Without a doubt. It’s reached political attention. When you’ve got The Economist writing about inequality, when you’ve got the IMF worrying about it, you know it’s a serious problem. For them it’s always been about freedom of the individual to attain whatever they can on the basis of what they’re born with. Conservatives have never been bothered about equality, but now they are. So yes, it’s gone too far, otherwise we wouldn’t have people that far along the spectrum bothered about this.
We’re seeing it in not just outcomes about who gets what, in terms of education and income, but in the systematic capture of public institutions for certain groups who wield far too much power. Whether it’s global capital, and the control of international institutions, and flows of finance, or national level politics, we’re seeing the backlash now. People are seeing that the small group who have captured these institutions are not doing a great job in regulating them in the public interest. So yeah, we’re seeing this inequality manifest itself in different ways now.
Undoubtedly. And for me the tipping point is when inequalities translate into increasing returns to power. Because then those who, in effect, benefit from inequality are now in a position to invest resources and mobilise institutions to reproduce inequality and then it really sucks in and becomes solidified and becomes that much more difficult to confront. And that’s a global phenomenon.
Well, they surely have. I think that probably a lot of people would have thought they had gone too far thirty or forty years ago. But now we’re talking about a radical dramatic skewing on national and world scales that was clearly not only unimaginable but thought to be patently impossible, given all theories of economics and politics that we have been relying on for many, many decades. So, it’s clearly gone too far and one of the interesting things about the new research agendas is a reviving of the older idea that inequality itself makes inequality difficult to address, and produces further perverse and undesirable outcomes. It’s not just a static condition of undesirable inequality, but that the levels of inequality are themselves producing these radically and distortional negative effects that we’re very worried about.
There’s no question that, globally, we’re seeing a rise in inequality. They’ve gone too far because they are affecting longer-term prospects for growth – on the economic side. Research shows that when you hit a certain level of inequality, growth becomes difficult to sustain, because you’re essentially losing a large chunk of potential consumers, when only the 1% (or the 0.1%) can actually afford sustainable consumption.
But also in the context of declining public services, inequality has gone too far. Increasingly we’re seeing inadequate access to basic services like health care, and those sorts of things associated with development and growth. Having a population that is educated and healthy from a purely instrumental perspective is important – but there are also normative considerations, which are of course equally important.
For me, that's the relevant question. Inequality is ubiquitous and probably impossible to eradicate, but how much is too much? For example, was 1960s America too unequal, too equal, or "just right"? That's a value judgment that does not have a scientific answer, but as a social scientist I am pretty certain that 1960s America was not so equal that its equality stifled economic innovation (US growth rates were much higher then than they are now) or unfairly penalized hard-working people of high levels of accomplishment (as perhaps professionals unduly suffered during Mao's Cultural Revolution).
If one does accept that levels of inequality in the US in the 1960s were more or less reasonable, then ipso facto levels of inequality in the US today are grossly unreasonable. The only way to avoid the conclusion that today's inequality is too high is to believe that yesterday's inequality was too low, and I just don't see any evidence of that. And this same argument applies to most European countries, just not in as extreme a form as it applies to the United States. If it weren't for the example of even higher inequality in today's America, inequality in today's Europe would itself seem grossly high by Europe's own historical standards.