^{I am by no means an economist and am very much learning at this point, so I encourage anyone reading to add to the conversation and point out any of the many things I'm probably missing. There is lots more to talk about here and I want to continue the discussion in another post, hopefully adding in discussion generated from this one.} ![1781661772534997531718808242426.jpg](https://files.peakd.com/file/peakd-hive/minismallholding/242DESNVDoGJjjamxg79XLKtygDJXEQ5uhLY4JJLTA5aojQbotpxB2drZqVC3h3ukafmA.jpg) ^{[Image courtesy of @barge](https://peakd.com/hive-118554/@barge/hive-stock-images-money-cash-fiat-currency-banknotes-coins-cashmachine)} Growing up it seemed like the quality of life would only continue to improve for each generation. My grandparents grew up with the great depression then lived through a world war (one of them even lived through two). My parents were born into a period of rebuilding and growth, so lifestyles started to improve for the working classes and they saw the creation of the welfare system. Probably for the first time someone working a basic level job could easily attain buying a house. In addition to this they could afford to save towards retirement and go on holiday abroad. We grew up in council houses, but when my parents were in their late 20s early 30s they were able to buy their first home. When my now husband and I bought our first house, in the late 1990s, we were in our early 20s. So it felt like each generation would find these things easier. It didn't take long to realise that this was not going to be the case. Everything had been built on the premise that we would have a perpetually growing economy and we realised that this could not continue indefinitely. We knew that as we got older the retirement age would get extended and there would be a good chance that the aged pension we were paying our National Insurance contributions into may not even exist by the time we reached retirement age, as the government got further and further into debt. We decided to take things into our own hands and start paying into private superannuation funds of our own, but lost our ability to even pay into them as the economy worsened.

The downward spiral

The economy in first world countries has been on a downward slope for some time now, but it's only recently started to become so apparent that the majority of the population are feeling it now, even the lower middle classes. Depending on who you speak to the cause of this seems to have lots of explanations usually along the lines of it being the fault of certain groups of people. It's the boomers, it's too many immigrants, it's landlords, it's capitalism, it's bad government spending...but none of these things make enough sense to be the cause, certainly not on their own and many are probably more symptoms than causes. It's only recently after coming across some interviews with Gary Stevenson that I've started to be able to make more sense of things and see the bigger picture. *Gary Stevenson is an economist from an impoverished background who made his money in trading, in particular through betting that the economy was going to collapse indefinitely and being right. He's well worth a listen to and has a YouTube channel, [Garys Economics,](https://youtube.com/@garyseconomics?si=-cLgonBr2Yjq8QB2) which he uses to try and create awareness of the issues facing us and the causes as he sees them.* As Gary sees it the main cause of the economic collapse is wealth inequality. I've been hearing for years from multiple sources that if we lose the middle classes then we go back to poverty for the majority while a handful of people hold all the wealth. I was never sure how losing the middle classes would cause that, though. Now I'm realising that it's not so much a cause as a symptom or perhaps the sign that the tipping point has been reached. Some describe what is happening as a wealth transfer, which is probably the best description. That transfer is happening in ways that aren't always obviously apparent, which explains why blame isn't going where some of the biggest causes are. Take, for example, the housing crisis across developed countries. House prices have increased far beyond what the working classes can afford. We see a boomer generation in houses that cost just 3 times their yearly wage when they purchased them and wonder if they must have done something to make sure future generations couldn't also do that. Migration levels have increased and we're seeing many more foreigners than we used to, so surely it must be because they are buying up all the houses and taking up all the government houses and we can't keep up with building enough new ones. News articles on Canada's initial drop in housing and rent prices since they reduced immigration in 2024 seem to corroborate this, but there are also others arguing that there is plenty of housing stock and lots of houses are sitting empty, both privately or housing trust owned, so that must be the real problem. While these factors are contributing to the problem, there is another less visible contributor that isn't being talked about as much and that is what the ultra rich are doing. You see, when you have everything you could ever need or want and you get some more money you buy assets. The more assets being bought up and held reduces what is available and increases the prices of assets across the board. That includes residential property, despite the fact that billionaires have no interest in buying physical residential property. It will even affect consumables like food and fuel, because on the stock exchange these can be classed as assets. This wasn't so much of a problem when we had a rapidly growing economy and lots of new resources being discovered, but now the rate of growth is lower than the rate at which the top end wealth is expanding, so that expansion has to come from somewhere, which seems to be the rest of the population. While governments make shows of trying to do something about what we see as the visible causes of the housing crisis like agreeing to reduce immigration or implenting extra taxes on older generations in bigger properties or with investment properties to try and force them to relinquish them, it feels like they are just tinkering around the edges and not addressing the cause of wealth and assets being siphoned over to a few people at an ever increasing rate due to compound interest. Any benefits gained from the tinkering will only be temporary while the wealth transfer floodgates remain open. Thus we are hearing more and more people calling for a wealth tax to try and at least slow some of that transfer and bring some back down into circulation at the bottom end. It sounds like a simple solution, but would it even work if it was implemented?

Other factors

There's another factor that isn't often talked about, probably because it's not a nice topic and most don't want to think about it too much. It's population. The reality is that the times when the lower classes have been better off for a while have been after rebuilding following an event that has decimated a population. Most recently for the western world that was two world wars. When there aren't as many people around to do work then the wealthiest are in a position where they have no choice but to make better employment offers in order to keep their workers. It's also a fact that the more people there are the more thinly the available resources need to be spread around, meaning that everyone gets a bit less as the population grows. *It's no wonder then that resentment will grow towards those hoarding more than they could ever use in multiple lifetimes.* There are differing viewpoints on what needs to be done to solve this problem. Some say tax wealth not income so that the working classes struggle less and some of the hoarded wealth is brought back into circulation. Some say the government needs to stop interfering to allow small businesses to be able to thrive and even start in the first place. I'd say why not both? One approach is considered left wing, the other right wing and people then end up arguing over who's right and who's wrong when neither solution on its own is likely to work, but applied together they could make a difference. The reality is that both sides are mad at the government for doing neither, but it's the very same people who are outbidding us for our governments who are the ones benefiting the most from them doing neither of these things. The reality is that the situation we're in today is completely different to the one following the second world war and we will likely never be able to replicate that level of wealth distribution again and even if we did it would be spread thinner due to the population level being so much higher. There is probably no harm in trying, however, especially as there isn't much to lose at this point. There are those who say there is no point in even trying to petition government any more, they have all sold out to the highest bidders, then there are those who say if we could just stop fighting among ourselves there are enough of us to demand change and override the billionaires who have the governments in their pockets. _{What do you think?}

Inequality