Labour has promised that, come what may, they will not be increasing taxes on ‘working people’. Well, jolly good. Those of us who work for a living will tend to welcome such a promise. So will hedge fund managers, who go to work every day, and the CEOs of Fortune 500 companies, and the lawyers and accountants who manage vast offshore tax efficiency schemes. Working people all.
‘Working people’ is a cant phrase, which – as Bridget Phillipson was forced to admit when she struggled to say if small business owners counted – means nothing concrete at all. It has the advantage, as all such cant phrases do, of denoting an automatic good: it’s something nobody can possibly be against. Work, as we know, collocates with all sorts of good phrases such as ‘dignity’, ‘sweat of brow’, ‘honest toil’. Nobody claims to be proud of not working, or dignified by idleness, or to deserve a reward for their indolence.
Capitalism, one way or another, is the only game currently in town
That sort of vibes–based rhetoric isn’t particular to Labour, of course. Tories have always had the same wearying resort to ‘hardworking families’ – which is the same notion given a sugar-frosting of social conservatism. What’s the opposite of ‘working’ or ‘hardworking’? If you’re a Tory, it’s mostly skivers, spongers, quangocrats and undeserving welfare recipients. If you’re Trad Labour, it’s members of the rent–seeking capitalist boss class. If you’re New Labour (and by extension Starmerite Labour) it’s a bit of both depending on who you are hoping to appeal to.
If nothing else, this across–the–board embrace of ‘working’ as a praise-word for a favoured constituency indicates that the ‘protestant work ethic’ – which Max Weber identified as the special sauce that gave Northern European capitalism its flavour – is still the ideology in which we all swim. Dissidence – Oscar Wilde’s quip that ‘work is the curse of the drinking classes’ – tends to reaffirm its centrality by presenting itself in the first place as humour.
But two things occur to me about the slipperiness of this epithet in the current context. The first is that its primary meaning – Sir Keir has said that his definition is someone who ‘goes out and earns their living, usually paid in a sort of monthly cheque’ – wants to play to the basic idea of the founding of the Labour party a century ago, which is that it is the party of the Working Man. The party’s clue was in the name. It belonged to the 19th-century paradigm of industrial relations familiar to Karl Marx. There was Capital, and there was Labour – one owned the mines or the cotton mills and the other toiled in them – and the two were easily distinguishable.
The problem is that that paradigm has changed beyond all recognition. It’s not just the small-business-owning middle-classes who muddy the two-tier system. Mrs Thatcher’s reforms in the 1980s – that boom in home-ownership, the democratisation of owning shares, and the ever greater abstraction of finance capitalism – worked purposively to change it. It’s no longer as easy as all that to divide the population up between Capital and Labour.
As I understand it – though I don’t claim to bring anything more than a very lay understanding of economics to the table – most working people are now a bit of both. Even if you don’t own shares in the means of production, your pension fund does – and the house in which you have been steadily paying off the mortgage, in a roundabout way, does too. How many shares do you have to own before you tip over from honest son of toil to boss-class parasite?
So my second is a wider point, and it’s a trickier one. The idea of ‘working people’, freighted as it is with an implicit moral dignity, sentimentalises one sector of the economy at the expense of the other. That’s underscored by Starmer and Reeves going on the attack against ‘unearned income’ – by which they have made clear they mean inherited income, rents for landlords, or returns on investments of one sort or another.
Does it not do to recognise that, like it or not, ‘unearned income’ is a gigantic part of how our economy works – and short of proposing fully-automated luxury communism, it will continue to be? Lending money at risk underpins the whole shebang: that’s how banks make money, and how investors in companies make money, and how those companies have money to pay ‘working people’ in the first place. And short of compulsory nationalisation of all property anywhere, landlords will always be with us. That’s the merry-go-round. As far as I know, Sir Keir doesn’t propose to abolish it. So why speak as if all that ‘unearned income’ is, so to speak, a bug rather than a feature?
Would it not be a bit ‘Two Tier’ to imply that passive investors in companies are essentially parasites, while the ‘working people’ whose wages they help pay are virtuous? It’s the same money. It’s all muddled together and, as I said, what with the existence of pension funds and a banking system in which ‘working people’ are heavily implicated, we are all, in some sense, in it together.
Don’t get me wrong: I’m no apologist for the grotesque imbalances in power brought about by rampant laissez-faire. I think – as that notorious communist Warren Buffett does – that it’s grotesque so many of the ultra-wealthy are able to dodge tax in ways unavailable to much poorer people. I think there’s every moral case for bolstering tenants’ rights against no-fault evictions and black mould. I think that the rent-seeking monopolies of what’s been called ‘techno-feudalism’ need a strong dose of antitrust law, that regulatory capture is filling our air with pollutants and our rivers with poop, and that the heads-I–win-tails-you-lose story of the 2008 crash was an affront to fairness and the basic operation of capitalism itself.
But you can believe all that and still believe that capitalism, one way or another, is the only game currently in town – and that not only does it rely on ‘unearned income’ in a practical sense, it will also rely on it in a moral sense. That to have private property, and to invest it, is not a sign of moral degeneracy but is part of the moral contract on which our economy operates.
Sure, tax unearned income; and tax the earned sort too. Pluck the goose in the way that yields the most feathers with the least hissing and do so in the way that seems fairest to you as the government of the day. But don’t pretend that taxing ‘working people’ is wrong while taxing ‘unearned income’ is a moral crusade, while being unable to draw anything like a satisfactory distinction between the two. They also serve, as Milton almost wrote, who only sit and count their money.
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