What have the rich got to do with the economic crisis? A great deal. Like the resurgence of the rich, the roots of the current crisis go back to the 1970s. And they are both associated with the growing dominance of the financial sector, or ‘financialisation’ as it’s sometimes called. In fact, the rise of the rich is an integral feature of the crisis, just as it was of the Great Depression in the early part of the 20th century. But there’s also a big difference: this time, many of the rich have not only got richer in the build-up to the crisis but – except for some short-term losses – after it too. Compared to their predecessors in the 1920s and 1930s, who then lost out, they are having a good crisis. Capitalism’s most successful decades in Europe and the US – the 1950s and 1960s – were also the period when the share of national income cornered by the rich was at its lowest. As we’ll see, this was no accident.

The main arguments so far apply to any phase of the history of capitalism, and whether they are right or wrong doesn’t hinge on whether capitalism is in a boom or a crisis. But while unearned income based on control of assets has always been a problem, it’s grown steadily over the last 40 years. Financialisation represents ‘the revenge of the rentier’ after being side-lined during the mid-20th century. They’re active rather than passive rentiers – part of the so-called working rich – ever seeking out new ways of extracting wealth from the economic system through rent-seeking. Financialisation has been both cause and consequence of a shift from wealth creation to wealth extraction and, with that, a shift of wealth to the rich.

All this can easily get overlooked in accounting for the crisis. It’s common to suppose that our current economic problems just go back a few years and result simply from irresponsible behaviour in the financial sector as it mismanaged risk on a spectacular scale. But although there has certainly been extraordinary irresponsibility, mismanagement, irrational exuberance, not to mention greed and indeed criminality, the basic causes go back decades, and they weren’t all to do with finance.