Wealth inequality has been growing steadily again since the 1980’s, I don’t think such huge gaps produces the best functioning societies. Regarding your comments on business investment, the current economic system does not encourage business to invest significantly back into the company but to cream off a lot of the profits for shareholders and owners. Much of which is then kept in offshore tax bank accounts avoiding going into the nation’s coffers. The promise of trickle down economics with the neoliberal reforms Thatcher started has not happened.
From chapter 10 from a report by IPPR on growing wealth inequality in the UK since the 1980s.
“ The total wealth of households and individuals in Great Britain is estimated at £12.8 trillion. It is very unevenly distributed. The wealthiest 10 per cent of households own more than 900 times the wealth of the poorest 10 per cent, and five times more than the entire bottom half of all households combined. Wealth is much more unequally distrib- uted than income: whereas the median income in the top 10 per cent is around seven times the median income in the bottom 10 per cent, the median wealth of the top 10 per cent is 315 times the median in the bottom 10 per cent.
Perhaps the starkest aspect of wealth inequality today is generational. In the first half of the twentieth century, wealth tended to cascade down the generations: each generation had more wealth than the previous one. But every generation since the postwar ‘baby boom- ers’ has had less wealth than the generation before them had at the same age. People born in the 1980s had just a third of the property wealth at age 28 of those born in the 1970s
Wealth inequality fell for most of the twentieth century, as economic growth allowed lower income groups to accumulate savings and buy homes. But since the 1980s, inequality has been rising again in almost all developed economies. As the rate of return on financial assets and property has exceeded the growth rate of economies as a whole, those with greater wealth have pulled even further ahead of those dependent primarily on their earnings from work.
In the UK, the largest single driver of rising wealth inequality has been rising land and property prices, which for two decades have grown far faster than earnings.
Land and property prices have risen because demand has out- stripped supply. Economic and population growth, particularly in London and the South East, along with a reduction in the average size of households, has increased demand. This has also been stoked by more permissive lending practices by banks and other finan- cial institutions, discussed further in chapter 11.21 Increasing foreign investment in property, much of it speculative, has exacerbated these trends, particularly in London.
Supply, too, has been constrained. Planning and housing policies, including the restrictions which successive governments have placed on local authority house-building, have kept new builds well below the rate needed to match increasing demand.And as we discuss below, a more general failure of public policy to capture the increase in land value which arises when planning permission is given has made house-building much more expensive than it needs to be.
Though rising land and property prices are the principal the principal cause of rising wealth inequality, other factors are also important. Individual ownership of company shares has declined markedly since the 1980s. The wealthiest 10 per cent now own over 60 per cent of the UK’s financial wealth, including stocks and shares.”
www.ippr.org/files/2018-10/cej-final-summary.pdf