Death and taxes

Political philosopher Martin O'Neill looks at the thinking behind a political issue of the day. In h

In a letter to his friend Jean-Baptiste Leroy in 1789, Benjamin Franklin famously opined that “in the world nothing can be said to be certain except death and taxes.” Franklin was surely right about this, just as his judgment was sound in so many other matters – after all, this was the man who told us that “beer is living proof that God loves us and wants us to be happy”. But it is astonishing how often passions become enflamed, and good sense goes out the window, when we encounter the heady mix of mortality and tax.

Recent events have borne this out. No matter when the next election is held - obviously it's now later rather than sooner - Inheritance Tax (IHT) will be one of the key issues, with Tory plans to raise the IHT threshold from £300,000 to £1,000,000 promising to be their most popular single policy.

David Cameron and George Osborne have found a policy that resonates with the fears and aspirations of many of their fellow citizens, who hold IHT in suspicion and opprobrium. IHT is seen as a despicable “death tax”, which hits families just when they’re down. Moreover, it is seen as especially illegitimate, given that it is a form of “double taxation” (“why should the government take my money, when they already taxed me when I earned it?”).

IHT is viewed as the manifestation of government in its most sinister form: cold and rapacious. But it is actually quite puzzling as to why IHT has quite such a bad image. It’s a fair and progressive form of taxation, that should be popular with both social democrats and free marketeers, for reasons that I’ll explain below. Labour shouldn’t be at all defensive about IHT (and certainly shouldn’t follow Blairite outrider Stephen Byers’s eccentric advocacy of its wholesale abolition), and instead should be prepared to proclaim its myriad virtues from the rooftops.

Here’s why we should learn to stop worrying and learn to love inheritance tax:

(1) Most People Pay Nothing (or at any rate not very much…)
At the current £300,000 threshold, only the richest 6% of estates pay anything. One common form of misjudgement is that many people who will not be affected IHT nevertheless think that they will be. A striking example of this kind of thinking comes from the U.S., where the Estate Tax threshold kicks in only at $2,000,000, or for the top 1% of estates. Nevertheless, Bush’s attempt at repealing the estate tax enjoyed widespread public support among the less well off. Surveys found that 20% of Americans believed that they were in this top 1%, with a further 20% expecting to come into this bracket in the near future!

Even those who fall within the threshold often don’t pay as much as they worry they will. Is Granny worried that her house is now worth £500,000, and the grandchildren are going to lose out? Well, under current rules, Granny can give them £3,000 a year each without any tax implications. Short of liquid cash? Then she can release some of the equity in her property with an equity release mortgage. Moreover, given that the first £300,000 is zero-rated, even if Granny eventually departs leaving an estate valued at, say, £400,000, the tax liability is only £40,000 – leaving a generous £360,000 for the grandchildren. The complaint that IHT stops people from “leaving something to make their descendants lives a bit easier” thus seem rather exaggerated.

(2) Arguments About ‘Double Taxation’ are Bad Arguments:
Perhaps the strangest, and yet most pervasive, aspect of opposition to IHT is that many people say that ‘double taxation’ is intrinsically unfair. But, if this were true, then it would be intrinsically unfair to levy any form of tax on the expenditure of post-tax income. Yet, we pay VAT, fuel taxes, alcohol duty, and stamp duty when we spend our hard-earned cash, without the same kinds of complaints about ‘double taxation’.

This sort of objection to IHT, if carried to its logical conclusion, would preclude the existence of any kind of system of taxation. To see why, just think that any discrete amount of money might be involved in a plethora of separate transactions over time, being subject to different forms of taxation at each point, depending on the nature of that transaction (employing someone, buying a product, bequeathing in a will, etc.).

The ‘double taxation’ argument suggests that, no matter how long this train of transactions, taxation can happen only once in the chain. The idea seems to be that once my money has been taxed once, it cannot be taxed again. Hence, we’d need to know the complete transaction history of the economy in order to know whether any element of taxation was legitimate or not.

This is, I may hazard to suggest, a crazy way to think about taxes. An objection to the aims or level of some tax, including IHT, needs to be made in a way that’s more careful than simply invoking this kind self-defeating ‘double taxation’ argument. The money and property that we legitimately hold is in part defined by, and results from, the operation of the whole complex web of tax rules and regulations.

We can criticize elements of that system, of course, for a wide variety of reasons, but a simple appeal to the illegitimacy of the government expropriating “my money”, simply short-circuits reasoned debate about tax. Yet, this “libertarian intuition”, as philosophers Liam Murphy and Thomas Nagel call it in their book The Myth of Ownership, is pervasive, and difficult to budge. Clear thinking about IHT, as about all taxes, demands that we do budge this ‘libertarian intuition’ aside.

(3) If not Inheritance Tax, then what?
Inheritance Tax is a tax that falls disproportionately on the old (the typical case is of 60 year-olds inhering from 80 year-olds) and the rich. If we wish to repeal it, or raise IHT thresholds, then, unless we want to reduce government expenditure, the shortfall needs to be raised elsewhere. The chances are that it will be raised to a greater degree from those who are younger and poorer than those affected by IHT. Many of the opponents of IHT would be less sure of their position if questions about IHT were framed in a different way. Instead of “Would you like inheritance tax to be reduced?” the question should be “Would you like to replace inheritance tax with increased income tax or corporation tax?”. Here again, thinking of IHT as part of a tax system, rather than in abstract isolation, helps to make the issues clearer.

Cameron and Osborne suggest that their reduction in IHT can be met by levying an annual £25,000 charge on ‘non-domiciled’ UK residents, who pay no tax on their non-UK sourced income. This is a problematic proposal in a number of ways. First of all, one may doubt that it would bring in anything like the £3.5Bn that would be lost by the IHT changes proposed by the Tories. Secondly, many of the UK’s “non-doms” are not Russian oligarchs, or well-paid City workers. Some are simply Polish plumbers, who don’t want to pay tax on their non-UK income. So, some non-doms just could not pay the charge, or would de-register as ‘non-domiciled’ if the charge were imposed. Thirdly, the Tory position seems wholly unprincipled.

Surely either non-doms should pay UK tax in the same way as domiciled tax-payers (in which case we should tax them in the normal way rather than imposing an annual charge), or they should be exempt (in which case current arrangements are fine). It is difficult to see what the justification for the half-way house of a £25,000 ‘residency levy’ might be. Fourthly, let us assume that the Tories are right that we should be doing more to tax non-doms, in one way or another. Well, then, why don’t we do so in order to reduce income tax rather than in order to reduce IHT; or, indeed, why not tax non-doms in order to invest more in health in education? Given these other options, reduction in IHT is not a reasonable priority.

(4) Why Free Market Conservatives Should Love Inheritance Tax
Inheritance Tax is often seen as a policy of the Left rather than the Right, and it’s certainly true that there are lots of good egalitarian reasons that support IHT. But this is only half of the picture. Those on the Right, and especially those who believe in the usual justifications for the free-market, should be just as enthusiastic as the staunchest socialist about the preservation of IHT.

Here’s why. Let us assume that we believe in the glories of the free market economy. If we give people responsibility, and set them on their own two feet, then they’ll work hard and prosper. A free market in trade and employment gives us, let us suppose, a dynamic, innovative and thriving economy. It does this by incentivizing hard work, and letting economic rewards flow to those with the best ideas and the greatest capacity for hard graft.

But, if this is our vision of society, we surely must admit that the unearned windfall gains of inheritance tax distort this picture. Large inheritances distort the level playing field which would allow the dynamic and innovative to prosper. If welfare payments cause listlessness and sap dynamism, then we can only assume that large unearned windfalls will do likewise. Indeed, these were precisely the sorts of arguments given by Teddy Roosevelt when he proposed an American federal estate tax in 1906. As Andrew Carnegie (another proponent of IHT) put it “the parent who leaves his son enormous wealth generally deadens the talents and energies of the son, and leads him to lead a less useful and less worthy life than he otherwise would.” One need hardly point out that neither Roosevelt nor Carnegie were approaching these issues from the left.

The solution? Inheritance tax can be used to fund education so as to create that level playing field and broad opportunities, or, perhaps, used to fund capital grants to young entrepreneurs. This is exactly the sort of scheme favoured by Bruce Ackerman and Anne Alstott, in their book The Stakeholder Society, where they advocate capital grants to each individual of $80,000 at the start of their working lives, funded by a progressive estate tax. One of the interesting features of this sort of scheme is that it is all about using the state to facilitate individual responsibility and to create opportunities, rather than simply doling out welfare. This is a much purer vision of a free market society than societies that are gummed-up and ossified by inherited advantage.

(5) Why the Left Needs To Be Less Defensive about Inheritance Tax
Just like the Democrats in the US, the Labour Party has tended to be somewhat defensive when reacting to proposals to abolish or reduce IHT. Rather than simply emphasizing that not all that many people pay IHT, Labour should be trying the difficult task of transforming public opinion on the issue. Perhaps the strongest arguments for IHT appeals to ideas of reciprocity and fairness that are very commonly shared.

Teddy Roosevelt took the view that “The man of great wealth owes a peculiar obligation to the State, because he derives special advantages from the mere existence of government.” There would be no good in being wealthy if one could not enjoy stable property rights, the protection of the police, and the peace of a well-defended country, all of which need to be paid for. And individuals do not make their money in a vacuum, but by building on a broad history of innovation and development. This sort of reciprocity argument is also made by Bill Gates, Sr., father of the Bill Gates of Microsoft, in his book Wealth and Our Commonwealth: Why America Should Tax Accumulated Fortunes. This sort of argument can get broad purchase with those of every political stripe, as is demonstrated by the fact that Roosevelt and Gates are hardly “soak the rich” firebrands or loonie lefties.

When one looks clearly at inheritance tax in terms of a concern with fairness and opportunity, it’s difficult to see why it has become so unpopular. Perhaps it is significant that many of those whose families would lose out most massively from a fair system of inheritance tax are precisely those who own some of our most influential newspapers, and who have the spare resources to exert political influence through lobbying and political donations. If so, that gives one more kind of democratic argument for why IHT is a vital policy in a fair and progressive country.

To return from abstract arguments to concrete policies, what should Labour do about IHT, in reaction to the Tory proposals? The answer comes from an unexpected direction. The American philosopher John Rawls, in his final book Justice as Fairness, suggests that a just society should have a system of IHT that taxed beneficiaries rather than estates. In that way, inheritance could be taxed much more like income, and hence inheritance tax could be made progressive, through orienting it towards receivers rather than donors. Large estates need not attract any taxation, as long as they were dispersed among a number of relatively disadvantaged recipients. At the same time, even small estates could be taxed heavily if they were all left to others who were themselves already wealthy. Under this system of IHT, there could be no objection that the state was stopping middle-income families from “setting something aside” for their children. But, at the same time, this form of IHT would prevent wealth-transfers which greatly widened existing inequalities.

Such a system of beneficiary-centred IHT could command easier public support than the existing system, and which would be deeply progressive in its effects. Best of all, under such a revised system, Granny need not worry at all, as she would be free to pass on her estate to her modestly well-off grandchildren (although not, perhaps, to those of her grandchildren who were already millionaires). Recipient-centred IHT would be a system of progressive Inheritance Tax that would be worth having, and worth arguing for. It might also help to undercut some of our common irrationalities about death and taxes.

Martin O’Neill is a political philosopher, based at the Centre for Political Theory in the Department of Politics at the University of Manchester. He has previously taught at Cambridge and Harvard, and is writing a book on Corporations and Social Justice.
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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