:00:00. > :00:00.its contract. 5,500 jobs are at risk. Now on BBC News, HARDtalk.
:00:00. > :00:12.Welcome to HARDtalk. I am Zeinab Badawi. Can we afford
:00:13. > :00:22.the world's super`rich and what have they ever done for us? My guest
:00:23. > :00:25.today is a leading social thinker, Professor Danny Dorling of Oxford
:00:26. > :00:28.University. He argues for a slow revolution against the top 1%, whom
:00:29. > :00:37.he claims are impoverishing the rest of us. If 99% of us are becoming
:00:38. > :01:07.more equal, does it really matter if a tiny minority are getting richer?
:01:08. > :01:14.Professor Danny Dorling, welcome to HARDtalk. Hello. You say the world
:01:15. > :01:19.can't afford the super`rich. How do you define the global super`rich?
:01:20. > :01:23.The global super`rich are probably the 1% of people in the rich
:01:24. > :01:42.countries of the world who have the most. You are talking about people
:01:43. > :01:45.earning a year at least $200,000. Within that group there is huge
:01:46. > :01:48.inequality. The top 1% of people in the world have more inequality among
:01:49. > :01:52.them than the other 99% of us. You put them all in the same category.
:01:53. > :01:55.You have talked about how 2% of family doctors in the UK, GPs, earn
:01:56. > :01:59.about ?200,000. That's about $300,000 They are often good public
:02:00. > :02:02.servants. These people at the bottom of the 1%, they are a public
:02:03. > :02:07.servants. They are at the bottom. Are they undeserving? Do you
:02:08. > :02:16.criticise them? The vast majority of doctors in Britain are not in the
:02:17. > :02:19.best`off 1%. It is only a tiny proportion who are and often they
:02:20. > :02:23.are in that because they own private companies at the same time. Almost
:02:24. > :02:29.all doctors, head teachers, almost all politicians are not in the 1%.
:02:30. > :02:34.The 1% is a group dominated by financiers and people who are
:02:35. > :02:37.inheriting money. It is a group splitting from the rest and it's a
:02:38. > :02:40.group, which at the bottom of it, includes people on 200, 300,
:02:41. > :02:43.$400,000. You don't worry about them? I am worried about this 1%
:02:44. > :02:56.zooming up, becoming richer and richer, taking more and more. At the
:02:57. > :03:00.top of this 1%, the very richest on the planet. Oxfam this year said 85
:03:01. > :03:02.of them have the same wealth as the bottom half of humanity. Forbes
:03:03. > :03:05.magazine corrected that and said it is 67. Then, Forbes magazine
:03:06. > :03:11.corrected themselves and said it was 66. At the top of the 1% you have a
:03:12. > :03:13.group zooming into the stratosphere. Are they all undeserving? Some have
:03:14. > :03:18.made great contributions to society through innovations, through
:03:19. > :03:21.technology. The late Steve Jobs for instance, fabulously wealthy, but
:03:22. > :03:25.revered by a lot of people because he transformed lives with his
:03:26. > :03:28.products. A lot of these people are revered and we have a culture which
:03:29. > :03:33.reveres celebrities and people at the top. Steve didn't do the
:03:34. > :03:36.innovation himself. He was in charge of that company. I am using him as
:03:37. > :03:39.an example. Are there some people who, because they are so exceptional
:03:40. > :03:42.and have brought something unique to society, that they are in some ways
:03:43. > :03:47.deserving of the kind of remuneration they get? I am very
:03:48. > :03:56.happy with having an income distribution and some people paid
:03:57. > :04:01.much more than others. Say eight or ten times more than others. It is
:04:02. > :04:05.when you get to 50 or 100 times more than others that you have a problem.
:04:06. > :04:09.It is a question about what you do with this money. Why do you need
:04:10. > :04:12.this much? In the UK, the best off 1% are taking 15% of all of our
:04:13. > :04:16.income, that is a higher proportion than anywhere else in Europe. They
:04:17. > :04:19.pay 30% of income tax. They have to. Where else will you get the income
:04:20. > :04:24.from? I am saying they are contributing to society if they are
:04:25. > :04:27.paying 30% of income tax. In a normal European country, more people
:04:28. > :04:34.pay income tax, it is more evenly spread, tax is not seen as a burden
:04:35. > :04:37.on those at the top. You all contribute and none of you take too
:04:38. > :04:40.much. That's a more normal situation. We have an absurd
:04:41. > :04:43.situation in the UK where one third of tax is paid by 1% of people
:04:44. > :04:48.because they are paying themselves so much and because people on
:04:49. > :04:55.average don't earn enough. They are contributing through their wealth to
:04:56. > :04:59.the public kitty. It is better to have people not very high paid than
:05:00. > :05:03.to have to take them a lot. It is better to have more people paid a
:05:04. > :05:06.larger amount so they can live on their earnings and don't rely on
:05:07. > :05:11.benefits. Why does it matter if there is the small number of
:05:12. > :05:16.people... The financiers, the bankers. You are talking about them.
:05:17. > :05:23.They cost so much. 15% of all UK income is an enormous sum of money
:05:24. > :05:29.and affects society. It changes what is seen as normal and it means
:05:30. > :05:32.everyone else has less money. We pay more in salaries and wages than
:05:33. > :05:35.before, but we don't have enough to employ hundreds of thousands of
:05:36. > :05:41.young people. There is a recognition now of what you say. Bankers and
:05:42. > :05:44.bankers' pay has hardly been off the front of the newspapers in the UK
:05:45. > :05:48.and so many other parts of the world. Even the bankers themselves
:05:49. > :05:53.are saying that their pay has been too high. Sir Philip Hampton,
:05:54. > :05:56.Chairman of the Royal Bank of Scotland, "Pay has been high for too
:05:57. > :06:01.long, particularly in investment banks, it needs correction". It is
:06:02. > :06:04.beginning to turn, beginning to happen. We still have well over 2000
:06:05. > :06:14.bankers earning over one million euros per year. The next highest
:06:15. > :06:23.number in the whole of Europe is Germany, where it is 197. If you
:06:24. > :06:30.take all the top bankers in the top of Europe, they have less people
:06:31. > :06:33.paid that much than in London. Take Barclays bank, they are paying 300
:06:34. > :06:37.members of staff over ?1 million per year. That is more than people are
:06:38. > :06:39.paid in the whole of Japan in every business. The point is that steps
:06:40. > :06:43.are being taken and legislation has come through the European Parliament
:06:44. > :06:46.that says that bonuses should have a cap. Europe is trying to do that and
:06:47. > :06:49.our government is resisting it. That is true. That's going through the
:06:50. > :06:53.courts at the moment. As a general kind of point of view, not just with
:06:54. > :06:56.the UK ` bankers' pay and people being paid excessively, there is a
:06:57. > :06:59.recognition that it isn't right. Absolutely. Is that right? You have
:07:00. > :07:02.the beginning of a change. Ten years ago we saw images of bankers
:07:03. > :07:05.drinking champagne. They were paying $10,000 per bottle. That isn't
:07:06. > :07:09.celebrated any more. Greed is no longer seen as good. We have had all
:07:10. > :07:14.kinds of changes in society in all kinds of levels. Pay has come down
:07:15. > :07:18.in various industries. It is just the beginning of change. There is a
:07:19. > :07:22.lot of resistance against this. If you look at the income of the top
:07:23. > :07:32.1%, HMRC said that last year, said... That is the England revenue.
:07:33. > :07:36.The taxman in the UK who knows more about incomes than anyone else. Said
:07:37. > :07:40.that last year the 1% took a big hike in pay and were taking more
:07:41. > :07:43.again. You are focusing a lot on the UK. That is because the UK and the
:07:44. > :07:46.US have a disproportionate number of financiers, bankers and bosses. And
:07:47. > :07:50.also, London particularly is the number one destination for a lot of
:07:51. > :07:51.the world's global rich. There are about a thousand Russian
:07:52. > :07:58.billionaires, millionaires, living in the UK according to the Sunday
:07:59. > :08:08.Times. The UK is sucking in members of the super`rich. This isn't the
:08:09. > :08:11.reason for the 1% having so much. That is a small proportion of the
:08:12. > :08:16.1%. In Switzerland, the 1% cost half of much as they do in the UK and the
:08:17. > :08:19.Swiss have a lot of bankers. But they work for half as much and they
:08:20. > :08:22.probably work even better. There haven't been as many problems in
:08:23. > :08:25.Switzerland in banking as there have been in London. The point in this
:08:26. > :08:28.part of this interview is that British bankers still don't get it
:08:29. > :08:31.and the authorities don't, they're still awarding excessive pay to the
:08:32. > :08:34.bankers, but the rest of the world is moving in the right direction.
:08:35. > :08:38.The world is, and countries like the Netherlands and Switzerland are
:08:39. > :08:45.becoming more equal. We have a problem in Britain in particular. A
:08:46. > :08:52.lot of money is moving in, making it very expensive to live here. Bakers
:08:53. > :08:56.hard to live. The people at the top hard to live. The people at the top
:08:57. > :08:59.have paid more for more expensive houses. You say in your new book,
:09:00. > :09:03.Inequality And The 1%, you say that you know because of the huge cost of
:09:04. > :09:06.the 1% that there is more poverty in the UK than in any more equitable
:09:07. > :09:11.rich nation. In a nutshell, what evidence do you have at the 1% are
:09:12. > :09:19.impoverishing the rest? There is a close correlation between the 1% and
:09:20. > :09:32.the poverty level. If you have people at the top making more, there
:09:33. > :09:41.is less for everybody else. There is less in pay. It is harder to employ
:09:42. > :09:53.young people. It is harder to pay them a decent amount. If you take a
:09:54. > :09:56.bank and you look at the pay of cashiers, the bank cannot afford to
:09:57. > :10:00.pay people at the bottom more. The picture is not so clear if you look
:10:01. > :10:07.at Spain and Norway, the top 1% share of income has been falling in
:10:08. > :10:10.both Spain and Norway. But Spain has been struggling economically,
:10:11. > :10:12.unemployment at 25%, double that for under 24s. Norway is doing quite
:10:13. > :10:15.well. The 1% does not explain everything. It is the strongest
:10:16. > :10:23.correlation of any factor we can find for social harm. It does not
:10:24. > :10:32.explain anything. Norway is a small country which has oil, Spain is a
:10:33. > :10:35.large country which does not. Where the top percentage of income has
:10:36. > :10:37.fallen, people in Spain feel gloomy about the country and their
:10:38. > :10:41.prospects. A research survey about the UK says there has been a surge
:10:42. > :10:46.in optimism among people in the UK about the economy. 43% of people
:10:47. > :11:01.feel that the economic climate at home is good, compared to 15%% last
:11:02. > :11:08.year. That's the biggest leap in the countries reviewed. In places like
:11:09. > :11:17.the USA, people are more optimistic. It is one way of getting through in
:11:18. > :11:21.the places like the USA. This is the UK we are talking about. In the more
:11:22. > :11:26.equal countries of the world, France, Scandinavian countries,
:11:27. > :11:33.Japan, people are a bit more dour. You do not get unbridled happiness.
:11:34. > :11:35.That is not what it gives you. You get less mental illness, less
:11:36. > :11:44.extreme poverty, better education systems. Housing is sorted out. All
:11:45. > :11:50.kinds of things are included. I was just making this point about the top
:11:51. > :11:52.1%. And yet we have got these two big extremes about how these
:11:53. > :11:57.countries feel about these economies. Does inequality between
:11:58. > :12:06.the 1% and 99% matter so long as people are generally becoming better
:12:07. > :12:08.off? A professor of economics at Stanford University says, your
:12:09. > :12:17.well`being can grow even when your share of the pie falls if the pie is
:12:18. > :12:20.getting sufficiently larger. It was much easier to defend growing
:12:21. > :12:25.inequality when people at the bottom are getting better off. That has not
:12:26. > :12:28.happened for 20 years in the USA. If you look at the effects of
:12:29. > :12:31.well`being, anxiety, depression and poor mental health, you find the
:12:32. > :12:40.highest rates of that in the most unequal countries. So there does not
:12:41. > :12:43.seem to be strong evidence to say that it does not matter what the
:12:44. > :12:53.rich gets, if you get some crumbs then you can be happy. You might
:12:54. > :12:57.have problems as to how your children are going to be, whether
:12:58. > :13:08.you can keep a job, can you pay your bills, will you keep a house?
:13:09. > :13:19.I am just looking at this correlation between the 1% and the
:13:20. > :13:23.99%. Because if you say, we accept your data, and Institute for Fiscal
:13:24. > :13:26.Studies in the UK says that as the very rich are becoming richer, the
:13:27. > :13:36.rest of us are becoming more equal. It says so if there is more equality
:13:37. > :13:39.within that 99%, does it matter if the super`rich are on their yachts
:13:40. > :13:45.and mansions? It does matter because it has a pervasive effect on
:13:46. > :13:49.society. Does it? Could we be happier with a small aristocracy at
:13:50. > :13:54.the top as long as we were more similar together? What is your
:13:55. > :13:59.answer? It is hard to find anywhere on the planet that seems to be
:14:00. > :14:03.particularly happy. The nearest place you have is Singapore.
:14:04. > :14:07.Singapore is the most unequal of the rich nations. It has a small group
:14:08. > :14:15.of very rich and a large group of very poor. Part of the poverty is a
:14:16. > :14:18.large number of guest workers. They are not allowed to have children.
:14:19. > :14:27.100,000 maids in Singapore pregnancy tested every three months. These are
:14:28. > :14:31.the guest workers, and the asylum seekers and migrants. You cannot use
:14:32. > :14:32.those to illustrate your point. Another economics professor is
:14:33. > :14:35.saying that although significant economic problems remain, we have
:14:36. > :14:40.been living in equalising times for the world. A change that has been
:14:41. > :14:46.largely for the good that may not make for convincing changes, but is
:14:47. > :14:52.the truth. The world is becoming richer. More and more people are
:14:53. > :14:56.being lifted out of poverty in the last 20 years. You are getting a
:14:57. > :14:59.growing middle class in the world. More people are becoming average
:15:00. > :15:09.worldwide. You have extreme poverty in the world. But at the top, the
:15:10. > :15:12.top are getting better off. Obama had to admit that under his watch,
:15:13. > :15:22.95% of all income gains in the United States have gone to the 1%.
:15:23. > :15:28.Perhaps are you too fixated on that 1% in order to improve the lives of
:15:29. > :15:32.the 99%? Professor Deirdre McCloskey, a celebrated economic
:15:33. > :15:35.historian says she is concerned about the condition of the working
:15:36. > :15:38.class, not about how many yachts some oligarch has. It is not the
:15:39. > :15:41.expenditure on the high end, the real problem is poverty and the
:15:42. > :15:46.solution to that is not going after the rich. If you look at the
:15:47. > :15:55.countries where the bottom 40% do best, it is the countries where the
:15:56. > :16:01.1% take the least. This is a very, very clear correlation. The working
:16:02. > :16:06.class people at the bottom get treated worst when there are huge
:16:07. > :16:11.inequalities at the top. People don't view other people as like
:16:12. > :16:14.them. They can't, it is very hard to see other people as important. If
:16:15. > :16:18.you are getting so much more than them, it has to be, you have to
:16:19. > :16:26.think, because you are special, you are different, you are worth more.
:16:27. > :16:28.So these people are not worth as much. That is how they are treated
:16:29. > :16:33.in unequal countries, people are treated much worse. Because of that
:16:34. > :16:36.1%? People living in mansions with the underground swimming pool and
:16:37. > :16:43.private jets and yachts, that is a tiny minority. We do not think, I
:16:44. > :16:54.would like to be like them. Or I am in this situation because he has one
:16:55. > :16:58.yacht to many. `` too many. Families do not mix. When you have the kind
:16:59. > :17:01.of inequalities we have in London, if you compare the best off tenth to
:17:02. > :17:05.the worst off tenth, the best of tenth of children, the families have
:17:06. > :17:07.100 times the wealth, they do not mix. They do not socialise. They
:17:08. > :17:11.might when somebody cleans their house. That does not result... Is
:17:12. > :17:15.what you do about it. This is the point. If you look at what the
:17:16. > :17:23.Indian government is doing. The Prime Minister, he is the son of a
:17:24. > :17:27.tea seller. So an example of social mobility. He is saying, I am going
:17:28. > :17:31.to tackle those at the bottom, but I also want to look at 380 million
:17:32. > :17:36.members of what he calls the middle class. The aspirational class. His
:17:37. > :17:38.Finance Minister says we are calibrating India to match
:17:39. > :17:43.aspirations. There is an aspirational India. It has to be
:17:44. > :17:50.supported and strengthened. So that is the point. Why not focus on
:17:51. > :17:55.strengthening of the 99%? And their aspirations, rather than just going
:17:56. > :18:02.after the 1%? The 1% is 1%. The 99% cannot all fit in the 1%. I am not
:18:03. > :18:08.against aspiration. It's great. Unless your aspiration is to have
:18:09. > :18:11.much much more than other people. The whole point of these
:18:12. > :18:14.inequalities is if you have a society where you tell people, if
:18:15. > :18:19.you work harder, if you get to the very top, you will be OK, if you get
:18:20. > :18:24.to the bottom of the top 10%, you will have an insecure pension. You
:18:25. > :18:28.will have to worry about your old age. Your health service might not
:18:29. > :18:33.be well provided. That is an unfair situation. You cannot get anywhere
:18:34. > :18:43.near the top 1%. And you are trained to tell everyone else that is what
:18:44. > :18:46.they are aiming for. Are you opposed to capitalism, free`market
:18:47. > :18:52.economies? You think it too big a gap? We have got capitalism whether
:18:53. > :18:54.we like it or not. We are likely to have it for another couple of
:18:55. > :18:56.centuries. But if you compare different capitalist countries, you
:18:57. > :19:03.find remarkable differences between them. In the Netherlands, the top 1%
:19:04. > :19:10.are taking less than the next 7%. `` less than 7%. The Netherlands is a
:19:11. > :19:16.bit of an economic basket case. That is just one factor. In the
:19:17. > :19:20.Netherlands, industry leaders make statements such as, if you pay me
:19:21. > :19:29.twice as much I would not work any harder. And if you paid me half as
:19:30. > :19:34.much it wouldn't actually damage me. You never hear that kind of
:19:35. > :19:38.statement in the UK. Certainly in the USA. You put it up as an
:19:39. > :19:41.example, it is contracting and is one of the worst performing
:19:42. > :19:45.economies in the EU. It is not obviously performing well in other
:19:46. > :19:49.areas. It does not have food banks, people going to get food from soup
:19:50. > :19:54.kitchens as the UK and US have had. The Netherlands is an average
:19:55. > :20:00.country. If you look at average European countries, you would see
:20:01. > :20:11.that a lot of people, it is better. `` Berlot of `` the lot of most
:20:12. > :20:16.people. They have 35 hour weeks. What to do about it? You said
:20:17. > :20:18.housing in the UK is a big issue, the defining economic issue. You say
:20:19. > :20:22.that you cannot build enough housing to make up for the shortage. One
:20:23. > :20:25.suggestion you have is that you may find a disincentive for the elderly
:20:26. > :20:31.to stay in their family homes. They may be too big. So people like newly
:20:32. > :20:40.arrived immigrants can move out. `` can be housed. Or newly formed
:20:41. > :20:46.families. Just British families can't get a house. Is that really a
:20:47. > :20:49.policy? Make it difficult for grandma or grandpa to stay in their
:20:50. > :20:55.family homes so that new families can move on? Is that a policy
:20:56. > :20:58.politicians should campaign on? You have to accept a problem, firstly.
:20:59. > :21:02.We don't in the UK... Political parties don't accept it as a problem
:21:03. > :21:05.and don't have a target to reduce it. If you look at housing, housing
:21:06. > :21:09.is more unequally distributed than in 1911 at the last peak. More empty
:21:10. > :21:18.bedrooms than before, something like 40 million empty bedrooms. Something
:21:19. > :21:21.radical has to be done. Not necessarily radical but you could
:21:22. > :21:24.say that we need to share things a little more equally because no
:21:25. > :21:27.matter how fast you build, you cannot build as fast as you can
:21:28. > :21:33.redistribute. Who is responsible for implementing these policies you
:21:34. > :21:37.advocate? Politicians? Nobody trusts them. Some politicians do advocate
:21:38. > :21:40.these kinds of things. Admittedly, it is a marginal group of
:21:41. > :21:45.politicians in a country like the UK. But in a normal European
:21:46. > :21:51.country, these are mainstream ideas. It is normal to ensure the
:21:52. > :21:54.population is well housed. In Germany for instance, for decades
:21:55. > :21:57.they have tried to prevent house price inflation. The policies I
:21:58. > :22:01.would like are normal in equal countries. In the USA, they appear
:22:02. > :22:04.like madness and in the UK they are on the fringe. Policies are housing,
:22:05. > :22:10.higher taxation levels that we saw up until the 1970s and the 90s at
:22:11. > :22:14.the Top End. I would put the high rate of tax up and a rate higher
:22:15. > :22:18.above it. The reason is not to raise money. The top tax rate doesn't
:22:19. > :22:22.raise money. What it does is when you have a young banker earning ?4
:22:23. > :22:25.million per year and the ask for six million because they hear another
:22:26. > :22:29.has six million, they will likely be deterred if they know they won't get
:22:30. > :22:37.most of that money. It is a deterrent to greed. You talked about
:22:38. > :22:42.a slow revolution. There are two points raised. You say, two views.
:22:43. > :22:46.One, that salvation is upon us but we haven't noticed yet that getting
:22:47. > :22:49.rich quick has lost its lustre. The other point is that the end is near
:22:50. > :22:56.because of greed and all will not end peacefully. Which is it? I would
:22:57. > :23:02.hope it would be recognition that it could end more peacefully than
:23:03. > :23:05.otherwise. The lack of peace I talk about if we don't address this is
:23:06. > :23:17.that the London housing market keeps on rising and then crashes. But a
:23:18. > :23:20.bigger picture for the final point. Not just housing. The bigger picture
:23:21. > :23:23.is you see growing unrest around the world as young people, almost young
:23:24. > :23:27.people are badly affected by this, become more angry. Unless born into
:23:28. > :23:30.a rich family, they work out they can't on their own, through their
:23:31. > :23:33.own merit, get to have a decent standard of living. If we don't do
:23:34. > :23:35.something about it you are looking at masses of well`educated
:23:36. > :23:38.university graduates around the world who figured this isn't in
:23:39. > :23:41.their interest. You have to change societies so people can have a safe
:23:42. > :23:45.and decent life for their families even if they can't get into the 1%.
:23:46. > :23:51.How quickly is this slow revolution going to see a result? Ten or 20
:23:52. > :23:53.years. A slow revolution. When it happened in the 1920s and 30s,
:23:54. > :23:58.people didn't realise it was happening, but it was. Thank you
:23:59. > :24:19.very much indeed for coming on HARDtalk. Thank you.
:24:20. > :24:25.Hello once again. I am just about Toshiba pressure chart which has got
:24:26. > :24:28.a very familiar look to it if you have seen any of our shows over
:24:29. > :24:33.recent days. A big area of high pressure still dominating the scene
:24:34. > :24:35.across Scandinavia. And across northern Europe Europe, but