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Once in a blue moon, I try to read something out of my ideological
comfort zone. Gosh, hope I don't get converted! There was no danger
of that here, though.
The Spirit Level purports to show that high levels
of inequality make societies, and the individuals in them, worse
off. The authors (Richard Wilkinson and Kate Pickett)
allege that there is virtually no social problem that inequality
can't make worse. Inequality decreases life expectancy, increases infant
mortality, and (for those still
alive) causes all sorts of physical and mental maladies. It also causes
various types of social dysfunction: crime, teen pregnancy, bullying,
etc. People living in unequal societies tend to trust their
fellow citizens less, are less happy, and are less likely to improve
their lot. And on, and on.
These assertions are supported with many graphs showing the tight
correlation of social ills with an increasing Gini
coefficient. Country-by-country comparisons bear out the
authors' thesis; within the US, state-by-state statistics do the same.
If you click over to the Amazon page, you can read blurb after glowing
blurb about the wonderousness of this book. Customer reviews are also
very good.
And yet, The Spirit Level
was entirely unconvincing for me. It's hard to see how
it would be convincing to anyone who brings any healthy skepticism
to the table.
The major stumbling block was the book's handling of what I considered
to be an obvious question: is it inequality
causing these social woes, or is it (instead) poverty? This is not
a subtle issue. It shouldn't
be any surprise that being poor sucks in a major way, and poverty is
also (of course) well-associated with a raft of other
dysfunctionalities.
The book at least pretends to
deal with this objection early: Chapter 2 is titled
"Poverty or inequality?" The authors present a scatter plot
of an "Index of health and Social Problems" versus income inequality.
As expected, it shows a decent positive correlation.
So then they plot their "index" against some measure of
the poverty rate, correct?
No they do not. They plot their "index"
against "average income". And (surprise, surprise)
no evident correlation there.
But waaaaiit a minute….
It's not that the authors were unable to look at how
social ills and poverty are correlated. Those statistics
are pretty easy to find. There's even a site (www.cdnic.org) where
you can do some of these correlations between US states
yourself. And you'll find
that (for example) there is:
- a strong negative correlation between
poverty rate and life expectancy;
- a moderate positive correlation
between poverty rate and diabetes rate;
- a moderate positive correlation
between poverty rate and adult obesity;
- a moderate positive correlation
between poverty rate and infant mortality;
- a moderate positive
correlation
between poverty rate and births to unmarried mothers;
- a strong
positive correlation between poverty rate and teen-mother
birthrates;
-
a moderate positive correlation between poverty rate and
murder/manslaughter rate.
In other words, at least for US states, a lot of the ills described in
The Spirit Level are moderately-to-strongly correlated with
poverty.
(Aside: I should point out that "CDNIC" in the link above stands for
"Correlation Does Not Imply Causation", a good saying for everyone
to take to heart. Wikipedia has a page
devoted to this concept.)
So: does income inequality explain social ills better than poverty?
Or worse? I don't
know. But Wilkinson and Pickett don't dispose of that issue in their
Chapter 2, despite its title. That obvious
failure haunts the rest of the book.
There are a number of other problems, but I don't want to yammer on
forever. I'll just mention a few that stuck out:
There are a couple chapters devoted to crime and punishment.
Unsurprisingly, inequality is fingered as a culprit.
But—again, waitaminnit—US violent crime rates have been
on a long-term downward trend since 1993,
during which period (we're told) income
inequality increased significantly. That would appear to indicate
that the actual effect of inequality on crime, if any, is dwarfed by
other factors.
After building their case, the authors are noticeably flaky on any
actual reforms. They argue that any lasting changes
must be something that incoming legislatures can't undo. (After all,
you can make it legal to loot the rich, but it's just as easy
to make it illegal again.) They devote many pages to employee
stock-ownership schemes, trying to argue that it's a superior
form of business operation. And they would never let the CEO
be paid a zillion times more than the custodians, would they?
So problem solved!
Anyone who even skims the business news will recognize the
weakness of the employee-ownership argument. Do employee-owned firms outcompete
their peers? Evidence is (to put it mildly) weak; if they
did, wouldn't there be a lot more of them?
And their examples of employee-owned firms aren't persuasive.
The biggest US example is probably Hy-Vee, a Midwest supermarket
chain with about 55,000 employees. A couple of their
other examples are less successful: United Airlines, which
terminated its employee-ownership plan years ago, just before
falling into bankruptcy, leaving the "employee-owners" with a lot
of near-worthless stock. And Polaroid, whose employee ownership
did not prevent its woes either.
Finally: The authors combine their argument with
some standard environmental doomcrying
to argue for a "steady-state" economy. They ignore the massive statism
that would be required to pull something like that off, and handwave
away any possible negative effects.
But, notably, they do find one country that "manages to combine acceptable
living standards with a sustainable economy." This country "proves
it can be done."
Friends, I am not making this up: that country held up by Wilkinson
and Pickett as a shining
example is Cuba.