Then they have noticed that, of course, some people at the top have done extremely well over that time. I believe that it was realisation of this issue that brought inequality to the fore. Now, why is inequality in general important? I think it is important, even for economic growth. Let me just put it in very simple terms. We know that in societies, where inequality is extremely high, we have a cementing of privileges across generations. We don’t have intergenerational mobility. We have lots of people who are never able to contribute to society by working, or by studying or anything else, because, simply, they don’t have money to actually engage in that.
Very high inequality is clearly not good. On the other hand, we have the example of formerly socialist economies that actually reduced inequality to such an extent that there was no incentive to even work harder or to study. That low level of inequality was unsustainable too and bad for growth. Clearly, I think, that we have to realise that not only there is some kind of optimal level of inequality, but there are two different types of inequality. Just like there are two different types of cholesterol. There is an inequality which is good, which actually, prompts us to take risks, work hard or study. There is inequality, which is bad, which essentially enables an elite to maintain its position without contributing much to society. [...]
We see inequality increase after the crisis in particular in Spain, Greece, Portugal. Then central European countries, that used to be and remain countries with relatively low inequality, but they are also small countries, very homogeneous in terms of education, ethnically as well. Like, Hungary, Austria, Slovak Republic, Czech Republic, Slovenia, they are countries with relatively low inequality. [...]
On the other hand, migration might lead to increases of inequality in some countries, as migrants actually put further pressure on wages, domestically. It might lead to political problems. Basically, there is a trade-off there. We cannot opt, I believe, for the extreme solutions. Free migration would not be politically feasible and then cutting migration to zero, I think, would be economically self-destructive, even for the countries that do do that.
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