O let us love our occupations,

Bless the squire and his relations,

Live upon our daily rations,

And always know our proper stations.

 

Charles Dickens

There is a growing sense of unease in the UK. Almost four out of five Britons (79 per cent) believe the country is “on the wrong track” according to a recent survey by Ipsos MORI. Just 21% of those questioned said that Great Britain was heading in the right direction, down from 35% at the start of 2018.

And economic performance over the past few years has been particularly poor, which probably reinforces that sentiment.

But is it just that? The German newspaper Die Zeit recently asked whether Britain was a feudal society,

“What is more important than an entry in the Peerage of England, the list of nobility, is which school and university the father of the father was in because it has a decisive influence on one’s own educational opportunities. The possibilities here are extremely limited. First Eton. Then Oxbridge. Half of England’s 54 prime ministers went to Oxford – for example, all three Brexit premiers, David Cameron, Theresa May, Boris Johnson – and another quarter went to Cambridge.

Without Oxbridge, you can hardly get to the top of power in Britain. This is the case in politics, but also in business, in theatre and cultural establishments, in banks, in courtrooms, in media outlets. No matter where you look in Britain, whoever is at the top usually meets at least two of the following criteria: Eton, Oxbridge, Ancient Greek.”

 

Do they have a point?

Of course not literally. The definition of feudalism is:

No one nowadays expects members of the nobility to commit to military service; and at the other end of the spectrum workers (very few of whom are now peasants working on the land) are able to own land themselves.

And yet there are clearly some disturbing trends which suggest we may be moving towards a kind of neo-feudalism:

  • although the economic pie is continuing (just) to grow, most people’s slices are getting smaller – the rich are getting richer and the rest are getting poorer;
  • the UK already has very low social mobility compared with other countries, and the barriers for poorer people are getting higher not lower;
  • and there is an increasing sense that there is one law for the rich and another for the poor.

Fortunately, none of this is inevitable. Mass impoverishment and the drift towards neo-feudalism are political choices. We can choose a future of solidarity and abundance. But we need to choose soon.

A Bigger Pie But Smaller Slices

the UK economy has performed poorly in recent years, as shown by the blue GDP per capita line in the chart below.

You can think of GDP per capita as representing the size of the pie: it is the value of goods and services created by the economy and available to be consumed by the population of the country. If all of those products and services were made available on an equal basis, GDP per capita is what each person would get. But of course they are not shared on an equal basis and what the typical person gets – the normal person’s slice of the pie – is median earnings.

As you can see, the pie has grown (not very impressively) but the median slice has shrunk. Where has the rest gone? Not so much into earned income at all, but more into unearned income like dividends and capital gains. If you have to work for a living, the last 10 years have probably not been good for you. But if you’re wealthy, and you are living off your investments, life has been okay.

One argument is that, while this may be tough, it is at least fair: Britain is a meritocracy and people’s income and wealth represents the value they bring to society. If you have done well, that is because you have worked hard and made good choices; and if not, that is also largely down to you. Unfortunately, this argument is not supported by the data.

Decreasing Social Mobility

The data show that the UK has long had problems of social mobility. here, for example, is a comparison undertaken by the OECD in 2010 showing that mobility of earnings was lower in the UK than any of the other countries they surveyed.

What the chart shows is that your parents’ earnings have a greater impact on your own earnings in the UK than in any of the other countries the OECD examined.

And this is of course not good. What is worse, however, is that recent policies are tending to exacerbate the problem rather than to solve it. The UK government’s own State Of The Nation Report explained that:

“Starting in the earliest stages of life we find that developmental gaps open up between disadvantaged and affluent children. Our research highlights the closure of hundreds of children’s centres and asks the government to revisit its approach to this policy. We call for an extension of 30-hours childcare to more disadvantaged parents. We also note the issues affecting the early years workforce and identify ways we can improve the prospects of those who care and teach our youngest children. Government needs to act to ensure these workers are better paid and have clearer and more elaborated progression prospects.

Schools have long been viewed as the engine for social mobility but we find that gaps between the poorest students and the others are prevalent at all stages in the education system. While the Commission welcomes initiatives such as the Pupil Premium and the investment in ‘what works’ activity, we are critical of how schools are being held to account. We want to ensure that the inspection framework does not perpetuate cycles of disadvantage and that those delivering educational excellence within the constraints of poverty are supported and their methods championed.”

And the Institute for Fiscal Studies has clearly shown how government tax and benefit policy tends to target the poorest and most vulnerable.

Those who have suffered most from the tax and benefit reforms between May 2015 and April 2020 are the poorest working age families with children. The prospects for these children are now substantially worse they would have been in May 2015.

One Law For The Rich and Another For The Poor

The lawyer Sir James Matthew famously (and ironically) remarked, “Justice in England is open to all – like the Ritz hotel.” And it is of course true that going to law is very expensive. The solution to this used to be legal aid. Justice was accepted as a human right, and if you could not afford the expense of going to court yourself, the state would step in to ensure justice was done.

As the chart below shows, this is no longer true. Legal aid has all but disappeared. More than 80% of those who would have been supported in the past are no longer supported – justice is no longer for them.

There also seems to be a discrepancy in the way that laws are applied to rich and poor. Wealthy people who admit to having dabbled in drugs tend to escape scot-free while the disadvantaged are heavily penalised for consumption.

And the very framing of laws tends to penalise the poor and favour the rich. Tax rates, for example, are higher on earned income – normal people’s income – than they are on dividends and capital gains, which is how rich people take most of their income. As the French writer Anatole France put it, “the law, in its majestic equality forbids the rich as well as the poor from sleeping under bridges, begging in the streets and stealing bread.”

Is The UK Heading For Feudalism?

Despite the intrinsic difficulty of forecasting, it is undeniable that the answers to these three simple questions will determine our future:

  1. Will the pie grow? Or in economic terms, will real per capita GDP grow?
  2. Will most people’s slices grow? Will real median incomes grow?
  3. Will we have a democratic transition to our future state?

For each of these questions, the answer may be yes or no. The combinations of these three answers give us eight scenarios for the future. There are no other possibilities. These eight scenarios are illustrated below.

In reality, it is very unusual for the pie not to grow – even since 2010, it has grown a little – so for brevity, we can ignore the even-numbered scenarios on the right and concentrate on the odd-numbered ones on the left of the diagram.

Scenario 1: Revolution At the top left of the diagram is the scenario titled Revolution. In this scenario, the size of the pie continues to grow and the median slice also grows – both of which are positive outcomes – but the route to this state is not by a peaceful transition. Even if the end state is acceptable, the route is not – it still represents a (violent) failure of our current civilization and the construction of a new one.

Scenario 3: Solidarity and Abundance The next scenario, Solidarity and Abundance, is by far the most attractive. The pie as a whole continues to grow, and the median slice grows with it. Furthermore, the transition is a peaceful one – society has united to implement the policies which bring about this shared growth in income and wealth.

Scenario 5: Accepting Impoverishment Accepting Impoverishment may also not be a stable scenario. It assumes that the mass of the population is prepared to tolerate indefinitely shrinking incomes, even in the face of continuing growth in the economy. Their experience will be of increasing scarcity and decreasing support from the rest of society. Whether a world of scarcity and isolation will be tolerated is not clear. We have already seen rising anger on the part of those left behind: there is growing evidence of the radicalization of the working class; and race and religious hate crime have started to rise. Maintaining a peaceful democracy in the face of another thirty-five years of mass impoverishment seems unlikely. But while we remain a democracy, the solution is always within reach — we just need to vote for Abundance and Solidarity.

Scenario 7: Neo-feudalism Neo-feudalism represents a world which has been captured by the wealthy. Democracy is no longer present, or it has become a sham. The economy continues to grow but most people continue to grow poorer. And there is no longer anything they can do about it.

Which of these scenarios will come to pass?

Of the scenarios on the left, only Solidarity and Abundance can be described as representing the survival of our current civilization – even Accepting Impoverishment would be a (peaceful) transition from a representative democracy to a de facto plutocracy, and the other two possibilities both involve regime change.

Fortunately, as Part 3 of 99% explains, we have a choice. We do not have to end up in neo-feudalism; we can head back towards Solidarity and Abundance. But that does need a shift in policy. So we must act now. If this matters to you, please do sign up https://99-percent.org/