Dead Men Left

Monday, March 21, 2005

A brief tirade about the Economist

I don't buy it, obviously; the damn thing plops onto my desk every week. Every so often it manages to say something useful. Mostly, it concentrates on berating predictable targets - Gerry Adams, Hugo Chavez, the French - and preening, constantly reminding itself how clever it is. Although I suspect it's been toned down since the heyday of muscular neoliberalism, with the odd concession to the touchy-feely style of free-marketeering that New Labour pioneered, the whole self-satisfied, superior attitude that a belief in market efficiency so promotes grates enormously.

That's not what I wanted to get cross about, however. What irritates me to a quite extraordinary extent is that every time - every damn time - the Economist wants talk about Gordon Brown, they seek to demonstrate what a sneaky social reformer he is by using the same graph. It's on page 39 in the March 19th issue, bottom right-hand corner. It shows "Net income, % change, by income-decile group" and appears to demonstrate an extraordinary amount of redistribution taking place under New Labour, with the income of the richest 10% apparently dropping by nearly 8%, and the poorest 10%'s rising by the same amount.

This is, as you might expect, complete and utter bollocks.

First, in small writing, the graph says that these figures are produced " a result of Labour's budgets, 1997-2004". In other words, this isn't showing actual changes in income. The richest 10% aren't earning 7% less than they used to be. Instead, this graph shows by how much, in total, income altered after each budget. That the rich have to pay more tax than the poor and that the poor receive more benefits than the rich is hardly astounding news. At best, it indicates that Brown's budgets have not been as actively perverse as, say, Nigel Lawson's in seeking to transfer cash from the poor to the rich.

Second, the gain in incomes for the richest over the last seven years has been enough as to completely annul even this minimal shift. After falling under John Major's Conservative government, income inequality has risen somewhat under New Labour.

Third, by looking at only income we ignore the huge growth in the inequalities of wealth.

Seven years of Third Way experimentation have failed to deliver. Grrr.