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- [00:00]
A
Greetings, everyone. Welcome to London, where I am based, and welcome to this seminar looking at wealth inequality across the globe. My name is Mike Savage. I'm professor of sociology at the London School of Economics. I'm also convening a theme in the International Inequalities Institute around wealth elites and tax justice. And I'm really proud to host this seminar. So the theme today is to understand how we respond to the challenge of intense inequality in many parts of the world. And we have, I think, three main hooks for our discussion. The first of these is that much of the research on inequality globally and within nations is led by economists. Today we have a group of sociologists who want to respond to the challenge which the economists have laid down and shown how sociologists can lend insight and new research findings to understanding inequality. And also to renew the sociology of class stratification. The sociology of class stratification has a long history. It's focused very much upon occupational and employment divisions. And it hasn't renewed itself by thinking sufficiently about income and wealth inequalities. The second theme of our seminar is to understand how wealth assets, tradable assets, forms of wealth, are key drivers stratification in different parts of the world. This is an idea which the economists, again like Thomas Piketty, have put on the agenda very powerfully. But this is an agenda which sociologists such as ourselves can speak to very powerfully. And the research you'll be hearing about today explores how we can sociologically take account of wealth and income inequality, part of our thinking about stratification and class. And thirdly, and in some ways, most importantly of all, the papers today are from outside the global North. They're not from Europe or North America, with the exception of the first paper, which will frame some of the debates around wealth inequality. So we're really thrilled to get papers from China, from South Korea, from Brazil and from Russia so we can try and understand these dynamics of wealth inequality, class stratification in a more global perspective. So the format for today's session will be that the first speaker, Louis Chavel, will speak for about 15 minutes, and he'll frame some of the broad sociological ideas around wealth inequality. And then I will pass on to the four other panelists to each introduce their remarks for a shorter period of time, seven minutes, where they will only be able to give a, sadly, a brief precis of their arguments. I should say that the papers today have all arisen from a conference which was held last September or October in China, in Kunming, organized by the Chinese Academy of Social Sciences. It seems a long time ago. You know, it seems like a different world when you actually used to get on planes and visit other countries. But we should only 18 months ago. And the papers are all published online and open access in the Journal of Chinese Social of the Journal of Chinese Sociology. So if these papers whet your appetite, please look at the online issue and you'll find much more details. So that's the format. I'll introduce the speakers before they speak. And let me pass the floor first, or let me pass the zoom screen. I should say to Louis Chauvel, who as many of us will know is professor of sociology at University of Luxembourg. He's a leading authority who has emphasized the significance of wealth in renewing the sociology of class and stratification. And he's going to make some opening framing remarks. So Louis, over to you.
- [04:38]
B
Thank you very much. I hope the audio is okay and you see my screen. Everything is fine in this respect. That's it. It's okay. You okay? So simply in 15 minutes. It's very difficult to introduce so many papers. Thank you. Professor Li Tuling and Mike Savage to have led this important project of comparative inequality dynamics, wealth and the middle class project. What I present here is simply a part of more general presentation. You can read it online. So the important point of this presentation is that for first the role of wealth as a new crucial variable. It's not so new if we have two centuries perspective, but it's new if we have only half a century perspective from the 1970s, if you want. The important aspect of this presentation is at first the fact that wealth is having an increasing role compared to income. And we have to consider the architecture of society that income and wealth builds. And this architecture is not a pyramid, it's a strobiluid. I come to that very soon. And this trobiluid permits the construction of interesting indicators of our difficulties, such as the wealth to income ratio that is bringing and even where the top wealth to income ratio tyir if you want to show that extreme inequalities are back after their extinction into middle of the 20th century. So we'll have to see the consequences in particular for the middle class. But of course for the working class it's even worse. We'll have to see the consequences of those extreme inequalities in terms of what we can expect in the future of our western and non western societies. And that simply to begin with very concrete elements in the LSE today we are in a place where square meter is €16,000. It was the case one year ago at least at the last measurement it's only 50% more than in Paris Luxembourg to reach. Yeah. The main message you have here is that a standard 100 square meter apartment in London is 1 million and a half euros or dollars. And what we see with those very basic data regarding housing realities research, you have an increasing gap between wealth and the realities of work income. If you consider the number of years of work income you need to buy a standard 100 square meter apartment in an okay neighborhood of different cities. You see that lucky people in Paris need 77 years of work to afford this kind of apartment. In London it's 136 years and in Mumbai it's 300 years. I just precise that those that are not super fresh from 10 years ago to today, square meters in most of those cities doubled. To understand the increasing imbalance between wealth and income, it's important to have in the structure of society so kind of social pyramid that is generated on one side, on the left by income and on the right side by wealth. Here it's at first western societies first friends. And in the paper you will have. Comparison between 10 countries. So on the side of income what you have is not a pyramid, but a strobiloid from strobilos spinning tap if you want. This spinning tap of income in France with a big belly means that you have a large median class, more than middle class. A large median class of people close to the median income. And the mean income is not that far far from that on the side of income. France is still today a kind of middle class society. But when you go in the direction on the side of wealth, what you see is that compared to income, there is no median class of wealth. In French society with a gene index of 66% that is relatively low compared to the U.S. what you see is you have no median class. You have simply a mass of people with virtually no wealth or sometimes net debt. Negative wealth if you want negative net wealth. And at the top you have an accumulation of people close to the sky. In France, if you consider this graph on your screen, the richest French person is at something like 10,000 meters high in wealth. And when you compare income, relative inequality or relative equality, wealth is extreme in this respect. And as soon as you compare France, a relatively qualitarian in income and wealth country, to the extreme tension between the top and the bottoms that you have in the US you see coming a new world of inequalities. It's not only the stretch of wealth, it also Survives that in the current. In the last 30 years there had been in many western countries there had been a boom of the wealth to income ratio. Wir the wealth to income ratio had been invented by Stiglitz as an indicator also weight of wealth into current GDP. This means that in the 1990s in the average of those countries, wealth represented something like three years something of accumulated GDP of the nation. Today or in 2015, it's no longer three years, it's six years of GDP. You need to build the wealth. It's clear that this indicator shows that wealth is of increasing importance. Twice more important today than 30 years ago. It's also the fact that extreme top wealth represents something crazy today in many countries. I mean that if you compute not the wealth to income ratio, but the top wealth to income ratio to average income ratio, that is the ratio between the average wealth of the top 1% of the population to the average income in the nation. What you obtain is that in France today you need 23. You need 123 years of accumulated average income to make on average top 1% wealth. This ratio is 123 today. It was only 50, 30 years ago. This means that top wealth represents now a booming number of years of incomes. It's bad news for those who want to save money because you need much more to gain a position at the top of society. But conversely, for those who are already homeowners, the situation is extremely favorable and positive for the rich. I mean that in the US now the average top wealth. The average top wealth represents 200 years of average income. In the US it was 102 times less in the past 30, 40 years ago. And the very interesting thing is a long term historical transformation. That is the message is wealth is back. It looks like Thomas Piketty implemented to the top wealth to income ratio. The US today is like the US before the first World War. France is not as extreme now as it had been. But if you look to the trend of the last 40 years, the dream of low wealth accumulation of the 1960s is very far away today. So important thing is to think about long term consequences for the middle class in western social democracies like in Europe and elsewhere. Simply because this increasing massive gap between the aims and to have nots is providing a massive imbalance. I have no time to enter onto seven pillars of middle class societies. The question is not simply a problem for middle class members. It's also a problem for middle class societies that we have developed after the second World War. I mean that at the End of the late 1970s in Europe and elsewhere, Japan and many other countries, we have created a wage earner middle class society based on welfare state, on social upward social mobility, on increasing returns to education, on upgrading of an important part of the working class and the creation of a society based on beliefs in progress and capacity of the middle class to have a role, a central role in politics. What we argue in the paper is that those seven elements are facing a new dynamics. It's a kind of concatenation of very well, many well known authors from piketty to make savage. In many respects, wage stability is replaced by precariat. Wage stagnation is now the new general situation. After wage expansion. I have no time to enter on the seven elements that show that we are facing a new squeeze of middle class. For the middle class members it's very difficult. But of course for the working class it's even worse. Time is short. I still have only three minutes. Anyway, we have to think about the consequences of this repatrimonialization in French re wealthization, the comeback of accumulated wealth into everyday life realities. An apartment in London, Paris, Luxembourg or elsewhere is only one facet of this re wealthization problem. For the middle class of wage earners. We face increasing segregation based on income and consequences in terms of social distortions in educational institutions or health situations or simply paralleling the housing market situations. So in terms of consequences in two minutes, the main result is that in objective terms, I don't speak of the subjective terms, but in objective terms it's clear that class are back soon. In this context of divide between the top and the bottom of society and the stretch at the middle, because there is no middle class in wealth consideration. And we have to think to different consequences in terms of class and also in terms of class structure. I have in Max Weber's concept of patrimonialismus and neopatrimonialism that could be the consequences. Second point, we have an important author, Walter Scheidel, who underlined the degree to which inequalities in the past of human societies inequalities or a kind of automatically accumulative threat for the stability of civilizations. And the point of Walter Scheider is so coming back of inequalities could be in terms of violence, a risk, a collective risk of us due to lack of time. I will not insist on Yuran Terbon Killing Fields of Inequalities, his book six years ago. What we see is an increasing source of tensions in terms of social mobility based problems of social mobility based on increasing wealth tensions, the different bidding wars into housing market and elsewhere in terms of health and other elements of development are very clear. And what we can expect is increasing violence in this respect. So it's important to underline that what we need also is a need for multi thematic analysis of international comparisons of the different consequences of those trends. And this issue of the Journal of Chinese Sociology was an opportunity, is an opportunity to discuss with Brazil, South Korea, Russia, China, certainly India at some point and other Western countries anywhere of those topics. I have no time to insist on that. An important aspect also of the Journal of Chinese Sociology is to think of social science toolbox coming from China regarding balanced and unbalanced societies. The notion of modest wealth society.
- [20:25]
C
Is.
- [20:25]
B
Amongst other an important way of reflection to increase harmonious relations in society. So thank you very much Niman, have a good and let's have an excellent debate. So I had been a bit too long. Thanks a lot.
- [20:54]
A
Thank you Louis for setting out such a clear vision. And I think, you know, it's worth underscoring the implications of your argument that for centuries we've had the view that we've got to lift aggregate mean wealth mean income. But the challenge of wealth inequality is to look at this missing middle, how the middle is being stripped out and how our conceptions of the middle class appear to be made much more problematic given recent economic trends. Of course, your account is based on European developed work and that's why it's important to have these voices from other parts of the world where there's been such huge economic growth in recent decades. And so all the other panelists have been asked to kind of reflect upon these framing remarks. And so we begin with Professor Li Chun Ling from the Chinese Academy of Social Sciences in Beijing and she'll be speaking for a few minutes about her research on China. Professor chidling over to you.
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D
So.
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E
Okay, thanks Michael. And I'm very glad to attend this seminar. Luis just talked about wealth back in Western countries. Now I'm discussing a similar phenomenon happened in China, housing based wealthization in China from a society with high equality and scarce wealth to a society with high inequality and wealthization. Over the past three decades, China share a similar wealthization process with Western countries. But Chinese Westernization is a little different story from Western countries. In Western countries the process is characterized by re wealthization and inherited wealthy just like Louis said. But in China 30 years ago, almost no private valuable property. There were very very few families having property worth US$1,000. Thirty years later, however, China now has 86,000 families have we more than US$30 million. Chinese wealthization is a process of new wealth accumulation and aggregation driving by marketization and privatization, which are different dynamics of wealthization from that of Western countries. Such a process is most prominent in housing wealth. Housing property is the most important wealth of Chinese families which on average accounts for 71% of total family wealth. This graph shows the process of China from a society with few private property to a society with growing private property property. In 1988, only 14% of Chinese families had housing ownership and most of Chinese families lived in public house. But after 2008, more than 90% of Chinese families have housing property. Now average family housing wealth increased by 56 times from about 2,000 yuan in 1995 to 96,000 yuan in 2009. Now wealthization has brought about a shift in major source of economic inequality from income inequality into the housing wealthy inequality igniting 80s and 90s income inequality was a major source of economic inequality and income Gini coefficient increased fast. However, since 2000, with growth of housing wealth, housing wealth inequality has become the major source of economic inequality and its Gini coefficient is much higher than income Gini coefficient Wealthy nation has created a wealthy class having lots of housing property. The members of this group are from different occupational groups or traditional occupational based classes. About 5% from the elites and about 65% from middle class and 30% from the working class and peasants. Now, wealthy leads to a differentiation inside each class. For example, middle class has been divided into wealthy middle class and regular middle class working class also into wealthy working class and regular working class. So China has experienced a different process of Westernization from Western countries, but got similar social consequences as Western countries did. That is emerging class system under the age of Westernization. I prefer to a class scheme proposed by some European scholars such as Professor Sevridge and developed a Chinese version of emerging class system under the age of wealthization in which elite is not upper middle class. Western middle class is upper middle class, regular middle class. And Wesley Working class and peasants. It's a low middle class, regular working class and the peasants are low class. The bottom are precarious. So thank you very much.
- [28:34]
A
Thank you, Professor Truddling. That was wonderfully clear and laying out very much the stark nature of social change in China and how it impacts upon wealth inequality. So now we're going to move on to the case of Brazil, another rapidly growing expanding economy. And we're going to hear from Andre Caetano, who's professor of Sociology and Demography at the Catholic University of Minas Joe and his research focuses on work and labour market race and ethnic inequalities and stratification methodology. Andre.
- [29:20]
F
That is okay that it's on the screen. Yeah it's very nice to be here and to have the opportunity to present this work. I'm second author and professor Sally Stallone is here. I'm sure she will be glad to take the helm during the Q and A session. I just have just a few minutes for a couple of slides so it's going to be a overview of the work so. Well, the point of departure of this paper was a debate that sparkled by Nadi in 2008 when increasing average household income placed half of the population between the median and the upper 10% threshold and he called it the emerging new middle class and indeed purchase power and consumption increased living conditions improved perhaps less an equal distribution and towards knowledge shape income distribution. And our questions are whether there were a substantial difference between the incomes traded in the 5th the first 15 years of the 21st century and what social demographic factors were most influential in holding our leasing Brazilian income structure. We analyze data from the national household sample surveys 200108 and 15 the population in the age span 2465. We use the least methodology of income groups so we have six groups and this is the our response variable in binomiology. So regression and these three years were not chosen randomly. As you can see on the two images in the left and the right here the income groups distribution in 20018 and 15 and we should keep in mind that the top five 10% tend to be underrepresented and there are limited actually meager information on assets and wealth. But what stands out is the permanent stability in the distribution of income groups in the three years. And here about the covariates that we employed just to have an idea of the importance of then the difference between male and female population 35 and older that finished secondary school in 2018 between self declared white and black people and between the northeast and the southeast region multi developed 1 70% of the population and this is the billionaires of schooling by income group There were gains during the period but strengthening the advantages of the most privileged group rather than reducing the educational gap. The main findings and that we got was actually just in a nutshell it's a loss between 2008 and 15 in the gangs occurred in between 2001 and 8 mostly especially for women, blacks and rural population. So it's sort of cumbersome to interact with interpret odds ratios having a multinomial response variable with six categories. So we fixed the we estimated the probabilities of an urban northeastern black female 25 years old and an urban southeast white male 35 years old. And what varies the number of schooling years for each group in each year. So what we see here is that for the northeastern black female, they are more likely to be in the two most poorest groups and very unlikely to be in a very rich group. It's about the same what urban southeast White male 25 years old, but compared to the black female in the Northeast, the situation is really, let's say, better. And to finish final remarks, the modest advances achieved between 2001 and 8 were overturned in the following seven years. Brazil was not heading, neither was heading, neither towards less than equal income Oliver shaped distribution nor towards a middle class society. Living standards depend heavily on economic growth. Rising in income without distributive policies are insufficient to change the stiff Brazilian social economic stratification. And that's about it. Thank you very much.
- [35:58]
A
Thank you, Andre. So another kind of pessimistic interpretation of social change and the significance of wealth and incoming and inequality in the Brazilian context. We're now through the miracle of zoom. We're now going to zoom over to Asia again, to South Korea. And we're going to hear from Kwang Yong Shin, who is professor of sociology at Trung An University in Seoul. He's an expert on the transformation of the labor market and on social inequality, historical social democracy and the neoliberal turn and the rise of the bikariat in East Asia. So Kwang Yong on to you. Thank you.
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C
Thanks Mike. Good here it's my honor and pleasure to share my research outcome today. Today I would like to talk about new approach to social inequality. And because I think there are some problems in conventional social stratification research, I'd like to raise some issues, important issues here and next one, Yes, I summarized major issues, four issues and I'd like to pursue my own research agenda. And probably you may recognize that current survey data does not have enough information for doing research on inequality simply because they do not represent the rich, super rich and of course the extremely poor. And also more important thing is that Soviet data based inequality research does not capture the social inequality because they focus on working individuals, individuals, wage and income. So non working population is not included in their research. And in addition, wealth is completely out of sight and wealth inequality is much greater than income inequality. As you know, income inequality is much greater than average inequality. So different dimension of inequality should be considered in our Understanding of social inequality. The major problem for that is the lack of appropriate data for wealth income. So we need new types of data. So I strongly argue that we need administrative data that covers entire population. So next one, I simply compare the conventional approaches to inequality with a new approach to inequality unit of analysis and focus on occupation or not. And the data survey data versus administrative data. And a measure of income and wealth. And some focal points of research. The mean difference of income between men and women, between classes, between different races. A new approach emphasized whole distribution of income wealth. So it is quite different from the conventional approaches to inequality. Next one. This is some visual representation of difference between a conventional approach to inequality left hand side. Only the sociologists focus on inner red circle. So economically active population. And the unit of analysis individual. So I would like to emphasize the right hand side. A new approach is comprehensive including non working elderly household. And there are different types of household. Single household, dual owner household and male bred unit household. And the very different types of household also generate a different level of income and wealth. And finally inequality.
- [41:52]
A
Next one.
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C
This is another graphic presentation of my idea in sociology, especially in certification old approach focused on individuals, earnings, class, occupation, education, gender, something like that. And we completely missed household income or wealth. And sometimes we focus on family background in order to explain social mobility class mobility. But we do not pay attention to inheritance. So in sociology is social research analyze almost half of social inequality. So we missed another half. So that's my argument. Next one. And this is empirical results based on my own idea and comparing income inequality and wealth inequality. As you see, the Gini coefficient is quite different. Whereas Gini coefficient here of 0.5722 is much larger than income Gini coefficient. Next, This is a graphic representation of joint distribution of income and wealth in 2017 in South Korea. So on left hand side you can see low income, low wealth poor and right hand side high income, high wealth poor. So it's a highly polarized distribution of income and wealth in South Korea. So now bipolarization or polarization of income and wealth. So it is a new trend in South Korea showing increasing polarization. So it shows the picture of bipolarization of income and wealth distribution. Next one. This is the result regression based inequality decomposition. It's a more sophisticated analysis of income and wealth inequality. Try to find out some factors contributing to the income inequality and wealth inequality. You can see usual variables or factors emphasized by sociologists. Care, occupation and wealth. Other factors, education and gender is quite contrary to our expectation. So conventional factors does not explain inequality of income and wealth. Much in particular. In particular, wealth inequality is quite interesting. So conventional variables are not so good in explaining wealth inequality. Rather, income and loan are a very important factor to explain wealth inequality. I'd like to focus on effect of loan on wealth inequality because loan is a special thing in the financialized capitalism. It reflects the credit inequality. Next one. So here you can see the rich tends to have larger debts. The poor cannot get loan due to the poor credit. So we are living in a credit society. So there is credit inequality. So loan represents some good credit. So higher credits generate a higher loan. Loan is not simply debt. It represents a kind of a capability in financialized society. So a loan should be important resources generating wealth inequality. Next one. So I'd like to conclude my talk. And wealth inequality is much larger than income inequality. So we should pay attention to wealth inequality. There is some relationship between income and wealth, so I call it positive feedback loop exists between them. And also we can identify different dynamics of income inequality and wealth inequality. In South Korea, it might be applicable to other society. Traditional sociological variables are weak explaining income inequality and wealth inequality. So we should pay attention to other factors that might be very specific to each society. Finally, I call it holistic approach is needed not only in sociology and also in economics. So we need some kind of holistic approach to fully understand the rising inequality, income inequality and wealth inequality. Thank you very much.
- [48:24]
A
Thank you. Kwan Yong. I mean, fascinating remarks. And I think again the theme about the hollowing out of the middle, how the middle classes is being stripped away and the polarization, but also the point about how you're finding debt. High levels of debt overlap with high levels of wealth. So debt can be used as a leverage generate wealth resources. Finally, I'd like to introduce Svetlana Mariva. She is head of the center for Stratification Studies at the National Research University High School of Economics in Moscow. And she's an expert on social stratification, social inequality and subjective perceptions of inequality. Thank you, Svetlana.
- [49:11]
D
I would like to add a few words on the problem of inequality from yet another part of the world, from Russia. And I think that Russia is quite an interesting case because it shows example of discrepancies in different measures of inequalities, inequality in mass population, inequality between the top of the society and the rest, and finally, in perceptions of inequality in public opinion. So if we talk about inequality in mass strat of population, Russia is characterized by the medium level of income inequality on the global scale. But compared to most European countries, its income inequality level seems to be Rather high. However, that picture changes if equivalent scales are applied. The positioning of Russia improves, placing it in line with most European countries in terms of inequality in mass population. We can separately look at the situation at the lower end of distribution of incomes, which is characterized by the share of poverty. And the situation with poverty has noticeably changed in Russia during the last 20 years. Russian society has transformed from mass poverty society to a mass middle income society. The type of poverty which is connected with the problem of physical survival is currently completely non existent in Russia. And that again places Russia in line with European countries and differentiates it from other BRICS members, where this type of poverty still presents quite an important change. To show another face of inequality, of income inequality, we can use relative approach that is similar to that that was shown in the presentation on Brazil, defining different income groups based on the ratio between individuals income and the median income in the country. And if we use this relative approach, which is presented here on the graph, we can see that during the last 20 years, the median group, the middle of the society, has shown a notable expansion in Russia. We can also see the contraction of the high income and low income groups. But again, we are talking about mass society here, about those who we can see in our social service. So currently the median income group dominates in the income structure of Russian society. So we can actually call Russia a middle class society if we use middle class in its economic definition based only on income. This model of income stratification that we see for Russia is also much closer to those of European countries. It is marked by broad middle stratum. And this, this model is opposed to the models that are typical for other BRIC members or Latin American countries that have heavy bottom and heavy top among the mass population as well. However, if we look, I've been talking about mass, about general population, about inequality in general population. If we look at the income and wealth concentration. So if we look at the top of the Russian society, the picture that we see with inequalities is completely different. If we measure inequality through income, and especially wealth concentration, it shows that on a global scale, Russia is currently one of the leading countries in terms of this inequality dimension. So according to different sources, we are just the leader or in one of the five or three leading positions in the world. And this extreme concentration of income and especially wealth in Russia is usually attributed to the specific chosen transition path that was taken to a market economy and that led to consolidation of ownership in hands of selected few. And the situation has not been changing during the last 20 years. And on the Contrary, it has been getting worse because the concentration of the wealth and income in the hands of the top 1% and even less is growing. And the most drastic differences between the top and the rest are not at the level of top 10% or top 5% of population, but at the level of 1% or even less. And this gap has been growing. And these differences between inequality in mass population and inequality between the top and the rest of the population partly explains the specific reflection of the objective picture of inequalities in the subjective perceptions that have formed in the public consciousness of Russian population. As you can see on this graph, Russians continue to be very sensitive to inequality. Inequality perceptions in public opinion have not changed much since the late 90s, despite the qualitative changes in socio economic reality that has taken place during this time. So we have seen income growth, we have seen radical decline of poverty, but the perceptions of inequality are very similar to what we have seen in 99. Differences in income are seen as too large, as unfair, and there is a growing request towards the government to reduce them. And also in public opinion, the state currently fails to address the challenge of inequality. And it is important to notice that these perceptions are held by all population groups, so they are not differentiated in terms of different income or different education. So this is a universal view of the Russian population as a whole. So we have seen that there has been the growing equalization of incomes has been happening among broad segments of the population. And this growing capitalization, this averaging out of incomes in the middle and the shrinking high income segment within the mass population, with the simultaneously growing gap between the very top and the rest, do not meet the request of population, especially most educated and qualified Russians, because that implies that their chances for upward mobility are decreasing. And finally, the importance of this growing gap between the very top of the society and the rest of the population is reflected in the public opinion of social conflicts. The conflict between rich and others is currently seen as most sharp by Russians. And even those who are quite well off by mass standards, who have quite high incomes by mass standards, still consider themselves to be others, as opposed to the top. And other lines of class conflicts, typical class conflicts are not seen as sharp. So the conflict between working class and middle class, the conflict between employees and employers, they're not seen as sharp conflicts on the background of this very sharp conflict between the rich and the rest. And that also highlights the importance of bringing back income and wealth into class analysis that we have been talking about here. Thank you.
- [56:02]
A
Thank you, Svetlana. And thank you all. The Panelists for your contributions. So I think you've all posed the challenge of inequality in different sorts of ways, and particularly the role of wealth and our wealth. Taking wealth into account gives us a bleaker picture of inequality than you would get if you focus upon income. So can I just invite all of you to use the Q and A function if you've got questions to ask. If I can ask all the contributors perhaps to come on screen so we can see you and see what questions we have about half an hour left for questions. So we have a question to Professor Chun Ling from Rosa Von, independent researcher, to understand more about the links between wealthisation in China and the link between political dynamics, particularly how significant membership of the Communist Party might be in wealth acquisition and elite. You know, entering the elite in the Chinese case.
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D
Yes.
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E
The question is about an effect of working class background and Communist Party membership gain a late position. Yes, before the economical reform, working class background and party membership had strong positive effect. But now the party membership has still been very useful for gaining political elite position, but not economical. Elated position.
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D
But no.
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E
Working class don't work. Working class background don't work. Yeah.
- [58:10]
A
Thank you. Thank you. So we have some questions about wealth data, both globally and between countries. And so firstly, a question from Vincent Tam to Professor Shin, but also to all of you, I think, Professor Shin, you made a very good point about the lack of wealth data globally. Without this, a sensible policy on redistribution can't be made. Can you say more about why countries are not collecting wealth data? This probably applies to all panelists and whether in the case of specific countries, you're familiar with whether wealth data has stopped being collected. And then the links question from Sally Empson is, do any of your countries have wealth taxes? And if they do have wealth taxes, how effective are they in addressing wealth inequality issues? So, Kwan Yong, do you want to start off about.
- [59:10]
C
Yes. Above all, every government collected wealth data for taxation, but usually sociologists couldn't utilize those data because it is controlled and regulated by the government. So sociologists did a survey and used the survey data to discuss inequality. So now some other administrative data collected by the government agency can be released, and sociologists and social scientists began to analyze those administrative data. So it is a new trend in research on inequality. So in Britain and in Sweden, in Germany, in the United States, so many good administrative data used by sociologists and economists. So it is a new trend and there are very good and very important information collected by the government we can utilize. Thomas Piketty also utilized tax data in Order to explain the rising wealth inequality. So why not a sociologist so we can utilize those data? It's called administrative data. So it's good for us to develop new ideas and new research.
- [61:21]
A
Thank you. Yes, that's really important work. Really important argument about the way we need to move beyond standard survey sources and think about other kinds of data. Do any of the other panelists want to reflect upon wealth data, but also wealth taxes? Do wealth taxes have any role to play in particular countries? Louis, do you want.
- [61:39]
B
Yeah, Louis, I just try to find a solution. Do you hear me with. I have two connections. One works with the microphone and the other one with the video. It's strange indeed.
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D
Yeah.
- [61:54]
B
Currently I live and work in Luxembourg, but I'm primarily French. You detect this with my accent, of course. And of Paris, where wealth issues we have in France wealth taxes. But the current system of wealth taxes, it transfers wealth on conservative wealth. Conservative wealth, I mean, is at first real estate accumulation of non productive things. In France land, any kind of professional wealth whatsoever is outside any kind of tax. So we cannot hope from the tax system relevant information on wealth. Because after a given level of wealth, an important share of your wealth is professional wealth. I mean that if you're poor rich, you have several flats in Paris and you become a real rich when you have those flats or buildings inside common real estate fund that provides you a lot of money. But a very important information on wealth currently is that whatever the western country, the game is not to have capital gains that translates through taxes, but to have auto generative long term capital gains that are much less taxable. I mean that in France, if you have several dozens of millions of euros, it makes no sense to have this.
- [63:52]
D
Investment.
- [63:54]
B
Providing you yearly capital gains, capital incomes. The best thing is to have them in business. And so long term capital, the capital gain generated by your business is automatically reinvested to buy new flats, new apartments, new buildings, for instance, and you generate almost no income. You only generate long term capital gains. And after 25 years any kind of investment is free from any kind of taxation. Long term gains in capital when you sell your assets after 25 years is free from any kind of tax. For wage earners and whatever, it's impossible to dream of this kind of tax shelter. But if you don't sell for several decades or two and a half your wealth, you have no taxation of very long term capital gains. So that you have a tax zero on super rich on the very superb reach. And it's a weapon just to finish on wealth information for the Moment what we have in many countries is so poor that even very light information on wealth accumulation is extremely interesting to understand society. For instance, in the US panel study of income dynamics, the PSID provide relatively non sophisticated information on wealth. It's sufficient to see extreme gaps in wealth between educated and relatively high occupational groups with no wealth versus those with wealth. I mean Sarge, in the same level of education bachelor and more and in the same income quintile. Knowing the quintile of wealth is extremely important. Additional information. Maybe I can circulate some information through.
- [66:23]
A
The chat regarding this Just following up. I mean it's better on question to you coming in from Elizabeth Schumpussel about the newly introduced wealth tax in Russia. Will that make any difference do you think in the Russian context?
- [66:38]
D
Yeah, I wanted to say that we had a flat income tax rate in Russia. It was 13%. And just in 2021 we have this new tax for those whose annual earnings exceed 5 million rubles and that is about 70,000 if I calculated correctly from 13 to 15%. So that is a change for Russia because we are going from the flat tax rate to a progressive tax rate. But I wouldn't say that this is a large progressive scale. So we have only one group of people who are affected by this progressive rate and the rate is not very high as you can see. So it's 2 percentage points. So I would say that it might give some difference for the budget but I don't think that it will make a big change on the general configuration of inequality and on the general configuration on the top. That's my opinion. We'll see. But I think that.
- [67:30]
A
Andre, you want to say something about Brazil?
- [67:33]
F
Well, Brazilian government collect. Collect data information, tax, taxation and wealth. But this is not. Not public available. One has to be authorized to use it get the data from the central bank and IRS like agency in Brazil. And a few people have had access to that. One of them was Pedro Sousa. It's in the. In the last slide of my presentation and he recognized the Gini coefficient using this information and you can see there that it's way above 0.6 when corrected by this. And as Brazil has a regressive taxation system tax system so this is very, very necessary. We should be able to have access to that.
- [68:42]
A
Chun Ling, do you want to say anything about China? Is there a wealth tax in China and how easy is it to collect data on wealth in China?
- [68:50]
E
It's very difficult because just government there is a bureau of statistic they have such a kind of data but they, they don't provide for researchers. Actually, I know Piketty and his colleagues want to get. They visit China, Beijing, Shanghai and others many times, but they cannot get this data. So.
- [69:18]
C
Yes.
- [69:20]
A
Okay. So actually if you don't mind, if I can just ask a question, use my chair's privilege. You've all been talking about kind of wealthization, how wealth assets have massively increased to a greater or less extent in your countries and how that's very disproportionately affected and benefited people at the top and led to more polarization. I mean, there is a reflecting upon some of the criticisms which Thomas Piketty's argument's got, which is obviously consistent with this interpretation. One of the things which is often said about him is that he is generalizing from a particular kind of boom in property prices which has taken place in a particular two or three decades. But there's no reason to assume that it's necessarily going to be a long term phenomenon. The housing bubble has been underscored by quantitative easing and certain kinds of policies which may not continue. So how would you respond to the view that possibly we're at the top of a wave, top of a wealthization boom, but it's not sustainable and we shouldn't necessarily assume these trends are going to be enduring ones. Any thoughts on that? Andre, you're looking as if you might want to say something.
- [70:40]
F
I'm just moving over about it because the price of properties, perhaps that's not the point in Brazil, but privatization of public health and education and this is a heavy burden on the police layers of the society. That's the state actually has a lot of roles that could fulfill this wealth and allowing the population of the families to save and get wealthier. It's not just private market.
- [71:40]
A
Kelly, do you want to get in?
- [71:42]
G
I just want to add something because Brazil is a big country, is very diverse. So of course the price of housing is quite high in Sao Paulo and Rio, but can be very low in big cities in the northeast, in the north. So it's a complicated thing to deal with if we think about the global cities, like some Paulo. So yeah, that would be comparable with the situation in Europe, but the other cities maybe don't stand for the same pattern. So I, I agree with Andrea. I think it's our, our good is that's, you know, aim for many families to have education and health.
- [72:30]
A
Okay.
- [72:31]
G
It's a big deal division between the middle class, upper middle class and the poor people.
- [72:36]
A
Any other panelists want to reflect upon whether these trends towards wealthisation are going to be enduring ones or whether they're. Louis, do you want to get in there?
- [72:44]
B
Yeah, Indeed. Thanks a lot.
- [72:46]
D
Indeed.
- [72:48]
B
20 years ago I thought wealth levels were entirely crazy and could not reach. But over the last 20 years, housing prices in Paris doubled, even if they were already extremely high. And if you look to the very long term asset values before the First World War, for instance, we can expect even a new doubling in France and in the UK to come back to the extreme inequalities, to the extreme inequalities of the past. Another element that is very important for wealth inequalities is the dynamics we observe in the US for the last 15 years. If you want in the US, the boom of the gene indices of wealth distribution is also due to the fact that median class, if you don't want to speak of middle class, the median class wealth is more and more often negative when you consider the net wealth after the effect of debt. And it's not only the top wealth that increases, it's also the median wealth that is converging to something like zero minus something.
- [74:21]
A
Okay, so there's another question in the Q and A also about policy from Derek Lough. What role do you see movements for wealth transparency playing in reducing wealth inequality in the near future? And obviously there's been these leaks such as the Panama Papers and Paradise Papers and there's campaigns for wealth transparency and for income transparency. How significant do you think those might be? Any of you in your countries?
- [74:51]
F
May I?
- [74:53]
A
Sure.
- [74:54]
F
I answered that. I see that Brazil, Brazilian government has no, it's not moving toward more transparency at all. And the future is. The next future actually is bleak.
- [75:19]
A
Right. Does anyone else want to offer a more optimistic view or is that.
- [75:26]
D
I would say my view is optimistic, but I'd like to say that for Russia, I think unfortunately this movement do not play a big part. The only changes that can be made can be made by the policy. And unfortunately in our case, these movements from the population are not seen as important as forming the political agenda. So the question lies not in the actions from the population, but actions from the government.
- [75:52]
A
Yes. Thank you. Good. Anyone want to speak a name? Yeah.
- [76:00]
C
Oh yes. I think the transparency of some information about wealth is a variable affected by the level of democracy. And so transparency of wealth information is directly affected by the level of democracy and some kind of. Some citizens engagement in monitoring and the process of taxation and some government behavior in collecting tax. And that kind of bureaucratic secret can be monitored and controlled. Eventually more transparent governance can be made by the citizens engagement. So now newly democratizing society like South Korea we can see lots of improvements in tax administration and also some kind of raising tax is quite important issue among politicians and also among different interest groups. So tax system itself is an outcome of democratic process.
- [78:05]
A
Thank you. Chun Ling, do you want to speak about transparency in China?
- [78:10]
E
Yes, yes. In recent decade Chinese government do a lot of work to promote transparency of wealth especially to government officials and also tax institutions collected a lot of information rich people. So I think it's work to.
- [78:45]
D
The.
- [78:45]
E
Government doing good work to control the wealth inequality but just some extent not very, very effective. However, I think the Chinese case maybe is not available for other countries because Chinese government is very strong they can do that and do successful to anti corruption campaign. So indeed we reduce some official income and wealthy something.
- [79:31]
C
Yeah, thank you.
- [79:33]
A
And there's a question questions about again about policy. So several of you were talking about how the top 1% or the top fractions have done really well. They're the major gainers. I mean how. How feasible do you think it would be to actually target policies particular specifically at that very small group, whether it's in the form of a wealth tax or inheritance tax or some other mechanism? Because in a way there's a danger, as you were saying in the Russian case of Armour, there's a danger that an aggregate policy is going to miss this key grouping. Any thoughts on that? Is it feasible to target this very small group who've done it particularly well? Louis?
- [80:14]
B
Indeed. Maybe you will think I'm very pessimistic indeed since I have two computers. I think if you want to see my face, maybe it's necessary to switch to anyway. Indeed. I don't want to sell the books of others, but Walter Scheidel Gret le Wer is extremely interesting to understand the long term dynamics of inequalities in the world from the stone age to 21st century. It's very modest title your subtitle you see. Anyway, the argument of the book is that in the normal dynamics of the world, inequalities are increasing and accumulating. To have a reduction of inequality for Walter Scheidel, you need four principal events. Total war, Violent revolution with millions of casualties, collapse of the state or massive epidemic like the Black Plague or something like that. COVID 19 is certainly too modest to change something in the direction of reduction of inequality. So it's not targeting the top 1% that can change something. It's big events such as a revolution or any kind of and it happened in the 30 years after the First World War. First World War was the first total war. And in the next 30, 40 years, you have had a massive reduction of inequalities due not only to epidemies, but also revolutions, wars and collapse of states. Okay. You will think that my social policies are relatively inappropriate for peace and better future.
- [82:23]
A
Do any of the panelists. This is probably the last question we've got time for. Do any of the panelists want to finish off with any thoughts about 1%?
- [82:30]
F
Just would like to say that this 1% are the dominant class in sociological terms and they have the judiciary and they are in the legislative. And it's just with something like what Chevelle said that they would bend to move more open to tax, to change the tax system. Not least in Brazil, that is really regressive. The poorer you are, the more you pay proportionally. And that's no way to. This is a rule, actually. There's no way to change that.
- [83:24]
A
Svetlana, do you want to add anything on Russia?
- [83:27]
D
Well, for Russia, I would say that it's not only an economic issue, but it's in very close connection to the political structure of Russia. So we often say that Russia is neo autocratic society where your position is determined not only by economic assets, but your connection, your position in the political structure. So this top 1% are not only well off in terms of business, in terms of wealth, but also in politics, power. So it really is another challenge in dealing with this group.
- [83:55]
A
Yes. Chun Ling, do you want to say anything? Fine. About China?
- [84:00]
E
Yes, I think as for the policy for reducing inequality, China have a lot of they know the government know a lot of lessons how to reducing poverty, but no less to control the top rich. Wealth accuration, you know, accumulation that is difficult to do that. No lesson for other country or something.
- [84:41]
D
Yeah. Okay.
- [84:43]
A
And finally, Kwang Yong, do you want to mention anything about South Korea?
- [84:46]
C
Yes. In South Korea, there is a group, chaebol. It's the largest. In the past it's a national capitalist. Now it's a global capitalist like Samsung and sk. So just very concentrated ownership in the.
- [85:12]
A
Economy.
- [85:14]
C
And the democratic process is one part of the strong control over some economic tycoon's behavior in politics and also in the economy. So very developed democracy, good democracy might control and also regulate the behavior of big capitalists.
- [85:52]
A
Thank you. Thank you. We reached the end nearly. I want to thank all the panelists. It's been so I think we're seeing the value of a sociological perspective on wealth. There's lots of room for cross Fertilization with the work of economists. To finish, I do want to briefly return to the fact that all these papers are online on the Journal of Chinese Sociology and to encourage you all to read it. And I'm going to pass on to May Chow to say a few words about the journal. Are you there, May?
- [86:20]
H
Yes. Thank you. Hi everyone. I'd like to first to thank all of you for participating in this special issue and thank Mike and Professor Li Chuning for organizing it. And it's a great honor to be able to launch it on the very prestigious platform of the LSE Public Lecture Program. I'd like to say a few very brief things about our journal. The Journal of Chinese Sociology is sponsored by the Institute of Sociology, the Chinese Academy of Social Sciences and published by Springer Nature. We welcome high quality work from all areas of sociology and sociologically informed contributions from anthropologists, economists, psychologists and political scientists. We are a peer reviewed and open access journal and over the past five years the 100 plus journals have already had over 300,000 downloads. So it really helped us to reach a much wider audience. And currently we are fully sponsored. So basically you publish open access, but for free. You don't need to pay the APC fees. So please do check out our journal and consider publishing with us. Thank you.
- [87:43]
A
Thank you May and thanks to all of you. Thanks to all the panelists and hope you enjoyed it and hope to see you again soon at the LSE Public events.
- [87:51]
C
Thank you. Thank you. Bye bye.