Wealth, Power and Liberal Democracy
Speakers:
- Rebecca Gowland—International Director for Patriotic Millionaires and established Patriotic Millionaires UK. Previously Head of Inequality Campaigns at Oxfam
- Oliver Bullough—Award-winning author and journalist from Wales who specialises in kleptocracy and money laundering, often with a focus on the former Soviet Union
- Kehinde Andrews—Professor of Black Studies in the School of Social Sciences at Birmingham City University. He is chair of the Harambee Organisation of Black Unity
The world is in the midst of what is being called the largest intergenerational wealth movements in history. Against this backdrop, the chasm between the ultra-rich and the wider population is more stark than ever—as of 2019, 26 people had the same wealth as half of humanity, according to Oxfam.
The question of the relationship between wealth accumulation, societal responsibility and democratic governance was posed to an expert panel recently, hosted by Prospect editor Alan Rusbridger in partnership with the Joseph Rowntree Foundation.
Rebecca Gowland, founder, Patriotic Millionaires UK, set the scene with some statistics, including the fact that the number of billionaires has doubled since the pandemic, while the wealth of five billion people dropped. “I find these statistics exhausting,” she said. “We’ve been talking about inequality for decades. It is out of control.”
One of the challenges in Britain is the historical facilitation of tax avoidance, argued Oliver Bullough, journalist and author of Moneyland. ‘We have made a living in exporting what I call ‘corruption services’ to other countries, enabling people to keep the money that they steal and to invest it in our property market via our tax havens.”
The inequality at the heart of how wealth is produced is the bigger issue, suggested Kehinde Andrews, professor of black studies, Birmingham City University. “You can’t separate capitalism from racism, the empire is where Britain generated wealth” he said. “We like to pretend that this has changed dramatically but if you look at a map, the poorest parts of the world are where black people live.”
We have the metrics and visuals for poverty but not a tangible line after which wealth becomes harmful
In the late Victorian era, the Rowntree family, alongside industrialist Charles Booth, started working on the concept of a poverty line—an income or other threshold for identifying those living in poverty. In the 1990s, the World Bank developed the concept of the “dollar a day” extreme poverty line – something that is used as a benchmark to set politics today. But do we need an extreme wealth line?
“We have the metrics and visuals for poverty but not a tangible line after which wealth becomes harmful,” says Gowland. This could be used as a tool not just for policy but for the wealthy themselves understand the limit, she said.
Any attempt to limit the wealth of the world’s richest people would be met with resistance, argued Bullough. “There is an entire industry of enablers who are willing to earn good incomes helping the very wealthy to evade any restrictions put in place on them.”
So what would the solution be?
Start with a wealth tax, argued Gowland. “It’s what the public and millionaires think, too,” she said. The panel were in agreement that the argument that wealth taxes are “economically illiterate” because the wealthy will leave is wrong. “That’s just a flaw in the structure of the way the world is run – money can move anywhere it likes, but laws can’t follow it,” said Bullough.
A solution, they agreed, might be exit taxes upon removing capital from a country, a global asset registry or the realisation of a global standard in taxing wealth, as suggested at the G20 in Brazil last year.
Andrews cautioned that for true equality to be achieved, it’s not just the billionaires who will have to act: “If you compare the UK globally, we’re at the top. If we want an equal world, we will all have to give up things.”
This will require a mindset shift, agreed Gowland: “The neoliberal mindset has told us we have to aspire to have more and wealth is good. That means that inequality is baked in.”
Beyond GDP: rethinking economics in an unequal society
Speakers:
- Dr Todd Tucker—Director of Industrial Policy and Trade, Roosevelt Institute, US
- Jane Green—Professor of Political Science and British Politics, Nuffield College, University of Oxford
- Alfie Stirling—Director of Insight and Policy, JRF
A perfect storm of inflation, high interest rates and geopolitical instability is impacting people’s lives. According to research from the Joseph Rowntree Foundation (JRF) average families in the UK will be £770 worse off by the next election. Meanwhile, Rachel Reeves is casting around for a new strategy to lead the UK economy out of the doldrums. But are we looking at things the right way? How might we rethink economics in an unequal society? This was the central question at a recent panel event, Beyond GDP, hosted by Prospect editor Alan Rusbridger in partnership with JRF.
The event was opened by Dr Todd Tucker, director of industrial policy and trade at the Roosevelt Institute, who used “Bidenomics” or “middle out economics” as a recent example of a bold economic vision: “Centrally it was about worker empowerment, promoting competition and public investment in the likes of the clean energy and semiconductor industries.” These three tenets did see some success, for example, 75 per cent of clean energy investment went to counties below the median income that had been previously reliant on fossil fuels and most adversely impacted by the China shock, he explained. Yet, the Biden administration lost the 2024 US election—so are these kinds of long-term, big-vision policies a sound way to move economies forward, boost equality and maintain the public vote?
“What was really exciting about this period of policy development was the scale of ambition,” said Jane Green, professor of political science and British politics, Nuffield College, Oxford University. “It could be popular here because it’s what people are crying out for, but trust in the government to deliver is low and people just don’t believe things can get better.”
We have a gap between policy and people’s perceptions of how they’re doing, argued Green—something the other panelists agreed with. “The crux of the problem is that we haven’t formalised the importance of the economic security and wellbeing of families as an input or desired outcome of a healthy economy,” said Alfie Stirling, director of insight and policy, JRF. “When people feel secure they’re more productive, more likely to invest in themselves, their skills or start businesses—GDP is important but it is a proxy to a more superior endpoint, which is the positive economic experience of households.”
Taking the lessons from Bidenomics, which may have missed the mark in part because of the lack of short-term focus, a balance of immediate and long-term impacts is important, it was agreed. “People living paycheck to paycheck don’t have the patience for something that might yield fruit in 10 years,” said Dr Tucker.
Here in the UK, there’s real scope for the government to improve living standards without breaking manifesto commitments, argued Stirling. “We often overlook the power of within-market interventions,” he said. “In sectors like energy, which are already heavily regulated and monopolistic, there are strong levers available. Things like social tariffs can meaningfully redistribute spending power and make the system more progressive.”
Green called for a wide-reaching approach to improving household security. “A policy that’s orientated to the working class is not broad enough,” she said. “Midlife, middle-class individuals are economically pressed too.”
With geopolitical instability and the climate crisis threatening to disrupt progress, we may start to see more ambitious policies, said Dr Tucker as the conversation came to an end. “These things change the parameters of what’s possible with domestic policy. What looked financially irresponsible in normal times, might look sensible in these times.”
