Enough: Why It's Time to Abolish the Super-Rich

Enough

‘This, right now, with no excuses, no delays, no equivocation, no loop-holes, no moaning.’

—Danny Dorling, Professor of Human Geography,

University of Oxford

‘A concise, readable and analytically sharp book that makes an incontrovertible case for a profound redistribution of wealth; and a rousing call to arms to take on the super-rich and build an economy that works for everyone.’

—Grace Blakeley, author of Vulture Capitalism

Enough

Why It’s Time to Abolish the Super-Rich

Luke Hildyard

First published 2024 by Pluto Press

New Wing, Somerset House, Strand, London WC2R 1LA and Pluto Press, Inc.

1930 Village Center Circle, 3-834, Las Vegas, NV 89134

www.plutobooks.com

Copyright © Luke Hildyard 2024

The right of Luke Hildyard to be identified as the author of this work has been asserted in accordance with the Copyright, Designs and Patents Act 1988.

British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library

ISBN 978 0 7453 4854 4   Paperback

ISBN 978 0 7453 4855 1   PDF

ISBN 978 0 7453 4856 8   EPUB

This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental standards of the country of origin.

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Simultaneously printed in the United Kingdom and United States of America

Contents

Acknowledgements

Introduction: Our Passive Acceptance of the Super-Rich

1More than Enough

2The Opportunity Cost of the Super-Rich

3The Economic Case for Equality

4Our Mis-Placed Deference to the Super-Rich

5Unearned Income and Wealth

6How to Abolish the Super-Rich

Conclusion

Notes

Acknowledgements

This book draws particularly on work done by the High Pay Centre, and I would especially like to thank colleagues behind a lot of the research and arguments cited – Andrew Speke, Rachel Kay, Harry Window and Rosie Neville.

The book also cites a number of external studies from other academics and researchers and I’m very grateful to authors who took time to discuss their work with me and highlight other relevant research, including Arun Advani, Andy Summers, Karen Rowlingson, Alex Maitland, Beth Stratford, Robert Palmer, Paul Monaghan, Thomas Dudley, Ethan Rouen and Camille Landais.

I am particularly grateful to David Castle at Pluto Press for commissioning the book and providing really useful insights and comments on drafts, as well as to Robert Webb during the production process, to Sophie Richmond for copy-editing, Dave Stanford and Melanie Patrick for design and formatting and to other Pluto colleagues involved with promotion and marketing: Emily Orford, Chris Browne, Alex Diamond-Rivlin, James Kelly, Jonila Krasniqi and Patrick Hughes.

Finally, I’d like to thank my incredible partner Georgina for being so unbelievably patient and supportive while I embarked on what was, with hindsight, the somewhat cavalier undertaking of writing a book while also trying to manage a full-time job and co-parent a one-year-old child.

Introduction: Our Passive Acceptance of the Super-Rich

As Director of the High Pay Centre, a ‘think tank’ that carries out research on economic inequality, employment rights and responsible business, I very occasionally get invited onto obscure radio stations at anti-social hours to join discussions on topics like CEO pay, bankers’ bonuses or billionaire wealth, if ever they happen to be in the news. The High Pay Centre generally takes a critical view of inequality and the super-rich, so the conversations often also include a representative of a think tank or pressure group that thinks these issues don’t matter so much. This ensures a balance of perspectives and if both of us tell friends or family we’re appearing it probably helps to get the audience numbers into double figures.

On one such occasion the ‘free market’ activist responding to my comments about the need to curb executive pay suggested to me, the presenter and possibly some people listening at home that ‘you don’t make the poor richer by making the rich poorer’.1 This comment summed up their argument with a line that was clear, memorable, effective and – in my opinion – profoundly wrong. In some ways, reflecting on that axiom, and the extent to which it shapes economic policy, and therefore people’s standards of living, was the genesis of this book.

My instant response was to garble something profoundly forgettable and very ‘think tank’ about how policies and regulations that affect the distribution of economic resources are in fact vitally important determinants of living standards. The audience no doubt drifted into the next segment with the lasting impression that you don’t make the poor richer by making the rich poorer.

To make the poor richer, you have to make the rich poorer

I should have just said ‘yes you do’. There are already loads of ways in which money is taken from the rich and given to the poor, often mandated by government intervention. These can be grouped into two categories – ‘redistribution’, whereby the resources accumulated by the rich are transferred to those who are not so rich, and ‘pre-distribution’, meaning mechanisms that apply further upstream, preventing money or assets that would otherwise accrue to rich people from reaching them in the first place, and ensuring they flow to people who are less well-off instead. Both processes can affect levels of annual income (how much someone accumulates in a year) or wealth (the total value of their assets including property and other possessions, pensions or financial wealth).

Despite being the kind of exceptionally unpoetic terms only ever used by professional policymakers, redistribution and pre-distribution are critical to securing a decent standard of living for vast numbers of people. All countries already do both to differing extents, and poverty, inequality and instability would be much worse if they didn’t.

Examples of redistribution include progressive taxes, which are paid disproportionately by rich people and used to benefit the entire population. This can mean literally giving money raised from the rich to the poor or disadvantaged – when these taxes are used to fund social security payments that support those on low incomes who might be in low-paying work, or have disabilities, or have lost their job. And it can also mean what is effectively indirect redistribution, whereby tax revenues are used to fund public services that benefit everyone – and that many people might otherwise be unable to afford – like health services or education.

Examples of pre-distribution include the minimum wage, which prohibits employers from paying their staff below a certain hourly rate, thus raising the pay of low earners and reducing the profits that would otherwise accrue to the business owners. Similarly, key employment rights, like rules guaranteeing trade union representation or preventing employers from sacking striking workers, are pre-distributive. They strengthen the negotiating position of generally lower-paid workers, meaning they get a bigger share of the revenues generated for the employer by their labour, again at the expense of profits accruing to the generally richer business owners.

In all these examples, the government makes poor people richer by making rich people poorer, either by giving the poorer people money or access to public services disproportionately paid for by rich people, or by implementing laws that facilitate increases to the income and wealth of generally poorer people at the expense of generally richer people.

Extreme high incomes and wealth sit alongside stagnating living standards and widespread hardship

The examples are interesting in the context of my talk radio interlocutor’s comments, because all these developments – the welfare state funded through progressive taxation, the minimum wage and the role of trade unions in economic life – were considered to be bordering on revolution when they were originally proposed. But despite facing strong initial resistance, they are widely, if not universally, accepted (albeit to differing degrees) across all advanced economies by almost all mainstream political parties and are generally agreed to have hugely improved society.

Now, as of mid-2023, it is fairly uncontroversial to say that the UK is failing quite badly socio-economically in many different ways. After over 15 years of pay stagnation real average pay remains below 2008 levels.2 Food bank use is hitting record highs.3 Polling in spring 2023 suggested that around 5 million households could not afford to heat their homes adequately, while over 2 million had defaulted on major payments like their mortgage, rent or credit card bills in the previous month.4

Our public services and infrastructure are also in a parlous state. The number of people waiting for consultant-led treatment on the NHS had ballooned to over 7 million people by April 2023, with more than 4 million waiting for over 18 weeks, double the figure for those facing a similar wait in 2010.5 An international analysis found that the UK has the fewest MRI/CT scanners of any of 19 comparable high-income countries, the second fewest hospital beds per 1,000 people and the fifth fewest intensive care beds.6

As these problems accumulate, the share of total incomes held by the richest 1 per cent of the UK population continues to hover close to its highest level since the Second World War, while the top 1 per cent by wealth own assets of a greater value than those of the bottom 50 per cent combined.7 The combined wealth of the richest 350 households in Britain as reported by the Sunday Times Rich List reached a new high of nearly £800 billion in 2023.8

A similar contrast is visible in other countries. In the US, for example, the Institute for Policy Studies think tank estimated that between the outbreak of the Covid pandemic in March 2020 and autumn 2022 billionaire wealth increased by about 50 per cent or $5 trillion.9

At the same time, extraordinarily terrible developments are occurring regarding the health and well-being of millions of Americans. Life expectancy rates in the country have fallen, in part due to the pandemic, but also due to rising rates of suicide, drug overdoses and factors including alcoholism and poor diet.10 In 2021, 210,000 Americans died from so-called ‘deaths of despair’, linked to alcohol abuse, drugs or suicide.11

An estimated 20 million people in the US are living in deep poverty – classified as having less than half the cash income required to surpass the poverty threshold (in 2021 this amounted to an income of less than $7,049 for a single individual under 65 and less than $13,740 for a family with two children).12 Nearly 28 million Americans have no health insurance, meaning they potentially lack access to vital medical care.13

The problem of the Super-Rich is being ignored by politicians who think we can grow pies and cakes

Despite the juxtaposition of collapsing public services and widespread hardship on the one hand, and the inexhaustible accumulation of vast riches by a tiny number of already incredibly well-off people on the other, the potential to ameliorate socio-economic problems and generate wider well-being through redistribution or pre-distribution is essentially being ignored. It is extraordinary to record that in the political mainstream there is no real discussion of rebalancing income and wealth significantly, let alone a policy programme with that stated intent. The existence of the super-rich isn’t seen as problematic or inefficient and the premise that to make the poor richer, you need to make the rich poorer is emphatically rejected, certainly by mainstream policymakers with any realistic prospect of political power.

Neither of the UK’s two major political parties has, for example, committed to a wealth tax on millionaires that would generate billions in support of vital public services. Arguably the most high-profile reform the government has enacted since ‘taking back control’ of our laws from the EU on behalf of the left-behind regions of Britain was to lift the cap on bankers’ bonuses.

It is true that the abolition of the top rate of income tax by the Liz Truss government in autumn 2022 was at least swiftly reversed, but the fact that the government’s instinct was to reduce taxes on the very richest (and that plans to do so were wildly cheered by MPs in Parliament) demonstrates how far the prospect of significant increases in taxes on the rich remain from the mainstream.

Setting out her agenda as UK prime minister in the Daily Mail, Truss told readers that ‘For too long politicians have fought over how to slice up the economic pie. My mission is to make it much bigger’.14 This was one of the clearest expressions of a series of beliefs that have defined recent policymaking in the UK: a delusion that the country, one of the most unequal in the developed world, is overly focused on reducing inequality; a belief that distribution doesn’t matter; and a bizarre conviction that this philosophy is