Agenda: Promote public values and policies that support an equitable distribution of financial assets and the ownership of real wealth to meet the needs of all.
Extreme inequality undermines democracy, the economy, public health and culture. Concentrated wealth translates into political power to further shape elections, legislative priorities and rules in favor of global corporations and the already wealthy. This in turn leads to the kind of economic distortions that caused the 2008 financial collapse. In the lead up to the collapse, the bottom 70 percent of the U.S. population responded to stagnant wages by borrowing beyond their means, while the top 1 percent engaged in reckless speculation on highly rated but essentially worthless securities in financial markets freed from essential regulation and public oversight.
Inequality is a disaster for public health. It leads to a breakdown in the social solidarity required for healthy communities. Social epidemiologist Richard Wilkinson observes that among the 30 richest countries, “the USA has the highest homicide rates, the highest teenage pregnancy rates, the highest rates of imprisonment, and comes about 28th in the international league table of life expectancy,…because it also has the biggest income differences.” The resulting competition for income and status erodes democracy and community, creates extreme physical and psychological stress harmful to human health, and drives excessive consumption and environmental abuse.
In high income countries like the United States, increasing economic equality through redistribution is far more important to increasing general well-being than growing aggregate economic output. The solution is not simply raising the floor and alleviating poverty, but directly addressing the overconcentration of wealth. Our team promotes a broad analysis of the impact of extreme inequalities and advocates for far-reaching policy interventions that broaden prosperity and redistribute dangerous concentrations of wealth.
Effective Corrective Action
According to market fundamentalists, equality is not an issue. Dismissing the issue of a finite ecosystem, they believe that poverty is best ended by growing the economy to bring up the bottom. If we lived in a world of endless resources and open frontiers, this might be a possibility. This, however, is not our reality. In the absence of a strong commitment to policies that maintain an equitable distribution of income, conventional economic growth increases the wealth gap even as it destroys the environment.
Effective corrective action will require a number of approaches, including:
- Income policies that assure every person access to an income adequate to meet basic needs and favor those who produce real value through productive work—for example teachers, entrepreneurs, factory and service workers, family farmers, agricultural laborers, and hospital attendants—over those who profit from financial speculation and passive financial returns.
- Progressive taxation and public spending policies that continuously recycle wealth from those who have far more than they need at the top to those at the bottom who lack access to the basic essentials of a secure and fulfilling life.
- Equitable development policies. Land use and regional development policies that limit sprawl, support multi-strata development, and prevent geographical division by class and race and between affluent and blighted neighborhoods.
- Broad participation in ownership and access to commonwealth. Work and ownership policies that minimize the class divide by encouraging every person to engage in productive work and to share in the benefits and responsibilities of ownership. Broad access to the shared wealth of the commons is also essential.
The Gilded Age
The U.S. was born of a rejection of monarchy and the hereditary concentration of wealth and power. Yet during the first Gilded Age, from 1890 to 1915, the industrial revolution and the rise of monopoly enterprise brought extreme inequality in the distribution of income and wealth. This in turn sparked a lively debate about the danger that wealth concentration presented to democracy and general well-being. The broader public organized and pressed for fundamental changes to reduce the impact of concentrated wealth on our economy, democracy and culture.
This led to a period after World War II of relatively shared prosperity and middle class expansion. It was also a period of empire, unsustainable resource extraction, and racial oppression. Inequality, however, was significantly reduced and prosperity was broadly shared.
Over the last thirty years, corporate interests mobilized to advance policy changes that supported a rapid upward redistribution of wealth into the hands of a very few. The rules of the economy—tax policy, public spending, deregulation, trade policy—were rewritten to favor large asset owners and corporations to the detriment of wage earners and small enterprises. Today, the wealthiest one percent of households hold a third of all private assets, more than the bottom 95 percent of households combined. [Recent inequality trend data]