Interview: Spirit Level Delusion author Christopher Snowdon on separating poverty and inequality
Fat cat - Image credit: Holyrood
This article comes with a health warning – which is ironic as Christopher Snowdon hates health warnings.
If you subscribe to the left-wing consensus that taxing millionaires and miscreants is the recipe for a more equitable society, this article may cause high blood pressure.
Finance Secretary Derek Mackay, in particular, may experience a feeling of nausea as he contemplates whether to follow the Chancellor’s lead and cut taxes for higher earners in his forthcoming budget.
For Snowdon, you see, actually thinks cutting taxes for the rich can make poor lives better.
Easy, Derek, you may want to sit down. Scottish Labour leader Richard Leonard might require a sedative at this point.
His book, The Spirit Level Delusion, firmly rejects the notion that all of society’s ills can be cured by reducing inequality.
It’s easy to dismiss Snowdon as a dyed in the wool right-wing Tory, with a clutch of books which rail against the nanny state and a fellowship at the Institute of Economic Affairs, the free market think tank which is greeted with a mixture of loathing and suspicion by the left.
But he was recently invited to the Scottish Parliament to give his views on Britain’s ‘class obsession’, in a Festival of Politics seminar entitled ‘Posh or Poor?’ which also featured outspoken Orwell Prize-winner Darren McGarvey, aka Loki.
McGarvey has done as much as anyone to illustrate the crippling effects of inequality with his book Poverty Safari, and he is a harsh critic of Theresa May’s recipe for prosperity through ‘social mobility’ which, he argues, is a mirage in places like the tough Glasgow streets where he grew up.
Snowdon acknowledges that poverty is the root of all manner of social ills, but he stresses that it is important to separate poverty from inequality.
“People get a bit confused between poverty and inequality,” Snowdon told Holyrood.
“My book is a very specific rebuttal to a book called The Spirit Level, which came out in 2009 and caused quite a splash at the time.
“It’s kind of died down now. They had a sequel out this year which didn’t seem to get much traction, but it was a big deal at the time because it appeared to give an empirical backing to what a lot of people intuitively felt, which was that income inequality wasn’t just wrong, but that it caused a lot of problems.
“Using a series of scatter plots, they showed that there was a correlation between inequality and life expectancy, recycling, infant mortality, homicide. Everything, really.
“I’d read good things about it and I’m interested in epidemiology, which is what it’s sort of supposed to be, but I thought, ‘This doesn’t look right’.
“There weren’t many countries in the analysis, and they were ignoring certain facts that I was aware of.
“So I started looking at the raw data, which is all available online as raw aggregate national statistics, and when I started trying to recreate their graphs, I noticed I couldn’t do it, or that their correlation was quite weak because it was down to an outlier, or because they had left a number of countries out.
“I got really interested for a while, and what should have been a few blog posts turned into a book. The Spirit Level very specifically said that if you compare countries on the size of the income gap alone, that can explain most things, which is quite a bold claim considering how many causes there are of something such as infant mortality.
“The difference in life expectancy between rich people and poor people is a real thing; the poor do worse on nearly everything that you can think of, that is well established and there is no two ways about it.
“But they were making a different claim which was about inequality, with the essential claim that if the UK reduced its level of income level inequality to about the level of Sweden, then we would see a dramatic decline in the murder rate, the mortality rate, and so on.
“This is supposedly true even if nobody got any richer, and they said this quite implicitly. If you created greater equality by just deporting all the rich people then that would suddenly have a positive effect on other things.
“The timing of the book was interesting, because they wrote it just before the financial crash and over the course of the next 10 years, you actually did see some of what they were prescribing.
“Inequality did fall, not to Scandinavian levels but to around the EU average, and we didn’t see any benefits, and why would we?
“The only reason inequality fell was because the average wage fell, and in fact, wages and incomes of the people at the top fell more sharply than anybody else.
“That reduced inequality, but it didn’t make anybody richer, and in fact, it coincided with a period of economic hardship.
“So the authors of The Spirit Level inadvertently got put to the test soon after the book came out, and it failed.”
Snowdon’s ideas are completely at odds with the prevailing left-wing consensus in the Scottish Parliament.
His first book, Velvet Glove, Iron Fist, railed against the anti-smoking movement which saw smoking banned throughout the UK in the middle part of the last decade.
The smoking ban is still held up as one of the greatest early achievements of the fledgling Scottish Parliament, but for Snowdon, it was just another manifestation of the ‘nanny state’ he proudly professes to despise.
“I got interested in the history of the anti-smoking movement around about 2006 when the smoking bans were coming in,” he said.
“I was a smoker then and I decided to see if I could pull together information about the history of smokers being persecuted which, essentially, has actually happened.
“It starts with the Spanish Inquisition, after Columbus went to America, through various dictators in the Ottoman Empire and Russia, and then it comes up to date with the current tobacco control movement.”
His latest book, The Art of Suppression: Pleasure, Panic and Prohibition since 1800, which charts the failure of prohibition through the ages from the temperance movement to the war on drugs, might actually find a few more fans in St Andrew’s House.
The Scottish Government has urged Theresa May to loosen the drug laws to allow safe injecting rooms in Glasgow, while some supporters of the move have cast admiring glances at Portugal, where drugs have been completely decriminalised, in an effort to cut Scottish drugs deaths, which are the highest in Europe.
Snowdon’s liberal attitude to drugs, coupled with his rejection of socialist notions of wealth distribution, makes it hard to peg him on the left-right spectrum which is often used to stifle debate.
“I have been called right wing, but I really don’t think ‘left’ and ‘right’ have been useful terms to describe people’s views for at least 200 years,” he said.
“When I hear the term ‘right wing’, I tend to think ‘socially conservative’, which I’m not. There isn’t an easy term for being socially liberal and economically liberal.”
Ruth Davidson, who broke the Tory mould by being a socially liberal lesbian leading the traditionally staid Scottish Conservatives, has likened her party to ‘Blue Dog Democrats’ in the US – which share the traditionally Republican desire for fiscal responsibility but reject their proscriptive notions about social issues like abortion or immigration.
Snowdon said: “I describe myself as a liberal, but basically, I’m a man without a party.
“The Liberal Democrats certainly aren’t the party for people who are liberal with their social views, they’re not religious, they don’t want the government getting involved in people’s private lives, they don’t want the government in the bedroom, and at the same time, they don’t want the government getting involved in every aspect of their financial lives either.
“It’s not a particularly unusual working position. It is a position that most 19th-century liberals held.
“My political hero is John Stuart Mill. I like to think that I’m similar to him, in that he was a laissez-faire liberal, and that he didn’t want to get involved in people’s lives.
“I think individual liberty is very important, and in fact, I write more about that social liberty than I do about economic liberty, but without economic liberty, I don’t think you’ve got that much liberty anyway.
“Even people like the Institute of Economic Affairs, and if you want to call them right wing that’s fine, but the IEA is not against the welfare state, it’s not against government paying for people’s healthcare, we just want to reform these things so they work a bit better.”
He added: “The point of having a free economy is not to make the rich richer so that they spend money on nannies and commission for the local Ferrari dealer.
“The point of a free market economy is to make the economy function really well, and one consequence of that is that the rich may very well get richer - in fact, it’s quite likely - but the important outcome is whether people on median incomes and particularly on lower incomes do better.
“Generally speaking, over the last 200 years the rising tide has lifted all boats.
“Peter Mandelson once said he was quite comfortable ‘with people getting filthy rich as long as they pay their taxes’, and I don’t disagree with that.
“People get obsessed with what is actually quite a small number of rich people and think if we could just take their money, everyone else would be better off.
“The reality is that there are nowhere near enough rich people, and they don’t have enough money to have anything more than a modest effect on the government budget, even if you did take all their money, and indeed all their wealth, which you couldn’t do anyway.
“So the idea that you can solve society’s problems with poverty by radical wealth redistribution is just not true.
“We have enormous wealth redistribution as it is, and it no doubt has made things better in many respects, but there is a limit to how much we can do that.
“We saw that with the income tax rise when the top rate of tax went up from 40p to 50p and you saw less money coming in. It then dropped to 45p and we saw more money coming in.
“It was the same with corporation tax, which generated more money when it dropped.
“The left are obsessed with corporation tax. ‘These guys have got loads of money, let’s take it off them’. But in fact, when you cut it, you tend to get more money coming in. Why? Because of capital flight.
“Whether you like it or not, it’s a global economy and people and businesses can just leave, but you need to attract them.
“That has a much bigger effect on the overall person’s standard of living than trying to squeeze another couple of quid from a handful of billionaires.”
Snowdon lets Derek Mackay off the hook, somewhat, as some of the most regressive taxes which he believes are keeping the poor down are actually outwith his control.
“It’s an incredible fact that the poorest groups in the UK pay the same proportion of their income in tax as the rich do, and that is overwhelmingly through indirect taxation,” he said.
“It is because of VAT, tobacco duty, alcohol duty, airline duty, and now the sugar tax. That to me is ridiculous.”
Airline duty is the only devolved tax in Snowdon’s list, and the Scottish Government has pledged to abolish it as soon as the budget allows.
However, the Scottish Government has broken one of Snowdon’s golden rules with its minimum pricing on alcohol policy, not strictly a tax but an attempt to influence behaviour by restricting the availability of cheap alcohol by upping the price, which is literally a big no-no in Snowdon’s book.
Critics of welfare reform will also be horrified to hear that Snowdon thinks Universal Credit is “a pretty sound idea” but he admits it has been badly implemented.
“Universal Credit looks like it’s going to be another government cock-up,” he said.
“We’ve got all these different benefits and the result has been essentially a poverty trap, because you lose money when you go into work so it’s a disincentive to work.
“It was a great idea to try and sort that out, but it looks like they’ve not managed to get it working properly.
“That’s not really surprising and that is one of my objections of government, in that they do tend to cock these things up even if they’ve got the best of intentions.
“Most people seem to think that the idea of Universal Credit was OK, even its opponents, but it’s been badly implemented.”
Snowdon acknowledges that some people may spend their benefit money on drink or drugs rather than essentials, but insists the only way to avoid that scenario would be to return to food stamps.
“Generally, in this country, there is no drive for food stamps even though we know full well that some people who we give money to for food are going to spend it on drink and drugs,” he said.
“I don’t think you make people more responsible by nannying them. In a free society, if you give people cash, they can go down the bookies, for example, but you would think people would learn from these mistakes.
“If they are suffering from such intense pressures, mental health problems or addictions, then maybe the government needs to step in and do something different, but I don’t have a problem with essentially giving people cash.
“We do it a lot of the time with benefits, so if the objection to Universal Credit is that you can’t trust people with the money then the only solution would be vouchers.
“We can’t trust people with their unemployment benefits or their pensions, so we’re just going to give them food vouchers for healthy food.
“Personally, I don’t think you create a more responsible citizenship by treating them like children.”
Snowdon said he is “in two minds” about one big idea to level the playing field which is popular with travellers on the left, including Nicola Sturgeon, known as the citizens’ basic income.
“I think it’s a good idea in theory,” he said. “Milton Friedman was one of the early supporters of it, or a negative income tax which is a slightly better version of the same thing.
“I think the problem with it is that it would have to replace everything else – and I don’t mean just benefits.
“It would have to replace the NHS, state-run schools, the lot, so you give people a set amount so that they can afford these basic things and a bit more. You would get money for your children and you would be able to use it to pay for whatever school you wanted to send them to, and that would encourage an element of competition and encourage schools to try different things to attract ‘customers’, if you like.
“You would do the same with the health service. Most countries have a health insurance system, and with the universal basic income, you would just be expected to pay for health insurance.
“If they want to blow all of their universal basic income betting on a horse then that is their prerogative – we want to treat people like adults.
“The budget for it would be enormous but the actual annual income that people would get would not be considered sufficient for some people.
“I think when Nicola Sturgeon talks about it, she’s thinking about, maybe, giving people £10,000 on top of all the benefits in kind that they are already receiving and that is just unaffordable.
“If you scrap the NHS, the entire welfare bill and the education system then you would have more money, and you could give people a basic income of a reasonable amount.”
Snowdon also agrees with Sturgeon that the British economy is lopsided, with too much investment and wealth creation in London and the South East and not enough effort to share it amongst the UK nations and regions.
“I think the UK is too unstable,” he said.
“I’m always surprised that there aren’t more businesses opening up in the north of England and Scotland, when you look at the lower rental prices and the lower wages you can pay outside of London. The whole thing seems almost like a market failure and at some point, you would think people would just snap and say this makes no sense, both for the people who are migrating south to work and the businesses that are setting up there. I think a rebalancing will happen, and in some senses, it is happening.”
However, he is sceptical that Scottish independence would lead to the eradication of inequality in Scotland, particularly the brand of independence espoused by the majority of nationalists who believe an independent Scotland would be a high tax, high public service Scandinavia-style utopia.
Snowdon’s prescription for an independent Scotland is actually closer to the one recommended by the SNP Sustainable Growth Commission, which horrified left-wing nationalists with its admiration of free market economies like New Zealand which attracted investment by cutting business taxes to the bone.
“I have no view on independence although I think Scotland could make it work, but not by becoming Scandinavia,” he said.
“I think the only way they could make it work would be by becoming like Hong Kong, or something, given that there are lots of businesses in London that are effectively getting ripped off by rents and wages.
“Ireland has done it, and I don’t see any other way to do it for Scotland. They can try to experiment with socialism for a few years, but it would quickly collapse
“If I was Scottish, I don’t think I would vote for independence, because it would seem that the economics don’t add up.
“England, as far as I can tell, does basically subsidise Scotland and without some kind of radical restructuring of the economy in order to attract a lot of investment and become, say, the Singapore of the North Sea, then I think independence would fail.
“But it’s not impossible by any means that they could make a success of it by competing with the UK and the EU for business, which is basically what the UK is seeking to do with Brexit.”