Inequality: should we really be worried?

Saturday 14 November, 14.15 until 15.30, Kulturhuset Stadsteatern, AB Box 16412, SE-103 27 Stockholm International Satellites

In 2011, the Occupy Movement launched in New York in protest at the increasing wealth of the ‘1%’ – at the expense, it was claimed, of everyone else. After the global economic crisis, many campaigners demanded that multinational corporations and wealthy financiers – ‘fat cats’ – should contribute more to society through taxation. In 2014, the left-leaning French economist Thomas Piketty had a surprise international bestseller in 2014 with Capital in the Twenty-First Century, which suggested that inequality was likely to continue to grow, while UK aid charity Oxfam caused a stir with the claim that the 85 richest people globally have as much wealth as the poorest half of the world’s population.

But concerns about inequality are by no means limited to radicals. In 2013, Christine Lagarde, managing director of the International Monetary Fund (IMF), declared ‘Excessive inequality is corrosive to growth; it is corrosive to society.’ It is a theme that has been popular among many politicians, too. In 2012, US President Obama called inequality ‘the defining issue of our time’. Sweden’s prime minister, Stefan Löfven, has linked inequality to the rise of the far-right, claiming ‘the increasing support of the Swedish Democrats is not a result of growing racism or even widespread xenophobia, but rather a result of wider and wider gaps in society’.

The Spirit Level: Why More Equal Societies Almost Always Do Better, published by two British academics in 2009, became a must-read book for many politicians and think tanks. The authors, Richard Wilkinson and Kate Pickett, argue that inequality has ‘pernicious effects’ on societies, including ‘eroding trust, increasing anxiety and illness, (and) encouraging excessive consumption’. Yet critics of The Spirit Level have argued that the authors were selective in their use of data and that inequality is a poor predictor of social problems.

Other critics of the discussion around inequality argue that poverty, not inequality, is the real problem. Even on this question, there is controversy. A common measure is relative poverty, which looks at the number of people whose income is below 60 per cent of a country’s median income. But is relative poverty really an appropriate measure? For example, Sweden is widely recognised to be a more equal society than the US. But as one commentator notes, ‘the Swedish poverty rate… is much lower than the US poverty rate. But equally other research tells us that the actual living standards of the bottom 10 per cent of Sweden are almost exactly the same as the living standards of the bottom 10 per cent of the US.’

Should we be worried about inequality as well as poverty? Does inequality have effects on society that go beyond material disadvantage? Why have politicians become so keen on tackling inequality today?

Speakers
Daniel Ben-Ami
journalist and author, Ferraris for All: in defence of economic progress and Cowardly Capitalism

Kajsa Ekis Ekman
Swedish journalist, writer and activist; author, Skulden - eurokrisen sedd från Aten and Being and Being Bought; writer, Dagens Nyheter

Laurie Penny
journalist; contributing editor, New Statesman; author, Unspeakable Things: sex, lies and revolution

Fredrik Segerfeldt
writer; author, Den nya jämlikheten : global utveckling från Robin Hood till Botswana; co-founder, Migro

Chair
Alan Miller
chairman, Night Time Industries Association (NTIA)

Produced by
Rob Lyons science and technology director, Institute of Ideas; convenor, IoI Economy Forum
Recommended readings
Why inequality is such an obsession

Critics of inequality often seem more concerned with social cohesion than poverty.

Daniel Ben-Ami, FundStrategy, 15 July 2015

Fattigdom snart ett minne blott

Det är väl belagt att bistånd tenderar att försämra förutsättningarna för utveckling, att det bidrar till korruption och väpnade konflikter.

Fredrik Segerfeldt, SVT, 3 November 2014

Why We’re in a New Gilded Age

Thomas Piketty has led a revolution in our understanding of long-term trends in inequality.

Paul Krugman, New York Review of Books, 8 May 2014

Why society is more unequal than ever

Five years after The Spirit Level, authors Richard Wilkinson and Kate Pickett argue that research backs up their views on the iniquity of inequality.

Kate Pickett and Richard Wilkinson, Guardian, 9 March 2014

Oxfam: 85 richest people as wealthy as poorest half of the world

As World Economic Forum starts in Davos, development charity claims growing inequality has been driven by 'power grab'.

Graeme Wearden, Guardian, 20 January 2014

Sweden's real equality problem

The best way to avoid similar riots would be for Stockholm to let income gaps widen.

Fredrik Segerfeldt, Wall Street Journal, 27 May 2013

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