The altruistic society versus the equal society

In these remarkably fluid political times, when our major political parties are each in the process of redefining themselves, I should like to propose an alternative radical vision of a society other than the conventional one which is based on equality.

Let us begin by making a clear distinction between certain types of equality. Equality of opportunity, and lack of discrimination, are both goals to which every society should aspire. It is equality of outcome which causes genuine problems.

We should, I believe, be highly suspicious of the principle of equality of outcome. The problem is that in its current usage it is not only consistent with uniformity, but practically its synonym. The attempt to impose equality of outcome by the state has always seemed to me morally dubious.

As evidence, we should look at societies which have pursued this type of equality above other values. There can be little doubt that during the past century the drive towards equality of outcome — at the forefront of the Soviet experiment, for example — has led to some of the most brutal and inhuman tyrannies the world has ever seen. If anyone should wish to observe what happens in a modern state when equality of outcome is the central and overriding aim, they should look to North Korea.

It is now quite clear how an equalitarian tyranny starts and perpetuates itself. If a naturally highly diverse human society is to be moulded into equality, it requires enormous state power — in fact, at its fullest extent, absolute state power.

The second great flaw in the ideal of an equalitarian society is that full equality can never be reached. Again, the Soviet experiment shows that however strenuous the state’s efforts to reduce differences in material outcome, the very structure of the equalitarian society, in which the state is guarantor, will act to undermine and destroy equality. As George Orwell demonstrated so eloquently in his great political satires, those who control the state will always end up much more “equal” than the passive, patronised population who are the recipients of state largesse. As the Soviet experiment collapsed, the shocking degree of material inequality between the state apparatchiks — with their exclusive shops and hunting lodges — and the rest of the population was cruelly exposed.

Given these historical lessons, I should like to suggest an entirely different society, which I propose to call the altruistic society. The altruistic society does not penalise diversity or variety; rather, it celebrates it. It sees diversity and variety as the engine of social and economic progress.

Equalitarian societies in which the state is the lead player expend enormous social capital in attempting the impossible — the equalising of material outcome. In an altruistic society, those same resources could and should be aimed not at the toxic and unreachable aim of equality of outcome, but at a single great social objective — eliminating poverty entirely, so that no single person lacks the material benefits of a full life, and only those who value poverty as a lifestyle (such as hermits or extreme ascetics, for example) would be poor.

Instead of expending valuable social capital trying to equalise incomes over the whole of society, the social capital of the altruistic society would be directed at raising the material levels of the least well off to sufficiency in material things. Above this level, the rest of society should be allowed to be as diverse as possible, to pursue its own individual interests (including the pursuit of wealth) to its heart’s content.

Indeed, these two aspects of the altruistic society are complementary. The chief product of an altruistic society, in which individuals are free to pursue material wealth and to enjoy its fruits, would be a healthy, strong economy. This healthy, strong economy would provide the material resource for its own great social objective, to eliminate material poverty in that society.

Carried to its logical outcome, it would benefit the altruistic society to eliminate the chief agency of the equalitarian state — namely, income tax. This is not quite as strange or radical as it first seems. William Gladstone, perhaps the greatest left wing politician in British history, thought income tax (initially created as a “temporary” tax to generate extra state income for war) was iniquitous, not only because it resulted in gross state interference in individual liberty, but because he believed it represented a crude and highly inefficient means of redistributing wealth. During his various chancellorships Gladstone reduced income tax from 8p in the pound by various stages to 3p in the pound. At each reduction of income tax the economy was stimulated, and he gathered more revenue. Unfortunately, he never achieved his aim of eliminating income tax altogether.

In Gladstone’s view the best, and fairest, way of taxing a population was through various kinds of sales tax. The beauty of sales tax is that it taxes consumption directly. And it is quintessentially fair. The more you consume, the more you pay. Its progressive quotient can be enhanced by placing high taxes on luxury goods — such as large, expensive cars — and low or no taxes on essentials such as food.

A second great advantage of sales taxes is that they are easily collected. Every time you buy a luxury item you pay tax. No tax collectors are necessary to pry into your individual affairs. No bureaucratic forms or complex and changing accounting formulas would be required to establish the level of tax payable. In fact, that part of the Inland Revenue which collects income tqax could be disbanded and its numerous, highly educated and capable functionaries redeployed to creative and productive work in the real economy. In addition the vast income tax avoidance industry which flows from the collection of income tax — and which has been the traditional bugbear of left wing economists — would also become redundant and its workers diverted to more productive occupations.

Currently, approximately half of all tax is generated by income tax, and approximately half by sales taxes of various kinds, such as VAT. The structure for collecting and enforcing sales taxes is already largely in place. Increasing the rate of sales taxes to take up the shortfall in income tax would hardly increase this existing structure at all.

An economy without income tax, and with every incentive for the individual to be as productive and creative as possible, would be a healthy and expanding economy. But it could also be a very “green” economy. The application of differential or graduated taxation according to environmental criteria could be a powerful instrument of green policy. Products or services with a high carbon footprint would be more heavily taxed, those with little or no carbon footprint less taxed or untaxed.

The elimination of poverty, never before achieved, could now be pursued with real purpose. Before doing so, poverty must not be defined in equalitarian terms, as some more-or-less arbitrary proportion of average incomes. It must be defined more precisely and objectively in material terms, as the amount of income required to lead a decent life without material want.

If the new generation of the Labour Party leadership wished to consider a genuinely revolutionary idea for a new society, it should consider whether the broad programme of the altruistic society is not superior to the older, traditional and divisive idea of an equalitarian society, with its morally dubious aims which remain always out of reach, its over-powerful state and its disastrous historical precedents.

By contrast, the altruistic society would liberate its population to earn as much as they are able within their talents and abilities, would require a tiny proportion of the vast administrative costs of the current equalitarian society to collect its graduated sales taxes, and (by directing its collective economic resources towards a primary aim) could achieve perhaps the greatest of all radical social objectives — the absolute elimination of material poverty.