London’s mayor is half right on envy, greed and inequality

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Boris Johnson has a talent for carefully calculated imprudence. The London mayor says, apparently artlessly, things others are advised not to say. The result is that while appearing as a buffoon, he is in fact one of the most thoughtful politicians of our time. These abilities were in evidence last week when he delivered the Margaret Thatcher memorial lecture.

Mr Johnson appeared to regard the observation that Britain had invaded 171 countries as a matter for pride not apology. But since he was clearly not suggesting we should once more adopt this foreign policy, his evident purpose was to wind up critics he knows will not vote for him anyway.

Other headline-grabbing observations were, similarly, truths that these critics think should go unmentioned rather than ones with which they could reasonably disagree. More people do have an IQ below 85 than above 130. (As Mr Johnson doubtless knows, this is a result of the way the statistics are constructed, not a function of the level and dispersion of achievement.)

When Mr Johnson said “after 2008 the left was ushered centre stage, and missed their cue: political history reached a turning point and failed to turn”, he scored a hit against his political opponents. When capitalism finally came to the point of collapse under the weight of its internal contradictions – an event Europe’s left had long anticipated – the policy response of its representatives was, and continues to be, to avert that collapse with lots of public money. Voters responded to this intellectual vacuum by throwing out whichever party – left or right – was in power at the time, and by turning to fringe parties.

But it was on inequality that Mr Johnson was most controversial. “Some measure of inequality is essential for the spirit of envy,” he said. “Keeping up with the Joneses is, like greed, a valuable spur to economic activity.” Yet most critics of capitalism deplore these things rather than deny that they are true.

Where Mr Johnson is wrong is in suggesting social mobility is what makes inequality tolerable. If medieval peasants did not resent the wealth of the king, it was not because they could imagine themselves as king but because they could not. Political agitation came from those who might be king. Social unrest increased when education and economic change enabled people to aspire to a lifestyle that most could not, in fact, achieve.

Envy is, therefore, indeed both inseparable from economic progress and destructive of social cohesion. Some inequality is inevitable, and there seem to be three principal factors that make it more tolerable.

Inequality is easier to accept if everyone is becoming better off. Recent dissatisfaction in Britain and the US is significantly attributable to the fact that while some have grown much richer, median incomes have not increased. The criticism that the rapid economic growth of China and India has been accompanied by rising inequality is mainly made from outside these countries.

Inequality is easier to accept if the beneficiaries have benefited people other than themselves. Bill Gates’s extraordinary wealth causes little resentment because he is associated with technological innovations that have transformed business and personal life. Financiers rarely attract similar approval because – sometimes rightly, sometimes wrongly – they are suspected of appropriating wealth created by others rather than engaging in genuine wealth creation.

And inequality is more tolerable if its beneficiaries behave well. Mr Gates has chosen to devote his Microsoft fortune and his time to philanthropy rather than fly in entertainers and exotic foods for lavish parties. Investor Warren Buffett lives in the Omaha bungalow he purchased 50 years ago.

Mr Johnson knows these things. When he muses on whether the widening income gap is the result of “boardroom greed or, as I am assured, the natural and God-given talent of boardroom inhabitants”, he makes clear which side he is on. When he refers to teddy bear braces and young people driving Porsches, it is not with approbation. And when he hopes, somewhat optimistically, that “this time, the Gordon Gekkos of the world are conspicuous not for their greed as for what they give and do for the rest of the population”, he correctly identifies the moral issue at the heart of London’s role as a financial centre.

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