Inequality

There is a fascinating article over at CiF about how the middle classes in the UK are now more concerned about equality because of the growth of a class of super-rich people immediately above them.

It is really rather disgusting to hear that physicians and architects are complaining about inequality but don't believe that their money should be redistributed to the poor (i.e. households earning less than £16 000 a year).

There is an interesting quotation, apparently from an Oxford study, that claims that the middle classes would only support a reduction of inequality as long as the middle class was expanding.

"There was a big expansion of the middle classes from the 60s to the 90s, but the academics warned it was a one-off event. From now on, any upward mobility would have to be matched by someone else's downward mobility."

From this you could deduce that civilization has become a zero-sum game. Those who benefit from the growth of the economy are only those in the top strata of society, and anyone who gains does so at the expense of someone else.

I've always suspected that Labour was using stealth tactics to redistribute wealth (the EMA, tax credits etc) without telling the middle classes, who would have to supply the money. Labour can keep Daily Mail readers happy by being authoritarian and pro-"British" and funnel cash to poor children and families.

I don't know if we're entering a new gilded age or if there will be some market crash that sees a swing in moral authority away from the rich towards "aspirant" middle class people, such as happened after 1929.

Game Theory and Northern Rock

There is a fascinating article over at Slate Magazine at the moment that places the recent crisis of confidence over Northern Rock in the context of game theory.

The article refers to a classic game theory problem of hunting stag versus hunting rabbits. Although half a stag is worth more than a brace of rabbits, hunting stag requires you to cooperate with another hunter, so the outcome relies on your trust in the skill and intention of another hunter. Hunting rabbits carries no such risk.

The people withdrawing from Norther Rock were hunting rabbits. They knew that there wouldn't be a big problem if no one chose to withdraw their savings from Northern Rock, but as everyone did (or rather the impression was given that everyone was) they were compelled to withdraw themselves, exacerbating the problem.

The key point the article makes is that the main difference between rich countries and poor countries boils down to the confidence people have in "the system." In the reliability of the state, the law, and the money.

So much that I take for granted is based on promises made by various organisations. I know my money will be safe and available for conversion into material assets because a company (my bank) tells me that this is so. I know that I am safe from foreign invasion because the state tells me this is so. I know the state will not harm me because the state says this is so. I know this post is available to millions, should they seek it, because Google says this is so. I know my computer is secure and functions satisfactorily because Microsoft says that this is so. I know that when I queue up behind someone I will be served immediately after them, I know this because social convention says it is so.

No one is an island. States and companies are superhumans in their sheer capability. I don't think ideological anarchists stand a chance of living in a world where their ideals are realised. We are all interdependent. It's like that Bob Dylan song: sooner or later you gotta serve somebody.

This is all fairly depressing. But at the same time it is fairly comforting. I am always going to be part of something, whether I like it or not.