Yahoo Finance Huge rise in UK inequality 'threatens democracy'
A huge rise in inequality in the UK could threaten the survival of democracy, a new report suggests.
A report on multiple forms of inequality in 21st century Britain highlights fears it could also cause a “crisis of capitalism,” as just one in six people believes capitalist system is working well today.
It suggests the turbulent international politics of recent years may be linked to growing inequality and anger at its consequences across the world.
The study, by the Institute for Fiscal Studies (IFS) think tank, highlights the soaring incomes of Britain’s highest earners and the decline of middle-income jobs, with the labour market ‘hollowing out’ into more higher- and low-paid work.
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It points to an increase in “deaths of despair” from suicide, overdoses and alcohol-related illness, warning they are on the rise after decades of improvement and could lead to a US-style social crisis.
And its authors argue the squeeze on living standards since the financial crisis has brought many forms of inequality into sharper focus.
It says: “With support for populist candidates rising on both sides of the Atlantic, and on both sides of the political spectrum, some question whether inequality may pose a threat not just to capitalism but also to our democratic system.
“Some have placed the surge in populism and the demise of established centre-ground political parties at the feet of growing inequality and a greater sense of economic insecurity. Yet there is little consensus on what this means and what should be done.”
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It also notes YouGov survey data from 2017 which suggests more young people have a favourable view of socialism than capitalism, a finding borne out by the unlikely rise of Labour leader Jeremy Corbyn and his greater popularity among the young.
The report is the first part of a £2.5m five-year study into inequalities, chaired by the Nobel laureate Angus Deaton and likely to feature analysis by many world-leading academics.
It will explore inequalities not only in income and wealth but also opportunity and health, and hopes to “answer some of the most fundamental questions” about the causes and consequences of modern inequality.
