“That this Synod call on Her Majesty's Government (and all political parties) to adopt an explicit policy of reducing the wealth gap between the rich and the poor and the disadvantages that flow from it.”
Leeds Diocesan Motion for Church of England General Synod
Acute polarisation of wealth is again rearing its head as the next most important issue after climate change. The motion quoted above will be debated at the Church of England's General Synod later this month, but the Church is not alone in setting out the challenge. The Resolution Foundation has calculated that 3.6 million families will remain worse off after the Budget as a result of their loss of the £20/week Universal Credit uplift and their president, Lord Willetts, has set out his thoughts on the ‘Conservative Home’ website.
There's also been a significant debate hosted by Intelligence Squared between Yanis Varoufakis and Gillian Tett, Editor-at-Large at the Financial Times, on the prospects for re-setting capitalism. Meanwhile, the Cambridge SHARE project is shortly to get underway, with a very distinct focus on disintermediation - which is not present in any of the above.
The situation is acute. In this special episode of The Bigger Picture, Trussell Trust Chief Executive Emma Revie explains how they support over 1,200 food banks throughout the United Kingdom as she sets out their progress and their plans for the difficult winter ahead.
And The Share Foundation continues to tackle the challenge of linking billions of pounds in Child Trust Fund accounts for the benefit of huge numbers of disadvantaged young people - and we seek your help here in getting the information out for these young people.
So in this commentary we return to this major task of introducing a more egalitarian form of capitalism, before the pendulum swings back towards subservient social welfare, yet again.
The fundamental problem with so many good intentions to tackle wealth polarisation, whether in the Church, the Resolution Foundation or with Yanis Varoufakis - is that they seek to impose intermediated solutions, rather than to set the conditions within which individuals can be empowered. The dichotomy is that social welfare is fundamentally at odds with the human spirit yearning for freedom: which is why I have proposed that disintermediation should be the yardstick by which a more egalitarian form of capitalism should be measured.
But it's worth reading and listening to these contributions from Willetts and Varoufakis.
David Willetts speaks of the need for more mobility in order to increase productivity, citing Norman Tebbit's exploitation too ‘get on your bike’. I'm not so convinced that he can bracket together labour and social mobility with geographical mobility: it might have been better for him to quote Sir Keith Joseph's determination to ‘break the cycle of deprivation’.
And there's a substantial ‘elephant in the room’ which is absent from the Resolution Foundation’s GDP comparisons, pre- and post- the Millennium: the technological revolution. It is the massive rise in automation which has de-monetised demand and introduced huge scalability in supply, driving down not only inflation and interest rates but also the apparent rates of GDP per capita, and reducing the need for travel.
This brings us to Varoufakis’ analysis: he describes us as being in the twilight of capitalism, as central bank intervention has overtaken profit as the main driver for investment, and as markets have been squeezed out by the tech giants and replaced by platforms. He sees the world economic order descending into a post-capitalist techno-feudalism, and asks ‘how do we avoid becoming techno peasants?’. His only solution is socialism.
Whether it's Willetts looking backwards or Varoufakis despairing of the future, this is depressing stuff! And it all smacks of an addiction to excess intermediation. Meanwhile Gillian Tett, responding to Yanis Varoufakis, spoke not only of Adam Smith’s ‘Wealth of Nations’ but also of his ‘Theory of Moral Sentiment’, which expouses free access to markets and prices, ownership bringing a sense of participation, and shared moral and ethical values. These last two hold the key to a more egalitarian form of capitalism.
The next challenge is to see how it applies across different age cohorts: that's why starter capital accounts for disadvantaged young people are so important, and it’s a scandal that nearly half a million 18-19 year olds in the United Kingdom are not aware of their Child Trust Fund accounts. The Share Foundation is running regular events in order to publicise the issue: please let us know of any venue where 16-19 year olds congregate in large numbers, and we'll arrange to send supplies of these posters:
In order to tackle Yanis Varoufakis’ fears of adult techno-feudalism, we should also move swiftly to adopt the policy of ‘Shares for Data’ which this commentary has been proposing. This will gradually introduce Adam Smith’s concept of ownership combined with a sense of participation, and it will allow all humanity not only to benefit directly from technology but also to transition from wages to dividends over the decades ahead: much better than the provision of Universal Basic Income, which would otherwise accompany Varoufakis’ techno-feudalism.
The key to all this is keeping disintermediation in the driving seat for change, and central to the new economic environment in which humanity can thrive – egalitarian capitalism.
Gavin Oldham OBE
Share Radio