back to article Piketty thinks the 1% should cough up 80%. Discuss

Piketty's Capital in the 21st Century has the economics world agog: be the first among your friends to really understand it. Thomas Piketty's book, Capital in the 21st Century, has managed to top the Amazon bestseller lists as well as getting economists snarling at each other. It's the combination of these feats that is so …

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That assumes continuation of state education and the NHS

This government is doing all they can to undermine them - what happens to the thesis in this article when the state funded services are so poor that only the poor would use them, and the cost of not using them is high enough to make most people poor?

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Anonymous Coward

Re: That assumes continuation of state education and the NHS

Blah Blah Blah. Usual lefty default position, fingers in ears, close eyes, hum loudly.

Labour sprayed money all over the the NHS, education, everything. Please could you point out where the improvements are? How is increasing funding for both in a time of austerity undermining them?

Perhaps the problem is the people in those organisations... and I wonder who they are more likely to vote for?

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Anonymous Coward

The welfare state and the lack of influence of the ordinary person

I agree none of this article is any comfort unless the welfare state continues.

Having read the article by Martin Giles and Benjamin Page (Testing theories of american politics...) which said that ordinary people (measured by income) have little influence on policy, we can't be sure of this at all.

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Re: That assumes continuation of state education and the NHS

> Labour sprayed money all over the the NHS, education, everything.

Wrong. Labpur gave taxpayer's money to various people through PFI deals (a policy started by the Tories). So they ended up paying DOUBLE the price for hospitals etc, guaranteed the companies' profits and got no tax back on those profits because the company was actually offshore in a tax haven.

That is a far, far cry from actually investing in the NHS etc.

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Re: That assumes continuation of state education and the NHS

The real problem with the NHS was the way Labour squandered the money. For example, when they came to power there was a shortage of Nurses so Labour poured a ton of money into employing.... Highly Paid Managers. To increase the efficiency of the Nurses time management.

There was (is) also the problem of PFI. Launched by the Tories, the Labour government picked up the ball and really ran with this one, ending up with hospitals that cost many times as much to run privately on behalf of the NHS than the NHS could do directly themselves.

The NHS is being undermined - by forced privatisation by the Tories and sheer incompetence by Labour. It needs more money to prop it up but that money needs to be spent on actual services, not on lining a private healthcare companies ledger or employing a gang of overpaid whip-crackers to make an over-worked Nurse work even harder.

Maybe (and there is probably a better solution) one solution is to divorce management of the NHS from the state and make it a government funded, autonomous entity, as long as provisions were made to ensure funds made available for the NHS didn't just disappear into the deposit account of large, private healthcare companies?

Disclaimer - I am a regular customer of the NHS. I am a type 1 Diabetic and also have a combination of Dyspraxia and Charcot joint disease, which between them have seen me taken to casualty on average once every three years of my life (I'm now 40, I've had about 12 admissions) with either a DKA or broken limbs, and on one occasion a suspected subarachnoid hemorrhage. I've had to clean a ward bathroom whilst an in-patient because the hospital could not afford to clean them every day and I didn't fancy showering whilst my fellow ward-mates vomit or faeces were staring at me from the shower tray - that was just four years ago.

In the past I've also been told to make a single-use syringe last for three days (that's fifteen injections - and they are blunt as fuck after two) because the GP couldn't afford to prescribe more than one pack of ten a month.

So yes, in my *experience* the NHS was and is severely underfunded.

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Re: The welfare state and the lack of influence of the ordinary person

"I agree none of this article is any comfort unless the welfare state continues"

The welfare state is really important and needs to be kept, however keeping in mind the way public pensions work (current pensioners getting money paid in by current workers) and demographic shifts (more pensioners per worker) is not sustainable in it's current state. The welfare state cannot be kept up unless and until pensions are really reformed - not just kicking the can further down the road but full sustainability for the indefinite future. the post-welfare calculations might work out a bit differently then.

Also, a LOT of money goes to people who either do not need it (all the tax code loopholes that are effectively welfare for the rich) or who are fiddling the system for what they can get out of it (eg professional 'single' mothers). These leeches need to be taken off the government teat

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Facepalm

Re: That assumes continuation of state education and the NHS

More precisely, there is no wealth in the pension because pensions are not paid from savings, they are paid from (future) taxation. There is no accumulated wealth, only current income & current expenditure.

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Re: That assumes continuation of state education and the NHS

@AC -

> Blah blah blah ...

I'll be civil, even though you are not. I agree with you about Labour's mismanagement - it's possible to do that without also giving the Tories a free pass for their failings. You ask, "How is increasing funding for both in a time of austerity undermining them?" Where those increases are real, rather than just massaged figures, they're aimed at managing down state-funded provision and pushing people to for-profit providers. This is the agenda behind £9k uni fees and the rise of 'free' schools.

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Re: That assumes continuation of state education and the NHS

I disagree.

The article claims that one should include the effects of welfare spending on the wealth of an individual.

It's just a few more terms to add to the equation.

Should any of state pension, NHS, state education, etc. be reduced or fall to zero, then the contributions due to state pension, NHS, state education, etc. also fall. The effect is to simply reduce the total wealth.

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Re: That assumes continuation of state education and the NHS

"£9k uni fees"

A Labour Party Policy.

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Re: That assumes continuation of state education and the NHS

Yes, but there is a timing problem there. If you own a shop you put some currency aside at night to make change when you open in the morning. If that curency is stolen overnight, then you look for the thief. You can raise prices in the morning to cover the loss, but the "business" problem of making change depends on your ability to go to the Bank and withdraw currency - from retained earnings or as a loan. Here's the timing problem, what if the Bank said, "You have neither credit nor currency, so wait for our next Shareholder Report wherein we say we have plenty of currency and help everybody" ?

So, as the author pointed out, if an Economist throws you under a bus, NHS will sweep up. Economists take credit for this sort of thing.

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Re: The welfare state and the lack of influence of the ordinary person

The welfare state is really important and needs to be kept, however keeping in mind the way public pensions work (current pensioners getting money paid in by current workers) and demographic shifts (more pensioners per worker) is not sustainable in it's current state.

The problem is that no matter how critical you think the welfare state is, it simply has no long term sustainability. You've identified the pension issue. You mention briefly but largely ignore the demographic issues. And you skipped key rational behaviors of the welfare state.

Pensions: while I personally would prefer to have all of my retirement money invested in publicly traded companies (shares and bonds), even that hides the reality that current pensioners are always paid from current workers. That is fine as long as there are 20, 10, or even 5 current workers per pensioner. Which brings us to the demographic shift.

I haven't independently confirmed that the UK has a baby boom issue similar to the US, but I imagine you do. Right now the number of people on pension is growing to the point that you have at best 2 people per pensioner and are rapidly shifting to 1 employed per 2 pensioners. There is no level of productivity that makes that work.

Finally, you have the rational reaction to the welfare state. This was actually the key bit of the Laffer curve and which progressives are always in denial. If you have welfare benefits* to the tune of say $25,000/year, and someone offers you a job at $26,000/year, is it worth it to take the job? The rational answer is probably not. In particular, if at $26,000/year you lose the welfare benefits, your marginal increase is $1000. For which you are going to have to work 2000 hours. That works out to 50 cents and hour marginal gain. So from a purely self-centered view, you're better off keeping the free time than taking the job. It's a perverse incentive and it is only one of them. Even if you fix the pension and demographic problems, this part will eventually overwhelm any welfare state.

*Using US numbers since there the ones with which I'm most familiar. While the specific values will change for the UK and various EU countries, the principle remains the same.

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Anonymous Coward

Re: The welfare state and the lack of influence of the ordinary person

> So from a purely self-centered view, you're better off keeping the free time than taking the job.

> Even if you fix the pension and demographic problems, this part will eventually overwhelm any welfare state.

This principle applies to the whole state and not just low income / welfare. Consider the other extreme of high net worth individuals. They face similar disincentives for different reasons: they make so much money off their assets (usually an inheritance) that there's no measurable difference between them not working or working. Consider a housewife in Texas who makes $1.2M/day off her inheritance. How do you create an incentive for her to work? If you don't create such an incentive and her wealth continues to grow (it would take a driven individual to spend $1.2M/day over a lifetime) she and her coffee latch will take down the state faster than any amount of welfare.

We see executives being paid absurd amount of money (not $1.2M/day...maybe per week) with the justification the board needs to "attract and retain" people that would otherwise be unavailable due to thi disincentive. How does this principle not apply at the bottom of the market? Why is it that the top of the market must accomodate the Laffer curve through increased wages but bottom of the market must accomodate it through reduced benefits?

As a final aside, the social safety net, while notionally created to provide a minimum acceptable quality of life, turns out to have real financial upside: preventative care turns out to be cheaper than crisis care.

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Re: That assumes continuation of state education and the NHS

@Jagged. Not really accurate to say that £9k fees were Labour policy. Fees were capped at £3225 under Labour. The Browne report was commissioned under Labour but it was the Tories who enthusiastically acted upon it. Of course we'll never know what Labour would have done - probably the same thing, but not with the same intent to open up a for-profit market

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Re: That assumes continuation of state education and the NHS

@Adam Nealis: "The effect is to simply reduce the total wealth." And to leave poor people poorly educated and in poor health. But who cares, eh?

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Anonymous Coward

Re: The welfare state and the lack of influence of the ordinary person

Pension funding: as with all the welfare state arguments, everyone forgets that it cost money to set it up - hospitals, services. This money came from taxpayers then, who contributed to their pensions as well as the rest, and was set up by a system funded by those gone before. Of course, when money is spent all over the place, the load is spread across current and future generations. The real oddity is that the state pension pot is not managed properly through investments or similar. The National Insurance is put into a pot that also pays for taking part in American wars, overpaid politicians and bank subsidies and, almost as an aside, for the health and pensions nominally "insured". One forgets too that the workers paying for current needs were not born independent, working and earning. Their pensioner parents, doctors, teachers, policeman all provided for their welfare, probably into their early twenties when costs were much higher than for some pensioner trying to make ends meet.

As for the high "rewards" to get the best: if the man or woman is so greedy that they are poached away by unusable amounts of money, I question their loyalty and judgement and do not class them as good value. If a person gets some generous salary and still needs a big bonus to do his job, he is definitely the wrong person (try telling your manager that as you get no bonus you will do a bad job).

Just look how well this worked and still works in European and American financial markets. All these highly rewarded people and not one of them could see the near criminality or lack of responsibility in what they did and most deny responsiblity even now, while Cameron seems to think he must perpetuate the system to get the best people.

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Re: The welfare state and the lack of influence of the ordinary person

>The Laffer Curve

Yet another wingnut who doesn't understand the 'Laffer Curve'.

It's got nothing to do with benefits.

Prof. Laffer simply proposed that there would be a level of tax (unknown then, unknown now), above which the state would gather less, rather than more tax.

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Re: The welfare state and the lack of influence of the ordinary person

Consider a housewife in Texas

Please introduce me to all of these housewives. Can't? Thought not. Next strawman please.

Why is it that the top of the market must accomodate the Laffer curve through increased wages but bottom of the market must accomodate it through reduced benefits?

Well, for one thing the guy getting the bonuses for being the CEO is working. The guy at the bottom sucking up benefits isn't. If you can't wrap your head around this fact you are incapable of doing even rudimentary economic analysis.

preventative care turns out to be cheaper than crisis care.

I've heard that urban myth. Turns out it isn't true, which is probably the only good thing to come out of 0bamacare. It's why they wanted to discourage women from getting mammograms. The bits about the radiation effects on health were all just smoke and mirrors.

Note that doesn't mean I think we'd all be better off using crisis care over preventative. Just that it might actually be more costly, and that being the case you have to figure out how to pay for it.

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Hmm

"We have a welfare state, whose aim and purpose is to make us all richer."

No it isn't. It's to prevent people from dropping off the bottom of the ladder and either dying (which makes our society look bad) or resorting to crime to survive (which damages lawful taxpayers).

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Anonymous Coward

Re: Hmm

If I was earning enough then I would prefer to buy private health insurance for my family. Does that mean that portion of state welfare is then lost to me, making me that much less wealthy? What about my dependants?

I am quite confused by this whole argument. Why stop with the welfare state? If I were to put a pound into the lottery each week, would not my chance of winning a fortune also need to be counted as part of my wealth just as my chance of requiring cancer therapy. Would I count it as a pro-rata fortune/treatment cost versus the odds of it happening? What happens if I die before I win the lottery?

I am not deliberately belittling the value of living in a wealthy country.

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Re: Hmm

Yes it is. The welfare state does not take money from anybody (that's the job of the inland revenue). It gives money and benefits-in-kind to everybody (including NHS and education). So it does make us all "richer". That is the ENTIRE point of the article and if you don't understand it, you should read it again until you do.

We can only go back to 19th century wealth inequality if the welfare state goes back to the 19th century. Which despite whinges about NHS going downhill etc etc just is never going to happen. Any NHS is better than none at all. Any state education is better than none at all, etc.

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Re: Hmm

"If I were to put a pound into the lottery each week, would not my chance of winning a fortune also need to be counted as part of my wealth"

I'm not an economist, but I'm guessing the answer is yes. So your wealth would increase by one thirteen-millionth of the average jackpot (about £5 million-ish?), and decrease by £1. No?

(obviously we'd also need to factor in the other prizes, and odds of winning them, but my point is that statistically you'll lose money on the lottery, so your wealth must decrease with the purchase of a ticket, albeit by slightly less than the cost of the ticket)

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Re: Hmm

>So it does make us all "richer".

Er, no. It does not make us richer. It stops us being brutalised.

Those are not synonymous.

Far be it from me to accuse Worstall of flat-out lying, but I suspect if he was in court and was asked under oath if he genuinely believed that a state education is equivalent in financial value and cost-effectiveness to a private education, I'd be surprised if he said yes.

Just as I would be surprised if all those parents paying for private educations decided that they were wasting their money after reading this.

But then false-equivalency is what this article is really about. Yes, we have a welfare state. But the poor - which pretty much means anyone who works - have perpetual financial insecurity, and are subject to the mad whims of the traders and bankers who control forex, commodity prices, and interest rates, and to (mostly) corporate employers who can move their jobs offshore at the drop of a consultant's PowerPoint.

The rich are the ones who benefit from their ability to control those things.

That's the crux of Piketty's argument.

Real equivalence will happen when that is no longer true, and market-making power-to-profit is more widely distributed.

Otherwise the welfare state will continue to shrink, pensions will become more and more distant and less and less valuable, and the alleged value of Worstall's opinions will continue to shrink with them.

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Re: Hmm

"Far be it from me to accuse Worstall of flat-out lying, but I suspect if he was in court and was asked under oath if he genuinely believed that a state education is equivalent in financial value and cost-effectiveness to a private education, I'd be surprised if he said yes."

No, it isn't worth the £10k per year that he quoted, but it is worth *something*, that's the point. And free education isn't in the calculation of a poor person's wealth, so the calculation is wrong. This is the point. OK, so say it's £5k rather than £10k, it's still something.

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Re: Hmm

"The welfare state does not take money from anybody (that's the job of the inland revenue)"

It is disingenuous to suggest that there is absolutely no connection between the two. We are taxed at least in part in order to fund the welfare state. If the article is predicated on this not being the case, it fails.

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Re: Hmm

But the poor - which pretty much means anyone who works - have perpetual financial insecurity

I do not know how it fits with official definitions, but this is what I view as wealth: Financial security. The ability to absorb unforeseen financial circumstances. You may have a good income, but if you have no savings and, say, the car you rely on for work dies, you will be in trouble.

By this definition, the NHS should be factored in to wealth calculations, as should insurance policies and some welfare benefits. Without the NHS (or some form of health insurance) an illness or injury would impact on your wealth. Similarly, without buildings insurance, your house burning down would seriously impact your wealth, and without out-of-work benefits a period of joblessness would (even more) seriously affect your wealth.

However, I do not believe education should be included as wealth. This would be a planned-for expense, affecting your income, not your wealth. The same could be said for some other forms of benefit, particularly long-term benefits. These affect income, not wealth (although of course the two are linked).

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Re: Hmm

Also:

The welfare state does not take money from anybody (that's the job of the inland revenue)

The welfare state does not just create money. It must, therefore, take money from somewhere. It takes it from government finances, which are raised through taxation. Therefore the welfare state takes money from us all.

I am not saying this as an argument against the welfare state. On the contrary, I support it. It is disingenuous, however, to imply that there is no cost to it.

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Re: Hmm

"So your wealth would increase by one thirteen-millionth of the average jackpot (about £5 million-ish?), and decrease by £1. No?"

Only until they draw the numbers at which point the cost will still be £1 but the ticket's value will most likely drop to £0.

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NHS

You caption a picture of an Air Ambulance with a comment about NHS funding. However the Air Ambulance is funded privately by charity donations with only the paramedics seconded from the NHS.

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Re: NHS air ambulances

The government would love to run the air ambulance service but luckily the people involved know what happens when government bureaucrats start to run things and won't play ball. Bit like the coastguards.

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Re: NHS air ambulances

The coastguards are a government body. You're thinking of the RNLI lifeboats.

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Anonymous Coward

Re: NHS air ambulances

The coastguards are a government body.

There's a proposal to flog them off.

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Some well made points

Some very well made points in there, but...

The effects of state services and benefits on inequality is only a factor where those services or benefits are /means tested/ - in the case of both state education and the NHS, the economic input of those benefits is equal for every member of society. The fact that some individuals have enough surplus income to be able to opt out of the state provision and into a private paid for alternative is largely irrelevant, as they still have access to that same level of economic benefit whether they use it or not.

So, whilst it is useful perhaps to measure the metric of inequality after state benefits and services, we should be mindful that the largest and most significant of these are not means tested and therefore effectively cancel themselves out in the equation.

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Re: Some well made points

That's ignoring maths and the measure of inequality (a ratio) - if someone has £100000 and someone has £1, the rich is 100000 times richer than the poor. If the state gives them both £100000, the rich is now ~2 times richer than the poor. That's a massive difference.

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Anonymous Coward

Re: Some well made points

"we should be mindful that the largest and most significant of these [state benefits] are not means tested and therefore effectively cancel themselves out in the equation."

They don't cancel themselves out of the equation at all. Those on low incomes are paying disproportionally less toward the provision of those benefits than those on high incomes. The benefits are equal, but the contribution toward providing them is much lower for those on low incomes (less income tax paid) than it is for those on high incomes (more income tax paid).

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Megaphone

Re: Some well made points

"The fact that some individuals have enough surplus income to be able to opt out of the state provision and into a private paid for alternative is largely irrelevant"

No - that's hugely dangerous. People who opt out of these services no longer care how well (or badly) they are run. Worse, they then resent having to pay for services that they aren't using.

Take education: my kids go to private school. We do this because the local primary schools aren't particularly good. All the parents at the school are very fussy and push like crazy to keep standards up. Now, imagine what would happen if these parents were let loose in the local state primaries: they'd be on the board of governors, they'd be pushing the school about school meals, the quality of the homework and lessons and bugging the hell out of their local councillors to ensure that the schools standards were maintained.

But, because they're not doing this, the local primary schools aren't pushed as much. If we want to keep services going we need to ensure people are bought into them.

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Re: Some well made points

"in the case of both state education and the NHS, the economic input of those benefits is equal for every member of society. "

Indeed. But that changes the wealth ratio.

Back a while one report said that the wealth ratio (90/10) was 100 to 1 in the UK. Top 10% families had £800k of wealth, bottom 10% £8k.

Now add in the welfare state. The under market tenancy, the state old age pension (deliberately excluded from those figures), the system of social insurance itself (the existence of unemployment pay has some option and capital value to all). Sure, OK, let's say this is all worth £100k to all (just a made up number). Our wealth ratio is now £900k to £108k. Or, by eyeball, more like 10:1 than the original 100:1. Keep going with state supplied services (health and education) and it falls again.

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Anonymous Coward

Re: Some well made points

They do not cancel out:

(a+x)/(b+x)<a/b for all x>0

So inequality drops even if everyone benefits equally from state incomes. There are some schools of political thought which advocate this as a blunt financial payment: rather than providing services the state simply gives everyone an equal lump sum, funded from taxation and trusts the market to do the rest.

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Re: Some well made points

Completely agree. I meant that it was irrelevant in terms of the value of those services in the equation.

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Re: Some well made points

It would certainly be interesting to measure these figures properly. Thanks Tim.

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Re: Some well made points

>Sure, OK, let's say this is all worth £100k to all (just a made up number).

Bollocks, in other words.

But even if the costs are as stated, you're still comparing protection from unavoidable costs - everyone needs health care, otherwise they die - with surplus disposable and/or investment income.

(Pensions, as everyone knows, are irrelevant, because if a pension system is run properly the benefits are already paid for out of advance contributions.)

In what bizzaro-world economic universe are basic, but steadily eroding, social benefits which exist solely to protect workers from unavoidable social costs remotely comparable to surplus free capital that can be converted into direct profit?

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Re: Some well made points

> Pensions, as everyone knows, are irrelevant, because if a pension system is run properly the benefits are already paid for out of advance contributions.

And you don't think it makes any difference whether those advance contributions are paid for by the individual out of their own income or by the state out of the income of people richer than that individual?

> basic, but steadily eroding, social benefits

I know politicians on all sides like to make good use of claiming that the welfare state is suffering without them, but, in fact, state spending on the welfare state has been increasing steadily for decades. The worst that ever happens to it is a decrease in the rate of increase (which is all the so-called austerity measures amounted to). The last two governments to cut spending to the NHS, for instance, were Harold Wilson's and the current Welsh devolved lot.

> ... comparable to surplus free capital that can be converted into direct profit?

Surplus free capital than can be converted into direct profit? That sounds like the sort of thing millionaires have; certainly not a salient feature of my life. These discussions of income inequality aren't really about millionaires, much as people like to drag them into the discussion, as if we're comparing mill owners to matchgirls or something. Most of us non-poor simply have decent incomes and a mortgage; we don't have estates full of serfs.

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Re: Some well made points

"In what bizzaro-world economic universe are basic, but steadily eroding, social benefits which exist solely to protect workers from unavoidable social costs remotely comparable to surplus free capital that can be converted into direct profit?"

Because if there weren't an NHS you would want private healthcare. See the US, where there is (basically) no version of the NHS, and actual money is put down by people to buy the same thing.

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Re: Some well made points

Iff a > b also

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Politics of Envy

Isnt this a very simple argument at the end of the day.

1. Its always been very easy to get the mob riled up with the right rhetoric.

2. If that rhetoric is "Capital Inequality" (hello new socialists) or "Immigration" hello UKIP.

3. The are only 3 fundamental choices:

a) Aspire to be on the right side of the in-equality.

b) Look around - be content with your lot.

c) Eat the rich/immigrants or do something else to drag them down to a level that pleases the mob.

Now c) has a whole range of responses ranging from mild taxation tweaks to public flogging, but lets not pretend we are doing anything but dressing up Envy in fancy clothes or "economic debate".

Fact of the matter is there is a certain level of inequality that a society will tolerate, but there are plenty of people who will magnify that in-equality so they can get power.

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Re: Politics of Envy

I think there's a certain level of inequality that society *requires* otherwise, as a later poster said, why bother striving in any of the various meanings of the word. Reward for effort towards common goals - ie. work, the common goals being "the economy continues" and "you don't rely on the state completely" must be selectively available.

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Anonymous Coward

Re: Politics of Envy

No it's not the politics of envy. In 1965 there was almost full employment, and the average median wage was roughly twenty times less than the highest paid executives. Today, the median wage is roughly 140 times that of the highest paid executives. Income was much more progressively taxed as well, and loopholes less easy to exploit (the top rate was either sixty or seventy percent in the 1970s from what I recall). This resulted in far less disparity between those at the top and the majority than we see today. Some countries still manage to have much less disparity and are also booming (Finland for example), but our politicians in the UK are in thrall to the city and the multi-nationals.

Yes, we need wage disparity to drive a considerable part of people's ambition and to reward acheivement. What we don't need is the current disparity that's causing problems such as the impossibility for many first timers to buy a home in the South East. We also need to get away from the short termism of politicians, where they flog off public services under the false claims that it will improve quality and lower cost (in almost no case has it done either). As soon as a service is contracted out or sold into private hands the results are a race to the bottom in terms of quality as shareholder interests take over, not helped by the fact that most executives have their salaries padded out with massive share incentives.

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Re: Politics of Envy

> As soon as a service is contracted out or sold into private hands the results are a race to the bottom in terms of quality

Yes, if only our smartphones were built by the Post Office.

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Anonymous Coward

Re: Politics of Envy

> Income was much more progressively taxed as well, and loopholes less easy to exploit (the top rate was either sixty or seventy percent in the 1970s from what I recall).

In 1997 the top 1% of earners contributed 20% of all income tax received by the treasury. In 2007 it was 24.4% and now it is 29.8. Tax loopholes are getting harder to exploit, not easier.

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Re: Politics of Envy

> In 1997 the top 1% of earners contributed 20% of all income tax received by the treasury. In 2007 it was 24.4% and now it is 29.8. Tax loopholes are getting harder to exploit, not easier.

If the disparity between the top 1% earners and the median earners is going up significantly then the proportion of the total earnings that those top 1% make would also go up wouldn't it? Which means the amount they contribute goes up even if they are paying a smaller percentage of their individual earnings. This would be the case if the graph of earnings was more of an exponential curve going up steeply as you get to the top 1%, rather than a straight line even distribution.

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