Sir Tony Atkinson, one of Britain’s most prominent economists and a world-renowned scholar of inequality, passed away on New Year’s Day 2017. Below is a reflection on his intellectual and scholarly legacy by one of his collaborators.
Tony Atkinson (1944-2017), economist, intellectual and leading scholar of inequality and welfare economics, died at the dawn of the new year, in Oxford, after after fighting an incurable multiple myeloma.
After graduating from the University of Cambridge, at the age of 23, he became a Fellow of St John’s College, starting the decade that marked his professional life profoundly. The study of mathematics (his first choice) and information technology (Tony worked for 11 months at IBM) never overshadowed his deep interest in social issues, especially poverty, that was his main focus throughout his professional career: in 1969 he published his first book, Poverty in Britain and the Reform of Social Security and, just a few months before he died, the report “Monitoring Global Poverty”, which was the result of his activity as Chairman of the Commission on Global Poverty established by the World Bank. Had the illness granted him more time, another book, “Measuring Poverty Around the World”, intended for a wider audience, was well on its way to completion.
In Cambridge, Nobel Prize winner James Meade—his mentor—had a profound influence on his future work. Here he also began teaching a course in public economics, leading to the publication, in 1980 with Joseph Stiglitz, of one of the most used textbooks on the subject (the second edition of Lectures in Public Economics was re-issued in 2015).
One of the fundamental theorems of optimal taxation bears their name: Atkinson-Stiglitz. In a seminal 1976 paper, Atkinson and Stiglitz analysed the relationship between indirect tax (on goods and commodities) and direct tax (on income) and showed how governments can, under specific conditions, rely solely on direct taxation. Interpreting capital tax as a tax on future consumption, numerous researchers have debated for years about the implications and usefulness of a tax on capital.
Atkinson showed us that the choice of an index of inequality often underpins a scale of specific values ??concerning social justice and equality.
Prior to that, Atkinson had already given fundamental contributions to economics and, in his best style, to the entire academic community. In 1971, for example, he founded the Journal of Public Economics and remained as editor in chief until 1997. A year earlier he had published the essay “On the Measurement of Inequality”, to this day still one of the most important contributions to modern welfare economics.
The article revolutionized the study of economic inequality by building a theoretical bridge between its measurement and the foundations of welfare economics. Classic economic inequality measures, such as the Gini coefficient, are usually described as a neutral representation of dispersion of income and wealth. Atkinson showed us, however, that the choice of an index of inequality often underpins a scale of specific values ??concerning social justice and equality. His alternative index was born precisely in order to make these normative principles explicit.
By varying the parameters of the so-called “aversion to inequality” one can choose the degree of sensitivity of the Atkinson index to changes in the economic status and well-being of the poorest sectors of the population. The higher the level of inequality aversion, the greater the weight that is given to the differences in income or wealth between the low and high part of the distribution. French economist Thomas Piketty, who has widely acknowledged Atkinson’s influence on his own work, once remarked that “these contributions alone would justify various Nobel prizes.”
Atkinson always believed in the social mission of economists and scholars. In his view—as in Keynes’s—economics is a “moral science”: a discipline that should aim to solve the tangible problems of our society, based on careful understanding and rigorous analysis. In many ways, his latest book, Inequality: what can be done? (“Dedicated to the wonderful people who work for the NHS” who accompanied him throughout his illness) is the epitome of his life as a scholar who believed in the role of institutions and of all citizens in improving the welfare of a society.
Tony was adamant that a good society was incompatible with wide inequality of resources. Most importantly, he made these claims at a time when the dominant thought, under the influence of Thatcherism and Reaganism, suggested the opposite. His 15 proposals to contrast inequality, many of which he described as “radical” but not utopian, were formulated in the few months after he discovered he had cancer, after more than 50 years of studies on inequality. “Too few”, he would have probably said.
Government has, and always had, the power to influence the process of technological development and ensure employment opportunities for all, as well as a more equitable distribution of asset ownership and control over productive activities (capital). We are not at the mercy of events, as we sometimes like to tell ourselves.
Only a few of these proposals, which are his last testament, are concerned with tax redistribution policies. For example, he advocated a more progressive income tax system (partly by increasing the top marginal tax rate for super incomes); expanding social insurance coverage; establishing a progressive tax on life-time inheritance and donations, establishing a basic income for all children and a basic participation income—a proposal which he supported since the early 1990s.
The proposals also emphasize the vital importance of promoting economic competition policies, rebalancing the bargaining power of workers, and establishing government bodies that support and promote full employment and public investments (by establishing a sovereign wealth fund). In describing these proposals, he used historical examples to reveal the emptiness of the pervasive rhetoric of the impossibility of action and the inevitability of economic processes such as globalization and technological progress. Government has, and always had, the power to influence the process of technological development and ensure employment opportunities for all, as well as a more equitable distribution of asset ownership and control over productive activities (capital). We are not at the mercy of events, as we sometimes like to tell ourselves.
This is a disarmingly simple lesson. In a similar fashion, another important article written with Joseph Stiglitz in 1969 posits that technological development is highly specific and localized, and can influence only the production techniques currently in use. It does not necessarily affect all the production processes homogeneously and proportionally, as commonly assumed in growth models. This vision, which was heretical at the time, is today catching on in the macroeconomic discipline.
In reading Atkinson’s written contributions, one is always surprised by a change of perspective and his presentation of an alternative view. His challenge to orthodoxy, his resistance to conformism, and his rejection of a unique and dominant theory are all evident traits in his writing—always distilled with elegance and respect for the ideas of others. The details of a theoretical model are often analysed in conjunction with empirical evidence, usually originally crafted and exposed in a historically comparative perspective. The data that he assembled on wage dispersion in the United States show that the increase in earnings inequality began in the 1950s. Hence, the phenomenon cannot be entirely explained by technological advancement and the concurrent increase in the demand for “skilled” workers.
His vision was informed and supported by facts, assembled with skilful and expert mastery, after months and even years of work. At the same time, Atkinson valued joint efforts in collaborative research highly, with humble and sincere generosity. About a month ago, commenting on all the difficulties we encountered over the last year while drafting our work on the evolution of the concentration of wealth in the United Kingdom, Tony stressed how “no one should ever do research alone”. In the analysis of the historical dynamics of the distributional aspects, which he deemed crucial for understanding the evolution of modern economies, he followed and re-founded the classical track of Ricardian political economy, later re-interpreted by Simon Kutznets.
Along with Thomas Piketty, Atkinson was the main architect of one of the largest and most ambitious collegial research projects in economics in recent years: The World Top Income Database, later transformed into the World Wealth and Income Database thanks to the joint effort of Facundo Alvaredo, Lucas Chancel, Emmanuel Saez and Gabriel Zucman. The project is based on national accounts and tax-based administrative data (even from remote former colonies) in order to acquire information previously unexplored regarding the distribution of income and wealth.
As a member of Nicolas Sarkozy’s Commission on the Measurement of Economic Performance and Social Progress, he concerned himself mainly with the increasingly common use of aggregate income measures (such as the Gross Domestic Product) that were distant from what ordinary people call “income”.
It is also thanks to this project that the topic of inequality is now centre stage in the global public debate. The slogan, “we are the 99%” was made possible by the capacity of the groundbreaking evidence the project gleaned to place the most affluent individuals of our societies under an investigative lens. This was all the more remarkable considering the fact that the most well-to-do often manage to avoidthe most common statistical harvesting of data.
Atkinson’s pragmatism was naturally extended to the language used in his writings. As a member of Nicolas Sarkozy’s Commission on the Measurement of Economic Performance and Social Progress (the “Stiglitz-Sen-Fitoussi commission”) he concerned himself mainly with the increasingly common use of aggregate income measures (such as the Gross Domestic Product) that were distant from what ordinary people call “income”. “Putting people first” it is not just an idiomatic expression used in the title of one of his recent article. It inspired his entire way of working. It is no coincidence that even organizations like Oxfam have acclaimed his life as a scholar, joining the choral praise from social scientists the world over.
Tony’s deep respect for his readers guided his choices. At the same time, he put great care into his bibliographies making sure that he had mentioned (after having researched and read) all his sources, even the most remote and in different languages ??(he was aware that academic research was very limited in scope by the use of English-speaking sources). Quotes from the early 1900s, unknown to most, as well as institutional sources or research in other disciplines, are not uncommon in his books and articles, as evidence of his deep erudition and curiosity, and of an extraordinary respect for the intellectual “ownership” of ideas.
His death has saddened and disheartened his family, long-time collaborators and friends. My hope is that his vast intellectual legacy and his reputation as a gentle intellectual, reformist and believer in the role of institutions and the collective action of individuals will continue to fascinate many young scholars and to stimulate policy debate and change.
An Italian version of this article has appeared on Eticaeconomia.it
Photo Credits CC Juliene Sanine
Also published on Medium.