The Importance of Economic Equality

[ting]

What if there was a way to raise a population's life expectancy and reduce its rates of crime, suicide, teenage pregnancy and mental illness, among other social problems? British epidemiologists Richard Wilkinson and Kate Pickett believe they have found one. In The Spirit Level: Why Greater Equality Makes Societies Stronger, published in the U.S. on Dec. 22, they present data suggesting that almost every indicator of social health in wealthy societies is related to its level of economic equality. (See the data here). Comparing statistics between developed economies and within the U.S., Wilkinson and Pickett argue GDP and overall wealth matter little to wealthy societies. Rather, it is the gap between the rich and poor that is telling. They spoke to TIME about what they believe are revolutionary findings.

You found a very strong correlation between income equality and societal well-being. Why had no one spotted it before?
KP: We and other researchers had noticed this trend. But the field was splintered — people looked at only health, or only crime. We've brought it together. Treating the 50 United States as separate countries and then comparing them really strengthened the evidence.

Why does greater income inequality lead to social problems?
RW: In hierarchical societies the quality of social relationships becomes strained, and that can be stressful. Many of the effects we note spring from chronic stress, whether you are talking about obesity or mental health or the ****** development of girls stressed early in childhood.

KP: Humans are highly social beings — we can either behave competitively or we can be cooperative. In more unequal societies, people are more out for themselves. Their involvement in community life drops away, and that’s corrosive.

(See TIME's 2009 Person of the Year coverage.)

Is it just the poor who suffer in unequal societies?
KP: The impact of inequality, although greatest among the poor, does seem to effect people almost all the way up the income ladder. We are not sure about the super-rich. They make up less than 1% of the population, so it's difficult to track.

If you had to pick a U.S. state to live in based on your data, which would it be?
KP: Vermont, with Iowa, New Hampshire or Utah close behind.

RW: Vermont or perhaps New Hampshire. But the point is that at any given level of income, education or occupational level, you are better off in a more-equal state. You will be less likely to have mental illness, and your children will be more likely to avoid drugs or teenage pregnancy, or become victims of violence.

How did you define income equality?
RW: There are many measures. We compared the gap between the richest and poorest 20% of households in each society. You can use more sophisticated indicators like the gini index, but they produce broadly the same answers.

(See the Top 10 Medical Breakthroughs of 2009.)

So is an emphasis on GDP growth misleading?
RW: Increases in income and economic growth are important in poorer countries where food, shelter and clean water are important. But when it's a matter of getting more cars per household or higher-quality electronics, it doesn't translate to well-being.

How can we achieve more income equality in a market economy?
RW: Some relatively equal societies, such as Japan, and some states such as New Hampshire have smaller differences between earnings before taxes and benefits. The other way is to start off like Sweden does — with large inequalities between earnings — and then redistribute wealth with high taxes and benefits. I think we need to do both. To reduce earning differences you need as many different forms of economic democracy as possible. We need to make it a bit more embarrassing for company directors to give themselves huge pay deals and bonuses while holding down wages elsewhere in their company.

You believe an emphasis on economic equality could help the battle against climate change. How?
RW: The biggest challenge to slowing carbon emissions is consumerism. Consumerism is driven by status competition and is intensified by inequality. Further, more-equal societies are more willing to think about the common good and to be more public-spirited. You can see this in terms of the proportion of waste recycled or the proportion of international development aid given. Both are greater in more-equal countries. In more-equal countries, business leaders are more likely to stress that their governments should abide by international environmental agreements, too.

KP: Since we finished the book, we’ve found that more-equal societies are more innovative in terms of patents granted per capita. This is probably because they develop more human capital. Kids do better in school, and social mobility is higher. We need innovation to tackle climate change.
http://www.time.com/time/world/article/0,8599,1948806,00.html

Graphs n stuff:
http://www.equalitytrust.org.uk/node/130

What do you guys and gals think? Does this sound reasonable, or should I run for cower before the screams of commie become too intense?p-)

[TheSteve]

Socialist! :)

Seriously though, tt always boils down to economics. I don't think its a new idea that a strong middle class, or greater economic equality, creates a more stable society.

Great article, thanks for posting.

[GregHJ]

I'm surprised they actually had to do a study for them to figure this out. It's really a no-brainer. Money gives people choices. People always complain that the poor are fat and lazy. Well, you would be too if all you could readily afford was Burger King. We could eliminate or at least reduce a lot of the social problems in America (crime, health, poverty) by making sure there is greater equality among citizens. And before anyone starts yelling communism and socialism, this article and I are talking about equality of opportunity, not equality of outcome.

[Clockwinder]

Thanks for the post - pie in the sky altruistic nonsense of course, but nevertheless, the Socialist dream will always live on in the hearts of man.

[hughdotoh]

There will always ALWAYS be some form of social stratification anywhere, whatever the economic condition. Even in socialist/communist/other theoretically egalitarian countries, the economics is skewed in favor of Party and Non-Party.

It's not so much as what you don't have, but what you're willing to do to get it. Opportunity is relative or even figurative.

[MaDuce]

You can change government's as much as you want but the human animal will alway stay the same. We are hardwired to look out for our selfs and our family/tribe.

[Nano]

I'm surprised they actually had to do a study for them to figure this out. It's really a no-brainer. Money gives people choices. People always complain that the poor are fat and lazy. Well, you would be too if all you could readily afford was Burger King. We could eliminate or at least reduce a lot of the social problems in America (crime, health, poverty) by making sure there is greater equality among citizens. And before anyone starts yelling communism and socialism, this article and I are talking about equality of opportunity, not equality of outcome.
I tend to agree with you on the opportunity part to an extent. The article however and the researchers' claims are about income disparity not opportunity disparity. Again people look at what they want the numbers to support and not an entire picture of any section,group and entire societies.
My best guess is that the people living in Vermont are demographically different than the people living in other parts of the country.

[seraosha]

Vermont
Iowa
New Hampshire
Utah

Interesting list.

So, the article is putting forth the idea that if we eliminate the poor, there won't be such disparity between the classes and less pollution? Hmm. And is this true?

The other way is to start off like Sweden does — with large inequalities between earnings — and then redistribute wealth with high taxes and benefits.

Really, you Swedes set this system up...on purpose?

[Mr.Salt]

You can change government's as much as you want but the human animal will alway stay the same. We are hardwired to look out for our selfs and our family/tribe.

Right and wrong.
The human animal is hardwired to fend for itself and its "in-group" interchangeably. Morality in humans evolved because of the need to survive in groups, along with religion, which helps curbs the half of our nature which is greedy. If we changed the way in which a government operates, then the level of morality able to be practiced changes also. In capitalism the selfish and greedy nature of man is glorified, and the communal and altruistic side is left in the dust. On the other hand, in socialism (let's go ahead and assume both of these are pure capitalism and pure socialism, neither which have existed.) The communal and altruistic side is fulfilled, but with the greedy side left without a place to channel it through. Thus, we will always have a half-ass of either system, lest this animal can collectively decide on one.

[RangerMT]

Sounds like propaganda for socialism IMHO.

[Mr.Salt]

Sounds like propaganda for socialism IMHO.

I'm a Marxist, but I tried to be as neutral as possible, giving Capitalism some credit. Is what I said wrong, though?

[INAT]

I think a good example of this was Jugosalvia.You had Serbs,Croats,Slovenes and Muslims living toghether in relative peace and mixed ethnic marriage until the harsh economic reforms imposed by the United States and the IMF helped lower the standard of living and raised the unemployment rate.At that point the ethnic tension increased and old hatreds were revived.

[Soldat_Américain]

I'd like for there to be less greed, we could easily eliminate poverty as we know it in the United States...but it takes both the man with the money and poor guy that likes welfare.

[Mr.Salt]

But that would require the man with much money to either not have as much, or simply exploit other countries, which would be worse.

[TheSteve]

I tend to agree with you on the opportunity part to an extent. The article however and the researchers' claims are about income disparity not opportunity disparity. Again people look at what they want the numbers to support and not an entire picture of any section,group and entire societies.
My best guess is that the people living in Vermont are demographically different than the people living in other parts of the country.
How do you measure level of opportunity?

[ting]

I'm not sure viewing the article and the data as a capitalist vs communist discussion is fruitful. I view this more as a means to get the most out of the capitalist system.

There is a lot of graphs in the other link. They are able to demonstrate how many of the factors which plague a society are higher in more unequal societies: Health, Crime, education, social mobility, innovation etc ad naseum.

Also they are able to show the same trend when comparing individual US states.

I also found it interesting that US social mobility is the lowest in the compared countries. Meaning the American dream is kaputtp-). Or rather much more of a dream in the US than the other countries were this dream is closer to reality.

[Danik]

I'm not sure viewing the article and the data as a capitalist vs communist discussion is fruitful. I view this more as a means to get the most out of the capitalist system.

There is a lot of graphs in the other link. They are able to demonstrate how many of the factors which plague a society are higher in more unequal societies: Health, Crime, education, social mobility, innovation etc ad naseum.

Also they are able to show the same trend when comparing individual US states.

I also found it interesting that US social mobility is the lowest in the compared countries. Meaning the American dream is kaputtp-). Or rather much more of a dream in the US than the other countries were this dream is closer to reality.

If their outcome is correct why are there so many outliers, why in so many instances are countries or states at the bottom of one scale tip the top of the other?

Most of the problems they list stem from cultural factors and levels of education.

Why not throw in a chart about peoples levels of happiness vs GDP? then we can prove that money and happiness are not hand in hand, in exactly the same way that obesity and income are related.

If social mobility was so low in the US then why do people come here? Its just a myth according to that chart yet everyone I know that immigrated here is far more successful than they were in their countries of origin and are more successful than the average american. That to me sounds like a problem with culture and education than income inequality.

PS Half of this data is over 10 years old.

[Atlantic Friend]

I'd personally think that a widepsread sense of social equity is more crucial to a society than an economic equality that can only be established by decree.

[Mackie]

Sounds like propaganda for socialism IMHO.

Sounds like a proven theory.

[maw]

i'm probably the only person in this thread who's actually read this book. it's a very interesting read and a very important one. it's destined to influence policies for a long time.

[hughdotoh]

I'd personally think that a widespread sense of social equity is more crucial to a society than an economic equality that can only be established by decree.

I tend to agree. Bhutan comes to mind. Majority of people there don't have much, but they seem to be content with what they have.

Also, Red China was economically egalitarian until they opened up to world trade in the 70's, yet it is clear that despite the economic equality, people needed room to grow individually, intellectually - which often leads to criticism of the imposed egalitarianism. But this was one thing that their government cannot allow.

So economic equality is plain red herring.

[ting]

If their outcome is correct why are there so many outliers, why in so many instances are countries or states at the bottom of one scale tip the top of the other?

My knowledge of statistics is poor, however I think you should look at the line in the graphs which marks the central tendency. Statisticians have a lot of wodoo tricks that in the end show that numbers are significant.



Most of the problems they list stem from cultural factors and levels of education.

That sounds very diffuse. I prefer the more specific income equality to the less specific terms education and cultural factors.



Why not throw in a chart about peoples levels of happiness vs GDP? then we can prove that money and happiness are not hand in hand, in exactly the same way that obesity and income are related.

I don't follow you here. This is about equality within society not between societies.



If social mobility was so low in the US then why do people come here? Its just a myth according to that chart yet everyone I know that immigrated here is far more successful than they were in their countries of origin and are more successful than the average american. That to me sounds like a problem with culture and education than income inequality.

That is anecdotal evidence. You have to have generalizable samples. Also you can not compare how they are doing now in a new country compared to how they would have done in their previous countries. Social mobility is about what income level you were born with(parents etc), and how you can increase your income level to a new level during your life time. I'm not sure I follow you. And again culture and education are not as specific as income equality. Anyway this article relates to income equality.

I'm sorry if I am unclear, I'm unsure of weather I'm having trouble understanding you, or that you are having trouble understanding the article or data. Or both.;)





PS Half of this data is over 10 years old.

Do you think the trends have changed that much in the last few years?

[ting]

I'd personally think that a widepsread sense of social equity is more crucial to a society than an economic equality that can only be established by decree.

What do you mean with social equity?

[Nano]

How do you measure level of opportunity?
I suppose it would have to be an indirect form of measurement. I would have to compare the simple basics that everyone in society who expects to achieve would have in terms of it being equitable to everyone. Educational funding from k-12 would have to be compared in relative terms to class sizes, quality&quantity of the education. The study in my view does show something and proves something important, but it certainly is not what they concluded. It certainly proves the economic concept of the vicious social economic cycle.

The study is simply skewed to demonstrate and prove their point of view. It is well known fact that statistics can be used to prove all sorts of ideological perspectives. I don't dispute their raw data(entirely) since I have yet to see it, but their conclusions are their own.

All I can say and wonder if they used data that would best support their preformed conclusion. Pre-Capitalist Russia(Soviet Union) and China are, but a few examples that would definitely destroy their so called proven theory. Simply put their data does demonstrate/points out something, but I'm afraid they entirely missed the boat one what it is that it proves.

[Atlantic Friend]

What do you mean with social equity?

Generally speaking, the feeling that roughly everyone's input into society is rewarded fairly, I'd say. A mix between the European ideal of social justice and the American ideal of social promotion.

If I take my own situation as an example, I'm a junior manager in a local government. I know a senior manager or a doctor or an engineer make more than me, but I don't see myself as being downtrodden. I earn enough to cover my needs and make my life comfortable, if not luxurious. My paycheck reflects my level of academia and professional qualification, and so does the paycheck of almost everyone I know. So, I endure no social tension, nor do I live under constant stress to engage in one-upmanship contests with the neighbors about a bigger house, or a bigger car.

I also know that if I obtain the qualifications to be a doctor or an engineer or a senior manager, I'll make more money - therefore I still have an incentive to get higher degrees or professional qualifications.

I don't think, to get back to the idea of social equality article, that a society can work seamlessly if a neurosurgeon is made by law to make as much as a museum guide. The level of studies, of responsibility, of professional stress is much higher in the medical profession and should be reflected, because if it isn't and everyone earns the same at the end, most people will take the easiest road. I do not think either that there should be no limitations. Social tension begins when people feel they are treated unfairly, not when they see that architects make more money than stonemasons.

[Jobu]

**** that bull****.

Greed is good. Inequality is good.

You want a better new iPod? You want a better new computer? You want a better new HDTV? You want better new hospital equipment, airplanes, and everything else that makes your life better?

That **** doesn't come from equality. It comes from greed. New innovations are born out of somebody's desire to get ahead, to get rich, to beat the competition, etc.

You want equality, go live is a cave somewhere you neanderthals. You'll love it until someone decides to fashion a better spear and realizes he deserves more of the meat.

[California Joe]

As usual, I agree with Jobu.

[Hollis]

Sort of saying what Jobu is saying, It is equal opportunity that is important. Redistribution creates a mediocre society at best. Entitlement programs should be short term in life as a help to those who needs it, long term entitlement programs creates dependent people who become unable to fend for themselves.

To say it is greed, only ignores all the other motivations that simulate people to action.

If you want a complacent society that is probably actually going backwards, then sure promote redistribution of the wealth.

The free market system seems to offer great opportunity to new entries in the market. Which means great economic freedom. BTW, so far saying capitalists this or that, seems to leave me to believe, some people do not know what the capital market is or isn't. It is only one part of the market, it is not the market.

[eskachig]

The article is not advocating a command economy, nor is it saying that there should not be any rich people. Essentially it is saying that all things considered, a smaller gap between the rich and the poor seems to result in increased social health.

Hell, as part of the model they examine Europe, which has a market driven fairly high tech industrial economy, so there is no reason to claim that people won't get their HDTVs. No need for such hyperbole.

This isn't exactly revolutionary - we have always understood that extremes of income disparities can create chaotic environments, witness Brazil. Or Detroit.

[ting]

Generally speaking, the feeling that roughly everyone's input into society is rewarded fairly, I'd say. A mix between the European ideal of social justice and the American ideal of social promotion.

If I take my own situation as an example, I'm a junior manager in a local government. I know a senior manager or a doctor or an engineer make more than me, but I don't see myself as being downtrodden. I earn enough to cover my needs and make my life comfortable, if not luxurious. My paycheck reflects my level of academia and professional qualification, and so does the paycheck of almost everyone I know. So, I endure no social tension, nor do I live under constant stress to engage in one-upmanship contests with the neighbors about a bigger house, or a bigger car.

I also know that if I obtain the qualifications to be a doctor or an engineer or a senior manager, I'll make more money - therefore I still have an incentive to get higher degrees or professional qualifications.

I don't think, to get back to the idea of social equality article, that a society can work seamlessly if a neurosurgeon is made by law to make as much as a museum guide. The level of studies, of responsibility, of professional stress is much higher in the medical profession and should be reflected, because if it isn't and everyone earns the same at the end, most people will take the easiest road. I do not think either that there should be no limitations. Social tension begins when people feel they are treated unfairly, not when they see that architects make more money than stonemasons.

I would perhaps say economic equality is a component of social equity. I don't view the concept of economic equality as everyone earning the same. It's more about the differences in what you take home after taxes are reduced by the tax system. Also that the guys in the top jobs don't earn insane amounts of money compared to those at the bottom.

A system were everyone earns the same no matter what seems crazy and is IMHO not possible within a capitalist system. However extreme differences in disposable income can be detrimental to a societies cohesion.

[ting]

Sort of saying what Jobu is saying, It is equal opportunity that is important. Redistribution creates a mediocre society at best. Entitlement programs should be short term in life as a help to those who needs it, long term entitlement programs creates dependent people who become unable to fend for themselves.

To say it is greed, only ignores all the other motivations that simulate people to action.

If you want a complacent society that is probably actually going backwards, then sure promote redistribution of the wealth.

The free market system seems to offer great opportunity to new entries in the market. Which means great economic freedom. BTW, so far saying capitalists this or that, seems to leave me to believe, some people do not know what the capital market is or isn't. It is only one part of the market, it is not the market.

I agree, greed is not what drives us humans. We are far more complex.

Actually most countries practice a redistribution of wealth. Even if one does not have progressive taxation. It's in the nature of a society. The question is of course to what degree. Or how much more do the rich guys pay compared to the poor guys, as well as how good are the social programs to help those at the bottom.


The article is not advocating a command economy, nor is it saying that there should not be any rich people. Essentially it is saying that all things considered, a smaller gap between the rich and the poor seems to result in increased social health.

Hell, as part of the model they examine Europe, which has a market driven fairly high tech industrial economy, so there is no reason to claim that people won't get their HDTVs. No need for such hyperbole.

This isn't exactly revolutionary - we have always understood that extremes of income disparities can create chaotic environments, witness Brazil. Or Detroit.

X2

Well said(written)!:)

[Danik]

That sounds very diffuse. I prefer the more specific income equality to the less specific terms education and cultural factors.

Income equality is something tangible, therefore easier to quantify, but many of the things in their research don't necessarily indicate a causal effect. This line of thinking and research is a populists wet dream and very easily leads to all sorts of laws and regulations stifling the upper middle class and the wealthy.


I don't follow you here. This is about equality within society not between societies.


I was pointing out that correlation does not equal causation



That is anecdotal evidence. You have to have generalizable samples. Also you can not compare how they are doing now in a new country compared to how they would have done in their previous countries. Social mobility is about what income level you were born with(parents etc), and how you can increase your income level to a new level during your life time. I'm not sure I follow you. And again culture and education are not as specific as income equality. Anyway this article relates to income equality.


The article, in a fairly straight forward fashion, is trying to prove that I and countless numbers of people I know and have met would have been better off moving to anywhere in the free world except the United States. After living in Europe for a bit I know that my opportunities are limitless in this county as opposed to anywhere else. Income equality is not straightforward at all, its a simple measure that really tells me nothing. The reason I also brought up levels of happiness and gdp is because in plenty of countries where people are happiest in this world there is also income inequality. Point being it is more their culture and their perceived needs that makes them happier rather than knowing that the guy next door has more money.





Do you think the trends have changed that much in the last few years?

Yes


At the end of the day I agree with Hollis and in part with Eskachig

[saturnin]

**** that bull****.

Greed is good. Inequality is good.

You want a better new iPod? You want a better new computer? You want a better new HDTV? You want better new hospital equipment, airplanes, and everything else that makes your life better?

That **** doesn't come from equality. It comes from greed. New innovations are born out of somebody's desire to get ahead, to get rich, to beat the competition, etc.

You want equality, go live is a cave somewhere you neanderthals. You'll love it until someone decides to fashion a better spear and realizes he deserves more of the meat.

X2

communist regime in Czechoslovakia createdel ratively income equal society (- apparatchiks). At the start some (50´s) people thoutht it works - then people get used to new conditions and acted according to this. Resuld: why work hard, do over work, push new project (with risk it will be not working and you will be the one blamed), why for ten years try to be promoted when you only get bonnus ~ 20% of your current income. Even ambicious and creative people got lazy because nobody around them wanted to cooperate on something new (risky).

people work hard and innovate because they want more. At the moment your chief, doctor, scientist, engineer get only few bucks more - your society is doomed.

[Violet Fashion by Mindy]

The problem with the rich and poor divide is that the poor end up with a major disadvantage in a lot of areas.

Poor access to education which results in the poor finding it increasingly hard to better themselves.

More expensive REAL cost of living. As inner city areas become gentrified, which pushes the poor out into the suburbs the poor are faced with having higher transport costs to get to work due to out suburbs having poorer public transport options. (Sydney is a case in point). It's also become widely known that supermarkets and stores charge more in poorer areas then in more afluent areas.

Higher crime rates

Essential services such as health and education are harder to come by since newer schools are larger then compared to old inner city schools. Health likewise.

Whilst I do believe people deserve to be rewarded for hard work, at the same time we should be ensuring that the difference between rich and poor is not as great as it is. We should also ensure that people from traditional working class can still in the areas that are close to their place of work. It's absurd that minimum wage workers get pushed to the city fringes where public transport doesn't exist thus requiring cars which mean in some cases people are forced to spend considerably on transport.

These are just some things. I could go on about this all day. But as the banking crisis proved rich ****s are in general ****s and are delibretly keeping the poor poor to keep lining their own pockets.

Like ****. A corporate executive on 10 million a year plus getting paid bonuses for leading a company to bankruptancy whilst the guy in the factory loses everything for simply turning up to work.

It's just not ****ing right.

[maw]

**** that bull****.

Greed is good. Inequality is good.

You want a better new iPod? You want a better new computer? You want a better new HDTV? You want better new hospital equipment, airplanes, and everything else that makes your life better?

That **** doesn't come from equality. It comes from greed. New innovations are born out of somebody's desire to get ahead, to get rich, to beat the competition, etc.

You want equality, go live is a cave somewhere you neanderthals. You'll love it until someone decides to fashion a better spear and realizes he deserves more of the meat.

i couldn't DISAGREE with you more. greed is pathologically harmful. it's much too narrowly focused. greed is not the motivator behind progress, necessity is.

[Atlantic Friend]

Apart from being a cute Wall Street/Michael Douglas quote, the Greed is Good speech does not convince me. Greed isn't good per se, as if it was a quality in and by itself.

Lay not up for yourselves treasures upon earth, where moth and rust doth corrupt, and where thieves break through and steal: But lay up for yourselves treasures in heaven, where neither moth nor rust doth corrupt, and where thieves do not break through nor steal: For where your treasure is, there will your heart be also.

No one can serve two masters, for either he will hate the one and love the other; or else he will be devoted to one and despise the other. You can not serve both God and Mammon.

—Matthew 6:19-21,24