activism business corporate responsibility equality wealth

He would say that – Lord Griffiths on inequality

Lord Griffiths, a Conservative peer and vice-chairman of investment Goldman Sachs, spoke out in favour of big bonuses on friday. “We have to accept that inequality is a way of achieving greater opportunity and prosperity for all”, he said.

Erm, no my lord. Inequality is directly linked to crime, teenage pregnancy, educational performance, alcohol addiction, stress, obesity, drug use, and mental illness. Inequality is a way of achieving greater social breakdown, as Richard Wilkinson and Kate Pickett ably showed in their book The Spirit Level.

Goldman Sachs is currently planning the biggest bonus payout in its history. As one of the few banks that has done well out of the recession, it has a grand $16.7 billion to toss around. But, whether or not it took public bailout money (it didn’t take any UK cash, but $10bn from the US), and no matter how well it performs, it is contributing to our unequal society.

Goldman Sachs may bring plenty of money into the economy. They claim they add £2 billion to the public coffers through tax, but even as they swell the economy, the vast salaries and bonuses undo that work in a hundred little ways, by widening the gap between the rich and the poor.

Lord Griffiths really needs to read The Spirit Level. I’ve written to him to invite him to do so, and my letter is below:

Dear Sir,

I am writing in response to the comments you made last Friday at St Paul’s Cathedral, when you proposed that the British public accept inequality as “a way of achieving greater opportunity and prosperity for all.” I would normally let this kind of comment pass, but I cannot on this occasion, as you are a major player in an industry that has done more than most to excacerbate inequality.

First of all, you claim that inequality is acceptable in building a prosperous society, but it is in fact an obstacle to it. Inequality has been directly linked to levels crime, teenage pregnancy, educational performance, alcohol addiction, stress, obesity, drug use, and mental illness. The more unequal a society, the higher the levels of each of these social ills, as the work of Richard Wilkinson and Kate Pickett has recently shown. Because these social problems affect all of us, both rich and poor, an unequal society doesn’t even favour those at the top of the tree.

Your company has been extraordinarily successful over recent months, and has created an awful lot of money. Congratulations. Unfortunately, desbite the large contributions to its overall size, your role in unbalancing the distribution of the economy makes your company ultimately socially regressive and therefore bad for Britain. Sorry about that.

The consequences of inequality have not been well understood in the past. Now that we can see how damaging it can be, you have a responsibility to work to avoid it. Please take the time to read The Spirit Level, by the two authors mentioned above, and discuss it with both business and political colleagues. There is no reason why you, and Goldman Sachs, could not become a major force for the public good. The Equality Trust may be able to help you to think through a response to the issue of inequality. I’ve taken the liberty of copying them in to this letter, as well as the Evening Standard, where I read your comments.

Many thanks for your time,

UPDATE: I’ve had a reply. You can read it here.


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