Chapter 1: Neoliberalism takes over
Inequality was rising up the political agenda of many affluent countries before the financial crisis of 2008. Five years later, most of these countries were returning economic data which showed the worst of the recession was over. With growth and prosperity slowly returning, inequality was a pressing issue once more, described by Barak Obama in this way: Since 1979, when I graduated from high school, our productivity is up by more than 90 percent, but the income of the typical family has increased by less than eight percent. Since 1979, our economy has more than doubled in size, but most of that growth has flowed to a fortunate few … The top 10 percent no longer takes in one-third of our income – it now takes half. Whereas in the past, the average CEO made about 20 to 30 times the income of the average worker, today’s CEO now makes 273 times more. And meanwhile, a family in the top 1 percent has a net worth 288 times higher than the typical family, which is a record for this country. (Obama 2013: n.p.) The president emphasized that these trends were worse in the USA but had nevertheless affected almost all the rich countries of the world. The largest study of inequality so far undertaken suggested that the more equal world Obama remembered in the 1970s was something of an anomaly (Piketty 2014). Most incomes did not come from investing in capital but incomes from capital tended to grow much more quickly than incomes from wages or state benefits.