At an unusually divisive time for politics in the West, there’s one thing most people can agree on: the economy is not working well enough, for enough people.
Right now, just 1% of the world’s population holds over 35% of all private wealth, more than the bottom 95% combined. According to Oxfam, the eight wealthiest individuals in the world – all men – have the same wealth as 3.6 billion of the world’s poorest. The world could see its first trillionaire in the next 25 years, yet one in nine people go to bed hungry every night and one in 10 of us still earns less than $2 a day.
And while the problem is truly global, it also exists within countries – including some of the world’s most advanced economies. By the late 2000s, income inequality had risen in 17 out of the 22 OECD countries, including by more than 4% in Finland, Germany, Israel, New Zealand, Sweden and the US.
Inequality is, as Jaideep Prabhu, a Professor of Business at Cambridge University, writes, “the defining social, political and economic phenomenon of our time.” The latest Global Risks Report agrees. The report ranked “rising income and wealth disparity” as the most important trend that will shape the world in the next decade.
The rise of anti-establishment populism, as well as concerns about the revolution in robotics and artificial intelligence, suggest that a revival of economic growth alone may not be enough to address the widening gap between rich and poor.
With capitalism in need of fundamental reform, here is a list of some of the bold ideas that could challenge the status quo.
Universal Basic Income
“Consider for a moment that from this day forward, on the first day of every month, around $1,000 is deposited into your bank account – because you are a citizen,” writes the author Scott Santens in this article.
Universal Basic Income, or UBI, is not a new idea (experiments have taken place in the US, Canada, Namibia, India and Brazil, while Finland and the Netherlands plan to follow suit), but this “social security for all”, which would guarantee a starting salary that is above the poverty line for the rest of your life, is experiencing a revival.
“Rising inequality, decades of stagnant wages, the transformation of lifelong careers into sub-hourly tasks … all of these and more are pointing to the need to start permanently guaranteeing everyone at least some income,” says Santens.
While critics argue that a UBI is unaffordable and would encourage people to do nothing, some advocates believe it would help to soften the blow of automation and give us the freedom to do something we really enjoy. “I firmly believe that a Universal Basic Income is the most effective answer to the dilemma of advancing robotization,” argues Dutch economist Rutger Bergman. “Not because robots will take over all the purposeful jobs, but because a basic income would give everybody the chance to do work that is meaningful.”
