The Cost of Inequality by Stewart Lansley

This engrossing text makes the argument that the levels of economic inequality witnessed in the UK and the USA have had a long-term impact on international economic performance. Further, it maintains that this influence has been negative. This contention is illustrated by three major trends.

Firstly, the growing gap between rich and poor has promoted the rise in the importance of credit. Secondly, the surge in credit has led to an increase in economic instability. Thirdly, the growing wealth of the rich has translated into an economy which prioritises finance over manufacturing, pulling skilled people into sectors which are not short of talented staff.

The argument is quite plausible and there are some positive suggestions about what could have been done after the international economic crisis. However, the environment is largely neglected in the analysis. In addition, Lansley strays towards arbitrariness in his musings on neo-liberalism:

“Personal fortunes that arise from exceptional personal risk-taking, innovation and merit are examples of good inequality. Today, most of the wealth gap is arguably the product of bad inequality.”

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