Income Inequality, Financial Crisis & Europe's Far Right: World Inequality Report 2018
Last edited Thu Nov 22, 2018, 12:54 AM - Edit history (1)
FRANCE24, Nov. 20. Citizens around the world are seeing their national wealth concentrated into fewer and fewer hands. But rather than calls for redistribution, this global trend has prompted many electorates to respond with a surge of support for the far right. Income inequality has increased in nearly all regions of the world over the past four decades, according to the World Inequality Report 2018. Since 1980, the global top 1 percent of earners has experienced twice as much of the global growth as have the poorest 50 percent. ~ Lengthy report worth the read. ~
While these ratios differ markedly between geographic regions (with the least disparity in Western Europe and the most in the Middle East), the trend toward concentrating wealth among the rich remains constant. And although the bottom half has also experienced gains from global growth overall, the bottom 50 percent received just 10 percent of global income in 2016 versus the 20 percent that went to the top 1 percent.
Such acute economic imbalances can lead to “political, economic, and social catastrophes” if they are not “properly monitored and addressed”, the report’s authors warned.
- A man looks at a mobile phone beside a woman begging on the pavement in Madrid on December 15, 2015.
Notably, Europe and the United States have seen a significant divergence from their relatively equal positions some 30 years ago. While the top 1 percent held close to 10 percent of the wealth in both regions in 1980, by the year 2016 this share had doubled to 20 percent in the United States while Europe saw only a slight increase to 12 percent.
Globalisation has “raised incomes and living standards for everyone in the West, but for some far more than others”, noted Dr. Russell Foster, of the Department of European and International Studies at King's College London, in an email. “Thus while everyone is better off, the gap between those who have, and those who have much more, is staggering.”
Foster cites the increase in zero-hour work contracts, meagre (or non-existent) pension plans, and the "skyrocketing costs of rent and mortgages” as some of the reasons behind the “severe gulf between the super-rich and the hollowed-out middle classes [and] working classes”. In Britain today, he said, “the gap between rich and poor is higher now than it has been since the 1860s”.
And yet despite these stark circumstances, there has not been a notable increase in class consciousness or a renewed solidarity among the have-nots. Instead, rising inequality has weakened previous class-based alliances, wrote French economist Thomas Piketty in a March 2018 report. Given the recent evolution, one might have expected to observe rising political demand for redistribution,” he wrote. However, “we seem to be observing for the most part the rise of various forms of xenophobic ‘populism’ and identity-based politics” – he cites Donald Trump, Brexit and France’s Marine Le Pen, among others – rather than “the return of class-based [politics]”.
The rise of the right
In an article for Foreign Affairs magazine, the authors of a 2015 study that compiled data on nearly 100 financial crises since 1870 observed that “far-right parties are the biggest beneficiaries of financial crashes”. “After a crisis, the share of the vote going to right-wing parties increases by more than 30 percent,” the authors found. Governing then becomes more difficult as more, smaller parties and anti-establishment fringe groups enter national legislatures.
The same phenomenon does not hold true for normal economic downturns, however, because acute financial crises are principally seen as “manmade disasters”. “People blame elites for failing to prevent them," the authors wrote. For those seeking to apportion blame, it is “often not hard to find policy failures and cronyism among the rich and powerful, so trust in the political system erodes. This opens the door to political entrepreneurs who try to set ‘the people’ against the ‘ruling class.’”
And yet left-wing parties, which also have a longstanding tradition of criticising elites, do not reap the same political gains following a financial crash. “Our research shows that the far left’s vote share stays about the same in the aftermath of a crisis,” said the authors. “It seems that when social groups fear decline and a loss of wealth, they turn to right-wing parties that promise stability and law and order.”
While those on the left tend to avoid blaming foreigners and minorities for domestic problems, far-right politicians often choose provocative rhetoric that suggests the national culture is “coming under attack from external forces” – such as a mass migration that could lead to a loss of jobs..
“Many who feel themselves economically losing out engage with politics in this way, [and] so economic issues can become very emotive and tied to the idea of defending the nation in powerful ways.”.The 10 years of austerity policies that followed the Great Recession have exacerbated these tensions..Angry and “disillusioned” voters are increasingly lured into “supporting nationalist parties and politicians who blame peoples' problems on centrists, socialists, or the convenient scapegoats of the EU and immigrants”. -MORE...
https://www.france24.com/en/20181116-income-inequality-financial-crisis-economic-uncertainty-rise-far-right-europe-austerity
= new reply since forum marked as read
[Russell] Foster cites the increase in zero-hour work contracts, meagre (or non-existent) pension plans, and the "skyrocketing costs of rent and mortgages” as some of the reasons behind the “severe gulf between the super-rich and the hollowed-out middle classes [and] working classes”.
In Britain today, he said, “the gap between rich and poor is higher now than it has been since the 1860s”. ~ Dr. Russell Foster, Dept. of European and International Studies, King's College, London. (France24)
"Pay Gap Widening To Victorian Levels," The Guardian, May 16, 2011
https://www.theguardian.com/business/2011/may/16/high-pay-commission-wage-disparity
World Inequality Report is a report by the World Inequality Lab at the Paris School of Economics that provides estimates of global income and wealth inequality based on the most recent findings compiled by the World Wealth and Income Database (WID).
WID, also referred to as WID.world, is an open source database, that is part of an international collaborative effort of over a hundred researchers in five continents. The World Inequality Report includes discussions on potential future academic research as well as content useful for public debates and policy related to economic inequality.
The first report, entitled World Inequality Report 2018, which was released on December 14, 2017 at the Paris School of Economics during the first WID.world Conference, was compiled by Facundo Alvaredo, Lucas Chancel, Thomas Piketty, Emmanuel Saez, and Gabriel Zucman based on WID data.
>The 300-page report cautions that since 1980, around the globe, there has been an increase in the gap between rich and poor. In Europe, the increase in inequality increased more moderately while in North America and Asia, the increase was rapid. In the Middle East, Africa, and Brazil, income inequality did not increase but remained at very high levels.
In an interview with Quartz, Piketty predicted that if the "world follows the trajectory of the US" inequality would get much worse. https://en.wikipedia.org/wiki/World_Inequality_Report
