Just another not very bright lefty groupuscule. Credit - TJN

The Tax Justice Network is one of these self-appointed groupuscules who think that if we all pay more tax then the world will become a Nirvana. No, not a boring group of largely unwashed young men caterwauling for large incomes, but the opposite a very heaven on Earth. Just give more money to Theresa May – or perhaps Jeremy Corbyn – to spend and Bob’s your parents’ relative of choice given these non-sexist days.

They do tend to rather brush over the important points in their insistences though. To the point that either they’re fools themselves or they’re trying to fool us. In reporting upon the situation in Bermuda they tell us that:

Without question, the twin afflictions of extreme income inequality and mounting poverty are recognised as the defining economic and public policy challenges facing the world today.

That’s interesting, Because everyone with an intellect above amoeba levels knows that poverty isn’t mounting, it’s falling dramatically. As those last few billions in absolute poverty fall to under one billion, down into the hundreds of millions and our best bet is that the number will be around about zero by 2030. You know, the largest reduction in human poverty in the history of our species, brought to you by neoliberalism and globalisation.

Yes, really, we do expect the number of people living routinely on under that $1.90 a day to reach around and about zero in just over a decade hence. The first time this will have been true since Homo Erectus first picked up a stone.

Mounting poverty? Pshaw!

But it is worse, of course it is, this is from the TJN:

Not surprisingly, the causes, consequences and potential remedies of extreme inequality and poverty have become the primary focus of researchers globally in recent years.

They are telling us that inequality and poverty are different things. And they can be, but are they in their measurements?

Unsurprisingly, extreme income inequality leads to significant differences in health and educational outcomes and impedes social mobility, severely curtailing the life chances of the poor. As some will regard as patently obvious, high levels of poverty and inequality serve to squander the talent and thwart the potential of individual lives of the disadvantaged.

Different things these inequality and poverty.

They then wibble on a bit more and finally we hear that there aren’t in fact any Bermudan statistics on poverty. Presumably the ghost of Sir John Cowperthwaite lives on in some outposts of Empire still.

Extending our international mosaic of inequality and poverty statistics is additional data from Guernsey – the Crown Dependency with not only an industry makeup very similar to that of our own economy, but of virtually identical land mass and population as ourselves as well. Obligingly, Guernsey’s statisticians publish their household income data on an equivalised and unequivalised basis allowing us to make the same comparison as we did earlier with London. As seen in Figure 9, while possibly not as severe as Bermuda’s, Guernsey is contending with inequality and poverty levels which, at least amongst developed, high-income countries, represents the world’s most extreme.

So, they take the poverty numbers from Guernsey and add a bit on for good luck. Hmm – but it should be said that worse is perpetrated every day in political statistics. In the absence of real numbers estimation is necessary, after all.

So, the Guernsey poverty numbers:

In 2014, 60% of the median net equivalised annual income was £18,655. 22.3% of people lived in a
household which had an income lower than that.

That does equate to the poverty numbers TJN claims for Guernsey. So, we’re talking about relative poverty then in Bermuda as well. And relative poverty isn’t poverty, it’s inequality.

There’s a reason behind this too. It used to be that the rich world left fought against actual poverty. That $1.90 a day thing. Capitalism and neoliberalism and markets and the economic development they bring led to even Barbara Castle pointing out – in 1959 – that the gross poverty and want they had started out fighting against had gone. Been killed off by that economic development – rising tides really do raise all boats.

It’s also true that at the time the general public didn’t give a beggar’s snot for inequality. Sure, lefty activists did but shouting about it wasn’t going to gain many votes. So, rename it, to relative poverty. Which is what all the rich nations other than the US use today as their poverty measure. It’s always a relative number, relative to the median. Which isn’t a measure of poverty, it’s a measure of inequality. But, politics, invest inequality with that aura of poverty, that historic want and outrage which we should all indeed fight against.

We’ve got to remember that as well. Inequality falls in recessions, relative poverty might as well. But we’d be mad or Maoists to insist that screwing the economy in order to reduce inequality, or relative poverty, would be a good idea. We might well be rather wise to advocate policies to reduce absolute poverty, that $1.90 a day. We might, just, be sensible in arguing to reduce inequality. But to confuse together relative poverty and inequality is to fall into the temptation of lowering all incomes to reduce poverty. Just not the way it works, is it?

So, what are TJN telling us here about Bermuda, inequality and poverty? That they’ve forgotten that the poverty measure they’re using, relative poverty, is in fact a measure of inequality. They’re thus telling us about inequality and inequality in Bermuda. That is, the TJN is either fools or trying to fool us.

File this report, as with their others, in that round filing cabinet under the desk.

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  1. “the twin afflictions of extreme income inequality and mounting poverty”…Why is absolute need a “twin” of relative need? Why do we even measure “inequality” unless we believe without measuring that someone’s success caused someone else to fail? These are not twin “afflictions”; they are merely twin sales pitches.

    “extreme income inequality leads to significant differences in health and educational outcomes” — Sure, given that stuff costs money — “and impedes social mobility, severely curtailing the life chances of the poor.” In fact, seeing someone making more than you might prompt you to pursue social mobility — unless a group of gadflies convince you to wait for Robin Hood to come to the rescue, or that not even he can lift you up. If so, it is a good thing there are opioids.

    Guernsey’s unique tax situation surely has induced some of the super-rich to reside there, as it is a shorter walk into town to count their money. Does their presence make anyone poorer? Do they fly in with sandwiches for their entire stay?

    • In fact, it’s not even true that “extreme income inequality leads to significant differences in health and educational outcomes” given that these are the two things most commonly given away for free, in response to a comparable campaign of misery/pity conducted in the past. Income inequality does not lead to these two things. People are different, and some people just don’t give a bleep, especially those on government assistance.