By: Jeffrey Chwieroth, Andrew Walter
June 3, 2019
Today, the politics of wealth is contentious in both democracies and non-democracies. It has helped to create both ‘millennial socialism’ and political populism (Alstadsæter et al. 2017, Ansell and Adler 2019, The Economist 2019). But wealth has been subtly reshaping politics and policy choices for decades. Our recent work shows that the accumulation of what we call ‘mass financialised wealth’ has made financial sector bailouts more likely and created rising financial instability – and thereby contributed to political instability and polarisation (Chwieroth and Walter 2019a, 2019b).
It is easiest to understand these changes in the long run. Figure 1 shows how average real wealth in democracies rose sharply after WWII. Middle-class households were major beneficiaries, even in countries in which their wealth share has seen the greatest erosion recently.