Cameron’s Gini and the hidden hierarchy of worth

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On 04 June, 2014, at 3.52pm BST, Cameron said inequality is at its lowest level since 1986. I really thought I’d misheard him. Cameron lies, that’s established fact. But mendacity of such epic proportions is surely a clear indication that this really is the Coalition’s last stand.

This isn’t the first time Cameron has used this lie. We have a government that provides disproportionate and growing returns to the already wealthy, whilst imposing austerity cuts on the very poorest. How can such a government possibly claim that inequality is falling, when inequality is so fundamental to their ideology, and when social inequalities are extended and perpetuated by all of their policies? It seems the standard measure of inequality is being used to mislead us into thinking that the economy is far more “inclusive’ than it is.

The Gini coefficient is a measure of statistical dispersion intended to represent the income distribution of citizens. It was developed by the Italian statistician and sociologist Corrado Gini.

The Gini coefficient measures the inequality among values of a frequency distribution and is currently how we measure levels of income inequality.

However, the Gini coefficient is a relative measure. Its proper use and interpretation is controversial. A Gini index does not contain information about absolute national or personal incomes. Wealth inequality may well be greater than income inequality. For example, economist Edward Wolff found that, while the highest-earning fifth of U.S. families earned 59.1% of all income, the richest  fifth held 88.9% of all wealth.

A major limitation of Gini coefficient in empirical work is therefore its focus on relative income distribution, rather than real, absolute levels of poverty and prosperity in society, and that aspects of inequality can be hidden via demographics or government policies. The relative Gini is used because the alternative methodologies are deemed too complex: it is simple, convenient formula that presents simple, convenient but meaningless values. Such rootless, unanchored values can then be given the same traditional Tory solutions, convenience being an alibi for endorsing social injustice.

Such a method of poverty measurement that has so little regard for how much money people actually have and what living standards they enjoy (or don’t) deserves to be treated with scepticism, if not contempt, especially by the man on the Clapham omnibus. And it generally is.

The Equality Trust directly compare income distribution, and this analysis provides a completely different account to the one Cameron is telling, but then we all know that “Tory” is an abbreviation of “tall stories.”

And since when were Conservative governments ever equated with social equality and egalitarianism? Thatcher, that great “communist” and social reformer (!), never tried to impose the scale of austerity cuts that the current government have, but few would disagree that she presided over a massive rise in poverty and inequality.

Tory policy creates inequalities. This is academically confirmed and verified empirically time and time again. Public health experts from Durham University have denounced the impact of Margaret Thatcher’s policies on the well-being of the British public in new research, which examines social inequality in the 1980s. The research shows the importance of the decisions of governments and politicians in driving health inequalities and population health. The researchers warn that advancements in public health will be severely limited if governments continue to pursue heavily neoliberal economic policies – such as the current welfare state cuts being carried out under the guise of austerity.

When it comes to reliable data about inequality and poverty, I think the Joseph Rowntree Foundation (JRF) has a well-established credibility, based on over a hundred years of experience in reliably measuring poverty. Cameron, on the other hand, does tend to get publicly rebuked for being … conservative with the truth.

Since 2010, wages have been rising more slowly than prices, and over the past 12 months, incomes have been further eroded by cuts to benefits and tax credits. Tory ministers argue that the raising of the personal tax allowance to £10, 000 for low income households will help. However, according to the JRF report, its effect is cancelled out by cuts and rising living costs. (Please see Quantitative Data on Poverty from the Joseph Rowntree Foundation.)

Currently the rise in the number of people who are unable to adequately heat their homes is largely due to inflated, rising fuel costs. The alleged progressive nature of the income tax system is severely undermined by the regressive nature of stealth taxes, duties, Income tax, National Insurance, Bedroom Tax, Council tax, Licences, Social care charges, VAT and many others taxes, which take a much larger portion of income from the poor than from the rich.

In 2011/12, the poorest fifth of households spent 29 per cent of their disposable income on indirect taxes, compared with 14 per cent paid by the richest fifth. All told, the poorest households pay 37 per cent of their gross income in direct and indirect taxes. In other words, the single biggest expenditure for people in poverty is tax. It is, at the very least, morally unjustifiable to be taxing the poorest citizens at such a rate. The most important thing the government can do to help the poorest people is to stop taking their money.

We don’t have the figures that may reflect the impact of the welfare “reforms” from the Office of National Statistics yet.

Last years figures showed that absolute poverty among children rose by 300,000, with two-thirds of those living in households with one or more earners. That makes a mockery of the Tory claim that they are “making work pay.” How does cutting welfare improve the lot of the lowest paid?

Absolute poverty means that people cannot meet their basic survival  needs – such as meeting the costs of food, fuel and shelter. Welfare evolved to address such fundamental deprivation, and absolute poverty had been eradicated in Britain because of the protective social security system. Until now. Children are once again suffering from illnesses historically associated with poverty and malnutrition, such as rickets and scurvy.

Alison Garnham, chief executive of Child Poverty Action Group, said: “Despite all the talk about ‘scroungers’ and generations of families never working, today’s poverty figures expose comprehensively the myth that the main cause of poverty is people choosing not to work.

“The truth is that for a growing number of families, work isn’t working. The promise that work would be a route out of poverty has not been kept as wages stagnate and spending cuts have hurt low-income working families.”

In March this year, Oxfam urged the chancellor George Osborne to use his budget to make an assault on tax avoidance and introduce a living wage, in a report they published. The report highlighted how a handful of the super-rich, headed by the Duke of Westminster, have more money and financial assets than 12.6 million Britons put together. 

Oxfam’s director of campaigns and policy, Ben Phillips, said: “Britain is becoming a deeply divided nation, with a wealthy elite who are seeing their incomes spiral up, while millions of families are struggling to make ends meet.

“It’s deeply worrying that these extreme levels of wealth inequality exist in Britain today, where just a handful of people have more money than millions struggling to survive on the breadline.”

This is a prime minister that has overburdened very vulnerable citizens with austerity, austerity and more austerity, taken away support services and reduced, cut and sanctioned away lifeline benefits for the very poorest whilst liberating the wealthiest from any social responsibilities, handing out tax breaks to the tune of £107,000 each per year to the millionaires. How can that NOT lead to gross inequalities?

The only truth I’ve ever heard Cameron utter was his Freudian-styled slip, when he said: “We are raising more money for the rich.” Yes. From where?

The poor.

It’s not as if most of us haven’t spotted the growing gap between the wealthiest and the poorest, and made a fundamental connection there.

A simple truth is that poverty happens because some people are very, very rich. That happens ultimately because of Government policies that create, sustain and extend inequalities. The very wealthy are becoming wealthier, the poor are becoming poorer. This is a consequence of  “vulture capitalism” –  the opportunism and pernicious greed of a politically influential few, it is instituted, facilitated and directed by the Tory-led Coalition. That isn’t democracy: it’s blatant corruption

The real reason for the austerity measures that this Government have inflicted on the poorest citizens is that Tory sponsors and very greedy rich people are being handsomely rewarded with tax payers money. The money for our welfare provision, our healthcare, our public services, schools, and so on, is being stolen from the British public and backhanded to the undeserving rich – there is the REAL “culture of entitlement”.

Private companies, many of which donate to the Conservative party, and have a subsequent powerful (and corrupt) lobbying influence on Tory policies, are making a fortune from the poverty that has been inflicted on many citizens. We have seen that the private sector do not deliver public “services” or meet public needs at all. (Atos, A4EG4S, for example.) Private companies simply make profit. Indeed, that profit is all too often made at the expense of the well-being of Citizens.

Eugenic policy is now an acted out by stealth, dressed up as a “necessary” economic act, and further dressed up by propaganda to hide the consequences as well as the intent, carried out by a government that has rigged the neoliberal market. The act of murder simply requires policies that leave the vulnerable without support to meet their basic survival needs, denial from government that this is happening, and then it’s just a matter of withholding or hiding the evidence.

An openly declared belief in eugenics is a thing of the past, as Hitler discredited the eugenics movement so thoroughly, however, eugenics is far from a thing of the past, and the right are and always have been social Darwinists. But I predict that if the Conservatives win the election in May, we will start to see reductions in welfare support for children from poor backgrounds, and a limit placed on the number of children that are entitled to support in families. That is eugenics.

Human rights were a cooperative international response to the Holocaust, premised on a socialist axiom that every human life has equal worth.

Authoritarianism, nationalism, fascism and Conservatism are premised on inequality, a hierarchy of worth and Social Darwinism. That’s why the Right are so against EU membership and the ECHR: they see such safeguard rights as an obstacle to their neo-feudalist vision of how society should be.

Prior to the Holocaust, eugenics fitted well with the dominant paradigm – comprised of laissez faire economics, competitive individualism, Malthus’s ideas on population and Spencer’s Social Darwinism. Those ideas, once explicitly endorsed, are now implicitly captured in policies and Conservative narratives about sanctions, “conditionality,”  “making work pay,” (compare with the principle of less eligibility enshrined in the New Poor Law) “fairness,” “incentives,” “scroungers,” and so forth.

If you think this seems a little far-fetched, consider that the government are deliberately targeting the most poorest and vulnerable citizens to bear the brunt of austerity cuts.

The cuts are not fairly distributed at all.

They target the very groups that a decent, civilised society would protect:

  • People in poverty (1 in 5 of us) bear 39% of all the cuts
  • Disabled people (1 in 13 of us) bear 29% of all the cuts
  • People with severe disabilities (1 in 50 of us) bear 15% of all the cuts

The unfairness of this policy becomes even clearer when we look at the difference between the burden of cuts that falls on most citizens and the burdens that fall on minority groups. By 2015 the annual average loss in income or services will be:

  • People who are not in poverty or have no disability will lose £467 per year
  • People who are in poverty will lose £2,195 per year
  • Disabled people will lose £4,410 per year
  • Disabled people needing social care will lose £8,832 per year

Thank goodness that the Tory-led government shows some compassion for those poor millionaires, who were handed £107,000 each per year from our Treasury in the form of a tax cut in Osborne’s 2012 budget. I wonder where the money for that handout came from….

Taking money from the most vulnerable and poorest members of Society means they are unlikely to be able to meet their basic biological needs. Welfare provision was based on the carefully calculated amounts we need to survive, so the amount of benefit is just enough to cover the costs of housing, food and fuel. That’s all. There is no provision made in any benefit for cars, holidays abroad, children’s birthdays and Christmas, large, flat screened TV’s. books or clothing. Just food, fuel and shelter. Anything more generous is simply added via propaganda. The Tory-directed media perpetuate myths to cultivate petty and divisive social “concerns” to “justify” the fact that we are being systematically and massively robbed of the money we paid in for our own provisions and services.

And people are dying as a consequence.

Related: 

Follow the Money: Tory Ideology is all about handouts to the wealthy that are funded by the poor

Tory dogma and hypocrisy: the “big state”, bureaucracy, austerity and “freedom”

The Poverty of Responsibility and the Politics of Blame

The Tories are not simply “out of touch”, their policies are deliberate and malevolent

Does income inequality cause health and social problems?  –  In 2011, the Joseph Rowntree Foundation conducted this research, with the main aim of reviewing the evidence concerning the impact of income inequality on on health and social problems. However, the report concludes by considering a range of policy implications.

Given the main conclusion is that both individual income (material circumstances) and income inequality (relative income) make a crucial difference to health and social problems, it seems clear that both need to be tackled. A range of policy levers can be used to do this: from redistribution through the tax/benefit system, to original income and wealth policies, to stronger public services, to a greater focus on equal opportunities.

Medical experts recently wrote an open letter to David Cameron slamming the rise in food poverty, saying families “are not earning enough money to meet their most basic nutritional needs” and that “the welfare system is increasingly failing to provide a robust line of defence against hunger.” – New research by Oxfam has revealed the true extent of the amount of British children living in poverty, with families taking drastic measures.

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Pictures courtesy of Rob Livingstone 

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25 thoughts on “Cameron’s Gini and the hidden hierarchy of worth

  1. Excellent piece
    And you are so right to point the finger towards the coalitions’ espousal of Malthus, The New Poor Law and Social Darwinism

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    1. Thanks Jess. It’s implicit in every policy, and all of their rhetoric.

      And now they want to withdraw from the ECHR. The Universal Declaration of Human Rights (enshrined in ECHR law) was a response to atrocities that one Social Darwinist government perpetrated in Germany. Frightening times.

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      1. You are particularly apposite in referring to Spencer; This, from his ‘The Coming Slavery’ (1884) feels horribly familiar;

        “Is it not manifest that there must exist in our midst an immense amount of misery which is a normal result of misconduct, and ought not to be dissociated from it? There is a notion, always more or less prevalent and just now
        vociferously expressed, that all social suffering is removable,and that it is the duty of somebody or other to remove it. Both these beliefs are false. To separate pain from ill-doing is to fight against the constitution of things, and will be followed by far more pain. Saving men from the natural penalties of dissolute living, eventually necessitates the infliction of artificial penalties in solitary cells, on tread-wheels, and by the lash.”
        In ‘The Man versus the State’, 1884
        http://socserv2.socsci.mcmaster.ca/~econ/ugcm/3ll3/spencer/manvssta

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  2. Reblogged this on stewilko's Blog and commented:
    Lies, inaccuracies, omissions, withholding statistics, falsifying statistics and so on. This guy and all the others are really starting to frightened me. These are running are country and the past four years they have been hell bent in destroying every part if it. Even more frightening is the fact, who will oppose these idiots.

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  3. One quibble. “The alleged progressive nature of the income tax system is severely undermined by the regressive nature of stealth taxes, duties, Income tax, National Insurance, Bedroom Tax, Council tax, Licences, Social care charges, VAT and many others taxes …. ” National Insurance is a flat-rate 11% for all incomes, and unlike VAT and the rest is proportionate. It still means that 11% of next-to-bugger-all wages means a bigger hit for the already impoverished, but at least high wage-earners pay the same percentage. There’s a case for exempting low wages from NI in the same way that we have tax thresholds. Quibble
    ends.

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    1. “There’s a case for exempting low wages from NI in the same way that we have tax thresholds. Quibble ends.”
      Whilst understanding the point you are making, that NI contributions are felt most heavily by people with low-waged jobs, under the present system, I think you misunderstand the system.

      When social security [as we now know it] was first mooted (In Prussia, incidentally) it was quickly established that it worked best with a contributory principle. That way, all contributed, and all were entitled to draw upon it when it was needed. That principle was enshrined in Lloyd George’s early 20th c enactment in our countries, and Beveridge’s revision.

      I think it was sound thinking. And has been a bedrock of the Social Security system ever since. What you are proposing would break that vital link.

      Neo-cons (not yourself, I hasten to add) love to bark on falsely about a ‘something-for-nothing’ system. It is a lie, but what you propose would add substance to their falsehoods.

      Perhaps a progressive system of NI contributions, the more you get, the more you put proportionately towards the communal pot, would be a better idea.

      Having said which, the leech at the door is ‘private insurance’. These ‘for profit’ ventures have nothing to do with ‘social security’ and, indeed have drained funds from mutual schemes in other parts of Europe

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  4. Cameron and his henchmen tell barefaced lies, and the mainly right wing media supports them. They will not be satisfied until they have re-introduced treadmill and workhouses and even then they will still bang on about the cost. As J. K. Galbraith once said, they are on an eternal search to find superior moral justification for their own selfishness.

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  5. Excellent article. I think you exaggerate a bit by bringing in eugenics – which was a deliberate attempt to wipe out/sterilise large proportions of the poor, whereas here it’s only a side effect that the powerful aren’t particularly concerned about.

    There is a strong sense of the ‘deserving and undeserving poor’ in Tory narratives though, and I find the lack of empathy mindboggling. Particularly as David Cameron himself had a severely disabled son, so must have firsthand knowledge of the expensive nature of care for the disabled.

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    1. David Cameron is very, very rich. He claimed every benefit available – to which as rich or poor we were all entitled to – for his son. He has now slashed those benefits, and apparently has no qualms about the reign of poverty and terror inflicted on the disabled by him and his government. This is the mark of social darwinists, helped in large part by the class divide, also sustained by a large degree of cultural and political sociopathy towards the “lower classes”.

      You obviously find the concept of Social Darwinism highly distasteful – we all should. But it is another thing entirely to deny that it is part of the bed-rock of the neo-lib ideology. Their view is based on a number of assumptions, all or any of which can be challenged, but as they form a self-serving and self-selecting group, it is somewhat self-defeating. The propaganda has already seeped into common cultural responses – like lack of manufacturing is inevitable given the IT revolution (wrong) and the lack of unskilled jobs for the “unemployed” as a result (both wrong). And so on. The solution to these “givens” is the road of Social Darwinism, where they literally want the poor to be gone, by any means. I truly accept your right to question the role of eugenics, but I would recommend you delve deeper. You may be surprised. You may also find it horrifying too. Many among us find it too hard to gaze on these matters, but it is required to give us the understanding not only of the problem of the neo-libs but the solution too.

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      1. I don’t disagree with them being Social Darwinists at all – there is a brutal ‘survival of the fittest’ logic to many of their policies in practice.

        But eugenics is different – I don’t believe that anyone in the current government actually wants the poor and disabled to be dead or infertile, just that they don’t want to pay to support them. There’s a small, but important, distinction between neglect and genocide.

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    2. I don’t think it was ‘exaggeration’, David. You raise an interesting point, which warrants some discussion. 🙂

      I propose that eugenics – and even the term itself, “hides behind Hitler”, since the consequences of his terrible application of it led to the international rejection of it, and the formulation Universal Declaration of Human Rights, as a response, to ensure it never happens again. I’d like you to consider for a moment that the Tories now want to withdraw from the ECHR. That is because many of their welfare “reforms” contravene human rights.

      We know that the western world never quite let go of it, though, and it has been manifest in our culture, more benignly, in our drive to eradicate disease, live longer, and “be the best we can” – fulfil our potential. That’s positive eugenics, but we don’t call it such. Zygmunt Bauman links the Holocaust with western notions of “progress”, Gordon Allport links it with a “formulaic” social process of escalating prejudice, and right now, Allports’ study is a compelling read and the socio-political processes he describes are frighteningly familiar.

      “it’s only a side effect that the powerful aren’t particularly concerned about.” I disagree – it’s deliberate, and that is why the government are so busy denying the consequences of their diabolical policies. For example, food banks aren’t because of absolute poverty, but because people like “freebies”. Benefit sanctions, which basically leave people with no means of meeting their basic survival needs such as food and fuel are described as “helping people into work”. And then there are the deaths correlated with the welfare “reforms” that are being denied, hidden by the DWP using statistical records that purposefully obfuscate the details and circumstances of their death, yet the media report the deaths and the opposition present these cases in parliament. A government that were merely neglectful would investigate the matter, rather than continually loudly deny its an issue at all.

      Sure, it’s not a medical procedure overtly associated with eugenics, but the intended consequences are the same, and if you look at coalition policies as a whole collective set of state directives, you will see that those aimed at the poor have consequences that potentially threaten survival, by the systematic removal of people’s means of meeting basic survival needs. It isn’t “neglect”: it IS deliberate. Inflicting harm, distress and slow death via intentional policy consequences is stealthy, but is just as illegal, immoral and unforgivable as death by lethal injection, or other means. And to withdraw lifeline benefits – especially from the sick and disabled – cannot feasibly be construed as anything other than inflicting intentional harm. If people haven’t the means of meeting basic needs such as food and fuel, shelter (bedroom/council tax now undermines poor peoples’ housing security), then they are more likely to die. The government knows this, of course.

      The sick and disabled have been targeted disproportionately, too. Policies are manifested political intentions, so is rhetoric. Notions of deserving and undeserving poor flourished at a time when Social Darwinism and eugenics where widely acceptable here. The utilitarianism of Jeremy Bentham and John Stuart Mill , identifying moral actions in public policy as those which produce the greatest good for the greatest number, could also support the contention that, while in the short run the interests of the poor would seem to be supported by public relief, the ultimate result of relief is detrimental to their interests. And soon after, Herbert Spencer’s social Darwinism, with his dictum “the survival of the fittest,” provided further support for the view that the vices of the lowest class in society make such persons undeserving of help from those who were financially privileged. (“Us” are the fittest: “Them” – the “Other” – are not.) It is but a short step to the Eugenics movement of the twentieth century, and the radical individualism of Ayn Rand, the latter’s popularity on the right continuing to support a libertarian celebration of selfishness—“Nobody is mine.”

      Eugenics by means of coerced sexual sterilization is but one facet of eugenics, we know that extermination of social groups on the basis of perceived ‘flaws’ or ‘undesired’ traits is another. Any social policy based on an underpinning philosophy of Social Darwinism – overtly or covertly, explicitly or implicitly – has eugenicist implications. Eugenics has, from the very beginning, meant many different things. The term eugenics is often used to refer to movements and social policies influential during the early 20th century. In social science disciplines, rather than the dictionary, eugenics is a broader, interconnected system of interlocking idea.s

      According to Richard Lynn, eugenics may be divided to two main ways by which the methods of eugenics can be applied. He sees that policy is a part of classical eugenics – “Just say no” campaigns, Sex education in schools,
      School-based clinics, Promoting the use of contraception, Emergency contraception, Incentives for women on welfare to use contraceptions, Curtailment of benefits to mothers claiming welfare, Eugenic ideas around immigration. There are plenty of examples.

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      1. That is a much better reply than I could ever make. The point is that people have and continue to die, directly as an outcome of the policies. The excessive and repeated DWP fight to withhold updated mortality statistics since 2012 is indeed a measure that they not only want to continue these policies, but BECAUSE they know the actual outcomes – more deaths. The same response was seen to the excess mortality figures (25,000 in one year alone) for the elderly over the same period. The solution was to stop officially collecting those figures too. The same drum-beat is used – look at the savings, look at all the money that we didn’t spend. But they did spend it – on tax breaks for the rich.

        We see the International Court of Human Rights this week taking action over the deaths in Serbia. It gives me cold comfort that there may be no time limit on the prosecution of those responsible for crimes committed here against our own people too.

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    1. Kitty,

      I wasn’t aware of the wider context of eugenics, the overlap with Mill and Bentham definitely seems an interesting point.

      I think we’re going to have to agree to disagree on the Tory government’s intent though. I do agree that the poor and disabled have been targeted, but I think it’s more a combination of them being easy targets who won’t have the influence to fight back, and the twisted neo-liberal mindset that says that cutting money from the poor is ‘tough love’ which will help them in the long run.
      Sure it’s horrible, and the faith that their policies will help more people than they hurt is pretty much psychotic given the evidence, but I can’t believe that they actually want the poor and disabled dead. Not without some definitive evidence. I get the impression that they see them as a problem to be tucked out of sight, a threat to their bottom line politics and an embarrassment to their reputations, but I don’t believe that they actually want those people dead.

      Florence,

      I don’t know the specifics about the cases when the government stopped the stat collection, but I’d imagine they were motivated by the blind faith in their system, and that the official stats were somehow ‘wrong’ (stats can be misleading). I think it’s more likely to be about political expediency, and tucking something embarrassing under the carpet.

      Liked by 1 person

      1. I’m revisiting this. “Curtailment of benefits to mothers claiming welfare” – tax credits are now limited to the first two children. There were also proposals to limit child benefit to two. Now that is frank eugenics.

        The mortality stats for sick and disabled people claiming ESA have been withheld since 2011. When they were finally released this year after campaigners fought a long battle, Mike Sivier taking it to court, the stats were intentionally presented in a way that made it difficult to place them in a context to make useful comparisons. Since, the government have persistently denied any “causal link” between increased mortality and the WCA. However, there IS a clear correlation, and though not quite the same thing as causality, correlation often indicates causality, and as such it demands and requires FURTHER INVESTIGATION. Instead what we get is loud denial and refusal to research further from the tories. But not all citizens have equal worth, apparently, and that is the underpinning philosophy of eugenics – https://kittysjones.wordpress.com/2015/09/25/a-tale-of-two-suicides-and-a-very-undemocratic-inconsistent-government/

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