Equities

Bringing balance back to capitalism: the next decade

Bringing balance back to capitalism: the next decade
Didier Rabattu - CIO, Sustainability Equities

Didier Rabattu

CIO, Sustainability Equities
Henk Grootveld - Head of Trends Investing

Henk Grootveld

Head of Trends Investing
Pascal Menges - CLIC Equities, CIO Office

Pascal Menges

CLIC Equities, CIO Office

The last three to four decades have resulted in huge wealth disparities in the developed world. In fact, the difference between the lowest and the highest levels of wages and wealth is the biggest since World War I.  This asymmetric capitalism is one of the four main excesses of modern times that we believe − and which history suggests − must reverse.

 

Need to know

  • As we explain here in the second part of our series “The Next Decade”, the imbalances are the result of interventions made by governments and central banks, particularly in recent years. The disparities are not sustainable, and we have reached the day of reckoning. 
  • Measures needed to return to symmetry are likely, in our view, to spur faster inflation and higher interest rates – part of the new paradigm for the next 10 years. 
  • We outline in detail how the world has been shaped since the 1980s, and the sources and ramifications of the misalignment between wages and capital. What are the catalysts for the reversal, and what changes can we anticipate in the move to a more equitable economy? 

 

The following graphic, which uses US data from the Pew Research Center, shows how the gaps in income between upper-income and middle- and lower-income households are rising, and the share held by middle-income households is falling.

 

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