Q4 2020 / Q1 2021: Growing Apart
Times of crisis often magnify underlying inequalities between those who have the economic and social capital to survive, and those who do not. Covid-19 has been no exception.
A plague of near biblical proportions has returned a verdict, prophesied long ago in the Gospel of Matthew (13:12):
“Whosoever hath, to him shall be given, and he shall have more abundance: but whosoever hath not, from him shall be taken away even that he hath”
In more prosaic terms, the “Matthew Effect” has seen the man who owns 11% of the company that sells and ships most of the stuff we have been ordering whilst sat at home increase his abundance by more than $70Bn since March 2020. The lucky employee who has kept their job, whilst millions of others have faced redundancy or furloughs, now works from home. This person frequently shuttles between their makeshift office and front door to receive the stuff shipped by the everything store. The warehouse workers and delivery drivers, who were previously faceless, second class citizens have recently been elevated to “essential” workers in recognition of their contribution to the consumer economy.
Sadly, promotions to hero status do not bring immunity against a deadly virus. Essential workers, who disproportionately come from poorer and minority backgrounds, have faced mortality rates two-folds higher than wealthier white cohorts, who are more likely to be in jobs that have allowed them to socially distance.
Sadly, these health outcomes are in line mortality rates outside times of crisis and the reasons behind them are familiar; essential workers have both higher than average preexisting health conditions and more limited access to healthcare compared to wealthier cohorts. This pandemic has simply magnified disparities that were already there.
Out of Sight, Out of Mind
Low socio-economic status is associated with all bad health outcomes linked to chronic stress; from hypertension to obesity, diabetes and suicide. (Many sources of which are linked to being in insecure work, with few employment rights). Across the globe, the health of nations is suffering on account of rising inequality. In the most unequal, it is declining.
Despite a global backlash against stagnating living standards, a loss of social status, recognition and esteem, developed nations have done little to improve the lot of workers in the bottom 70% of the income distribution. Nor have they found substantive ways of addressing rising gini coefficients (a statistical measure of the distribution of income across a population where 0 = perfect equality and 1 = perfect inequality).
Our societies are consciously uncoupling as our political and media class invent ever more labels to describe workers who are “failing” to adapt to globalisation and technology driven change. We speak about those who have been “left behind” and are unlikely to catch up. And a “squeezed middle” who are experiencing a palatable loss of spending power and social status.
That’s before we even get to “JAMs”, which I can only presume is a cheaper form of marmalade for the “precariat” (a Marxist sounding portmanteau that evokes the precarious existence of an alienated 21st century worker).
These technocratic terms are part of a wider, more derisory lexicon that labels the “losers” of globalisation as “stupid”, “dumb”, “economically negative assets”, or as a 2016 Times Op Ed put it, “the weak, the unlucky, the resentful [and] the fearful”. It doesn’t take a sociologist to work out that a growing list of labels is a poor remedy to the discontent that has found expression in Trumpism, Brexit, the rise of the AfD and the Gilets Jaunes movement. So what is driving this growing divide, and what can we do about it?
The Reasons Why
Five interconnected beliefs are said to justify this social and economic divide. Most have become “conventional wisdom”, despite obvious flaws. (Much like the “trickle down effect” was pre-2008). Unless we confront them we can forget “building back better”:
- Wage differences are driven by market forces and the immutable laws of supply and demand. Some workers get paid more than others because their skills are in higher demand, and the available supply of these skills is lower. This is why software engineers get paid more than delivery drivers. But why do estate agents get paid more than postgraduate neuroscientists? Or, despite a massive undersupply of nurses and adult social care workers in western societies, why are their real wage increases flat? Seemingly these recognition and remuneration gaps defy the laws of supply and demand. Like the five highest paid employees of each S&P 1500 firm (7,500 workers overall) whose total compensation amounted to 10% of S&P 1500 firms’ collective profits — in many cases without any measurable increase in shareholder value .
- The money we make is a mark of the value we contribute to society. In a market society it is easy to slip into the belief that what we earn accords to our value. By this logic a chemistry teacher contributes considerably less value to society by educating young minds than he or she should could by using these same skills to cook up meth. (Yes, this is the market failure subplot at the heart of Breaking Bad). To borrow the words of Michael Sandel, “being good at making money neither measures our merit nor the value of our contribution. All the successful can honestly say is that they have managed — through some unfathomable mix of genius or guile, timing or talent, luck or pluck or grim determination — to cater effectively to jumble of wants and desires, however weighty or frivolous, that constitute consumer demand at any given moment”. Welcome to the Kardashian theory of labour.
- The money we make and the value we contribute to society is determined by our Human Capital; our individual stock of knowledge and skills, acquired through innate characteristics and enhanced through education and training. This is said to determine our Marginal Revenue Product (i.e. the additional amount of revenue a firm can generate by hiring you as a unit of labour). In basic terms, Human Capital Theory (HCT) assumes that someone with a Masters degree will add more value to a business than someone without one. Which is one of the reasons we have seen an explosion in the number of people attending university (40% + in developed countries) and a concurrent rise in credentialism. If you ever wonder why your Linkedin feed is littered with “Scaled Agile” certificates, this is why. The fact that a majority of graduates now end up in non-graduate employment, with only large debts and damaged livers to show for it, suggests this theory has its flaws. More dangerously, it has led us to undervalue jobs in the Hand (skilled manual labour) and Heart (care) economy because it is considered that “anyone can do them”. 90 minutes in the company of Ken Loach’s Sorry We Missed You might change your mind. If it doesn’t, it only proves that our heads now rule our hearts.
- Globalisation has “taken our jobs” through offshoring and liberal migration policies. A rising tide does not lift all boats, which is why citizens in deindustrialised parts of rich nations are electing populists promising to return “good jobs” through economic protectionism. Globalisation will not be reversed. But rebuilding countervailing institutions like labour unions, state schools and anti-competition commissions is a good place to start, and what’s more, they are closer to home. Opposing exploitative workplaces may seem quaint in a modern “gig” economy, but can still be effective. UK startup Organise is one social impact organisation re-inventing collective bargaining for workers at the coalface of 21st century capitalism, and is doing so with modern means. It has helped non-unionised workers win small victories against the likes of Amazon. Government failures needn’t become market failures.
- God helps those who help themselves. The inevitable fate of workers in free markets is that competition will create winners and losers, but because everyone has a chance to rise by their talents and hard work, often referred to as “equality of opportunity”, this outcome is fair. Many of you will recognise this as the idea of a meritocracy. Here is Barack Obama laying out the meritocratic bargain:
“No matter what you look like, no matter where you come from, no matter what your last name is, no matter what setbacks you may experience […] if you work hard, if you are willing to take responsibility, then you can make it. You can get ahead”.
He is not alone amongst modern leaders when it comes to advocating in favour of individual responsibility. Here is former German chancellor, Gerhard Schröder:
“Everybody has the same opportunities. But it also means everybody has the duty to seize their opportunities”.
And here an aspirational soundbite, founded on the same set of beliefs, from former Prime Minister, Tony Blair:
“We believe people should be able to rise by their talents, not by their birth or the advantages of privilege”.
These extracts are examples of a “rhetoric of rising”. They bestow agency upon all of us and implore us to seize our opportunities, take responsibility for our actions, and work hard (an inherited protestant work ethic is palpable in that last one). But as the moral philosopher Michael Sandel argues in The Tyranny of Merit:
‘Precisely because people differ in their talents and ambitions, some rise higher than others. But at least it can be said that these inequalities reflect people’s merits rather than the circumstances of their birth […] A society that enables people to rise, and that celebrates that rising, pronounces a harsh verdict on those who fail to do so’.
Adding Moral Insult to Economic Injury
This harsh verdict adds moral insult to economic injury, with the costs amounting to more than damaged pride. They can be measured in the excess deaths of men and women without a university education. The underlying conditions are not health related, but forms of direct and indirect self harm: alcohol abuse, opioid overdose and suicide. These “deaths of despair” have increased so rapidly they are now the main driver of declining life expectancy in the USA. (Deindustrialised and poorer parts of Western Europe show similar trends, although a lower incidence of opioid abuse, better access to healthcare and closer community ties are assumed to ameliorate negative impacts in nations like the UK, France, Germany, Spain and Italy).
Meritocratically justified exclusion has thus inscribed itself on the bodies of those left behind. In a macabre rearrangement of letters, oxytocin, a hormone we secrete when building social bonds, has for many been replaced by OxyContin, a prescription opioid that numbs the pain of failing to rise.
The condescension of a hubristic elite is breeding a public health crisis and fuelling a rancorous political discourse that is reaching near absolute levels of polarisation. This goes far beyond our respective echo chambers and filter bubbles. Whoever we are: liberal or conservative, anywhere’s or somewheres, metropolitan city dwellers or rural inhabitants, school leavers or university educated; the common ground is disappearing from beneath our feet. The words of Disraeli, penned in 1845, feel more relevant than ever:
“[We inhabit] two nations; between whom there is no intercourse and no sympathy; who are ignorant of each other’s habits, thoughts, and feelings, as if they were dwellers in different zones, or inhabitants of different planets; who are formed by a different breeding, are fed by a different food, are ordered by different manners, and are not governed by the same laws”.
The Myth of Meritocracy
Overcoming the myth of merit presents a considerable ideological challenge, not least because these set of beliefs are entangled with those of free markets and competition. More straightforwardly, the so-called “winners” in a meritocracy have good reasons for believing their success is deserved. The majority succeeded in an academic environment from school to higher education, and have cause to believe that this was “down to me, not anyone else”. Many of the top 5% work (very) hard in a demanding job, that on average takes 50–60 hours of their week and puts them under constant pressure to perform. (That is not to say that others in our highly stratified societies don’t also, but you cannot accuse todays elite of aristocratic idleness). I keep it together. I pay my taxes. I give back where I can. Enough with the politics of envy.
What’s more, this defence is supported by a major new rebuttal to Thomas Piketty’s argument that the top 5% of earners exact their superior economic capital through inherited wealth, capital accumulation and rent seeking. (His 2013 Magnum Opus, Capital in the Twenty First Century was supposed to have put this question to bed for a generation, as his extensive analysis proved that returns to capital exceeded returns to labour over the long run).
However, Daniel Markovits’ analysis of household wealth suggests that the meritocratic elite of today are pulling away from the rest through higher returns to highly skilled labour i.e. base salary, equity shares and bonuses, not inherited wealth. He argues that we have witnessed the emergence of a “superordinate working class”, sweating their human capital for superordinate returns. His data shows that of the top 5% of earners:
- 60% work > 50 hours per week
- 30% work > 60 hours per week
- 10% work > 80 hours per week
Although we can say that crying in a Porsche is preferable to sobbing in a bus, the prevalence of work related anxiety and depression suggest wellbeing and a happy home life is not always correlative with wealth and status. These competition driven lifestyles also exact a cost.
Often out of sight, is a dynastic transmission of unearned advantage. And these are not just our genes and household income. Those who land at the top get a head start across a range of dimensions. The research of Stanford neuroendocrinologist Robert Sapolsky shows that the difference between growing up in a stable home environment and having a loving mother shows up in the cognitive and neurological development of kids by age 5. Those who don’t, already have one of the main markers of bad health outcomes — an overactive inflammatory system — which is closely connected to poorer behavioural regulation and depleted cognitive functioning.
That’s before we get to the massive differences in the investment of money, time and attention in elite education and extracurricular cultivation. Or the social capital (networks, access to knowledge, ideas and opportunity) we inherit based on the randomness of where we are born, and to whom.
When combined, anyone who has benefited from these circumstances of birth can consider themselves extremely lucky. Self satisfied myopia arises when we believe in the false notion that we made it on our own. Even in genuine rags to riches stories, there is always a mentor or guardian who provided at least a few of these elements.
Playing The Cards We Are Dealt
Playing the cards we are dealt is an aspirational edict if you are holding anything above a two pair, maybe even three of a kind. But not when the deck is stacked against you.
The house, represented by the richest 1%, takes in more than the combined earnings of the entire bottom half of the population. Median incomes have stagnated for forty years. The idea that playing your cards right, through effort and hard work and that this will lead to a better life is less a card game, more a card trick.
We would all be wise to pause and acknowledge the role luck has played in our own lives. However much we want to believe in our own skill, it is also the case that:
“the race is not to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet riches to men of understanding” (Ecclesiastes 9:11).
Chance doth happeneth to us all. Ask yourself this, if you were dealt different cards, would you blame the player, or the game? This acknowledgement is the first step we must take to overcome meritocratic hubris, and the divisive sense of failure it imposes upon those “left behind”. And we must start now if we are serious about building back better.
📚 Reading list — for the committed and the curious 🤓
- Michael Sandel, The Tyranny of Merit (2020)
- Daniel Markovits, The Meritocracy Trap (2019)
- David Goodhart, Head, Hand, Heart: The Struggle for Dignity and Status in the 21st Century (2020)
- Joseph Stiglitz, Globalisation and its Discontents (Revisited), (2016)
- Richard Wilkinson & Kate Pickett, The Spirit Level: Why Equality is Better for Everyone (2010)
- Anne Case & Angus Deaton, Deaths of Despair: And the Future of Capitalism (2020)
- Steffen Mau, Inequality, Marketization and the Majority Class: Why Did The European Middle Classes Accept Neoliberalism? (2015)
- The King James Bible (1611)
