Rising inequality and the two party system

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(Screen shot via oecd.org)

Unequal distribution of wealth is deepening the divisions between rich and poor, and creating political instability, says Patrick Keane.

RISING INEQUALITY may be difficult to connect directly to the shrinking of the two-party system, but there is a correlation.

The two-party system is a shrinking space.

In Australia, the United States and the United Kingdom, the two-party system is changing because of transition abroad and increasing inequality at home.

Income inequality in the Organisation for Economic Co-Operation and Development (OECD) countries is at its highest in the past half century — and it’s getting worse.

The average income of the richest ten per cent of the population is about nine times that of the poorest ten per cent across the OECD, up from seven times, 25 years ago.

In emerging economies, such as China and India, a sustained period of strong economic growth has not been evenly distributed and high levels of income inequality have risen further.

Brazil is the only emerging economy to reduce inequality in recent years, but the gap between rich and poor is still about five times that of OECD countries.

Inequality is now growing within some nation-states as overall wealth has risen and so now we see some of the world’s poorest communities in the richest nations.

Australia, for example, is now home to some of the poorest communities in the world.

The infant mortality rate among Aboriginal and Torres Strait Islanders in the Northern Territory was 13 deaths per 1,000 births, which is higher than Romania, Sri Lanka or Lebanon.

The UK is the most inequitable country in Europe, with inequality levels among the highest in the world and it has remained so since the global financial crisis (GFC). Inequality in the UK is often considered by commentators as a cause of the emergence of the United Kingdom Independence Party (UKIP) and the Brexit.

Australia has remained just above the OECD average for income inequality. In Australia, inequality is associated with the rise in popularity of Pauline Hanson’s One Nation party (PHON) by News LimitedFairfax and the ABC.

The United States is one of the most inequitable nations in the OECD and became more so since the GFC, also dubbed the Great Recession (2007-2008) in the U.S. The relationship between inequality and the presidency of Donald Trump is commonly referred to across the mediascape. For example, the PBS News Hour and the Brookings Institute.

Although the two-party system in the U.S. appears to be resilient to the instability created by growing inequality, the emergence of the Tea Party movement in 2008/09 and the election of Donald Trump – a reality TV star – rather than Hilary Clinton – a career public servant/politician – prove political conditions are unstable.


Pauline Hanson’s One Nation party's success at the 1998 Queensland State Election and the United Kingdom Independence Party’s success at the 2016 UK Referendum on Independence from the European Union – also known as Brexit – were both made possible by acute inequality and the political instability it created.

Inequality gives more power to sectional interests than common or public interests. Parliamentary politics is one avenue sectional interests pursue power. Major parties are supposed to – or at least advertise themselves as capable of – representing universal interests or the interests of all the individuals and communities of the nation. Because inequality and instability undermine the possibility of those universalising goals, voters turn to sectional interests or minor parties they believe will represent their individual needs best or who may represent the least harmful option.

In electoral systems like Australia and the United Kingdom, inequality and the instability it has produced means minor parties have been able to influence the system, through a parliamentary balance of power, in previously unimaginable ways. Brexit is one example and the Australian Government's visible move towards more conservative policies, particularly with regard to immigration at the behest of PHON, is another. 

Patrick Keane completed an honours thesis on Pauline Hanson's One Nation and the 1998 Queensland State Election in 2010, and was an advisor to a Labor Senator. You can follow Patrick on Twitter @pckeane2014.

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