Battlers & Billionaires: The Story of Inequality in Australia

Redback Quarterly #1

by Andrew Leigh

Is Australia fair enough?

And why does inequality matter anyway? In Battlers and Billionaires, Andrew Leigh weaves together vivid stories, interesting history and powerful statistics to tell the story of inequality in this country. This is economics writing at its best.

From egalitarian beginnings, Australian inequality rose through the nineteenth century. Then we became more equal again, with inequality falling markedly from the 1920s to the 1970s. Now, inequality is returning to the heights of the 1920s.

Leigh shows that while inequality can fuel growth, it also poses dangers to society. Too much inequality risks cleaving us into two Australias, occupying fundamentally separate worlds, with little contact between the haves and the have-nots. And the further apart the rungs on the ladder of opportunity, the harder it is for a kid born into poverty to enter the middle class.

Battlers and Billionaires sheds fresh light on what makes Australia distinctive, and what it means to have – and keep – a fair go.

'Be warned: this book will open your eyes and prick your conscience.' Ross Gittins

'A thought-provoking book which emphasises how far we have strayed from confidently discussing public policies that seek to give meaning to our egalitarian spirit.' Laura Tingle

Genres: Economics, Politics, Australia, Nonfiction, Sociology, History

218 pages, Paperback

First published June 26, 2013

Reviews

[Avril · Rating 4 out of 5]

Despite the fact that this book is written by a politician who is also an economist, I think I trust it. The sheer number and detail of the endnotes (all 418 of them taking up almost a quarter of the book's pages) suggest that the author is writing from a position of knowledge. (But then everyone who knows me knows that I have a footnote fetish.) I was impressed that only the last part of the last chapter and the conclusion could be read as at all partisan; the other six and a half chapters read to me as party-politics free. This book doesn't seem to make extreme claims, and indeed critiques some of the claims about the results of inequality in The Spirit Level, but does make a solid argument that Australia has got more unequal in recent decades and that this is a problem.

I'm not sure that this book makes me feel at all optimistic that rates of inequality in Australia are going to change, though. Surveys do seem to find that Australians are in favour of economic equality, and prefer wealth to be distributed more equally than it is now - but that might be because the rich don't actually know that they're rich and the poor don't know that they're poor. Everyone in Australia thinks that they're in the middle and that most other Australians are at about the same level of income as themselves. Tell the upper 20% of Australians that they actually have 62% of the wealth and that a fairer distribution would mean that they have a smaller proportion and see whether they're still interested in a more equal distribution! But maybe I'm overly cynical.

Some great lines in here, of which I think my favourite was the argument that Gina Rinehart is NOT 190 times more ingenious than her father, Lang Hancock, who was worth $150 million at the time of his death, and so can't be argued to have 'earned' her $29 billion by her own ingenuity.

As a member of the Uniting Church, which for better or worse has private schools, I also appreciate the suggestions of ways in which such schools can avoid perpetuating existing hierarchies in the chapter on 'Mobility'.

So, to sum up, a short book, a quick and interesting read, that I recommend to anyone interested in equality in Australia - despite the profession(s) of the author!

[jpolstep · Rating 3 out of 5]

**This is 3 1/2 stars**

Pretty interesting book, the beginning gives a fantastic economic history of Australia from Indigenous times to the neoliberal boom seen across the West.

It focuses heavily and in-depth on causes of economic inequality and intergenerational class/social mobility throughout Australia history (access to private property/assets, class placements of parents, educational attainment/quality etc) and shows the relationship it has with modern day Australia - this is good an informative in relatively bite sized pieces to get an overall picture on the state of inequality in Australia.

My main concern with the book is that is more-so just feels like good PR for the progressive aesthetic of the Labor Party. I was expecting such due to the nature of the Author but it’s pretty bad, here’s why;

- Focuses so much on just how bad inequality gets through privatisation, reliance on markets and how nepotistic private institutions are (schooling, firms etc) - but just has an absolute lack of any arguments from the Socialist school of thought - it completely dismisses it and makes sure to reaffirm just how important FTAs, economic productivity and immigration are to achieving relatively stable economic equality

- Takes any opportunity it does to praise Labor gov policies, names drop specific policy proposals and Labor MPs/Senators in a very circle jerk kinda way

- Also takes every opportunity to shun the Lib/Nats in a way that shows them in polar opposite to them

This is all well and good (I don’t think the libs need any sort of approval) but seems rather tone-deaf when you consider just how much the Labor party has warmed up to neoliberal policies and visions. Especially with Andrew admitting ‘sometimes my Labor colleagues and I get sick of talking about inequality’ - bit of a mask off moment

It also doesn’t help that the solutions to said problems of inequality (albeit good policy proposals) are just like a Labor party election poster.

His opinions on the family role are also rather interesting, he proposes very ‘nuclear family’ which is rather interesting . Yeah he mentions the social stigma faced by single-parents and families/children born into poverty... but he doesn’t really tackle the systemic reason why this is the case.. just pushes the solution to ‘just marry someone long term and parent the child like every affluent married couple’

Overall a good read written by a very intelligent person. I just feel like this would be a lot more interesting and important if Andrew wasn’t a Federal Politician for a major party.

[Jasmyn · Rating 4 out of 5]

An easy to read, and more importantly easy to follow, overview of the history of equality in Australia and our attitude towards it. A great starting point for anyone interested in learning more about equality, or inequality.

Arguing for Australia to remain (or perhaps return to) an egalitarian society, Andrew Leigh uses excellent comparisons, for example how different sports codes treat equality and how the competition is affected accordingly. 

While these arguments are very broad, it makes the content accessible to basically anyone and would hopefully spark internal debate of how the reader really feels about equality.

I particularly found the discussion around “relatives” in equality interesting – especially in a time where I see more and more examples of people who don’t believe privilege exists, argue that equality of outcomes is not important. If systems and policies are in place which don’t result in any change to outcomes, and potentially even broaden the gap, is this not by definition the opposite of equal opportunity? 

“We must improve our education system, as a society we need to recognise that there’s nothing equal about a race in which people start from different points. Equality of opportunity doesn’t mean making some competitors run with lead shoes, but it might mean buying a pair of runners for someone who can’t afford them.”

[Sarah Walsh · Rating 4 out of 5]

Pretty much the same conclusive evidence of books read from the UK, NZ and US. I like Leigh's idea of test-running social policy on random situations to see how they fair. Unfair is the obvi stagnant pond of inequality whereby the rich do little to push real social change. Six years on from the global crash and all I'm seeing are nuclear attacks from those who uphold business, deflecting concrete evidence such as this to gravitate the lift for our poor.

[liv (≧▽≦) · Rating 4 out of 5]

3.75 Stars ----

This is an incredibly well-researched (half the book is dedicated to the bibliography) and well-rounded book, despite being written by a Labor MP. Also very readable by the average person despite Leigh having a PHD in economics. He could have chosen to write in very academic language, but I think the decision to keep it simple ties into his commitment to equality.

It is pretty horrifying to see just how bad inequality has gotten in Australia. I found the graphs included particularly helpful in visualising this inequality amongst walls of text, and I enjoyed the short history of Australian inequality over time. Crazy that a house in Sydney used to cost $800 ($28,000 adjusted for inflation) SO WHY THE FUCK DOES IT COST 2.5 MILLION NOW... read the book to find out lol
I'm not sure I feel any better about inequality though, given that 88% of Labor MPs support income redistribution but only 9% of Coalition MPs do. YIKES.

Despite my own cynicism, Leigh provides a whole chapter of strategies to slow and reverse inequality. It's not hard to achieve, its actually quite easy, hopefully reform is achieved before inequality is unfixable. I think this is a good book to suggest to people beginning their journey in understanding both economics and politics, especially if they're interested in a fairer country.

[Tad Tietze · Rating 3 out of 5]

Full of useful data on inequality but its causal explanations lie not at the level of social relations but a technicist and distributive set of factors. Its policy prescriptions, unsurprisingly given the author is a Labor MP, run not much further than a centre Left / liberal policy program (with a dash or two of paternalism thrown in).

The Australian Piketty, but a paler shade of the the French economist's critique.

[Fionn McGorry · Rating 3 out of 5]

Disappointing. Might be a bit harsh - maybe 3.5 stars is fairer.

It’s very interesting in considering pre-Colonisation and early Convict era inequality, but then subsequently basically falls apart in its ambition.

First a couple of methodological challenges:
- Pre-decimal values are expressed in pounds (which ones? British pounds? Pre-decimal Australian pounds?) but as a decimal currency - and no method of calculating that value is given.

- Leigh dismisses the genre-defining work of Wilkinson and Pickett by critiquing their work as a static snapshot, and saying that their claims on inequality’s link to crime is not convincing, but only looks at violent crime, as if petty theft and similar aren’t the obvious crimes to look at with respect to inequality, rather than assaults or murder. Similarly his dismissal of health consequences of inequality basically only refers to life expectancy and internal medicine, and doesn’t engage at all with W&P’s work on consequences of inequality for mental health.

Then some general issues:
- A lot of backslapping for Australian cultural egalitarianism, without considering whether some of that is affected, counterproductive and probably ultimately a disingenuous smokescreen designed to conceal class conflict.

- His conclusion that inequality is modestly good for growth doesn’t engage at all with what kind of economic growth we’re talking about. Are we talking about extractive resource production… or what?

- There is an entire section on inequality and social mobility, which is perhaps to be expected but very short-sighted. It doesn’t engage in any Bourdieusian thought on cultural capital, doesn’t consider the inevitable consequence of increased social mobility (ie that some people are therefore inevitably downwardly mobile) and fails to engage with the obvious offer that socialists make here: “Rise with your class not from it” (a la John McLean)

- Bafflingly one solution he proposes for increased social mobility is for private schools to offer more bursaries and needs based scholarships - a truly wild position for a social democrat to take.

- There is a totally uncritical approach taken to the tendency of Labor to favour means-tested welfare politics, claiming it’s more efficient. There is a vivid and nuanced literature here which he doesn’t consider, that universalism is inherently more efficient, encourages wider social support for redistribution, and any inefficiencies can be clawed back at the top through the tax system. Probably because he is a Labor MP, he wants to defend his colleagues approach to welfare spending, but it is not a settled debate. Possibly for the same reason, when discussing the decline in trade union membership he doesn’t engage with the ALP’s own role in gutting TU influence through the Accord, and argues against “closed shop” approaches for no good reason, in my view, and doesn’t propose any legislative or other measures that government could take to strengthen trade unionism. In the same vein he doesn’t spell out clearly enough the consequences for democracy of inequality (Hacker and Pierson’s Winner Take All Politics would be worth engaging with) and the role that closed shop or similar could have to increase economic democracy.

Ah, well!

[Barbara · Rating 4 out of 5]

A well-argued, thoughtful and fact-filled discussion of the history of inequality in Australia by ANU economist turned parliamentarian, Andrew Leigh.

[Lee · Rating 4 out of 5]

Well worth reading and very accessible.

[Tony Senanayake · Rating 4 out of 5]

Battlers and Billionaires provides a data-focused, well-researched summation of inequality in Australia as well as policy prescriptions for how we may move forward. The book is built on the premise of Australia's desire and history of egalitarianism. It makes a strong argument for why this culture is preferable for the country and why it should be preserved.

The book then goes on to describe the history of inequality in Australia, noting periods of high inequality in the 19th Century and periods of low relative inequality from the 1920s to 1970s. We then arrive at current day Australia where inequality is rising markedly to levels that exceed social understanding. The book provides a short list of potential drivers including taxation, education and family structures.

Finally the book provides policy prescriptions for how we may reduce inequality in Australia in way that are argued to be sustainable and maintain Australia's underlying ethos.

The book is remarkably level-headed given that the author is a politician. The author highlights uncertainties and counter-arguments. The book is data-rich and pragmatic.

I would have appreciated more detail on the policy prescriptions, and also greater comparison and contrast to other countries inequality journeys. The book is unabashedly Australia-centric, however I feel there is a lot to be learnt even from a quick glance around the world.

[Darcy · Rating 5 out of 5]

A great book to start the year with. Leigh provides a great overview of economic inequality in Australia. He begins with the historical trends of inequality, then discuss the issues of inequality i.e cause, effect, mobility, public perception and finally finishes with soem policy suggestions.

Leigh is clearly well read and this comes through with his diverse references to literature, art, music I.e. Peter Garrett and pop culture. This invigorates the book, transforming it from a dry economic exposition on income inequality into a narrative of income inequality

Leigh cites all of research extensively, making it easier to find aby further information or conduct further research.

Leigh’s discussion of the causes of economic inequality equality is a particular highlight in the book. Leig, as he does throughout the book,weaves in anecdote to explains how economic equality develops i.e the superset musicians and movie stars. His summarisation at the end of the chapter and discussion of the implications for policy is also well crafted.

The chapter on Australian attitudes to economic is equality date is interestering. Leigh cites a range of surveys that indicate Australians want Australia to become more egalitarian. However, there is no data that indicates what Australians would sacrifice for such. The survey asking how angry Australian feel about the wealth gap resulted in an average answer of 5. This indicates there may not be such appetite for reform.

[Stephen Torsi · Rating 4 out of 5]

This is an excellently readable travel through the last century of inequality in Australia. Leigh has a genuine passion and interest in his subject and his research adds depth to the understanding of the Australian context. He shows quite clearly how inequality has changed, why it is an issue of national concern and what can be done about it. His one guiding principle that comes through in numerous examples is Australia as a beacon of egalitarianism among western democracies. I'm really enjoying the Redback series, which is offering insightful, concise analyses of current Australian issues.

[Zac McDougall · Rating 5 out of 5]

An excellent overview of the history, causes, and proposed solutions by economist and parliamentarian Andrew Leigh. He is surely the one of the most intelligent people in the current Labor caucus. It’s unfortunate that Leigh isn’t in the Cabinet (likely due to not being factionally aligned), but it is comforting to know that someone who thinks about these issues seriously is a member of the Government.

[Nancy · Rating 4 out of 5]

A well researched and cogently argued book examining the presence of inequality in a country which traditionally prides itself on its egalitarian ideals. This was a fascinating book which was never once dry or dull. And the author ends the book with possible solutions to the inequality which now undeniably exists, which is always refreshing.

[Adrian · Rating 4 out of 5]

It was solidly cheap at the time, and taught me both about some interesting aspects of history and about some interesting economic ideas. Obviously sways to the left, but is very gentle with its treatment of the right, going into reasons why inequality can be ok and the actual truth behind trickle down economics (the answer may surprise you).

Recommended if cheap or available in a library.

[Dom Courtney · Rating 4 out of 5]

This book is quite challenging. It is all about Australia’s wage inequality. Some sections were challenging reading for a non-economist, and some sections were challenging for a reader with undeniable privilege. There is even a section discussing reading habits of wealthy and poorer people…
Better than any book I’ve written.

[Andrew Steven · Rating 4 out of 5]

Well written and consise

Good book, well worth the read, has interesting points and well above the grade expected from the price, definilty read it was a pleasurable read well worth picking up

[Dominic Behrens · Rating 4 out of 5]

Essential, approachable introduction to the study of Australian inequality. Doesn't feel like a book written by a politician, but is sanguine about the political realities.

[Revelly Robinson · Rating 5 out of 5]

The premise of Andrew Leigh’s exploration of social and economic inequality throughout history is that Australian society has been based on egalitarianism. He introduces his book with anecdotes of World War II stories where historians observed the spirit of fairness and mateship exhibited by diggers, even when they were imprisoned in Japanese prisoner of war camps. Elaborating upon this notion that the egalitarian spirit underpins Australia’s fair go society, Leigh launches into a scrupulous economic analysis of the statistical trends defining wealth and income since Australia’s inception.

Commencing with an initial explanation analysing the deeply stratified unequal society that defined Australia’s colonial past to the subsequent reduction in inequality arising in the post-World War II era, Leigh looks at what the primary drivers of inequality and conversely equality are based on economic studies conducted not only in Australia but around the world. He summarises the bases for the contracting diversification of wealth as being primarily attributed to a few defining features of the period, increases in trade union membership and proportionate tax rates being among them. By applying empirical analysis of the data, Leigh is able to surmise that inequality has been rising in Australia since the 1980s, as it has been in countries elsewhere such as the United States.

After identifying the reasons for the reduction of inequality throughout the 60’s and 70’s, Leigh then considers whether inequality is necessarily a bad thing and the social implications of living in a society where the wealth is tapered towards a minority few. It is through this research that Leigh uncovers some surprises in his findings, such as the lack of a link between crime and growing inequality. He also considers the effect that technology has had upon equality in society, not only in Australia but elsewhere. By directing readers to the relevance of inequality as a social condition and why Australia should be concerned about growing levels of inequality, Leigh is then able to put draw attention to the political debate about how an understanding of inequality on a macroeconomic level informs policy making on a wider spectrum.

Leigh does this through poignant depictions of real life experiences that contextualise the contemporary approaches to government policy by drawing on examples of real people. He draws on his interactions with members of his electorate and even mentions how an understanding of economics and the psychology of equality is pertinent to governing the domestic affairs of a household. In doing so, Leigh has provided a readable and digestible essay of the factors contributing to the dichotomisation of Australian society into the ‘haves’ and ‘have nots’. He is able to navigate through the complex numerical information presented with remarkable ease and present it to the reader that is not only engaging but thought-provoking due to its current significance.

Leigh concludes his story of inequality by looking at one of the most undesirable aspects of having deeply entrenched levels of intergenerational wealth, being that of social mobility. By encouraging social structures that lead to ingrained inequality, Leigh argues that the ability of people to increase their own level of wealth is inhibited due to lack of opportunity. Such a result is undesirable for society as a whole as it further increases the strain on the welfare system and leads to other problems such as decreasing levels of education.

Ultimately, Leigh sums up, drawing back to his prelude about Australia’s egalitarian society, the fabric of equal opportunity and a fair go which we as Australians like to feel epitomises our society could be at stake. Equality is after all, not merely about wealth, but a reflection on social institutionalism. It impacts upon education, health, access to technology and the family structure and vice versa.

These are pinnacles of Australian society that we have had the fortune to cherish and potentially take for granted in the most recent economic growth era. Leigh’s examination of inequality and what this means for Australian society is a telling reminder that our current levels of wealth are the result of years, if not decades of conditioning, and that future patterns of wealth diversification will also be informed by current policy makers.

[Pete · Rating 4 out of 5]

Battlers and Billionaires (2013) by Andrew Leigh is a solid read by the ALP’s member for Canberra and former Economist about Inequality. It presents a plethora of statistics on how inequality has changed in Australia and conclusions in an impressively short 155 pages or so. The book has extensive end notes that increase the length. It’s definitely very carefully researched.
Inequality is definitely a topic that many people on the left find very interesting. The increase in intra country inequality in many countries in recent decades has sparked debate. Leigh does note that global inequality has been falling due to the rise of China and India.
The book has a great deal of information on inequality through Australia’s history. Leigh shows how the richest Australians according to the percent of national wealth lived in the 1900s. From the 1900s to the 1970s inequality reduced before rising since then and recently rising dramatically in the 1990s and 2000s.
Leigh devotes a chapter to the consequences of inequality and refers frequently to surveys and looks at sporting leagues. Leigh also points out that the effects of inequality have been exaggerated by various people including the book The Spirit Level.
Finally the book makes recommendations about how to reduce inequality. They are first that steps to do so should be done in mind with economic growth, that we should improve education, that the family should be a key part of the program, unions should play a role and that means testing for social benefits should be used and that Australians should recognise that egalitarianism has long been seen as very important for Australians.
I enjoyed reading the book but it didn’t actually motivate me to worry more about equality, indeed it made me reflect more about the whole issue and indeed be a bit less concerned. It is, however, tremendously solid, well written and informative.

[Jesse Coulter · Rating 3 out of 5]

A short and interesting account of the history of inequality in Australia, Leigh balances statistics and graphs with enough anecdotal evidence to keep things interesting for the layman (me). For a book written by a politician, it remains surprisingly impartial (with a few small exceptions). Right-wing types won’t like the assertion that a focus on unionism decreases inequality, but the facts are there to support the argument, both statistically and anecdotally. I particularly liked one of the summarising analogies used in the conclusion of the book (which manages to capture the essential drive of the whole thing); do we want Australia to be more like the English Premier League, where might reigns and half of supporters go for the same team, or the AFL, in which salary caps keep the game more fluid, equitable, interesting and ultimately enjoyable for everyone?

[Fraser · Rating 3 out of 5]

An important topic but a reasonably dry read.

The author explores the causes of inequality which include to equal extents de-unionisation, tax cuts and technology and globalisation, as well as the consequences of inequality. Interestingly, unequal societies experience more rapid economic growth, however they also experience other undesirable effects such as decreased social mobility.

The author suggests that in order to reduce inequality we must maintain our policy expertise which has delivered strong economic growth, improve our education system, focus our welfare spending on those most in need and maintain the progressive income tax system.

[Sean Finn · Rating 5 out of 5]

Great little read this one.

Good analysis on the underlying components of inequality. The book brings to view the problems as well as solutions! and from a politician! Bloody hell... it was getting a bit too much to take in for a while as all these pre-conceived notions were falling down around me.

Read this book, inequality is an important danger that needs averting and this book goes a long way, especially considering it is a domestic piece, in understanding the cause and solutions in moving port side of this iceberg.

[Jane Potter · Rating 4 out of 5]

Fascinating! I loved hearing about Australian examples of egalitarianism! I liked when he compared AFL to the way the English football league is run in terms of equality. The point he makes about education being the equaliser was also good.

[Kim Tang]

Well, I like some points that have been raised in this book. However I think there are many more factors that affect a person's social-economic status have not been discussed and mentioned here. The topic indeed is complex and one can hardly cover all the factors.