Disparities: Rich & Poor in Times of Austerity

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    • 00:10

      ANDREW SAYER: Hello, everybody.And, yes, this is the flip side, if you like.You've been hearing about various formsof misrecognition, misrepresentation, grotesqueslandering of people alone on low incomes,and living in poor areas. [Andrew Sayer, Professorof Social Theory and Political Economy, Lancaster University]But I think also, there's a kind of misrecognitionand misrepresentation going on of a completely different kind

    • 00:30

      ANDREW SAYER [continued]: as regards those at the top, where they'retreated with deference as specially talented wealthcreators, working 24/7, blah, blah.And I think to critique this, we need what Icall a moral economic approach.So what is that?Well first of all, it sees economies

    • 00:51

      ANDREW SAYER [continued]: like feminist economics and economic anthropologistsdo, as systems of provisioning, thatis providing the wherewithal for us to live adequately or well.And in a sense, all economies are moral economies,because they all have norms and justifications and rulesabout who's allowed to do what.

    • 01:11

      ANDREW SAYER [continued]: Who's allowed to get what, who's allowed to control what, and soon.And even if we don't agree with those particular moralarguments, they are a kind of argument about what'sjust, what's fair, and so on.And what moral economy as a form of study does,is not only describe and explain,but subjects them to evaluative judgments to do

    • 01:35

      ANDREW SAYER [continued]: with well-being and justice.And so primarily, I think the most important elementis examining the moral justificationsof basic familiar economic institutions and practices,especially property relations.And secondarily, if you like, it'salso can be about moral influences on economics.

    • 01:59

      ANDREW SAYER [continued]: You know, how an Islamic society influences the kind of banking,or conversely how economic processes influence morality.How neoliberalism encourages selfishness, for example.And one thing which it does, which may seem strange,is reunited the normative, that is, the evaluative,

    • 02:20

      ANDREW SAYER [continued]: with the positive, that is the descriptive and explanatory.And I say reunite, quite deliberately,because it takes us back to the kind of approachof classical political economy.People like Adam Smith, David Ricardo, John Stuart Mill.In some ways Marx, and many others.Who, at that time, they were free of a common misconception

    • 02:43

      ANDREW SAYER [continued]: which is very popular in social science today.The misconception that if you're going to be objective,you can't have values, or conversely,if you're going to make value judgments, that meansyou're not objective.They didn't labor under that misconception.OK.The graph.One I guess you're familiar with, in many cases.

    • 03:04

      ANDREW SAYER [continued]: This is the last 100 years in the UK,the proportion of total income going to the top 1%.And you can see after the First WorldWar they were getting nearly 20% of total income,and it then fell very sharply, including, interestingly,through the Great Depression, and came out

    • 03:27

      ANDREW SAYER [continued]: in the post-war period, bottomed out about 6%percent of total income.And interestingly, the most successful periodof capitalism, the great post-war boom,was also the most equal.But since then, we've seen the rich roaring backwith a vengeance.And we've had this crisis, and OK, youcan see a dip at the end.But it seems to be, for the time being, at about 12.7%

    • 03:51

      ANDREW SAYER [continued]: of national income.And although I guess many of you know this,I think it's easy to underestimatewhat this means in terms of concentration of wealthat the top.So from the Sunday Times rich list,this is the wealth of the 1,000 richest people back in 1997,98 billion.

    • 04:12

      ANDREW SAYER [continued]: And you can see in the beginning of the 21st century,it roared up to 413 billion.Took a dip in the crisis, but from 2012onwards continued to bounce back.Unlike what happened in the Great Depression.So as you can see, you can see the period of austerity

    • 04:33

      ANDREW SAYER [continued]: here quite clearly.If you divide that figure, 576 billion, what's that mean?By the population of the UK, about 65 million,about 8,300 pounds each.The cost of the NHS.It could fund the NHS for over four years.

    • 04:54

      ANDREW SAYER [continued]: Where are we going to get the money for the NHS, I wonder.But we need more than data plus indignation.We need some analytical distinctions.All these relationships, basic economic relationships,can be unequal.Some are inherently unequal, like landlord tenant, lender

    • 05:16

      ANDREW SAYER [continued]: borrower, employer employee.Some are contingently unequal.They're likely to intersect with other forms of inequality.But they can also exist independently.They can generate inequalities, for example,in a racially ethnically homogeneous country,they still will generate economic inequalities.But whereas is normal, they intersect

    • 05:37

      ANDREW SAYER [continued]: with these other inequalities.They may reinforce one another or maybe contradictone another.And I think that misrecognition, which the first two papers werevery much about, is often very much in responseto the effects of economic inequality.

    • 05:59

      ANDREW SAYER [continued]: And one of the reasons for that is a common belief.Very, very strong in the US, but becoming stronger in the UK,possibly.What Melvin Lerner called "the belief in a just world."We live in a world where, roughly, if you work hardand try hard, you'll do OK.And if you don't, you won't do so well.So you're paid what you're worth, worth what you're paid.

    • 06:22

      ANDREW SAYER [continued]: And it's kind of wishful thinking.Maybe that would sound quite a nice world if it was like that.And so people think it is like that, especiallyif they're doing fairly well.But we don't, unfortunately.And we need this distinction betweenearned and unearned income.It's an old one which has been very conveniently forgotten.And earned income here is defined

    • 06:44

      ANDREW SAYER [continued]: as any income which is conditional on providingsome good or service.Maybe a service which is providedfree like a school lesson, but the teacher's paid.And so long as it directly or indirectly contributesto producing those goods or services, you get paid.You don't get paid for not doing that.

    • 07:06

      ANDREW SAYER [continued]: And then something very different.By the way, I'm not saying that what you get paidis equal to what you contributed.That's unlikely to be the case, actually.But it's conditional upon getting it.And then there's unearned income,which is extracted not on the basis of some kind of exchangeor doing some work, but through controlling assets which

    • 07:26

      ANDREW SAYER [continued]: other people don't have but which they need.And the most obvious forms are land and property intereston loans, money that other people need,which they don't have.If you have it, you can lend it to them,and without actually providing a goods and services for them,doing any work, you can get an income.

    • 07:49

      ANDREW SAYER [continued]: Here's another term I think we should bring back, improperty.Now property, as opposed to improperty,is things like your clothes, and your furniture,and if you own a house, your house, maybe car.If you're self-employed, the tools you need to do your job.Those things which you actually use.But then there's improperty as J. A. Hobson called it

    • 08:09

      ANDREW SAYER [continued]: in the 1920s.For example, not only having a house, but buying some more,and to rent out to people who can't afford to buy them.And there, leaving out maintenance costs,OK, that is a real-- that is providing a good or service.Anything above that is pure, unearned income.

    • 08:30

      ANDREW SAYER [continued]: Something for nothing.And I think we should use this term,but against the right people.Not the wrong people.And so it takes various forms, and actually, Idon't think you need the labor theory of value for this.All you need remember is that mere ownership of somethingproduces nothing.And yet, in the form of improperty,

    • 08:50

      ANDREW SAYER [continued]: it can yield you an income from peoplewho need that thing that you own that don't have it themselves.OK.You may be familiar with that first quotefrom John Stuart Mill about landlords.Classic kind of [INAUDIBLE].And perhaps the second quote is less familiar,but I think it is really important, about where

    • 09:14

      ANDREW SAYER [continued]: this money comes from.It comes from other people.So for example, if you're renting out a place in Londonand it increases 10% in value as it has been doing last year,so you say you make-- I don't know, 100,000 pounds.You make-- you get, sorry.

    • 09:34

      ANDREW SAYER [continued]: That 100,000 pounds can only have valueif there are goods and services that it can buy.And those goods and services haveto be produced by someone else.But you don't have to do anything,that's something for nothing.And sometimes I think, you know how we tell our students,undergraduate students right at the beginning,what you got to do in social science is

    • 09:56

      ANDREW SAYER [continued]: stop taking things for granted-- familiar things for granted.Problematize them.Make them strange.Think how extraordinary this is.And I think as we get older, evenwhen you've been in the game a long time,they can still get blase.And I think this is something quite extraordinary,transferable shares.Almost all the shares which are traded

    • 10:16

      ANDREW SAYER [continued]: are second hand, third hand, fourth hand, and so on.So when you buy shares, the moneydoes not go to the company, it goes to the previous ownerof the share.You are not investing in the company.You're not benefacting the company in the economy.You are buying yourself an entitlementto a stream of unearned income, and the possibility

    • 10:36

      ANDREW SAYER [continued]: of speculative gains from trading the shares.It's something for nothing, and something even more simple.Isn't it extraordinary that you canwork in a firm for all your life and neverhave any say in what happens to the revenue whichyou've helped to produce?And yet someone who has nothing to do with the firm, whoknows nothing about the business,

    • 10:58

      ANDREW SAYER [continued]: can come and buy it, and make you redundant, asset strip it,raid the pension fund, do what they like with it.Isn't that extraordinary?And these are moral, economic questions about social justice,about fairness.And I think that there's a huge literatureon the crisis in sociology and related disciplines which

    • 11:18

      ANDREW SAYER [continued]: has been very useful in giving usan engineering critique of the whole thing of finance,and so on.How it is dysfunctional?How it's contradictory.Well, it is, massively so.But what it doesn't tell you is whether it's fair or unjust,or how it works.What are the implications for well being?

    • 11:38

      ANDREW SAYER [continued]: Those are exactly the things whichclassical political economy focused upon,and which what I call moral economy should try to do.OK.Now, as Tracy said, people want to contribute.Being able to contribute to a communityis a form of human flourishing.We should talk about human flourishing.

    • 11:60

      ANDREW SAYER [continued]: And being able to do work is one of those,and it can include care work.But so many people are prevented from achievingthat basic element of flourishing by job shortages,by lack of funding to help so they can do the care work,and so on.So it's about contributive as well as distributive justice.

    • 12:21

      ANDREW SAYER [continued]: It's about free-riding.[INAUDIBLE] unearned income.It's about free lunches at others' expense,but this time with the rich, not the poor as the target.OK, I'm going to say a bit about working crisis,and this may seem a total change.But if you get in to talk about crisis, the biggest crisis

    • 12:41

      ANDREW SAYER [continued]: that we face, that humankind faces, is global warming.You know, Naomi Klein was absolutely right.And I'm amazed at the complacency in social scienceabout it.You can read tomes on the latest developments in capitalismand its prospects, and there's only a couple sentences

    • 13:02

      ANDREW SAYER [continued]: on global warming.Well, Piketty manages nearly two pages, actually,a very big book.But, anyway.And one of the great illusions isthat it will be all right, because wecan have green growth.But that doesn't work, as has been exposed by Tim Jacksona long time ago, and nobody has contradicted this.Checked it out.

    • 13:23

      ANDREW SAYER [continued]: It is true that for every item that you buy, whether it'sa fridge or a book or a piece of clothing,the amount of carbon embodied is generally lowerthan it used to be.But that's falling at a much slower rate than populationgrowth and spending growth.And actually that bottom figure, the 4.9%,is too, because we've been so slow in switching away

    • 13:46

      ANDREW SAYER [continued]: from fossil fuels.That's probably much too low.And Kevin Anderson, Manchester University,says it needs to be 10% full per year.And of course when it comes to carbon emissions,it's not only the rich but the relatively well-off,

    • 14:09

      ANDREW SAYER [continued]: at least half, perhaps more than half of the populationsof rich countries, who account for them.And who are, quite clearly, from the point of view of justice,need to do most about it.And Kevin Anderson argues that with beingso slow at switching to non-fossil fuel energy,

    • 14:35

      ANDREW SAYER [continued]: that the only way that we can hope to achieve those targetsis if the better off actually cut their consumption.Well, for social justice reasons,I would cut the incomes.Have a maximum income anyway.But we cannot afford to keep buying more and more stuff.And I've been trying to think at a very preliminary way, whatwork would be like in a sustainable economy, which

    • 14:59

      ANDREW SAYER [continued]: would have to be a zero growth, possiblyde-growth economy for a while.Now we're talking about rich countrieshere, not poor ones, where you need growth.And so you have to cut consumption and income,I think, of the rich and well-off.You may say, well, in your dreams.But we have to think through what was would actually

    • 15:20

      ANDREW SAYER [continued]: be entailed to achieve this.We'd have to, as it were, switch offthe growth mechanism, which is basically capital accumulation.Capital accumulation can halt. Net capital accumulationcan halt for long periods of time,capitalism can stagnate without growing.But it's always seeking new forms of investment.

    • 15:43

      ANDREW SAYER [continued]: It's always seeking innovations which willget the edge on competitors.It's got that inherent accumulative drive to it.Co-operative ownership could stillbe providing for markets would be less competitive,because workers will not be so willing to exploit themselves,

    • 16:03

      ANDREW SAYER [continued]: presumably.And also, if you have de-globalization to cutthe carbon emissions, which are very big in transport,air transport and sea transport, then youhave more localized production.Local monopolies, perhaps.

    • 16:23

      ANDREW SAYER [continued]: And lots of things to do with work,to reduce the working week in orderto provide more with jobs.And in order to provide more pay to support carers and so on.There's many, many things.I haven't got very far thinking about this.But if that all sounds terrible, think of business as usual.I love this cartoon.And business as usual is not a good prospect.

    • 16:47

      ANDREW SAYER [continued]: And particularly for young people,this is the future they face, very clearly.And so what I'm suggesting is that it'dbe useful to go back to basics, and we don't perhapsneed some terribly sophisticated analyses of financial crisis,new products and things.It's basic economic relations, and whether they

    • 17:08

      ANDREW SAYER [continued]: are conducive-- whether they are fundamentally sociallyjust and fair, or they're just based upon the use of poweragainst others, the strong taking advantage of the weak.And we need to turn the critique against the rich.Very strongly, that's what I've been trying to do.And think about what global warming-- sorry-- a sustainable

    • 17:32

      ANDREW SAYER [continued]: economy would be like.I'm actually very gloomy.I think we're doomed.But some escape is possible, because as we know,social reproduction is always open to change.It doesn't happen automatically, it depends upon what people do.So there you go.

    • 17:53

      ANDREW SAYER [continued]: Thank you.

Disparities: Rich & Poor in Times of Austerity

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Abstract

Professor Andrew Sayer discusses economic inequality and challenges the moral value ascribed to the wealthy. He highlights the difference between earned and unearned income, and he advocates for a return to classical economics, which could be objective and make moral judgements about what it saw.

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Disparities: Rich & Poor in Times of Austerity

Professor Andrew Sayer discusses economic inequality and challenges the moral value ascribed to the wealthy. He highlights the difference between earned and unearned income, and he advocates for a return to classical economics, which could be objective and make moral judgements about what it saw.

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