Gary Stevenson entered the world of finance as a 21-year old interest-rate trader at Citibank in 2008. Since walking away in 2012, he has become one of the country’s most recognisable economic commentators, building an audience online with his argument that soaring wealth inequality is driving falling living standards. His message has become increasingly political, with calls for a tax on the super-rich and warnings that failing to tackle inequality will fuel economic decline and political extremism. He joined Oli Dugmore on The Exchange to discuss why he believes a wealth tax is inevitable, whether it is practical, and why he thinks Britain is running out of time.
Oli Dugmore: Gary, in a sentence, why a wealth tax?
Gary Stevenson: If you don’t do wealth taxes, living standards will continue to collapse very quickly.
Let’s dial into the correlation between those two things. What you’re saying is that widening wealth inequality leads to a decrease in living standards. Talk to me about the relationship between those two things.
I came to this idea in 2011, the aftermath of the 2008 crisis, in a period where there’d been about three years of everybody thinking the economy was going to get better because people are going to have so much money means they’re going to spend so much money. It wasn’t happening. I wanted to understand why people weren’t spending money.
All you need to do is look at the wealth positions of ordinary people. In my parents’ generation, my dad worked for the Post Office for 35 years. Regular person, regular job, buy a house, retirement, family, holidays.
My sister’s got two degrees, and she’s got a West End musical playing at the moment – she can barely pay the rent. What I want you to understand is wealth inequality is not just about Elon Musk. It’s also about where’s your wealth? Where’s your sister’s wealth?
The other big elephant in the room is government wealth. Government wealth has collapsed.
Can you just give us a sense of the scale? How unequal is it?
In the last five years: the fastest ever increase in wealth of the super-rich, at the same time, collapse in government wealth [and] in living standards for ordinary people. These are two sides of the same coin. If you don’t fix this, it’s going to get worse very quickly.
Statistically, we don’t know. Because at the moment, we don’t know who owns what.
We’re not recording it. I always remember when Rishi Sunak became prime minister and suddenly appeared on the Sunday Times rich list. We’re not measuring it. The very rich are very effectively successfully hiding their wealth.
But obviously, you’ll have seen in the last couple of weeks, we had Elon Musk, the world’s first trillionaire. Six years ago, the world’s richest man was worth £100bn, and now Elon Musk is worth $1.2trn. This is in Western economies that are growing 1 or 2 per cent a year. If you have a small group of society with an enormous chunk of wealth that’s ballooning at 15, 20 per cent a year in economies that are growing 1 per cent a year, that’s cancer.
Let’s say the policy position is a floor 2 per cent of wealth above £10m, or £100m. But every single year then we have to appraise people’s wealth, don’t we? We have to figure out how much they’re worth. What do you think about that problem?
It’s tricky, but doable, and it’s essential. The thing that comes to mind is the JFK quote, “We send men to the moon and do the other things, not because they’re easy, but because they are hard.”
Taxing the very rich is very difficult, and that’s why the vast majority of human history is ten guys owning everything while the rest of us fuck off in a field somewhere.
It wasn’t easy to stop the Nazis, was it? It wasn’t easy to invent the polio vaccine, but we did it. It wasn’t easy to move from the kind of world my grandparents lived in, where regular people lived in desperate poverty, to the kind of world my dad lived in, where you can work for the Post Office and have a house.
It’s a question for the British public. Do you want things to be fucking shit or not? If you don’t, then get your head down and do the hard work.
That’s a tough political sell, isn’t it? “Life’s going to be worse, vote for me.” The reason I ask is not to undermine the credibility of the argument, which is one I’m sympathetic to. But when I think about how to implement it and the mechanisms of doing it, I wonder how you do it. What do you think about the tension?
It doesn’t have to be annual. You can do it every 10 years. Inheritance tax on the very rich is 50 per cent every 30 years. And a wealth tax, we’re talking 2 per cent every year. It’s very similar. When Jeff Bezos gets divorced, suddenly we know everything he owns. We do it when you die. Say you want to do it every year, and they say, “Oh, sorry, that’s impossible, mate.” It doesn’t need to be every year.
We’re in this stupid space in the argument now where I come up legitimately and say, “Society and living standards are going to collapse. Poverty is going to explode if you don’t deal with wealth inequality. Let’s do a wealth tax.” And a bunch of rich people, or people paid by them, say, “Oh, well, that’s impossible.”
Why is it impossible when I say it, but it’s not impossible when Jeff Bezos gets divorced? It’s the only person in the world who can do a wealth tax: Jeff Bezos’ ex-wife. Is that what you’re telling me? Of course it’s doable.
Are there any arguments that you do find convincing, though? If you were to steel man your argument, what would be the counterpoints to what you’re advocating, that you actually go, “Yeah, do you know what? You’ve got a point there.”
No, there are. You saw this in a documentary at the end of my discussion with Dan Neidle. He was saying he’d never even thought of the political consequences.
I said to him, “Listen, in my opinion, when you have very high inequality, it pushes wages down. Lower levels of inequality push wages up.” And I think this creates a problem because if you have part of the world which is low inequality, which was Europe and the US, Japan, then part of it which is very high inequality, which is the rest of Asia, the unequal places have low wages and the equal places have high wages. That creates an economic drive for immigration from the unequal place to the equal place, and for capital flight from the equal place to the unequal place.
And this is basically why Europe has deindustrialised. Because rich people don’t want to pay European wages. They want to go to the really, really unequal parts of the world and pay really low wages. We can deal with that. I think you have to be talking about things like tariffs. All I want is for there to be a sensible conversation which understands flows of wealth.
Wealth is flowing away from this briefly very enriched Western middle class towards billionaires, domestic and foreign. And we need to talk about how we can stop the flow of our wealth away from Western governments.
But I think there’s this absurd assumption that it’s not possible. I feel like it’s deja vu all over again, because I go on show after show, and I say, “All right. My part of the economy, the part that I’m an expert on, is on fire, guys. And can we put the fire out, or else everything’s on fire?” And people say, “Oh, but the tax you’ve suggested is not workable. I think we’ll just let it burn.”
What it shows is that these people don’t care about fixing the problem. They live lives of extreme luxury, and they’re allowing the system to move very quickly towards extreme instability. I don’t worry about Nigel Farage, and I don’t worry about Donald Trump: I worry about what comes after Farage and what comes after Trump. Because both of them will fail in the economy. They will cut taxes on the rich, living standards will fall, and then they will have to reinvent themselves further to the right. And it’s very hard for me to look at what’s happening now and not be reminded of what happened in the 20th century.
Can we just stop this stupid Marvel hero interpretation of the economy, which is, “Oh, you said the economy’s going to break, and you’re right. Well, you fix it, you fucking dick.” This isn’t Gary Stevenson saves the world here. I’m telling you what’s going to happen.
I want to dial into capital flight, not least because when I have been having conversations like that, I very often get thrown back in my face if I say we could consider wealth taxes.
I think people think that wealth is just money on a screen, and they think that Elon Musk has got a trillion dollars in a massive bag. No. They own assets. All wealthy people are wealthy because they own assets, and the vast majority of those assets exist in Western nations. Or at least the customers are in Western nations, so we can tax them on it.
What I see when I look at this is really a crisis of Western intellectualism. If you think a wealth tax is not going to work because you think we can’t tax assets, fine. But where is that conversation being seriously had?
Nowhere. It’s a bunch of idiots just saying it’s impossible. There’s no seriousness in this debate. But of course there’s not, because what you need to understand is that the crisis of inequality is good for the top 5 per cent, right?
There’s this change happening at the top of the Labour Party and I think you’ve actually said this is kind of a window of opportunity for a wealth tax. Or indeed another mechanism to address inequality. Have you managed to speak to Andy Burnham about your ideas?
I’ve not managed to speak to Burnham himself. I would love to. If he wants to speak to me, of course we would make time for him.
I’m not a professional lobbyist. I don’t do what I do to be big on YouTube. I do what I do because I want to change policy. We can say, “If you talk to us, we can support you on social media. We can support you online.” We can help you with your economic policy. I’m trying to lobby but I don’t really know what I’m doing. I was in parliament a couple of weeks ago and there were all these rumors, “Oh, Gary’s going to be advisor.” Because I was just talking to Labour MPs and that happened to be the Monday when Starmer resigned.
I’m trying to lobby, but it’s a game of Burnham whispering out there. You’re trying to work out who actually has access to Andy Burnham, who he’s actually listening to, who he’s not listening to.
Obviously the next part of the wealth tax question is what do you do with the money that you generate. I’ve seen different people estimate that it could be £20-30bn a year, depending on the level you apply it at. How do you think about that next part: where the money gets spent?
We use this slogan, “Tax wealth, not work.” I chose that slogan because it’s quite strategic. I say tax the super-rich, and Rupert Murdoch convinces you I want to tax your dad who’s a doctor. I try to make it really clear. The government can’t borrow any more money. We’re in a situation where you have three options, which is increase taxation of the very rich, increase taxation of workers, or further reduce the welfare state.
I’m an inequality economist. If you don’t stop inequality increasing, you’ll have a disaster. I’m relatively agnostic about how you spend the money.
I guess, that is what politics is for, right? It’s whoever’s elected, the priorities they put forward, people vote on it and decide. We’ve raised the money, it’s up to the elected government to decide how it gets spent.
What I’ll say is, if you don’t deal with this growing inequality issue, you won’t be able to afford anything. We aren’t in a situation where the situation is just bad. We are in a situation where the situation is bad and aggressively worsening in a rapid and accelerating fashion.
There’s a good chance that what we’re going to do is tax working people more in order that we can keep things going. Then the economy is weakened because these guys have less money. That money ends up going in interest to the super rich, and then working people are poorer, and the rich are richer, and asset prices are higher, and these guys are consuming more, so everything is more expensive.
And I want you to realise: these guys can make food more expensive. In the colonial times in India, people starved while the fields were growing cotton to ship to Europe. These guys will take the fields that you need to feed your kids and use it to make biofuel to put in their data centres so that you can’t play the guitar anymore.
What is it about YouTube that you like as a medium for communicating ideas and sharing insight?
2020 is when I started writing publicly and I started writing for OpenDemocracy. Then I wrote for The Guardian, The Express. I wrote for loads of papers in 2020. I was making a lot of these really pessimistic economic predictions that I’m sort of known for.
Then my mates were freaking out, coming up to me, “Oh my God, what can I do?” And then they wanted to know more about it, they were going straight to YouTube.
I realised and knew we were about to go into a massive economic crisis. I knew with near certainty we’re about to go. Then it was like, “These guys have got nowhere to go.” And I think it was almost like this commercial brain of mine said “Let’s take that space.” There’s going to be so much demand for somebody who can communicate economics clearly and simply. What I knew, the trade with me was like, “These predictions are going to be right.” I was betting massively on it. Because this is what I’m good at, is making good predictions.
I just saw the gap. It was just glaring. I don’t think there is a single other person in the country explaining economics to the public in a way they understand.
I’ve heard people describe the outlook of younger generations as “financial nihilism”. I think to get your average deposit, you’re looking at saving for about 13 years. In London it’s 30. It’s a kind of natural reaction for younger people to see those figures and go, “Well, I might as well speculate. I might as well consume,” because even with the power of compound interest, am I really going to spend the next 30 years of my life saving so that I can buy a house when I’m 50?
Yeah. And the house price will double by then anyway.
I get it 100 per cent. This is what keeps me up at night, what story do we tell to these people? And people who have this kind of mindset are largely young men. They want to find their own way out of it, and you’ve seen there’s a guy in the documentary who’s kind of said it, “I’ll teach you to get rich.” We can see in the documentary, these young men, it’s not just young men, they become very vulnerable.
If you’re in your twenties, early thirties today, your parents fucked it for you. But you can save it for your kids. That’s what you can do. And you do that by working together.
And if there’s any young people out there today, artists, musicians or whatever, I want you to find stories that we can tell to our young men and women today that get them to put down their stupid selfishness, selfishness which allows them to be taken advantage of by the rich, and work together like their grandparents did.
That’s the only way you’re going to survive this.
[Further reading: Burnham’s Labour left allies call for a “progressive chancellor”]
Content from our partners
Related
Join the debate
Subscribe here to commentThank you Gary. The best summary of how it was in the late 1950s to 1979: ‘In my parents’ generation, my dad worked for the Post Office for 35 years. Regular person, regular job, buy a house, retirement, family, holidays’. And in those days university was free if you could get your act together. My best mate’s dad worked in the post office and my dad worked in a ball bearing factory. We lived on the same street and had almost identical houses. We thought we were middle class! But that was the 1960s/70s and it has been downhill all the way from then whatever anyone says. You are absolutely right about a wealth tax.