Is lobbying fair?

All participants in society have a right to make their views known, and to seek to influence politicians and other decision-makers. In fact, in many ways it is hard to see how politicians and regulators can fairly balance the interests of affected parties without hearing their perspectives. But that need for fair balance is crucial: those reaching key decisions need to hear all perspectives, and they need to be active in thinking whether they are actually doing so, or whether in practice they are hearing only from those with the loudest voices (often a function of having the greatest financial resources) or the most vested of interests – who will always be the ones with the greatest incentive to use all available powers of persuasion.

And decision-makers need to listen thoughtfully and actively to all perspectives in the full knowledge that there is a human tendency to give greater weight to the views expressed by the already powerful and successful. The wealthy have excess influence, through the greater resourcing they put behind expressing their views, but also because their apparent success (let’s remember, it may only be apparent success) lends them greater standing. The voices of ordinary citizens, who may be more fundamentally affected by political or regulatory decisions, are always relatively downgraded. And that’s even before we consider the recent phenomenon of fake grass-roots organisations that purport to represent ordinary folk but instead again promote the interests of the wealthy who fund them – so-called astroturf initiatives.

Even before an assassination attempt, it was clear that we faced oddly febrile times politically, with polarisation and starkly angry social media noise. That surely raises the stakes for all political lobbying, and should require caution by the powerful. It doesn’t seem to have done so far.

These are the reflections inspired by applying fairness considerations to some remarkable analysis of corporate lobbying by the good people at ACCR (the Australasian Centre for Corporate Responsibility). ACCR specifically invited me to think about their analysis of Shell’s lobbying activities – and the apparent gaps in that company’s transparency about it – which came out in March. Forgive me that it’s taken a while to think this one through.

Recent elections may have been fair, perhaps sometimes in spite of their electoral systems. But not all democracy is as well-established or transparent – and even long-standing democracies are not clean of allegations of impropriety (think of the UK’s pandemic era PPE-purchasing scandal, party funding from Kremlin-adjacent oligarchs or the grubbiness of minister Robert Jenrick signing off a housing development shortly after sitting next to its promoter at a Conservative fundraising dinner – in doing so overruling the planning process and the day before a new regime came into force that would have required the developers to pay the local authority £30-50 million to help fund local schools, community centres and other amenities).

Particularly where democracy and transparency are weaker, the powerful have additional influence, and perhaps excess influence. Fairness ought to dictate that they should wield that greater influence with greater circumspection. They should also be more transparent in their activities. Where they do not and are not, they will inevitably create concerns about the propriety and fairness of their actions. Any limit on full transparency may also invite concerns about whether their lobbying efforts are in fact in line with their stated policies.

That’s why ACCR’s findings on Shell are so troubling to an investor, and citizen: the research and shareholder advocacy NGO identifies multiple developing economies where the oil major has been active in lobbying organisations without being fully transparent about it – the title of the research says it all, really: In the dark: gaps in Shell’s climate lobbying disclosures. Given that such a high proportion of the oil company’s future activity will be in these developing economies, this failure to be fairly transparent represents a particular gap.

Source: ACCR, In the dark: gaps in Shell’s climate lobbying disclosures

As the chart shows, the research identifies at least 80 associations of which Shell is a member which conduct climate or energy lobbying which the company does not itself disclose. 45 of these are in emerging economies, and in many of them Shell takes a leading role. The 80 undisclosed memberships are in addition to 98 on which the company does make some disclosure.

The ACCR research identifies ways in which Shell’s emerging economy lobbying has influence both on the demand-side for fossil fuels and on the supply-side. This may be unsurprising given ACCR’s broader analysis of Shell’s strategy and capex indicates the scale of the company’s gamble on gas as a transition fuel. The lobbying includes support for increases in long-term LNG demand in southeast Asia; opposing transition from fossil fuels in China, Mexico and South Africa; expanding production across emerging economies including Brazil, Kazakhstan, Malaysia, Nigeria and Tanzania; and arguing for new exploration as a driver of economic development in Columbia and Namibia. As the study shows, the money spent on this is not visible to shareholders and other stakeholders:

Source: ACCR, In the dark: gaps in Shell’s climate lobbying disclosures

This invisibility bars shareholders from holding the company to account for this expenditure of money and raising questions about its consistency with stated policies. The invisibility also bars citizens from questioning the influence that corporations generally may be having on political and regulatory decision-making.

This company-specific analysis sits within a broader context regarding corporate lobbying and political influence – and I am not in any way intending to imply that Shell is worse than other companies. Investors want more transparency: it’s been notable this year how many shareholder proposals there have been at companies, from the US and elsewhere, seeking further visibility of corporate lobbying activities (some specifically regarding climate change, some lobbying more generally). For example, 41% of the non-founders of Alphabet supported such a proposal, as did 28% of Nippon Steel’s shareholders, 40% of those at Goldman Sachs and 45% of those at Morgan Stanley (once the holdings of Japan’s MUFG are set to one side). Again, I am not intending to imply that Alphabet, Goldman, Morgan Stanley or Nippon Steel are in any way particularly extreme offenders in this regard.

The issue of lobbying and political influence is most notably an issue in the US. Corporate governance guru Bob Monks has long railed at the negative influence of large companies on that country’s politics, and the commensurate limited constraints on corporate power exerted by politicians. He did so in his 2007 book Corpocracy, spectacularly subtitled How CEOs and the Business Roundtable Hijacked the World’s Greatest Wealth Machine – and How to Get It Back. This focuses ire on a US Supreme Court decision, First National Bank of Boston v Belotti, that enabled companies to engage in campaigns on state legislative ballot initiatives – the first step opening the door to full involvement in the political process by businesses. He writes: “today even the political process is largely in the control of corporate masters who fund campaigns, back “debates,” and stymie in every way conceivable their own regulation.”

In the book, Bob further said: “the Belotti decision appears on its face sufficiently absurd as to suggest that reversal is just a matter of time.” For once, Bob’s general prescience failed him, as Belotti was not only not reversed, it was in fact moved further onwards, this time in a federal law context, in the Supreme Court’s later decision in Citizens United v Federal Election Commission. And that case predates the latest successful corporate attack on regulation, facilitated by the Supreme Court: last month’s decision to overturn the 1984 precedent of Chevron v Natural Resources Defense Council, in effect removing the right of regulators to regulate without express Congressional authority.

Bob railed more strongly in 2022’s The Emperor’s Nightmare, a book that is subtitled Saving American Democracy in the Age of Citizens United. Citizens United was the 2010 Supreme Court decision that fully extended the right to free speech assured by the First Amendment to the US Constitution to corporate entities, in effect removing all limits on corporate spending on lobbying and political campaigns. It’s a fundamental human right, but corporations are not humans, only enjoying the benefit of legal personality, so it seems an odd decision to extend the First Amendment right to companies. As the dissenting opinion in the case, written by Justice John Paul Stevens, states: “A democracy cannot function effectively when its constituent members believe laws are being bought and sold.”

Bob spoke even more bluntly in his speech this week to the International Corporate Governance Network (read on his behalf in his absence by CEO of ValueEdge Advisors, Rick Bennett) accepting his Lifetime Achievement Award from that organisation. Entitled ‘American oligarchs prevail’, the speech began “American exceptionalism has been lost…” and identified the decisions in Belotti and Citizens United as the moments at which that loss started and accelerated.

Politics is about finding a fair balance between different interests. The powerful will always want influence – and power and wealth are automatically accorded respect and given extra weight in the way the balance is struck. But fairness requires that the balance is not struck in a way that is biased towards those corporate interests. Fairness further requires visibility and honesty from corporate actors about their activities – and their shareholders are asking for it. Bob Monks argues that bias is now firmly established in the US, and he calls to action investors to lean against this; perhaps that bias, and its pernicious effects, are less well established elsewhere, but without transparency it’s hard to tell.

At the very least, we need visibility on lobbying and the ability to hold it to account, and so limit its influence – probably both as investors and as citizens. Sadly, ACCR’s analysis suggests that such transparency is far from universal. That’s far from fair, and it risks propagating further fundamental unfairness in policy-making.

See also: Was the election fair?

Meritocracy’s unfair

I am happy to confirm as ever that the Sense of Fairness blog remains a wholly personal endeavour.

In the dark: gaps in Shell’s climate lobbying disclosures, Australian Centre for Corporate Responsibility, March 2024

Corpocracy: How CEOs and the Business Roundtable Hijacked the World’s Greatest Wealth Machine – and How to Get It Back, Bob Monks, Wiley, 2007

First National Bank of Boston v Bellotti, US Supreme Court, 435 US 765 (1978)

Citizens United v Federal Election Commission, US Supreme Court, No. 07-2240, 2008

Chevron USA Inc v Natural Resources Defense Council, US Supreme Court, 467 U.S. 837 (1984)

Overruled by: Loper Bright Enterprises v Raimondo and Relentless Inc v Department of Commerce, US Supreme Court, No. 22–451, 28 June 2024

The Emperor’s Nightmare: Saving American Democracy in the Age of Citizens United, Bob Monks, De Gruyter, 2022

Was the election fair?

A member of my family has just discovered that the UK’s first-past-the-post election system brings anomalous results for small parties – at least it does if you compare votes cast nationally with the number of seats won. It may be no coincidence that this individual has gone from supporting one of the main parties – which benefit from first-past-the-post – to backing a much smaller party, which lose out from it. Notwithstanding that, the question they raise is, was this election result fair?

Certainly, the raw comparison between the seat share and vote share percentages suggest that the outcome isn’t fair (note that I have included here only the non-Northern Ireland seats as the unusual politics of that place would add confusion, not least because the listed parties mostly do not campaign there; the Speaker of the House of Commons, whose seat is traditionally not contested by other parties – though no one seems to have told the Greens – is included here as an Independent):

         SeatsSeat share  VotesVote share      Votes per seat 
Labour41165.0% 9,704,65534.5% 23,612
Conservative12119.1%6,826,758 24.3% 56,419
LibDems7211.4% 3,519,199 12.5% 48,878
SNP91.4%724,7582.6% 80,529
Reform UK50.8%4,117,221 14.6%823,444
Green40.6% 1,943,265 6.9%485,816
Plaid Cymru 40.6% 194,8110.7% 48,703
Independent60.9%564,2432.0% 94,041

The votes per seat numbers are perhaps the most striking statistic, what might be called ‘vote efficiency’. Labour clearly benefited disproportionately on this measure, and Reform and the Greens (whose manifesto was happily leavened generously with the language of fairness) were the parties that most lost out. There’s no doubt though that both of those parties were delighted by their tally of MPs and will certainly rate that level of parliamentary representation a major success.

But considering votes on a national basis mistakes what’s going on in a first-past-the-post constituency system – and it’s worth remembering that the form of British elections long predates the invention of national political parties, let alone their regimented form of more recent years. First-past-the-post is all about delivering the single MP chosen by the constituency, and that means localised voting strength is rewarded and national performance isn’t.

That’s why it’s worth considering the Scottish National Party (SNP) and Plaid Cymru performance, whose results strongly outperform those of the other small parties – true even though it was a very poor election result for the SNP. Each of these parties benefit from fighting elections not on a UK-nationwide basis but within their own nations – Scotland and Wales respectively. Plaid’s votes were shared across only the 32 Welsh constituencies, the SNP’s across the 57 Scottish ones. The parties with the lowest ‘vote efficiency’ – votes per seat gained – are the two parties that stood candidates nationally but really had only a very limited number of constituencies where they were realistically competing to win.

Local concentration is why, for once, first-past-the-post seems to have suited the Liberal Democrats – traditionally a smaller party that has fared badly under it, and has argued strongly for proportional representation (arguing that it was needed for fairness reasons, not for their own political advantage). Again, the LibDems happily headlined their manifesto For a Fair Deal – though the fairness language is slightly less universal across their document than it is in the Greens’. The LibDems had a vote efficiency remarkably similar to Plaid Cymru’s, because its votes too were largely concentrated in constituencies where they were competing to win (particularly in the Southwest of England). A large part of that effect was because of tactical voting, with both Labour and LibDem supporters lending the other party their votes in constituencies where the other had the best chance of beating the Conservatives. Labour too was therefore a beneficiary of votes cast tactically in reflection of the apparently widespread desire to oust the Conservatives.

And that’s really the story of this election: it was more about voting against rather than voting for. Just as with the French election a few days later, the clearest message from the electorate was what they did not want rather than what they did. In France, opinion pollsters were shocked when the National Rally (the rebadged, and perhaps reformed, National Front) was beaten into third place – having placed first in the first round a week before, and in the prior European election. Some in the country will no doubt complain at unfairness through manipulation of the candidates left standing following the first round (more three-party contests than usual survived that first round as high turnout made it more likely that third placed individuals met the required threshold of 12.5% electoral support; there were then 48 hours in which candidates could choose to stay and compete in the second round, and many were withdrawn), so that there was a decision simply between the National Rally and a not-the-National-Rally candidate. Yet in many ways, this seems simply to have been an adjustment making the tactical voting decision more clear. The turnout, 66%, and the strength of the support for the not-the-National-Rally candidates, is suggestive that actually the electorate welcomed this clarity and were very willing to vote tactically and oppose the National Rally, voting against something rather than voting for.

Voting against, as well as helping Labour in its contest with the Conservatives – both directly and in the way Reform votes were mainly taken direct from Conservative candidates – also harmed them. In a number of constituencies there was clearly a strong protest vote in relation to the Labour leadership’s stance on the conflict in Gaza. Setting aside the unusual situation of former party leader Jeremy Corbyn retaining his seat against the official Labour candidate, there were four seats won from Labour by Independents, apparently all related to concerns about the approach to the issue of Palestine. In still further seats, independents took votes from Labour, in some cases clearly allowing incumbent Conservatives to survive (not that Sir Iain Duncan Smith, for example, seemed willing to acknowledge that on the night).

It would be welcome of course to have a politics where people are inspired to vote for something rather than simply to vote against. But it does seem that voters understand their electoral systems pretty well and know how to deploy them to get the results they want – even if those results are more about what they don’t want.

That seems fair.

But perhaps it is fair in spite of the electoral system, not because of it. The election results, particularly the vote efficiency statistics, suggest that something isn’t right, and that something will need to be addressed over time. Proponents of proportional representation will need to find a response to the importance placed on genuine constituency representation by the many who continue to favour first-past-the-post, the personal connection between MPs and their locality, and their individual constituents. That’s why something like the modified d’Honte system seems most likely to gain traction (there was an odd moment sometime in the night’s coverage when a Reform representative referenced modified d’Honte and was told by the presenter it wasn’t a good time of night to start discussing such things). It’s already used in the UK – for the Scottish parliament, the Welsh Senedd and the London Assembly – and seems to lead to reasonably fair outcomes, with constituencies electing candidates on a first-past-the-post basis and then other seats filled in a way that ensures the whole elected body is more fully and fairly representative of the weight of votes overall.

For fairness’s sake, something needs to change – and change is also needed because the mindset and approach of the electorate has changed. It seems that mindset can no longer be crammed into the tight election box of first-past-the-post.

Historically one benefit of the UK’s first-past-the-post system has been seen to be the clarity of the results it gives. It’s hard to say that isn’t true of this result, given Labour’s huge majority. But historically that clarity tends to have arisen because of the small number of realistic options between which the electorate could choose. It wasn’t quite a binary choice, but it did sometimes seem that way. The real lesson of this election has to be that the electorate is now much more open-minded about its choices and that five parties that campaign nationally have a genuine chance of winning seats, and a further two are competitive in the 10% and 5% of seats in which they respectively fight. If even independents can win seats, and upset the results in other seats, it’s clear that the electorate’s perceptions of the election process have changed. The electorate’s desires have fragmented, and even with first-past-the-post strongly favouring the larger parties, the electorate has rallied effectively behind other options in many cases.

That fragmentation of desires will need at some point to be reflected in some change to the electoral system. The current system will find itself less able over time to respond to the actual wishes of the electorate, which are clearly very different from the more binary world of the past. While this does seem a result that fairly reflects the wishes of the electorate – for removal of the incumbents, a vote against rather than a whole-hearted vote for – it does seem that soon only some proportional system will be able to capture fairly the wishes of the British people.

I am happy to confirm as ever that the Sense of Fairness blog is a wholly personal endeavour.

Real Hope, Real Change, Manifesto for a Fairer, Greener Country, Green Party

For a Fair Deal, Manifesto 2024, Liberal Democrats

Fairness in the blood

“When citizens have concerns that something has gone seriously wrong, fairness should mean that they get answers.”

The report (all 7 volumes and 2500 pages of it) have the words unethical, unconscionable and wrong echoing throughout – sometimes in the same sentence. This is the devastating report of the Infected Blood Inquiry, released last week, and it is a tough read from which few in authority emerge well. Particularly tough is Volume 2, which relentlessly relays individuals’ stories, mostly in their own words. Unethical, unconscionable, and wrong; in many cases, actions were simply inhumane, indeed cruel.

I had the privilege of being at the launch of the report. Though I am not a core participant in the scandal, being neither infected nor affected in the way the Inquiry’s terms have been drawn, I have followed it closely and witnessed both its start in 2018 and this closure. A good friend at university was one of the 380 haemophiliac children infected with HIV along with their Factor VIII treatment. Thanks to the miracle of antiretrovirals, he survived to 30 but the threat of death – and the stigma attaching to HIV and Aids through crucial years of his life – blighted Dave’s time with us.

The launch a week ago today certainly did provide some closure. As I said to the Inquiry staff, it was clear from the mood in Westminster Central Hall that afternoon that people felt they have been heard and that the truth has now been fully revealed – though, sadly, in both cases this was for the first time.

The quote that heads this blog is from Sir Brian Langstaff’s masterly speech at the launch. The relevant segment is worth reproducing in full:

“The failure of clinicians to tell people of the risks of infection from blood or blood products; the failure to tell people of the availability of alternative treatments; the failure to tell them that they were being tested for HIV or Hepatitis C; and sometimes, the failure even to tell them, or to tell them promptly, that they had been infected with HIV or Hepatitis by their treatment; the failure to explain these devastating diagnoses privately, in person and with sensitivity; these failures were widespread, they were wrong, they were unethical.

“The failures in decision-making that led to the original infections were then compounded by institutional defensiveness, and that’s a pattern of institutional defensiveness that must stop.

“When citizens have concerns that something has gone seriously wrong, fairness should mean that they get answers. People infected with blood and blood products did not. Instead, their trauma has been compounded by the lack of recognition of what happened to them and by a lack of accountability.”

Sadly, too often we have found in recent times that ordinary citizens have had serious wrong done to them and that rather than getting the answers that fairness demands, they have faced assertions that nothing was wrong and a closing of ranks by those with power. I have previously discussed the Post Office/Horizon IT scandal; similar failures of candour have become apparent in other cases. There is a natural human tendency to support and protect your own, both people and organisation. There is a natural human tendency to believe that your organisation has done the right things and not the wrong – perhaps particularly so when the consequences of those wrongs are so devastating. It is these human tendencies that lead to the institutional defensiveness that Sir Brian refers to. For organisations with such power over the lives of ordinary people, such institutional defensiveness must be wrong. Fairness requires that we have systems and leadership that leans against these human tendencies.

I don’t underplay the recommendations that Sir Brian makes with regard to future monitoring and treatment of those still suffering from their infections, for memorials to those who have suffered and in particular on reinforcing the safety culture in health services, notably through the duty of candour and by giving patients greater voice. But the apparent general problem means that his recommendations regarding the defensive culture in the Civil Service and government are perhaps of broad urgency and could have the widest impacts. In essence, though put in careful and lawyerly language, Sir Brian is pressing for statutory duties on both Civil Servants and politicians in government, specifically a statutory duty of candour. His relevant recommendations in full are:

  • The Government should reconsider whether, in the light of the facts revealed by this Inquiry, it is sufficient to continue to rely on the current non-statutory duties in the Civil Service and Ministerial Codes, coupled with those legal duties which occur on the occasions when civil servants and ministers interact with courts, inquests and inquiries, as securing candour.
  • If, on review, the Government considers that it is sufficient to rely on the current non-statutory duties in the Civil Service Code, it should nonetheless introduce a statutory duty of accountability on senior civil servants for the candour and completeness of advice given to Permanent Secretaries and Ministers, and the candour and completeness of their response to concerns raised by members of the public and staff.
  • The Government should consider the extent to which Ministers should be subject to a duty beyond their current duty to Parliament under the Ministerial Code.

I do not think it an accident that the chapter of the report that discusses the government response over decades to the concerns of those infected is called ‘Lines to Take’. The words ‘lines’ is remarkably close to the word ‘lies’, which is what the three key lines proved to be (that the infected had received the best treatment available, that infections were inadvertent, and that screening was introduced as soon as possible). When Sir Brian said at the launch that “all of those claims were untrue” (just following the segment quoted at length above) he received one of the longer of many periods of applause. These lines – lies – were pursued for years even after they had been proven wrong, and the long delay in setting up the public inquiry re-emphasised the institutional defensiveness (Sir Brian makes helpful recommendations on that too).

The memorial sculpture as created at the opening of the Inquiry; by the report launch, it had doubled in size as more individuals had added vials containing their own messages over the years of the Inquiry process.

He doesn’t quite say it explicitly in his recommendations, but it is clear that Sir Brian himself believes that there should be a statutory duty of candour on all civil servants and ministers, that they should not simply be expected to tell the truth but the whole truth, and to flag up the chain where they believe this hasn’t been done. Leadership must welcome such challenge, and not blame those who raise concerns (even if wrong) but rather blame those who know of a matter of concern and do not raise it. He accepts that in some circumstances telling the whole truth may have to be constrained by the public interest, but he expects this to be limited and he believes all those involved need to help “ensure that Government as a whole is candid”.

It’s terribly sad that this needs to be said – that a Civil Service and Government need to face calls and requirements to be candid in their dealings with ordinary citizens. But it is very clear, from this scandal and others, that it does indeed need to be said. And, as Sir Brian says, it is clear that fairness requires nothing less.

See also: Money is not the answer

Unfair trials: justice in the dock

The scandalous Post Office

I am happy to confirm as ever that the Sense of Fairness blog is a wholly personal endeavour.

Infected Blood Inquiry Report, May 2024

Sir Brian Langstaff’s speech, 20 May 2024
I am told that there is no plan to publish a written form of Sir Brian’s remarks, but this is the YouTube recording; the section I quote in detail appears from around minute 51.

Is enough enough? Addressing the problem of the super-rich

“To make the poor richer, you have to make the rich poorer.”

It’s one of the bolder early assertions made in a new book, Enough: Why it’s time to Abolish the Super-Rich, from my friend Luke Hildyard, who leads the High Pay Centre, the think tank dedicated to considerations of pay and employment rights. Given the hours he put into it, he’ll hate that I note it’s a short book, but that means it is a quick read – which its brisk and energetic style greatly assists. It includes extensive references to the evidence of academic and other studies, but Hildyard doesn’t let them weigh down his central messages and arguments.

Much of the book is dedicated to demonstrating the truth of this early assertion. Beyond that, Enough also aims to show that there would be benefits from a more equal income and wealth distribution and that much current income and wealth is unearned and undeserved. It argues that it is possible to address the issue of the super-rich, both politically and practically – but that at present the political will isn’t there and the social pressure for change isn’t yet great enough. “The super-rich are tragically unloathed,” says Hildyard in one of his typically crisp and blunt phrases.

As is perhaps obvious, this is a polemic, using vigorous and direct language to make its points – and it is none the worse for it. It’s also funny. I didn’t expect to laugh out loud at the book, but its dogged pursuit of a thought experiment of carpeting the nation in £5 notes is only one among its amusing moments.

Hildyard also charts a path for addressing the issue of the super-rich, one part of which would be wealth taxes. That particular path became potentially much easier just yesterday when a UN committee of tax experts agreed to develop a clear map for it: the Committee of Experts on International Cooperation in Tax Matters approved guidance for the creation of wealth taxes. This will not be called a ‘model law’ but rather an ‘example law’, but the intent is clear, and the idea of international cooperation in this area is aimed to reduce incentives for individuals to move to avoid such tax burdens. We’ll see how far these proposals progress in practice.

There is clearly some political will, and indeed some general willingness to engage in these issues. If the interest shown by those seeing me reading Enough on public transport are anything to go by, this is a book whose time has come. I would certainly heartily commend it. It was formally published this last week.

In many ways, vigorous and blunt as it is, Hildyard’s language is less hardline than others’. For example, the authors of the wonderful Spirit Level, Kate Pickett and Richard Wilkinson, both professors of epidemiology at York University, recently wrote a comment piece published in venerable journal Nature entitled Why the world cannot afford the rich.

As well as noting the disproportionate greenhouse gas emission impacts of the lifestyles of the wealthy (as previously noted in this blog), Wilkinson and Pickett state: “large differences in income are a powerful social stressor that is increasingly rendering societies dysfunctional”.

They continue:

“bigger gaps between rich and poor are accompanied by higher rates of homicide and imprisonment. They also correspond to more infant mortality, obesity, drug abuse and COVID-19 deaths, as well as higher rates of teenage pregnancy and lower levels of child well-being, social mobility and public trust.”

Most strikingly, the epidemiologists argue that “Even affluent people would enjoy a better quality of life if they lived in a country with a more equal distribution of wealth”. They complain about the wastefulness of unfair distributions: “Inequality also increases consumerism…Studies show that people who live in more-unequal societies spend more on status goods.” It’s certainly clear that this is happening. For example, ultra-luxury carmaker Bentley recently revealed its financial results, making revenues of €2.9 billion on sales of just 13,560 cars (or over €200,000 per vehicle), with margins improved by a record of nearly 10,000 of those vehicles including personalised features costing upwards of €40,000. For these buyers, it appears, it’s not enough to be able to buy a car that costs more than many houses. They also want the additional status of a still more expensive and truly unique vehicle.

The wealthy also buy other trappings of status – like the arts building branding that was part of the focus of the Sackler family in deploying their immoral earnings from Purdue Pharma’s role in the opioid crisis, or political donations. Evidence shows that rarely are such gifts really generosity – something is expected in return (as the reliably brilliant Tom Burgis amply shows in his excoriating new book Cuckooland). Sadly, rarely do the super-rich now feel the need to be genuinely generous in sharing their wealth in the ways their predecessors in earlier generations did. Alms houses are among our most beautiful old buildings, mostly built by our wealthy Tudor or Victorian forbears, but there seems to be no modern equivalent being created now.

This urge towards status skews our whole business sector. When you now look at the market capitalisations of major businesses, it is notable how much more valuable are the luxury goods companies that cater to the demands of a tiny minority than those that provide much larger markets with less luxurious versions of the same products. Germany’s Porsche is valued at more than $90 billion and Italy’s Ferrari (actually listed in the Netherlands to benefit from rules allowing unequal voting rights) is touching a valuation of nearly $80 billion; Ford and General Motors hover around the $50 billion mark, while producing orders of magnitude more vehicles. In a similar way, the valuation of Hermes (around $270 billion) is nearly double that of Inditex, whose major brand is Zara (valued at some $150 billion). The mass market isn’t where the money is made any more: even collectively, the centre doesn’t hold as much spending power.

Pickett and Wilkinson capture their findings in a striking chart that sets the Gini coefficient measure of inequality against an index the authors created of environmental, health and social issues (including measures such as air pollution and recycling; infant mortality, life expectancy, and obesity; and educational attainment, teenage births, social mobility and trust). As they say, “There’s a clear trend, with more-unequal societies having worse scores”:

As an earlier editorial in Nature raged, Reducing inequality benefits everyone — so why isn’t it happening? Essentially, that’s the challenge that Hildyard is attempting to rise to, and he provides some useful answers, and relevant solutions, as well as amusing challenge to the status quo. Do we need to make the rich poorer in order to make the poor richer? Probably, yes. The greatest political challenge on this issue though is likely to be defining what amounts to ‘rich’ or ‘super-rich’ for these purposes. One hindrance to action may be that definitions of what is too much are hard to draw. It’s hard to build a coalition of the willing among those who fear they may be next to face reductions (even if intellectually they might accept the idea that they would benefit from less inequality), and that – for the present at least – seems to limit the political pressure for change.

Hildyard himself blurs these lines, at times railing only and specifically at the truly (absurdly) super-rich, the billionaires, and at other times focusing on broader wealthy groups, including all public company bosses, top lawyers and bankers, and anyone earning in the top 1%, or having wealth among the top 1%. He quotes income of £183,000 and wealth of £3.7 million for the UK, and $400,000 and $11 million respectively for the US, as placing people into the respective 1% groups. These are huge numbers, clearly, but not close to being in the same league as the billionaires. A focus on a loosely defined super-rich elides this challenge – and while Hildyard demonstrates just how much might be available from the individuals at the very top of the income and wealth distributions, were they taxed more effectively (a simple function of their extreme wealth), he leaves open the question of seeing changes lower down the income levels too. This doesn’t undermine his arguments, but clarity is likely to be helpful in garnering political support and leveraging real change.

Hildyard ends the book saying:

“Indeed, it will be impossible to achieve our full potential to build a fairer, happier, more prosperous society without a major rebalancing of incomes and wealth. This ought not to be a question of partisan ideology – the logic, feasibility and urgent importance of the issue are clear. It is time to abolish the super-rich.”

I’d argue that all of this but the final sentence is unarguably true – that last sentence probably remains open to some debate, not least as to where the threshold for super-richness lies.

As the phrase goes, the poor are always with us. It is less clear that the super-rich need to be.

See also: Unfairness in carbon emissions

The centre cannot hold

As ever, I am pleased to confirm that the Sense of Fairness blog is a purely personal endeavour.

Enough: Why it’s time to Abolish the Super-Rich, Luke Hildyard, Pluto Press, 2024

Subcommittee on Wealth and Solidarity Taxes Guidance as of 1 March 2024, UN Committee of Experts on International Cooperation in Tax Matters

Why the world cannot afford the rich, Richard Wilkinson, Kate Pickett, Nature 627, 268-270, 12 March 2024

The Spirit Level: Why Equality is Better for Everyone, Kate Pickett, Richard Wilkinson, Penguin, 2010

Highest Levels of Personalisation Drive Second Best Financial Performance on Record for Bentley Motors, Bentley, 19 March 2024

Cuckooland: Where the Rich own the Truth, Tom Burgis, HarperCollins, 2024

Reducing inequality benefits everyone — so why isn’t it happening?, Nature 620, 468, 16 August 2023