Why is no one asking billionaires difficult questions?

High levels of wealth inequality are damaging our society, economy and democracy. But these arguments are rarely rehearsed when billionaires are challenged about their wealth, giving them a free pass.

In Are Billionaires Bad? (BBC Three, 28 July), the comedian Shabaz Ali embarks on a funny and thought-provoking exploration of extreme wealth that takes him from the luxury handbag shops of Knightsbridge to the Colorado lair of British billionaire and philanthropist John Caudwell. There are some revealing insights, but Ali finds, like so many before him, that his basic challenge – that billionaires are bad and shouldn’t exist – is far too easily rebuffed by the people he meets, almost all of whom (in the name of good old BBC balance) are on the side of, well, the billionaires.

Take Caudwell as an example. He seems like a genuinely good person, and he’s undeniably an impressive philanthropist (who says that he’s not that keen on most of his fellow billionaires). But when Ali suggests that billionaires have too much influence on politics, Caudwell waves the idea aside with the eyebrow-raising suggestion that rich people have influence because they have good ideas, so politicians should listen to them. Maybe Ali’s comeback didn’t survive the edit, but it would have been nice to see him pushing back on this evidence-light assertion rather than giving Caudwell an open goal.

Many critics of inequality have found it challenging to respond robustly to the inevitable backlash that they provoke, despite the fact that public opinion is generally, and increasingly, more on their side than not. This is partly because people with an enormous amount of wealth - and those who represent them, work for them, sell things to them or aspire to be them – have a largely sympathetic media on their side, as well as a set of stubborn cultural beliefs (not least the myth of meritocracy) that serve to justify the status quo. Their enormous lobbying firepower doesn’t hurt, and neither does their largesse towards political parties (see previous paragraph). There’s also an insidious sense that the technical expertise is on the side of inequality defenders (and a bigger group that we could call ‘change sceptics’), who are bravely defending the truth against an ill-informed rabble of activists and dreamers.

However, the notion that the evidence favours those who defend the existing system over those who seek to change it doesn’t hold up to scrutiny. In fact, there’s a rapidly growing and increasingly convincing body of research to show that inequality isn’t just unfair, it’s actively harmful for all of us, not just those at the sharp end. Given that this evidence exists, it should no longer be possible for an inequality defender to accuse a critic of simply being jealous of other people’s wealth without being hit with a volley of arguments about how and why inequality is bad for everyone.

At the Fairness Foundation we’ve spent years compiling and communicating the evidence base about the negative effects of wealth inequality in particular, looking at how it harms our society, economy, democracy and environment. You can read up on these impacts – and what we can do about them – on our online Wealth Gap Risk Register.

One of the key findings is that many of the negative consequences of inequality come about as a result of its fundamental unfairness. In other words, inequalities that arise from unfair causes tend to have negative consequences. Let’s take economic growth as an example. Researchers have compared inequality to cholesterol, arguing that inequality caused by barriers to opportunity is bad for economic growth, whereas inequality arising from individual effort can be good for growth. It turns out that most inequality today in Britain and other advanced economies is caused by barriers to opportunity rather than different levels of effort. This means that, far from being an inevitable side-effect of growth or even a precondition to it, inequality is a barrier to economic growth. We’ve argued that inequality undermines growth through five distinct mechanisms – reducing demand, wasting talent, extracting wealth, skewing investment and undermining competition.

However, even inequalities that some might see as arising from unobjectionable causes can have negative consequences. The increasing influence of extreme wealth on politics is an obvious example. We do not need to object in principle to the idea that someone deserves to become a billionaire to worry in practice about the outsized influence that they exert on political decisions and priorities.

And this is where it can be useful to distinguish between different aspects of inequality, to think in a more nuanced way about exactly what is driving some of these broader harms to our society, economy, democracy and environment, and what this means for how we should respond. Which harms arise mostly because of the existence of a small class of billionaires, i.e. from the extreme concentration of wealth at the top of society? Which come about more as a result of the gap between richer and poorer households? And which are primarily a consequence of the lack of wealth among those at the bottom of the distribution? Finally, how do these three different aspects of wealth inequality interact with each other?

Answering these questions is crucial in helping us to better understand and communicate the evidence about the negative impacts of inequality (of wealth in particular), and to win the argument about both the need for change and the effectiveness and feasibility of some of the most promising policy solutions, from better taxes on wealth to ways to share wealth more broadly in the first place, as well as stronger ‘guardrails’ to protect against the worst harms caused by both extreme wealth and zero wealth.

We’ll be doing more of this work at the Fairness Foundation over the coming months and years, so please follow us to find out more. In the meantime, my forthcoming book, The Fair Necessities: Why We Need a Fairer Britain and How to Make It Happen (out on 8 September with Policy Press – you can pre-order a copy and sign up to a launch event using the link) digs into the broader fairness arguments. I published an article recently with HopeWorks setting out some of the ideas in the book about how to get the public behind a vision of a fairer Britain; in the coming weeks I’ll write here about some of the suggested policy fixes set out in the book, followed by a final article previewing the book’s arguments about how to overcome the barriers to change.