Danny Dorling - Professor of Geography, University of Oxford HARDtalk

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Welcome to HARDtalk. I am Zeinab Badawi. Can we afford

the world's super`rich and what have they ever done for us? My guest

today is a leading social thinker, Professor Danny Dorling of Oxford

University. He argues for a slow revolution against the top 1%, whom

he claims are impoverishing the rest of us. If 99% of us are becoming

more equal, does it really matter if a tiny minority are getting richer?

Professor Danny Dorling, welcome to HARDtalk. Hello. You say the world

can't afford the super`rich. How do you define the global super`rich?

The global super`rich are probably the 1% of people in the rich

countries of the world who have the most. You are talking about people

earning a year at least $200,000. Within that group there is huge

inequality. The top 1% of people in the world have more inequality among

them than the other 99% of us. You put them all in the same category.

You have talked about how 2% of family doctors in the UK, GPs, earn

about ?200,000. That's about $300,000 They are often good public

servants. These people at the bottom of the 1%, they are a public

servants. They are at the bottom. Are they undeserving? Do you

criticise them? The vast majority of doctors in Britain are not in the

best`off 1%. It is only a tiny proportion who are and often they

are in that because they own private companies at the same time. Almost

all doctors, head teachers, almost all politicians are not in the 1%.

The 1% is a group dominated by financiers and people who are

inheriting money. It is a group splitting from the rest and it's a

group, which at the bottom of it, includes people on 200, 300,

$400,000. You don't worry about them? I am worried about this 1%

zooming up, becoming richer and richer, taking more and more. At the

top of this 1%, the very richest on the planet. Oxfam this year said 85

of them have the same wealth as the bottom half of humanity. Forbes

magazine corrected that and said it is 67. Then, Forbes magazine

corrected themselves and said it was 66. At the top of the 1% you have a

group zooming into the stratosphere. Are they all undeserving? Some have

made great contributions to society through innovations, through

technology. The late Steve Jobs for instance, fabulously wealthy, but

revered by a lot of people because he transformed lives with his

products. A lot of these people are revered and we have a culture which

reveres celebrities and people at the top. Steve didn't do the

innovation himself. He was in charge of that company. I am using him as

an example. Are there some people who, because they are so exceptional

and have brought something unique to society, that they are in some ways

deserving of the kind of remuneration they get? I am very

happy with having an income distribution and some people paid

much more than others. Say eight or ten times more than others. It is

when you get to 50 or 100 times more than others that you have a problem.

It is a question about what you do with this money. Why do you need

this much? In the UK, the best off 1% are taking 15% of all of our

income, that is a higher proportion than anywhere else in Europe. They

pay 30% of income tax. They have to. Where else will you get the income

from? I am saying they are contributing to society if they are

paying 30% of income tax. In a normal European country, more people

pay income tax, it is more evenly spread, tax is not seen as a burden

on those at the top. You all contribute and none of you take too

much. That's a more normal situation. We have an absurd

situation in the UK where one third of tax is paid by 1% of people

because they are paying themselves so much and because people on

average don't earn enough. They are contributing through their wealth to

the public kitty. It is better to have people not very high paid than

to have to take them a lot. It is better to have more people paid a

larger amount so they can live on their earnings and don't rely on

benefits. Why does it matter if there is the small number of

people... The financiers, the bankers. You are talking about them.

They cost so much. 15% of all UK income is an enormous sum of money

and affects society. It changes what is seen as normal and it means

everyone else has less money. We pay more in salaries and wages than

before, but we don't have enough to employ hundreds of thousands of

young people. There is a recognition now of what you say. Bankers and

bankers' pay has hardly been off the front of the newspapers in the UK

and so many other parts of the world. Even the bankers themselves

are saying that their pay has been too high. Sir Philip Hampton,

Chairman of the Royal Bank of Scotland, "Pay has been high for too

long, particularly in investment banks, it needs correction". It is

beginning to turn, beginning to happen. We still have well over 2000

bankers earning over one million euros per year. The next highest

number in the whole of Europe is Germany, where it is 197. If you

take all the top bankers in the top of Europe, they have less people

paid that much than in London. Take Barclays bank, they are paying 300

members of staff over ?1 million per year. That is more than people are

paid in the whole of Japan in every business. The point is that steps

are being taken and legislation has come through the European Parliament

that says that bonuses should have a cap. Europe is trying to do that and

our government is resisting it. That is true. That's going through the

courts at the moment. As a general kind of point of view, not just with

the UK ` bankers' pay and people being paid excessively, there is a

recognition that it isn't right. Absolutely. Is that right? You have

the beginning of a change. Ten years ago we saw images of bankers

drinking champagne. They were paying $10,000 per bottle. That isn't

celebrated any more. Greed is no longer seen as good. We have had all

kinds of changes in society in all kinds of levels. Pay has come down

in various industries. It is just the beginning of change. There is a

lot of resistance against this. If you look at the income of the top

1%, HMRC said that last year, said... That is the England revenue.

The taxman in the UK who knows more about incomes than anyone else. Said

that last year the 1% took a big hike in pay and were taking more

again. You are focusing a lot on the UK. That is because the UK and the

US have a disproportionate number of financiers, bankers and bosses. And

also, London particularly is the number one destination for a lot of

the world's global rich. There are about a thousand Russian

billionaires, millionaires, living in the UK according to the Sunday

Times. The UK is sucking in members of the super`rich. This isn't the

reason for the 1% having so much. That is a small proportion of the

1%. In Switzerland, the 1% cost half of much as they do in the UK and the

Swiss have a lot of bankers. But they work for half as much and they

probably work even better. There haven't been as many problems in

Switzerland in banking as there have been in London. The point in this

part of this interview is that British bankers still don't get it

and the authorities don't, they're still awarding excessive pay to the

bankers, but the rest of the world is moving in the right direction.

The world is, and countries like the Netherlands and Switzerland are

becoming more equal. We have a problem in Britain in particular. A

lot of money is moving in, making it very expensive to live here. Bakers

hard to live. The people at the top hard to live. The people at the top

have paid more for more expensive houses. You say in your new book,

Inequality And The 1%, you say that you know because of the huge cost of

the 1% that there is more poverty in the UK than in any more equitable

rich nation. In a nutshell, what evidence do you have at the 1% are

impoverishing the rest? There is a close correlation between the 1% and

the poverty level. If you have people at the top making more, there

is less for everybody else. There is less in pay. It is harder to employ

young people. It is harder to pay them a decent amount. If you take a

bank and you look at the pay of cashiers, the bank cannot afford to

pay people at the bottom more. The picture is not so clear if you look

at Spain and Norway, the top 1% share of income has been falling in

both Spain and Norway. But Spain has been struggling economically,

unemployment at 25%, double that for under 24s. Norway is doing quite

well. The 1% does not explain everything. It is the strongest

correlation of any factor we can find for social harm. It does not

explain anything. Norway is a small country which has oil, Spain is a

large country which does not. Where the top percentage of income has

fallen, people in Spain feel gloomy about the country and their

prospects. A research survey about the UK says there has been a surge

in optimism among people in the UK about the economy. 43% of people

feel that the economic climate at home is good, compared to 15%% last

year. That's the biggest leap in the countries reviewed. In places like

the USA, people are more optimistic. It is one way of getting through in

the places like the USA. This is the UK we are talking about. In the more

equal countries of the world, France, Scandinavian countries,

Japan, people are a bit more dour. You do not get unbridled happiness.

That is not what it gives you. You get less mental illness, less

extreme poverty, better education systems. Housing is sorted out. All

kinds of things are included. I was just making this point about the top

1%. And yet we have got these two big extremes about how these

countries feel about these economies. Does inequality between

the 1% and 99% matter so long as people are generally becoming better

off? A professor of economics at Stanford University says, your

well`being can grow even when your share of the pie falls if the pie is

getting sufficiently larger. It was much easier to defend growing

inequality when people at the bottom are getting better off. That has not

happened for 20 years in the USA. If you look at the effects of

well`being, anxiety, depression and poor mental health, you find the

highest rates of that in the most unequal countries. So there does not

seem to be strong evidence to say that it does not matter what the

rich gets, if you get some crumbs then you can be happy. You might

have problems as to how your children are going to be, whether

you can keep a job, can you pay your bills, will you keep a house?

I am just looking at this correlation between the 1% and the

99%. Because if you say, we accept your data, and Institute for Fiscal

Studies in the UK says that as the very rich are becoming richer, the

rest of us are becoming more equal. It says so if there is more equality

within that 99%, does it matter if the super`rich are on their yachts

and mansions? It does matter because it has a pervasive effect on

society. Does it? Could we be happier with a small aristocracy at

the top as long as we were more similar together? What is your

answer? It is hard to find anywhere on the planet that seems to be

particularly happy. The nearest place you have is Singapore.

Singapore is the most unequal of the rich nations. It has a small group

of very rich and a large group of very poor. Part of the poverty is a

large number of guest workers. They are not allowed to have children.

100,000 maids in Singapore pregnancy tested every three months. These are

the guest workers, and the asylum seekers and migrants. You cannot use

those to illustrate your point. Another economics professor is

saying that although significant economic problems remain, we have

been living in equalising times for the world. A change that has been

largely for the good that may not make for convincing changes, but is

the truth. The world is becoming richer. More and more people are

being lifted out of poverty in the last 20 years. You are getting a

growing middle class in the world. More people are becoming average

worldwide. You have extreme poverty in the world. But at the top, the

top are getting better off. Obama had to admit that under his watch,

95% of all income gains in the United States have gone to the 1%.

Perhaps are you too fixated on that 1% in order to improve the lives of

the 99%? Professor Deirdre McCloskey, a celebrated economic

historian says she is concerned about the condition of the working

class, not about how many yachts some oligarch has. It is not the

expenditure on the high end, the real problem is poverty and the

solution to that is not going after the rich. If you look at the

countries where the bottom 40% do best, it is the countries where the

1% take the least. This is a very, very clear correlation. The working

class people at the bottom get treated worst when there are huge

inequalities at the top. People don't view other people as like

them. They can't, it is very hard to see other people as important. If

you are getting so much more than them, it has to be, you have to

think, because you are special, you are different, you are worth more.

So these people are not worth as much. That is how they are treated

in unequal countries, people are treated much worse. Because of that

1%? People living in mansions with the underground swimming pool and

private jets and yachts, that is a tiny minority. We do not think, I

would like to be like them. Or I am in this situation because he has one

yacht to many. `` too many. Families do not mix. When you have the kind

of inequalities we have in London, if you compare the best off tenth to

the worst off tenth, the best of tenth of children, the families have

100 times the wealth, they do not mix. They do not socialise. They

might when somebody cleans their house. That does not result... Is

what you do about it. This is the point. If you look at what the

Indian government is doing. The Prime Minister, he is the son of a

tea seller. So an example of social mobility. He is saying, I am going

to tackle those at the bottom, but I also want to look at 380 million

members of what he calls the middle class. The aspirational class. His

Finance Minister says we are calibrating India to match

aspirations. There is an aspirational India. It has to be

supported and strengthened. So that is the point. Why not focus on

strengthening of the 99%? And their aspirations, rather than just going

after the 1%? The 1% is 1%. The 99% cannot all fit in the 1%. I am not

against aspiration. It's great. Unless your aspiration is to have

much much more than other people. The whole point of these

inequalities is if you have a society where you tell people, if

you work harder, if you get to the very top, you will be OK, if you get

to the bottom of the top 10%, you will have an insecure pension. You

will have to worry about your old age. Your health service might not

be well provided. That is an unfair situation. You cannot get anywhere

near the top 1%. And you are trained to tell everyone else that is what

they are aiming for. Are you opposed to capitalism, free`market

economies? You think it too big a gap? We have got capitalism whether

we like it or not. We are likely to have it for another couple of

centuries. But if you compare different capitalist countries, you

find remarkable differences between them. In the Netherlands, the top 1%

are taking less than the next 7%. `` less than 7%. The Netherlands is a

bit of an economic basket case. That is just one factor. In the

Netherlands, industry leaders make statements such as, if you pay me

twice as much I would not work any harder. And if you paid me half as

much it wouldn't actually damage me. You never hear that kind of

statement in the UK. Certainly in the USA. You put it up as an

example, it is contracting and is one of the worst performing

economies in the EU. It is not obviously performing well in other

areas. It does not have food banks, people going to get food from soup

kitchens as the UK and US have had. The Netherlands is an average

country. If you look at average European countries, you would see

that a lot of people, it is better. `` Berlot of `` the lot of most

people. They have 35 hour weeks. What to do about it? You said

housing in the UK is a big issue, the defining economic issue. You say

that you cannot build enough housing to make up for the shortage. One

suggestion you have is that you may find a disincentive for the elderly

to stay in their family homes. They may be too big. So people like newly

arrived immigrants can move out. `` can be housed. Or newly formed

families. Just British families can't get a house. Is that really a

policy? Make it difficult for grandma or grandpa to stay in their

family homes so that new families can move on? Is that a policy

politicians should campaign on? You have to accept a problem, firstly.

We don't in the UK... Political parties don't accept it as a problem

and don't have a target to reduce it. If you look at housing, housing

is more unequally distributed than in 1911 at the last peak. More empty

bedrooms than before, something like 40 million empty bedrooms. Something

radical has to be done. Not necessarily radical but you could

say that we need to share things a little more equally because no

matter how fast you build, you cannot build as fast as you can

redistribute. Who is responsible for implementing these policies you

advocate? Politicians? Nobody trusts them. Some politicians do advocate

these kinds of things. Admittedly, it is a marginal group of

politicians in a country like the UK. But in a normal European

country, these are mainstream ideas. It is normal to ensure the

population is well housed. In Germany for instance, for decades

they have tried to prevent house price inflation. The policies I

would like are normal in equal countries. In the USA, they appear

like madness and in the UK they are on the fringe. Policies are housing,

higher taxation levels that we saw up until the 1970s and the 90s at

the Top End. I would put the high rate of tax up and a rate higher

above it. The reason is not to raise money. The top tax rate doesn't

raise money. What it does is when you have a young banker earning ?4

million per year and the ask for six million because they hear another

has six million, they will likely be deterred if they know they won't get

most of that money. It is a deterrent to greed. You talked about

a slow revolution. There are two points raised. You say, two views.

One, that salvation is upon us but we haven't noticed yet that getting

rich quick has lost its lustre. The other point is that the end is near

because of greed and all will not end peacefully. Which is it? I would

hope it would be recognition that it could end more peacefully than

otherwise. The lack of peace I talk about if we don't address this is

that the London housing market keeps on rising and then crashes. But a

bigger picture for the final point. Not just housing. The bigger picture

is you see growing unrest around the world as young people, almost young

people are badly affected by this, become more angry. Unless born into

a rich family, they work out they can't on their own, through their

own merit, get to have a decent standard of living. If we don't do

something about it you are looking at masses of well`educated

university graduates around the world who figured this isn't in

their interest. You have to change societies so people can have a safe

and decent life for their families even if they can't get into the 1%.

How quickly is this slow revolution going to see a result? Ten or 20

years. A slow revolution. When it happened in the 1920s and 30s,

people didn't realise it was happening, but it was. Thank you

very much indeed for coming on HARDtalk. Thank you.

Hello once again. I am just about Toshiba pressure chart which has got

a very familiar look to it if you have seen any of our shows over

recent days. A big area of high pressure still dominating the scene

across Scandinavia. And across northern Europe Europe, but