Why are we such an unhappy society? Socialists blame capitalism. Capitalists blame an over-mighty state. Populists blame other people, especially foreigners. But two scientists, Kate Raworth and Kate Pickett, from very different backgrounds, offer an alternative view. We are trapped by the illusion of growth and by structural inequality. Together they offer a powerful analysis.
The outer circle: the limits to growth
The economist, Kate Raworth, invented the idea of ‘doughnut economics’. Her ‘doughnut’ is two concentric circles. The inner one represents what is required to ensure that everyone can lead a decent life, while the outer one is the limits of resources available. A stable economy exists between the two. We are breaching both.
At the outer edge, we have run up against, and in some cases beyond, the resources available, globally and sometimes nationally. Despite this, the illusion of endless growth still dominates the economic thinking of most governments. It is the main aim of our own government.
She argues that an economy is a kind of organism. Like all organisms, they begin small and grow. But when an organism reaches maturity, it stops growing. Beyond that point continuing growth is a disease: we call it cancer.
When Adam Smith founded modern economics in the late 18th century, the UK economy was beginning an adolescent growth spurt. Natural resources seemed unlimited and the possibility of humans making any lasting impact on the environment was remote. But we long ago reached maturity. It is very clear that the capacity of the planet to sustain its populations is limited. And in a variety of ways humanity has already breached the outer circle of the ‘doughnut’. Our current and projected use of resources is unsustainable.
The inner circle: a decent life for all
There are still countries which need the growth spurt which would allow them to reach the stable state. But ‘mature’ societies like ours should be seeking stability, not endless growth. Our real problem is with the inner circle. While some of us are pushing against the limits of sustainability, many are still falling far short of minimum living standards. This inequality is the cause of much of unhappiness in our society. It is the question which Kate Pickett addresses in her latest book The Good Society: and how we make it.
In her previous book The Spirit Level, written with Richard Wilkinson, she drew on a mass of data to demonstrate the relationship between inequality and social problems. They looked at physical and mental health, life expectancy, substance abuse, violence, crime and homicide, educational performance and illiteracy, social mobility, teenage pregnancy, levels of trust and civic engagement. And all these problems were consistently worse in countries with higher levels of inequality. Inequality is not the result of our social and economic problems; it is the cause of them.
Patching up is expensive
Critically, she argues that we in the UK spend huge resources patching up the damage that arises from our failure to fix the fundamentals. It would be much cheaper in the long run to fix the underlying issues – and at the heart of those is inequality, especially of income.
She presents the argument with a metaphor. In an unequal society, the people who do worst are like people on a cliff top. They fall over the edge and we provide expensive ambulances and hospitals at the bottom to put them back together again. But if we could build fences on the cliff edge, the result would be better for them and much cheaper for all of us. Fences are cheaper than ambulances.
She catalogues the extraordinary range of expensive ways in which we try to patch up the consequences of inequality. For example, public health experts agree that the most effective way of reducing the cost of our health services would be to improve the income of the poorest. That is because poverty generates stress, and mental and physical ill health.
These not only put pressure on the NHS; they also impact parenting, which in turn generates problems for the education system, which then feeds under-qualified people into the labour market and, for some, a life of crime. We have an epidemic of obesity, not because people don’t know what healthy eating looks like, but because they are poor: they can’t afford the ingredients or the time to prepare.
Similarly, poverty encourages people to turn to crime (and poor people are disproportionately victims of crime). In response, we send people to prison. But although we lock up more criminals than most developed countries, we don’t have less crime. And, by any test, prison does not work: a year in prison costs more than a year at Eton, but within a year of release a third of those prisoners are back inside.
We do worse than our neighbours
In her latest book, Pickett explores the international comparisons. She presents clear evidence on health, care, education and justice. No country has got all these things right. But on each of these issues there are countries that have done better than Britain.
But there is an exception, which proves her point. Having identified the long term benefits of investing in the earliest years, the Blair government created Sure Start, to provide intensive multiagency support to new parents and the youngest children. The evaluation shows benefits in educational performance, in the physical and mental health of children and parents, and indirectly in reductions in violence, crime and unemployment. But these all take time to produce results. And they are difficult to fund because the savings are often not made in the departments that paid for the scheme. And it fell victim to the austerity programme of the Cameron government.
Imagining a better world
So, we continue to pay for ambulances to patch up the people who never needed to fall off the cliff in the first place. It is a very expensive strategy and making the ambulances more efficient is not a good answer.
But changing our models is not a small task. It requires radical political imagination and long-term commitment. The last decade shows that our political system is poorly equipped for either. But perhaps the time to try has come. At the end of her book, Pickett explores two radical recommendations: universal basic income and wealth taxes, which I will discuss in future articles.
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