Can it possibly be morally defensible that the annual return on the wealth of the world's richest man, Mexico's Carlos Slim, is the equivalent of the combined average wages of 400,000 Mexicans? That our economy is so ordered to value Slim's social contribution at 400,000 times that of so many of his compatriots? Or that, according to Oxfam last week, the combined wealth of the world's 85 richest people, €1.2 trillion, is equal to that of the poorest half of its population, 3.5 billion people? That, in this world of plenty, some three billion live on less than €2 a day?
For many of us such disparities are self-evidently obscene, a hallmark of an uncivilised society. And a serious impediment to growth – not least because declining incomes depress the demand that can lift our economies out of the doldrums. Between 2007 and 2012 the bottom 70 per cent of US wages fell despite productivity growth of nearly 8 per cent, while CEO remuneration rebounded – in the last 35 years CEOs increased their remuneration by 876 per cent, double the real growth in stock markets.
Seventy per cent of the world’s population lives in countries where inequality has increased since the 1980s – and Ireland has not bucked the trend with a 58 per cent increase in the share of pre-tax income going to the richest one per cent over the last 30 years.
That growing inequality has recently acquired a sharp new political salience internationally is most welcome. President Obama has made the issue central to mid-term election campaigning, "the defining challenge of our time". The gathering of plutocrats, movers and shakers at the World Economic Forum in Davos also debated the issue. Pope Francis, the new champion of the poor, urged them "to ensure that humanity is served by wealth and not ruled by it," while the forum's own survey of top people identified rising income disparity and attendant social unrest as the biggest threat to the world.
But the political and economic orthodoxy of our time, although professing concern about poverty and the need for programmes to help the deserving poor to help themselves, resists what it sees as easy assumptions about a supposed causal connection between extreme poverty and extreme wealth, the idea that the poor are poor because the rich are wealthy.
Inequality is inevitable, and, indeed, because it provides business with incentives to grow economies, necessary. By that logic, however, the US should be strongly outperforming countries like Sweden where social cohesion and equality are core values. Far from it. Growing inequality is a critical moral, economic and political challenge. Rightly or wrongly, it feeds a sense of unfairness, of burdens unequally shared, and perceptions that, although a democracy, our society is run by and for the few. Yes, it is the “challenge of our time”.