COVID-19 may trigger an ideological shift over decades

Significance

Research by Thomas Piketty shows that a form of free-market ideology has been a key driver of rising income inequality since the 1980s. The airing of alternative ideas, the challenge of decarbonising economies and the potential for the COVID-19 crisis to reset politics raise the prospect of a paradigm shift.

Impacts

• In much of the global South, borrowing constraints and obstacles to taxing the wealthy will make redistribution harder.
• Strengthening democratic institutions may be as important as strengthening pro-equity political parties to advance redistributive agendas.
• Political parties in OECD nations have focused on ‘identity’ issues since the 1980s; COVID-19 is bringing redistribution back to the fore.