The Cost of Inequality: Three Decades of the Super-Rich and the Economy

Stewart Lansley, London, Gibson Square Books, 320 pp, ISBN-10: 1908096063 (hbk)

Reviewed by Joanna Mack

Lansley argues that the soaring inequality of recent decades is not just an issue of social justice but has also had significant negative implications for the economy. The increased concentration of income and wealth at the top of society since the early 1980s, especially in the UK and the USA and more latterly in parts of continental Europe, has led to greater economic turbulence, slower growth and greater economic fragility, culminating in the crash of 2008/09.

The author maintains that the persistence of inequality is now central to the lack of global recovery. He also:

examines the impact on economic performance of the sustained wage squeeze and increased income concentration at the top of society in the UK and the USA over the last 30 years
argues that the rise in low pay has put pressure of measures to tackle poverty
provides a detailed critique of the assumption underpinning market theories that a sharp dose of inequality is good for the wider economy
shows that economic performance under the more regulated model of capitalism in the years after the Second World War was better on all economic goals, bar inflation, compared with under more unregulated market capitalism of recent decades
provides a detailed comparison of the role of rising inequality in the build-up to 1929 and to 2008
examines the relationship between inequality and economic instability and identifies the mechanisms that link the two. Lansley argues that, although ignored in official accounts, rising inequality was a primary cause of the 2008 crash, just as it was in the 1930s Depression
provides evidence that allowing the gains from growing prosperity to be colonised by a super-rich elite has sucked the lifeblood out of productive enterprise and made the global economy much more prone to crisis.