Event Recap: What Does Inequality Mean In Canada—99% Of Us Want To Know
Thomas Piketty's 2014 book Capital in the 21st Century became a best seller by changing the terms of the debate over inequality, claiming that rising inequality is the natural state of capitalism, and that the 21st century will be ruled by dynasties based on inherited wealth.
Almost two years after the release of Thomas Piketty’s Capital, people are still riveted by the French economist’s revelations around the growing economic inequality in our world. So how did a technical 600-page economics book become a bestseller? According to Brian Krauth, it was all about timing. With the growth of social movements such as Occupy Wall Street and the increasingly apparent failures of the current system, people want to hear about economic inequality and what is happening to our society. Even more, they want to know what we can do about it.
On April 15, 2015, Brian Krauth and Krishna Pendakur, both professors in the SFU Department of Economics, led a curious audience through the main points that Piketty brought forward, and explored the implications that his findings have for Canada. The primary point, one that has captured the world’s attention, is the global resurgence of economic inequality that’s been taking place since the 1980s. In particular, Piketty has highlighted the increasing concentration of income and wealth in the top 1% of the population. This trend of growing inequality has particularly impacted neoliberal states such as the US and the UK, creating a variety of problematic outcomes including low levels of social mobility and increasing the power of the rich in our political systems. While Pendakur’s work indicates that Canada has not experienced such an extreme concentration of wealth and income, we are not immune to the impacts of inequality.
As interesting as Piketty’s analysis is, there is one question at the front of most people’s minds: what can we do about growing inequality? Essentially, solutions fall into one of two categories: government policies, or changing societal norms.
Following Piketty’s lead, Krauth highlights the need for stronger taxation policies to rein in our economic system. For example, a global wealth tax of approximately 1-2% would address the issue of accumulated wealth and its contribution to increasing inequality. Pendakur takes a different approach to the issue, stressing the need for the provision of quality public services such as primary and secondary education as a mechanism for the redistribution of resources. He also points to alternative forms of taxation, such as property taxes, and the potential of using these revenues to fund public services.
On the other hand, both Krauth and Pendakur remind us that social norms play an important role in economic inequality. Over the last several decades, the economy has developed to benefit managers and investors at the expense of workers, with CEOs often making thousands of times what those at the bottom of the company are paid. Our acceptance of this status quo is allowing for an increasingly unequal distribution of resources, as larger portions of the economy are being concentrated in the hands of a few.
Of course there is no silver bullet to the question of wealth and income inequality. But there is also no doubt that we need strong and progressive public policies to begin to address this issue. We need policies that protect workers, provide strong public services such as education and health care, and ensure wealth is equitably distributed amongst all citizens. We need to demand more of our governments, and of ourselves. It’s time for us to start talking about the values that we hold as a society, and how we are going to change this system. More importantly, it’s time for us to take action, and to build the world that we want.
Molly Henry is currently a Masters of Public Policy candidate at Simon Fraser University.