What happens in societies where social mobility ends?

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12 December
14:13
December
2016

You just have to look at a country with virtually no social mobility, and a great example is Brazil. Most countries have had periods of relative equality and inequality, such as the dip in inequality that happened after World War II. Brazil hasn’t. It has effectively had terrible inequality since it was colonized by Portugal in 1500.

"Why should the elite welcome social mobility? People see it as a good thing because people from the bottom come up to the top – but it needs an equal number of people from the top to go down to the bottom."

Brazil has an inherent belief in inequality amongst its elite. Behind it is racism – the elite tend to be lighter skinned, which dates back to slavery and seeing the indigenous people as inferior. The country has every kind of barrier to social mobility, and terrible exploitation. Even when people think they’re moving upwards, they’re usually being tricked.

One result is obviously extreme income inequality. Brazil has low tax and investment in public services, with all that that entails. A very common sight in Rio is huge billboards advertising plastic surgery for the rich, and homeless people sleeping beneath them. Crime is rife and the rich have a vast number of gates and metal bars around their homes.

It’s terrible, but there is passive support from America for this way of carrying on. America criticises Cuba endlessly but it never criticises Brazil. Well, Brazil is what Cuba would have been if they hadn’t had Castro’s revolution.

Across the world, there is a very high correlation between low social mobility and high income inequality. The simple reason is that when you have high income inequality, the affluent try very hard to get their children into the top 10% of earners because the consequences of not doing so are so bad. In Brazil, the publicly funded universities accept mostly rich kids and the very few poor kids who go have to pay high fees to go to private universities, which is shocking.

Yet why should the elite welcome social mobility? People talk of it as a good thing because they like people from the bottom coming up to the top, but they rarely realise that it needs an equal number of people from the top to go down to the bottom. They also don’t realise the idea of social mobility is cherished in unequal countries as an excuse for inequality. People say it’s OK to be unequal as long as we give people at the bottom a chance of getting to the top, whereas what we actually need is a society where the level of social mobility doesn’t matter so much because the gap between the top and the bottom is relatively small.

I have a daughter. In a more equal, normal European country than Britain, if she said she wanted to be a nurse, I wouldn’t have to worry that she would never be able to buy a house and would be paying rent for the rest of her life. You don’t just get more social mobility in more equal countries – you also don’t worry about it so much.

One problem about social immobility is that it creates more social immobility. If society is effectively segregated, people mix far less, so few people marry outside of their social class. This squares the inequality, because a household where two people are lowly paid is much poorer on aggregate than a household where both partners are well paid.

In a very unequal society such as Britain, anybody who does marry into a better off family is inevitably viewed as a gold digger. Even then, the rich party will want a pre-nup agreement, which is designed to prevent any equalisation of wealth in the event of a divorce. Socially mobile countries don’t need pre-nups.

The best way to increase social mobility would be to have fewer jobs at the bottom of society. Currently we have a government who are obsessed with the employment rate and who feel that the more people they can get into work, the better. This has resulted in a huge increase in awful low-paid jobs that are not really needed: call centres, and people cycling around delivering pizzas because it is so cheap that people can’t be bothered to go and fetch their own pizzas. In more equal, socially mobile countries, you don’t see people doing those jobs. It’s almost invented labour.

A hard Brexit could make our social immobility even worse. If Britain leaves Europe completely, our ability to shelter the world’s tax havens – a lot of which are in Crown territories – and allow London to turn into a tax haven would increase. Right now, we are teetering between two options: ‘Do we want to become more equal, or shall we be that country again which has lots of servants but at least has some trickle-down from the super-rich?’

We started off here talking about South America, and one consequence of social mobility coming to an end has historically been a revolution. Revolution has never really been the British way, but when people realise that their children’s future is likely to be worse than their own, they react in unusual ways. Just look at Brexit! In a way, that’s what Brexit is – a British revolution.

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