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.He found no differences in skill: ‘The results resembled what you would expect from a dice-rolling contest, not a game of skill.’ On presenting the results to the firm’s executives, the implications were ‘quickly swept under the carpet’.‘Facts that challenge such basic assumptions – and thereby threaten people’s livelihood and self-esteem – are simply not absorbed,’ noted Kahneman.5 If bonuses are awarded for luck not skill then a dice-rolling monkey is as deserving.Such uncomfortable truths have, despite growing political pressure for greater moderation, done nothing to interrupt the bonus and pay juggernaut that drives the culture of the wildly leveraged financial services industry on both sides of the Atlantic.Does it matter if a small corporate and financial elite are able to command such a large and growing share of national income? Their rewards may be seen to be unmerited to many but do they have a wider impact on the rest of society? Does this runaway growth in the extremes of inequality at the top end inevitably diminish the prospects of the poor?In the past, tighter controls were in place to ensure the gains of growth were more widely spread.From the 1930s onwards, the UK became a steadily more equal society and rewards at the top became much more modest while, crucially, tax rates on the rich were increased sharply.As a result, the concentration of income at the very top had, by the mid 1970s, fallen to its lowest level in history.As shown in Figure 28, the share of national income taken by the top one percent fell from seventeen percent in the mid 1930s to a low of 5.7% in 1978.Figure 28: The fall and rise of the top one percent, UK: 1937 to 20119The share of net income (after income tax) received by the top one percent of taxpayers, percentagesIt was not to last.Since then, the share taken by the very top has risen, moving back towards the level last seen in the 1930s.While incomes at the bottom began to rise more slowly than the wider growth in prosperity from the early 1980s, the rate of personal enrichment surged and, with a temporary step backwards in 2008, has continued to do so.Moreover, Figure 28 will underestimate the actual gains of the rich because of the growth of personal tax avoidance, and the way actual incomes at the top are understated to the tax authorities.6 In the United States, the even greater boom in incomes at the top over the same period was dubbed an ‘economic megashift’ by the former Republican strategist and expert on wealth, Kevin Phillips.7 Though they have progressed at different speeds, and from different starting points, most rich nations have experienced a similar shift from falling inequality from the 1930s to rising inequality in recent decades.8The ideological divideThe relationship between inequality and poverty has long been the subject of controversy with an ideological divide between those who see reducing inequality as the solution to poverty and those who see inequality as necessary for helping the poor.The pro-equality side argue that poverty cannot be separated from inequality, that the two are intimately linked, and that greater inequality generates greater poverty.The eminent historian and social reformer, Richard Tawney, writing a hundred years ago, argued that poverty was down to a ‘problem of riches’.10 It was the inevitable product of an excessively uneven sharing of the national pie.Challenging the mainstream thinking of the time – that poverty was the product of weak morals and idleness – Tawney pointed instead to a societal explanation where the rich gain too large a share of the nation’s wealth in a way that consigns large numbers to poverty.A similar argument was made by Peter Townsend sixty years later: ‘More attention must be given to the exposure of excessive and unnecessary privilege, as much as excessive and unnecessary power.It is impossible to raise the poor without simultaneously diminishing the rich [ Pobierz całość w formacie PDF ]