The Great Widening: Why Global Inequality is the World’s Most Urgent Problem
Stewart Lansley

Inequality is back on the political agenda. In the last few months, those launching attacks on the growing income divide include President Obama and the heads of the IMF and the OECD. The issue dominated much of the agenda at Davos, 2012.  

Despite this, the income gap is continuing to widen. In the United States, 93 per cent of growth in 2011 went to the top one per cent. In the United Kingdom, the earnings gap has risen since the 2008 Crash while the number of global billionaires has gone on soaring through the crisis. While living standards are falling across much of the globe, some 1200 members of the super-rich now command economic power equivalent to a third of the size of the US economy.

There has much talk on the need to close the gap, but this has yet to be matched by action. The economic thinking that got us into this mess remains largely in place. Yet inequality is now the most urgent problem facing the global economy. The evidence is clear – inequality was a key factor causing the 2008 Crash. It is now the central explanation for the lack of recovery.  The continued concentration of income and wealth is now the most significant global economic threat to jobs, livelihoods and social balance. Unless it is tackled, much of the world will remain locked in stagnating economies, near-permanent slump and social unrest.  

The Great Widening will:

• Examine the roots of rising inequality in the world’s biggest economies, especially the US, the UK and continental Europe
• Show how the US and the UK have turned into ‘plutonomies’ – societies where economic power is dangerously concentrated in the hands of the few
• Challenge the official view of the causes of the 2008 Crash. Drawing on evidence from the 1920s and the post-1990s, it will show how inequality leads to economic crashes
• Show how a 30-year long squeeze on wages led to collapsing living standards, soaring profits and mass global surpluses that merely destabilised the global economy.
• Show how more equal societies enjoy more stable patterns of growth
• Reveal why stable and sustained recovery depends on breaking up the great concentrations of income and wealth
• Lay out an economic and political agenda for change