The Inequality Puzzle: European and US Leaders Discuss Rising Income Inequality

Is there too much inequality? We are witnessing for the first time in many decades a vigorous public debate in the United States and many European countries as to whether income inequality is approaching unjustifiable levels. The financial crisis has drawn special attention to remuneration at financial firms, as well as other more broadly based increases in inequality, and the pendulum may well have swung back toward attitudes favoring strengthened regulations. It is against this background of shifting public and political views about income inequality that the Roland Berger Foundation decided to solicit the opinions of U. S. and European political, business, and labor leaders by partnering with the Stanford Center for the Study of Poverty and Inequality. This initiative, led by a diverse team of five authors, sought to cast light on how prominent European and U. S. leaders are making sense of rising inequality. The objective was not to provide yet another scholarly tome on inequality,or another analysis of how the general public views inequality. We are already awash in such analyses. What we don’t know, and what we have sought to offer, is a window into how senior leaders view this historic moment. In the summer of 2009, we interviewed thirteen political, business, and labor leaders and presented these interviews in their original form.

Should we be troubled by rising income inequality? Does the Financial Crisis oblige us to consider how much inequality is desirable? The United States and many European countries have seen shifts in public attitudes toward a widening gap between the rich and poor. Will income inequality return to the political agenda? In thirteen candid interviews, distinguished business, political and labor leaders discuss the "inequality puzzle" and what should be done. "In the current socio-economic environment, there seems to be a broad consensus that the present degree of inequality is too high, less in terms of wealth, than in terms of compensation. This certainly holds true for the United States, but also to a lesser degree for Europe." Josef Ackermann, CEO & Chairman, Deutsche Bank "So anybody who says that inequality isn't a big issue for the effective functioning of a society, is simply ignorant of the record of humanity. It's a huge issue." Fred Smith, Chairman, President & CEO, FedEx Features interviews with -Josef Ackermann, CEO & Chairman, Deutsche Bank -Bertrand Collomb, Honorary Chairman, Lafarge -Gabriele Galateri di Genola, Chairman, Telecom Italia -Jürgen Hambrecht, Chairman, BASF -Maurice Lévy, Chairman & CEO, Publicis -John Monks, General Secretary, European Trade Union Confederation -Sir Mark Moody-Stuart, Former Chairman, Anglo American; Former Chairman, Shell -Poul Nyrup Rasmussen, President, Party of European Socialists; Former Prime Minister, Denmark -Fred Smith, Chairman, President, & CEO, FedEx -John Sweeney, President Emeritus, AFL-CIO -William Weld, Partner, McDermott Will & Emery LLP; Former Governor, Massachusetts -James Wolfensohn, Chairman & CEO, Wolfensohn & Co.; Former President, World Bank -Jerry Yang, Co-Founder & Chief Yahoo, Yahoo! Analytical chapters and recommendations -Roland Berger, Founder, Roland Berger Foundation -David B. Grusky, Director, Stanford Center for the Study of Poverty & Inequality -Christopher Wimer, Associate Director, Collaboration for Poverty Research, Stanford Center for the Study of Poverty & Inequality