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“Inequality is not inexorable”: MP Michael Meacher in the FT

michael meacher2In the FT on January 1st, MP Michael Meacher pointed out that the record of capitalism has been poor over the current decade: some 90% of the income gains have been appropriated by the top 1% at a time when average wages were stagnant or falling.

He added that growing inequality has been championed by some on the basis that if the rich gain, the benefits will percolate down through society, but that the trickle-down theory has been discredited – it doesn’t work, wealth actually steadily trickles up.

Meacher cites a book by Richard Wilkinson and Kate Pickett, The Spirit Level (2009), which demonstrates that the more unequal a society is, the greater the social pathology on more than a dozen counts.

He asserts that such inequality is not inexorable; his recommendation:

“The metric of reward is not universal across the income distribution. Different criteria apply:

  • collective bargaining for wage-earners,
  • private contracts for white-collar workers,
  • and often self-appointed remuneration committees at the top, with excessively generous incentive schemes that bear little or no connection with reality.

“What is needed is the development of a single system of remuneration for calibrating rewards at all levels, plus much greater transparency in the process”.