For most of history, generation after generation have lived a similar life to that of their parents. If your father toiled the soil, the odds are you would do the same. If your mother married young and had a dozen children, you would do the same. The Industrial Revolution changed this.
However, it didn’t change it quickly. Even in 1989, wealth in Britain was dominated by the landed gentry. As the latest The Sunday Times Rich List reveals it’s taken 30 years for entrepreneurs to win out.
Here are the key stats:
• 1,000 richest individuals and families have a combined wealth of £724bn — a 10% rise on last year’s figure of £658bn
• 145 billionaires — 11 more than last year
• 141 women in the top 1,000 (14%); in 1989, there were 9 of 200 (4.5%)
• 86 ethnic minorities (8.6%); in 1989, there were 5 of 200 (2.5%)
• 29 (2.9%) landowners; in 1989, 57 (28.5%) were landowners, then the largest single category of wealth
• 5.7% of this year’s list represent wealth passed from one generation to the next
At the top of the Rich List is Jim Ratcliffe – a self-made, British-born industrialist who grew up in a council house in Greater Manchester. Over 20 years, he has amassed a fortune in excess of £21bn.
Shadow Cabinet Office Minister Jon Trickett MP has come out against those on the list: “People have had enough of years of the elite pinching wealth from the pockets of ordinary working people. Labour will overturn the rigged economy that the Tories are obsessed with protecting.”
Trickett is taking the wrong approach. Rather than trying to tear down the hardworking entrepreneurs who deliver products, services, jobs and growth, we should be thinking about how to ensure that the current trend towards meritocracy continues. Short of eating the rich (which would reduce inequality), the best thing the government can do to decrease national inequality with the UK is to increase the stock of houses. The only long-term rise in capital’s share of income is in housing. Global inequality is best addressed by easing mobility.
Entrepreneurs need defending. To do this it’s is incumbent on all of us to give a realistic impression of the trials and tribulations involved in starting and growing a business. People aren’t as bothered by economic inequality as many presume – as long as people think that it's fairly earned. What people care about economic unfairness.
Entrepreneurship isn’t anti-worker – quite the opposite. Entrepreneurs are the job creators. Any government intent on improving the lives of its citizens needs to understand this.