The House of Commons Library has published research projecting the post-2008 growth of inequality until 2030, arriving at an eye-popping headline figure: at current rates, the richest 1% will own two thirds of the world’s riches by 2030. I think that number is too low. Here’s why.
The years since 2008 have been boom times for inequality: the collapse of debt markets and the trillions in state bailouts were a bit like the collapse of the USSR, a moment in which public assets and public money could be massively shifted into the hands of super-rich people who just stole shit like crazy, and got away with it, even when they were caught red-handed.
The House of Commons Library projections assume that inequality will progress linearly, without accelerating, but there are accelerants aplenty on the horizon. No less than the Wall Street Journal predicts that we will see massive, bursting debt bubbles in domains like student debt, scammy bonds overrated by captured rating agencies, upside-down markets dominated by index funds, and a resurgence of “complex” (Wall-Streetese for bullshytt) financial instruments.
All other things being (ahem) equal, these impending crises pose major opportunities for accelerating inequality. When the banks are blown up by student debt defaults or cascading collapses of scammy bonds, governments will face more pressure to bail them out, not less — because the decision to bail out (rather than break up) the banks in 2008 has made the failure of even one of the world’s major banks into an immediate systemic risk that far outweighs the prospective, speculative benefits of diversifying and down-regulating the finance sector as a whole as a volatility-reducing measure.
The banks have not gotten any better since 2008, after all: they’re still stealing like crazy, at every level and every opportunity, with no consequences to speak of, ever (don’t hold your breath waiting for better from the Democrats: they’re long on oligarchy).
In the Guardian‘s coverage of the report, they quote George Freeman, a Tory MP, to get the official line on why inequality just isn’t that bad: “mankind has never experienced such rapid increases in living standards. Around the world billions of people are being lifted out of poverty at a pace never seen before.” I have heard these words uttered so many times, by so many Kubler-Rossing capitalism apologists who are beyond denial (“OK, wealth inequality is really a thing”), and moving smartly into bargaining: “But surely you have to admit that inequality isn’t a problem in and of itself — it’s only when the rich make everyone poorer that inequality matters, but since inequality is just the result of uplifting the job-creating ubermenschen, it’s the price of admission we as a planet will have to pay for ‘being lifted out of poverty.'”
It’s far more likely that letting a tiny number of crooked, ruthless plutocrats have an outsized role in policy choices has slowed the growth of human progress, rather than accelerating it. After all, the more a country is dominated by its super-rich, the more its policies are aimed at increasing the wealth of the already-wealthy. Policies that uplift poor people only fit through the Overton window if they don’t gore some rich person’s ox.
Then there’s the outsized role that rich peoples’ irrational prejudices play in the policy sphere: whether that’s Wahabism and its systematic oppression of women, or American hydrocarbon barons’ climate denial, Mike Pence’s Dominionism, Gwyenth Paltrow’s multi-million-dollar science-denial business, Putin’s violent aggression against anyone who criticizes the Russian Orthodox church, or Prince Charles’s absurd belief in homeopathy. When the richest of the rich can swing policy outcomes just by insisting that they’re right and everyone else is wrong, evidence is unceremoniously dumped and we all have to survive the shear where uncaring reality meets uncompromising ideology.
It’s worse than that, actually, because when the shear occurs, the rich don’t just admit they were wrong and move on. They jail people who point out their mistakes, get their paid-for lawmakers to defund research into their pet theories, and deny, deny, deny, until the seas rise and measles kills all our kids.
Danny Dorling, professor of geography at the University of Oxford, said the scenario in which the super-rich accumulated even more wealth by 2030 was a realistic one.
“Even if the income of the wealthiest people in the world stops rising dramatically in the future, their wealth will still grow for some time,” he said. “The last peak of income inequality was in 1913. We are near that again, but even if we reduce inequality now it will continue to grow for one to two more decades.”
Richest 1% on target to own two-thirds of all wealth by 2030
[Michael Savage/The Guardian]
(via Late Stage Capitalism)