The rise in income inequalities within major countries since the 1980s poses a threat not only to social stability, but also to globalisation. It may be hypothesised that the continuation of these trends could result in two outcomes. First, there may be social upheavals in some countries, where social tensions due to growing inequalities will become unbearable and produce a social turmoil. Second, the rise of income and wealth inequalities means that there are groups of people that are not gaining from globalisation; this creates a fertile ground for rise of nationalism and ethno-populism. When globalisation is properly managed, it is good for growth and income distribution and does not lead to nationalism. But if it is accompanied by the decline in real incomes for large masses of people, nationalist political forces get additional arguments for instigating anti-globalisation and isolationist feelings.
Among the questions to be addressed:
- Why are income inequalities at the highest levels in history?
- What are the likely scenarios for the change in inequalities of income and wealth distribution? Increase? Stabilisation? Decrease? Why?
- What comes next after the liberal economic order – a new ‘reformed capitalism’ or a period of chaos and disarray? Or something else entirely?
- Will the rise of nationalism lead to conflicts, if not wars, between countries, with the collapse of the international trade and capital flows, like in the 1930s?