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Inequality and discontent

Ralf DahrendorfRalf Dahrendorf, author of numerous acclaimed books and a former European Commissioner from Germany, is a member of the British House of Lords, a former Rector of the London School of Economics, and a former Warden of St. Antony's College, Oxford. His last article on Webdiary was Elections are not enough.

by Ralf Dahrendorf

In the last two decades, the world as a whole has gotten richer, but, while some national economies have advanced sharply, others have fallen farther behind. The increase in aggregate wealth has not led to the abolition, or even reduction, of poverty.

Much the same is true within countries. Almost everywhere, globalisation has produced both a new class of multi-millionaires and an underclass comprising people who are not just poor in the statistical sense of earning less than half the national average, but who are excluded from opportunities that are supposed to be open to all. Globalisation’s dynamism has benefited many, but it has also increased inequality.

Is that necessarily a bad thing? There are many who think so. In fact, entire countries have a built-in egalitarian streak. They dislike the business leaders who take home huge sums even when they fail, and they hate to see poor and excluded people in their midst.

But, while it is comfortable to live in the social-democratic world of Scandinavia, Germany, and other European countries, many of them have purchased their equality on credit from future generations.

Moreover, an egalitarian climate does not promote innovation and a sense of dynamic development. Creative individuals tend to leave societies in which there is strong pressure not to be different. Inequality is not merely compatible with freedom, but is often a result of and stimulus for freedom.

Is that the choice we have to make then: freedom or equality? Things are not quite so simple. A free society recognises two limits to economic and general inequality. Both raise quite difficult practical questions, though they are clear in principle.

Inequality is incompatible with freedom if it limits individuals’ chances of participation in the political community, in the market, and in civil society. At the lower end of the social scale, this raises the old and vexing question of equality of opportunity. What is clear is that everyone must have access to elections and political parties, to education and the labour market, and to the associations of civil society.

In short, citizenship in the full sense of the word requires basic rights and the ability to enforce them. It also requires a basic economic status, including an income guarantee, which can be provided in a variety of ways.

One difficult question is where, exactly, to draw the line that defines the basic status to which all citizens are entitled. In most countries, it should probably be higher than it is now. Another difficult question is how the basic status is to be guaranteed. The debate about individual income supplements versus general public services has become lively everywhere. It may well be resolved with different answers that accord with different countries’ traditions, although tax credits and similar additions to people’s incomes are more compatible with free societies.

At the upper end of the social and economic scale, a different issue arises. Many people object to business managers who take away in pay, bonuses, and stock options hundreds of millions of dollars from their companies. Indeed, there is a legitimate question whether the behavior of today’s capitalists promotes the general acceptance of capitalism. But individual wealth becomes a problem only if and when it can be used to restrict others’ chances of participation.

When wealth turns into unchecked power, something must be done to restrict it. What has come to be called money laundering, that is, the attempt to turn illicit gains into legitimate riches, provides one example of the need for action. There are others, including the question of inheritance taxes, which have long been regarded as a necessary component of a free society.

Nevertheless, while a free society recognises limits to inequality, it also accepts that inequality exists, for it provides hope for many by showing what one might achieve with ability and luck – or perhaps even luck alone. Inequality adds color and variety to societies; it is one of the marks of lively, flexible, and innovative countries. It is thus not bad in itself, even if its excesses must be capped in the name of citizenship for all.

Social exclusion and personalized power through wealth are always unacceptable. But if we want freedom, then social and economic inequalities are a legitimate, and necessary, price to pay.

Copyright: Project Syndicate/Institute for Human Sciences, 2006.
www.project-syndicate.org
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Phil Moffat "Cheers mate,

Phil Moffat: "Cheers mate, have a great Australia Day and I hope the weather is just as you like it so you may enjoy your afternoon swim"

Thanks and you too. If I owned a flag I might be out waving it or wrapping it around a Waverley Councilors head!

I guess I will just have to make do with a BBQ and one or two quiet ones. Don't know if it is advisable to go for a swim afterwards though.

Decent and caring

Jay White, just a quite thank you for your thoughtful and considered reply to my questions. I do respect your feelings regarding our flag and one could not argue those feelings have originated from that place inside you that is decent and caring.

Cheers mate, have a great Australia Day and I hope the weather is just as you like it so you may enjoy your afternoon swim.

Public v Private debt

Mark Ross (re “If you read my post you will see that external debt is the sum of private and public debt”), that’s fine but gross private debt alone is still a largely meaningless stat in regard to a nation's (or anything really) financial position. I’m not questioning the source, rather the relevance of the statistic. The implications from public and private debt are not the same.

C'mon Gareth

Gareth, please don't try to be slippery with me.

If you read my post you will see that external debt is the sum of private and public debt. I made that as clear as the English language will permit.

Private debt is our trade deficit, though that's a simplistic way of defining it. My information is from the same source that you quoted.

The question of the World owing 12.7 trillion USD also struck me as odd. If you think this is enough to discredit my post of last night, then, since I used your sources, you'll have discredit yours as well.

Deal?

As for borrowing money overseas and buying shares overseas. If the shares gave returns equivalent to the cost of servicing your debt, then, as you indicated, your financial position would not have changed. If your shares perform well, any profit you made would increase Australia's GDP.

If you bought shares in Australia, from Australian companies, and that capital was used to supply Australian goods or services to the overseas market, then you would definately have helped out our GDP.

I have stated in other posts that I'm not an economist and I feel that I'm getting close to the limits of my understanding on the topic. However, I feel that I have reasonably explained the basics of external debt and how it's an important indicator of fiscal health.

Craig Rowley would probably be much more capable than I to explain the finer points of issue.

Freedom v Equality

Andrew McRae, I think we need to agree on a definition of freedom and equality. Here’s my take.

Freedom: To the extreme this means complete anarchy. In philosophy it is opportunity.

Equality: To the extreme this is humans as robots, everyone gets the same everything. In philosophy it is results and what is fair (another messy term to define).

I’ll give some examples to illustrate how I see this being framed, they show how freedom and equality are not mutually exclusive, but may need to be traded off.

Tax: to an individual any tax is a reduction in freedom (opportunity), with more tax, less freedom. However taxes can impact equality in either extreme, for example a fixed tax (i.e. everyone pays the same amount) or even no tax would reduce equality. Conversely a strong progressive income tax should improve equality. A progressive tax is a perfect example of where freedom is being traded for equality.

Law: Laws, rules and regulations all curtail personal freedom (I’m certainly not saying laws are a bad thing). Most are in place to ensure a degree of fairness and equity. Once again trading freedom for equality.

I think my assertion is most correct in relation to monetary/economic measures of personal freedom and equality.

Mark Ross, regarding your point about external debt, it is important especially for the currency market. It is a good way to estimate future money flows between nations, however I don’t believe it is a very good indicator of a nations financial position. Gross external debt on its own is meaningless, if I borrow money from overseas and buy an asset (maybe shares?) my financial position hasn’t changed but I have increased Australia’s external debt. I should also note the first item in the list states that the World owes 12.7 trillion USD, does that mean anything? Who do we owe that money to?

Graeme Finn...

Graeme Finn: "I would rather judge people by their actions than the piece of cloth they hide their prejudices and dirty politics under. It's just another convenient wedge to trot out when faced with things that really matter".

So I take it from that you are happy with the flag as is? I mean it is only piece of cloth isn't it?

If you want prejudice look no further than some of the types of people on Waverley Council. I mean you would not want to put anything up that could attract for whatever reason (in hushed tones) those other people. In fact some could say that the flag may operate similar to a fast food joint like say a McDonalds or Starbucks? They don't think much of them either.

Best put in more parking meters!

Flag divisions

Jay White, you are using the flag to be divisive. In fact most of your posts are full of insults and childish slurs that serve no other purpose than be divisive. The sort of self righteous patriotism you display is exactly why I am not a flag waver. I would rather judge people by their actions than the piece of cloth they hide their prejudices and dirty politics under. It's just another convenient wedge to trot out when faced with things that really matter.

Mark Ross “BTW, Canada

Mark Ross “BTW, Canada owes $0.19 of every $100 it earns. Bloody socialists!

Soon not to be! All is not well in social paradise.

Phil Moffat “On another thread I did mention what our flag represented to me and personally I feel our weather at the moment is crap. It would, however, be rather unnecessary of me to blame that on John Howard. You see I hate hot (over 28C) and humid weather“

Like it between about 28 and 32. I enjoy an afternoon swim during daylight saving.

Now about the flag business. I have never been much of a flag waver myself and never really thought much about it until recently. I always just felt a quiet respect for it and not much more as I thought most people did. However the last year has proven me very wrong.

Now we have always had radical loons who do not like the nation's flag for one strange reason or another. I have always seen this as the some mothers do have 'em syndrome. However in the last couple of decades we have been seeing the rise of the symbolism flag haters. You know Phil the ones that always tell a person that it is only “cloth with colours on it” but yet it still seems to be important to change the colour to suit which ever way a person wants to see this country.

Well personally I do not have a problem with this. I will respect whichever flag the "majority" of Australians wish for. My only point would be that it is not divisive and that a majority agrees to any change. Let's just say if there must be a change there must be a vote I would not be happy with a panel stacked with every media tart, village idiot and usual rent a crowd obnoxious yokel Australia has to offer, making the decision for me.

Having got past that point I can now say I see the Australian flag in whichever its agreed upon form as a uniting force. Hence my disgust with the Waverley Council decision to make a public statement by not flying it. In fact so cowardly was their decision they gave into criminals such as the mug gaoled for not only stealing one and destroying it, he also took it from a RSL club of all places. Making a statement of not only what he thinks of this nation but the people who have died to make and protect what it is.

As for this utter crap put around by some that the flag itself is divisive and patriotism is to be shied away from I find this the strangest suggestion of all. These people often make the complaint that Australia is not a fair go society. In truth this is correct to an extent. Australia like every single nation on earth has always been this way and it always will be irrespective of who leads it. Any adult that still believes life is always fair and it is their right for it to be this way seriously needs to get out more.

In truth the Council of Waverley are dividers whether they have the intelligence to work that out or not. They are excluders by the very fact they made a statement that they are in some way frightened of attracting the wrong kind of people. One thing all Australians have in common rich, poor, smart or dumb, born here or somewhere else, from Cronulla or Lakemba, Tasmania or Turramurra, Bondi or Bathurst we are all represented by the one symbol. Waverley Council chose not to be a part of that and pretend in someway they are made of different stuff.

Now the greatest rise and probably the biggest danger to this place is the rise of the nimby. Waverley through their fights against what they perceive to be outsiders (getting bigger by the day) is legendary however with this they are not alone. It is a plague spreading across the nation and it is the suburb siege mentality. My joints alright so stuff everybody else! Strangely when it comes time for the money to be shared about these places are again part of Australia.

I believe in individual rights very strongly. I also believe that the rights of the nation and the best interests of the nation take precedence over any suburb or state. That is what the flag tells us all only if on occasion when we choose to notice. We are all living in the same suburb, a suburb with a population of around twenty million.

Interesting Cronulla has been said to be about tribes and exclusion. Take out the violence and I see little difference with Bondi. By the way what are Waverley Council going to do during the football World Cup? Ban all Australian and Brazilian flags? These people sure do represent a element of Australian society, the nationally embarrassing element!

Put your flags away

Don't get too excited about our public debt. It only tells a fraction of the story.

Public debt is money borrowed by government for internal spending on such things as health, education and infrastructure.

If you want to know what Australia, as a nation, owes, then you need to include private debt as well. This forms what is called external debt, which can be paid for in cash or by trade.

Here is a listing of total foreign debt for most countries in the world and here is a partial list as a % of GDP. As you can see, when you include or trade deficit, we owe $38.17 of every $100 we earn, which nestles us comfortably between Afghanistan and Angola. At least we're beating the Kiwis ;)

BTW, Canada owes $0.19 of every $100 it earns. Bloody socialists!

Gareth Eastwood (sorry, I

Gareth Eastwood (sorry, I called you Gareth Edwards!), I think Phil Moffat is right. Why must 'freedom' and 'equality' be mutually exclusive? These are very nebulous concepts, as Phil and I have suggested. In fact, usually when you hear people, especially politicians, talk about freedom it's either humbug, or vacuously in connection with being able to drive some type of car or go on a holiday or not pay taxes or buy a house possibly with a government subsidy, and so on.

Nevertheless, I think the only sense in which there must be a curtailment of 'freedom' (no matter how you define it) in order to effect a greater level of 'equality' is that in which some people who are very wealthy must be told there is to be a limit placed on, say, how much they can make, or keep after tax. So long as there is then some redistributive mechanism that really works, through taxation reform, greater public spending on health and education and transport, or higher wages it can be said that a type of 'freedom' that some enjoy has been somewhat curtailed. But surely that increases the freedom of those others who will have then have more (of a kind - collectively or privately) without really causing serious loss of liberty to those who enjoyed untrammelled wealth?

That is what I think you have not understood in supporting Dahrendorf's simplistic assertion as if it were some kind of mathematical formula.

Mind you, here am I talking about these things as if they were only to do with material prosperity! And have I foreseen the extent to which the wealthy may be able to draw on other 'freedoms' in order to prevent the creation of greater equality. The freedom, say, to move one's wealth or even oneself, to another country, or to bring one's friends in the global banking business or the IMF to impose their will on the government, etc.

Furthermore, 'equality' does not necessarily mean more, or better. A very poor country, or which there are many, could increase its internal 'equality' (if allowed by the IMF or the WTO) and its people could still be very, very poor, and still lacking certain 'freedoms' that we take for granted, although more 'equal'.

What a lovely day

Jay, I was just wondering what our flag represents to you and what do you define as “great weather”.

 

On another thread I did mention what our flag represented to me and personally I feel our weather at the moment is crap. It would, however, be rather unnecessary of me to blame that on John Howard. You see I hate hot (over 28C) and humid weather.


Just wondering?


Finally, I must agree with you Jay for at this point in time Australia is a great place to live (for most) compared to many other countries I’ve been to.

Hamish, as Australia Day (Invasion Day) is nearly upon us it would interest me to hear what our flag means to other Webdiary contributors. Just a thought, and if you think it is worth the discussion, debate or whatever may evolve then you are welcome to use that section of my contribution in the Alexander’s Wheat Dream thread  on January 21, 2006 - 11:39am as a controversial starting point.

Gareth

Gareth Eastwood  highlights:

3rd        Japan               170% of GDP

7th        Italy                  107% of GDP

31st      Germany          68% of GDP

34th      France              67% of GDP

36th      USA                65% of GDP

51st      Sweden            50% of GDP

100th    Australia           16% of GDP (I feel like waving the flag now)

Whoa and here I was thinking that the USA and Australia were in hock to everybody! Excuse me as I head out to wave the flag and thank my lucky stars for living in not only a very successful nation but one with great weather.

I bet if Paul Keating were still in power even the weather would be crap!

Equality on credit?

Michael de Angelos, I’ll have a go at some of the statements, 1st one.

"But, while it is comfortable to live in the social-democratic world of Scandinavia, Germany, and other European countries, many of them have purchased their equality on credit from future generations."

I have to assume that Ralf is partly referring to future issues relating to their aging populations. Even then I don’t think he is entirely correct, Norway is a star when it comes to fiscal responsibility. Their own North Sea oil financed “future fund” should see them through any demographic problems.

However I believe Ralf is correct for most of Europe. Many Euro nations face a triple threat. 1. Public expectations of generous social welfare, especially pensions. 2. Demographic trends indicate at some stage there will be as little as 2 taxpayers for every pensioner. 3. Public debt already exceeds 50% of GDP, in a stagnant economy.

Now this is a broad generalisation, but to my knowledge basically true for most of “Old Europe”. The US does have a big problem with its public debt but is much healthier in the other areas I have mentioned. Here’s a link that shows where the world stands on public debt.

Some highlights:

3rd        Japan               170% of GDP

7th        Italy                  107% of GDP

31st      Germany          68% of GDP

34th      France              67% of GDP

36th      USA                65% of GDP

51st      Sweden            50% of GDP

100th    Australia           16% of GDP (I feel like waving the flag now)

I don't either G.Eastwood

I don't disagree with what you said .

 I too would like a closer examination of statements like this : "But, while it is comfortable to live in the social-democratic world of Scandinavia, Germany, and other European countries, many of them have purchased their equality on credit from future generations." If any country on this planet has hocked itself for future generations it must be the USA.

He also claims : "Moreover, an egalitarian climate does not promote innovation and a sense of dynamic development." On what proof is such a claim made ?. Being poor absolutely consumes one's entire time. Innovation and invention surely arises out of man's natural curiosity and need to always find a new way to do things.

Dahrendorf  is putting forth the idea that a perfect state can be reached and it's one of wealth that should produce an envy in those that don't have that wealth who will be inspired to innovation. The opposite is more likely - a demoralised population that feels excluded.

The greatest threat is possibly a government like John Howard's that fosters the notion that a comfortable heterosexual middle class family with a mortgage and 2.5 kids is the ultimate in normality. It is no co-incidence that this government also stifles and cuts funds for scientific development.

Dahrendorf  takes the old adage necessity is the mother of invention and transposes it into a reason we should accept the appalling imbalance in today's western world where big business is favoured and the concept of everyone enjoying a reasonable share in wealth is viewed as a socialist plot and a stumbling block to development.

Moreover I would suggest that the protectionism granted by the state to large corporations under this sort of thinking particularly in the USA stifles invention and innovation. The capture of the government's attention by corporate bodies like the oil industry stifles any dissent about the use of natural resources and ensures new discoveries of alternative power never get past the starting post.

He is wrong: "In the last two decades, the world as a whole has gotten richer." The world hasn't got richer - the rich have got richer and the poor poorer and there are a lot more of them and it will stifle innovation.

Let's Be Greedy And Have Both

Is it possible we can have both equality and freedom and is this not what we as a people and a community should be striving for?

But what is “equality” and what is “freedom” and why should one necessarily benefit at the expense of other?

I’m afraid this article gives me a dose of the Socrates. So many assumptions based on questionable premises. Do we need to go back to the basics on this one?

For example the opening sentence states: “In the last two decades, the world as a whole has gotten richer, but, while some national economies have advanced sharply, others have fallen farther behind. The increase in aggregate wealth has not led to the abolition, or even reduction, of poverty.”

It would appear the defining terms of this statement are “richer and “wealth” but what do these terms represent? It would appear for the sake of argument that the terms are interchangeable.

So what does Mr. Dahrendorf mean by wealth, how do we gauge wealth and by what process?  As Mark Ross I am no economist, but if wealth simply represents the amount of cash we carry in our wallets then are we doing justice to the term?

Many of us would possibly agree that wealth is not just about how (financially) rich we are for wealth also relates to the commonwealth of our global village which includes our recourses, environment, education and health.

The dropping of DU bombs in Iraq and elsewhere are financially speaking a benefit to the makers of those bombs, it is good for their business and increases the financial wealth of the company's shareholders. However if we consider the wider implications of such actions in relation to the commonwealth then one would be tempted to assume that the ongoing physical and mental consequences of those actions will in the long run be a negative for the commonwealth.

Of course when I discuss the above I make no mention of such nebulous terms as morality or ethics or decency. All this before we even get to define our terms for freedom and equality.

Finally I am tempted not to allow this piece to incite personal conflict; I prefer to revisit my opening sentence and dream of a better and more “just” world. But then again “What is Justice?”

Told you this article gave me a dose of the Socrates.

Cheers all for the polite and civil way this thread has been conducted so far.

Thanks Hamish and love and best wishes to Margo.

We are freeish?

Michael de Angelos, re this "I do not believe we live in a free society".

I agree, nationally and globally there are many restrictions placed on our lives and many markets are distorted by govt interference (like business welfare/subsidies). I think it is fair to say that we enjoy relatively high degree of personal freedom compared to most parts of the world. I also agree with you point on business welfare, the developed world talks a nice line on free trade, but the US, Europe and Japan are the worst offenders when it comes the trade distorting subsidies, quotas and restrictions.

I don't get which part of my post you disagree with, from your response you sound like you are in agreement?

Andrew McRae, you're right, Africa (and the world) is littered with nations that have little personal freedom and high levels of inequality. I am not asserting that inequality ensures freedom, that's getting it backwards. My point is that greater levels of freedom also tend to create greater levels of inequality, nothing more. I would have thought most on this forum could at least agree that much. We would then be able to have a discussion over how much freedom we are willing to sacrifice (we are lucky to live a country where by and large we can choose) in order maintain a degree of equality.

Gotta start my own country...

I'm not an economist and I struggle to understand how all this stuff works. In fact, I've repeatedly told Mr.Carmody that I am unfit to be a branch office of his department and therefore should not be trusted to do his job.

He didn't listen.

He went ahead and forced me to collect all this tax on his behalf. Then, prickteaser that he is, he told me to put all his dosh into my bank account and not spend it until he asked for it back. Yeah Right!!

Obviously that worked out well. Those booming economic times that were enjoyed by multi-billion dollar resource extracting companies did very little for me. Try as I did, China and India simply didn't give a f--k about my wonderful cabinet making skills.

So what money came in was spent to keep the home fires burning and I ended up owing an obscene amount in penalties and GIC.

Does the U.S. pay GIC? Do they pay penalties? Can they even pay their debts?

Am I allowed to create my own fiat currency and tell Mr. Carmody to go rub my knob?

Doubt it.

Please forgive my crudeness, but this topic really gives me the poops!!

Freedom and inequality

I agree that Webdiary should publish a wide range of views, and I have not one objection to reading Ralf Dahrendorf’s piece here.

It seems on the surface to be quite inoffensive to assert as Gareth Edwards has done, “the basic truth that a truly free society will inevitably produce winners and losers”. But is the supposed trade-off between freedom and inequality really a meaningful notion at all? Gareth said blandly: “It is up to individual nations to decide how much freedom they are willing to trade in order to promote equality.” It seems, again, superficially unexceptionable, but in practice the poor nations whose members might wish to do a little of this “trading” are stuck with being unfree AND unequal and with not a jot they can do about it as they hold no strong cards, especially since “FREEDOM” of trade (in goods, this time) is now seen as more important than freedom of the individual.

A good corrective to Dahrendorf’s vacuous piece would be the book “Nickel ‘and Dimed: On(Not)Getting By in America”, by Barbara Ehrenreich. This shows the crippling effects of too much “freedom” (or is it too little? We're all talking about it in the most necessarily nebulous way) on tens of millions of Americans, the working poor. That nation seems to have made the “decision” that trillions of dollars of tax cuts to the fabulously wealthy (“luck” of “hard work”, Ralf?) is a pretty good deal when the nation doesn’t have to trade anything for it other than the freedom of millions to take a job in Wal-Mart at $7 per hour, or leave it. These are wage levels that cannot support the cost of basic accommodation. This is not “freedom” as Ralf Dahrendorf means it, surely?

The US Census Bureau has calculated that the number of people below the officially defined poverty level has increased during the period of Bush’s pernicious tax cuts by more than a million people to over 37 million. To me, a more plausible “basic truth” about a “truly free society” (can there be such a thing?) is that many of the members are not very free AND suffer from gross inequality. Where there is entrenched inequality - you could call it institutional or even legislated inequality - you often get “freedom” for some and much less of it for most!

Purchasing on Credit

If they have, "purchased their equality on credit from future generations," what about the Americans, who seem to have got their inequality the same way?

Read Jessica Irvine's piece from the SMH: US carries a big stick, and an even bigger debt.

more like this is good

we absolutely need other viewpoints. I disagree Gareth Eastwood. I do not believe we live in a free society rather one where the power of corporations has been boosted beyond it's fair place by a plethora of government subsidies and favoritism. If business were to be truly free to live or die in the market place then we would have true capitalism. Many who claim to support capitalism and decry socialism carefully avoid mention of the business welfare that is out of control.

Conservatives have been for a long time libelling government as a terrible thing yet however bad it can be, it is still acountable  to people whereas private business is not. Thus power in society has been shifting into private business. Recent IR changes are a good example. Business success and wealth is now see as the ultimate attainment in society and politicians like Howard and Costello (and Labor) constantly reaffirm it  and do a great disservice to their constiuency.

Ralf Dahrendorf, is endorsing this concept in the most cynical way. He puts forth the idea that poverty will force people to become inventive - in other words pull themselves up by their own bootstraps. Obviously most of Africa is somehow not getting the big picture. He says that the rich will inspire people to rise out of their gutters and strive to emulate their betters. Although he avoids the problem of once they have, then what happens? Do the formerly rich then need to get to an even higher plane so the formely poor are once again beneath them and begin the struggle all over again? Is that then the role that the majority of people on this planet? - a constantly shifting back and forth from poverty to wealth in a sort of great human experiment? No wonder some simply by-pass this process, revolt and put their masters against a wall.

As if to rub it in Dahrendorf, lectures us on the benefits of our suffering from a sheltered workshop like the House of Lords, having done the rounds of other similar bloated bureaucracies like the European Commission that produces nothing, initiates no inventiveness but subsidises  a few privileged on a claim it will benefit all but which could not survive without  the taxes paid by the majority of those workers.

It's not that I doubt it...

But, while it is comfortable to live in the social-democratic world of Scandinavia, Germany, and other European countries, many of them have purchased their equality on credit from future generations.

But I'd like to see evidence of your postulation.

Free society = winners & loser

I think Mr Dahrendorf has used a rather messy academic essay to state the basic truth that a truly free society will inevitably produce winners and losers.

His point regarding the difficulty of "drawing the line" is really the heart of the issue, equality really is what differentiates a socialist society from a capitalist one. It is up to individual nations to decide how much freedom they are willing to trade in order to promote equality.

Personally I fall towards a strong preference for freedom over equality, but many (especially on Webdiary) fall the other way. The beauty of our democracy is that we get to choose where to draw the line.

Grievous is Good

Whilst I don't agree with the author, it's still good to read other perspectives.

Webdiary should not become a mutual admiration society. That would be terribly boring.

Kudos to Hamish  for trying to get this project to be a bit more inclusive.

More good grief

This takes the cake:

"Nevertheless, while a free society recognises limits to inequality, it also accepts that inequality exists, for it provides hope for many by showing what one might achieve with ability and luck – or perhaps even luck alone. Inequality adds color and variety to societies; it is one of the marks of lively, flexible, and innovative countries. It is thus not bad in itself, even if its excesses must be capped in the name of citizenship for all."

So hope is something that springs from inequality? Well, I suppose if nothing else is going to spring from it, all you've got in the end is hope. The thing that springs eternal, or what you have left when all else is lost? Is hope a good thing, or the ONLY thing? Something that CEOs don't need in spades, or at all, but a jolly good thing for the destitute? Patronising rubbish, Ralf.

Inequality 'adds colur and variety to societies; it is one of the marks of lively, innovative countries'!!!! The Dahrendorf Travelogue. Countries like Bolivia, Peru, Sierra Leone, Rwanda, Bangladesh. They must have oodles of colour and innovation. Well, at least the Bolivians innovated, electing a coca plant farmers' leader as their new president. Usually, in the recent past, when those inequality-ridden countries have innovated in a collective way the machinery of international corporate free enterprise has made sure it's an experiment that doesn't last long.

And what a mealy-mouthed smack on the hand for CEOs' obscene and unwarranted payments, combined with a paternalistic statement in favour of things like tax credits, for the people who have to stay unequal permanently. Still, there's always hope.

Ralf asks:

"Globalisation’s dynamism has benefited many, but it has also increased inequality. Is that necessarily a bad thing?"

Pretty obvious from his piece that it he considers it not to be.

Good grief

He must be a New Labour member of The Lords. What an outrageous statement :"But if we want freedom, then social and economic inequalities are a legitimate, and necessary, price to pay". So there you are. The reason you're poor is because your free. All that's been happening throughout the West and on full speed since the Reagan years is a shift from general welfare to a pumped up bloated private sector that couldn't survive without corporate welfare. Who needs innovation when governments spoon feed private business ?

The idea of a member of the House of Lords lecturing anyone on unchecked power must be a joke. God save us from bloody economists and indeed, rectors of schools of economics.

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