Welcome to Income Inequality Kos.
Join us Thursdays, at 9:00 p.m. eastern. We discuss income inequality, concentration of wealth, and related issues.
Previous diaries in the series can be found by the tag Income Inequality Kos, or by a series history.
Volunteering for Diaries
- Diaries come from the community. Please volunteer!
- A signup sheet for upcoming diaries is available in an editable google doc. You can volunteer for future diaries by just adding yourself to the list.
Writing Diaries
- Use "Income Inequality Kos" in your diary title, and add the same tag, that people can find it.
- Copy for this introduction is available in a google doc. Copy and paste it as your diary Intro.
The Spirit Level
Income inequality is not healthy for a society. That's the take-away from The Spirit Level by Richard Wilkinson and Kate Pickett, 2010 (American Edition), NY, Bloomsbury Press. Income inequality in the US is at an all-time high and many of us have been bothered by this for some time. Inequality offends our sense of justice. There is a large zero-sum element involved so that more for those at the top means less for the rest of us and there is a self-perpetuating trend so that more wealth means more political power which means even more wealth and so on. These are reasons enough for concern, even outrage, about income inequality. But there is more, a lot more.
Wilkinson and Pickett are medical researchers in the UK and in The Spirit Level they bring a new methodology to economics. They treat it as a public health problem. They have taken publicly available research on a variety of social issues and plotted the results against publicly available statistics on income. They looked at: level of trust (social cohesion), mental illness (including drug and alcohol addiction), life expectancy and infant mortality, children's educational performance, teenage births, homicides, imprisonment rates and social mobility vs. income inequality in 23 wealthy countries and the 50 US States. Do I have to tell you what they found ? There is a very strong correlation between each of these social ills and income inequality.
Once a country reaches a state of development where basics like food, water and sanitation have been taken care of, absolute wealth is no longer the determinate and inequality within countries becomes the important variable. The researchers started with the richest 50 countries in the world and eliminated those without published data on incomes and those with populations less than 3 million. The health data are from sources like the US Census, the UN, the WHO and the OECD, all pretty much unimpeachable. For the income inequality they used a ratio of incomes for the top 20% vs. the bottom 20% to compare countries and the Gini index for US states. Robert Reich, who wrote the foreword for the US edition, will tell you that these common measures are are no longer adequate to describe the extreme inequality we are now experiencing, but they are a place to start.
Economics has been called "the dismal science" but it is not really a science at all. Economics deals with people and their relations to one another; psychological and cultural factors that can't be measured with certainty. The most interesting passages in The Spirit Level are the ones dealing with possible causes for the results. They have to do with emotional responses and attitudes. In unequal, highly stratified societies relations among people differ from those in more equal ones. When we meet a new person in the US, our first question is: "What do you do ?" We're not really asking about the person's occupation. We want to know their income. Our relative positions on the social scale will largely determine our relations with each other. Questions like these; how we perceive other people and how we expect to be perceived, are at the root of income inequality effects in wealthier countries. It is psychology with very real consequences.
That's an introduction to The Spirit Level; the methodology used and the issues addressed. Here are some of the charts; scatter plots with regression lines. These are from the website of The Equality Trust, an organization founded by Wilkinson and Pickett to advance awareness about income inequality and its effects. The best charts are in the book, you'll have to get hold of a copy to see them.
Trust
Mental Illness
Drug Use
Homicides
Imprisonment
Social Mobility
This last one is interesting. The higher the income inequality the lower the social mobility, the harder it is to rise from the social class you were born into. Remember the 1980s, the Reagan Revolution, the beginning of the Republican Class-War ? People were watching Dallas and Lifestyles of the Rich and Famous. There was a celebration of wealth in the popular culture. Why not institute policies favoring the wealthy ? Anyone can become rich if they want to, right ? Well, no. Free-market economics has given us a country with very little social mobility, a highly stratified, highly unequal country, a country like the European monarchies of old, a country that would have horrified the Founding Fathers. I highly recommend The Spirit Level. Read it and weep.