So Rachel Reeves, Chancellor of Britain’s Exchequer, this week abolished the two child cap on benefits said by the Trussell Trust to be “the single biggest driver of child poverty”. Call me a curmudgeon but, while I welcome the move, I’d no more laud its author for it than I would the neighbourhood thug who, under community pressure, has seen the upside in ceasing to relieve little old locals of their handbags.
More to the point here, her budget’s continuation of neoliberal policies benefiting a tiny but powerful rentier elite – which will assuredly reward her on expiry of the purdah period after leaving office – is not only morally indefensible 1 but must further hollow out, if such a thing is possible, any capacity for recovery in UK manufacturing.
For the bigger picture on Reeves’s economically illiterate – if we’re being kind – kowtowing to Big Finance, whose net contribution to real wealth creation is negative, see Why read Michael Hudson? and Richard Murphy’s podcast yesterday, The UK is cursed: how finance destroyed our economy.
Here my focus is a report published on November 20 by the Equality Trust. I refer often – here for instance – to:
levels of … inequality as dysfunctional 2 as they are obscene, and a mortal threat to meaningful democracy
But I do so in broad brush strokes applied to the West as a whole. This report by contrast teases out the mechanisms of that threat – ‘actuality’ is a better fit – in one of the West’s most unequal distributors of wealth. 3
I mean of course the United Kingdom. Over to that Equality Trust report of nine days ago.
Money, Media, and Lords
Introduction
The relationship between wealth and democracy has always been uneasy. In principle, democracy rests on political equality, the idea that each citizen’s voice carries equal weight. In practice, vast wealth inequality has created parallel economies of influence. Obscene wealth increasingly dictates who is heard, what issues are prioritised, and whose interests shape policy decisions. These concerns are not new; classic studies have examined how economic inequalities translate into political inequalities.
Yet despite these alarms, the problem has only deepened. Since the turn of the 21st century, inequality in the UK has rapidly accelerated, overwhelmingly to the benefit of the ultra-rich: the UK’s 156 billionaires now hold £619.5 billion.
Our analysis shows that over this period extreme wealth concentration has hardened into political concentration, as unelected influence has risen sharply over the past twenty years, reshaping the balance between wealth and democracy in the UK.
Large political donations, unelected appointments to the House of Lords, and consolidated media ownership have become conduits through which wealth converts into political authority. The result is a feedback loop: wealth buys access, access shapes policy choices, and policy protects an economic system that allows the obscene accumulation of wealth. As this loop tightens, ordinary people not only lose economic ground, but the political agency to effect change.
Britain’s centres of power are drifting further from public accountability and closer to private wealth. The outcome is an economy and polity that is responsive only to a narrow set of elite financial interests, rather than to the broad public. In practical terms, this looks like policy blind spots on low real wages, housing affordability, and fragile public services.
Key Findings
A twenty-year rise in unelected influence: Our Concentration of Power Index tracks the alignment of party capture, media control, and unelected appointments between 2001 and 2022. Looking at its components: membership of the House of Lords has increased from an average of 676 members in 2001-2003 to 803 members in 2020-2022; large political donations (of more than £250k) rose from £7.6m in 2002 to more than £47m in 2019; the media share of the top three conglomerates rose from 71% in 2014 when the data series began, to 90% in 2022. The Concentration of Power Index synthesises the trends in these key variables into a simple metric, which shows a marked increase and entrenchment in the political influence of the ultra-rich and powerful over the past two decades.
Wealth concentration moves in step with unelected influence: The Concentration of Power Index rises almost exactly in step with increases in the top 1% share of wealth. As the ultra-rich grow richer, political influence, authority, and power increasingly aligns with them.
Wealth, not income, is the main driver: The correlation between political influence and wealth inequality (particularly the top 1% share) is strong and statistically significant, while the same is not true for income inequality. Wealth accumulation, rather than wages, is the more relevant driver of the concentration of power.
Outsized influence is now cemented control: Despite repeated public alarms, the overall trajectory shows no signs of reversing. Britain’s democratic architecture has become more susceptible to unelected influence, now hardening into systemic dominance, while countervailing forces such as trade unions, local journalism, and civic organisations have weakened.
See the full report. At 3500 words it isn’t long; a half hour read, tops, even allowing for study of its few graphs. I forbid skipping the discussion of methodology; specifically, its definitions and metrics for the four core variables: unelected appointments, political party capture, media monopoly and wealth inequality . As usual in such liberal exercises – I see the same in the work of Richard Murphy, superb in many ways but let down by naivete – quality takes a dive in the recommendations section. But yet again baby and bathwater spring to mind. With its report on Money, Media and Lords, the Equality Trust shines a much needed beam on places our rulers and their media 4 prefer kept in deepest shade.
* * *
- Says Owen Jones, in a budget post–mortem three days ago with economist Richard Meadway, Reeves has done nothing to alter the reality of wage/salary earnings being taxed, once regressive taxes are factored in, at 40%; profits at 15%.
- While the focus here is on the incompatibility of high levels of inequality with democracy in any meaningful sense, let’s not overlook entirely the economic dysfunctionality. When Western governments pumped trillions into QE, after the 2008 crash, they bailed out the crooks too big to jail. That the morality stinks goes without saying. (Not for nothing did Obama brag to a gathering of creditor dons that only he stood between them and “the pitchforks”.) But had those funds flowed into the pockets of labour sellers, directly or as debt relief, the economic impact would have been vastly more efficacious. Unlike the 1% – who hoard, speculate or bid eyewatering sums at Christies and Lucien Paris – the rest of us cannot but spend in ways that cannot but boost the real economy.
- Today in Aldi – one of the few supermarkets not supplying Israeli produce (others being Morrisons and Co-op) – Jackie bought a joint of lamb. It bore a security tag, the kind only a store assistant can remove and once reserved for high end items like Chanel No 5 or a 12 year old Talisker. Most supermarkets have now reduced, at some inconvenience to the customer, the number of store exits. In such small tells I see the growing impoverishment – who but the most desperate mother would risk prison by shoplifting the Sunday joint? – of my country as its most affluent have gotten, especially since 2008, more obscenely opulent. Like the food banks and tent cities, the beggars on every high street and the jails run for profit, things once unthinkable now barely raise an eyebrow. You can get used to anything after a while. Just as, when the Tweedledum/Tweedledee bankruptcy of the UK charade of democracy sweeps Nigel Farage and his Neanderthals into office on a wave of wildly misdirected hope, we’ll get used to fascism of creeping or galloping stripe.
- Speaking of corporate media, I welcome the report’s emphasis on monopoly ownership but regret its neglect of the pernicious effects of advertising and rich sponsor reliance as discussed here and here.
What we need is democracy, aka ‘sortition’. ‘Representative’ democracy was recognised in ancient Athens as a direct pathway to oligarchy, which is what we have. (Optionally, you can call it kleptocracy).
Are you sure it was ‘representative democracy’ that did this, Jams? I’m all for the real deal, as in the Russian Soviets till their abolition by Stalin in the 20s, but in The Collapse of Antiquity Michael Hudson makes a powerful case for the unchecked rise of unforgiven debt – which increases exponentially while wealth creation, from which debt is repaid, rises logarithmically at best – as paving the way for creditor oligarchies past and present.
Before such oligarchies became entrenched in Greece and imperial Rome, he shows, the traditional check was a king sufficiently powerful to impose debt cancellation. I consider the modern equivalent the ‘authoritarianism’ of China and perhaps Russia, in their greater control over finance capital to ensure it serves the state and not vice versa. That liberals and much of the Left in the West – fondly believing ours to be flawed but more or less functioning democracies – could write on the back of a stamp all they think they know of decision making in those countries does not stop them, to the delight of our rulers and their agenda setting media, vilifying those ‘regimes’.
I guess this is a chicken-and-egg affair, or vicious circle, but like any good materialist I see at the end of the day the financial power of a creditor caste as preceding and giving rise to its political power. That said, I suspect me ‘n thee are as one on the utopianism of the proposed remedies of an otherwise worthy report.
I’d have to unearth a few books to allow me to argue my remarks properly – maybe later. In the meantime, as far as I remember, in early Athens, Solon, who was not a king but I think one of the ‘nobility’, was invited to re-organise the whole political system (probably because of the debt problem), and as part of that did indeed arrange to forgive all debts, but unfortunately for the general populace, this was a one-off event. Later (in the lifetime of Socrates) they experimented with sortition, and it did ok until the aristocracy got rid of it. During that time ‘representation’ rather than ‘direct’ democracy was, I’m pretty sure, regarded as a stepping stone to oligarchy. But that doesn’t really contradict much of what you or Michael say, or the importance of indebtedness leading to oligarchy.
Like I said Jams, the relationship is chicken-egg-chicken; what the report calls a ‘feedback loop’. But I bow to your erudition on the ancients and welcome the fruits of any further inquiries by you.
In the meantime …
Not only democracy, but also civilisation itself:
https://heininger.substack.com/p/through-the-looking-glass-the-wests
To paraphrase (thank you fustyducker BTL at SONAR21):
“western “civilization” took a foul turn way, way back in Rome’s era of global conquest…and has been rotten to the core ever since. Rome’s imperial model—conquest for extraction, military domination over productive development, transformation of citizenship into imperial privilege—set Western civilization on a path fundamentally opposed to human flourishing. Western imperialism over the past five centuries represents the Roman model scaled globally—extraction from periphery to core, military force to maintain unequal exchange, financial domination as the successor to direct conquest.
That odious foundational model has now reached its terminal stage. Rather than adapt to this new reality—rather than accept multipolarity and seek cooperative development—the West’s response is to declare all the rest of the world its enemies. To manufacture threat narratives, to mobilize trillions for war preparations, to refuse diplomatic accommodation, and to reject multipolarity as intolerable.
Ordinary Americans who can’t afford healthcare, whose children are drowning in student debt, whose infrastructure is crumbling, whose communities have been hollowed out by deindustrialization—are being told that the real problem is China and Russia. That we need to spend trillions on weapons. That war preparation is necessary and prudent.
This is what empire looks like in its death throes: irrational, dangerous, and determined to take the world down with it rather than accept decline gracefully. Trump epitomizes everything foul about the entire rotten edifice.
The Alice in Wonderland quality of current events—where up is down, threats are manufactured, and trillion-dollar mobilizations are justified by enemies who pose no existential danger—represents the final stage of a civilizational model that made a very wrong turn two thousand years ago!
The only question now is whether the rest of the world can contain the damage as the West thrashes about in its dying rage. Because make no mistake: what we’re witnessing is the deadly temper tantrum of a failing hegemon that would rather destroy everything rather than accept that history has moved on and left it behind to rot in its own filth.”
While the controlling oligarchy in the West is re-feudalising its domains (re-setting the calendar back to the 15th century), de-industrialising, borrowing like there’s no tomorrow (because in their eyes there is no tomorrow without them) to fund a war against the rest of the planet in order to impose their backward system, here is what a real civilisation is doing*:
https://www.youtube.com/watch?v=LaaK8Z-Quqc
*Which is why I’m off for a look to see for myself come October next year.
You took the words right out of my mouth, Dave. We can of course substitute ‘westerners’ for ‘Americans’ in your first paragraph.
Just to be clear, these are not my own words but those of a BTL commentator summarising the contents of the linked article.
I am merely acting as the re-broadcasting node.
Well your high fidelity relay service took the words right out of my mouth then!