Neoprene

Under the title: „Income Inequality and Capitalism in the UK“ David Miles has a few remarks on the Morgan Stanley – Global Economic Forum:

Income inequality in the UK is once again on the rise. Latest data show that on a range of different measures the distribution of household income — after tax and after the payment of social security benefits — became slightly less equal over the course of the past year or so. What is surprising, and perhaps worrying, about this is not that the scale of the increase was great — in fact it was rather small — but that it happened despite a prolonged and concerted series of policy measures to make the distribution of incomes more equal.
Let’s start with the facts, and then turn to the implications. The most widely used single measure of income inequality is the Gini coefficient. There was a very sharp, indeed almost unprecedented, increase in income inequality in the 1980s. Inequality rose somewhat further in the early years of the Labour government at the end of the 1990s. Since around 2000, inequality first dropped slightly but then resumed its upwards path over the past couple of years.
So over the ten years that Labour has been in power under Prime Minister Blair, the distribution of income has crept up slightly. This is despite a series of major changes to the tax and benefit system which have redistributed incomes towards the less well-off. Without this sustained policy of using the tax and social security system to re-distribute income, inequality would have increased much more dramatically. Here is what the UK Institute for Fiscal Studies — the authoritative and independent research institute — says:
“Labour has introduced a package of redistributive tax and benefit reforms since 1997 …tax and benefit reforms since 1997 have clearly been progressive, benefiting the less well-off relative to the better-off. Given the fact that Labour’s tax and benefit reforms have tended to benefit poorer households at the expense of richer ones, it might seem surprising that income inequality is slightly higher on most measures than it was in 1996–97…While the actual level of inequality as measured by the Gini coefficient is slightly higher in 2005-06 than it was nine years earlier, with an approximate value of 0.347 in 2005-06 compared with 0.333 in 1996-97, our simulations here suggest that the Gini coefficient would have increased considerably, to around 0.378, if the tax and benefit system had remained unchanged”.
There are limits to how much any government can use the tax and social security system to re-distribute incomes. Indeed, it appears as if the UK government may have concluded that those limits have been reached. The budget that Chancellor Brown introduced just last week did make some changes to the tax and benefit system, but these were designed to simplify the system, bring down some headline tax rates and ensure that few people lost out. What they did not do — unlike nearly all his previous annual budgets — was re-distribute incomes to the less well-off.
So, the stark picture is this: after a decade of steady economic growth, in which unemployment has fallen sharply and employment has risen significantly, and during which the government has used all the levers at its disposable to try to engineer a redistribution of incomes towards the less well-off, it has managed to prevent much of a further increase in inequality. But as it has neared the limits of its ability to use the tax and benefit system to re-distribute incomes, inequality has recently started to move higher again.
If it took an enormous effort in using the tax and benefit system — one that pushed it to the limits of feasible redistribution — just to keep income distribution from rising much further, then what next? Note again that all this has happened in the UK when unemployment has been — on average — falling and the employment rate — the participation rate — rising. Employment has been boosted by a rise in public sector employment as state spending has risen sharply since 2001. In the poorest and most deprived parts of the country, the reliance on public sector jobs is great — there has been little growth in the private sector, the market and jobs. And from here on we are likely to have much slower growth in state spending.
All this has potentially worrying implications for business and for financial markets. For 10 years under the Labour government there has been muted anti-business sentiment in the UK, and to an extent that is unusual. The UK has embraced the global economy in a way that would have been hard to predict based on much of its history over the past 50 years. The UK has been more open to foreign ownership of what were UK companies, more open to trade and more open to flows of migrants than most large developed economies. It is far from clear that there is a powerful link between those things and the pressures driving inequality higher. But in the eyes of many ordinary people and of some politicians there is a much clearer link.
It is easy to become complacent about the relatively pro-business environment in the UK today — something that seems to have the support of the main political parties. Whether that situation is robust to potential further increases in income inequality is far from clear.

Mein Kommentar zu diesem Kommentar stammt vom GegenStandpunkt Marburg:

Der Spruch „Die Reichen werden immer reicher, die Armen werden immer ärmer“ ist heutzutage durchaus populär. Diese Feststellung ist meistens jedoch nicht der Auftakt zu einer Erklärung von Armut und Reichtum, zu einer Erklärung, die ausführt, wie Marktwirtschaft genau zu diesem Resultat führt. Dieser Spruch ist gewöhnlicherweise kein Einwand gegen die absurde Sorte von Reichtumsproduktion, die auf Armut beruht und sie in regelmäßig vergrößertem Maße zum Resultat hat.
Der Standpunkt der sozialen Gerechtigkeit stört sich offenbar nicht an der Armut selbst, sondern an dem Ausmaß der Armut: Die Reichen werden immer reicher, die Armen immer ärmer. Insbesondere die Steigerungsformen „reicher“ und „ärmer“ halten diese Kritiker für kritikabel. Man möchte sie schon fragen, welches Größenverhältnis von reich und arm denn ihrem sozialen Gewissen nach in Ordnung ginge. Ihre schlichte Botschaft heißt: so, wie es ist, müßte es doch nicht sein.