Inequality: the root of all problems?

[Kevin_Lowe]

Not caring about social status. Only care about health, longevity, and so on.

Not following the argument. Not understanding these things correlate.

 

[stup_id]

Inequality?

[opinion]

Inequality is not the problem. The concept of "fairness" is.

People are born unequal - that is, no two people are the same. Even identical twins have subtle differences. Some people are strong, some have greater dexterity, and others are healthier than their peers.

It's when people lacking in some ability (or maybe the initiative to actually earn their way) seek to legislate equality and demand the same benefits as the more "gifted" people without having earned those benefits that is one of the roots of the problem.

Another root is the idea that if legislation can not elevate the lesser-gifted folks to the ranks of the greater-gifted, then the lesser folks are somehow "entitled" to drag everyone else down to their level through legislation ... or revolution.

People are not equal in ability even though they may have equal rights - some are just more (or less) equal than others.

[/opinion]

Hello everybody, it-s been a time since i've decided to participate in a discussion held in this forum, but some replies just make me want to speak my mind.

First of all, I want to state clearly that this isn't in any way a personal attack at the opinion of the poster i'm quoting, it's rather a response to a way of thinking i find quite often in the forum, and it just happened to be a good example i happen to have read.

It seems to me, that disregarding inequality as something inherent to the people who suffer the worst part of it, is something that can only be done so unreflexelly when you are born in a level of assured equality.

Let me elaborate about that, I'll try not to sound arrogant or vain, but would use myself af an example, I was born in Mexico, from a low middle class family, as it turns out, I've been quite good for Academia since a child, perfect grades, scholarships and all that, I graduated top of the class in high school, and have been already 2nd place in a National Math Olimpyad, for the second year of my medicine school education i was trainer of the statal team of Math, and co-autor of one of the six problems in the national math olympiad test of 2003, I had quite good grades in my career as well, 10th plaece of my 250 prom, been national representavie of the International Federation of Medical Student's associations, and as such, travelled to Spain, Uk, Turkey, Egypt, Australia, President of the organising committee of one of such meetings in my hometown, etc, etc. I speak Spanish, a decent English, and can follow a conversation in French, Italian, Catalan, besides uttering some German words and reading courtesy phrases in Serbian, and Greek.

I don't reckon this as a personal triumph, I acknowledge I've been very lucky, I just put all of this as a proof that I may call myself of the "lucky" deserving good things group in society.

Nevertheless, I'm finding my future quite dark, and everything I've accomplished banishes in comparison with the luck of being of a more wealthy family, one who could pay for my next grade of education and be expected to be refunded with work, meaningly an scholarship. I've been working in many things since 14 years old, selling hamburguers, security in a jewelry, administrative staff in a hospital, teaching private lessons, etc, etc. and even ALL that can't overcoem the growing barrier of inequality that prevents me of having even the usual things everyone gives for granted such an stable job in what i'm good at and being economically solvent enough to live a happy life.. not a bit more.

this is not a call for help or simpathy, i'm positive things will turn out good, but i offer it only as a brief example of what is looking inequality from the bottom half. I do not believe everybody should be given the same benefits, some are, as the previous poster mentioned, more talented than others, but equality doesn't necesarily means that, it means setting the game straight so the people can earn things accordingly with their talent and hard work, which I honestly can say are very far from as a society.

Also, this reffered kind of reasoning has a major flaw, it assumes that natural talent and motivation are not related to the environment people are born, when they are quite undeniably related, even to the physiologic level, the development of the brain depends upon a sufficient and adequate supply of nutrients, which in turn are a consequence of the nourishment the guardians of the child can provide. Wouldn't it be reasonable to admmit that potentially more talented people are being prevented of reaching its full potential, by the already existing impairing inequality

I'd like to conclude with my personal opinion that being insensitive about inequality is easy when you live in the bright side on the question, and IMHO humankind has its hopes for the future in a more reasoned way of ruling things to cooperation and an strict understanding and actively pursuit of freedom for all individuals.

 

[Francesca R]

I don't really consider Germany and France the more traditional "North European welfare states".

Well Otto von Bismarck pioneered social insurance and pretty much made Germany the first welfare state in the world, and Germany has not had a Thatcher or a Reagan or a group of Chicago Boys to dismantle it.

Anyway your numbers are for 2008 average; most economies fell apart in the middle of that year and rates are a lot higher than that everywhere. Unemployment has risen most sharply in countries where the employment regulations have been scaled back more (such as UK and US) but it is on average lower over time. The relationship you allude to is not correct.

Those are the "most socialist" countries, right? "Their" average appears to be about half of the US and UK?

Not particularly no. Government spending as a fraction of national income (GDP) is an OK measure of the size of a "welfare state". The OECD website has this info but not in readily linkable form.

 

[Francesca R]

Equality is an illusion. it doesn't exist.

Irrelevant.

 

[Francesca R]

Not caring about social status. Only care about health, longevity, and so on.

If you don't care about income and wealth, presumably you don't have any problem with compulsory redistribution that reduces inequality.

I suspect Professor Y meant income or economic status, not social status anyway.

 

[Francesca R]

I don't reckon this as a personal triumph, I acknowledge I've been very lucky, I just put all of this as a proof that I may call myself of the "lucky" deserving good things group in society.

I strongly suspect that many individuals hugely over-attribute their wealth/income and socioeconomic position to their own skill and effort rather than luck, relative to the objective truth. This is corroborated by measures of socioeconomic mobility which tend to explain the majority of such status to geography and parental status. So in short, your typical wealthy person thinks they are highly deserving of their spoils and that poor folk are certainly not. This conveniently gives rise to opposition to social insurance and redistributional equity on the part of wealthy people; perhaps more than most other things.

Since it's based on flawed assumptions born of over-inflated egos, it's intellectually rather broken and unsupportable in the way many adherents like to support it.

Insurance is based on a relatively simple concept of risk pooling through which the lucky (beneficiaries of good chance) compensate the unlucky, because they (the "lucky") accept that it was significantly (not completely) in the lap of the gods that they rolled a six, and that their neighbour rolled a one. No sensible social insurance program has the goal of equalising everybody because inequality is not all evil, not all due to luck, and not something it is desirable to eliminate completely. Furthermore, a good deal of risk pooling is rendered ineffective if the pool is self-selecting, so welfare insurance does not tend to work in the absence of some measure of compulsory participation

 

[Dogdoctor]

Perhaps all they are talking about is a homogeneous population. If everyone speaks the same language, is the same race and has the same education then they will be more cohesive.

 

[Cain]

Social hierarchies are positional rather than absolute, so inequalities do matter. There's a famous study that followed British civil servants, and contrary to popular belief that stress-related diseases do not increase as you go up social hierarchies (those receiving that 3 A.M. call), but as you go down them (the person who has eight different bosses telling him about TPS reports). Many people forget Adam Smith was a moral philosopher first, and in his book Theory of Moral Sentiments he argues everyone should have leather shoes because no one should feel "ashamed" to go out in public.

Now does this mean we should redistribute money so ugly people can have plastic surgery? Not necessarily. We also participate in our own hierarchies. So in our society actors have higher social status than directors, and directors have more status than producers. But, I'd guess most directors do not really care what the general public thinks, and producers only really care about the opinions of others in their industry.

Political philosopher Brian Barry offers a compelling argument against inequality in his book Why Social Justice Matters, a portion of which can be read here: http://books.google.com/books?id=ww...4sXKDg&sa=X&oi=book_result&ct=result&resnum=1

One of the things he discusses is cumulative dis/advantage vis-a-vis opportunity costs.

 

[kellyb]

Well Otto von Bismarck pioneered social insurance and pretty much made Germany the first welfare state in the world, and Germany has not had a Thatcher or a Reagan or a group of Chicago Boys to dismantle it.

Anyway your numbers are for 2008 average; most economies fell apart in the middle of that year and rates are a lot higher than that everywhere. Unemployment has risen most sharply in countries where the employment regulations have been scaled back more (such as UK and US) but it is on average lower over time. The relationship you allude to is not correct.

Not particularly no. Government spending as a fraction of national income (GDP) is an OK measure of the size of a "welfare state". The OECD website has this info but not in readily linkable form.

Ok, I guess, but is there evidence that socialism (or other reductions of inequality) produces more unemployment?
I've looked at years 2000-2008, and I'm not seeing a trend that capitalism-only driven societies reduce unemployment.
The trend I see is that more equal societies have roughly equal to or less unemployment. I see no evidence that having a social safety net makes people unproductive. It appears to just make them happier and reduce social ills.

 

[Francesca R]

Ok, I guess, but is there evidence that socialism (or other reductions of inequality) produces more unemployment?

I don't think it is very mainstream but the "Abrams Curve" (a name that has not really caught on) argues that way yes--that increased size of government is positively related to unemployment rate.

http://ideas.repec.org/a/taf/applec/v37y2005i10p1193-1199.html
http://www.udel.edu/PR/UpDate/98/7/economist.html

I suspect this is consensus economic wisdom--that the price of greater redistribution (which is normally a market distortion) is at least somewhat slower growth than otherwise, and thus a higher unemployment rate. The two primary reasons for this would be (1) the deadweight loss effect of taxation which necessarily excludes some value-added activity that would otherwise have happened, and (2) government consumption/investment generally being less value-adding than market-price driven consumption/investment, and the bigger government is, the more it crowds out the private version of the same.

I think that arguing for greater income equality on the grounds that this produces stronger growth in total income, and so on, is arguing on a sticky wicket.

 

[Fnord]

OK, so the person running a company usually has greater ability and initiative than the lowest-paid employee... but how much so? Is (s)he twice as good as them? Or fifty times? Or ten thousand times?

.
The answer is: "Whatever the market will bear."

There is no fixed scale, and there can be none. The owner of a bagel shop might be worth more than the cashier, but considerably less than the owner of the car lot down the street.

The bagel merchant might make 64K$ and call it a good year, but the car dealer who makes that much in a year might not. Yet both depend on the same vast pool of consumers (bagel-loving drivers).

The point is that to put everyone on the same pay scale would be impractical and unjust. Consider a brain surgeon; by the time one is ready to be accepted by the College of Surgeons, he or she has already spend nearly a third of a million dollars on education (4 years at ~32K$ per year).

http://wiki.answers.com/Q/How_much_does_it_cost_to_become_a_brain_surgeon

Would it serve justice to force the brain surgeon to have the same income as the bagel merchant? I don't think so. You don't even need a college degree to make bagels, yet I would hesitate to even seek medical advice from a person that had not been to college.

 

[Francesca R]

The answer is: "Whatever the market will bear."

Except that this answer pre-supposes that the market can arise and act on its own and is doing so in all cases.

The point is that to put everyone on the same pay scale would be impractical and unjust.

That isn't the point, it's a reply to a straw argument nobody made.

 

[Ivor the Engineer]

<snip>

I think that arguing for greater income equality on the grounds that this produces stronger growth in total income, and so on, is arguing on a sticky wicket.

I agree.

Why is total income a more important output from economic activity than, say, happiness?

 

[Fnord]

I agree.

Why is total income a more important output from economic activity than, say, happiness?

Because contrary to popular belief, money can buy happiness ... or at least rent it for a weekend.

 

[SirPhilip]

Can anyone spot any major flaws in their evidence or reasoning? Because I am becoming a bit of a bore about this and wanting to interject it into every conversation I have, as it has such wide relevance. If someone found something majorly wrong with it, I might find myself able to talk about other things again.

The primary falsehood, historically consistent across all civilizations including the ancient world, is that essentially the more people have in contrast to everyone else, the more they want for themselves or respective group - regardless of what merit that actually has. Inequality itself exists because it cannot cease to exist in nature. Ideally, a balanced society would regulate and redistribute advantages to naturally high aptitude individuals. It takes a village.

 

[ZirconBlue]

Another thing that I noticed is that people seem to think that America is this land of great opportunity, where even the lowliest person can become rich and successful. Yet it seems looking at the figures, that social mobility is quite low in the USA compared to many other developed countries.

That's why it's called "The American Dream" rather than "The American Reality".

 

[Ivor the Engineer]

The primary falsehood, historically consistent across all civilizations including the ancient world, is that essentially the more people have in contrast to everyone else, the more they want for themselves or respective group - regardless of what merit that actually has. Inequality itself exists because it cannot cease to exist in nature. Ideally, a balanced society would regulate and redistribute advantages to naturally high aptitude individuals. It takes a village.

I don't think most people oppose the idea of an uneven distribution of power and resources.

What they find objectionable is the vastly uneven distribution of power and resources that some markets, if left alone, tend to produce.

 

[Francesca R]

(bump)

I have recently been reading a lot of The Equality Trust's material and was wondering what other people thought of them. Their basic idea is that most social problems (physical and mental health, obesity, violence, teenage pregnancies drug abuse etc) in developed countries vary closely with the amount of income inequality within the country (it also seems true on a state level within the US).

I bought "The Spirit Level" at the weekend, and wrote this review of it:


One of the sub-titles of this book ("Why Equality is Better for Everyone") is a little uninspiring as it hints at some kind of "Can’t we all be nice" outreach. But the content is deceptively methodological. Ambitious is it is to simplify a plethora of social negatives into one and tie them uniformly to variance in incomes (and ignore all other social strata, incidentally), the authors do this surprisingly well. Their story: Above some income-per-head threshold, social welfare (life expectancy, health, mental health, education, crime, trust, others) no longer improves much, but the more uneven the income distribution gets (which appears to happen as average income continues to rise) the more aggregate social welfare seems to unravel—and not solely for the unlucky relative poor but across society. Thus, countries enter a sweet spot where they are rich enough to support first-world living standards and to afford the redistribution necessary to score highly on social welfare too. (Over countless graphs—admittedly conspicuously lacking axis units—the reader quickly has it drummed into her that Japan and Scandinavia invariably occupy the "Here is where you should be" zone).

Income inequality is consistently measured as a ratio of top-fifth to bottom-fifth of population (except for US states where the more informative Gini coefficient is used). This is reportedly for simplicity and because UN data avails the authors of it readily. However, all the countries studied are rich (IE OECD) ones, and the OECD similarly provides Gini coefficients of all its members. Most of the measurements of social welfare ills lack a scale, with only a very sparse data annex in the back. The web-site of the NGO (the Equality Trust) that powered the authors’ analysis may have the missing detail.

After journeying through to chapter 13, it becomes pretty compelling that the links between income inequality and problematic outcomes are most unlikely to be spurious. Along the way explanations are offered which make intuitive sense, most of them built on a negative relationship between relative material wealth and fraternity, empathy and even tolerance (think gated communities next to slums, a common sight even in poorer countries not covered by this). This reviewer felt that the regression lines on some of the copious charts probably did not have R-squared values honourable enough to justify their presence, but there are many that do, and she applauds the inclusion of so many results, since the volume could have been slimmed down to contain a still impressive number of tighter associations. The causality part—more fully covered later in the text—is passable too, although the authors too readily dismiss it working in reverse (not that that weakens their argument). They also somwehat over-stretch themselves with the argument that the rich folk in unequal societies suffer too. They do, but would not be the major winners from the redressing of social bads. Moreover, this reviewer suspects that most or all of the analysis is heavily—if not completely—influenced by the incidence of welfare failures at the low income end, such that addressing this would be the main inference. And to the extent that social ills are directly driven by have/have-not antipathy, she questions whether it is any government’s legitimate task to legislate economic policy to minimise jealousy.

Wilkinson and Pickett's policy recommendations—mostly collected in the last chapter—are generally tentative, low-key and dignified. This will not insulate them from challenge though. They offer routes to greater income equality via a larger state (with increased transfers) but also point to societies where the economic model favours more equal results before that step (partly obviating it)—such as Japan, whose social-market structure dampens the ability of labour (and capital) to exert influence on its claim of national output. Nonetheless, in either case there appears to be no way for an unequal country to transform itself into more equal other than via quite hefty policy engineering. And all of this seems to work to rebalance the value-doctrine of Liberty, Equality, Fraternity away from the first term--a retrograde step that is insufficiently acknowledged as a trade-off. The authors bravely delve into the chartering of corporations with a discussion of shifting their legal mandate away from allegiance to owners and more to employees, but their putative mechanism looks iffy (greater employee ownership is a somewhat bland route to this; and the desire for a means of preventing enfranchised employees from voluntarily selling their interest for material gain—thus reverting the structure to how it plays currently—was a red flag that perhaps hints at the hard-to-avoid requirement for a distinctly less liberal regime).

The call for greater "political will" likewise smells like a desire for increased state intrusion—maybe with positive social intentions, but the reader may certainly have heard that before, and seen unfulfilled hopes and unintended consequences a plenty. The focus on income inequality as the bottom line also (presumably deliberately) leaves the case for reform shorn of applications to concentrate on simply addressing the economic plight of the poorest cohort (and not worrying about bringing down their wealthy neighbours as an objective in itself), and leaves the text devoid of recommendations that are not directly redistributive as well. This reviewer suspects that the final prognosis of "The Spirit Level" thus leaves itself open to concerns that it is a step too far, as well as probably in the wrong direction. The welfare state has much unfinished work in efficiently providing the public goods that actually raise incomes overall, and can disproportionately increase opportunity at the bottom simultaneously. The implication that rich nations are at the effective pinnacle of average income, such that they can concentrate on the contentious and restrictive matter of re-routing it via transfers, rather massively diminishes the social good delivered by the relatively recent journey to prosperity.

 

[Beerina]

Thus, countries enter a sweet spot where they are rich enough to support first-world living standards and to afford the redistribution necessary to score highly on social welfare too. (Over countless graphs—admittedly conspicuously lacking axis units—the reader quickly has it drummed into her that Japan and Scandinavia invariably occupy the "Here is where you should be" zone).

I wonder if they include invention productivity, which dwarfs all else when it comes to increasing the average quality of life. It's fraudulent to let other countries do the inventing, then distribute those inventions across your population and claim you're some great friend to The People. You can't hand out inventions "for free" if they don't exist.

 

[drkitten]

I wonder if they include invention productivity, which dwarfs all else when it comes to increasing the average quality of life.

Not clear if they include that directly. It's also not relevant, since both Japan and Scandinavia also dwarf the United States in terms of "invention productivity," if you measure that in natural units like patents per capita.

So even by this measure, Japan and Scandinavia turn into the "you wanna B here" sweet spot.

Which makes sense; invention is driven at least partially by having enough security and leisure to be able to invent, and by having affordable enough access to higher education to permit inventors to get the necessary skills.