So the first big difference you see between a more equal society and an unequal society is that the unequal society as a whole cares less about spending and cares more about saving. This is because if we consider only this, the passive income that comes from ownership in an equal society, that’s all going to middle-class people and middle-class people, they tend to spend most of what they get over the course of their lives.
If they get more money, they’ll tend to increase their spending. Whatever it is, they may go on more holidays, buy a bigger house, that kind of thing. So if you are distributing this passive income to middle class people, it’s getting spent, it’s getting spent, it’s getting spent. If instead we take all of that income and we give it to this tiny elite group, Of course, they will spend a lot of money, but we can see from the spending profiles of the very rich.
You know, if you give £1,000 to a middle-class person, they’ll probably spend £600. You give £1,000 to Rishi Sunak, you’re never going to notice, right? He’s not going to change his spending at all. So as we give more and more money to the very rich, basically, societal spending starts to fall. They don’t want to spend money. And what they’re doing instead is, well, if we look at the behavior of the very, very rich, they’re just saving; they’re just saving, they’re just saving; they’re just saving.
they live in a world where all of the spending power is held by a very small group of people who don’t and can’t spend a lot of money on goods and buy assets instead.
So they live in this world where they really, really, really need to work, but society doesn’t really want to spend that much because the group of people with spending power is quite small and those people tend to save like 98% of their income.