Even after Thatcher, the Conservatives never learned the benefits of redistribution

Sometimes you want to make everyone better off, not just the rich.

One of the clips of Thatcher which has been passed around in the days since her death is this one, of two exchanges from her last speech in the House of Commons on 22 November 1990. In it, she attacks the left-wing focus on equality by arguing that that focus ends up resulting in making the poor poorer – just by less than it makes the rich poorer:

I've never understood why it's an exchange held in quite such high regard – the bit at the end, where she starts making graphs with her hands, is a particularly excruciating bit of political communication – but the point does stick home. It's not that common to hear arguments for the poor to be made poorer, but it remains the case that policies which help both rich and poor are argued against on the grounds that they help the rich more.

There's good reasons for this, of course. As Richard Wilkinson and Kate Pickett's book The Spirit Level documents exhaustively, in developed nations like our own, a huge number of social, political and health outcomes are dictated by equality, not absolute wealth. So even given the fact that Thatcher's legacy was of the poor getting richer, the fact that that it included a massive increase in inequality may have meant that poor people were worse off at the end of her premiership than the beginning.

But if hurting the poor to hurt the rich more is a trap for socialists, there's a sort of parallel problem that Conservatives fall prey to: an opposition to redistribution which prevents them enacting policy combinations that help everyone.

A new paper by economists David Autor, David Dorn, and Gordon Hanson, titled "Untangling Trade and Technology: Evidence from Local Labor Markets", compares and contrasts the effects of trade and technology on employment. On the face of it, it doesn't matter to you whether you lose your job because a robot can do it cheaper, or because a Chinese labourer can do it cheaper: you still don't have your job, and your employer has more money. But in actual fact, the two have markedly different macroeconomic effects:

Trade exposure reduces overall employment and shifts the distribution of employment between sectors, [but] exposure to technological change has substantially different impacts, characterized by neutral effects on overall employment and substantial shifts in occupational composition within sectors.

Trade in particular is found to impose "particularly large" employment losses on workers without college education; but even technological change, which is neutral on "overall employment", has the effect of destroying middle income jobs while bolstering high- and low-paid labour.

Of course, all of that is background to the strong evidence that technological change and free trade make society as a whole richer. The problem isn't with the lack of gains – it's with the distribution of those gains.

How do you deal with good gains and a bad distribution? You bank the gains, and fiddle with the distribution. Cut taxes – or boost tax credits – at the bottom end of the income distribution, and pay for it with higher taxes at the top end. Or even just leave taxes at the top the same, and use the fact that the rich are getting richer – and thus paying more tax – to (more than) compensate the poor for the losses.

This is the lesson that Thatcher, and the Conservatives who have followed her, never learned. It's more than just economic good sense: it's politically useful, too, to be able to tell everyone that they will be made better off. Think how much easier the debate over immigration would be if the Tories could point to a tax cut – for the poor – which was funded through the increased gains migration brings.

In the language of economics, there are very few pareto-optimal policies left; the number of changes you can do which help everyone, as opposed to helping some and harming others, has dropped close to zero. But a good bundle of policies can still make everyone better off – and that bundle will nearly always include redistribution of wealth.

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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Andy Burnham and Sadiq Khan are both slippery self-mythologisers – so why do we rate one more than the other?

Their obsessions with their childhoods have both become punchlines; but one of these jokes, it feels to me, is told with a lot more affection than the other.

Andy Burnham is a man whose policies and opinions seem to owe more to political expediency than they do to belief. He bangs on to the point of tedium about his own class, background and interests. As a result he’s widely seen as an unprincipled flip-flopper.

Sadiq Khan is a man whose policies and opinions seem to owe more to political expediency than they do to belief. He bangs on to the point of tedium about his own class, background and interests. As a result he’s the hugely popular mayor of London, the voice of those who’d be proud to think of themselves as the metropolitan liberal elite, and is even talked of as a possible future leader of the Labour party.

Oh, and also they were both born in 1970. So that’s a thing they have in common, too.

Why it is this approach to politics should have worked so much better for the mayor of London than the would-be mayor of Manchester is something I’ve been trying to work out for a while. There are definite parallels between Burnham’s attempts to present himself as a normal northern bloke who likes normal things like football, and Sadiq’s endless reminders that he’s a sarf London geezer whose dad drove a bus. They’ve both become punchlines; but one of these jokes, it feels to me, is told with a lot more affection than the other.

And yes, Burnham apparent tendency to switch sides, on everything from NHS privatisation to the 2015 welfare vote to the leadership of Jeremy Corbyn, has given him a reputation for slipperiness. But Sadiq’s core campaign pledge was to freeze London transport fares; everyone said it was nonsense, and true to form it was, and you’d be hard pressed to find an observer who thought this an atypical lapse on the mayor’s part. (Khan, too, has switched sides on the matter of Jeremy Corbyn.)

 And yet, he seems to get away with this, in a way that Burnham doesn’t. His low-level duplicity is factored in, and it’s hard to judge him for it because, well, it’s just what he’s like, isn’t it? For a long time, the Tory leadership’s line on London’s last mayor was “Boris is Boris”, meaning, look, we don’t trust him either, but what you gonna do? Well: Sadiq is Sadiq.

Even the names we refer to them by suggest that one of these two guys is viewed very differently from the other. I’ve instinctively slipped into referring to the mayor of London by his first name: he’s always Sadiq, not Khan, just as his predecessors were Boris and Ken. But, despite Eoin Clarke’s brief attempt to promote his 2015 leadership campaign with a twitter feed called “Labour Andy”, Burnham is still Burnham: formal, not familiar. 

I’ve a few theories to explain all this, though I’ve no idea which is correct. For a while I’ve assumed it’s about sincerity. When Sadiq Khan mentions his dad’s bus for the 257th time in a day, he does it with a wink to the audience, making a crack about the fact he won’t stop going on about it. That way, the message gets through to the punters at home who are only half listening, but the bored lobby hacks who’ve heard this routine two dozen times before feel they’re in the joke.

Burnham, it seems to me, lacks this lightness of touch: when he won’t stop banging on about the fact he grew up in the north, it feels uncomfortably like he means it. And to take yourself seriously in politics is sometimes to invite others to make jokes at your expense.

Then again, perhaps the problem is that Burnham isn’t quite sincere enough. Sadiq Khan genuinely is the son of a bus-driving immigrant: he may keep going on about it, but it is at least true. Burnham’s “just a northern lad” narrative is true, too, but excludes some crucial facts: that he went to Cambridge, and was working in Parliament aged 24. Perhaps that shouldn’t change how we interpret his story; but I fear, nonetheless, it does.

Maybe that’s not it, though: maybe I’m just another London media snob. Because Burnham did grow up at the disadvantaged end of the country, a region where, for too many people, chasing opportunities means leaving. The idea London is a city where the son of a bus driver can become mayor flatters our metropolitan self-image; the idea that a northerner who wants to build a career in politics has to head south at the earliest opportunity does the opposite. 

So if we roll our eyes when Burnham talks about the north, perhaps that reflects badly on us, not him: the opposite of northern chippiness is southern snobbery.

There’s one last possibility for why we may rate Sadiq Khan more highly than Andy Burnham: Sadiq Khan won. We can titter a little at the jokes and the fibs but he is, nonetheless, mayor of London. Andy Burnham is just the bloke who lost two Labour leadership campaigns.

At least – for now. In six weeks time, he’s highly likely to the first mayor of Greater Manchester. Slipperiness is not the worst quality in a mayor; and so much of the job will be about banging the drum for the city, and the region, that Burnham’s tendency to wear his northernness on his sleeve will be a positive boon.

Sadiq Khan’s stature has grown because the fact he became London’s mayor seems to say something, about the kind of city London is and the kind we want it to be. Perhaps, after May, Andy Burnham can do the same for the north – and the north can do the same for Andy Burnham.

Jonn Elledge edits the New Statesman's sister site CityMetric, and writes for the NS about subjects including politics, history and Daniel Hannan. You can find him on Twitter or Facebook.