If you’re anything like me, you may intuitively feel that the world ought to be a fairer place, and that there shouldn’t be such a large gap between the rich and poor. And yet, when asked why equality is intrinsically a good thing, I have no real answer other than a sense of fair play.
As it turns out, there are dozens of reasons why equality is good. ‘The Spirit Level – why more equal societies almost always do better’ is the result of 30 years worth of research, and the title says it all. There is a direct correlation between income equality and a whole host of indicators – crime, teenage pregnancy, educational performance, alcohol addiction, stress, obesity, drug use, and mental illness. Inequality, in short, makes us crazy.
Unfortunately, equality as a goal in itself has fallen by the wayside. Since Thatcher and Reagan, when inequality soared, the general idea has been that the best way to solve poverty is not to divide the pie more fairly, but make a bigger pie. Economic growth replaced equality as a guiding principle, and the wealthy were allowed to race away with ever larger shares.
The problem with this is that differences between people matter. Poverty is relative as well as absolute. We draw our sense of worth from those around us, and the bigger the gap between us, the more inferior we will feel. This makes us insecure about our position in society, and prompts that ‘status anxiety’ that Alain de Botton writes about. It also undermines trust. The greater the differences in society, the fewer people there are like us. Without trust, there can be no community.
Perhaps you can see where this might lead – a nation of people who are isolated and insecure plays right into the hands of consumerism. “While inequality has been rising in the USA and Britain, there has been a long-term decline in savings and a rise in debt” say Wilkinson and Pickett. “The growth of inequality made it harder for people to maintain standards relative to others. The increased pressure to consume led people to save less and borrow more to such an extent that the expansion of consumer demand became one of the main drivers of the long economic boom and financial speculation which ended in crisis.”
So how do we make society more equal? The most common answer is redistributive taxation (ie higher taxes on the rich, VAT on luxuries, etc) but a better way is to prevent the inequality of income in the first place. Japan, for example, has much greater equality without redistributive taxes – people just earn fairer wages. Minimum and maximum wages might be ways of dealing with this, but ultimately it is out of government hands. The solutions will need to come from business, and the authors suggest community ownership and cooperative models. There’s an intriguing list of companies that already work this way, sharing the profits. I knew about John Lewis. I didn’t know about United Airlines, Polaroid, or the Hill and Tribune media group.
Since inequality affects so many things, ‘The Spirit Level’ ranges across economics and sociology. It even delves into the interplay between inequality and climate change, recommending contraction and convergence and tradeable personal quotas as more equal ways of cutting emissions. As well as encouraging co-ops, it mentions open-source technology, and gives a considerable amount of time to the steady-state economy.
It also hits the nail on the head with economic growth, declaring it to have “finished its work” in the rich countries, and painting this as a real positive: “It is fortunate that just when the human species discovers that the environment cannot absorb further increases in emissions, we also learn that further economic growth in the developed world no longer improves health, happiness, or measures of wellbeing. ”
There are a few things missing from ‘The Spirit Level’. It only deals with the international perspective as an occasional aside, and offers no data on inequality within developing countries, or its consequences. I would like to have seen a little more material on the political context, on why Conservative policies increase inequality, and why Labour policies don’t seem to bring them down. The authors acknowledge that there is more to do, despite over fifty years of research man-hours that have gone into the book. They have set up the Equality Trust to continue that work.
Overall, ‘The Spirit Level’ is one of the best books I’ve read this year, a wide-ranging, coherent and convincing piece of work. It should be required reading for every politician and every politics student, and reset the ideal of equality for a new generation.