[Marxism] Robin Hood in a Time of Austerity

Louis Proyect lnp3 at panix.com
Thu Feb 11 15:25:59 MST 2016

LRB, Vol. 38 No. 4 · 18 February 2016
Robin Hood in a Time of Austerity
James Meek

Myth is a story that can be retold by anyone, with infinite variation, 
and still be recognisable as itself. The outline of surviving myth is 
re-recognised in the lives of each generation. It’s an instrument by 
which people simplify, rationalise and retell social complexities. It’s 
a means to haul the abstract, the global and the relative into the realm 
of the concrete, the local and the absolute. It’s a way to lay claim to 
faith in certain values. If those who attempt to interpret the world do 
so only through the prism of professional thinkers, and ignore the 
persistence of myth in everyday thought and speech, the interpretations 
will be deficient.

This is the importance of the Robin Hood myth. It’s the first and often 
the only political-economic fable we learn. It’s not a children’s story, 
although it is childlike. It contains the three essential ingredients of 
grown-up narrative – love, death and money – without being a love story, 
a tragedy or a comedy. It doesn’t tell of the founding of a people. It’s 
not a fairy story or a religious myth; it has no monsters, gods or 
wizards in it, only human beings. It’s not a parable. In place of a 
moral, it has a plan of action. What does Robin Hood do? We all know. He 
takes from the rich to give to the poor.

A change has come over Robin Hood. On the surface, he’s the same: the 
notion of taking from the rich to give to the poor is as popular as 
ever. But in the deeper version of his legend, the behaviour-shaping 
myth, he’s become hard to recognise. The storytelling that makes up 
popular political discourse is crowded with tales of robbery, but the 
story has been cloven. I can no longer be sure that my Robin Hood is 
your Robin Hood, or that my rich and poor is your rich and poor, or who 
is taking and who is giving.

The old Robin Hood, embodiment of the generous outlaw of Sherwood 
Forest, still occasionally bubbles up, as when the actor-director Sean 
Penn called Joaquín El Chapo Guzmán, head of the world’s biggest 
supplier of banned narcotics, ‘a Robin Hood-like figure who provided 
much needed services in the Sinaloa mountains’. This is Robin Hood the 
‘noble robber’, in Eric Hobsbawm’s characterisation. In the final 
edition of his much reworked book Bandits, Hobsbawm bids farewell to the 
type. ‘In a fully capitalist society,’ he writes,

the conditions in which social banditry on the old model can persist or 
revive are exceptional. They will remain exceptional, even when there is 
far more scope for brigandage than for centuries, in a millennium that 
begins with the weakening or even the disintegration of modern state 
power, and the general availability of portable, but highly lethal, 
means of destruction to unofficial groups of armed men. In fact, to no 
one’s surprise, in most ‘developed countries’ – even in their most 
traditionalist rural areas – Robin Hood is by now extinct.

Sinaloa state in Mexico, from where El Chapo carried on his business 
until his recent recapture by the combined forces of the entertainment 
world and the Mexican marines, is still fertile ground for belief in the 
existence of the noble robber in a way present-day Nottinghamshire, or 
Missouri, or Victoria, once homes to the mythical Robin Hood and the 
real Jesse James and Ned Kelly, no longer are.

Still, if we move out from Hobsbawm’s focus on the social bandit as 
actual individual, and consider the entire Robin Hood myth, the ideal 
remains familiar in our outlaw-free world. The myth requires a great 
mass of heavily taxed poor people who work terribly hard for little 
reward. The profits of their labour, and the taxes they pay, go to 
support a small number of lazy, arrogant rich people who live in big 
houses, wallow in luxury, and have no need to work. Any attempt to 
resist, let alone change, this unjust system is crushed by the weight of 
a vast private-public bureaucracy, encompassing the police, the courts, 
the prison system, the civil service, large property-owners and banks, 
all embodied in the ruthless figure of a bureaucrat-aristocrat, 
personification of the careerist-capitalist elite, the sheriff of 

Two figures stand between the sheriff and the poor. One is the absent 
king. He carries a monarch’s title, but exists only to represent benign 
authority, order and justice, the kinder, fairer authority that existed 
before he went away, naively leaving the sheriff to govern in his name 
and pervert his wishes, the same authority he will restore when he 
returns. The other is Robin Hood, who defies the system, who stands up 
for the little people, who levels the playing field. He takes from the 
rich to give to the poor.

It’s a plan. Taking from the rich to give to the poor has been, is and 
should be the way forward for an exploited majority against remote, 
unaccountable concentrations of extreme wealth and power. One word for 
it is ‘redistribution’. Robin Hood is a programme of the left. Robin 
Hood is Jeremy Corbyn. He’s Russell Brand. He’s Hugo Chávez.

So it used to seem. But a change has come about. The wealthiest and most 
powerful in Europe, Australasia and North America have turned the myth 
to their advantage. In this version of Robin Hood the traditional poor – 
the unemployed, the disabled, refugees – have been put into the 
conceptual box where the rich used to be. It is they, the social 
category previously labelled ‘poor’, who are accused of living in big 
houses, wallowing in luxury and not needing to work, while those 
previously considered rich are redesignated as the ones who work 
terribly hard for fair reward or less, forced to support this new 
category of poor-who-are-considered-rich. In this version the sheriff of 
Nottingham runs a ruthless realm of plunder and political correctness, 
ransacking the homesteads of honest peasants for money to finance the 
conceptual rich – that is, the unemployed, the disabled, refugees, 
working-class single mothers, dodgers, scroungers, chavs, chisellers and 

In this version of the myth, Robin Hood is a tax-cutter and a 
handout-denouncer. He’s Jeremy Clarkson. He’s Nigel Farage. He’s 
Margaret Thatcher and Ronald Reagan. He’s by your elbow in the pub, 
telling you he knows an immigrant who just waltzed into the social 
security office and walked out with a cheque for £1000. He’s in the 
pages of the Daily Mail, fingering a workshy good-for-nothing with 11 
children, living in a luxury house on the public purse. He’s sabotaging 
the sheriff of Nottingham’s wicked tax-gathering devices – speed cameras 
and parking meters. He’s on talk radio, denouncing inheritance tax. He’s 
winning elections.

This is not a uniquely British phenomenon. The alternative version of 
the Robin Hood story is heard when left and right clash in Australia, 
Canada and the United States. An early version was the ‘welfare queen’ 
legend of America in the 1970s, popularised by Reagan. The ‘welfare 
queen’ was a mythical woman, usually portrayed as black and swathed in 
furs, who drove her Cadillac to the welfare office to pick up a dole 
from the government that amounted to $150,000 a year, tax-free.

Today, the key signifier is the phrase ‘hardworking people’. With this 
expression, right-wing politicians embrace the entire spectrum of 
employed people with property, from a struggling small-time café owner 
with a bank loan to Britain’s richest beneficiary of inherited wealth, 
the multibillionaire Duke of Westminster (who does have a job, looking 
after his money), and class them as peasants, put-upon smallholders 
clawing a living from the soil in the face of the sheriff’s cruel tax raids.

Here is the Conservative chancellor, George Osborne:

We choose aspiration. This budget backs the self-employed, the small 
business owner and the homebuyer. We choose families. This budget helps 
hardworking people keep more of the money they have earned.

His boss, David Cameron, criticising Labour in Parliament last month:

They met with a bunch of migrants in Calais, they said they could all 
come to Britain. The only people they never stand up for are the British 
people and hardworking taxpayers.

The former Conservative prime minister of Canada, Stephen Harper, in 2015:

The opposition will say, now, let’s spend and spend and spend. But, next 
year, we will use the fiscal room to do what we promised: cut taxes for 
hardworking Canadian families.

The US Republican Marco Rubio, who wants to be president, speaking at a 
debate in 2015:

Under my plan, no business, big or small, will pay more than 25 per cent 
flat rate on their business income. That is a dramatic tax decrease for 
hardworking people who run their own businesses.

As the Economist pointed out, whatever crumbs Rubio’s tax plans might 
offer low-earners, the great beneficiaries would be the mega-rich: the 
most wealthy 1 per cent of Americans would receive a tax cut worth an 
eighth of their income. That’s the way the ‘hardworking people’ shtick 
operates. You can be a hedge fund manager with a ten-figure salary. You 
can be a near full-time partygoer who dabbles in property development, 
living off the money your great-grandparents made. Once you would have 
been universally numbered among the rich. Now you are bracketed, through 
the formula of ‘hardworking people’, with the oppressed of the earth.

In characterising ‘hardworking people’ as the conceptual poor, no matter 
how technically rich they might be, right-wing polemicists evoke a class 
of people who are not hardworking. Why are they not hardworking? We are 
invited to speculate. Perhaps they are lazy. Perhaps they came from a 
poor country, attracted by the bounties and luxury houses the government 
offers foreigners. Perhaps they belong to a trade union, an organisation 
that exists, as Osborne likes to explain, to stop people working hard by 
badgering them to go on strike. Perhaps they are pretending to be ill, 
or bred improvidently, or failed to prepare for their retirement. 
Anyway, they don’t work hard enough, or didn’t when they were younger; 
but instead of being punished for this, they’re rewarded by the 
government with lavish benefits. They are idle, they are well-off, and 
they live off the hard work of others: thus are those who would once 
have been numbered among the poor transformed into the despised rich.


In 2010, in the wake of the financial crisis, a campaign was launched in 
Britain to get the government to introduce something called the Robin 
Hood Tax. The idea of the tax is, on the taking side, to discourage the 
reckless speed with which banks and funds shift vast, destabilising 
amounts of money from place to place around the globe, and, on the 
giving side, to raise money to combat poverty and climate change – all 
this to be achieved by levelling a tax on every financial transaction. 
It has been embraced by the shadow chancellor, John McDonnell, and 11 
European countries plan to introduce something like it, called the 
Financial Transaction Tax. Britain will not be one of those countries 
while the Conservatives are in charge. Shifting vast, destabilising 
amounts of money from place to place around the globe is one of the 
areas where Britain is keen to help.

The Robin Hood Tax isn’t a bad idea. Introduced by enough wealthy 
countries, and with enough pressure put on the tax havens they protect, 
it could be a forerunner to the far more radical global tax on capital 
proposed by Thomas Piketty as a way to ease the extremes of inequality 
built into the capitalist system. The idea goes back at least to Keynes. 
But the fact modern supporters chose to name it after the legendary hero 
of Sherwood Forest is a marker of how popular thinking about taxation 
has changed. Isn’t all tax a Robin Hood tax? Isn’t tax, to put it 
another way, the form in which the Robin Hood myth finally crystallised 
into reality? If communities in the Sinaloa Mountains really do rely on 
the philanthropy of the narco-baron El Chapo for much needed services, 
surely the reason is to be found in the flaws of Mexico’s system of 
taxation and social spending? Maybe the solution to inequality and to 
austerity economics is not a Robin Hood tax. Maybe it’s just tax.

The entry level for national myth is high. It’s not that the mythical 
hero must have some basis in historical fact: that might actually be an 
obstacle. It’s that any individual must be able to interrogate their own 
memory to assemble their own version of the myth. When I try to conjure 
Robin Hood in this way, without looking anything up, just from 
pre-existing fragments, I produce a figure who is no longer young, yet 
lean and agile, almost acrobatic. Sometimes he’s scruffy, unshaven, 
morose, clad in leather and chain mail; at other times, oddly well 
groomed, smiling, fey, in a tight-fitting pantomime costume of bright 
green and a jaunty hat with a feather. He goes on foot, with a bow slung 
over his back, greets his compadres in a hearty manner, and is dogged by 
a stubborn sense of fairness. He has a girlfriend, Marian, but it’s hard 
to shake off the sense that she’s there as a kind of beard, to offset 
uncertainty among the socially conservative peasantry over what Robin 
and the merry men get up to in the woods when they aren’t out on the 
rob. There’s an obese cleric, a fight with staves on a bridge over a 
stream, a scene where Robin is captured, and an episode where Robin, in 
disguise, wins a silver arrow in a contest hosted by his arch-enemy.

All this revolves, however, around a single, eternal, core chapter. Here 
it is. We’re in the forest. Shafts of sunlight fall through the canopy 
and strike the golden leaves on the forest floor. A column on horseback 
rides in wary silence between the trees. First comes a soldier in chain 
mail; then a haughty gentleman, dressed in clothes that are at once 
ostentatious, expensive, and redolent of decadent fetishes; then a cart 
carrying an iron-bound strongbox, guarded by more soldiers; then the 
rearguard. A horse rears and whinnies. A feathered arrow is embedded, 
quivering, in the bark of a tree, just in front of the rich man’s 
arrogant nostrils. The soldiers draw their swords, but it’s too late; 
each finds himself with an outlaw’s arrow pointing at his head. The rich 
man, who turns out to be the sheriff of Nottingham, becomes a snivelling 
coward, begging his attackers to take the money and spare his life. The 
strongbox is taken and forced open. Silver coins spill out. The outlaws 
are about to fill their pockets, but Robin wards them off: this money is 
for the poor.

However abstract the Robin Hood myth has become in political terms, to 
retell it is to embed the central plan of taking from the rich to give 
to the poor in the specifics of the era when it first emerged, somewhere 
between the First Crusade and the Black Death, that is, somewhere 
between the beginning of the 11th century and the middle of the 14th. In 
the context of high medieval England, the modern right-wing notion of 
taxation as an oppressive burden on the great mass of people makes 
sense. The majority of the population were peasants working the land. 
They were obliged to pay three kinds of tax: one, indirectly, through 
customs duties and debasement of the coinage, to the king, to finance 
his wars; another to the church; and a third, the largest, to their 
feudal landlord. Most peasants were enserfed – that is, bound to the 
lord in the place where they were born – and paid taxes in kind, in the 
form of compulsory labour in the lord’s fields, with the family having 
to surrender their best beast to their lord when the head of the 
household died. At the same time they were subject to an intense system 
of local monopolies under the lord’s control – obliged to pay to use the 
lord’s mill to grind their corn, for instance, or the lord’s ovens to 
bake their bread – and to a complex web of prohibitions, fees and fines 
for everything from having a child out of wedlock to killing the lord’s 
doves. This flow of money, labour and goods from the slave poor to the 
landholding rich brought nothing to the poor in return except a vague, 
often broken promise of protection from external violence and the 
intangible pledge of relief in heaven. The rich were not hardworking; 
they would have been insulted to be described as such. They 
conspicuously spent the taxes they received on themselves: on luxuries, 
on display, on the aristocratic pastimes of war, poetry, fashion, music, 
dancing, hunting, romance and fornication. The medieval Robin Hood, 
then, was not taking from the rich to give to the poor so much as taking 
back from the rich to return to the poor, who would be doing all right 
if the rich hadn’t been so greedy.

It’s this medieval notion of taxation as robbery from a hardworking 
peasantry to fund the lifestyle of idle hedonists that maps directly 
onto the version of the Robin Hood myth that conservative and right-wing 
populist parties want to promote. This is what Osborne is getting at 
when he tweets with the hashtag #hardworkingpeople and says: ‘Where is 
the fairness, we ask, for the shift-worker, leaving home in the dark 
hours of the early morning, who looks up at the closed blinds of their 
next-door neighbour sleeping off a life on benefits?’ When he does this 
he’s positioning himself as Robin Hood; the welfare state and the 
unemployed as the rapacious Anglo-Norman aristocracy of 13th-century 
England; and all those who think they pay more in taxes than they get 
back, be they shift workers or billionaires, as the peasants who feed 
them. In Pity the Billionaire: The Unlikely Comeback of the American 
Right, Thomas Frank describes a similar process in America: ‘The 
conservative renaissance rewrites history according to the political 
demands of the moment, generates thick smokescreens of deliberate 
bewilderment, grabs for itself the nobility of the common toiler, and 
projects onto its rivals the arrogance of the aristocrat.’

A socialist Robin Hood – one whom the myth does not provide – would tell 
the sheriff he doesn’t want his money, but his power. He wouldn’t be 
fobbed off with a box of silver coins: he would demand control of the 
system. Rather than destroying taxation, he would shift the burden from 
the poor to the rich, and spend the revenue for the common good. But as 
Hobsbawm tells us, while the noble bandit may be generous and 
chivalrous, he’s a lousy socialist:

Insofar as bandits have a ‘programme’, it is the defence or restoration 
of the traditional order of things ‘as it should be’ (which in 
traditional societies means as it is believed to have been in some real 
or mythical past). They right wrongs, they correct and avenge cases of 
injustice, and in doing so apply a more general criterion of just and 
fair relations between men in general, and especially between the rich 
and the poor, the strong and the weak. This is a modest aim, which 
leaves the rich to exploit the poor [and] the strong to oppress the weak.

The Robin Hood myth may be copied over into political discourse, but the 
translation won’t go in the opposite direction. The core Robin Hood 
scene of taking from the rich to give to the poor is cathartic rather 
than curative.


The start of the great redistributive transformation, the moment when 
the medieval system of taxation began decisively to change into the 
modern system and the welfare state, only occurred when Robin Hood laid 
down his bow, came out of the forest and took over the sheriff’s office. 
In Britain, it’s hard to fix exactly when this happened. On the face of 
it, some of the arrangements made for the disabled, the unemployed, 
widows and orphans in the late 16th and early 17th centuries were 
enlightened – the Elizabethan Poor Law, for instance – and obliged the 
gentry to stump up to help the less fortunate. Yet the labouring classes 
themselves had no say, and were still subject to the economic orthodoxy 
of the time, which held that paying labourers anything more than 
subsistence wages would ruin the country. The more closely one looks at 
the poor laws of the Tudor era the less they look like the first signs 
of equality, or even an attempt to mimic the patriarchal obligations of 
the lord-serf system, and the more like an attempt by the better-off to 
suppress the dangerous habit the country’s former serfs had acquired of 
moving from place to place in search of a better life.

Robert Peel’s introduction of Britain’s first peacetime income tax in 
1842 – just under 3 per cent on incomes above £150 a year – was, in 
retrospect, a breakthrough, if not one the protest movements of the era 
had demanded. For Peel, trying to marry laissez-faire economics with 
Tory paternalism, and for radical agitators, the tax was a technical and 
supposedly temporary detail that allowed the government to cancel 
onerous tariffs on essential goods, notably food. Income tax has been 
with us ever since.

The diverse, contradictory, overlapping groups of agitators of the time 
– the unemployed, starving Irish smallholders, excluded Catholics, the 
disenfranchised, exploited poor of the industrial cities – demanded that 
their rulers put right immediate grievances. They wanted an end to high 
duties on imported corn. They wanted cheap bread. But they also wanted 
the vote, and education for their children.

By the time the 20th century arrived, the successors to the 
constellation of idealists, organisers, polemicists and journalists who 
led the Chartists and the Anti-Corn Law League had moved on from the 
Robin Hood myth’s focus on the contents of the strongbox and the futile 
hope for the return of that wise, just ruler, the absent king. They 
understood that the silver coins were only a symbol of the power that 
was denied them, and that to achieve that power, they must become their 
own king. By 1908, when Britain, walking where Denmark and New Zealand 
had already trod, introduced a means-tested old-age pension – £13 a year 
for anyone over seventy who earned less than ten shillings a week and 
wasn’t a criminal, a lunatic or a recent pauper – Robin Hood was 
vanishing into the system by achieving oneness with it.

David Lloyd George, the chancellor, funded the pensions by tweaking the 
tax rate paid by the 12,000 richest Britons. The changes, Lloyd George’s 
biographer Roy Hattersley points out, were expressly designed to take 
from the rich in order to give to the poor: it was the moment, as 
Hattersley puts it, that taxes became ‘the engine of social policy’. 
‘There are many in the country,’ Lloyd George said at the time, ‘blessed 
by Providence with great wealth and if there are amongst them men who 
grudge out of their riches a fair contribution towards the less 
fortunate then they are very shabby rich men.’

Since the welfare state and progressive taxation began to replace the 
medieval state and predatory taxation, income tax and other taxes on 
wealth have been used for other purposes, such as military spending and 
paying off government debt. Both Peel and Lloyd George, when they turned 
to income tax in their most famous budgets, had an eye on the country’s 
past borrowings. As Piketty points out in Capital in the 21st Century, 
the huge increase in income and wealth tax rates in industrialised 
countries after the First World War wasn’t just a consequence of 
universal suffrage and the clamour for better services; it was also a 
consequence of debts racked up in wartime. Between the 1920s and 1980s, 
the demands of the welfare state – the social state, in Piketty’s terms 
– and war-related debt kept progressive taxes high: progressive meaning 
that the poorest paid little, the middle classes paid a significant 
amount, and the richest paid a lot. Before the First World War, taxes in 
Europe and North America had made up less than 10 per cent of national 
income, not enough to pay for much more than pensions for the very old, 
an army, a fleet and a diplomatic service. When the war ended, they 
increased three or fourfold.

Tax rates on the rich were higher in Britain than in Continental Europe, 
and were highest of all in the United States. The line ‘There’s one for 
you, 19 for me,’ in George Harrison’s song ‘Taxman’, released by the 
Beatles in 1966, referred to the 95 per cent tax rate paid by the very 
richest fraction of the British population, which included George 
Harrison. At one point in Britain in the 1970s the super-rich were 
liable for 98 per cent tax on their investments. It was the US that led 
the way, inspired, Piketty says, by a belief that the rich were to blame 
for the Depression and by a fear that if measures weren’t taken to keep 
narrowing the gap between the richest and the poorest, America would 
become a class-bound society of aristocrats and peasants, like the old 
Europe from which the New World had always sought to distance itself. At 
one point during the Second World War the richest Americans were paying 
a top rate of 94 per cent. For almost fifty years in the middle of the 
20th century, the era Americans commonly consider their golden age of 
prosperity and power, the wealthiest among them – fewer than 1 per cent 
– were paying federal income tax at an average rate of 81 cents on the 

If the past were a guide, the wealthier part of British society would be 
paying much more in tax now than it does. Income taxes are lower than 
they were in mid-century – much lower for the well-off. And yet we’ve 
been through a damaging financial crisis that, as Martin Wolf of the 
Financial Times puts it, hurt the British and American public finances 
as much as a world war. Even critics of the present government’s 
economic course agree Britain has to make inroads into debt in the 
longer term. Rather than, as in the past, repairing the damage by some 
combination of tax increases and public spending cuts – and Keynesian 
economists maintain that cuts are more harmful than tax rises – we are 
being prescribed cuts, cuts, cuts.


In Britain, there are two mainstream political narratives about what has 
happened in the last 15 years. The first, more electorally successful, 
put about by the Conservatives, is that the Labour government went on a 
reckless public spending spree in the years running up to the crash of 
2008, leaving Britain dangerously deep in government debt, in the same 
manner as Greece. This narrative, the austerity narrative, holds that as 
a consequence Britain, like a household with too big a mortgage, must 
cut its spending deeply and sell off its remaining national possessions 
in order to begin returning what it owes and pay its way in the world. 
But because the Conservatives also promote the medieval, Robin Hood-era 
model of taxation – that taxes are first stolen from hardworking people, 
and then wasted – they seek to eliminate taxes rather than to increase 
them. Hence cuts, and the consequent shrinking of the state.

The second narrative, favoured by Labour, often goes by the name 
‘anti-austerity’. In this account, Gordon Brown didn’t borrow or spend 
excessively at all. The British economy faltered in 2008 not because of 
borrowing and spending by the state but because of borrowing and lending 
by a handful of bloated, arrogant British banks. A country with its own 
currency isn’t like a household, this story runs; it can’t become 
bankrupt through excessive spending. Britain’s debts, by historical 
standards, are easily manageable. This narrative holds that the 
Conservatives’ austerity programme has been spawned not by need, but by 
an ideological yearning to destroy the state and those it protects. 
According to this version, economic sense and historical experience 
demand that, in the short term, when borrowing costs are low, debt 
should be increased to stimulate the economy, and taxes on the richest 
should go up.

There are problems with each of these narratives. The problem with the 
austerity narrative is that it is false. Gordon Brown was not profligate 
with the public finances, and comparisons with Greece are wide of the 
mark. Britain’s national debt was lower when the crash hit than when 
Labour took over from the Conservatives in 1997, and its current account 
only just in the red. The British economy ran into trouble in 2007 for 
exactly the reasons the anti-austerity crowd say. What happened was 
that, all over the world, vast amounts of money that might have been 
spent was instead hoarded. Countries like China and Saudi Arabia, which 
exported more goods than they imported, hoarded foreign currency 
reserves against future rainy days. Large corporations hoarded cash 
instead of investing in better products. It became easier for 
individuals legally to suck wealth out of firms they owned, or ran, into 
their personal hoards.

The combined effect was a global savings glut. It didn’t, of course, 
find expression in warehouses packed with dollar bills. All these 
hoarders sought to park their hoards in places where they would earn the 
most interest. Countries like Britain and the US found themselves 
importing the ‘products’ of resource giants like Saudi Arabia and 
Russia, and of export giants like China and Germany, twice over: first 
as the products themselves (oil, gas, cars, phones) and second as the 
profits made from selling them, in the form of hoarded savings, looking 
for a return. The trouble was that with so much hoarded money looking 
for a comfy place to sit and grow fat, governments were offering meagre 
rates of interest. The industries of the old industrial world – places 
where the savings glut might once have been invested – were themselves 
more interested in saving than in spending on making themselves bigger 
and better. So American, British, Irish, Spanish and Icelandic banks 
found another way to help the hoarders: they parked the money in private 
loans, first and foremost in residential mortgages. Through sleight of 
hand and the use of impenetrable mumbo-jumbo the financial industry 
shuffled safe and risky loans together in huge interest-paying packets 
that promised the lenders, i.e. the hoard-parkers, that they were as 
safe as if the whole bundle were safe, yet paid as much interest as if 
the whole bundle were risky. In an incredibly short space of time the 
banks swelled to grotesque size, then popped.

The debt and deficit Gordon Brown bequeathed on leaving office, then, 
was not the result of crazy public spending before the financial crisis, 
but of spending during the crisis to repair the mess the financial 
industry had made, and spending afterwards to prevent demand in the 
economy collapsing in the way it did during the Depression. This rescue 
effort was successful. The austerity economics of his successor Osborne, 
by comparison, resulted in three years of unnecessary economic 
stagnation. The policy is still being pursued, leaving no doubt that the 
chancellor’s aim, like that of Republicans in the United States, is to 
shrink the state.

The austerity narrative is based on a lie. And yet it has been a popular 
enough lie for the people who tell it to have been elected to run the 
country. The anti-austerity camp believes it would have made a big 
difference in the 2015 election if Labour had made more effort to defend 
its record and expose the silliness of accusations that Brown was a 
spendthrift with the public purse. Perhaps. But not everyone makes a 
clear distinction between the Brown who managed the Treasury carefully – 
which he did – and the Brown who did not act to stop the banks pursuing 
the demented expansion of their balance sheets. Which he also did.

When, in 2007, Northern Rock had to be rescued by the Labour government 
after it suffered the first bank run in Britain since the 19th century, 
it turned out that the bank’s management had bundled together much of 
its future income stream from people making monthly mortgage repayments 
and used it as collateral to borrow £49 billion from around the world, 
with which it created more mortgages. It did this via a so-called 
charitable trust called Granite, based in the offshore tax haven of 
Jersey, which used, as its nominal charity, a tiny organisation from the 
North-East that helps those with Down’s syndrome. Northern Rock never 
bothered to tell the charity its name was being exploited in this way. 
It didn’t occur to the bank or the regulators that there was any problem 
with what they were doing. Why would it? There were pages on the 
Treasury’s own website explaining how it should be done.

Labour can’t pretend it didn’t know, or shouldn’t have known, what was 
going on. In the beginning, New Labour made a decision to trust 
Britain’s wizards of high finance, less, I suspect, because it thought 
them trustworthy, than because it feared the alternative would make the 
party unelectable – the alternative being to have imposed a completely 
different kind of austerity, one that would not only have reined in the 
banks but, as a consequence, made it harder for ordinary voters (I 
almost wrote ‘hardworking people’) to get mortgages and the other forms 
of credit to which we’ve become accustomed. Rather than cuts to public 
spending, there would have been cuts to private spending. Had it even 
suggested this, Labour would have been accused of planning to strangle 
the economy, choke growth and kill jobs.

Now Labour is redesigning its ideas. The divide between Corbyn and the 
Blairites has its echo in the divide on the liberal left in the United 
States between Bernie Sanders and Hillary Clinton. Might not – should 
not – anti-austerity actually be austerity for the rich, rather than for 
the poor? Might not the answer to public spending cuts be private 
spending cuts, that is, tax increases for the well-off?

The arrival of Piketty’s book promised much to those who don’t accept 
the market is the answer to all problems, and who value the 
institutionalisation of the Robin Hood principle in the workings of the 
social state. Its main conclusion was devastating to the populist 
discourse of the modern right. Drawing from a deep well of data Piketty 
found that for almost all recorded history, those who are rich enough to 
be sitting on a pile of cash and assets will get richer just from the 
returns on their capital at a faster rate than the economy can grow as a 
whole. In other words, if you don’t start with capital, you can never 
close the gap with the rich, no matter how hard you work; whereas if you 
do start with capital, you’ll get richer and richer whether you work or 
not. Over time this leads to greater and greater inequality. Piketty’s 
work came as a shock because he showed that the mid-20th century, when 
the average person could and often did become better off faster than 
those who lived off the return on their capital, was not some new 
normal, as many thought, but an aberration, and that, since then, we’ve 
reverted to the mean.

The detail of Piketty’s work, however, is less palatable for a 
left-liberal movement trying to operate on the single country level. The 
subtlety of his position is that he separates the issue of inequality 
from the practicalities of trying to run a modern state. For Piketty, 
taxing the mega-rich isn’t a means to plug holes in a country’s annual 
budget, but a means to prevent the extreme concentration of wealth in a 
very few hands, or, as he puts it, the ‘fiscal secession of the 
wealthiest citizens’. A high marginal tax rate on extremely large 
incomes is a good thing, he argues, but brings almost nothing into the 
state’s coffers.

Piketty writes with uncommon urgency about tax: ‘Without taxes,’ he 
says, ‘society has no common destiny, and collective action is 
impossible.’ And yet in terms of everyday national policies of tax and 
spend, his position is centrist. The state, he maintains, has never 
played a bigger role in people’s lives, and while there isn’t much 
support for shrinking it, there also isn’t much support for making it 
larger. ‘To be sure,’ he writes, ‘there are objectively growing needs in 
the education and health spheres, which may well justify slight tax 
increases in the future. But the citizens of wealthy countries also have 
a legitimate need for enough income to purchase all sorts of goods and 
services produced by the private sector.’

It’s easy to be distracted from the moderation of Piketty’s thoughts on 
what individual countries should do by the extreme radicalism of his 
solution to the problem of inequality: a progressive global tax on 
wealth. He even comes up with suggested numbers, from 0.1 per cent on 
fortunes of a million euros to as much as 10 per cent a year on 
billionaires. But, as he admits, ‘a truly global tax on capital is … a 
utopian ideal.’ It’s not going to happen.

Piketty hasn’t so much crunched the numbers on Britain and the US as 
ground them to a fine powder, but it seems worth remembering he’s 
writing from the perspective of France, where the state is so much more 
entrenched than on this side of the Channel. His confidence that there 
is little appetite to shrink the role of the state doesn’t seem so well 
founded in the Anglosphere. At one point he talks about the future 
consequences of rampant global inequality. ‘Individualism and 
selfishness would flourish,’ he writes. ‘Since the system as a whole 
would be unjust, why continue to pay for others?’ In describing an 
oligarchic global future, Piketty seems to describe Britain and other 
Anglophone countries today. Could this be the reason so many Britons 
appear prepared to accept the upside-down notion that the poor are in 
some way the idle rich – not because they are callous, but because the 
actual rich are so powerful and untouchable that they no longer seem to 
belong to the same world as the rest of us?


How like the Middle Ages, if it were so. Behind the twisted rhetoric of 
a hardworking majority oppressed by a welfare-mad government, a modern 
version of the medieval world has been constructed, one where the real 
poor are taxed more heavily than the rich; where most of those who are 
not rich are burdened by an onerous roster of fees and monopolies levied 
by remote, unaccountable private landlords; and where many of us live 
out our lives shackled to an endless chain of private debt.

Since the Thatcher revolution in 1979, British governments have boasted 
of how they’ve lowered taxes. And they have, except for one section of 
society: the poorest 20 per cent. In 1977, the least well-off fifth of 
households paid 37 per cent of their gross income in direct taxes (like 
income tax) and indirect taxes (like VAT), against 38 per cent for the 
richest fifth. In 2014, the tax take from the poorest group had gone up 
to 37.8 per cent, while the taxes paid by the richest had gone down to 
less than 35 per cent.

Not only does this understate the extent of tax cuts for the top 1 per 
cent; it shows only part of the burden borne by the least well off. 
Piketty writes that ‘modern redistribution does not consist in 
transferring income from the rich to the poor, at least not in so 
explicit a way. It consists rather in financing public services and 
replacement incomes that are more or less equal for everyone, especially 
in the areas of health, education and pensions.’ This is a very cautious 
definition of the modern social state. Health, education and social 
security make up the lion’s share of public spending, but they’re 
intimately linked to a wider set of networks that includes energy, water 
and transport and, some would argue, should include housing. What these 
networks have in common is that society has decided they’re essential, 
and therefore should be universal – that is, we think everyone should 
have access to them, all the time. The significance of this is that, on 
the one hand, society takes on itself the obligation to give its poorest 
members access to these networks, which they wouldn’t otherwise be able 
to afford; and, on the other, payment to use these networks, if it isn’t 
funded out of general taxation, becomes in itself a tax, particularly 
when that network is a monopoly. In Britain, many of these universal 
networks, such as electricity and water, have been privatised, often 
twice – once to put them on the stock market, once to put them into the 
hands of overseas owners. Bills for these services have increased faster 
than inflation, and take little account of people’s ability to pay. It 
is the poorest, then, who as well as paying the heaviest combination of 
indirect and direct taxation bear the brunt of such hybrid 
public-private taxes as the water tax and the electricity tax.

Other universal networks, such as health and education, haven’t been 
privatised, but have been through another process that makes them ripe 
for the introduction of flat fees for usage in future. This process 
really got going under Labour, and it is a sign of the liberal left’s 
failure to recognise what it has done that there isn’t a name for it. 
One word to describe it might be ‘autonomisation’ – the process by which 
state-run bodies continue to be funded by the state but are run 
autonomously on a non-profit basis. So state secondary schools become 
academies, NHS hospitals become NHS foundation trusts, and council 
estates are transferred to housing associations. The British state is in 
a condition of rolling abdication, leaving behind a partly privatised, 
partly autonomised set of universal networks, increasingly run by 
absentee landlords in the form of global companies and overseas 
corporate investors, that is disproportionately funded by the poorest 
payers of taxes, fees and duties, many of whom are also deep in debt.

There is a cynical view which says that as long as the majority of the 
population feel they’re doing all right, a democratically elected 
government is safe to squeeze the poor and pamper the rich. But cynicism 
is a risky thing to rely on when a government is simultaneously cutting 
spending and shedding control of the universal networks on which its 
entire population relies. As Hobsbawm writes in Bandits, ‘concentration 
of power in the modern territorial state is what eventually eliminated 
rural banditry, endemic or epidemic. At the end of the 20th century it 
looks as though this situation might be coming to an end, and the 
consequences of this regression of state power cannot yet be foreseen.’ 
We’re a long way from the return of the literal outlaw to 
Nottinghamshire. But we need to remember the insight given our ancestors 
when they saw through the illusion of the Robin Hood myth, when they saw 
that the strongbox of silver coins wasn’t just money stolen from each of 
them individually, but power robbed from them collectively, and that 
they needed to wield that power collectively as much as they needed 
their money back. For sure, freedom to choose is a grand thing, and the 
market will try to help you exercise it. With a bit of money in the 
bank, a middle-class family might choose to send their child to private 
school, provided by the market; but that same family can’t choose to 
build and maintain a universal education network by itself, and the 
market won’t provide it. With money, you can choose to buy a car, and 
the market will provide it; but you can’t choose, all by yourself, to 
build and maintain a universal road network, and the market won’t 
provide it. To make and keep universal networks requires the authority 
of the state, an authority that has been absent; and it’s hard to see 
where that authority might come from if the people don’t find a way to 
assert their kingship.

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