Can Ideas Get Us to a More Equal World?
By Max Lawson
Head of Inequality Policy at Oxfam International & EQUALS Podcast co-host
‘The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas. Not, indeed, immediately, but after a certain interval; for in the field of economic and political philosophy there are not many who are influenced by new theories after they are twenty-five or thirty years of age, so that the ideas which civil servants and politicians and even agitators apply to current events are not likely to be the newest. But, soon or late, it is ideas, not vested interests, which are dangerous for good or evil.”
This is the last half of the last paragraph in John Maynard Keynes’s book General Theory of Employment Interest and Money. I have often thought about it. For anyone interested in ideas, it is a comforting thought. But perhaps because of this it should be treated circumspectly.
One dark trend that Keynes misses is that ideas themselves can be beholden to vested interests. Perhaps academia was more independent in his time. Think of the way scientists have been paid to cast doubt on the dangers of smoking, or the existence of climate change. Economists are amongst the worst, with many of the world’s leading economists having their research sponsored by Wall Street, and not even declaring it. This was exposed by the Oscar winning documentary Inside Job. American academics can even testify in congress without disclosing if they have been paid to do so. If you have enough money you can buy ideas.
But nevertheless, I do think that ideas can have huge power to change the world. This is especially true when they become seen not as just one set of ideas, but instead as common sense. In the last forty years the neoliberalism has gradually become understood by many as common sense, as the only way of doing things. This has important implications for inequality. It means even if we can demonstrate, as the IMF has done, that neoliberal economics increases inequality, people do not believe there is any other way of organising our economies. So, anything that challenges this set of ideas, and begins to replace it with alternative ideas about fairer ways of organising things, has to be a good thing.
Economics to change the heart and soul
Central to ideas becoming common sense is when they influence values and emotions, moving beyond the rational. Speaking to the Sunday Times in 1981, Mrs Thatcher declared: ‘Economics are the method; the object is to change the heart and soul.’ Her objective was to make the UK public more individualist, to value individual progress and competition far more.
The Economist magazine has a circulation of around 1 million. These are arguably one million of the most powerful and influential people in the world. I remember being in Washington DC and walking to work through the streets of expensive brownstone houses near the White House and the Economist had been delivered to almost every doorstep. The Economist are also generally known for being socially and economically liberal. They are big fans of neoliberalism. On one book I have about the history of neoliberalism the supportive quote from the Economist on the cover reads, ‘A great history of a great idea’.
So when the Economist starts to discuss the benefits of neoliberalism and other ways of organising the economy it is a big thing. Part of the problem with the inequality crisis is that the market is producing much greater levels of inequality in the first place, meaning that the power of taxation and spending to mitigate this is unable to cope. So a key part of reducing inequality is to try and design the economy so that it has fairer outcomes in the first place. This was an important theme of our paper, ‘An Economy for the 99%’, and our work on the future of business. There are lots of great ideas on how this can be done, like co-operatives, using government procurement to push for higher labour standards and taking out-sourced services back in house at municipal and national levels. Others include moving away from the dominance of wealthy shareholders, to prioritise investment and higher wages for workers.
There has been a brilliant series run by Aditya Chakrabortty in the Guardian on many of these ideas. To see these taken relatively seriously by the Economist is I think a key measure of the shift away from neoliberalism. But maybe I am too optimistic. It would be great to know what others think. Neoliberalism became the dominant set of ideas with the direct help of vested interests. In contrast, new ideas about a more collective and fairer way of organising our economy will not benefit from such help. In fact, vested interests will probably do their best to stop these ideas. But I still think we have passed ‘peak neoliberal’. These alternative ideas are beginning to gain traction, and that is exciting, and it is vital to ending the inequality crisis.
Barcelona and the dream of a fairer world
I was in Barcelona at Oxfam Spain for meetings on inequality a couple of weeks ago, with inspiring colleagues from all over the world.
I have always been deeply interested and moved by the Spanish Civil War. A new book was recently published on the topic, called ‘Spain in our hearts’ by Adam Hochschild. He is a great author. He has written brilliant books on the campaign to end slavery and the actions of King Leopold in the Congo.
His one about Spain does not disappoint. A Republican government democratically elected in Spain was overturned by a fascist military coup in 1936. The coup leaders, who were fascists, were enthusiastically backed by Hitler and Mussolini, who sent tens of thousands of troops and the most up to date arms and weaponry. The British government pretended to be neutral but tacitly supported the fascists and the US and France also refused help to the Republican government. Undeterred, ordinary people from all over the world made their way to Spain to fight fascism, side by side with the Spanish Republicans.
At the same time as the Republican government was fighting for its life, a social revolution broke out in Catalonia, centred in Barcelona. Anarchists took over much of the economy. The dining room of the Ritz hotel was turned into a people’s canteen.
Even the barbers of Barcelona formed their own anarchist collective, and had a poster celebrating their freedom.
In the face of far stronger force, the Republic was crushed, and Spain lived under the dictatorship of Franco until 1975. Tens of thousands were murdered after the war often buried in unmarked graves. In Spain it remains a very contentious topic and is rarely discussed, and there is no museum about the war.
Meanwhile events were over taken by World War Two, when Britain and the US finally woke up to the need to fight fascism. With the rise and rise of the far right in so many of our countries, the lessons of the 1930’s are so relevant. It is so easy to dismiss a threat before it is too late.
This is one of the most famous songs about the Spanish Civil War in English, by the Irish folk singer Christy Moore, celebrating the Irish who went to fight against the fascists, despite the catholic church enthusiastically backing Franco. It is a beautiful tribute to those who often gave everything to fight for freedom and or a fairer world.