Concentrating too much wealth in the hands of the few will ultimately spell the end of government by the many
What happens to society where economic power is becoming concentrated in the hands of the few? The present might provide an unsettling answer. A tiny global elite is experiencing a great flourishing; the masses below them are, at varying rates, being left behind. Last week the landmark World Inequality Report, a data-rich project maintained by more than 100 researchers in more than 70 countries, found that the richest 1% reaped 27% of the world’s income between 1980 and 2016. The bottom half of humanity, by contrast, got 12%. While the very poorest people have benefited in the last 40 years, it is the extremely rich who’ve emerged as the big winners. China’s economic rise has lifted hundreds of millions out of poverty but the wealth share held by the nation’s top 1% doubled from 15% to 30%. Such has been the concentration of wealth in India and Russia that inequality not seen since the time of the Raj and the tsar has reappeared. By 2030, the report warns, just 250 people could own 1.5% of all the wealth in the world.
In the west the prevailing ideology of the last 40 years has been of privatisation, deregulation and most recently austerity. This was grounded in rules that served to hold in check the collective power of electorates. The result was higher profits and dividends, lower personal taxes and – for the richest – a higher share of national income. A culture has embedded the perpetual making and lavish expenditure of wealth. However, this came at the expense of almost everyone else: the age of globalisation has seen the pay of lower- and middle-income groups in North America and Europe stagnate. The toxic afterburn of these policies – moulded by domestic choices as much as global pressures – has poisoned politics. Support for anti-establishment parties is now at its highest level since the 1930s. At the same time, mainstream parties have either been radicalised or considerably weakened.