The Fault Lines of Inequality : COVID 19 and the Politics of Financialization

This book examines how decisions made by the Conservative government during the COVID19 pandemic have increased economic inequality in the UK. Decades of austerity, asset-based welfare and financialization had already exacerbated social divisions in the UK prior to the pandemic. The political blueprint behind these measures combined Privatized Keynesianism and the Asset Economy. To explain, economists have highlighted that inequality derives from the fact that income from wealth increases at a faster rate than income from wages. The ensuing political assumption is that – in the face of pressures on public finances – promoting asset ownership is the best alternative to government-funded welfare schemes. What this meant, as the pandemic unfolded, was that when tough decisions about resource allocation needed to be made, the UK Treasury and the Bank of England found almost unlimited funds to rescue and protect asset-holders and middle-income homeowners, whilst reverting to a narrative of “misfortune” for the asset-less poor. This book assesses the political decisions taken by UK policymakers during 2020-21 and their consequences. In doing so, it challenges policymakers and the informed public to re-consider the morality of inequality, and to make alternative decisions to promote a more ecologically sustainable, caring, equal and prosperous society. Contents 6 List of Figures 8 1 An Introduction to Crisis Response 9 1.1 Introduction 10 1.2 Covid Fault Lines 11 1.3 Outline of Book 15 1.4 Plea to Policymakers for a Progressive Public Policy 18 References 20 2 Inequality and the Asset Economy 24 2.1 Introduction 25 2.2 The Ascent of Finance and the Politics of Financialisation 26 2.3 The Asset Economy and Asset-Based Welfare 28 2.4 Perpetual Crisis and Response in the Asset Economy 30 2.5 Asset-Based Inequality 32 2.6 The Fault Lines of Inequality 34 2.7 Closing Thoughts 39 References 39 3 A Windfall at the Top 43 3.1 Introduction 44 3.2 Governing the Asset Economy 46 3.2.1 Monetary Policy—How Central Banks Defend Asset Owners 47 3.2.2 Fiscal Policy—Taxation as Driver of Inequality 52 3.3 Covid Fortunes—Why Did the Economic Response Worsen Wealth Inequality 55 3.4 Closing Thoughts 58 References 59 4 A Squeezed Middle 62 4.1 Introduction 63 4.2 Covid-19 Intervention—The State’s Role in Providing Social Security 64 4.3 Housing-Based Welfare Works as Designed 69 4.4 Debt and Saving 71 4.5 Inclusion in the Squeezed Middle—Gender and Racial Inequality 75 4.6 Closing Thoughts 78 References 79 5 Precarity for Those at the Bottom 82 5.1 Introduction 83 5.2 No Homes—Insecure Housing for Non-Asset Holders 84 5.2.1 Renters in a Rentier Society 85 5.2.2 Homelessness 87 5.3 No Food Means no Security 89 5.4 Poor Children and the Moral Economy of Deprivation 92 5.5 No Money and the Compounding Problem of Precarity 94 5.6 Closing Thoughts 97 References 99 6 Conclusion 103 6.1 The Problem with the Return to Normal 104 6.2 Redressing Inequality in Policy and Politics 105 6.3 Advancing a New Normal—Solutions for the Twenty-First Century 106 6.4 Transformative Politics is Needed, not Technocratic Fixes 109 References 110 References 112 Index 127