Inclusive Capitalism: People Should Replace Profit as the Bottom Line

25/06/2015 17:23 | Updated 25 June 2016

Leading figures from politics, business and finance will meet in London tomorrow to discuss how to respond to the widening gap between the very rich and the rest: a crisis where just 80 individuals own the same wealth as 3.5billion people, the poorest half of the world's population.

Many of those who will attend the second annual Conference on Inclusive Capitalism are part of that elite wealthy group. Last year's delegates were estimated to control between them a third of the world's investable assets - around £18trillion. Their participation demonstrates their concern that inequality is now threatening the health of our societies and economies around the globe.

At last year's event speakers from Prince Charles to the Bank of England's Governor came together to warn that extreme economic inequality is striking at the heart of a basic social contract of fairness across generations, with grave repercussions for us all. It is also holding back the fight against global poverty at a time when one in nine people do not have enough to eat and more than a billion people still live in extreme poverty. With fairer distribution not only would more poor people benefit but we could actually have faster economic growth.

Concern is not confined to one part of the political spectrum. Labour's election defeat under Ed Miliband - who famously championed the need to tackle inequality - has not deterred Conservatives from picking up the baton. Earlier this month Boris Johnson warned that tackling economic inequality is the big issue of our time, lambasting the unfairness of eye-wateringly high CEO salaries and championing a decent living wage for workers. Tim Montgomerie's The Good Right project is proposing measures from raising the minimum wage to higher taxes on luxury goods.

Partly, concern is hard-headed, driven by the numbers. As the International Monetary Fund showed last week, economic inequality is bad for growth and more equal economies perform better.

Yet it would be wrong to ignore the human and social consequences of a situation where the richest 1% of the global population is within a hair's breadth of owning the same wealth as the other 99%, where, in the UK, increasing numbers of people are forced to rely on food banks to feed their families and in less wealthy countries, the most marginalised people are missing out.

This is not about envy, but about recognising that one person's wealth should not be built on the poverty of others. When the middle classes are forced to take on ever greater amounts of debt just to stay afloat, when the poorest and most vulnerable are deprived of essential services like healthcare and an education that make the difference between a life of dignity or despair, it really is time to act.

As Mark Carney and others have said, greater fairness is needed, because without it, the social contract that binds us together is weakened. When people feel that the playing field is far from level, that the rules are rigged by those with power and influence to work against them and their children, society begins to feel the strain.

The challenge now is to move the debate about extreme inequality from acknowledging the problem to discussing solutions. Today's event - much of which is happening in private - is the ideal setting for conversations to start converting concern into action.

The starting point must be that - as Professor Tony Atkinson demonstrated in his recent book Inequality What Can Be Done? - fixing economic inequality requires, above all, political solutions. We have somehow constructed a sphere of public debate where people are secondary to numbers; where the well-being of millions is too often secondary to the economic indicators.

Tackling inequality requires that people, not profit constitute the bottom line. We need everyone who is in a position of influence - business leaders, financiers, politicians, civil servants - to put the interests of ordinary citizens back at the heart of every decision he or she makes. To borrow from Steve Hilton, David Cameron's former adviser, we need an economy that is "more human".

After all, what's the point of building a prosperous economy but to ensure a prosperous future for all who live in it? The American political philosopher John Rawls suggests that we encourage those most able to generate wealth so that it can be used to help those who are less fortunate. Call it wealth for a greater purpose. Oxfam wholeheartedly agrees.

We are looking to our leaders - here in the UK and around the world, public and private sector, to find ways to break down structures that perpetuate poverty and keep individuals from realising their full potential in life. That means fair wages to ensure people can live dignified lives and find pride in their work, and investment in essential public services that poor people in particular, depend on. It means more progressive tax systems and cracking down on big companies and billionaires who avoid paying their fair share of tax - here and in poor countries - through complex accounting tricks. It's about properly regulated financial markets that behave with integrity to spur innovation, commerce and enterprise, rather than simply multiply individual bonus pots.

Reducing inequality may seem an impossible task but the rewards are potentially huge - in tackling poverty, improving social cohesion and human well-being. Around the world, seven out of ten people live in countries where inequality has increased since the 1980s. As a global community, we've managed to halve the number of people living in poverty during that time but without inequality slowing us down, progress could have been so much greater.