The third way needs a theory of fairness. These days most of us are rather confused about those grand old phrases-“social justice,” “equality of opportunity,” “meritocracy.” New Labour is no exception.
Almost everyone agrees that equality of outcome is out, and equality of opportunity and meritocracy are in. The trouble is that the latter are as unattainable as the former without trampling over many of the values we cherish. Even if inheritance tax is raised and private schools closed, you cannot ban people from handing on the “cultural capital” which is what matters in shaping life chances. And the majority of us with only moderate talents know that a real meritocracy would be an uncomfortable place in which to live.
We want something gentler than the social Darwinism of the right, but rooted in today’s realities. The economic reality is that capitalism is creating a more diverse income spectrum and a wider gap between top and bottom. The best that centre-left governments can do is to slow the speed at which the gap increases, through mild redistribution. Indeed this is what has happened in Britain over the past two years. There has been more redistribution, but at the same time the inequality gap has continued to widen.
So, what’s the problem? The old fixation with the “gap” is the problem. A third way theory of fairness should state that the gap does not matter-or at least that it matters less than the life chances of the people at the bottom. If those are rising steadily then it does not matter that the rich are getting even richer. People once assumed that redistribution would automatically narrow the gap. But redistribution now coexists with a growing income gap.
“Gap” thinking is also based on a defunct zero-sum idea of wealth creation. In a 19th-century mining village it was clear that the mine owner’s wealth in a sense caused the poverty of the miners. Other than the odd sweat shop, that is not the case today. The poverty of the poor does not create the richness of the rich and vice versa. Bill Gates has not amassed a fortune of $150 billion by exploiting the poor of Seattle.
Public policy might still want to distinguish between the “good” rich (meritocratic)-whom Tony Blair likes to praise-and the “bad” rich (inherited from ancestors in the slave trade). The point is that the rich, and…