Work isn't working

Families and firms are at war. It will only be won when parents - fathers as well as mothers - can c

The Sex War is over. Girls outperform boys at school and are streaming through higher edu cation. Young women are now taking home the same size wage packets as young men. But the celebrations have to wait. A new, tougher battle has to be fought. It is not a duel between men and women, but between families and firms. This family war will be won only when parents - fathers as well as mothers - can care for their children without dumbing down their careers.

Women now compete with men on a virtually equal footing in both business and politics - but only until the precise moment they become mothers. It is not a question of old-fashioned notions about their capabilities. "Women don't lose out because of outdated views about them as women," says Mary Gregory, an economics lecturer at Oxford University and expert on gender and work. "They lose out because they make different choices about work when they have children." It is not possession of a womb that now holds women back, but its use.

This is fertile political ground, and the Conservatives are beginning to move on to it. David Cameron has proposed that maternity leave should be made transferable, allowing mums and dads to tag-team the childcare, or even take time off together. It is a modest proposal, not least because fathers will only be paid £112 a week (the current statutory maternity pay rate). Labour's John Hutton retorted that few families would be able to afford to make use of such a right. This is true: but why deny those people the possibility?

It is lack of choice that is now the issue. Legislation aimed at tackling direct discrimination, most importantly the Equal Pay Act, has helped to bring about a sea change in employer attitudes and pay scales. Barbara Castle, author and advocate of the Equal Pay Act, must sit beside Keir Hardie, Clement Attlee and Nye Bevan in the Labour pantheon. The latest research from the TUC shows that the gap between the full-time earnings of men and women in their twenties is only 3 per cent. Even this small gap is explained entirely by the very large salaries of a handful of men at the top of the income distribution, which pull up the male average, and the unwillingness of women to pitch for more money. As Gregory suggests, "Women don't ask."

But the good news comes to an end at 30, the age at which the typical married woman has her first child. Children strike women's careers like a meteorite, while glancing almost imperceptibly off fathers' working lives. The pay gap for thirtysomethings is 11 per cent; women in their forties earn 23 per cent less. The picture gets even worse when part-timers are brought into the picture. Female part-timers in their thirties and forties earn only two-thirds as much an hour as male full-timers of the same age. It is motherhood, rather than misogyny, that explains the pay gap. As Gillian Paull from the Institute for Fiscal Studies writes in the latest issue of the Economic Journal: "The 'family gap' in employment and wages - that is, the differences in work behaviour between women without children and mothers - may be more important than the gender gap alone." Meanwhile, men's working hours go up slightly when they become fathers: and dads do better in terms of wages than childless men.

Direct discrimination is no longer the prin cipal enemy. Three structural problems explain the pay gap. First, women and men work in different occupations, with women clustered in less well-paid sectors such as teaching, retail and health care. This occupational segregation has hardly diminished over the past few decades. Second, the significant increase in general wage inequality has had the unfortunate side effect of making the gap between men and women bigger. Third, the penalty paid by women for working part-time after having children has become much more severe, as a high proportion slide down the occupational ladder in what the erstwhile Equal Opportunities Commission termed a "hidden brain drain".

Campaigners for gender equality hope that the Single Equality Act, scheduled for inclusion in this year's Queen's Speech, will force companies to conduct equal-pay audits. It is in fact a forlorn hope, but they should not be too disappointed. As Barbara Petrongolo, a labour specialist at the LSE, says: "Equal treatment policies like equality audits will not have much bite. The problem is not that employers are paying women less for doing the same jobs as men - it is that women are doing different jobs after having children."

Occupational downgrading

A slew of recent studies has dissected the complex data on motherhood and part-time employment. The conclusions highlight the real problems facing British families, and the failure of the labour market to deliver real choice. Most mothers work part-time for some years in order to balance raising their children with staying in the labour market: only a third of mothers with pre-school-age children are in full-time work. A substantial minority - around a quarter - of these end up in a lower-status job: managers become clerical workers. Some professions, such as nursing and teaching, offer most women the chance to go part-time without loss of status or hourly pay. And those women who stay with their current employer are less likely to suffer "occupational downgrading". As Gregory and her co-author Sara Connolly lament: "This loss of career status with part-time work is a stark failure among otherwise encouraging trends for women's advancement."

It is important to be clear what the problem is. Is it bad news that women want to spend time with their children? Surely not, given the evidence for the importance of parental engagement in the early years of a child's life. Are these women "forced" into part-time work, and now just grinning and bearing it? No - the overwhelming majority say they positively chose part-time work, and their job satisfaction is higher than that of mothers working full-time. Most men and women, according to the British Social Attitudes Survey, think that a conventional division of labour is the right one, with mothers taking on the bulk of responsibility for childcare.

We may wish to change these attitudes, but equally we must respect them. The TUC, for example, struggles to take women's choices at face value, declaring: "Women take on a disproportionate share of caring responsibilities due to unequal pay and limited opportunities within the workplace." This presupposes a level of responsiveness to economic incentives that would make Milton Friedman proud. Like it or not, women are doing most of the caring because they see it as part of their role in life. Groundbreaking work by the American economists Rachel Kranton and George Akerlof suggests that being a mother is part of women's identity, and that this explains their otherwise irrational labour-market decisions.

Perhaps the problem is an economic one - the loss of productivity as a result of the underuse of women's skills? This is the argument adopted by many who are urging more government action, but it is a fragile one. The latest TUC report, Closing the Gender Pay Gap, estimates that £11bn a year is being lost. The Women and Work Commission puts the figure at between £15bn and £23bn. A strange, unholy alliance has in fact developed between old-fashioned feminists, who insist women ought to work full-time to gain economic parity with men, and Treasury economists, who worry about the apparently "irrational" squandering of "human capital" by educated women. The principal difference between these allies is that the feminists want to spend billions of pounds of public money on childcare to allow more women to work full-time - the "Swedish option", at which the mandarins generally baulk.

There are, however, grave dangers in relying on economic arguments. For a start, such estimates are notoriously difficult to generate and are open to subjective manipulation (another recent study even found that £5bn is lost each year as a result of bosses' failure to say "thank you" to their staff, which suggests there are easier ways to boost productivity). And even if there really is an economic cost, there may well be a counterbalancing social gain in better-quality family life and happier children.

"Cost" of legislation

Overall, welfare might be greater even if our GDP - the size of which is a source of constant anxiety to male politicians - is somewhat smaller. Employers and their representative bodies are also just as adept at producing studies showing the apparent "cost" of any legislation to help working families - whether it is to introduce a minimum wage, equal pay, better maternity leave or better rights for temporary staff. Equality then becomes a battle of numbers, each side wielding its own semi-fictional cost-benefit analysis. Once we start putting a price tag on equality, we have lost sight of its value.

The problem is not a dent in economic output. The problem is not that mothers reject a life as what the sociologist Heather Hopfl has called that of a "quasi-man". The problem is lack of choice, for women and men alike. Millions of women do not have the option of reducing their hours as well as maintaining their status. And very few men have the option of sharing the childcare responsibilities with their partner. Liberal societies should aim to offer individuals the maximum range of options from which to construct their version of a good life.

"The heart of the choice issue is limited opportunities for women to work part-time in high-quality jobs," says Petrongolo. Gregory agrees: "The crunch question is this - can part-time women continue at the same level?" The one area of dissatisfaction expressed by women working part-time is with their wages. That is not surprising.

Employers are reluctant to retain or hire senior part-timers. While 60 per cent of employers say they would allow a woman returning from maternity leave to switch to part-time status, of these only two-thirds would allow her to remain at the same level of seniority. So, less than half would permit a reduction in hours without loss of status. This may not just be the result of Jurassic attitudes, as Gregory admits: "We can't assume that employers are simply stupid." Assuming it costs as much to hire and train part-timers as full-timers, they will offer a lower return on investment. There may also be co-ordination costs, especially associated with part-time or job-sharing managers. But it is hard to know the true height of these barriers.

Since 2003, employees have had a "right to request" flexible working while firms have had a corresponding duty to take such requests seriously. Some one-off surveys suggest that since the law came into force, one in seven women have made a request, and that most have been accepted. But the Labour Force Survey - the main data source on workplace trends - shows no increase in levels of part-time work over the same period. This puzzles economists. The most likely explanation is that a similar number of requests was being made and granted even before the legislation, and that the law has made little difference. It also looks as if women are asking for part-time work in the sectors where they are most likely to be granted, such as nursing, rather than in the senior and professional jobs where the real problem lies.

Part-timer fathers

It is clear that British families do not want to outsource the raising of their children to others, and prefer to combine paid work and care. At the moment, this means mums, but in the future it could mean dads, too. The model we should be emulating is Holland, where workers have the right to convert a full-time job to a part-time one unless the employer can produce convincing evidence for damage to the firm. "We need to shift the burden of proof from the employee to the employer," insists Gregory. We need to go Dutch, and remove the words "to request" from the right to request flexible working.

It is possible that without the risk of occupational downsliding, more men may also choose to work part-time; but it is also necessary to give men the same freedom as women to take time off for childcare as women. Cameron's idea of transferability is a step in the right direction: it is high time the government stopped deciding for us which parent should raise our children.

Markets are usually good at offering choice, but at present the labour market is failing the family. Companies are not generally acting on the basis of a rigorous business case against senior part-timers. They are exhibiting what psychologists call "path dependency": doing what they do because that's what they've always done. A decisive legislative strike on the Dutch model could jolt them on to a fairer path. Rather than aiming at creating economy-friendly families, it is time to shape a family-friendly economy.

This is the kind of package Labour MPs used to advocate. Indeed, the Commission on Social Justice - under the influence of its deputy chair Patricia Hewitt - proposed just such a move back in 1994. But, in a battle between families and firms, Labour now leans towards the latter. Gordon Brown loves to praise "hard-working families". What families need now is for him to work harder for them.

Working parenthood: by numbers

1/3 of mothers, and one-fifth of fathers, use some form of flexible working pattern

£7,000 average cost of taking a full 12 months off work after the birth of a child

83% proportion of women who want to return to work after having children

1 in 3 proportion of female corporate managers who lose status after having children

94% of all new fathers take some time off after the birth to care for their children

90% of mothers take at least six months' leave

39 number of weeks women are entitled to statutory maternity pay at 90% or less of weekly earnings

2 number of weeks men are entitled to paternity leave (pay negotiable)

Research: Simon Rudd

This article first appeared in the 24 March 2008 issue of the New Statesman, The truth about Tibet

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Why the elites always rule

Since an Italian sociologist coined the word “elite” in 1902, it has become a term of abuse. But history is the story of one elite replacing another – as the votes for Trump and Brexit have shown.

Donald Trump’s successful presidential campaign was based on the rejection of the “establishment”. Theresa May condemned the rootless “international elites” in her leader’s speech at last October’s Conservative party conference. On the European continent, increasingly popular right-wing parties such as Marine Le Pen’s Front National and the German Alternative für Deutschland, as well as Poland’s ruling Law and Justice party, delight in denouncing the “Eurocratic” elites. But where does the term “elite” come from, and what does it mean?

It was Vilfredo Pareto who, in 1902, gave the term the meaning that it has today. We mostly think of Pareto as the economist who came up with ideas such as “Pareto efficiency” and the “Pareto principle”. The latter – sometimes known as the “power law”, or the “80/20 rule” – stipulates that 80 per cent of the land always ends up belonging to 20 per cent of the population. Pareto deduced this by studying land distribution in Italy at the turn of the 20th century. He also found that 20 per cent of the pea pods in his garden produced 80 per cent of the peas. Pareto, however, was not only an economist. In later life, he turned his hand to sociology, and it was in this field that he developed his theory of the “circulation of elites”.

The term élite, used in its current socio­logical sense, first appeared in his 1902 book Les systèmes socialistes (“socialist systems”). Its aim was to analyse Marxism as a new form of “secular” religion. And it was the French word élite that he used: naturally, one might say, for a book written in French. Pareto, who was bilingual, wrote in French and Italian. He was born in Paris in 1848 to a French mother and an Italian father; his father was a Genoese marquis who had accompanied the political activist Giuseppe Mazzini into exile. In honour of the revolution that was taking place in Germany at the time, Pareto was at first named Fritz Wilfried. This was latinised into Vilfredo Federico on the family’s return to Italy in 1858.

When Pareto wrote his masterpiece – the 3,000-page Trattato di sociologia ­generale (“treatise on general sociology”) – in 1916, he retained the French word élite even though the work was in Italian. Previously, he had used “aristocracy”, but that didn’t seem to fit the democratic regime that had come into existence after Italian unification. Nor did he want to use his rival Gaetano Mosca’s term “ruling class”; the two had bitter arguments about who first came up with the idea of a ruling minority.

Pareto wanted to capture the idea that a minority will always rule without recourse to outdated notions of heredity or Marxist concepts of class. So he settled on élite, an old French word that has its origins in the Latin eligere, meaning “to select” (the best).

In the Trattato, he offered his definition of an elite. His idea was to rank everyone on a scale of one to ten and that those with the highest marks in their field would be considered the elite. Pareto was willing to judge lawyers, politicians, swindlers, courtesans or chess players. This ranking was to be morally neutral: beyond “good and evil”, to use the language of the time. So one could identify the best thief, whether that was considered a worthy profession or not.

Napoleon was his prime example: whether he was a good or a bad man was irrelevant, as were the policies he might have pursued. Napoleon had undeniable political qualities that, according to Pareto, marked him out as one of the elite. Napoleon is important
because Pareto made a distinction within the elite – everyone with the highest indices within their branch of activity was a member of an elite – separating out the governing from the non-governing elite. The former was what interested him most.

This is not to suggest that the non-governing elite and the non-elite were of no interest to him, but they had a specific and limited role to play, which was the replenishment of the governing elite. For Pareto, this group was the key to understanding society as a whole – for whatever values this elite incarnated would be reflected in society. But he believed that there was an inevitable “physiological” law that stipulated the continuous decline of the elite, thereby making way for a new elite. As he put it in one of his most memorable phrases, “History is the graveyard of elites.”

***

Pareto’s thesis was that elites always rule. There is always the domination of the minority over the majority. And history is just the story of one elite replacing another. This is what he called the “circulation of elites”. When the current elite starts to decline, it is challenged and makes way for another. Pareto thought that this came about in two ways: either through assimilation, the new elite merging with elements of the old, or through revolution, the new elite wiping out the old. He used the metaphor of a river to make his point. Most of the time, the river flows continuously, smoothly incorporating its tributaries, but sometimes, after a storm, it floods and breaks its banks.

Drawing on his Italian predecessor Machiavelli, Pareto identified two types of elite rulers. The first, whom he called the “foxes”, are those who dominate mainly through combinazioni (“combination”): deceit, cunning, manipulation and co-optation. Their rule is characterised by decentralisation, plurality and scepticism, and they are uneasy with the use of force. “Lions”, on the other hand, are more conservative. They emphasise unity, homogeneity, established ways, the established faith, and rule through small, centralised and hierarchical bureaucracies, and they are far more at ease with the use of force than the devious foxes. History is the slow swing of the pendulum from one type of elite to the other, from foxes to lions and back again.

The relevance of Pareto’s theories to the world today is clear. After a period of foxes in power, the lions are back with renewed vigour. Donald Trump, as his behaviour during the US presidential campaign confirmed, is perfectly at ease with the use of intimidation and violence. He claimed that he wants to have a wall built between the United States and Mexico. His mooted economic policies are largely based on protectionism and tariffs. Regardless of his dubious personal ethics – a classic separation between the elite and the people – he stands for the traditional (white) American way of life and religion.

This is in stark contrast to the Obama administration and the Cameron government, both of which, compared to what has come since the votes for Trump and Brexit, were relatively open and liberal. Pareto’s schema goes beyond the left/right divide; the whole point of his Systèmes socialistes was to demonstrate that Marxism, as a secular religion, signalled a return to faith, and thus the return of the lions in politics.

In today’s context, the foxes are the forces of globalisation and liberalism – in the positive sense of developing an open, inter­connected and tolerant world; and in the negative sense of neoliberalism and the dehumanising extension of an economic calculus to all aspects of human life. The lions represent the reaction, centring themselves in the community, to which they may be more attentive, but bringing increased xenophobia, intolerance and conservatism. For Pareto, the lions and foxes are two different types of rule, both with strengths and weaknesses. Yet the elite is always composed of the two elements. The question is: which one dominates at any given time?

What we know of Theresa May’s government suggests that she runs a tight ship. She has a close – and closed – group of confidants, and she keeps a firm grip on the people under her. She is willing to dispense with parliament in her negotiation of Brexit, deeming it within the royal prerogative. Nobody yet knows her plan.

The European Union is a quintessentially foxlike project, based on negotiation, compromise and combination. Its rejection is a victory of the lions over the foxes. The lions are gaining prominence across the Western world, not just in Trumpland and Brexit Britain. Far-right movements have risen by rejecting the EU. It should come as no surprise that many of these movements (including Trump in the US) admire Vladimir Putin, at least for his strongman style.

Asia hasn’t been spared this movement, either. After years of tentative openness in China, at least with the economy, Xi Jinping has declared himself the “core” leader, in the mould of the previous strongmen Mao Zedong and Deng Xiaoping. Japan’s prime minister, Shinzo Abe, has also hardened his stance, and he was the first world leader to meet with President-Elect Donald Trump. Narendra Modi in India and Rodrigo Duterte in the Philippines are in the same mould, the latter coming to power on the back of promising to kill criminals and drug dealers. After the failed coup against him in July, Recep Tayyip Erdogan has also been cracking down on Turkey.

***


In Les systèmes socialistes, Pareto elaborated on how a new elite replaces the old. A, the old elite, would be challenged by B, the new, in alliance with C, the people. B would win the support of C by making promises that, once in power, it wouldn’t keep. If that sounds like the behaviour of most politicians, that is because it probably is. But what Pareto was pointing out was how, in its struggle for power, the new elite politicised groups that were not political before.

What we know of Trump supporters and Brexiteers is that many feel disenfranchised: the turnout in the EU referendum could not have been greater than in the 2015 general election otherwise, and significant numbers of those who voted for Trump had never voted before. There is no reason to think that they, too, won’t be betrayed by the new leaders they helped to bring to power.

In the last years of his life, Pareto offered a commentary on Italy in the 1920s. He denounced the state’s inability to enforce its decisions and the way that Italians spent their time flaunting their ability to break the law and get away with it. He coined the phrase “demagogic plutocracy” to characterise the period, in which the rich ruled behind a façade of democratic politics. He thought this particularly insidious for two reasons: those in power were more interested in siphoning off wealth for their personal ends than encouraging the production of new wealth, and consequently undermined national prosperity (remember Pareto’s training as an economist); and, as the demagogic elites govern through deceit and cunning, they are able to mask their rule for longer periods.

Much has been made of Trump’s “populism”, but the term “demagogic plutocrat” seems particularly apt for him, too: he is a wealthy man who will advance the interests of his small clique to the detriment of the well-being of the nation, all behind the smokescreen of democratic politics.

There are other ways in which Pareto can help us understand our predicament. After all, he coined the 80/20 rule, of which we hear an intensified echo in the idea of “the One Per Cent”. Trump is a fully paid-up member of the One Per Cent, a group that he claims to be defending the 99 Per Cent from (or, perhaps, he is an unpaid-up member, given that what unites the One Per Cent is its reluctance to pay taxes). When we perceive the natural inequality of the distribution of resources as expressed through Pareto’s “power law”, we are intellectually empowered to try to do something about it.

Those writings on 1920s Italy landed Pareto in trouble, as his theory of the circulation of elites predicted that a “demagogic plutocracy”, dominated by foxes, would necessarily make way for a “military plutocracy”, this time led by lions willing to restore the power of the state. In this, he was often considered a defender of Mussolini, and Il Duce certainly tried to make the best of that possibility by making Pareto a senator. Yet there is a difference between prediction and endorsement, and Pareto, who died in 1923, had already been living as a recluse in Céligny in Switzerland for some time – earning him the nickname “the hermit of Céligny” – with only his cats for company, far removed from day-to-day Italian politics. He remained a liberal to his death, content to stay above the fray.

Like all good liberals, Pareto admired Britain above all. As an economist, he had vehemently defended its system of free trade in the face of outraged opposition in Italy. He also advocated British pluralism and tolerance. Liberalism is important here: in proposing to set up new trade barriers and restrict freedom of movement, exacerbated by their more or less blatant xenophobia, Trump and Brexit challenge the values at the heart of the liberal world.

***


What was crucial for Pareto was that new elites would rise and challenge the old. It was through the “circulation of elites” that history moved. Yet the fear today is that history has come to a standstill, that elites have ­become fossilised. Electors are fed up with choosing between the same old candidates, who seem to be proposing the same old thing. No wonder people are willing to try something new.

This fear of the immobility of elites has been expressed before. In 1956, the American sociologist C Wright Mills published The Power Elite. The book has not been out of print since. It is thanks to him that the term was anglicised and took on the pejorative sense it has today. For Mills, Cold War America had come to be dominated by a unified political, commercial and military elite. With the 20th century came the growth of nationwide US corporations, replacing the older, more self-sufficient farmers of the 19th century.

This made it increasingly difficult to ­distinguish between the interests of large US companies and those of the nation as a whole. “What’s good for General Motors,” as the phrase went, “is good for America.” As a result, political and commercial interests were becoming ever more intertwined. One had only to add the Cold War to the mix to see how the military would join such a nexus.

Mills theorised what President Dwight D Eisenhower denounced in his January 1961 farewell speech as the “military-industrial complex” (Eisenhower had wanted to add the word “congressional”, but that was thought to be too risky and was struck out of the speech). For Mills, the circulation of elites – a new elite rising to challenge the old – had come to an end. If there was any circulation at all, it was the ease with which this new power elite moved from one part of the elite to the other: the “revolving door”.

The Cold War is over but there is a similar sense of immobility at present concerning the political elite. Must one be the child or wife of a past US president to run for that office? After Hillary Clinton, will Chelsea run, too? Must one have gone to Eton, or at least Oxford or Cambridge, to reach the cabinet? In France is it Sciences Po and Éna?

The vote for Brexit, Trump and the rise of the far right are, beyond doubt, reactions to this sentiment. And they bear out Pareto’s theses: the new elites have aligned themselves with the people to challenge the old elites. The lions are challenging the foxes. Needless to say, the lions, too, are prototypically elites. Trump is a plutocrat. Boris Johnson, the co-leader of the Leave campaign, is as “establishment” as they come (he is an Old Etonian and an Oxford graduate). Nigel Farage is a public-school-educated, multimillionaire ex-stockbroker. Marine Le Pen is the daughter of Jean-Marie Le Pen. Putin is ex-KGB.

Pareto placed his hopes for the continuing circulation of elites in technological, economic and social developments. He believed that these transformations would give rise to new elites that would challenge the old political ruling class.

We are now living through one of the biggest ever technological revolutions, brought about by the internet. Some have argued that social media tipped the vote in favour of Brexit. Arron Banks’s Leave.EU website relentlessly targeted disgruntled blue-collar workers through social media, using simple, sometimes grotesque anti-immigration messages (as a recent profile of Banks in the New Statesman made clear) that mimicked the strategies of the US hard right.

Trump’s most vocal supporters include the conspiracy theorist Alex Jones, who has found the internet a valuable tool for propagating his ideas. In Poland, Jarosław Kaczynski, the leader of the Law and Justice party, claims that the Russian plane crash in 2010 that killed his twin brother (then the country’s president) was a political assassination, and has accused the Polish prime minister of the time, Donald Tusk, now the president of the European Council, of being “at least morally” responsible. (The official explanation is that the poorly trained pilots crashed the plane in heavy fog.)

It need not be like this. Silicon Valley is a world unto itself, but when some of its members – a new technological elite – start to play a more active role in politics, that might become a catalyst for change. In the UK, it has been the legal, financial and technological sectors that so far have led the pushback against a “hard” Brexit. And we should not forget how the social movements that grew out of Occupy have already been changing the nature of politics in many southern European countries.

The pendulum is swinging back to the lions. In some respects, this might be welcome, because globalisation has left too many behind and they need to be helped. However, Pareto’s lesson was one of moderation. Both lions and foxes have their strengths and weaknesses, and political elites are a combination of the two, with one element dominating temporarily. Pareto, as he did in Italy in the 1920s, would have predicted a return of the lions. But as a liberal, he would have cautioned against xenophobia, protectionism and violence.

If the lions can serve as correctives to the excesses of globalisation, their return is salutary. Yet the circulation of elites is a process more often of amalgamation than replacement. The challenge to liberal politics is to articulate a balance between the values of an open, welcoming society and of one that takes care of its most vulnerable members. Now, as ever, the task is to find the balance between the lions and the foxes. l

Hugo Drochon is the author of “Nietzsche’s Great Politics” (Princeton University Press)

This article first appeared in the 12 January 2017 issue of the New Statesman, Putin's revenge