All things being equal....................Revisited

In a previous post I mentioned the work on inequality discussed in the book The Spirit Level written by Richard Wilkinson and Kate Pickett.  Just to recap, they presented data to support of the hypothesis that rising levels of inequality were leading to unhappier and unhealthy societies.

As a follow on, it's interesting to read that Oxfam has recently challenged the World’s political leaders, gathered at this week’s World Economic Forum in Switzerland, to do more to tackle inequality , demanding a “global new deal to reverse decades of increasing inequality.” Oxfam's report, 'The cost of inequality: how wealth and income extremes hurt us all' can be found here  In this they claim that efforts to tackle poverty are being hindered by an “explosion in extreme wealth,” which it describes as “economically inefficient, politically corrosive, socially divisive and environmentally destructive.  Oxfam argues that the “accumulation of wealth and income on an unprecedented scale, is at the expense of secure jobs and decent wages for the poorest” which undermines the “ability of people who survive on … low wages to improve their situation and escape poverty.”

The key points Oxfam makes are:
*  The world must urgently set goals to tackle extreme inequality and extreme wealth.
*  Extreme wealth and inequality are reaching levels never before seen and are getting worse.
*  Extreme wealth and inequality are economically inefficient.
*  Extreme wealth and inequality are politically corrosive.
*  Extreme wealth and inequality are socially divisive.
*  Extreme wealth and inequality are environmentally destructive.
*  Extreme wealth and inequality are unethical.
*  Extreme wealth and inequality are not inevitable.

Each point is supported with some evidence (nothing too weighty as it's a very short report -just under 4 pages) and the conclusion is: "we cannot afford to have a world of extreme wealth and extreme inequality.  We cannot afford to have a world where inequality continues to grow in the majority of countries.  In a world of increasingly scarce resources, reducing inequality is more important than ever.  It needs to be reduced and quickly".

All very laudable and a philosophy I agree with.  I am, however, underwhelmed by this stated objective: "that is why we are calling for a new global goal to end extreme wealth by 2025 and reverse the rapid increase in inequality seen in the majority of countries in the last twenty years, taking inequality back to 1990 levels".  Calling for a return to the poverty level of a previous decade strikes me as rather self-defeating for a organisation that claims to want to eliminate it.  After all, 1990 was not a year when the star of equality shone brightly in the sky. 

All things being equal..........

..........but, of course, they aren't!

A few years ago (2, 3?) I was impressed by a book entitled The Spirit Level written by two academics, Richard Wilkinson and Kate Pickett. It was/is a data-rich read in which the authors posited that rising levels of inequality were leading to unhappier and unhealthy societies. For each of eleven different health and social problems (physical health, mental health, drug abuse, education, imprisonment, obesity, social mobility, trust and community life, violence, teenage pregnancies, and child well-being) outcomes are significantly worse in more unequal rich countries. They presented a lot of information to support their hypothesis and it struck me as a pretty sound piece of work. It also struck me as being profoundly depressing. At one level it was a damning indictment of free market capitalism: at another, a pointer about what needs to be changed to make our society more equitable.

Recently, the New Statesman decided to repeat the exercise and look at the latest data. Do the conclusions of Wilkinson and Pickett still hold? In short, they do. And it's fascinating to see how the evidence and trends have held up over the intervening period. Things have certainly not got any better for most of us. The main findings of the New Statesman's analysis are given in the chart below. It's long but it's well worth trawling through. 

Collectively these data do not provide a ringing endorsement for the free market practices of the countries rated worse by the criteria looked at. We are among them and when our political masters promise basically 'more of the same', it really shouldn't fill us with optimism for a more equal society in the future. To repeat my mantra "where are the leaders who can articulate a viable alternative?".