In economic language, as in any language, a single word can mean quite different things. Words like ‘earnings’, ‘investment’ and ‘wealth’ may seem humdrum and innocuous, but they mask important economic, moral and political differences in contemporary life. They prompt ideas and assumptions about economic practices that guide what people do, but they do so in a way that conceals a great deal. For example, it’s easy to suppose that because the rich are ‘investors’ they have ‘earned’ their wealth, so everything’s perfectly right and proper. If we are to understand the problem posed by the excessive concentration of wealth, we need to crack open these words to reveal the crucial differences they hide, because they affect how we evaluate what we and others do, including the rich. Let me illustrate:

‘Earnings’

When someone says ‘I’ve earned £x this year’, they could just mean that they have been paid £x. But, especially if they say it with emphasis – ‘I’ve earned that £x’ – they’re likely to be implying that they have deserved what they have been paid; they may feel they’ve put in a lot of effort and done a good job. Some languages have separate words for these things, but English and many others do not. Slippage between the two meanings is very useful in leading people to assume that people get paid what they deserve. So it’s not unusual for those on quite low incomes to say of the rich: ‘Oh well, they’ve earned it so they’re entitled to it’. It allows the rich to imagine that they are both deserving and special, and that those on low incomes are inferior. It also allows ‘earners’ of all kinds to imagine that taxation takes away what they deserve.

There are many reasons why income and wealth have little to do with merit and effort. To understand them we need to look not only at where income and wealth come from, but also at what enables and encourages merit and effort in the first place. Much of this book is concerned with these matters.

‘Investment’

Investment is surely a good thing: the word has a halo. We need to invest for the future, training people, building better infrastructure and communications networks, improving technology and so on.