Thomas Burgess - From Here to Prosperity

TO ME that says it all, it is the basis of how we should live our lives and outlines the tasks for the governments we elect to act on behalf of us all, not just the few.

Though today, nearly seventy years later, the global economic system is creating extreme inequality, causing unnecessary hardship for millions of people. So many have so little, while so few have so much. Where is the progress?

I am frustrated by the lack of action to solve inequality, persistent poverty and slow economic growth. I did not want to write another analysis of the problem, about how bad it is and how it is getting worse. I wanted practical answers, and I was pretty sure there were simple answers, I like simplicity.

I am inspired by my late father, Dr Ronald Burgess, an economist, who had written several economic papers, as well as a 1993 book: Public Revenue without Taxation. I always thought this seemed like a great idea and it was indeed simple. However my Dad wrote an academic, learned book. I wanted to propose practical answers written in a more every day language so that you need not be an economist to understand. I did study economics at school and university so I should know the basics!

Just twenty years later, inequality has worsened, poverty is still endemic and the economy of the world is still fragile. It should be strong, given globalisation, technology and advances in healthcare and communication. There should not have been the Great Recession, but there was, we should have recovered much faster. But we are in danger of making the same mistakes again. While I believe we could raise public revenue without taxation (you will need to read his book to find out how!), we now need some urgent action to bring some strong structural changes to correct our economy and make progress for our society in the 21st century.

I have always been fascinated by politics, I was a Student Union President and active in the National Union of Students, later I was a founder member of the Social Democratic Party and twice stood for city council, and also founded and edited a political newspaper. I really wanted to stand for Member of Parliament but there was no party that ideally matched my views. As my headmaster once said in my school report: ‘Tom is an individualist’ which apparently means one that pursues a markedly independent course in thought or action. I also got busy with my own business and sharing in the joys of bringing up a family, which became my priority. Now that my children are grown up, left home and off the payroll, and now that I have left the business world behind I can now devote my energy to making a difference.

This book is just the start.

Another factor is that I have been fortunate enough to live in both the UK and USA. One of the consequences about being out of your home country is that you can take a more objective view of your home nation, and a much better understanding of the culture, media and politics of the nation you now call home. So I hope I can bring an impartial view.

The longer you live your life and the more you travel, you see the contrasts, in culture, living standards, the variations in income, wealth, opportunity, housing and outlook on life. The businesses I founded have worked for over 500 clients in nearly 100 countries. I have seen and experienced all sides now from the mansions and yachts of the super rich, the smart hotels, impressive boardrooms and excesses of senior corporate executives, to the unemployment, insecurity and frustration of so many people as well as the determination and courage of ordinary working people, trying to make ends meet and lead a fulfilled and purposeful life. Having experienced so much I hope this puts me in a good position to comment and propose some answers to the dilemmas of today. I hope this book will inspire you to realise that if we collaborate, we can bring change and elect a government that truly does work for us, the majority, not just the few.

In From Here to Prosperity, I hope to persuade you that together we can build a fairer society that truly provides the opportunity of prosperity for everyone and encourages greater democratic engagement. And I propose to show you how. I want to bring you practical and simple answers. The mechanisms of change that I will describe include measures that will appeal across the whole political spectrum, bar its extremes, and will benefit the vast majority at little expense to the very wealthy few.

I propose an Agenda for Progressive Prosperitythat aims to minimise extreme inequality and create greater opportunity for all by bringing significant financial relief to the poor and squeezed middle class. It is based on the inequality-busting strategy of ‘inco me for me /we alth for we’. We each keep the income we earn from the personal effort of our work and we share more equitably the wealth we create jointly. The tax system could be reformed to shift the base from income to wealth and to encourage greater social responsibility. A key tactic to achieve this would be by abolishing income and payroll taxes for the majority of the population. This would be more than covered by a greater contribution, based on a small percentage from the value of personal assets above a threshold from those who have accumulated significant wealth. Everyone will be better off. With more funds brought into circulation, consumer demand will be boosted and more jobs created, leading to greater opportunity for all. This agenda is inclusive and non-partisan; it causes no hardship and could transform our society bringing sustainable growth and greater social justice.

Inequality is not someone else’s problem. It is a tragic consequence of a broken system that affects us all and we need to fix it fast. With such high levels of poverty, low wages and weak consumer demand even the wealth of the rich is at risk. If we do not change, change will be thrust upon us by social unrest and revolution. The rapid concentration of wealth into the hands of a tiny minority has drifted us into a plutocracy, government by the rich for the rich. As a believer both in democracy and capitalism, I find this deeply troubling and not just from a moral perspective, though that is critical, but also because my sense of history tells me that it is dangerous. To my mind, it is better to encourage peaceful but profound change whilst we still have the chance.

The Agenda for Progressive Prosperity is built on a five-step process that will bring increased financial security, greater freedom and more choices leading to a more fulfilled and purposeful life for many. The eminent economist Joseph Stiglitz said reform could be achieved through the tax system. I agree. All these five interlinked policies that I propose, contribute to reducing inequality by increasing disposable income for lower earners and sharing more equitably the wealth we jointly help create.

A living wage to be the minimum wage: Low wages cause hardship. Five million people in the UK earn less than a living wage (as defined by the Living Wage Foundation) and the British government spends £30 billion topping up low wages. In the USA, where 51 million jobs pay under $15 per hour, the federal government spends $227 billion subsidising low pay. Research shows that paying a living wage would have a minimal effect on company profits, yet most companies still choose not to do it even though higher wages have been proven to bring benefits such as less absenteeism, reduced recruitment costs and better quality of work. This policy is effortless to implement, it just requires raising the minimum wage to an agreed level i.e. a wage based on agreed acceptable living standards. UK Chancellor of the Exchequer George Osborne proposed a ‘National Living Wage’ of £9 an hour by 2020, in his 2015 budget. This is the minimum wage in new clothing, and not to be confused with the real thing. While small companies may have transitional challenges to living wage, big companies making substantial profits have no excuse, business models may need to be amended but we must do the right thing. The big benefit to us all is greater consumer demand, as Henry Ford found when he increased his employees’ wages so they could afford to buy the cars they made.