The gap between the very richest and the rest of us has increased continuously over the last thirty years. Did you know that top 10% of population earns on average 6 times more than the bottom 90%? Many factors contribute to this growing gap, but one of the most significant is least understood: the role of money creation by banks.
As a volunteer for Positive Money, I’ve spent much of the last two years investigating the connections between inequality and the money system. The evidence I’ve compiled suggests that there are several factors contributing to the growth of inequality, but at the heart is the operation of the banking system. If we want to tackle inequality, we need to change the way that money is created.
I’ve written up these initial findings into a 16 page academic paper, Banking, Finance and Income Inequality, which you can download below. The paper outlines some of the connections between the money system, the wider economy, and inequality. There’s further research to be done on some of the specific connections, but this lays out a framework for understanding the system as a whole.