What causes inequality?

The widening gap between rich and poor that has disfigured and weakened our society over recent decades is widely deplored, but there is surprisingly little understanding of how that growing inequality has been brought about. For most people, it simply reflects the natural order; the rich have each individually taken their chance, as anyone would, to inflate the rewards of various kinds – profits, salaries, bonuses, share issues, golden handshakes – that they are able to command.  Their riches are regarded, as a general proposition, as a reward for their success.

But those huge advantages – on a scale so outrageous that it is hard to comprehend – have not so much come about by good fortune nor because the rich have individually discovered the path to great wealth through their own hard work, cleverness or luck, but because the whole operation of the modern economy has been deliberately geared to favour them as a class.  The statistics are incontrovertible; the rich have claimed virtually the whole of the additional wealth that has been produced over the past thirty years. They have been able to do so because they were already rich.   It is beyond doubt that the best way to become seriously wealthy is to start off wealthy in the first place. Continue reading