I first became aware of The Spirit Level: Why Greater Equality Makes Societies Stronger by British university professors Richard Wilkinson and Kat Pickett over the weekend. I followed a link from RealClearPolitics to The New York Times: "Eliminating Inequality is Good for the Soul" was the link. Actually, the article by Nicholas Kristof was titled "Equality, A True Soul Food." Writes Kristof:
So why is inequality so harmful? “The Spirit Level” suggests that inequality undermines social trust and community life, corroding societies as a whole. It also suggests that humans, as social beings, become stressed when they find themselves at the bottom of a hierarchy.
So I picked up a copy of the book. It argues, from lots of research and government data on developed countries, that health and social problems are higher in more unequal societies, right across the income spectrum. Getting specific, these problems are higher in the US and the UK, where inequality is high, than in Germany, Sweden, and Japan, where inequality is lower.
Let's accept the book's argument, that people do better in an equal society, and think about what it means.
The big problem is that Wilkinson and Pickett provide no context. They present data that shows inequality; they talk about hierarchy, about exclusion, and about deprivation as though humans are blank slates on which social and political structures write their story.
OK, let's provide some context. The US is more unequal that Germany and Sweden. Why might that be?
The US is notable in that, ever since the 1830s, it has been receiving millions of immigrants, people who, in most cases, have come straight off the farm. This was true for the Irish, the Italians, the Jews, and then, after World War II, the blacks coming off rural poverty in the South, and latterly Hispanics coming off the farm in Mexico. These are people thrown into a world for which they are ill adapted. They are not migrating from one farm to another. They are moving off the farm and parachuting into the industrial city. They are going to have to struggle and adapt to make it in the urban industrial world of the city. You think that's easy?
In the UK there has been, since World War II, a significant influx of immigrants from the West Indies and South Asia, and this has swelled recently, by design, during the recent Labour government.
It is notable that, in the more-equal countries, in Scandanavia and Japan, there has been little immigration, until very recently. Here's a story about how Japan discourages immigration (and low-wage competition) from the Philippines.
Our lefty friends have, over the last two hundred years, been repeatedly scandalized by the messy facts of reality. First they were appalled by the chaos of the industrial revolution. Well, just how would this unprecedented change in human society from agriculture to industry occur without wrenching difficulties? In the early years of the industrial revolution, the migration was at least within the countries industrializing. But soon, with the advent of steam navigation, the great migration became trans-Atlantic. Now of course the Chinese people are migrating at a rate of 15 million a year into the burgeoning cities. The idea that a compassionate political elite could manage this migration, the greatest migration in human history and the greatest increase in human population in history, without severe problems is laughable. Of course, when an actual left-wing activist was in charge of China's adaption to the modern world, the result was that tens of millions of Chinese starved to death in the Great Leap Forward. Same thing in Russia, where about ten million people starved in the 1930s. At no time in the industrial development of the UK and the US was there famine. In fact the record for the US and UK is that, in the wake of the industrial revolution, increase in well-being was consistent and extraordinary with notable blips, in the 1840s and the 1880s and the 1930s when government screwed up the economy. In the US and UK, there was a notable increase in inequality in the 1980s. Perhaps that had something to do with the economic recovery after the Great Inflation of the 1970s. You remember the Great Inflation. It was caused by an excess of Keynesian economics and was inspired by the notion that politicians and economic experts could fine tune the economy, avoiding unemployment with just a little bit of inflation.
The lesson from the last two hundred years is that, when change happens, the result is that the early adopters do very well, but the great mass of people struggle to catch up. There's a word to describe how that appears in national income statistics. Inequality.
But if you remove the context from your analysis, you aren't going to know much about what your numbers mean. And Wilkinson and Pickett don't seem to have a clue.