Plato, the great scholar of Ancient Greece, said that the differences between rich and poor should not exceed a ratio of one to four. In the eighteenth century the influential writer, Jean-Jacques Rousseau, who gave birth to the notion of the “Social Contract”, argued that the invention of private property and immoderate accumulation are the origins of great discord among peoples. He also was one of the first to advocate a return to democracy, a system of government that had got lost once the Greek empire declined. He saw the modest reforms of his era as “garlands of flowers along the chains of iron”. He died a decade before the French Revolution but was celebrated by its leaders.
Over the last two decades we can see, on the one hand, a massive decrease in poverty around the world, most significantly in China and India. On the other hand, we have witnessed in recent decades a phenomenon that has no parallel in history- an incredible speed to riches for the upper classes, making the world ever more unequal. Some billionaires today are richer than states. According to Oxfam, the Third World aid charity, 8 of the world’s richest possess the same wealth as the poorest half the world. The 22 richest men have more wealth than all the women in Africa. Since the advent of Covid the wealth of the world’s richest men has doubled.
Today, when powerful individuals in the capitalist system have more financial and business autonomy than they have ever had, the situation seems not only unfair but totally exploitative. As we have watched, over the last couple of months, the seizure of the mega-yachts of Russian oligarchs, it has been driven home to us how severe the differentials are. But they are merely emulating their Western counterparts who seem to have got away with hiding their money from the tax man, storing it in accounts in some of the Caribbean islands, Panama, the Isle of Man in the UK, the state of Delaware in the US, and in Swiss and Luxembourg banks.
The US Declaration of Independence, a profound document if ever there was one, says the self-evident truth of our existence is the pursuit of “life, liberty and the pursuit of happiness”. An earlier draft substituted wealth for happiness. Philosophers and psychologists can wrangle for centuries about what “happiness” is, but common sense suggests that having one’s own big, super-yacht is not it. Happiness is having peace inside one’s soul, a fulfilling job, a modestly adequate income and a family which has good health and is well-educated.
Research carried out by economists in many countries shows convincingly that happiness increases steadily as an individual escapes from poverty up to an income per head of around $75,000. (This applies to the US, but in other societies, including European ones, it is much less. One must also look at the cost of living. So in India or Africa it might be, at a guess, $20,00.) After this amount is reached happiness doesn’t increase so fast. There are diminishing returns.
The human being has been created not to be greedy. If one goes against this built-in impulse, then one is pursuing ephemera. If this pursuit of unnecessary wealth is done at the expense of poorer people, then it is an evil, and we should shout that out.
On the surface these days, it looks as if the world has done a bad job in creating more equality. This is only half true. Since the Industrial Revolution, step by step, the poor in the industrialised states have achieved adequate nutrition, improved health care, education and social support, such as unemployment benefits and childcare. Between 1914 and 1980 inequalities in income and wealth decreased markedly in the Western world. It is only in the last 40 years that this flooding tide has ebbed and indeed has been reversed.
In the Third World the number of poor is greatly down. The longevity of their children and women in childbirth, together with improved literacy and access to pure drinking water and vaccines have grown beyond all expectations. United Nations’ goals have been exceeded again and again, perhaps suggesting that economists and statisticians set their sights too low.
It almost seems that large parts of the Third World are on course to reaching that ceiling of attaining happiness within a generation. But the harsh fact is, as they get better off their societies will probably become less equal. This will slow the rate at which happiness can be achieved for the majority.
Maybe this wouldn’t matter if we could trust the rich to be more responsible and caring. If like Bill and Melinda Gates and Warren Buffet they used their money to better the condition of the poor we would welcome, or at least tolerate them. But we know most of the rich are not like this. Indeed, the well-to-do generally- I mean most of the middle and upper classes, not just the very rich- resent the way they are taxed and seek ways to reduce it. In the US, the Republican Party has waged over recent decades a fight to reduce taxes on the better off. In the UK, the present-day Conservative-led government is doing all it can to cut benefits for the poorer and to make its voters, who are very much better off, even more so.
What can change this? Only intense social struggle or the disturbance of war appear to be the message of the two centuries since the dawn of the Industrial Revolution.
The Bolshevik revolutionaries overthrew the aristocracy and created the first “proletarian state” in history. The Soviet state achieved considerable advances in education, land distribution and public health, writes Thomas Piketty, the important French economist. But on Lenin’s death the state got captured by the egomaniacal Stalin who sought absolute power and wielded it to frightening effect. Mao Zedong who imitated him in China had the same impact.
Was the increase in wellbeing that most Russians and Chinese achieved during the Soviet and Mao eras worth it? For the ordinary man, woman and child in the street, probably yes. (I still hear my Russian friends saying how much better the health services were in Soviet times, when you were in the same queue for the same kind of treatment as the next person.) For those who wanted a say in how to govern society, no.
Now that post-Soviet Russia has discarded its brief experiment with democracy and its replacement by Vladimir Putin’s quasi dictatorship we may well come to the same conclusion. Similarly, in China the grip of President Xi Jinping has become so tight that the previous moves to liberty and free expression have been curtailed after two decades of opening up. Still, Xi’s claim that China has abolished severe poverty is probably true.
The good thing about the Bolshevik Revolution was the impact it had on Western democracies. The fear of communism advancing and spreading made even conservatives realize that something had to be done about the plight of their own poor. The slow march to the welfare state got underway. Bit by bit, the property-owning classes accepted social security and progressive income taxes (and later decolonization and civil rights for black people and other minorities).
Do we need another Revolution or World War to halt the surge to inequality? A World War would lead to a nuclear holocaust, so forget that. Revolutions would be the cause of much bloodshed but could well happen. Last week the Financial Times reviewed three books that seriously argued that the US was perhaps heading for a new violent civil war- between conservatives and liberals.
All this could be avoided if Plato, Jesus Christ, Mohammed and Buddha, among others, were taken more seriously. But that is hoping for a lot.
