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.
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Can you just give us a sense of the scale? How unequal is it?
Let’s say the policy position is a floor 2 per cent of wealth above 10 million pounds, or 100 million. 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?
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?
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.”
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.
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?
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, 30 billion quid a year, depending on the level you apply it at. How do you think about that next part: where the money gets spent?
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 is it about YouTube that you like as a medium for communicating ideas and sharing insight?
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?
