Economic inequality is properly a concern for public policy. Its adverse impacts on economic efficiency, social cohesion and environmental sustainability make it necessarily so. A good society is one characterised by a collective concern with social justice and a capacity to act in pursuit of that objective. That this case even has to be made is symptomatic of the pervasive influence of neoliberalism during the last two decades, subordinating the concern with economic inequality to narrower concerns with economic efficiency and growth, and casting doubt on the capacity of the state to act in pursuit of common goals. The proponents of incentivation have also ignored the ways in which egalitarian policies can contribute to efficiency and growth in practice. As the authors of an American book, The Winner-take-all Society, note, ‘Much of the rivalry for society's top prizes is both costly and unproductive’ (Frank and Cook 1995: viii). It is time to change direction.

What can – and should – be done? This chapter focuses first on individual responses to inequality, looking at the tension between personal striving to get rich, and other personal choices, such as philanthropy and downshifting. The discussion then turns to what governments can do to redistribute income towards the poor, focusing particularly on taxes and government expenditures that could ameliorate economic inequalities. Employment policies then come into the spotlight, recognising that universal access to useful and reasonably remunerated employment is crucial for the economic basis of a more equitable society.