Equality

The equality issue is very well covered by THE SPIRIT LEVEL by Authors Richard Wilkinson and Kate Pickett.

This book carries a powerful message. It demonstrates that the prevalence of negative health and social issues in developed countries are strongly related to the degree of economic inequality.

At one extreme of unequal societies are The United States, Portugal, UK, Singapore and Australia. At the other extreme are the most equal societies, Japan and the Nordic countries, particularly Finland, Sweden and Norway. Canada is in the middle, between the two extremes.

The problems, for which there is reliable data in developed countries, are the following:

• Level of trust
• Mental illness (including drug and alcohol addiction)
• Life expectancy and infant mortality
• Obesity
• Children’s educational performance
• Teenage births
• Homicides
• Imprisonment rates
• Social mobility

Key conclusions:

The absolute level of wealth is irrelevant. It is the difference in levels of wealth in a particular society that matters. e.g. Greece has a per capita GDP less than half of the US, and spends less than half than the US spends on health care, but scores much better than the US with respect to the incidence of health and social maladies.

It is not only the poor in less equal societies who are negatively affected. While they are the most affected, the middle class and the wealthy are also worse off than their equivalents in more equal societies.

In addition to comparing countries, the authors also compared the states within the United States. The same patterns were reflected, with the least unequal states Minnesota, New Hampshire, Vermont and North Dakota always scoring much better than the most unequal states Mississippi, Louisiana and Alabama.

The frequency of problems is also shown to have dramatically increased within developed countries as income equality has worsened since 1970.

The effects are not trivial, they are enormous! Typically, the incidence of any problem is three to ten times higher in the most unequal as compared to the most equal societies. Across whole populations, rates of mental illness are five times higher in the most unequal compared to the least unequal societies. Similarly, in more unequal societies people are five times as likely to be imprisoned, six times as likely to be clinically obese, and murder rates may be many times higher.

While life expectancy increases in the early stages of economic development, in rich countries there is no relationship between per capita health spending and life expectancy.

The status of women is better in more equal societies, there is less violence, people trust each other more, punishment is less harsh, community life is stronger and social relations are less hostile.

Continuing economic growth in the developed world no longer improves health, happiness or other measures of well-being. It does lead to further environmental damage, global warming and increasing disparities with the developing world.

People work much longer in more unequal societies, the equivalent of two to four extra months a year.

Unequal countries spend much more per capita on advertising, with the US and New Zealand spending twice as much as Norway or Denmark.

The growth in inequality makes it harder for people to maintain standards relative to others. The consumption of the rich reduces everyone else’s satisfaction with what they have, by showing it up as inferior, this dissatisfaction is a cost which the rich impose on the poor.

Pressure to consume leads people to save less and to borrow more. Credit card and mortgage debt soared and contributed to the recent economic collapse.

The sad thing is that most people have an intuition that inequality detracts from their quality of life, but they are trapped by the social and economic systems in which they live. It is clear that endless growth is impossible and that humanity must change course. Henry Wallich, an economics professor at Yale said; growth is a substitute for equality of income. So long as there is growth there is hope, and that makes large income differentials tolerable. Fortunately, the relationship holds true in the other direction; Greater equality makes growth much less necessary and is a precondition for a steady state economy.

People seek more money to improve their self-image and their status with respect to others. A survey asked people if they would prefer to be less well off in a rich society, or have a much lower income in a poorer society but be better off than others. Fifty percent said they would trade as much as half their real income if they could live in a society in which they would be better off than others.

The picture is clear. The studies reported in this book show that we are inclined to concern ourselves with particular problems and their possible solutions. It is as if we are concerning ourselves with the symptoms rather than the disease. The authors say: Rather than reducing inequality itself, the initiatives aimed at tackling health or social problems are nearly always attempting to break the links between social economic disadvantage and the problems it produces. The unstated hope is that people, particularly the poor, can carry on in the same circumstances, but will somehow no longer succumb to mental illness, teenage pregnancy, educational failure, obesity or drugs.

Attempts to deal with health and social problems through the provision of specialized services have proved expensive and, at best, only partially effective.

Other services, such as social work or drug rehabilitation, exist to treat, or process their various client groups, rather than to diminish the prevalence of social problems.

When government agencies announce policies ostensibly aimed at decreasing obesity, reducing health inequalities, or trying to cut rates of drug use, it usually looks more like a form of window dressing, a display of good intentions, intended to give the impression of a government actively getting to grips with problems. (e.g. the war on drugs and the politically generated fear of crime)

It is interesting that equality can be achieved by very different methods in different societies. Japan has low taxes but smaller differences in pre-tax incomes. Sweden has large differences in pre-tax incomes but high levels of redistributive taxes. They both achieve relative equality and similar low levels of social and health problems.

If everyone understood and appreciated the messages contained in this book, one might hope that they would support measures to achieve greater equality, even at some economic cost to themselves and whatever their political allegiance.

The authors have set up Equality Trust with a website www.equalitytrust.org.uk All the tables contained in the book are available there as are other resources. There is a very good interview with the authors at the Home Page, click on: See the evidence. Scroll down to see the interview.

A sustainable society must maintain a very high level of equality to avoid the social tensions, mis-allocation of resources and turmoil that inevitably accompany severe and worsening income polarization.