Socialists, Economics & Inequality

“What makes capitalism intolerable is the rise of relative poverty and increased levels of insecurity and exploitation.” (22-Oct-2010)

This quotation from Geoff has worried me for some time, if only because it poses more questions than it answers. To echo John Rawls, would an economic system be more justifiable if everyone were worse off, but the society were more equal?

I would argue that it is the goal of socialists to increase the material well-being of ordinary working people both absolutely and vis-à-vis the wealthy beneficiaries of capitalism.

Geoff is right to stress that capitalism provides working people with little security. Indeed, well-being consists of two parts wealth/income AND the security of that income and wealth. In periods of upswing (e.g. early 2000s, despite credit financing) the well-being of all but the poorest sections of the working class do rise, but long-term financial security does not outlast the boom.

Geoff writes:

“Overall, the UK and western societies in general have become richer over the long term. This can be seen in part in National Income statistics. In addition to the figures there are the many technical changes that have made our lives easier.” (22-Oct-2010)

Here I would qualify Geoff. Yes, capitalism is not entirely useless; in cycles it expands wealth by technological development and reducing production costs. Today we can all in the West benefit from agro-engineering for our food and have mobile phones.

Yet how well-off one is and can expect to be is determined by what we can reasonably expect from an equitable distribution of the fruit of the productive forces given their level of development.

In these terms we can speak of real poverty in Britain: a day’s work at the minimum wage to purchase a 100km ticket into London before ten; several days work for simple dental treatment – or several lifetimes of work to purchase a terraced house. For the growing numbers who are sick or without work the situation is far worse.