarke, publisher of Mail Online, attaching an invoice for several hundred pounds. I heard nothing, so emailed McLelland to ask if he intended to pay me for using my work. Again I heard nothing, so I posted both emails on Facebook and Twitter.

I was astonished by the support I received, especially from my fellow journalists, some of them household names, including several victims of Mail Online themselves. They clearly loathed the website and the way it tarnishes and debases their profession. “Keep pestering and shaming them till you get a response,” one urged me. Take legal action, others exhorted me. “Could a groundswell from working journalists develop into a concerted effort to stop the theft?” SubScribe asked hopefully.

Then, as pressure from social media grew, Mail Online capitulated. Scott Langham, its deputy managing editor, emailed to say it would pay my invoice – but “with no admission of liability”. He even asked if it could keep the offending article up online, only with my byline instead of McLelland’s. I declined that generous offer and demanded its removal.

When I announced my little victory on Facebook some journalistic colleagues expressed disappointment, not satisfaction. They had hoped this would be a test case, they said. They wanted Mail Online’s brand of “journalism” exposed for what it is. “I was spoiling for a long war of attrition,” one well-known television correspondent lamented. Instead, they complained, a website widely seen as the model for future online journalism had simply bought off yet another of its victims.