19/04/2015 19:48 BST | Updated 19/06/2015 06:59 BST

Inequality Is the Dog That Isn't Barking in the General Election

Everybody in Britain knows that inequality is rife and that it is rising. This fact forms a backdrop to the election campaign, but no party seems able to talk about it directly and openly. In one sense, there is nothing especially surprising about this. To draw attention to inequality in this way would be to demand a response. By contrast, the chilling reality is that all the principal political parties in Britain remain committed to the old growth model of debt-fuelled and consumption-driven growth and so the next British government (however it is eventually assembled) is almost bound to preside over a further intensification of social and economic inequality.

The figures, even before the crisis, were awful. As Thomas Piketty has shown in graphic detail, the share of total income captured by the top percentile grew in Britain from a depressing 6 per cent in 1980 to a staggering 15 per cent in 2008 (Capital in the 21st Century, 2014); and, more significantly, over the same time period, its share of national wealth rose from just over 20 per cent to just over 30 per cent.

But what Piketty and others have thus far failed to show (in part because the data is not yet in) is what has happened since the crisis. This is where the story becomes more depressing still. If the inequality scenario before the crisis was horrendous, then it has only worsened subsequently. For what we now know is that the response to the crisis in Anglo-liberal states like Britain has essentially been two-fold: public austerity, on the one hand, and an ever more concerted and frenetic attempt to reboot the conditions of asset price (and hence wealth) appreciation, on the other.

The argument is not difficult to make. Austerity on the scale and the time-frame now envisaged by all the major British political parties, particularly in the absence of stable growth and rising tax receipts, can only be achieved by drastic (indeed, unprecedented) cuts in public welfare spending. And it was, of course, precisely those public programmes which are now most at risk that were largely responsible for compensating the poor for the rising social inequality they had come to experience since the 1980s. In short, austerity is synonymous with regressive redistribution - it is, and can only be, an inequality-multiplier!

Yet that is only half of the story. For, having bailed out the banking sector with public funds (nationalising, in effect, its losses whilst demanding essentially nothing in return - not even a certain tolerance for a more precautionary regulatory environment), the current British Coalition government has also done its best to re-secure the conditions of asset-price (notably house-price) inflation - and, to date at least, with some success. The consequence is that those with accumulated assets (with wealth, in other words) are the key beneficiaries of the post-crisis public policy regime that is now in place - and they are set to benefit in proportion to the assets that they already hold or have the resources to acquire. This isn't asset-based welfare; it isn't even trickle-down economics - for the trickle has turned into a torrent and the torrent is raging upstream. The whole process is instead staggeringly inegalitarian, deepening rather than ameliorating the problem.

So is there are alternative? We think so. We call it civic capitalism - the governance of the market, by the state, in the name of the people, to deliver collective public goods, equity and social justice - and we have written a short book urgently setting out the argument for it (Cambridge: Polity, 2015). The core and defining ethos of civic capitalism reverses the long ascendant logic of Anglo-liberalism in which citizens have been made to answer to the perceived logics of the capitalism they have been required to serve. This reversal, we argue, is not only intensely desirable, but also absolutely necessary.

The crisis surely shows us that we can no longer be driven by the perceived imperatives of the old model and by those who have claimed for far too long - as it turns out, quite falsely - to be able to discern for us the imperatives of the market. It is now time in Britain to ask what capitalism can do for us and not what we can do for capitalism.

Sadly, it seems, we will have to wait at least one more election before we might have the chance to debate this idea properly and then conceivably vote for a party espousing such a capitalism at the ballot box. For now at least, this dog is not being allowed to bark.

Also by Colin Hay, Co-director of the Sheffield Political Economy Research Institute