Stephen McKay - Wealth and the Wealthy: Why They Matter and What We Might Do About Them

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ISBN 978 1 84742 307 8 paperback

ISBN 978 1 84742 308 5 hardcover

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Acknowledgements

We would like to thank our colleagues at the University of Birmingham for their support when writing this book, not least for agreeing to give Karen Rowlingson study leave during the autumn 2010 term and covering some of Karens teaching and tutoring during that time. Thanks also go to colleagues for providing ideas and comments on drafts of certain parts of the book. Particular thanks here go to John Doling and Stephen Gorard. Thanks also to the team at The Policy Press, particularly Karen Bowler and Laur a Vickers, for all their support through the writing and production process. An anonymous reviewer also provided some very useful comments that helped us to tighten up the arguments in the book, so thanks are due to him/her also. Last but not least, we would like to thank Adrian Sinfield for all his encouragement over the years to pursue this area of work.

This report includes new analysis of four large-scale datasets:

The usual disclaimer applies all remaining errors are the responsibility of the authors.

About the authors

Stephen McKay is Professor of Social Research at the University of Birmingham, UK. He has research interests in the welfare state and in methods of analysing large-scale datasets.

Karen Rowlingson is Professor of Social Policy at the University of Birmingham, UK. She has particular interests in poverty, wealth and inequality, and in mixed research methods.

Introduction

In recent years there has been increasing academic, policy and public interest in personal assets, and in the growing gap between rich and poor. This book brings these two issues together. Although they are conceptually distinct, they are also strongly related, with the rich having significant levels of assets while people at the bottom of the economic distribution have very few, if any. It is aimed at a wide audience, including students, academics, policy makers, journalists and members of the general public. It draws on debates from a range of disciplines including sociology, economics, politics and philosophy, and it touches on policy issues in relation to taxation, housing, pensions and education. It is therefore an ambitious book and one that we do not see in any way as definitive, but as a contribution to an important debate on wealth and the wealthy.

But why should we be interested in wealth and the wealthy rather than in the seemingly greater social problem of poverty and low income? We are not arguing that poverty and low income are unimportant, but these issues have received a great deal of attention from academics and policy makers for decades; there has been much less discussion of wealth and the wealthy. The first two chapters in the book consider why wealth and the wealthy are important issues for social science and, in particular, for social policy. We argue that wealth is an important issue because there has been increasing emphasis placed on personal assets by both Conservative-led and Labour governments in recent years. This shift towards personal assets and more individual responsibility for welfare has, however, failed to achieve its aim of greater individual financial security and wellbeing and so, we argue, a new settlement is needed. We also argue that wealth, in the form of personal assets, is important because it plays a different role in peoples lives than income. There is growing evidence that wealth might have an independent effect on peoples health, prospects and general wellbeing. considers the evidence here.

The wealthy are an important subject for social science for a number of reasons. First, there is increasing discussion about whether or not the gap between rich and poor causes various social and economic problems. Second, there is also discussion about the process by which some people become wealthy and the extent to which this is based partly on luck of birth rather than merit. And finally, there are strong arguments to suggest that the extent of the gap between rich and poor cannot be justified even if those who accumulate large amounts of wealth did so largely through merit rather than birth. These points are discussed in .

provides a more detailed discussion about what we mean by the terms wealth and wealthy as these are often used in different ways, and there has been too little discussion of their conceptualisation, definition and measurement. In this book we focus on wealth in the form of personal assets, particularly housing, financial and private pension wealth. The term wealthy is more complex and we discuss a range of perspectives, particularly from sociology, on social class and elites. We draw particularly on the work of John Scott to define the wealthy (or rich) as those who can afford more exclusive and private lifestyles.