Equality has long been a unifying rallying cry for the Left. But a series of important shifts in our economy, culture and society since 1945 demand new political strategies. In particular, deindustrialisation and the decline of deference are shifts that the left must take into account when developing policy.
We know that inequality (as measured by the Gini coefficient among other things) rocketed in Britain in the 1980s. It increased by over ten percentage points between 1980 and the late 2000s. Often when the causes of this shift are debated two arguments emerge. One frames the growth in inequality as the result of political choice: the effect of Thatcherism or neoliberalism. The other suggests that, whatever Thatcher might have done to accelerate rising inequality, it was, in fact, the inevitable effect of the accelerating globalisation of the 1980s and 1990s. This article points to the importance of recognising two shifts that long predate the 1980s--deindustrialisation and the decline of deference--which must be taken into account if we want to really understand why inequality has risen and what political options there are for tackling it.
Many of the causes of rising inequality in and after the 1980s can certainly be traced back to Thatcherism or 'neoliberalism': hollowing out trade union power; scaling back redistributive tax and transfer schemes; liberalising credit and financial markets, privatisation, and an overwhelming belief in the power of the harsh winds of globalisation to stimulate competition and efficiency.
After Thatcher, inequality levels stabilised but did not fall significantly. This is despite the fact that, after 1997, Labour governments set out to affect the biggest transfer of resources from rich to poor in decades. They were unable to significantly reverse the increase in inequality because the blame for increasing inequality cannot be placed solely at the door of Margaret Thatcher, the Institute for Economic Affairs and the Adam Smith Institute. Some would now charge that a key failure of New Labour was to accept--even to embrace--the idea that globalisation was inevitable.
There are, however, long-term, secular causes for increases in inequality, quite outside of Thatcherism and globalisation. Of particular importance is deindustrialisation and the shift to a service sector economy. The proportion of the workforce involved in industrial employment has been decreasing since the mid-1950s. That is, long before the end of the Bretton Woods system and the Thatcher years. Globalisation is part of the story, then, but not the whole story. There are important reasons for deindustrialisation quite outside globalisation. One of these is, quite obviously, technological advance, which means that fewer workers are...