The deaths of Tony Benn and Bob Crow last week led to many discussions about left wing politics. Much of what was said seemed like ancient history as far as these two figures' political views were concerned. My favourite Bob Crow moment came when he was being interviewed by Edward Stourton for the BBC at the height of the Iraq war. As the interview came to an end, Stourton asked Crow what he thought about the war. Quick as a flash Crow replied 'What war is that?' Laughing, Stourton said, 'The War in Iraq,' to which Crow retorted, 'I thought you meant the Class War,' before going on to say, essentially, that his members were more concerned with what was going on in the UK, rather than in a foreign country thousands of miles away. I remember laughing out loud at this bit of masterful showmanship. However, it would appear that Crow was being something of a canary in the coal mine, as following our experience in Afghanistan, Iraq and Libya, MPs failed to support military action in Syria as they belatedly realised that the general public were not behind it. As a number of people put it to me, they felt very sorry for the people of Syria who were suffering but they thought that military action would be costly yet ineffective and that the current job of the government was to do something to improve the lot of its own citizens rather than the citizens of another country.
'Class War' does sound like a anachronistic slogan to me. Or maybe I feel it's just a bit too impolite and possibly offensive and I wouldn't want to upset anyone. Yet whatever you want to call it, something has been going on since the 1970s across the developed world that has drastically altered the distribution of income and wealth. Those at the top of society have pulled away from those in the middle and at the bottom, while those at the very top have pulled away even further from everyone else. This has led to levels of inequality not seen since before WWII in some places. The most recent chart I have seen that shows the rich getting richer not just by taking a bigger share of newly created wealth, but also by taking income that used to go to those at the bottom and the middle, is this one from the economist Paul Krugman's blog:
This data from the Economic Policy Institute shows that between 1973-2012, hourly real wages for men in the US have fallen for the lowest 60 percent of male earners. It's the picture painted by facts like these that led the legendary investor Warren Buffet, to famously remark:
“There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”
So on this point at least, we can say that Crow and Buffet would be in agreement.
One of the reasons given for the ability of the better off to appropriate more and more income and wealth for themselves, has been the decline in union power. We are particularly prone to scoff at this in the UK, because we have a national story which says that the economy was brought to its knees in the 1970s because of excessive union power which culminated in the Winter of Discontent in 1979. This led the country to turn to the Conservatives who, under Margaret Thatcher, transformed the nation from the sick man of Europe into a vibrant, prosperous, modern economy, by employing policies of privatisation, market deregulation and curbing the power of the unions. I think most people would accept the view that the unions do have a case to answer for the way they behaved up until 1979, as demonstrated by the fact that the last Labour government didn't repeal any of the legislation enacted by the Tories to reduce their powers. However, here is an inconvenient truth:
In the UK, economic growth was higher during the period of supposedly excessive union power than during the new age of private sector dynamism ushered in by Thatcher. Between 1948-1978, average real capita GDP in the UK grew at 2.17%. Between 1979-2001 it grew at 1.99%. If you include the period from 2002-2012, where it grew at less than 0.8% on average per year, then the post 1979 figure drops to less than 1.6% a year. By contrast, between 1960-1978, when union power was arguably at its height, average real capita GDP grew by 2.4% a year.
These figures seem to turn our national story on its head. Therefore, maybe we shouldn't be so fearful that, if a rise in worker power is what is required to restore living standards and increase equality, then the result need not be a collapse in growth. Perhaps it is possible to have higher pay for the bottom 60% and higher growth for the economy as a whole? It looks like that's what we had in the past.
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