Podcast Summary: "Wealth Inequality Across the Globe"

Podcast: LSE: Public lectures and events
Date: February 18, 2021
Host: Mike Savage (LSE Film and Audio Team)
Panelists:

• Louis Chauvel (University of Luxembourg)
• Li Chunling (Chinese Academy of Social Sciences)
• Andre Caetano (Catholic University of Minas Gerais, Brazil)
• Kwang Yong Shin (Chung-Ang University, South Korea)
• Svetlana Mareeva (National Research University Higher School of Economics, Russia)

Overview

This episode addresses wealth inequality from a sociological perspective, moving beyond traditional economic analysis. Experts from Europe, China, Brazil, South Korea, and Russia compare how wealth—distinct from income—has come to drive social stratification, polarize societies, and challenge assumptions about the middle class. The episode draws on research published in a special issue of the Journal of Chinese Sociology, itself a product of international collaboration.

Main Discussion Points and Insights

1. Framing the Global Wealth Inequality Challenge

Speaker: Mike Savage
(00:00–04:38)

• Sociologists offer new perspectives on inequality, traditionally led by economists.
• The focus shifts toward wealth and “wealthisation”—the growing importance of assets over income.
• Middle-class societies, once robust post-WWII, are now hollowing out, with wealth polarizing populations.

2. The Centrality and Consequences of Wealth Inequality

Speaker: Louis Chauvel
(04:38–20:53)

• Wealth's significance has surged since the 1970s; it now increasingly overshadows income as a driver of social structure.
• Chauvel introduces the "strobiloid" metaphor—societies once with a broad middle are now more hour-glass shaped, especially in terms of wealth (large numbers with low/negative wealth, a few with sky-high fortunes).
• Housing markets exemplify the disconnect: e.g., in London or Mumbai, it would take lifetimes of average income to buy a flat.

“In London, it’s 136 years [of average salary] and in Mumbai, it’s 300 years to buy a standard apartment.” (08:30, Chauvel)

• Wealth to income ratios have doubled or more in the last three decades across Western nations.
• Top 1% now hold what would amount to centuries of average income—a trend reviving inequalities reminiscent of the pre-WWI era.
• The “re-wealthization” or patrimonial society undermines middle-class stability, spurring social segregation, and possibly violence.

“For the middle class members, it’s very difficult. But of course, for the working class it’s even worse.” (13:30, Chauvel)

3. Case Study: China’s Distinct Wealthisation

Speaker: Li Chunling
(22:17–28:34)

• China has transformed from a society where virtually no one owned property 30 years ago, to one with 90%+ home ownership.
• The driver: marketization and privatization, rather than inherited wealth.
• Housing accounts for 71% of Chinese family wealth; housing inequality now exceeds income inequality as a driver of social gaps.

“In 1988, only 14% of Chinese families had housing ownership…now more than 90% have housing property.” (24:30, Li)

• Emerging “wealth-based classes” cut across traditional occupational divides; even within classes (middle, working), wealth divides foster new distinctions.

4. Case Study: Brazil’s Stalled Middle Class Dream

Speaker: Andre Caetano
(29:20–35:57)

• Income gains in early 2000s raised hopes of a “new middle class”; these advances reversed post-2008, especially for women, black, and rural populations.
• Data shows income group distributions remained stubbornly stable (with poorest and richest groups stationary).
• Socioeconomic barriers persist; schooling gains mainly benefited those already privileged.

“Living standards depend heavily on economic growth. Rising income without distributive policies are insufficient to change the stiff Brazilian socioeconomic stratification.” (35:44, Caetano)

5. Case Study: South Korea’s Polarization and the Limits of Data

Speaker: Kwang Yong Shin
(36:46–48:23)

• Critiques conventional inequality research: household surveys undercount the rich and overlook non-working populations; administrative/tax data is needed.
• Wealth inequality (Gini coefficient ~0.57) dwarfs income inequality.
• Bipolarization: sharp divide between low-income/wealth and high-income/wealth groups.
• Debt/loans play a complex role—wealthy use credit as leverage, while the poor lack access.

“We missed another half [of social inequality]. That’s my argument.” (41:54, Shin)

• Advocates a holistic approach, incorporating wealth, debt, household structure, and administrative data.

6. Case Study: Russia—Expanding "Middle" and Extreme Top Concentration

Speaker: Svetlana Mareeva
(49:11–56:02)

• Median incomes have grown and poverty has dropped—Russia now resembles a European-style “middle-class” society on mass metrics.
• BUT: At the top, wealth/income is hyper-concentrated among a minuscule elite, a legacy of privatization during the market transition.
• Public views income gaps as unfair; 1%–5% top bracket increasingly isolated.

“This gap has been growing… the most drastic differences are at the level of 1% or even less.” (53:35, Mareeva)

• Perceptions of inequality and conflict with elites are widespread, transcending income/education lines.

Notable Quotes and Memorable Moments

• On the "Return" of Wealth Inequality:

  "Wealth is back... the US today is like the US before the First World War." (14:55, Chauvel)

• On Middle-Class Squeeze:

  "The challenge of wealth inequality is to look at this missing middle, how the middle is being stripped out..." (20:53, Savage)

• On China's Wealth Growth:

  “Chinese wealthization is accumulation and aggregation, driven by marketization and privatization… a different process from the West.” (22:40, Li)

• On Brazil's Social Mobility:

  “Brazil is not heading toward a more equal income distribution nor toward a middle class society… The advances of 2001–08 were overturned.” (35:51, Caetano)

• On Data and Policy:

  "Above all, every government collects wealth data for taxation, but usually sociologists couldn’t utilize those data..." (59:09, Shin)

• Policy Pessimism:

  "It’s not targeting the top 1% that can change something. It’s big events such as a revolution or total war." (80:14, Chauvel)

• On the Dominance of Elites:

  “This 1% are the dominant class in sociological terms… There’s no way to change that.” (82:30, Caetano)

Timestamps for Key Segments

• [00:00–04:38]: Introduction – The sociological turn in inequality study (Savage)
• [04:38–20:53]: Framing lecture – Wealth as a central axis of inequality, global comparison, the “strobiloid” society (Chauvel)
• [22:17–28:34]: China’s housing-based wealthisation (Li Chunling)
• [29:20–35:57]: Brazil’s income stagnation and persistent inequality (Andre Caetano)
• [36:46–48:23]: South Korea’s data challenges and wealth polarization (Kwang Yong Shin)
• [49:11–56:02]: Russia’s expanding middle, extreme top concentration, and public perceptions (Svetlana Mareeva)
• [57:18–79:30]: Q&A – Wealth data collection, taxes, transparency, prospects for reform
• [80:14–85:52]: Policy targeting the top 1%; prospects and limits of change

Panel Q&A — Wealth Data, Policy Tools, and The 1%

• Data Challenges: Access to detailed wealth data is politically sensitive and often restricted, limiting scholarly analysis and policy intervention.
• Wealth Taxes: Existing wealth taxes are either ineffective or target “conservative” rather than productive wealth (e.g., France, Russia). Public data is scarce.
• Transparency Movements: Respondents were largely pessimistic about transparency driving change, except in some emerging democracies.
• Targeting the Top 1%: Skepticism about incremental reform—major reductions in inequality, historically, followed wars, revolutions, or state collapse (Walter Scheidel reference).

Closing Thoughts

• Wealth, and the inequality associated with it, is rapidly reshaping societies globally.
• Sociological approaches reveal nuances—class fragmentation, new divides within social groups, and the intersection of politics and wealth.
• While policy solutions appear elusive or limited without major structural change, comprehensive data and sociological understanding are foundational for addressing the challenge.

Further Reading:
All research papers discussed are available open access in the Journal of Chinese Sociology.