Show Hide image

Danielle Allen: Labour’s new heavyweight

Between boxing lessons and books on Plato, the American professor Danielle Allen has campaigned for Obama and is now lending Ed Miliband a hand. So what’s her big idea?

Danielle Allen is perhaps the most educated person to set foot in Westminster this year. At the age of 41, she holds two doctorates, one in classics from Cambridge and one in government from Harvard, and was awarded a $500,000 MacArthur Foundation “genius grant” in 2002 for combining “the classicist’s careful attention to texts and language with the political theorist’s sophisticated and informed engagement”. In 2007, she succeeded Michael Walzer as UPS Foundation Professor at the Institute for Advanced Study in Princeton, the postgraduate centre best known as the academic home of Albert Einstein. She has written studies of the Athenian legal system (The World of Prometheus), citizenship (Talking to Strangers), Plato (Why Plato Wrote) and, most recently, the Declaration of Independence (Why the Declaration of Independence Matters). She also served as a field organiser for the Obama campaign in 2008 and is a keen amateur boxer (trained by a coach called “Heavy”). Now, she has been invited to join the Labour policy review.

On 27 November, while most of Westminster was preoccupied with the imminent publication of the Leveson report, a group of Labour MPs, think-tankers and academics gathered in a House of Commons committee room to listen to Allen deliver a seminar on the “connected society”. The following day, shortly after Prime Minister’s Questions, Ed Miliband met her to discuss how her ideas could aid his party’s renewal. “Your ‘one nation’ should also be a ‘connected nation’,” Allen told her audience at the Commons. But what is a “connected nation”? And why is Labour so intrigued by the concept?

When I met Allen at Portcullis House the day after the seminar, I began by asking her to define “connected society”. “I think of a connected society as one that reflects bonding social ties while maximising bridging social ties,” she told me. “Bridging ties are the ties that connect people across different kinds of social network, whether that’s socio-economic, or ethnic, or religious, or occupational.” What is the difference between the two? “Bonding ties are the more familiar, easier ones that come from your family and your immediate community. But bridging ties are the kind that really facilitate economic mobility and educational improvement, so a connected society maximises bridging ties.”

The most successful societies, Allen argues, are those in which the major institutions – schools, universities, companies, the military, political bodies – promote links between ordinarily disparate groups. At the seminar, she pointed to research showing that “the majority of people who get a new job through information passed through a social network have acquired that information, not from a close connection, but from a distant one”.

Chicken or egg?

Allen’s vision became clearer when she told me about her social activism.While teaching at the University of Chicago, she sought to apply her theory by situating the university “within its community”. She founded the Civic Knowledge Project to encourage links between the university and low-income groups on the city’s south side. She also sat on the boards of the university’s four charter schools and worked on the Odyssey Project, which gives adults at or below the poverty level the chance to resume their education.

Michael Walzer said of her: “A lot of political theorists are interested in political theory, but they’re not much interested in politics. They are interested in what other academics are doing. But she’s interested in the real world and that’s, I think, an important quality.”

When I asked Allen for some examples of connected societies, she replied: “In the modern context we don’t really have any good examples. What we have are examples of failure, so one has to take the failures and from that point imagine the positive version.” Allen, who is mixed race, cited present-day racial segregation in the US as an “extreme” case of disconnection. “It [segregation] has been pretty conclusively shown to be at the root of racial inequality along all dimensions: educational inequalities in terms of achievement gaps between white and African American students; inequality in distribution of wealth; inequality in terms of employment mobility; inequality in terms of health.”

In recent years, drawing on works such as The Spirit Level, the left has cited income inequality as the cause of social disconnection. Allen argues that the reverse is true: social disconnection is the cause of inequality. “To achieve connectedness you have to have an egalitarian ethos, so there is a bit of a chicken and egg element,” she said. “But on the other hand, if you don’t start to build institutional channels for connection, it doesn’t matter what type of egalitarian ethos you have, you won’t be able to make use of it.”

Allen believes the left’s focus on fiscal and monetary policy has obscured the role of social organisation in reducing inequality. It is easy to see why her conclusions appeal to the Labour leader. While pledging to narrow the gap between the rich and the poor, Miliband has emphasised that there will be less money available for redistributive measures such as tax credits. “A lot of progressive politics is focused on compensatory or remedial approaches. What I am thinking about is how to solve resource situations so that the outcomes are more egalitarian in the first place,” Allen said, welcoming Labour’s recent emphasis on “predistribution”.

Jon Cruddas, the cerebral MP leading Labour’s policy review, described Allen to me as an “outstanding theoretician” whose ideas “work across all the different elements of the project we’re trying to build –on the economy, society and politics”. Cruddas, who has already brought in thinkers including the Harvard philosopher Michael Sandel and the Australian writer Tim Soutphommasane (see NS Profile, 13 August), said Allen’s involvement was further evidence of his party’s desire to pull together ideas “from a wide international orbit”. He added: “The question we’re asking is, how do you confront enduring patterns of inequality and division? The concept of a connected society gives you a frame to drill into that.”

Allen was born in Takoma Park, Maryland in 1971, and grew up in California in what she described as an “intensely political” household. Her father, William, was a black “Reagan conservative” who taught political philosophy at Michigan State University and served for five years on the US Commission on Civil Rights, including as chairman from 1988-89. He twice ran for the Republican Senate nomination in California, and the young Allen inherited his conservative beliefs. She was on the right until her arrival as an undergraduate at Princeton, where she encountered “various conservative journals that, on the subject of income inequality, took no interest in the evidence”.

Now a registered Democrat, she first met Obama when he was running for the Senate in Illinois. “He hailed me from across a parking lot outside a Caribbean restaurant with the greeting, ‘Hello, Professor!’”

Talk about toxic issues

It was Marc Stears, one of Miliband’s oldest friends (they were at Oxford together) and the man credited with crafting his “one nation” conference speech, who introduced Allen to Labour. “We knew each other’s work and then we met on a panel at the American Political Science Association conference,” she recalled. Allen told me that she had been inspired by Miliband’s “democratic energy” and by his attempt to “reinvigorate British self-understanding in all of its many parts.” The Labour leader’s emphasis on improving educational opportunities for the “forgotten 50 per cent” and his plan to put workers’ representatives on corporate remuneration committees were “excellent examples” of “connector programmes”.

I asked Allen why her goal of a “connected society” should be considered one of the left. Who favours a disconnected society? “I’m comfortable with that because it should be a project that everyone wants to say yes too,” she said. “But at the same time, the purpose and the consequence of these connections is a more egalitarian society, so at the point where they challenge vested interests, the people who benefit from forms of hierarchy or inequitable distribution of resources, that’s where resistance would come in.” The Conservatives’ reform of the NHS was an example of a “disconnected” approach because it proceeded “without consultation with the holders of local knowledge”.

Allen was careful to distinguish her idea of a connected society from the Tories’ “big society”. “There’s a relationship between the two ideas in that they are both ways of thinking about society, but there’s a critical difference,” she said. “I’m not talking about the voluntary sector at all – that’s important, that would be a part of my picture, but what I’m talking about is the way in which our institutions provide the architecture of our social arrangements, which means you can’t really separate the state from charities. The state has incredibly important consequences for society and how well society itself can contribute to the goal of flourishing for all individuals.”

Jonathan Rutherford, the editor of the leftwing journal Soundings and one of the thinkers closest to Labour’s policy review, told me that Allen’s emphasis on a more “relational” approach was central to the party’s future.

“One of the key issues that Labour has to look at and develop is ‘What is our good society?’, and that has to form the basis of our thinking around immigration and welfare – it’s the only way we’ll be able to talk about these toxic issues. And Danielle’s thinking around the connected society was really helpful for setting out a theoretical frame and a language of citizenship.”

If Labour is to build a connected society, it will need to unleash what Stewart Wood, one of Miliband’s closest advisers, has called a “supply-side revolution from the left”. Banks must become regional institutions that support an active industrial policy; major companies must offer apprenticeships (just a third do so at the moment) and pay the living wage; and our elite schools and universities must open themselves up and sponsor academies.

“It takes work,” Allen said. “I don’t think it’s going to happen spontaneously. It’s about a mixture of incentive, persuasion and regulation. It requires conscious thought about the concept.” And she maintained that it was a task only Labour could accomplish. “Building a connected society is about empowering the disempowered – and that has to be a cause of the left.”

George Eaton is editor of The Staggers

George Eaton is political editor of the New Statesman.

This article first appeared in the 10 December 2012 issue of the New Statesman, Greece: a warning for Britain?

Show Hide image

Q&A: What are tax credits and how do they work?

All you need to know about the government's plan to cut tax credits.

What are tax credits?

Tax credits are payments made regularly by the state into bank accounts to support families with children, or those who are in low-paid jobs. There are two types of tax credit: the working tax credit and the child tax credit.

What are they for?

To redistribute income to those less able to get by, or to provide for their children, on what they earn.

Are they similar to tax relief?

No. They don’t have much to do with tax. They’re more of a welfare thing. You don’t need to be a taxpayer to receive tax credits. It’s just that, unlike other benefits, they are based on the tax year and paid via the tax office.

Who is eligible?

Anyone aged over 16 (for child tax credits) and over 25 (for working tax credits) who normally lives in the UK can apply for them, depending on their income, the hours they work, whether they have a disability, and whether they pay for childcare.

What are their circumstances?

The more you earn, the less you are likely to receive. Single claimants must work at least 16 hours a week. Let’s take a full-time worker: if you work at least 30 hours a week, you are generally eligible for working tax credits if you earn less than £13,253 a year (if you’re single and don’t have children), or less than £18,023 (jointly as part of a couple without children but working at least 30 hours a week).

And for families?

A family with children and an income below about £32,200 can claim child tax credit. It used to be that the more children you have, the more you are eligible to receive – but George Osborne in his most recent Budget has limited child tax credit to two children.

How much money do you receive?

Again, this depends on your circumstances. The basic payment for a single claimant, or a joint claim by a couple, of working tax credits is £1,940 for the tax year. You can then receive extra, depending on your circumstances. For example, single parents can receive up to an additional £2,010, on top of the basic £1,940 payment; people who work more than 30 hours a week can receive up to an extra £810; and disabled workers up to £2,970. The average award of tax credit is £6,340 per year. Child tax credit claimants get £545 per year as a flat payment, plus £2,780 per child.

How many people claim tax credits?

About 4.5m people – the vast majority of these people (around 4m) have children.

How much does it cost the taxpayer?

The estimation is that they will cost the government £30bn in April 2015/16. That’s around 14 per cent of the £220bn welfare budget, which the Tories have pledged to cut by £12bn.

Who introduced this system?

New Labour. Gordon Brown, when he was Chancellor, developed tax credits in his first term. The system as we know it was established in April 2003.

Why did they do this?

To lift working people out of poverty, and to remove the disincentives to work believed to have been inculcated by welfare. The tax credit system made it more attractive for people depending on benefits to work, and gave those in low-paid jobs a helping hand.

Did it work?

Yes. Tax credits’ biggest achievement was lifting a record number of children out of poverty since the war. The proportion of children living below the poverty line fell from 35 per cent in 1998/9 to 19 per cent in 2012/13.

So what’s the problem?

Well, it’s a bit of a weird system in that it lets companies pay wages that are too low to live on without the state supplementing them. Many also criticise tax credits for allowing the minimum wage – also brought in by New Labour – to stagnate (ie. not keep up with the rate of inflation). David Cameron has called the system of taxing low earners and then handing them some money back via tax credits a “ridiculous merry-go-round”.

Then it’s a good thing to scrap them?

It would be fine if all those low earners and families struggling to get by would be given support in place of tax credits – a living wage, for example.

And that’s why the Tories are introducing a living wage...

That’s what they call it. But it’s not. The Chancellor announced in his most recent Budget a new minimum wage of £7.20 an hour for over-25s, rising to £9 by 2020. He called this the “national living wage” – it’s not, because the current living wage (which is calculated by the Living Wage Foundation, and currently non-compulsory) is already £9.15 in London and £7.85 in the rest of the country.

Will people be better off?

No. Quite the reverse. The IFS has said this slightly higher national minimum wage will not compensate working families who will be subjected to tax credit cuts; it is arithmetically impossible. The IFS director, Paul Johnson, commented: “Unequivocally, tax credit recipients in work will be made worse off by the measures in the Budget on average.” It has been calculated that 3.2m low-paid workers will have their pay packets cut by an average of £1,350 a year.

Could the government change its policy to avoid this?

The Prime Minister and his frontbenchers have been pretty stubborn about pushing on with the plan. In spite of criticism from all angles – the IFS, campaigners, Labour, The Sun – Cameron has ruled out a review of the policy in the Autumn Statement, which is on 25 November. But there is an alternative. The chair of parliament’s Work & Pensions Select Committee and Labour MP Frank Field has proposed what he calls a “cost neutral” tweak to the tax credit cuts.

How would this alternative work?

Currently, if your income is less than £6,420, you will receive the maximum amount of tax credits. That threshold is called the gross income threshold. Field wants to introduce a second gross income threshold of £13,100 (what you earn if you work 35 hours a week on minimum wage). Those earning a salary between those two thresholds would have their tax credits reduced at a slower rate on whatever they earn above £6,420 up to £13,100. The percentage of what you earn above the basic threshold that is deducted from your tax credits is called the taper rate, and it is currently at 41 per cent. In contrast to this plan, the Tories want to halve the income threshold to £3,850 a year and increase the taper rate to 48 per cent once you hit that threshold, which basically means you lose more tax credits, faster, the more you earn.

When will the tax credit cuts come in?

They will be imposed from April next year, barring a u-turn.

Anoosh Chakelian is deputy web editor at the New Statesman.