Wilkinson, R & Pickett, K., The Spirit Level: Why More Equal Societies Almost Always Do Better. London; Penguin Books, 2009
A man visits his doctor in the hope that a cure for his headaches may be found. “Every time it rains, I get this ringing in my ears followed by a raging headache, doc. Unless you can make it stop raining, you’ll just have to prescribe me a pill!”
The doctor—ever the skeptic about self-diagnoses, as doctors tend to be—prescribes a pill and the man goes home . . . in the rain. As he walks through the front door, his wife greets him with “How many years am I gonna have to wait for you to fix the leak in the roof??” and she conks him on the head with a frying pan . . . again.
Question is: What really caused the man’s headache? Was it the rain, a physically aggressive wife, his procrastination? Or can it all be blamed on parents who didn’t raise their kids properly?
The thesis in The Spirit Level is that the spread of means among citizens in a country is a factor in all sorts of social ills, regardless of that country's real wealth or lack thereof. But like the man with the headache, it’s incumbent that cause and effect be established beyond a reasonable doubt or someone is bound to say, “How do you know it’s not the high crime rate that’s causing inequality and not the other way ‘round?” Or, “How do you know that a third factor is not causing both the inequality of means AND the high crime rate?”
Sometimes identifying the real relationship between a cause and its effect is easy: the man’s headache certainly didn’t cause the rain. At other times, it’s not all that clear.
You might well scoff if someone were to tell you that, “All penguins walk single-file . . . at least the two I saw did!” How many times would you have to observe penguins walking single-file to establish a principle of behaviour? Ten? Hundred? Thousand? And if they only walked single file 5 times out of 10, would there be a useful observation to be made there?
Wilkinson and Pickett are fully conscious of the problems of demonstrating cause and effect, particularly on a subject like Why More Equal Societies Almost Always Do Better—the subtitle of the book. Their basic method is this: using the relevant research gathered from around the world, they plot the equality/inequality factor on the X axis of a scatter graph and the incidence of a certain social ill (murder rate per 1 million, incidence of teenage pregnancies, for instance) on the Y axis. Then they get their computer to draw a straight line through the “averages” and by the gradient of the slope, the relationship between the two factors is revealed. Needless to say, everything from drug use to obesity to social mobility/immobility is clearly demonstrated by the research to bear a statistical relationship to inequality/equality that goes well beyond a reasonable doubt.
The USA is the most unequal country in the world on Wilkinson’s and Pickett’s X axes; Japan one of the most equal. The USA experiences 63 murders per I million population annually, Japan only 5.
Clearly, none of the correlations are one to one. “Health and social problems” tend to increase quite strongly with inequality, but that obviously doesn’t mean that egalitarian societies don’t have any such problems. Imagine the difference it would make to health care, though, if the incidence of such problems were reduced by even 10%. What is also evident is that countries don't necessarily show the same social responses to economic equality/inequality, and so the graphs show a lot of what could be called “outliers,” countries that might be predicted to have high drug use rates, for instance, but don't. The reader might find the presence of so many “outliers” disconcerting even though the trend indicators can hardly be doubted.
If the relationship between equality and inequality were one to one, it would follow that poor countries or communities could be happier places than richer places . . . if everyone were similarly endowed with worldly goods. It would also follow that wealthy countries with great inequality would find social dysfunction reaching toward plague proportions.
The question, “what can be done about it?” follows naturally. Here The Spirit Level definitely needs a sequel. Reference is made to the escalating, exorbitant salaries being paid to management, for instance, and a revisit of the tax system, minimum wages, employment insurance, social assistance programs, etc., is a no-brainer; these income-adjusting measures always need to be tailored to changing conditions.
Seems to me, though, that nothing short of a new philosophy of nationhood will do, a philosophy that begins and ends with the premise that we all benefit when we are relieved of the burden of social stratification. This notion, of course, swims upstream as it has always done. The long and the short of it is that equality of means will never come to be under an unregulated market economy, and our 2008 experience of the financial meltdown in the USA and the current economic woes in Europe have proven to be ineffective in advancing the social democratic option . . . so far.
The solution to much of what ails us lies in moving from growth to steady-state economies, but a quote from Herman Daly hints at the difficulty in moving in that direction:
Capitalism can no more be “persuaded” to limit growth than a human being can be “persuaded” to stop breathing (220).
On the same subject, the authors quote Henry Wallich, former governor of the Federal Reserve and professor of economics at Yale:
Growth is a substitute for equality of income. So long as there is growth there is hope, and that makes large income differentials tolerable (221).
Why this is so may not be obvious, but it may well be as simple as the observation that we are made to want the things people with greater means have:
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 (223).
Inequality drives up consumption and with it, debt. Both are symptoms of the rising inequality in developed countries, both phenomena have increased lock-step with the escalation of inequality. Both have made the climate change and national debt issues almost impossible to address reasonably.
The final chapter deals with the future. The authors point out that there is a pervasive mythology out there that says public enterprise is inefficient and private enterprise is therefore the way to go. In the USA, public utilities produce product for consumers at an average of 11% less than corporate enterprises (245). Cooperatives and companies in which the workers own the bulk of the shares are doing very well, thank you, and are acting as good examples of ways to reduce inequality.
So much is left to be talked about. Government policy is, of course, key to the inequality/equality question. In Canada today, this question is not on the agenda, at least not in the nation or in Saskatchewan where I live. Economic growth is being held up as the primary measure of success by both the Harper and the Wall governments. I recently attended a conference with delegates from across the country; the Saskatchewan boom entered the conversation and I pointed out that the optimism about our boom wasn't equally shared, that for the bulk of the population, it just meant that housing was now less affordable while incomes were remaining static. Municipal taxes are rising faster than the inflation rate because increased population is straining infrastructures.
The corporate world is booming, no doubt about it, but the obvious downsides are the stubbornness about environmental concerns and the tendency to balance budgets by reining in social programs.
Recipes for increasing inequality.