Political responses to inequality are possible, and perhaps politically necessary, to improve people's lives – but are controversial.
As described in the previous section (6.7.1), individualists want to minimise government spending and taxation. They believe that market forces are the best way of allocating economic resources. This ideology, also known as ‘neoliberalism’ (3.5.9), has dominated politics in Britain and America since the 1980s. It has led to a very unequal distribution of wealth (3.5.6). Many people have not seen much improvement in their standard of living, whilst seeing others becoming very rich.
As Martin Jaques asserted, in a 2016 article The death of neoliberalism and the crisis in western politics, economic inequality “is, bar none, the issue that is driving the political discontent that is now engulfing the west”. Voters have repeatedly removed incumbent governments in what this website has described as the politics of resentment. The election of Donald Trump in 2016, the flip to the Democrats in 2020, and the flip back to Donald Trump in 2024 were all examples of voter discontent with the political establishment.
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 not working received the same economic rewards. If most people believe that they personally have a good chance of becoming wealthier, they will tolerate some inequality – but if people believe that the whole system is unfair, they become resentful and they want politicians to correct it.
The following sub-sections explore different aspects of the political responses to economic inequality:
· Individualists and collectivists differ on whether inequality is a problem (6.7.2.1). These contrasting ideologies were clearly visible in the difference between the Democrat and Republican party platforms in the 2024 election, for example. Republican policies for increasing economic growth would increase inequality (and the UK Conservative Party policies are similar).
· There are several political reasons for reducing inequality (6.7.2.2). Thomas Piketty and others have argued that survival of the political system might depend on it – and there are examples of public resentment leading to revolution. And there is evidence that more equal societies have a better quality of life for both rich and poor.
· There are different policy objectives for intervening to reduce inequality, according to the level of poverty being addressed (6.7.2.3). They range from humanitarian assistance to the destitute all over the world, through socio-economic rights in wealthy countries, to more equal sharing of wealth.
· There are several ways of intervening to reduce economic inequality (6.7.2.4). These include providing public services, education, and healthcare that are available to everybody, and also addressing regional variations.
(This is an archive of a page intended to form part of Edition 4 of the Patterns of Power series of books. The latest versions are at book contents).