In this article Andrew Sayer revives some concepts – ‘unearned income’, ‘rentiers’, ‘functionless investors’, and ‘improperty’ – to explain why the very rich are unjust and dysfunctional. We need to challenge the myth that the rich are specially-talented wealth creators, he argues.
In light of the news that the richest 80 people in the world have as much wealth as the poorest half of the world’s population, all 3.5 billion of them, and at the time of the plutocrats’ World Economic Forum in Davos, many people are talking about the extraordinary concentration of wealth at the top.
Here in the UK, the combined wealth of the richest 1,000 people is £519 billion (up from $450 billion in 2013). That’s over 4 times the size of the annual NHS budget (£127 billion), 12 times the size of the education bill (£42 billion), and 9 times the size of the welfare bill (£58 billion). We might well ask which of these figures can’t we afford? Given the tendency of the rich to portray themselves as specially-talented wealth creators we have to ask whether these inequalities are justified. In my new book Why We Can’t Afford the Rich, I argue they are unjust and dysfunctional.
To show why, we need to consider what economists call ‘the functional distribution of income’ – the different sources of income such as work, rent, interest and profit that go to different people. We can best do this by reviving some concepts which tend to have fallen out of use over the last 40 years – just at the time they were becoming more relevant: ‘unearned income’, ‘rentiers’, ‘functionless investors’, and ‘improperty’.