Inequality Knocks

Identifying and mitigating the risks of wealth inequality in the UK, including the potential for unchecked wealth inequality to lead to societal collapse

On 1 November, the Fairness Foundation, the Future Threats Lab at the Department of War Studies, and the Policy Institute at King’s College London convened a one-day workshop for 25 senior stakeholders from the worlds of politics, government, academia, business and civil society. Its purpose was to examine the evidence for the risks posed by wealth inequality in the UK to our society, economy, democracy and environment, and for the ways in which those risks can be mitigated.

Here is a snapshot of some of the key insights from the workshop. We’ll be publishing a full report of the event in the new year.

A consensus of concern

The stark question at the heart of the event: could wealth inequality trigger societal collapse in the UK? Our participants agreed that growing wealth inequality poses a major risk to British society. Every participant considered it plausible that wealth inequality could drive societal collapse in the UK within the next decade – a degree of unanimity that we had not anticipated, given the varied backgrounds of the people in the room.

Through three structured sessions, the workshop revealed deep concern about how wealth inequality is destabilising British society. One participant memorably described Britain as "an alcoholic... one shot away from catastrophe." Despite some efforts to "right the ship," the consensus was that the UK is on a clear trajectory of decline, with wealth inequality undermining social cohesion and risking further deterioration without intervention.

Teetering on the brink

Institutions are being systematically weakened through multiple mechanisms. The government's 'business model' is fundamentally broken, being over-reliant on revenue from taxing income rather than wealth. Public services are deteriorating, and the social contract has demonstrably collapsed along with public trust in government and democratic institutions. There's widespread disbelief in mainstream politicians' willingness or ability to improve people's lives. While wealthy interests have long captured media and political narratives to argue that the status quo is the only way, it's increasingly clear to everyone that this isn't the case.

In this vacuum, people are unsurprisingly turning to populists who provide easy answers and tempting scapegoats. The political system appears to lack both the will and ability to think and act in the long-term interests of the country, or to consider wide-ranging structural reforms instead of narrow fixes. The speed with which problems are mounting far outstrips the pace at which institutions try to keep up with them.

A range of possible triggers

The workshop identified multiple pathways to societal disintegration. Potential triggers include economic crises (such as runaway inflation and currency collapse), climate events (such as a catastrophic failure of the Thames Barrier, or crop failures elsewhere in the world), and technological disruption (such as AI-linked mass unemployment and advances in quantum computing ending privacy as we know it). The behaviour of elites provides warning signs, with tech leaders buying bunkers in New Zealand described as "canaries in the coal mine."

Quick fixes and deeper changes

The final session focused on solutions, acknowledging that while political leaders face enormous pressure to deliver quick and measurable improvements to living standards, rising inequality coupled with declining public services makes it increasingly hard to deliver results through 'sticking plaster' approaches. As one system or service starts to fail, it increases pressure on others, creating a vicious cycle. Only a comprehensive approach to tackling underlying issues will deliver the progress needed.

The challenge, therefore, is to find ways to achieve short-term progress while rapidly building the coalitions needed to overcome the many obstacles to more fundamental institutional reform. These coalitions must include the public, and rebuilding trust requires political leaders to set out a compelling vision of what constitutes a "good society" and how they will rebuild the social contract.

Reasons for pessimism and hope

While there are grounds for pessimism - with one participant noting that government's response to accelerating challenges is "like taking a pea-shooter to a gunfight" - there are also reasons for cautious optimism. Historical precedents show that radical reforms can transform society for the better, such as the 1945 creation of the welfare state. Finland and other Scandinavian countries demonstrate how high wealth inequality can be made less damaging by strong public services and an effective social safety net.

Key priorities include reforming political systems, particularly strengthening inadequate lobbying regulations, and fixing dysfunctional housing and employment markets. While many changes require spending, not all are hugely expensive. Often what's needed most is political courage and vision to act boldly and relinquish control - to act in the long-term interest and devolve power to the local level.

The workshop concluded that progress at a scale equal to the challenge is almost impossible without finding ways to reduce the influence of those with the most power and a vested interest in the status quo. However, as societies are complex adaptive systems, small changes can have disproportionate impacts if properly directed.

Plans for future work

Several participants pointed out that getting experts together to propose top-down solutions isn't sufficient on its own. Future work will focus on understanding public attitudes through quantitative and qualitative research, using participatory futures approaches to explore how views vary based on demographics and political beliefs. A particular objective will be to shed more light on how wealth inequality is undermining faith in mainstream democratic politics and the social contract, and how best to reverse this process.

A full report of this workshop will be published in the new year. Fair Comment will be back on 6 January. Have a good Christmas break and Happy New Year!