6.7.2 Economic Inequality and Sharing Wealth
Politicians control enough levers of power in the Economic Dimension to increase the probability that all those who are economically active are adequately rewarded, whilst also catering for those who are unable to look after themselves – whether on a permanent or temporary basis. Perfect equality of income and assets is unachievable and undesirable: people need to feel that they can improve their finances by hard work, as an incentive to create wealth (3.2.1), and it would create a sense of injustice if those who were idle received the same economic rewards.
Thomas Piketty’s book, Capital in the Twenty-First Century, was published in 2013; it showed how there has been a historical tendency for the wealthy to increase their wealth “…because the rate of return on capital has been outpacing the rate of economic growth. In layman’s terms, the rich are getting richer”. It is a growing problem that is causing discontent, because it is not just virtuous hard work that has made some people so wealthy.
People have now started to blame politicians for the distortion, having started to realise that the rich have bought themselves political influence to become even richer (126.96.36.199). It is politically necessary to share wealth fairly, in addition to the economic benefits of doing so (3.5.6).
The following sub-sections explore the political control of economic legitimacy in more detail:
- Individualists and collectivists differ (188.8.131.52) on whether inequality is a problem and, if so, what to do about it.
- There are several issues that cause discontent (184.108.40.206).
- Interventions in the sharing of wealth can vary in their objectives and can range from local to global (220.127.116.11).
- Wealth can be redistributed in several ways (18.104.22.168).