(This is an archived extract from the book Patterns of Power: Edition 2)
There are several justifications for reducing inequality:
· There is striking empirical evidence that “unequal societies are bad for almost everyone within them – the well-off as well as the poor”.[1]
· It diminishes the value in being wealthy if, the moment one steps out of one's door, one is surrounded by poverty and resentment. Good public facilities and contented neighbours are as much valued by the rich as by the poor.
· Rawls’s arguments are philosophical, based upon the justness of sharing good fortune, in his “difference principle” – which is his second key principle in “justice as fairness”.[2]
· The taxation of the wealthy, “not only in proportion to their revenue, but something more than in that proportion”, is a policy that has some economic justification as a form of reciprocity (3.5.1).
· The labour market allocates wages according to the laws of supply and demand (3.3.3.1); this leads to inequalities which appear to be justifiable from an economic perspective but not on any other basis.[3] The enormous disparity in earnings between teachers and financial traders, for example, cannot be justified by their relative capabilities, workload, responsibilities or value to society.
· Measures to improve the economic well-being of the poor are politically popular with those who benefit from them.
· Gross inequalities can lead to a political backlash – as manifested, for example, by the emergence of the ‘Occupy Movement’.[4] At the time of writing it is too early to tell whether that will result in peaceful social change, or violence, or just fizzle out.
· If wealth seems to have been unfairly acquired, for example by inheritance and privilege, those who are less wealthy might feel resentment. Social stability is then at risk. The French Revolution was an example of the population rising up against injustice.
These political considerations are in addition to the economic benefits of ensuring that middle-income people have enough money to spend, as the engine of growth and prosperity (3.5.6.4). ‘Middle-out’ economics would benefit more people than the current gross inequalities, so it is also politically attractive; President Obama, for example, has referred to it.[5]
© PatternsofPower.org, 2014
[1] There is a wealth of statistical data in The Spirit Level, by Wilkinson and Pickett, which demonstrates that people function better in more equal societies: better life expectancy, lower levels of crime, less mental illness etc. The benefits apply to both rich and poor people in those societies.
Some of the data have been challenged, for example in a report from the Taxpayers’ Alliance that appeared to contradict The Spirit Level’s findings. Other critics were Peter Saunders’ pamphlet Beware of False Prophets, published by Policy Exchange, and Chris Snowdon’s book The Spirit Level Delusion.
The writers of The Spirit Level responded to these three critics, in a detailed article that was available in May 2014 at http://www.equalitytrust.org.uk/sites/default/files/responses-to-all-critics.pdf. This response was convincing, tending to confirm that the critics had used questionable methods to try to discredit a message that they had found to be unwelcome.
[2] Rawls’s “difference principle” appeared in his book A Theory of Justice, and was stated in several ways, including this:
“social and economic inequalities are to be arranged so that they are both: a) reasonably expected to be to everyone's advantage and b) attached to positions and offices open to all.” (sect. 11, p. 60; p. 53 PDF)
A PDF copy of Rawls’s book was available in May 2014 at http://economia.uniandes.edu.co/content/download/41151/360980/file/Rawls99.pdf.
Michael Sandel, in his book Justice, illustrated this principle in less abstract language:
“Encourage the gifted to develop and exercise their talents, but with the understanding that the rewards these talents reap in the market belong to the community as a whole. Don't handicap the best runners; let them run and do their best. Simply acknowledge in advance that the winnings don't belong to them alone, but should be shared with those who lack similar gifts.” (p. 156)
[3] Michael Sandel discusses the lack of compatibility between earnings and virtue, in his book Justice (pp. 162-3)
[4] The Occupy Movement has several identities. In May 2014 there was a coordinating webpage at http://www.occupytogether.org/connect/.
The Berkeley Journal of Sociology had a web-page entitled Understanding the Occupy Movement: Perspectives from the Social Sciences, which at that time provided links to 35 academic essays and several journals, lectures, newspaper articles etc.; it was available at http://bjsonline.org/2011/12/understanding-the-occupy-movement-perspectives-from-the-social-sciences/.
[5] An article in Bloomberg BusinessWeek on 24 July 2013, entitled Obama's 'Middle Out' Argument Against Trickle-Down Economics, reported a speech by the President. It was available in May 2014 at http://www.businessweek.com/articles/2013-07-24/obama-appeals-for-middle-out-economics. The full text of the speech was available then at http://www.whitehouse.gov/the-press-office/2013/07/24/remarks-president-economy-knox-college-galesburg-il.