The Age of Increasing Inequality

THE AGE OF INCREASING INEQUALITY: THE ASTONISHING RISE OF CANADA’S 1%
By Lars Osberg

In 1981 Lars Osberg wrote a book on economic inequality in Canada. At the time it wasn’t a subject that attracted a lot of interest because levels of inequality had been stable since the end of the Second World War.

Since then, however, a lot has changed. Inequality has become a hot topic because (1) it has been increasing; (2) there’s a general consensus that this is not a good thing; and (3) there doesn’t seem to be anything we can do about it.

Osberg’s new book provides an excellent overview of the subject. Acknowledging that “inequalities matter differently, at different parts of the distribution of income” he divides his analysis into three main parts, looking at how inequality is measured and how its effects are felt in the lower, middle, and upper classes. He then considers some of the impact inequality has more generally as well as what is driving it and where it is being driven.

His prognosis is not cheery. The post-Second World War golden age of capitalism is now viewed as “a happy accident of history” and not a norm. Meanwhile, Osberg’s suggestions for at least ameliorating the ill effects of the coming Age of Robots are only tentatively advanced. They are made, he admits “with the recognition that some big trends affecting economic inequality are likely to continue, regardless.” That is, regardless of any political will, should any be discovered, to stem the job-killing tide of technology and globalization.

In other words, don’t expect the current trajectory to change very much. This is something that will make at least some people happy. “Many things have changed in Canada over the last thirty-five years, but it is still true that [here Osberg is, I believe, quoting his earlier work] ‘the Canadian industrial structure is, to a very large degree, dominated by foreign ownership and a relatively small number of great family fortunes.'” Even many of the names are the same: Thomson, Weston, Irving, Desmarais. There is a ratchet effect to economic inequality that makes it very hard to go backward once a fortune has been made. The effect of a ratchet, however, may be to squeeze things too tight. One wonders if or when we’ll come to that point.

Notes:
Review first published online February 6, 2020.