Wealth, Merit and the Future of Fairness: Reflection from Prof. Mike Savage

Prof. Savage opened the discussion by acknowledging the global belief in meritocracy—the idea that hard work and education remain the primary pathways to success. He noted that empirical evidence consistently shows that between 80% and 90% of people across diverse societies, regardless of income or development level, affirm that effort and perseverance determine one’s socioeconomic outcomes.

“This speaks to something fundamental,” Savage observed. “Meritocratic ideals act as ideological glue holding societies together.” He cautioned that beneath this consensus lies rising unease: a growing number of individuals suspect that the system is no longer delivering on its promise, even for those who meet traditional markers of diligence and achievement.

He highlighted the structural barriers faced by young people today. While attending university once represented a clear route to opportunity, access to elite institutions has become a decisive determinant of career prospects. Top‑tier companies frequently recruit from a narrow group of prestigious universities, leaving graduates from other institutions with fewer high‑potential entry points.

“Students from less renowned universities often enter a far more precarious labour market,” Savage explained. “They face greater instability—temporary contracts, gig economy roles, limited benefits—despite equivalent academic commitment.”

This disparity, he suggested, fuels frustration and undermines faith in fairness. As young people confront stagnant wages, soaring housing costs, and diminishing public investment, the myth of equal opportunity begins to unravel.

A New Era of Wealth Inequality

When asked how wealth inequality has evolved over the past three decades, Prof. Savage offered a compelling reframing. Rather than focusing solely on the widening gulf between the richest and poorest, he pointed to a broader transformation: the sheer expansion of accumulated wealth across generations.

“We’re living in a huge wealth society,” he stated. Although the ratio between extreme poverty and ultra‑high‑net‑worth individuals has not shifted dramatically, what has changed profoundly is the overall volume of wealth held collectively—especially among middle‑ and upper‑middle‑class households. Many families now possess significant assets through homeownership, pensions, and investments, creating what Savage described as a “multiplier effect” across generations.

But this accumulation carries consequences. A key concern is the potential erosion of collective solidarity, particularly in relation to public services.

Drawing on insights from his late LSE colleague, Professor John Hills—a leading authority on the welfare state—Savage recalled a pivotal observation: historically, even affluent citizens relied on, and therefore supported, universal provisions such as subsidised transport, healthcare, and education.

“But Hills questioned whether that still holds true,” Savage said. Increasingly, the wealthiest can opt out entirely, financing private schooling, medical care and transportation. This detachment, he warned, threatens the political sustainability of public infrastructure: why invest in common goods if you no longer depend on them?

“If the wealthy cease to see themselves as stakeholders in public systems, confidence in civil society weakens,” he added. “It creates a quiet but profound withdrawal from shared citizenship.”

Beyond Reshuffling: Challenging the Limits of Social Mobility

One of the most striking moments came when Savage addressed the limitations of framing solutions purely through social mobility. While often celebrated as a measure of fairness, he cautioned against mistaking mobility for genuine equality.

“To improve someone’s position does not necessarily reduce inequality—it may simply reshuffle who occupies the top spots,” he said. “We must ask: are we addressing root causes, or merely managing movement within an unequal structure?”

He contextualised this shift historically. Those born in the mid‑to‑late twentieth century—including himself—benefited enormously from favourable conditions: affordable housing, robust pension schemes and rapidly appreciating assets. These advantages were amplified by three decades of sustained asset‑price inflation, enabling widespread wealth accumulation independent of entrepreneurial or professional excellence.

Today’s younger generations face a starkly different landscape—one in which intergenerational transfers of wealth, such as parental support for home purchases, increasingly shape life chances.

“This isn’t just about individual effort anymore,” Savage stressed. “It’s about inherited advantage operating under the guise of merit. Without recognition of this dynamic, policy responses will fall short.”

Towards a Fairer Future: Taxation, Responsibility and Philanthropy

To counteract these trends, Savage advocated for a broader public discourse around wealth. Awareness must grow, he argued, both among those with modest means—helping them recognise systemic obstacles—and among the affluent, prompting ethical reflection on stewardship.

On fiscal policy, he posed a central question: should income earned through work bear a heavier tax burden than returns generated passively from wealth?

“In countries like the UK,” he noted, “taxes on income are significantly higher than those on capital gains or inherited wealth. From a meritocratic standpoint, that seems inverted. Shouldn’t we protect earnings derived from contribution while fairly taxing unearned appreciation?”

While acknowledging debates about competitiveness and the risk of capital flight, Savage insisted the imbalance merits serious reconsideration. Shifting part of the tax base towards wealth, he suggested, could align fiscal design more closely with principles of equity and fairness.

Turning to philanthropy, Savage expressed cautious optimism. While noting concerns about democratic accountability when private funds shape public agendas, he emphasised philanthropy’s unique capacity to pilot transformative ideas—precisely because it is not constrained by electoral cycles or taxpayer risk aversion.

Referencing Andrew Carnegie’s founding of public library systems— initially funded privately before being adopted nationally—Savage praised strategic, experimental giving aimed at long‑term systemic change.

“I believe philanthropy adds greatest value when taking bold risks: supporting innovation, testing models, challenging norms,” he said. “That’s where it can catalyse wider reform—not by replacing the state, but by inspiring its evolution.”

Conclusion: Rebuilding Shared Futures

As the conversation concluded, Savage reiterated the urgency of confronting wealth’s cultural and political dimensions—not merely its economic footprint.

“It’s not enough to redistribute after disparities emerge,” he said. “We must reshape how wealth influences identity, belonging and civic engagement. Otherwise, we risk normalising separation disguised as choice.”

His message resonated in the conversation—a call for introspection, courage and collaboration across sectors. Addressing inequality, he reminded attendees, is not only about levelling material differences, but renewing a collective vision of society in which prosperity is measured not by exclusion, but inclusion.

The insights shared by Professor Mike Savage at The Future of Social Mobility conference serve as a timely provocation—urging policymakers, foundations and financial institutions alike to move beyond narrow metrics and embrace deeper structural reforms. At a moment when trust in institutions falters and generational divides deepen, his analysis offers both warning and hope: the path forward demands honesty about privilege, creativity in solution‑building, and an unwavering commitment to justice.