Travelling home on the train last week, I heard the dulcet sounds of political discourse drifting towards me across the carriage. The words ‘social housing’ were followed soon after by the word ‘moron.’ I removed my headphones and attended more closely.

The speakers were two men aged about 30, whipping themselves up into a lather over the suggestion that there ought to be less social housing in central London. They seemed to be genuinely astonished by an argument they’d come across which pointed out that social housing tenants are dependent on the state for subsidy. ‘Moronic!’ they said, ‘insane!’

Sometimes you’re brought up short by how badly the social contract has frayed

Based on their clothing and accents, I’d bet money on both of these men being graduates, probably working in professional creative jobs of some kind, meaning that they’ll be on salaries of £40-50k, which puts them in the top third of earners nationally.

And yet, given that they got off the train at Peckham Rye, an inner London suburb that is now home to a large number of millennial graduates made downwardly mobile by housing costs, they’re probably spending about half of their after-tax income on a dingy flat share, while also experiencing the highest level of taxation since world war two on top of their student loan repayments.

I doubt very much that they realise that this is happening to them in a Labour-run borough in which 40 per cent of housing units are allocated to social housing, with roughly half of those tenants out of work, and many having arrived in the country only recently: in London as a whole, one fifth of social housing tenants were born overseas.

If our Peckham Rye friends somehow manage to save up for the deposit, they might just about be able to afford a £300-400k ex-council flat within walking distance of Peckham Rye station. Their next-door neighbour will then be subsidised, potentially to the tune of tens of thousands of pounds per year, in order to live in exactly the same quality of housing.

In other words, whether or not they choose to believe it, their tax revenue is not only being spent on their unemployed neighbours’ rent, it is also being used to reduce the supply of private housing available to them, thus driving up prices even further.

The problem here is that, like most voters, these tragic residents of Peckham Rye can’t give correct answers to these two questions:

1) How much do you need to earn to be in the top 1 per cent?

2) How much do you need to earn to be a net-contributor?

People tend to overestimate on one and underestimate on two. They assume you need to be earning millions in order to be in the top 1 per cent when in fact the figure is more like £160k. And they think that most people are net-contributors, when in fact most people – by design – are not.

Depending on how you calculate it (there are a lot of variables at play), you need to be earning at the bare minimum £40k in order to break even on what you take out of the state in any given year. In other words, it is the top third of earners, and in particular the top 1 per cent, who are responsible for keeping the financial show on the road.

These figures will vary between countries, of course, but the general principle remains the same across the West. Income conforms to a Pareto distribution, and welfare states are designed to redistribute money from the rich to the poor. These facts in combination mean that most people end up taking out more than they put in.

All of which is to say that, although the upper middle classes are often very annoying, they are not parasites or sponges, as many on the left would have you believe. Quite the opposite. We are all incredibly dependent on them, even if most voters don’t realise it.

Of course I do recognise that the effects of capitalism are often cruel and perverse, and that people can make many different kinds of contributions to the nation state aside from tax revenue, for instance as stay-at-home mothers or by performing essential work that needs to be subsidised (British farmers, for instance, are in this category).

But our current reality is that the top 1 per cent of UK earners contribute 28 per cent of all income tax. And yet, because most voters don’t understand the numbers, they expect the state to ‘give back’ money they think is theirs when in fact they’re asking for money contributed by other taxpayers. ‘I’ve paid into the system all my life!’ says every single pensioner in the comments section under an article on the triple lock. ’No,’replies the weary millennial, ‘your National Insurance contributions have already been spent, and were too low to cover the cost of your pension anyway – you paid for a much smaller sum for the previous generation, and now I’m tasked with paying a much larger sum for you.’

And as the demographic pyramid becomes ever more inverted, working age people are facing an ever heavier tax burden, even while pay stagnates and house prices rise. This is why the economic problems generated by low birth rates are so intractable.

Most people don’t have an intuitive grasp of a problem, which – to be fair to them – is really not at all intuitive. They don’t realise that the generous welfare provision we’ve all grown used to is paid for by an increasingly tiny share of the population, and they don’t realise that this system will eventually collapse under the weight of an ageing population with 70 years worth of sub-replacement fertility behind it. Our Peckham Rye friends are being taken for a ride and they don’t even realise it.

Personally, as a 31-year-old London resident – and a mother, too – I very much realise that I’m being taken for a ride. One feature of being self-employed is that you end up with a very clear idea of how much income tax you pay because you have to transfer it directly to His Majesty’s Revenue and Customs, and they don’t even send you a ‘thank you’ note in return. You tell yourself that this tax revenue is going towards good and important things – okay, not tax breaks for families with young children, or long-term infrastructure, or generally any investment in the future – but other good and important things, right?

But then sometimes you’re brought up short by how badly the social contract has frayed. Not long after I completed my last tax return, I happened to read a news item about a foreign national who had committed a series of particularly horrible crimes and had relied on taxpayer funded legal aid in order to avoid deportation. His legal aid bill was almost exactly equal to my income tax bill. I doubt he’ll be sending me a ‘thank you’ note either.

I’m not saying I oppose legal aid, or social housing, or state pensions, or the welfare state in general. I believe that the nation state ought not to be understood like a shop, in which people come and go as they please, with no particular connection to the business or its customers. It should instead be understood like a home, in which people are obliged to look after one another: from each according to his ability, to each according to his need. And this should be a home in which the inhabitants have control over who they live with (i.e. immigration policy), and the standards of behaviour they expect in return for support (i.e. crime policy). One of the best things about living in a rich country is that we can spend the surplus on looking after the young, the old, the disabled, and those fallen on hard times. I’m not proposing that we do otherwise.

But what do we do as that surplus shrinks? Because it is shrinking, and fast. For now, most of the property-less net contributors of Peckham Rye don’t know this, and even if they did, they would be highly reluctant to acknowledge that the policies they tend to support – mass migration, the triple lock, Covid lockdowns – are policies that make them worse off and further disincentivise productive, law-abiding people from playing by the rules. This is a class suffering from false consciousness. When, I wonder, will they realise?