[The themes in this post will be explored in my book, Small is Powerful: Why the era of big government, big business and big culture is over (and why it’s a good thing). I'm crowd-funding for the book, so you can pre-order and help make sure it gets published here.]
There aren't many people left in the political mainstream who think huge disparities of wealth and income are a good thing.
Or if there are, they keep mighty quiet about it.
The truth is, left, right and middle all accept that in the years before the Crash something went wrong. Policy-makers agree that it is morally indefensible for speculators to earn tens of millions a year while hard-working people doing a meaningful job find it tough to pay for life's necessities. They concur that in a society where the wealthy and the middle earner live such utterly different lives, mutual incomprehension and suspicion can only grow. Even the originator of the famous quote himself admits that the days when we could be "intensely relaxed about people getting filthy rich" are long gone.
So we all want greater equality now but we rarely ask ourselves what type of equality. No question, however, could have a bigger impact on the actions we might take to secure that fairer world.
We need to recognise that we have to choose between a small equality and a big equality.
Small Equality: More Equal Shares
Small equality has a long pedigree rooted in the turmoil of the English Civil War and the American Revolution. Many of the thinkers and fighters of this time believed fervently in a more equal society and economy. There were few who desired extreme egalitarianism but, much like our attitudes to the super-rich today, they were repelled by the huge wealth and power concentrated in the hands of the nobilities and monarchies of Europe.
For most, equality meant more equal shares of a nation's wealth which, at the time, largely meant land. The influential Civil War thinker James Harrington, for example, proposed that no-one should be able to own more than £2,000 worth of land. The US Founding Fathers, as I've detailed before, were determined to create a new Republic where everyone had a share of land rather than one where ownership was concentrated in a few hands. Indeed, leaders like Thomas Jefferson and Benjamin Franklin consistently argued that a good society required that the mass of the population were 'husbandmen' - farmers working on their own smallholding.
These ideas remained influential throughout the nineteenth century. The rise of mutualism and the co-operative movement in the UK was built on the principle that working people would be better off when they had a share of wealth they could call their own. In the US, the homesteading movement led to a long series of laws that sold parcels of land at knock down rates to those seeking to make a living for themselves and their families. An idea that was one of the causes of the Civil War as the Southern states sought to concentrate the lands of the American West in the hands of the plantation owning class.
Big Equality: Public Ownership and decent incomes
However, by the late nineteenth century, the big corporation was becoming the defining feature of the modern economy. A 'merger mania' gripped America as 2,000 small and medium-sized companies were conglomerated into less than 200. The rise of mass production in the early twentieth century provided the complex and expensive technologies that consolidated these new corporations' hold on economic life. A vast labour force was created that relied on the wages provided by these powerful companies.
The response of those who cared about greater equality was to follow suit and abandon the small equality vision. The huge concentration of wealth enjoyed by the corporations was to be remedied not by sharing out that wealth more equally but by redistributing the income generated by that wealth for its owners. And the redistributing was to be conducted by a state that would match and ultimately exceed the corporations for sheer size and power. As the century wore on, many thinkers and policy-makers even came to the conclusion that the process would be more efficient if the state simply became a corporate owner itself. The result, of course, was a wave of nationalisation across the economies of Europe after 1945.
This was a very different notion of equality to that popularised in the previous centuries: fairness was to be delivered now by a complex state acting on behalf of the wider public and particularly the less well-off. Like the corporation it was top down, bureaucratic and, most importantly, big which by the middle of the last century was seen as an unquestioned virtue. While small equality placed a premium on the role of the individual as the direct owner of assets they could put to their preferred use, big equality conglomerated assets in the hands of one big owner, the state, who theoretically held them on behalf of whole populations.
Small equality was about more equal shares for all, big equality was about public ownership of assets controlled by a professional elite.
Equality in the Twenty-first Century: Big or Small?
Today, when we talk of equality, we still nearly always mean big equality. The twentieth century exerts a powerful unconscious grip. Most of the objections to austerity in the UK, for example, have been about the loss of welfare income provided by the state. Recently fears have been raised that the state's role in redistributing resources across the UK will be degraded if greater devolution to the English regions is allowed to go ahead. Even state ownership is enjoying something of a revival on the left.
The rise of creative times
However, there are many good reasons to revisit that small notion of equality but one of the best is the fact that we now live in a very different world to the one that existed when big notions of equality took hold.
Back in the early to mid twentieth century, the large corporation and the bureaucratic state were regarded as the height of human civilisation. The technical experts that ran these organisations were humanity's saviour delivering a more efficient economy and improved human welfare. Millions accepted the elitism and deference without complaint.
Today, elitism and deference are in full-scale retreat. We are as likely to offer challenge as respect to authority. Corporations are constantly under threat of reputational collapse as the public casts a sceptical eye over the behaviour of big business. And the state, rather than being saviour, is widely seen as a repository of vested interest and inefficiency.
This shift away from the acceptance of big power has been a trend for forty years but now it goes much deeper. Internet technology is allowing people to turn their desire for self-expression and self-determination into something more than just alienation from existing authority. A world of creativity is opening up where millions can form their own networks, launch their own social and political initiatives at speed or establish their own businesses at low cost. Regular visitors to this blog will know how transformatory, we at the RSA think this 'Power to Create' trend can be.
The notion that we can deliver a more equal society in these creative times through the methods of the top down state working with big business is fanciful. That approach thrived in a mid-twentieth century world where the passive consumer, conformist citizen and disciplined employee was a given. Today consumers are highly active and engaged, citizens choose their own lifestyles and employees want autonomy so much that millions in fact now choose to work for themselves.
The small vision of equality works far better in this environment because it is not about giving people an income or a service controlled by an authority figure, it is about ensuring that individuals have the resources and assets they need to shape their lives creatively. It says a lot about the strange values of the twentieth century that it was thinkers and leaders of two and a half centuries ago who understood the importance of this far better than our more recent forebears.
Small Equality in Practice?
The practical implications of a shift from big to small equality are fundamental. I can't claim to have thought them through fully - they will be a central feature of the research I am doing for my book. But there are two broad implications which are relatively obvious.
The first is the need to focus on wealth as much as, or maybe more than, income. Small equality is about equal shares of capital not the distribution of the income arising from that capital. It goes to the heart of the productive resources that fashion an economy and have the power to release individual creativity. It is, in fact, a far more thorough-going notion of what makes for a fair society than big equality. A new concern with wealth would require a recasting of policy and public debate which remains heavily focused on piecemeal reform of the top down institutions of big equality: welfare, public services and tax.
We could start by looking at the key indicators we use to assess how fair our society is. For example, we are very used to defining poverty in terms of income: usually less than 60% of median income. The Labour Government used this measure throughout its thirteen years in power to judge how well it was progressing against its child poverty pledge. As one might expect, Labour turned to classic big equality measures - higher tax credits and benefits - to achieve the goal. It is telling that there is no equivalent indicator or target for wealth. What might we consider a decent standard of wealth for a citizen? How far off that standard are we and what might be done to achieve it? There is hardly any public debate on this, let alone a consensus.
The second implication makes the small equality perspective much tougher to achieve than the big equality approach. It is that small equality cannot rely on a pro-active government to deliver its vision. Small equality is predicated on a fairer share of assets which is another way of saying we want a wider distribution of power within the economy. The state cannot be a big, powerful player in the economy under such a vision. As I've argued elsewhere, it is an inherent contradiction to claim that a highly active government can deliver greater equality when it controls swathes of the economy far larger than any other organisation or individual.
This does not mean that state can do nothing: it can usefully identify those areas, from planning regulation to IP law, where its interventions encourage the concentrated ownership of assets and undertake reform as necessary.
Ultimately, however, small equality has to be delivered by the actions of the "multitude" to use a term popular with the leaders of the American revolution. The shift to micro-business, new forms of collaboration on the web and a growing consumer taste for the authentic and self-generated all provide intimations of the sorts of trends - driven by people rather than governments - which could provide the framework within which small equality begins to flourish. What we need to understand far better is how we galvanise and focus such efforts to create a world that our forebears of two and half centuries ago might be proud.
Adam Lent is on Twitter here.