Born poor? Bad luck, you have won last prize in the lottery of life

Will Hutton

The Observer, Sunday 15 July 2012

The economic and social crises are merging. The protracted “contained” depression is making life ever harder and disillusioning for those, and their children, trapped at the bottom – while making those at the top ever more robust about looking after themselves and their own. A mean world growing still meaner fosters division and mutual suspicion.

In the US, Robert Putnam, the pioneering social scientist whose book Bowling Alone set out an electrifying account of a new American loneliness, has been revealing the results of another round of social research. Class is becoming ever more important as a determinant of outcomes in American life; it now trumps race, he argues, and the differences can be observed very early on in the children of different classes.

In particular the middle class of whatever ethnic background is spending more on what Putnam calls its children’s “enrichment activities” so important for psychological wellbeing and character building; in fact they are spending 11 times more than those at the bottom. In 1972, working-class children from the bottom quartile of earners were just as likely to participate in a wide range of sporting and cultural events as children from the top quartile. No more. A chasm has opened, claims Putnam. Whether it is captaining a school sports team, winning an internship or being read to at night the middle-class child’s chances are at least two times better.

As a result, the arteries in American society are hardening. Social mobility is in decline, but, worse, the general drop in trust observable in all social classes is most marked among the poorest third of Americans. Nor should it be any surprise that they are “cynical and even paranoid”, writes Putnam: it is a rational response to their situation. Every institution that might be expected to alleviate their plight – family, school, voluntary organisations and church – has become dysfunctional.

Meanwhile, the rich, dealing themselves out of society’s institutions into ever stronger and sealed ghettoes of their own, become ever more ignorant of the world around them even while they ensure their off-spring scoop life’s prizes.

There are parallels in Britain. The rise of rightwing individualism and an accompanying celebration of the private and distrust of the public, is undermining the diversity and strength of our social institutions. The much vaunted flexible labour market – code for a world in which its principle institution, the trade union, is enfeebled and workers are treated as commodities – is a mortal threat to the cohesion of the working-class family and its chances of being a platform for aspiration and mobility. It is not just lack of money that undermines parents’ capacity to support enrichment activities; they can’t spend time with their children because of the irregular and anti-social hours they are forced to work.

The stress makes holding marriages together harder, reinforced by a cultural disposition that marital relationships occupy the same disposable space as junk food or contemporary job contracts. Single parent families are disproportionately high among the poorest, with all the implications for children. Company heads relegate stewarding their employees far below the achievement of their personal bonus; this was exemplified last week by the crisis at G4S. The conservative wisdom of the age is that “efficiency” results from just such a nexus. By contrast, the truth is that organisations – whether delivering Olympic security or long- run innovation – need to husband and nurture their staff.

Last but not least, there is the education system. Private schools are much more important in Britain and America than in Canada and Australia; unsurprisingly it follows, as the Carnegie Corporation/Sutton Trust recent social mobility summit found, that social mobility is much lower in Britain and America. The privately educated, the quintessential expression of enrichment activity, not only dominate the upper echelons of British society, so do their children. Private schools play a pivotal role in repressing mobility; however good state schools become, private schools’ well-understood job is to stay a step ahead and deliver economic and social advantage.

Anthony Seldon, the master of Wellington College, charged by the prime minister with trying to persuade private schools to sponsor academies, acknowledged in these pages that most governing bodies did not want to bond with state schools. Parents would object. He found it demoralising and frustrating – worrying proof that independent schools had begun to lose their sense of moral vision.

The moral decline of private schools that Mr Seldon describes is the mirror image of the moral decline of much of our business and financial elite with similar origins: that the pursuit of individual advantage trumps obligations to others and the upholding of what society holds in common. Taxes are what little people pay. State schools are for hoi poloi, not us. Companies are only legal constructs to be bought and sold as casino chips — not social institutions that co-create wealth in a complex, iterative relationship with the society around them. Banks can lend indiscriminately, secure that losses will be socialised and gains privatised. Trade unions only inhibit the autonomy of management and qualify shareholder rights.

Yet it is this bad capitalism – and the socially immobile society that accompanies it – that has brought the British economy to its knees. A regular visitor to No 10 tells me wryly that the reason the government has lost the competence gene is that almost everyone he meets is an ex-public school boy like him. There is too little social diversity and knowledge of broader Britain: they are locked in bad capitalism along with the social constructs and attitudes that created it. They cannot know what to do because the correct policies go against their every Tory instinct.

Yet against the Tory grain, reality will out. Under Lib Dem pressure the coalition is creating a social mobility commission. Tax evasion has become socially toxic. There are moves to reform finance. There is a growing recognition that government has to play a catalytic role shaping a better capitalism – to the growing dismay of the Conservative right.

In this debate Thatcherite Toryism has nothing to offer. A socially mobile, economically dynamic country will spring from different philosophic and political roots – more liberal, more Whiggish and more social democratic.

Thatcherite Toryism, with nothing to offer the country but euroscepticism and jingoism, is about to enter a period of long decline. The open question is whether Labour can articulate what needs to be done – and build the broad based coalition to do it. It is the conundrum on which the future of British politics – and the future of our children – hangs.