Friday, 3 January 2014

The Spirit Level: consequences of inequality

Over the last several years a very troubling social issue has boiled to the top of the political cauldron: the increasing income inequality in many countries of the world.  President Obama recently gave a speech in which he stated that reversing the growing gap between rich and poor was "the defining challenge of our time".  His speech did not, by any means, meet with universal approval.  For example, columns in the Wall Street Journal and The Atlantic were sharply critical of the idea that inequality in itself was a problem, and also challenged that it was a growing condition.

Nevertheless it does seem to be established that income inequality has become much more pronounced since the Reagan-Thatcher years.  If you doubt this have a look at this very compelling presentation of the US situation.  There are many other statistical analyses and I think that you have to be completely blinkered not to accept that income inequality is a growing phenomenon.

But is it a "problem" that we should be working to solve?  Maybe income inequality is a motivator to make societies stronger or more efficient.  And how can we judge the arguments for and against when clearly this is an issue that is likely to be politically polarised with the left arguing on the basis of social equality and the right arguing on the basis of rewarding the most industrious?

I have just finished reading "The Spirit Level" by Richard Wilkinson and Kate Pickett.  Theirs is not a political text but they do come down completely on the "Income inequality is harmful" side of the question.  They demonstrate, by a large number of statistical analyses, that income inequality is correlated with a host of societal evils (poor social relations, poor mental health and drug abuse, poor physical health and lower life expectancy, obesity, low educational performance to name just some).  They display their results in graphs that plot, country by country (or US state by US state) how income inequality is correlated with particular social evils.

Now correlation is not necessarily the same as causation but the authors do consider in depth whether some other causal agent than income inequality might be present.  Coupled with arguments for how income inequality can be so pernicious they come to the very strong conclusion that very many societal evils stem directly from income inequality.

This part of their book - the case for income inequality having such negative effects - is the main take-home message.  I found it entirely convincing, so convincing in fact that I believe every honest politician should acknowledge its validity.  The remainder of the book begins a discussion about what to do.  Of course this is much less clear-cut but I found it valuable for two main reasons.  The first one is that we should be aware that there are multiple types of solution not all of which would be unpalatable to those on the political right.  

The second one brings in the other flagship problem of our age: to come to terms with our now rapidly changing climate and the inevitable adjustments it will being to our way of life.  It turns out that yet another strong correlation (arguably causal) is that nations with greater income equality are more seriously inclined to pursue vigorous policies to address climate change.

So to underline the principal message of the book: every nation should be aware that  most of their social problems will be alleviated if they can institute measures to distribute their national wealth more equitably.  This is not the politics of envy - it is the politics of our very survival as a species.

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