James Thompson on inequality and Thatcherite follies

At her final PMQs Margaret Thatcher’s was asked by LibDem MP Simon Hughes about the gap between rich and poor. To paraphrase – although the economy has grown, so too has inequality and is that not a problem?

In response, Thatcher was robust, her reply a brilliant bit of oratory and theatre (well worth a watch). She said…

“People on all levels of income are better off than they were in 1979. The hon. Gentleman is saying that he would rather that the poor were poorer, provided that the rich were less rich. That way one will never create the wealth for better social services, as we have. What a policy. Yes, he would rather have the poor poorer, provided that the rich were less rich. That is the Liberal policy.”

Before we dissect this statement, it is worth noting that it is expressing something of the zeitgeist. Nowadays, we know that inequality is a big problem in all sorts of ways. Similarly, in the immediate pre-Thatcher years, equality was an ideal that many subscribed to. According to right-leaning academic (and Oliver’s dad) William Letwin, in 1980 equality was a “leading fetish of our time” that “so many people endorse it as an obvious ideal… so many have enlisted in it as a cause, without having considered its consequences”

Thatcher’s response in 1993 marked that a new ‘common sense’ was now in place that had no room for concerns about the just or equitable distribution of resources. All that mattered was absolute levels of affluence.

Whilst pondering on the oratory power of Thatcher’s performance when I stumbled across a jokey social media post called the ‘The 10 Commandments of Rational Debate (…Know Thy Logical Fallacies)’, which sets out ten logical fallacies that often wrongly win arguments.

The 10 Commandments of Logic

1) Thou shall not attack the person’s character, but the argument. (Ad hominem)

2) Thou shall not misrepresent or exaggerate a person’s argument in order to make them easier to attack. (Straw man fallacy)

3) Thou shall not use small numbers to represent the whole. (Hasty generalisation)

4) Thou shall not argue thy position by assuming one of its premises is true. (Begging the question)

5) Thou shall not claim that because something occurred before, it must be the cause. (Post Hoc/False cause)

6) Thou shall not reduce the argument down to two possibilities. (False dichotomy)

7) Thou shall not argue that because of our ignorance, claim must be true or false. (Ad ignorantum)

8) Thou shall not lay the burden of proof onto him that is questioning the claim. (Burden of proof reversal)

9) Thou shall not assume “this” follows “that” when it has no logical connection. (Non sequitur)

10) Thou shall not claim that because a premise is popular, therefore it must be true. (Bandwagon fallacy)

By my reckoning Thatcher’s reply in PMQs breaks seven of the ten rules, which is a pretty impressive score in just 75 words.

Let’s take it one by one…

Ad hominem – the question was about inequality, not about whatever the Liberal policy was or wasn’t.

Straw man fallacy – it was simply not the case that Simon Hughes (or pretty much anyone else at the time) was arguing for the poor to be poorer even if it had the desired effect that inequality was reduced. This is a total misrepresentation and exaggeration to the point of distortion of the argument (resulting in Simon Hughes’s vigorous head shaking).

Begging the question – Thatcher’s response rests on some pretty unreliable assumptions, the main one regards the relationship between economic growth and growing inequality. Thatcher’s argument only makes sense of these two are inextricably linked i.e. growing inequality is a necessary precondition for growth or an unavoidable consequence of growth. When Thatcher said it, there was a sense that ‘a rising tide lifts all ships’ and that the growing wealth of the rich would slosh around the economy eventually raising everyone’s living standards, albeit unevenly. This myth is one of the main reasons there has been such widespread acquiescence in the face of runaway inequality. The myth became so powerful that it has only been seriously challenged since economic crisis of 2008 (onwards).

Post Hoc/False cause – once again, just because the economy grew overall during a period when inequality rose (notwithstanding two recessions), certainly does not mean the same formula will keep on working. Policies like privatisation and selling off council housing produce an unrepeatable and unsustainable windfall – especially when money is not reinvested. They do, however, lead to greater inequality.

False dichotomy – Thatcher had constructed a powerful false dichotomy between high inequality and higher incomes for all on one hand and a lower gap and a lower standard of living for all (explicitly the poor) on the other. Faced with this choice, it would be a hard sell to go for the latter (even if the evidence suggests we may ultimately be happier and live longer etc.). However, this is not the choice that societies of governments face and probably never was. Nevertheless, this false dichotomy proved to be a powerful and enduring myth that we are only comparatively recently waking up to.

Non sequitur – yet again, once the link between inequality and a healthy growing economy has been broken, Thatcher’s comments are rendered nonsensical. It does not follow that growing inequality leads to higher living standards for the poorest. If anything, the opposite is true – that inequality is bad for growth, as the OECD recently concluded.

Bandwagon fallacy – underscoring all Thatcher’s public debates and public pronouncements is the assurance of someone who has won three consecutive general elections. The evidence may strongly favour her opponents on a range of issues, but ‘in the court of public opinion’, which in a representative democracy is the bottom line, Thatcher was right by default.

These days, only right-wing buffoons and neo-liberal, evidence averse zealots claim that current (and increasing) levels of inequality are good for the economy or that the unequal rewards we witness are generally reflective of merit. This idea was always deeply suspect but has also recently been amply demonstrated as false by many top bankers still receiving obscene wages and / or bonuses despite demonstrably failing during the financial crisis (amongst other numerous examples).

We have come long way since 1993 and most of the arguments for inequality have been debunked, both in the academic literature and the public consciousness. If Simon Hughes were to accuse David Cameron of presiding over rising inequality, the prime minister would not be able to draw on the same ‘common sense’ attitudes towards inequality as Thatcher, as these have now changed. This would inevitably make for rhetorically weaker and less persuasive answer.

He does, of course, still have unlimited access to the full gamut logical fallacies, which he would no doubt use to maximum effect.