When the Labour party this year reopened the debate about whether the state should become an owner of parts of British life, it was derided as a throwback to the failed ideologies of the 1970s. Yet the surging inequality apparently endemic to modern-day capitalism is cause enough for the state to intervene. What is becoming increasing clear is that the shares of national income received by the owners of capital and labour are diverging. If this is allowed to continue unabated wealth will, like a century before, become concentrated in a patrimonial caste: a small group of rich rentiers able to live lavishly on the fruits of its inherited wealth while the rest struggle to keep up.

Britain is on its way to such a future. The wealthy have been quietly accumulating capital: whether that is physical, such as houses; intangible, such as brands; or financial, such as shares. When income generated by capital grows rapidly, the very richest benefit disproportionately. Since the crash, in the UK corporate profits, dividend payouts and the stock market have all risen sharply, but wages have barely budged. If the ownership of capital were distributed equally, this wouldn’t matter much as all citizens would all share in the rise in profits, dividends and rents. However, the wealthiest 10% of UK households now own 45% of the nation’s wealth, while the least wealthy half of all households own just 9%

A larger proportion of the population ought to have a greater share of capital. Owning capital is not just about expanding fortunes, it is also about gaining control over how businesses are run. Alternative forms of ownership allow power, voice and reward to be distributed differently, more pluralistically and democratically. A recent report by the Institute for Public Policy Research makes three very good suggestions, which are mainstream in Europe, to put flesh on the bones of such ideas. First, it suggests the establishment of a national citizens’ wealth fund, giving the public a share of corporate and other assets. A model of this could be Norway’s wealth fund, which has £65bn worth of stakes in 74 companies, generating £3bn in dividends a year, to create value in the national economy. The report also calls for the expansion of employee ownership trusts, which give staff majority ownership of companies. It is a scandal that boardrooms hoard share-based pay in the UK, awarding themselves 30 times the equity that ordinary workers might get if salary levels determined handouts of stock. Last, the thinktank rightly pinpoints the need to grow the co-operative sector, a form of capitalism whose virtue can be gauged by the fact that the five largest UK mutuals paid 50% more tax than Amazon, Facebook, Apple, eBay and Starbucks.

The Conservatives would do well to lift a page from Labour’s manifesto. Capital’s share of national income will continue to increase because of three trends. First, the value of land – worth £5 trillion, more than half of Britain’s value – will continue to rise faster than economic growth. Second, growing automation in the economy will benefit owners of capital rather than labour. Third, new digital platform monopolies will squeeze labour’s share too. There are ways to reverse these trends: progressive tax policies; union-friendly laws to allow workers to bargain for higher wages; and higher inflation. Voters are waking up to the fact that politics and income distribution are two sides of the same coin. Tory pledges of a property-owning and shareholding democracy were easily made but not upheld. Unless the Conservatives change tack – as Labour has – they will debase their own political currency by abandoning the public to the empty rhetoric of their prevailing ideology.