A few weeks ago, the Sunday Times published one of those appalling "rich lists" that sends my blood pressure skyrocketing each year. They chose to make it their main front page headline for the day, too: something to the effect that "UK's rich get even richer". Next to that was a political story under the headline "Tories fall to 8-year low in public support". I was watching one of those "press preview" things on TV during the evening, and remarkably enough, neither of the two expert panellists sought to make any connection between the two stories, though that may have had something to do with the fact that one of them appeared to have indulged rather heavily in the "green room" before going on air. Well, it was a Saturday evening after all.
There surely is some connection, though, isn't there? We seem to be seeing a full-fledged shareholder revolt against "fat cat" pay in the UK. Bob "shine on you crazy" Diamond at Barclays managed to trouser his bonus, at the cost of some embarrassment, but others, including Sly Bailey at TrinityMirror and the CEO at Aviva, have had to bow out in the face of shareholder wrath. Bob and Sly and the Aviva guy may not be in the Abramovich/Mittal/Green stratosphere of wealth, but they're doing OK: newly-released data show that remuneration for FTSE-100 CEOs jumped more than 11% last year, while average earnings across the economy rose barely more than 1%. "All in this together", is it?
It's not just in the UK that this is happening. Even in the US, where greed is still mostly regarded as a virtue, eyebrows are starting to get raised by statistics showing a burgeoning wealth and income gap. Not so long ago, American CEOs used to earn about 40 times as much as their average employee; now it's closer to 400 times. And there can be little doubt that the "throw the buggers out" trend in recent European elections, which has now claimed President "bling-bling" Sarkozy in France, has its roots in voters' sense that the wrong people are bearing the costs of fixing the financial crisis.
There are moral arguments to be made about all this, of course: it is easier for a camel to pass through the eye of a needle than to for a rich man enter the Kingdom of Heaven, and so on. That sort of thing doesn't wash with most people in today's society, sad to say, but there are sound practical reasons to fret about the consequences of rising inequality.
Yesterday on CNBC's morning panel show, one gent (whose name I didn't catch) bravely argued the case that inequality in the US risks causing profound damage. The regular hosts, who never met a plutocrat they didn't like, tried their best to talk him to a standstill, but he held his ground admirably. His fundamental point was that if society becomes more and more polarised between rich and poor, then politics becomes more polarised too, until eventually you reach a point where it's almost impossible to agree on any moderate solutions. You can see how that works in the results of the recent Greek elections. Call it Yeatsian economics:
"Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity."
(W. B. Yeats: The Second Coming, 1921)
A further serious consequence of inequality is that it makes it ever harder to generate economic growth. Putting "a chicken in every pot" will ultimately result in a much greater lift to GDP than building another yacht for Larry Ellison. And growth is important. When overall income and wealth are rising, it's possible (though possibly ill-advised) for people to shrug wearily at the excesses of the plutocrats, but when ordinary people are feeling the squeeze, they get angry very quickly. Then you get riots and looting, and you see headlines like "Tories fall to 8-year low in public support".
Let's give the last word to Yeats and his wrist-slitting "Second Coming", with a question whose answer we can hope we never find out:
"And what rough beast, its hour come round at last,
Slouches toward Bethlehem to be born?"
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