How to battle the inequality threat: Stop respecting greed (Interview with Richard Wilkinson)

Professor Richard Wilkinson, author of The Spirit Level and one of the world’s foremost researchers on health and income inequality met with Genevie Fernandes, representing The Essayist, to discuss the nature and significance of inequality and understand the ways in which we can create a movement towards equal societies. This is Part 2 of a two-part interview; the first part is The Age of Inequality

 

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One of the world’s foremost researchers on the social determinants of health and on the societal effects of income inequality; Richard Wilkinson is the author of various books including the best-selling “The Spirit Level.”  An advocate for healthier, more equal societies, Richard Wilkinson is also a co-founder of The Equality Trust, a not for profit organization that provides resources and works with numerous affiliated local groups in the UK and across the world, carrying out awareness-raising and campaigning to reduce economic inequality.

 

He is also Professor Emeritus of Social Epidemiology at the University of Nottingham Medical School, Honorary Professor at UCL and a Visiting Professor at the University of York. He studied economic history at the London School of Economics (LSE) before training in epidemiology.

 

Read Part 1: The Age of Inequality here

 

RW = Richard Wilkinson; TE = The Essayist

 

 

TE: How do people from deprived communities view inequality? How do they think about it or react to it?

 

RW: There is definitely annoyance at the bonus culture, particularly when cuts are being made, and public sector wages are held down. But the consciousness of these issues is not there anymore; the consciousness that a generation of socialists developed from the early 20th century onwards, now that’s largely gone.

 

About two years ago, riots broke out simultaneously in the poorest areas in a lot of cities in England. A  black man was shot in London, but there were riots all over the country which weren’t really to do about race. The rioters were poor, it was looting, and they were stealing status goods, clothes with the right labels, electronics. What was significant in a way was that it was oppositional and it was against the system and yet it had no political consciousness at all. I think in countries like Greece, Spain and Portugal, there has been slightly more politicised opposition, and not just rioting. And that’s a sign of how political consciousness is almost evaporated.

 

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I think we have got to rebuild it.

 

 

TE: How do we rebuild this consciousness?

 

RW: You know there are few bankers and major business people who have started not to take as much as they can get. And that is because they know they won’t be respected for it, and we have got to increase that. We must get to a point where people taking these huge salaries know that they will be regarded as greedy and selfish, and not respected for it.

 

One has to change greed from being a source of status to being a source of disrespect.

 

 

TE: How do we change? How can we create a movement towards equal societies?

 

RW: There is a professor of politics and philosophy who used to teach at Princeton University, called Anthony Appiah. He wrote a book called ‘The 1011-HoweHonor Code’, and in it he looks historically at the changes in the number of social practices. One of them is the ending of foot binding in Chinese women. Another is the decline in honour killings. He also examined when the English Aristocracy stopped fighting duels with each other. And in each case he says that the change happens and these practices are given up when they cease to be sources of honour and respect. So that is what people are after. And we have to change what they feel they get respect from. Today many of our successful people think that they survive and do well at the expense of others.

 

We don’t need inequality to thrive.

 

 

TE: If we have to create a culture where greed is not honourable anymore then don’t we have to start in the places where greed is bred and allowed to thrive – Wall Street and the modern corporations?

 

RW: The big corporations are where the income differences are the largest and they have widened dramatically since the 1970s. In multinational corporations in the 1970’s, the CEO’s used to get 20 or 30 times as much as the junior workers, but it is now 200, 300 or even 400 times higher.

 

But if you look at the army, the police, the health services, the local authorities, universities, you find that the ratio of the salary between the head and the junior employee is usually between 10 to 1 and 20 to 1.

 

In the Mondragon Cooperatives in Northern Spain, which is a group of companies that employs 80,000 people, the differences between the CEO and junior employees are about 1 to 5 or sometimes 1 to 9. And so, I think one has to regard large corporations as having two quite separate functions, one is producing the goods and services we all need, and the other is to concentrate wealth and power at the top, in totally undemocratic ways. And these companies have the power to run circles and rings round the political elite. They pretty much dictate terms with national governments and so that’s the problem we have got to deal with. And I do think that means democratizing.

 

 

TE: Democratizing means more power to people for making decisions that impact their lives. However, is it not one of the important aspects of modern-day economic systems that it demeans people; makes them irrelevant to decision-making? How do we get out of this trap?

 

RW: I think we cannot do without a large measure of the market; you need tax and benefit systems, and constraints on pre-tax income differences within companies. I think we have to campaign for the democratization of the economy. Democracy is about power and extending it into the economy is about changing who has power, and this has to be done with employee representations on company boards, with incentives to grow employee earned companies and cooperatives. I think that has to be our vision of the future.

 

Modern production is a cooperative effort and increasingly, the value of a company is the value of the people it brings together. No longer is it a matter of the plant and the building and the equipment and so on. What matters is the assembled skills and knowledge of a group of people. So buying and selling companies is basically buying and selling a group of people, which is really anachronistic.

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At one point I suggested, in a talk, that maybe companies should have to pass two percent of their shares each year into an employee earned trust, which would mean after 25 years employees would be majority shareholders. There was a time when companies’ shareholders were people who kept shares for a long time, had a genuine interest and knowledge of a particular company they invested in. But now, of course, the financial dealing is done in finance houses, employees who buy and sell shares with computer programs that trigger it. The average length of shareholding I believe is about four months. These finance houses own shares in thousands of companies and probably know very little about them. They say it is very difficult for the company to discover who its owners are and so the system of earning and controlling companies has become increasingly short term, and the vast majority of the shareowners don’t turn up to company board meeting.

 

There is now more evidence that more democratic models where pay differences are much smaller are more efficient, and productivity is much higher. I think, increasingly employee representation on company boards is moving up the agenda.  About half the member countries of the European Union have some legislation for employee representatives on company boards, although it is usually pretty weak. But in a few countries like Germany it is quite strong.  There are different rules about employee representation for different sizes of companies. You have to have some representatives when you have 500 employees, but when you get to 2000 employees, half of the members on the remuneration committee have to be employees. There is evidence which shows that companies with employee representatives on the management board have smaller income differences.

 

We have to spread this economic culture.

 

 

TE: Do you think more and more policymakers and people in general are discussing and getting concerned about inequality? Are there actions that match this concern?

 

I think these issues are moving up the agenda, to the extent that inequality is moving up the agenda. I mean when we were writing our book in 2007, there was no concern with inequality and no mention of it in the media. But about a month ago, OECD got the agreement of a number of major tax havens including Switzerland, that they would share information on bank accounts with tax authorities in other countries. You cannot put out top tax rates when the rich can hide their money so easily. So you have to deal with the tax havens first and that’s an important step first. I read yesterday, that in California, in the legislature, they had narrowly lost a vote to implement a sliding scale of corporation tax, which meant that if you have very big pay differences in your company you would pay more corporation tax. That vote was lost but only narrowly. Switzerland had a referendum on whether there should be a pay ratio for companies of 1:12, it was lost, but 35% of the people voted in favour of it, and that was late last year. So these things are coming up the agenda pretty fast.

 

At the city level, the ‘Fairness Commissions’ have been a good idea in that they raise consciousness. They were set up by local city governments and by now, fifteen or sixteen cities in the UK have instituted these commissions.  The most important thing that they have done is commit the local governments to paying the living wage rather than the minimum living wage at the bottom. They have led to substantial increases in income to tens of thousands of people. This is an idea that they should try and spread to the rest of the public sector and into the private sector as well. There are a few big private employers that have started to do that but I suppose it is a largely a public relations move. But still…it’s a start.

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Some people are even asking their suppliers about wage ratios in the companies they buy things from. These interventions are important for raising consciousness, but as it is labour controlled, it is bound to feed into changes in thinking in the labour party nationally. I think that’s important. I think I have spoken to almost all of them and quite a few say that they were stimulated by the Spirit Level, but off course they don’t have the power to change income distribution even in their own cities very dramatically. They don’t have legal power over companies.

 

 

TE: In one of your best-selling books, ‘The Spirit Level: Why Equality is Better for Everyone’ (2009) which you co-authored with Kate Pickett, you present a battery of evidence to show that the countries with the biggest gap (inequality) between the rich and the poor also have the highest level of health and social problems?

 

RW: Inequality has dire consequences on our health and well-being. Economic growth no longer seems to be an indicator of a better quality of life. What the evidence made us emphasize is the vital importance of social relationships to human health and well-being and we found that higher levels of income inequality damage the social fabric that contributes so much to healthy societies. Our key argument is that we do better when we are equal and therefore we should work towards reducing inequality and subsequently improving the psychosocial wellbeing of the whole society. Our social status seems to be at the heart of many of our society’s health problems.

 

We examined available data from richer, more developed countries because we wanted to write a very simple accessible book. Because things that we were looking at are unrelated to GNP per capita that one does not need to control for it. The other reason for looking at rich countries is that we could get more comparable data. We don’t produce our own data; we just download it from OECD or WHO.

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What we found in our analysis is that so many things are influenced by one factor: income inequality.

 

How can all these different problems be influenced just by income inequality? But the key is that they are all problems that are more common at the bottom of the social ladder. Although there is depression, ill health and mental illness at the top of the social ladder, they are all much more common at the bottom. And it is those multiple problems which are all related to income inequality.

 

We did a formal test of that in a research paper in the American Journal of Public Health. We looked at causes of deaths with steep social gradients and ones like breast cancer and prostate cancer which have little or no social gradient. What we found was that steeper the social gradient the more strongly is it related to inequality. So basically all we are saying is something extremely simple: Problems that are related to social status get worse when you increase status differences.

 

The surprising thing is that they don’t just get worse among the poor; they get worse amongst the whole population, because inequality changes the whole social fabric. They lead to changes in social relations, and social evaluative threat increases throughout the population. It is clear that the damaging effects of inequality are the largest at the bottom of the society but even higher up the social ladder there seems to be some benefit of greater equality.

 

To explain why the US has the highest obesity, the highest violence, highest prison populations, and amongst the lowest life expectancy and so on, and why the Scandinavian countries do quite well on those indicators across different populations, one is trying to explain these common patterns in quite different problems but in problems related to social status which have social gradients. So as researchers we have to seek or think of something very deep seated in society, enough to influence so many outcomes. This is what makes social status more important. And it is pretty hard to think of any other explanation.

 

 

TE: While ‘The Spirit Level’ is a bestseller and has won the support of many, it has also garnered criticisms such as picking and choosing of data. How do you respond to critics?

 

RW: While I was a student at LSE, I did courses in the philosophy of science with Karl Popper. And off course, he always said that the best test of a good theory is whether it can make novel predictions which can then be verified.

 

And this relationship with inequality has been tested just so many times, and although there are papers where people manage to control it out, there are small minority of them, and they are usually controlling for things that are I think are on the causal pathway, such as things to do with class and so on. But people don’t realise that the first research papers on income inequality and health came out 35 years ago, this story has been building up over a long period, and you probably know our research paper in 2006 reviewing 169 studies, and yet they treat it as if we were the first people to have made this daft suggestion.

 

Some critics accuse us of picking and choosing our data. We have an absolute rule that if our source agency such as OECD, WHO or UN has data for one of the countries we’re looking at, it goes in. We make no judgements of whether the data is comparable. We leave that to WHO, OECD or UN, or whatever the data source is. One cannot say I don’t like the position of the country, and so I can leave it out of my analyses.

 

We have replied to our critics and I think now we have got better perspective and we have probably done better replies. And talking about it as much as we have, you come slowly to understand it better.

 

If all the countries are not shown in the analysis, for instance in the case of mental health, then that is because WHO hadn’t produced comparable data for other countries, and there is data that we are suspicious about, but we include it because it is there. For instance, Singapore is the country with the lowest infant mortality according to WHO, but it also has the highest inequality in our dataset.  And I never believed that data, but it goes in because that’s the data that the WHO has.

 

I was invited to give some lectures in Singapore, and one of the reasons why they have low infant mortality is because they are a little city-state. They don’t want people to gain Singaporean nationality, they don’t want population expanding. About 25% of their labour forces are migrant workers. They are not allowed to get married nor have children. They get a health check every six months and if they get pregnant or married they get sent home. And off course they are the poorest 25% of your labour force, so what you are doing is removing from the figures the section of the population where you’d expect infant mortality to be the highest.

 

Some critics argue that the relationships we have found between income inequality and poor health are spurious because they firmly believe that if you add in a few countries or take out some select countries, then one can make the relationships disappear. That is silly because there are analyses with over 100 countries. And of course the attacks have come from the far right.

 

There was a lot of controversy in epidemiology but it was less about whether there was a relation; they agreed there was a relationship but they argued mainly about the causes of the relationships, it. So there was the neo-materialist hypothesis, which is basically saying that material things mattered beyond the old public health issues of food, safety, and sanitary conditions.

 

It was really a fight against the growing recognition of the importance of psychosocial factors in health which works through the pathway and mechanism of chronic stress. And it was also motivated by people on the far left, whose fear was that if the causal mechanisms were presented as psychosocial then governments would say that we needn’t worry about low incomes, just get the poor to be nice to each other, and the problem will be solved.

 

But what seemed important to me was something different. As we showed more and more factors in our lives were related to income inequality, then we were basically demonstrating that income inequality was even more important to us than we had ever imagined.

 

 

TE: So what can we expect as we go into the future?

 

I would say, we need to paint a picture of future society where the quality of work is transformed by democratization of the work place and income redistribution, where community life is strengthened, where leisure is increased, and you get a higher quality of life through that. You know what I call the convenient truth as opposed to Al Gore’s inconvenient truth is that in the rich countries it is no longer material life that drives the quality of life; it is the quality of social connections. So in order to create a better future we have to stop worrying about our economic needs and start dealing with our social needs. Greed will not be good in that future.

 

 

************END OF INTERVIEW*************

 

We thank Prof Richard Wilkinson for giving his time so freely.

 

If you want to take action to help address inequality then please visit The Equality Trust website at www.equalitytrust.org.uk

 

Watch Richard Wilkinson talk about how economic inequality harms societies in a TED Global Conference filmed in 2011.

 

If after reading this article you would like to learn more about social inequality and its impact on health and human development, click here for a further reading list.

 

 

 

Open Access Article

© Genevie Fernandes (2014). Inequality: Interview with Richard Wilkinson. The Essayist, July 2014. http://www.the-essayist.org/

 

This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are properly cited. To view a copy of this license, visit http://creativecommons.org/licenses/by/3.0/

 

The Essayist is a strong advocate of the “no-plagiarism” policy.

 

Image Reference:

  • Richard Wikinson Image accessed from Wikimedia Commons: http://commons.wikimedia.org/wiki/File:Richard_G_Wilkinson_2013.jpg
  • Car and Street Images by Dennis Dodson
  • The Honor Code: http://books.google.co.uk/books/about/The_Honor_Code_How_Moral_Revolutions_Hap.html?id=P368fFhdvEwC&redir_esc=y
  • The Spirit Level: http://www.futureeconomics.org/2012/07/beyond-the-spirit-level/

 

 


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