Drinks at the Ritz – a tale of two cities

Fresh from a moving analysis of persistent inequality in Britain, I crossed the threshold of the Ritz hotel in Piccadilly last night for the first time in years. It was a stimulating study in contrasts.

The inequality had been eloquently explained at a conference in Birmingham where University College London's Professor Sir Michael Marmot, a softly spoken member of the Great and Good, told a staff audience from Nice – the National Institute for Health and Clinical Excellence, which vets the suitability of NHS drugs – how social standing and personal autonomy is crucial to health.

The author of a Labour-commissioned review, Fair Society, Healthy Lives, whose recommendations the Tories have (mostly) endorsed, keeps saying he's not party political ("I am a simple doctor") while making it clear that he thinks the coalition's use of "fairness" while making very unfair cuts is, well, unfair.

But he speaks with great charm as he argues that "health tells us how well we are doing as a society", so that we should have known the Soviet Union was in trouble when its health stats started getting worse. Cuba and Costa Rica – a much freer central American republic – both do well. The rich usually enjoy better health outcomes than the poor even when both groups drink or smoke too much.

We can break the links between social deprivation and poverty, especially the crucial kind, child poverty, by doing specific things – it's evolutionary, not revolutionary, he says. Better parenting, healthier lifestyles, the minimum wage, that sort of thing. And Britain does do some things very well. The NHS has the most equitable record for what people like him call "cost-related access" to health care, ie very few people are put off by fear of bills. Excellent.

From the professor's plea to society to do the morally right thing by the vulnerable – if you're poor, where you live matters; the south-west is better than the north-east, his slides suggest – to the Ritz in an hour or two was quite a leap. Plenty of people in the Ritz probably feel relatively poor compared with the folk in the next suite.

Why did I go? Because I'd been invited to hear Steve Forbes, publisher of Forbes magazine, launching something called Forbes Europe. I've heard him talk before and he is engagingly daft in the way really rich people can be. Besides, I haven't been in the Ritz for years.

Are there holes in the carpet now that the bankers bonuses have been (slightly) trimmed? And the hedge fund types who inhabit the nearby streets of Mayfair have (one or two of them) decamped to racier Zurich? Short answer: no. You can still break an ankle on the carpet pile.

And the chap who chaperoned me to the Forbes bash was obsequious attentiveness itself. "Welcome to the Ritz, sir." And "is this your first visit to the Ritz?" No, it wasn't though he should regard me as an infrequent visitor. I distinctly remember being there once in Mrs T's day. And at least once before that. He welcomed me again and deposited me safely with my hosts, unmugged.

It was a perfectly nice occasion, full of jolly people who had dropped by for a drink. White wine or champagne (myself, I'm a white wine man) plus nibbles, I chatted and picked up story tips which I will pass on to the colleagues. Forbes himself didn't detain us long with his gracefully brief remarks – certainly not as long as the breakfast speech I attended at the Savoy (I think) in 1996 or 2000 when he was running for US president.

As Wikipedia's gentle CV shows here Forbes backs the sort of stuff you'd expect a rich, rightwing Republican to back: less government, lower taxes, weaker gun laws, the death penalty, anti-abortion positions (in 2000 though not 1996) and hostility to gay rights – despite his publisher father, Malcolm's, interesting private life in his later years.

Needless to say Forbes's own name does not appear in Forbes magazine's list of the super-rich, any more than Rupert Murdoch's appeared in this week's Sunday Times 2011 Rich List. On Forbes estimate Rupe should be in there at No 11, worth £4.7bn, incidentally a lot more than Forbes.

Murdoch is an indifferent speaker and his rare interviews are strikingly banal. It's what the old rogue DOES that is interesting. Time magazine (a rival publication) once described Forbes's campaign style as a "comedy-club impression of what would happen if some mad scientist decided to construct a dork robot". But last night he was fine, what you'd expect an experienced speaker to sound like at a private function.

What he said was much the same. There was a plug for Forbes's multimedia platforms, which are poised to storm the world, the sort of thing all publishers say though they are whistling in the dark. What the web has done to overturn the media world is about to happen to other industries too, Forbes cheerfully predicted.

He's probably right and certainly right to say that technology has obliterated the boundaries of production so that an iPad emerging from China at a cost of $178 (£110) actually contains parts from all over the world and more content from the US – $10 worth – than from China itself ($6) where the parts are assembled.

Forbes seemed quite optimistic about this and would probably tell Marmot that those low-paid Chinese workers assembling iPads are earning a lot more than their parents did. He'd be right too, but Marmot would be right to ask questions about their working conditions and social/political rights. Saints and sinners usually make valid points.

Central and eastern Europe will bounce back, putting pressure on western Europe, Forbes continued. The US will have to follow Britain in deficit reduction and – within five years – end its destructive policy of running a weak dollar. Sound currencies will be back – "linked to gold as it [the dollar] was until the 1970s in a Bretton Woods-style agreement" the publisher predicts.

Gosh. Bretton Woods! It is a grand hotel in remote northern New Hampshire where JM Keynes and others created the postwar world of the International Monetary Fund, World Bank and fixed currencies, a system dominated by the victors.

When Richard Nixon abandoned fixed exchange rates – officially $2.40 to the pound at that stage – foreign reporters dashed to the White House phones – while US colleagues were baffled.

So were the US tourists I interviewed as a young reporter outside the American Express office in the Haymarket next day – a few 100 yards from the Ritz. No one would buy their beloved dollars because they didn't know what they were worth. Was the world ending?

Well, Forbes's sentiments are fine and dandy. I agree that the over-borrowed US can't debauch its currency too much – and so do the Chinese who hold so much of it. Something has to change.

But Forbes sounded as if it is going to be business as usual soon enough. The 25 years up to the crash of 2007 had seen more people become prosperous than at any time in history – before the basic principles were discarded – but basic principles will be back. Hmm.

No mention here of the possibility that the crash of 2007 might have something to do with the Reagan-Thatcher paradigm, which drove the economic car so fast that it went off the road at speed. No mention of the shift in global economic and – soon enough – political power to Asia.

Nothing about the institutional failures of the US (UK and EU too) system of governance and regulation, the wild excesses of the banking system, which taxpayers are now carrying. No mention of Obama or Osama, whose names so many of us keep mixing up – as Private Eye points out this week.

Nope. Forbes is still peddling his favourite panacea, which is tax simplification via the flat tax – levied at 17% on all consumption (defined as income minus savings) with basic deductions according to family size. Get rid of capital gains tax, follow the Irish (sic) towards lower corporation tax – "Brussels will be angry, that is a sign you are on to something."

Hmmm again. We should not dismiss flat tax notions out of hand, certainly not tax simplification, usually a good idea. But one can't help noticing that it is rich people and free market economists who promote them. Or that tax complexity is often the response of government to the endless desire of rich people to shelter their loot from the tax man.

We don't need the saintly Marmot to tell us that it is unlikely to be progressive, and progressive is what we need to prevent current inequalities from becoming worse.

Here's Wikipedia's guide to flat tax. And be sure to clock the reference to the "diminished marginal utility of money". It means that, beyond a certain point, they have more money than they can possibly spend on yachts, call girls, old masters, fine houses – or even obsequiously poured tea at the Ritz.