Ideas - The Return of Inequality | Lessons of History

Episode Date: May 10, 2024

In 2016 Jennifer Welsh delivered her CBC Massey Lectures, The Return of History — a wake-up call to those of us who may have felt a little too optimistic about the future after the fall of the Berlin Wall. IDEAS revisits the final lecture in her series, The Return of Inequality.

Hey there, I'm David Common. If you're like me, there are things you love about living in the GTA and things that drive you absolutely crazy. Every day on This Is Toronto, we connect you to what matters most about life in the GTA, the news you gotta know, and the conversations your friends will be talking about. Whether you listen on a run through your neighbourhood, or while sitting in the parking lot that is the 401, check out This Is Toronto, wherever you get your podcasts. This is a CBC Podcast. One of the greatest defences of inequality,

its last bastion, if you will, is the argument that levels of wealth are justly earned. Welcome to Ideas. I'm Nala Ayyad. Those who have more have worked harder. They possess special talents. They've taken extraordinary risks. But in today's world of inequality, this is much harder to sustain as an argument. Canadian political scientist and 2016 Massey lecturer Jennifer Welsh.

Her Massey lectures were called The Return of History. And the clip you just heard is from the fifth and final lecture, The Return of Inequality. Fairness is part of liberal democracy's very DNA. Unless we are prepared to also address wealth inequality, we are not changing the entrenched patterns that are undermining fairness. In the late 1980s, Francis Fukuyama famously wrote of the end of history. He argued that the collapse of communism had settled the long battle over how people should be governed. Western liberal democracy had won.

Social, political, and economic progress was assured across the world. But Jennifer Welsh's 2016 lectures took a hard look at what was wrong with those expectations of liberal democracy. Jennifer Welsh is Canada 150 Research Chair in Global Governance and Security at McGill University, where she is also Director of the Centre for International Peace and Security Studies. She is from Regina, Saskatchewan, and is of Métis descent.

As part of Massey College's 60th anniversary celebrations, she sat down with IDEAS executive producer Greg Kelly to talk about her 2016 Massey Lectures. You can hear that episode on our podcast feed or online at cbc.ca slash ideas. Tonight, we present an encore of Welsh's fifth and final lecture, The Return of Inequality, recorded live in Toronto in 2016. Thank you so much.

This past couple of weeks, delivering the Massey Lectures have allowed me to get reacquainted with my country, have also reminded me of how big this country is, from Vancouver to Halifax, with Winnipeg and Saskatoon in between, and now in Toronto. And the wonderful thing about being asked to be the Massey lecturer is that you're told that you can talk about whatever you want.

And I thought for a long time about what would be the best way for me to structure the lectures, what to talk about, but what I really wanted to do was blend the personal and the professional to talk about the future of liberal democracy as I see it, not just in terms of the troubling global landscape, but things that are happening at home. Because you see, it's the conceit of every generation to think that it's living in extraordinary times.

living in extraordinary times. For my parents, it was the Second World War and the miracle of post-war reconstruction. For my older siblings, it was the civil rights movements of the 1960s. And for my generation, it was the end of the Cold War. It was hard for us all to keep up with the speed of the change, the spreading of revolution that ultimately reached the Soviet Union itself. In my first Massey lecture, I tried to paint a picture of the optimism of that time, of the thesis, that audacious thesis of Francis Fukuyama, that what we were seeing was not just the end of the Cold War confrontation, we were seeing the end of history, as he defined it in Hegelian terms, as the end of a struggle between ideas, the triumph of liberal democracy as the world's top economic and social model.

Those years were very formative for me, and I think for many of my generation. We started our working lives, to put it glibly, thinking things can get better. And that's certainly how it felt. But it's my thesis in these lectures that history's not been transcended, that history is returning in some very troubling ways. It's returning in terms of barbarism, mass flight, and the return of Cold War-like confrontation with Russia. And taken together, I believe that these trends show that the West hasn't won in the way that we believed in 1989. And we in the West have had a hand in that hollow victory. It is a world of our making. Now, most of the manifestations of the return of history are out there,

the ones that I've talked about. And certainly, in my professional life as a scholar of international relations, that's what I've focused on. But as I wrote the book and I was writing the lectures, I also wanted to reflect on what was happening right here inside liberal democracy. I wanted to come full circle and gaze inward. And so I want to shift tonight from the big and sometimes intractable issues like migration and war and talk much more about what's going on in our own cities and our own communities and the way that history is returning in the form of extreme inequality. The weakness of the end of

history thesis applies just as much inside our borders as it does outside. Liberal democracy itself is less stable and less admirable than it was at the end of the Cold War. And I think we should also be less confident and complacent about its longevity. In addition to showing how inequality has returned, I want to talk about its corrosive effects. As prominent economists have recently argued, economic inequality is also bad for the economy in ways that neoliberals didn't want to admit. But what I also want to focus on is the way that it affects social cohesion and even individual behavior. It affects our sympathies.

It affects our moral sentiments. I want to challenge the myths that continue to circulate that inequality somehow helps our economies grow and that it is the just result of hard work. And I want to talk instead about how I think it is undermining contemporary liberal democracy. Grand narratives like The End of History, like Fukuyama's book, can make us very resigned and overconfident about the stability of our own system. And I think it's time to shake that up. So let me start by talking about the contours of today's inequality, because one of the most often cited benefits of globalization is its fostering of economic growth, and by implication, its contribution to reducing poverty levels worldwide.

So Branko Milanovic, who for a decade was the World Bank's chief economist, has showed us how the mean incomes of countries across the globe have started to converge since the end of the Cold War. So according to his data, the two decades between 1988 and 2008 marked the first decline in economic inequality between world citizens since the dawn of the Industrial Revolution. And we've seen a decrease in the number of people living on $1.25, it now is, per day, which is the World's Bank measure of extreme poverty. These figures undoubtedly signify progress, But globalization has winners and losers.

Those at the top of the economic pyramid, those in the so-called global 1%, have done spectacularly well. They've increased their incomes by 60% during this 20-year period. Now, when he penned his end of history thesis, Francis Fukuyama praised America's egalitarianism. He described the society as the essential achievement of a classless society. Sure, there were gaps between rich and poor that still existed, but they were not due to any legal or social arrangements. The United States,

Fukuyama believed at the time, had formally erased existential inequality. Inequality between individuals on the basis of their identity, whether that's race, gender, or sexual orientation. And it had done that through progressive laws and social mores that gave every citizen an equal chance to realize her dream. Well, today, the leader of the world's liberal democratic club also has the dubious honor of having the highest level of income inequality. And as we know, in 2011, in the financial district of New York, the Occupy Wall Street demonstrations began with their famous ratio of 1 to 99,

trying to capture this discrepancy between the richest 1% who were bringing home 20% of national income and the rest. But again, the gap's even greater when we consider wealth, which is based on ownership of assets. In 2015, the wealthiest 1% of Americans held 35% of the country's wealth. And that concentration actually increased when you took housing assets out of the mix. And of course, even within that 1%, as Canada's own Chrystia Freeland has written about, you have the super, super rich, the 0.1%, who take home just over 11% of America's total income. percent of America's total income. And increasingly, that super rich is constituting a nation unto themselves. But their affluence is occurring against a backdrop of significant underemployment,

stagnating incomes, and declining living standards among ordinary Americans, the hollowing out of the middle class. Now, these trends, among other things, deal a mortal blow to the theory of trickle-down economics, which was made so popular during the Reagan era, which theorizes that when the rich do well, the rest of the population also benefits. But this pattern of inequality repeats itself to varying degrees in other liberal democracies. So we should be wary of falling prey to this idea of American exceptionalism, that they're the outlier. Yes, they're the most extreme example, but it's happening in many liberal democracies. In Canada, over the past three decades, the top 1% of Canada's income earners captured 37% of income growth in this country.

And all of this has a very local dimension to it. David Hulchansky, who's a professor of housing and social work at the University of Toronto, has written a fascinating study entitled, The Three Cities Within Toronto, about the geographic distribution of inequality and the gradual creation of an island of wealth surrounded by poor suburbs. We are setting up, he says, two extreme lifestyles. One where people struggle just to get by, and another where every option in the world is open to them. But even more alarming for me is the source and the nature of today's inequality, and in particular how it's undermining the meritocratic values that are so crucial for liberal democracy to thrive. So Thomas Piketty in his book posits that when

countries have a high capital income ratio, as they did in the late 19th century, accumulated and inherited wealth becomes the most determining factor of an individual's well-being. And so this is why so many 19th century novels are about marrying into wealth, or the struggle of the poor to reach affluence, as in Mark Twain's book, The Gilded Age. And so ever since, the whole idea of a gilded age has become a metaphor for a historical period in the late 19th century, when the United States, as well as Great Britain and France and Russia, saw a combination of materialist excess and poverty. So on the one hand, this period gave rise to haute couture, Victorian architecture, but of course, on the other hand,

it gave rise to the Dickensian slums and the passage of poor laws that tried to limit who could gain economic relief. So in shifting our gaze back to that era, today's economists of inequality, and there's a growing number of them, have reminded us of its dark underbelly. Contemporary economic disparity is primarily driven by the ownership of assets, much in the same way as it was in the run-up to the First World War, when wealth was concentrated in the hands of a few rich families. And in this era, capitalism was automatically

generating arbitrary and what proved to be unsustainable inequalities. But remember, history never repeats itself fully. It returns with a modern twist. So one of the things that's interesting about our period today is that more and more people within the 1%, the top 1%, are wealthy both in terms of their salaries, their income, and their ownership of assets. So labor and capital isn't separated in the same way as it was, say, in the era of Downton Abbey. But the implication remains the same. Individuals will become better off not

primarily through a lifetime of hard work, as suggested by the American dream, but through how much capital they inherit. So as the American economist and columnist Paul Krugman put it recently, it's generally more valuable today, in the second decade of the millennium, to have the right parents or to marry into having the right in-laws than it is to have the right job. I think by presenting these cold, hard facts, the economists have done us a huge favour. And they've contributed to a greater willingness to talk openly about inequality. And they've also laid bare many of the planks

of the received wisdom of how modern Western liberal economies were meant to develop in this century, but also beyond. And one example is something in economics called the Kuznets curve. Some of you may be familiar with, named after the famous post-war American economist Simon Kuznets. And he argued that as societies underwent industrialization, as ours did, they would initially become economically unequal, but then over time would move into a period of declining inequality as economic growth took effect. And through an increasingly skilled labour force and an educated labour force and broader social transfers, richer countries would become more egalitarian.

And he seemed for a long time to be right. But the work of today's inequality economists offer a very different picture. They argue that in retrospect, the decades after 1945 were not a story of unfettered progress, which might be repeated elsewhere, but actually a blip in history, a function of very specific economic conditions like war, drought, economic recession. Those are what brought about the leveling of inequality in the 20th century.

But now the trend is reversed. So the future that the economists paint for us is one of low-growth capitalism combined with high levels of inequality and low levels of social mobility. And certainly the entrenchment of deep inequality is creating a global super elite, which is forcing us to revise our collective conceptions of what's fair and what's just.

So how does inequality really challenge liberal democracy? After the end of the Cold War in 1989, economic growth seemed to be the inevitable product of the spread of globalization. And within Western societies, the focus of social democratic parties, new labor in Great Britain, the New Democratic Party here in Canada, was on poverty alleviation rather than addressing broader and deeper forms of economic inequality. British politician Peter Mandelson, in 1998, famously quipped that his party, his new Labour Party, was intensely relaxed about people getting filthy rich as long as they pay their taxes.

And that was the mantra of that time, because tax policy was designed to address poverty, to bring people up above the poverty line, and to improve and expand social services. And what happened above that basic level was deemed acceptable in the name of economic growth. Now, those gains in terms of poverty alleviation were undoubtedly substantial and they were just but there's a number of reasons why we can't just focus on absolute poverty levels, why relative positions also matter in a society. It's important for maintaining the health of liberal democracy. So to put it another way, extreme economic inequality,

especially at today's historic levels, cannot, I believe, be accepted as part and parcel, an inevitable result of capitalism. Now the first and most basic reason why we should care about inequality and not just absolute levels of poverty is it's bad for the economy. In the book by Nobel Prize winning economist Joseph Stiglitz, The Great Divide, he debunks this idea that increased inequality is the corollary of economic success. If the top 1% is reaping the majority of the benefits of the growth in income, he asks, then how can the middle class be strong enough to create the kind of consumer spending that's traditionally fuelled economic growth? So what happens? The vast majority end up borrowing,

usually beyond their means. And this was, of course, the theme of Margaret Atwood's wonderful 2008 Massey lectures, debt. The International Monetary Fund is also warned about the negative economic effects of inequality, particularly on efficiency and stability. The fund's research has shown us that countries with high levels of economic inequality tend to be marked by lower rates of growth and higher levels of instability, thus challenging the oft-heard argument that if we proceed with equality, we're going to damage the economy. So findings like these have prompted the search for alternative proposals for how to conceive of economic growth beyond measures like growth

domestic product. We also know that public health researchers have argued for the need to evaluate societal success with a broader array of measures beyond just economic ones. And what they find is that mental illness, drug addiction, obesity, loss of community life, imprisonment, all increase in prevalence as societies become economically unequal. So the effects of inequality are not confined only to the poor. They damage the entire social fabric. So that's the first reason why we need to care about inequality. The second and obvious reason is that it can very quickly translate economic inequality into inequality of opportunity. And this result runs very counter to the mantra in the US that anyone can succeed in America. seed in America. Those in the top echelons can afford to buy privileges for their children, for their families, particularly in the realm of education, and provide more direct access to certain kinds of jobs and opportunities. And they're also less likely to see the need for

common public infrastructure, including public transportation. So these trends, these features, chip away at Fukuyama's image of the classless society and raise questions about an exclusive focus on addressing existential inequality. Citizens of liberal democracies have used law to win very important battles of equality. And we should celebrate these victories. But they are not enough. They are insufficient to reduce social injustice. While legal equality puts everyone on the same starting line, it does not care, in Milanovic's words, that some come to the starting line with a bicycle and others come with a Ferrari. Now, this erosion of equality of opportunity is even more problematic if we accept

Stiglitz's claim that the earnings of the top 1% are not always just desserts for their contribution to society's prosperity. And this is where the argument really starts to hit a raw nerve. Because for those who live in contemporary liberal democracies, one of the greatest defenses of inequality, its last bastion, if you will, is the argument that levels of wealth are justly earned. Those who have more have worked harder. They possess special talents. They've taken extraordinary risks. But in today's world of inequality, this is much harder to sustain as an argument. With some notable exceptions, and we can all think of examples, the individuals at

the top are not usually those who have engineered great innovations for society's benefit, nor are they necessarily the greatest job creators. Instead, the vast majority within the 1% pursue what economists call rent-seeking, appropriating a greater share of the existing pie rather than enlarging the pie. And many derive their wealth from connections, whether familiar or political. So that's a second concern about inequality. The third, which has long bothered political theorists, is the potential for economic inequality to turn into political power. This dynamic eats away at liberal democracy's fundamental premise, that each citizen ought to have an equal voice in political decision-making and have their voice heard.

Now, it is long been suspected that wealth buys political influence. We've all heard that. And what's interesting is that political scientists have started to give us the proof. So Martin Gillens, for example, has amassed some fascinating evidence examining the outcome of and attitudes towards thousands of proposed policy changes in the United States. And he shows very convincingly that those public policies that are favored by the wealthy, for example, in the realm of taxation, are much more likely to be acted upon by political representatives than those that are favoured by the less well-off. So there's a feedback loop that's been established

whereby economic inequality translates into political inequality and political inequality creates further social stratification. And this is why so many commentators have begun to refer to the United States as a plutocracy, not a democracy, ruled by the rich. As Stiglitz memorably quipped, U.S. politics is no longer about one person, one vote. It's about one dollar, one vote. And even if those who hold public office are not at the top echelons of the wealth hierarchy, the rich in America have disproportionate influence over who holds office and the actions

that they take. Now, there's a variety of factors, again, that would explain this, to explain the strong relationship between the preferences of affluent Americans and particular policy outcomes. And I won't elaborate on them here, but they're the stuff of political science. They're about party financing, particular party structures, and the dominance of special economic interest groups. But the broader point I want to make here is that there's something else going on. There's a lack of genuine political

competition in the realm of ideas. There's a convergence on a narrow set of ideas that's undermining representative democracy in the United States and potentially elsewhere. Let's call it a deficit in political will and imagination. Jennifer Welsh, delivering her lecture, The Return of Inequality. It was the fifth and final of her 2016 CBC Massey Lectures. As part of the 60th anniversary of Massey College, we're revisiting some of the Massey lectures presented by Ideas over the decades. You can also hear Jennifer Welsh in conversation with Greg Kelly about her further reflections since she gave the Massys.

That episode can be found online at cbc.ca slash ideas, or wherever you get your podcasts. You're listening to Ideas on CBC Radio 1 in Canada, across North America on US Public Radio and on Sirius XM, in Australia on ABC Radio National and around the world at cbc.ca slash ideas. I'm Nala Ayed. I'm Nala Ayyad. it is an attempt to explain what vision loss feels like by exploring how it sounds. By sharing my story, we get into all the things you don't see about hidden disabilities. Short Sighted, from CBC's Personally, available now. At each stop on her Massey lecture tour, Jennifer Welsh talked with someone from the community about the personal element of the big issues she was tackling.

In Toronto, she met with Sherry DeNovo, social justice activist, former NDP member of the Ontario Legislature, and minister at Trinity St. Paul's United Church. A quick note, the statistics cited by DeNovo reflect the situation in 2016, eight years ago, well before the pandemic. For one thing, the number of Toronto families awaiting affordable housing has increased since this episode first aired by about 20%. So let me make the discussion about inequality really immediate, really local, and ask you about Toronto and what you see in this city, how it's changed, and how inequality manifests itself? Sure. Well, in one generation, my generation, we've gone from where you could afford a house on one salary and have a car in the driveway. And if you were middle class, possibly a cottage in the country to a place where two salaries will barely get you a down payment on

a small condo. You will never own your car and only the wealthy can own a second property. Now we're back in the 30s. We have food banks. Now we have over 70,000 families waiting on affordable housing, wait lists. You can barely walk around the streets of downtown Toronto without stepping over someone who's sleeping on a grate. Over 50% of Ontarians work in precarious labour. That is contract, temporary, non-sustainable jobs. So this is the new employment field where you've got people on minimum wage who cannot make ends meet. And we've cut our social service assistance rates to the point

that you cannot live on them, that you have to live in a shelter because of them. So it's a pretty grim picture. And it's not a picture that I grew up with. It's changed in one generation. The question is, where do we go from here? How do we turn this train around? And I guess what interests me when I listen to you describe how the city has become is what that does to democracy. I mean, if you look at democracy's foundations, it's about fairness, it's about equality. Does that ultimately begin to cut at the very system we've got? Well, I see capitalist so-called democracy as not really very democratic at all, never has been. But now it's even less so, let's put it that way. So what really makes decisions in a place like

Queen's Park or a place like the House of Commons is money. Money makes those decisions. And when you look at what decisions are made, they're made on behalf of large corporate interests here as in the States. And why? Because those are the large donations made to political parties. It's that direct. And I think, you know, when you understand that that's the way our so-called democracy works, you understand why the laws are made the way they are and who they're made for and who they're made against.

And we have to own that. We have to understand that if we're going to make a difference to that. And so where do you begin to make the change? Because what I've observed is we don't even seem to have the language anymore to critique our system. Well, actually, I like to point to jurisdictions that do it better. I think that's realistic. They're not utopias, but they do it way better than we do, and there's lots of them. So there are 22 countries that have free post-secondary education.

Think about that. Go to Scandinavia. You'll get free dental care and almost free child care. You'll have a house to live. And 85% of them have union jobs, even those who work at McDonald's in Sweden. And the response I got from their MPs was, well, nobody would eat there if it wasn't unionized. So let's look at jurisdictions that do it better. And we can do that. We keep looking south of the border to where it's far worse, instead of to jurisdictions where it's far better and understanding how they get there.

First of all, taxes, you know, something that we need to pay. And those who are wealthiest need to pay more and corporations need to pay taxes. A lot of them don't. They don't pay, you know, significant taxes at all because, of course, they have offshore companies. That has to come to an end. taxes at all, because of course they have offshore companies. That has to come to an end. So, you know, until we get to utopia, let's just do what other people are doing and let's do it better. It seems that we have a sense almost that our system is failing and then we completely abdicate responsibility. But what I hear you saying is that it may take individuals

simply saying no or doing things differently. Well, whole groups of people saying no. And we've seen this, but we need more. We need people to start getting very angry, angry and in the streets and speaking up. That really is an organizational question for activists. I consider myself an activist as well as a politician. I'm a raging socialist, but I also want to get things done. It is possible to do both. You can actually, you know, get decent legislation passed and also want fundamental change because actually it's worse today than

it was back then in many ways. And we need that voice again. So way to go, Occupy movement, but let's keep it going. Way to go Black Lives Matter. The more that people organize around issues that are salient, and the more that they do it radically, and they don't take no for an answer, the better it will be, and the more we'll get things done and change. We might even survive as a planet. Jennifer Welsh in conversation with politician and social activist Sherry DeNovo. And now, back to The Return of Inequality. Here's Jennifer Welsh with the fifth and last of the 2016 CBC Massey Lectures. In the age of acquiescence, American labor historian Steve Fraser laments what he sees

as the incapacity of Americans to imagine a better system to predatory capitalism. The mid-19th century and early 20th centuries were a time of outrage, of protest, of attempts to change the status quo. And this popular mobilization contributed to progressive change. But today, by contrast, if you look around, there's still far too little popular challenge to similar levels of economic inequality that we face today. Yes, the Occupy Wall Street movement stole the headlines for a while, but it ultimately fizzled, given a lack of agreement among its members on a concrete agenda, and its unwillingness to engage, even at a minimum, with established political institutions. Most 21st century Americans, and the same might be said for citizens

of other liberal democracies, have by and large submitted to a system whose permanence they assume. So as a result, any political figure who dares to question the excesses of inequality is characterized at best as part of the fringe, or at worst, a threat to national security and prosperity. The media response to the staying power of Bernie Saunders, his policy platform again included things we've talked about over the decades, a minimum wage, free tuition at public universities, implementing more progressive taxes. Regardless of how you feel about each of those individual elements, the fact that they're not seen as part of normal political discourse, that somehow Sanders was way out in left field,

is remarkable. And all of this raises a broader political point, that what we are seeing today in terms of economic inequality is not something that's been thrust upon us by historical forces. It's the result of conscious policy choices. After all, if the laws of economics were so universal, why is inequality not rising at the same levels in every part of the capitalist world?

Why do some jurisdictions, including liberal democratic jurisdictions, do things differently? Now, in many of today's liberal democracies, the alternative to the plutocratic system that we're seeing in the United States seems to be an angry populism that reflects the increasing frustration of the middle class. So if equal opportunities undermined and merit no longer secures your advancement, if political influence is skewed towards the wealthy, and if those who do well are not perceived to necessarily be net contributors to society, is it any surprise that citizens become alienated from the political and economic system? And the political trajectory of Donald Trump has traded heavily on that disenchantment. Now, for years to come, political scientists and historians are going to be commenting on what explains the rise of figures like Donald Trump.

But one common feature of that analysis has already emerged, that the success of his populism rests on an ability, a seeming ability, to empathize with and leverage feelings of resentment and fear that have been building for decades. Now, a common response to these alarming circumstances that I paint is to say, we've been here before. The 20th century saw a series of crises that seemed at the time to spell the demise of liberal democracy. Some of these challenges were economic, like the Great Depression. Some of them were in the form of ideological rivals, communism, fascism, in the period between the wars, or in the form of particular crises in democratic institutions,

like Watergate, for example. At each of these junctures, commentators were fixated on the prospect of democracy's failure, concentrating on its weaknesses rather than its strengths. So as the novelist and historian H.G. Wells predicted in 1933, when it seemed that fascist dictatorships were on the ascendant, democracy would soon be discarded as, and I quote, altogether too slow-witted for the urgent political and social riddles with ruin and death at hand. Now the British political scientist David Runciman argues that this preoccupation with crisis and failure is actually inherent to liberal democracy and its evolution. Liberal democracy's onward march, he reminds us, has always been accompanied by intellectual

anxiety. Now the good news is that liberal democracy has a capacity to self-correct. While autocratic societies lack that, lack the checks that prevent their rulers from literally leading them over into disaster, democracies have political and constitutional safeguards that prevent them from going over a cliff. But while Runciman believes that democracy's hidden talents have helped to ensure its longevity, he also points to an associated danger, and that is complacency, overconfidence. He calls it a confidence trap. If every warning bell starts to sound the same, we screen them out.

And so rather than learning from crisis and becoming far more farsighted, liberal democracies keep making the same mistakes. Now, the only lesson that liberal democracies seem to have learned from history is that no crisis is really as bad as it seems. We get through it. Whenever democracies get too close to the edge, they eventually see sense and pull back. And so the question arises, is it different this time? Well, ladies and gentlemen, I can't give you the answer. Only history will tell us. Is this just one more challenging period that liberal democracy will eventually overcome? Fukuyama is still an optimist. He looks at the big picture.

He acknowledges the cracks in liberal democracy, especially the tendency towards plutocracy that we're seeing in the United States, but his eye remains fixed on the fact that there are still more democracies, liberal democracies today than there were in 1970s. I am much more of a chicken little about liberal democracies future. Call it my prairie pragmatism. Only history as it unfolds will prove me

right or wrong. It may be true that liberal democracies have proven adept in the past at navigating crises, but they've not been particularly astute in recognizing or avoiding those calamities, even with the ample warning signs. And this might be because all the surface noise that happens in democratic politics makes it hard to see what might be the real tipping or turning points. But in addition, as we get further away historically from liberal democracy's early origins, our view of it becomes tinged by the negative argument. At least we get to kick the bad guys out every four or five years. At least our system is better than the alternative. Democracy is the worst form of government,

Churchill was said to have lamented, except for all other forms that have been tried from time to time. But what happened to the positive allure of liberal democracy? Where are the voices trumpeting its capacity to bring dignity, to empower, to build collective consciousness. Growing inequality has fostered widespread amnesia about democracy's positive foundational values, and above all, I think, the value of fairness. And what I'd like to suggest to you tonight is that the breakdown in social solidarity that afflicts many of today's liberal democracies happens at an even more micro and private level. And this is because economic inequality can actually change individual behavior.

For those on the lower end of the scale, we know that it can sap initiative or worse breed grievances that can become revolutionary or violent. But for the upper echelons in society, inequality often morphs into a feeling of entitlement, which can then translate into actions that further undermine social trust and common purpose. Over the last decade, there's been some groundbreaking research done by behavioral psychologists that illustrate how inequality actually shifts states of mind. In other words, there's a certain psychology to wealth and status and privilege. So the professor of psychology, Paul Piff, and his team at the University of California have shown that the wealthier people are, the more likely they are to pursue self-interest

to the detriment of others. Through dozens of experiments with thousands of participants, researchers consistently found that as levels of wealth increase, feelings of entitlement also rise, and levels of empathy and obligation towards others decline. Again, there are always exceptions to this trend. We can all point to billionaire philanthropists. But Piff argues, statistically speaking, the tendency to look out for number one increases as a person rises to the top of the status hierarchy. And in his experiments,

this translates into a greater propensity to engage in self-regarding behaviour, unethical behavior, including cheating to increase your own chances of winning a prize, endorsing unethical behavior at work, or breaking the law while driving. So consider one of his experiments. Fascinating. Drivers of different types of cars are observed at a pedestrian crosswalk. In 90% of cases, drivers stop when they see a pedestrian crossing, except for those who drive luxury cars. PIF's study found that the latter are almost as likely to run the intersection

as they are to wait for the person to cross the road. 46% did not stop. In a second experiment, researchers create a rigged game of monopoly. They give one player more money, more resources, and more dice, greater opportunity, and they watch how his behavior changes relative to the other player. In game after game, Piff and his team observe that the better off player develops a strong sense of self. He becomes louder, ruder, less sensitive toward the other player, and he also feels more entitled than his opponent to grab for a plate of pretzels, which is in the middle of the table. So greed affects all people. Of course it does.

But these studies indicate that it's not equally present across all social strata. There's something going on here. The greater resources and independence available to those at the top of the economic hierarchy have a distinct effect on their behavior, is what the psychologists argue. Those with greater wealth can deal more effectively with the downstream costs of acting unethically, while reducing dependency on others makes them less concerned with others' evaluation. on others makes them less concerned with others' evaluation. Those at the top feel more deserving than those at the bottom. Having more means that you can rely less on others, leading in turn to a reduced feeling that you owe anyone anything. Adam Smith said it eloquently in the 18th century,

our moral sentiments are eroded. So ultimately, economic inequality is a moral issue. Economists have demonstrated its pernicious effects. Sociologists and medical researchers have outlined its effects on health outcomes, on life expectancy. And political scientists have shown how it undermines values of fairness and equal voice, which is the foundation of liberal democracy. I've called fairness a basic human value, but it goes even deeper. It extends beyond to all primates. In a famous experiment that was conducted by the Dutch primatologist Frans de Waal,

two capuchin monkeys were asked to do a routine job handing a lab worker a small rock in return for a reward. The reward was a cucumber. And at the beginning of the experiment, the monkeys fulfill their task and each gets a cucumber. And they're happy to repeat the exercise 25 times or more for this reward. And then the parameters are changed. One monkey keeps giving the rock and gets a cucumber. The other monkey gets a grape. And the grape is seen as a much higher value treat for monkeys. The first monkey is initially perplexed so he hands the rock, he still gets a cucumber and the other monkey keeps getting a grape and the differential treatment continues and

monkey A who's receiving the cucumber gets increasingly incensed. He begins to throw the cucumber at the lab worker. He starts to rattle the cage. It's the unfairness of it all. A different reward for the same hard work that provokes the monkey A into despair and ultimately a form of violence. In liberal democracies, risk and reward are designed to be shared. We are part of a collective endeavor through our equal right to participate in debate and decision-making. So fairness is part of liberal democracy's very DNA. And when we compromise on that basic, common moral sentiment, we also start to erode what courageous individuals

in earlier parts of liberal democracy's history, working together, built up brick by brick. Yet there's too little willingness to talk openly about fairness in contemporary liberal democracies and to take seriously the policies that would enhance it. Political parties talk about redistributive policies through changes to tax systems and programs to enhance skills. These are all good ideas in and of themselves, but they still dance around the edges. All the current policies can produce, writes the British economic commentator Paul Mason, is the oligarch's yacht coexisting with the food bank forever. So unless we are prepared to also address wealth inequality, we are not changing the entrenched patterns

that are undermining fairness. And so the economists who chronicle inequality are suggesting more fundamental redistributive solutions. I'm not an economist. I can't judge which is more effective than the other. But I look at these ideas and they promote things that we don't hear very much in mainstream political debate. A progressive tax on private wealth, a reverse estate tax, and enforced transparency for all bank transactions. They sound pretty radical,

but they begin to get at wealth inequality. My point is simply that bolder prescriptions seem out of reach to our contemporary political class and our contemporary political discourse. But in the end, a shift in our ways of thinking about social ills like inequality require a shift in politics. And in a liberal democracy, if we want transformation in politics, we have to initiate it ourselves. That is what the history, the 20th century history in particular, of liberal democracy revealed. Individuals stepping up to draw attention to injustice, to demand greater equality and participation, and to stand up for fairness.

The crises facing today's liberal democratic societies suggest that we need to reread our history, to learn more about how our societies coped with both global and domestic challenges, about the particular battles fought in the name of creating the world's best political system. And then we need to take that history into the present and give it a modern twist. I thank you so much for listening to an Encore presentation of The Return of Inequality from the 2016 CBC Massey Lectures by Jennifer Welsh.

The book version of the lectures, The Return of History, Conflict, Migration, and Geopolitics in the 21st Century, is published by House of Anansi Press. For more on the Massey lectures, including audio of past series, head to cbc.ca slash Masseys. This episode was recorded at Kerner Hall in Toronto by Jennifer Rowley. The 2016 Massey Lectures were produced by Philip Coulter, with online production by Liz Nagy and Sinisa Jolic. This episode was produced by Sean Foley, technical producer Danielle Duval,

our web producer is Lisa Ayuso, acting senior producer is Lisa Godfrey. The executive producer of Ideas is Greg Kelly, and I'm Nala Ayyad.