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Colin Talbot

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The Riots: It may be the Under-Class that did it, but it's the Uber-Class that lost it

Posted: 09/08/11 12:47

So, the riots have come. They had an almost inevitable quality to them - indeed last December I outlined one scenario for when they would happen (see The Great Train Wreck of 2013).

I was partly wrong about their nature and way out on the timing (I was suggesting 2013) - but that they would happen sometime seemed to me undoubted. These 'riots' are much smaller in numbers involved than the early 80s and much more focussed on theft and arson rather than fighting the police. I know, I was in Brixton and Clapham Junction on the nights of the riots in the early 80s and saw the large crowds attacking the police.

Let's be immediately clear - NOTHING justifies the riots, arson, violence and looting we have seen over the past few days. I have no time for this sort of violence and I support the police coming down hard on the perpetrators. But who are they and why has this apparently so suddenly happened?

First, there are the 'criminal element' who are clearly taking advantage. They appear to be well organised and fairly numerous - gangs of 100+ flash-mobbing shopping areas at clearly well coordinated times and places.

Who are these people, and why are they apparently so well organised and able to be so 'agile' - a word that keeps cropping up in the reporting? The answer is that they are almost certainly part of a growing under-class of well organised shadow economy denizens. The shadow, or informal, sector of the economy has been steadily growing since the mid-1970s as more and more people unable, or unwilling, to make a living in the 'stated' economy turn to untaxed, and sometimes but not always, criminal endeavours to make ends meet.

During the 'long boom' from the mid 90s to 2008 the criminal element of this burgeoning shadow economy was relatively small but increasingly well organised, mainly around the illegal drugs trade but also people trafficking.

This is what policy-makers and criminal justice organisations focussed on, largely ignoring the much larger under-class living outside of the state's purview.

It is this much larger cohort - some estimates put it at up to 10% of the working age population and even bigger amongst the youth and ethnic minorities - that provides the 'sea' in which the more criminal element swims. These people live partially 'outside' - they don't pay income taxes, register to vote, etc. But of course they do continue to draw on education, health and other taxpayer funded services to which they largely do not contribute.

The downward pressure on jobs, wages, security, services and housing experienced by this group, and the 'legitimate' lower-paid population, has been immense as a result of the recession. That this 'pressure cooker' atmosphere might provide the ideal conditions for an outbreak of lawlessness is pretty obvious. But there is one other, massive, factor at play - ones that I'm pretty certain will be largely ignored by the media.

It is not just the 'under-class' that has opted out - it is also the uber-class of financiers, directors, derivatives traders, newspaper moguls and others who have decided the 'normal rules' don't apply to them.

Britain has experienced a massive financial crisis brought on by greed and recklessness of epic proportions. No-one has been put on trial, much less gone to jail, for what appear to most honest and dishonest people as grand theft auto-bank. Instead, the banks have been bailed out by the tax payer, their bonuses were reduced, a little, for a while, and then everything returns to business as usual.

The banks have just been found guilty of mis-selling payment protection insurance on a truly gargantuan scale - billions of pounds worth - but is anyone going to prison for this swindle?

'Legal' tax avoidance is running at massive levels, with a huge grow in individuals and corporates using tax-havens to avoid paying their fair share of even the direct taxes on them that have been reduced substantially over the past 30 years.

The phone hacking scandal has revealed that some parts of the uber-class who run our media see themselves as well and truly 'above the law'. So much so that we have just 'lost' the Police Commissioner for the Metropolis just a few weeks before the riots erupted. This latest decapitation of the Met - the second in three years - coupled with massive cuts to police budgets and radical reforms in process certainly won't have done much for Police morale or leadership.

Britain has also experienced a massive spiral of wage inflation for the directorial class with top pay reaching stratospheric levels. Only last week it was also revealed that Directors of our large private institutions were continuing to gold-plate their pensions whilst stripping their workers of theirs. Many now retire on large multiples of what their staff earn for working. Inequality has surged.

And of course the parliamentary expenses scandal - very small beer compared to the above - but yet another nail in public confidence in our rulers.

A society in which the uber-class see themselves as exempt from the normal rules of taxation, cream-off ever larger personal rewards unrelated to performance, cause huge financial catastrophes, rip-off their customers see themselves as 'above the law' cannot expect the under-class to behave themselves.

Labour has talked recently about the 'squeezed middle' - there may be more truth in this than even they realised. The vast majority of ordinary people pay their taxes (more or less), obey the laws (mostly), and 'keep calm and carry on' even when things get rough. Are they now squeezed between two irresponsible, immoral, tax-avoiding, lawless, classes at the bottom and the top of society? If so, its fairly clear that those at the top carry far more moral responsibility for what's happening than those at the bottom. How long before they start retreating to their gated-communities, US-style, and leave the rest of us to it?

 

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