Tilted Scales

Hope never dies. Heightened vibrancy and quality to the debates on inequality remind us of the need to face the neo-liberal hydra that cripples our societies. Socialism, when not anaesthetised can be rendered potent enough to ensure fairness.
Academic works of Atkinson and Piketty, political ‘revolutions’ with the mass appeal of the likes of Corbyn and Sanders and the wisdom of seasoned economists (Stiglitz’s ‘The Price of Inequality’ prominently) having percolated to the mainstream augur a change from the formatted ideas and the caveats of the No Alternative cohort that we have been accustomed to. All these contributions in the agora have rendered equality relevant.
 « l'humanité n'est jamais stationnaire. Elle avance ou recule. Sa marche progressive la conduit à l'égalité. »- Blanqui.
Dubbed ‘the doyen of inequality economics’, Atkinson offers insights on what can be done to curb inequality in his book. The proposals, described by the writer as ‘radical but realistic’, are explained in simple terms and thus accessible to everyone.
Gist of the Proposals
The Man-Machine Relationship
The academic recommends that policy-makers should not neglect the human element when embarking on technological change. Care should be taken to encourage the type of innovation that increases the employability of workers. The proponent of equality highlights that ‘the human service element adds up to the relative productivity of people vis-à-vis capital’.
Balancing the scales
Departing from the blinkered view that the focus should be on shareholders, the author underscores the need for policy-makers to ensure that power is well balanced among the different stakeholders. In this regard, Atkinson is a proponent of including a distributional dimension to competition. He emphasises that ‘consumer welfare is an aggregation of individual interests that are diverse and that can be combined only by some process of weighting the circumstances of different groups’.
Additionally, he judges that it should be legally enshrined that trade unions can represent workers on level terms and that social and economic councils including social partners and other non-governmental bodies should be created. If they already exist, as is the case in Mauritius, they should be reviewed and strengthened. The scholar refers to the ‘Sociaal- Economische Raad’ of Netherlands which is actively involved in policy formulation.
 Of Employment and Earnings
Atkinson makes the case for guaranteed employment by proposing that the government should act as an employer of last resort and that this recruitment should be effected at the minimum wage. This would affirm the value of work, thereby sending a message that “no one is too small to fail”. In Mauritius, where youth employment is daunting, this would help salvage a lost generation.
 
Broadening his ideas on earnings, Atkinson recommends the adoption of a National Pay Policy which would have 2 parts to it; a minimum wage set at a living wage and a code of practice for pay above the minimum agreed as part of a ‘national conversation’ with the Social and Economic Council. This dialogue would have at its heart the equitable distribution of growth.
Ensuring a decent return on savings
The economist’s indictment of the fate of UK pensioners who can no longer sustain themselves as a result of the low return on savings is noteworthy. This is a worldwide phenomenon, as the IMF’s World Economic Outlook states, “Real interest rates worldwide have declined substantially since the 1980s and are now in slightly negative territory”. As the inequality expert explains; small savers are the ones most penalised by the low interest rates. Appeal is made to authorities to ‘offer via national savings bonds a guaranteed positive real rate of interest on savings, with a maximum holding per person’.
Inheritance for all
Atkinson reminds us that inheritance allows the wealthy to conserve their position at the top of distribution. To counter this, he recommends that a capital endowment (minimum inheritance) should be paid at adulthood. An idea dating back to Thomas Paine who advised  the creation of a national fund from which every person reaching the age of 21 was offered a compensation for the loss as the result of landed property.
 “As the returns to capital continue to outpace the returns to labor, this allocation of ownership further aggravates inequality. Ownership should be broadened through a plan that would give every newborn American an “opportunity share” worth, say, $5,000 in a diversified index of stocks and bonds”-Robert Reich.
 Atkinson further delves into the heritage challenge by advocating that inheritance tax should be scrapped to be replaced by a progressive lifetime capital receipts tax. This new fiscal arrangement would ensure that ‘every single legacy, or gift received by person would be recorded from the date of initiation of the tax, and the tax payable determined by the sum received to date’.
A Strategic State
In an article by Jeremy Corbyn, the importance of ‘shared economic growth’ which can only be created through a ‘strategic state’ in opposition to ‘an absentee government’ is stressed. The socialist defends his perspective with economic realism, ‘If you want to revive manufacturing and rebalance the economy then you need a strategic state leading the way’. In the same vein, Atkinson prescribes the creation of an investment authority that should be created, operating a sovereign wealth fund with the aim of building up the net worth of the state by holding investments in companies and in property.  
Progressive Taxation
Laying the ground for his idea that a more progressive levy structure should be adopted, Atkinson hammers that the main goal of a fiscal regime should not be revenue maximization but instead the realisation of social objectives with fairness as the keystone. The academic further advises that an earned income discount should be introduced which would limit the tax imposed on middle and low income earnings. This ‘modest help’ would help those with humble earnings but would not convey the benefit to those with investment income.  Using findings from the Mirrlees Review of taxation which highlights that properties need to be taxed at current market prices, Atkinson’s cures also include the inception of a property tax based on up to date value assessments.
 
A future for our children
Atkinson’s perspective is distinctly on the long term as he recommends the paying of child benefit at a substantial rate.  As Atkinson puts it “the investments we make today in disadvantaged children promote social mobility, create opportunity and foster a vibrant, healthy and inclusive society and economy”. Atkinson disapproves of targeting and avers that children should be deemed as individuals on their own. He thus stands firm by the idea of the universality of child benefit irrespective of the income levels of their families.
A Basic Income to everyone
The scholar proposes a universal income for everyone. This citizen or participation income would complement any existing social transfers rather than transform them. Atkinson opposes the ideas of John Rawls whobelieved that the income should be based on participation and Philippe Van Pariks who believes that participation cannot be used as the benchmark to gauge whether someone deserves a basic income and that everyone whether is ‘participating’ or not should be entitled to same. In 2016, experimentation of a basic income to all without any discrimination based on employment status will be carried out in Utrecht.
Modernising Social Security
Atkinson deems that the social security contributions need to be adapted to the changing nature of work. The economist for example highlights the importance of including non-standard workers in the protection net.
The final proposal to offset inequality originates from a global perspective. In line with Amaryta Sen’s proposal, Atkinson advocates that rich countries should raise their target for Official Development with an assistance of 1% of Gross National income.
 Ergo
Through the lack of support to entrepreneurs, the admonishing of public servants, the waiving of taxes for the haves and thinly veiled currency manipulation, successive governments have shown their commitment to their financers’ pleonexia.  Voters in last December’s elections are unlikely to appreciate the vile piquancy of the situation. Left with gossamer changes and waltzes in inanity from blithe politicians, the answer lies in a citizen movement for equality. As Atkinson puts it, “collectively we are not helpless in the face of forces outside our control.”
 
Readings:
Inequality-What Can Be Done? , Anthony B. Atkinson, Harvard University Press, 2015
How to Shrink Inequality?, Robert Reich ( HYPERLINK "http://www.thenation.com/article/how-shrink-inequality/" \t "_blank" http://www.thenation.com/article/how-shrink-inequality/)
The Globalization of Inequality, François Bourguignon, Princeton University Press, 2015.
The Tories are taking us back to 1979 – we need a strategic state by Jeremy Corbyn ( HYPERLINK "http://www.theguardian.com/politics/2015/aug/22/jeremy-corbyn-labour-leadership-strategic-state" \t "_blank" http://www.theguardian.com/politics/2015/aug/22/jeremy-corbyn-labour-lea...)
Capital in the Twenty-First Century, Thomas Piketty, Harvard University Press, 2014.
Agrarian Justice, Thomas Paine, 1797 ( HYPERLINK "http://www.ssa.gov/history/paine4.html" \t "_blank" http://www.ssa.gov/history/paine4.html)
Textes Choisis, Auguste Blanqui, avec préface et notes par V.P. Volguine, Editions Sociales, Paris 1971.
The Price of Inequality: How Today's Divided Society Endangers Our Future, Joseph Stiglitz, W. W. Norton & Company, 2012.