The noted British economist Anthony B. Atkinson, who made seminal contributions to the academic understanding of inequality, passed away on New Year’s day, 2017. He was 72.
Thomas Piketty might be a more famous name in inequality studies today but by the time his magnum opus, Capital in the Twenty-First Century was published in 2014, Atkinson had already clocked over 40 years of research on issues of distribution of wealth, income and property. At the time of his death, he was a senior research fellow at Nuffield College, Oxford and Centennial Professor at the London School of Economics. He has also taught at the University of Cambridge, University College London, University of Essex and University of Oxford. He was educated at Cambridge and MIT.
Following the tradition of Simon Kuznets, who famously came up with the first year-by-year account of income distribution in the USA in 1953, Atkinson along with Allan Harrison did the same for Britain between 1910 and 1970 in the now classic book, Distribution of Personal Wealth in Britain. In fact Piketty referred to him as the ‘godfather of inequality research’ and admitted to being inspired by Atkinson’s work. For economics students in almost all universities across the world, the book that Atkinson co-wrote with Joseph Stiglitz in 1980, Lectures on Public Economics, sets the standard in public economics courses. In 1972, he founded the Journal of Public Economics – which is considered to be one of the top economics journals in the world.
Although Atkinson was a theoretical economist of the highest quality, what set him apart from conventional economists wa his in-depth work with data. His research on the distribution of inherited wealth, top income percentiles and intergenerational income mobility extended to countries in Europe, the Americas and Asia. In the last few years of his life, he worked on building a time series of top incomes in countries in Africa. The difficulty of this endeavour will be familiar to anyone who has tried to work with fiscal data, especially in developing countries. He took it upon himself to work with interdisciplinary teams to build databases to facilitate transnational comparisons of wealth and income. This enables us to put a number on the worrying issue of global economic inequality, absolute poverty and exclusion. His ability to derive valuable information from non-survey sources like estate data, wealth tax data and investment income tax data was unparalleled and unfortunately, a very underrated skill in the profession.
Atkinson’s prowess was not just in academics – he fulfilled the role of a public intellectual as well. He didn’t shy away from making radical suggestions for fiscal policy. He was one of the earliest proponents of guaranteed employment by the state, a guaranteed return on savings and a capital endowment to each citizen as soon as they turned 18, which would be financed by progressive taxes. He was vocal against Reagan-Thatcher economics, which according to him, worsened the problem of inequality since the 1980s that had stabilised after the Second World War following the New Deal and the Beveridge Report.
Empirical studies are not the most glamorous subject in the economics profession with almost no economist who exclusively involves herself or himself in data work ever receiving the Nobel Prize. Perhaps that was the reason Atkinson’s passing was not discussed outside academia. It is also possible that at a time when the welfare state is being dismantled across Europe and Asia, Atkinson’s proposals (see below) and ideas of taxing the rich to serve the needs of the poor – articulated in his 2015 book Inequality: What Can be Done – are not particularly fashionable. As the pendulum swings away from neoliberal dogma, however, his monumental contributions to the field of public economics and progressive fiscal policy are bound to be remembered.
The 15 Proposals from Tony Atkinson’s Inequality – What can be done? (Harvard University Press, 21015)
Proposal 1: The direction of technological change should be an explicit concern of policy-makers, encouraging innovation in a form that increases the employability of workers and emphasises the human dimension of service provision.
Proposal 2: Public policy should aim at a proper balance of power among stakeholders, and to this end should
- (a) introduce an explicitly distributional dimension into competition policy;
- (b) ensure a legal framework that allows trade unions to represent workers on level terms; and
- (c) establish, where it does not already exist, a Social and Economic Council involving the social partners and other nongovernmental bodies.
Proposal 3: The government should adopt an explicit target for preventing and reducing unemployment and underpin this ambition by offering guaranteed public employment at the minimum wage to those who seek it.
Proposal 4: There should be a national pay policy, consisting of two elements: a statutory minimum wage set at a living wage, and a code of practice for pay above the minimum, agreed as part of a “national conversation” involving the Social and Economic Council.
Proposal 6: There should be a capital endowment (minimum inheritance) paid to all at adulthood.
Proposal 7: A public Investment Authority should be created, operating a sovereign wealth fund with the aim of building up the net worth of the state by holding investments in companies and in property.
Proposal 8: We should return to a more progressive rate structure for the personal income tax, with marginal rates of tax increasing by ranges of taxable income, up to a top rate of 65 per cent, accompanied by a broadening of the tax base.
Proposal 9: The government should introduce into the personal income tax an Earned Income Discount, limited to the first band of earnings.
Proposal 10: Receipts of inheritance and gifts inter vivos should be taxed under a progressive lifetime capital receipts tax.
Proposal 11: There should be a proportional, or progressive, property tax based on up-to-date property assessments.
Proposal 12: Child Benefit should be paid for all children at a substantial rate and should be taxed as income.
Proposal 13: A participation income should be introduced at a national level, complementing existing social protection, with the prospect of an EU-wide child basic income.
Proposal 14 (alternative to 13): There should be a renewal of social insurance, raising the level of benefits and extending their coverage.
Proposal 15: Rich countries should raise their target for Official Development Assistance to 1 per cent of Gross National Income.
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Alongside these proposals are several possibilities to explore further:
Idea to pursue: a thoroughgoing review of the access of households to the credit market for borrowing not secured on housing.
Idea to pursue: examination of the case for an “income-tax-based” treatment of contributions to private pensions, along the lines of present “privileged” savings schemes, which would bring forward the payment of tax.
Idea to pursue: a re-examination of the case for an annual wealth tax and the prerequisites for its successful introduction.
Idea to pursue: a global tax regime for personal taxpayers, based on total wealth.
Idea to pursue: a minimum tax for corporations
Source: www.tony-atkinson.com
Rohith Jyothish is a PhD student at the Centre for Informal Sector and Labour Studies, Jawaharlal Nehru University (JNU), New Delhi. He tweets at @rohithjyo