Wednesday, January 5, 2011

Spirit Level Week: Who's To Blame?

In The Spirit Level Richard Wilkinson and Kate Pickett determine that people in developed countries with high inequality (i.e. the US and UK) suffer more health and social problems that people in low inequality countries (i.e. Sweden, Japan).

Back to start: Equality Without Context

For Wilkinson and Pickett, the solution is government programs to mitigate inequality, such as higher taxation of the rich and/or promotion of employee-owned companies.

We hope we have shown that there is a better society to be won: a more equal society in which people are less divided by status and hierarchy; a society in which we regain a sense of community, in which we overcome the threat of global warming, in which we own and control our work democratically as part of a community of colleagues, and share in the benefits of a growing non-monetized sector of the economy.
In other words the solution to our problems is the enactment of the current center-left agenda, a world congenial for university professors to live in.

Yesterday, we looked at the absent historical context in Wilkinson's and Pickett's analysis. Now let's look at the absent political context.

Wilkinson and Pickett note that inequality has risen in the United States and the United Kingdom recently, especially in the 1980s during the presidency of Ronald Reagan and the ministry of Margaret Thatcher. In both nations, inequality increased by about 40 percent. The question is: was that good or bad? Was it inevitable, after the Great Inflation of the 1970s, or could it have been avoided? They also show that in the United States social mobility, expressed as a percentage of sons' income explained by fathers' incomes, as gone down since 1980. Is that due to fathers giving their sons a leg up at the family firm? Or is it the result of lousy government education in the inner cities, and the demolition of the low-income family by welfare?

The fact is that it is very difficult to obtain clear answers to these questions, good people disagree profoundly about them. Moreover, it is very difficult to change any government program once it has been started up.

So when a couple of university professors talk easily about reducing status and hierarchy, regaining a sense of community, overcoming the threat of global warming, and turning work into a community of colleagues, we have to ask a question. What gives us any confidence that political action can ameliorate these problems? Let's take them one by one:

  • Status and hierarchy. If you start more government programs you are going to increase status and hierarchy. Today we have a definite hierarchy in the west. The educated ruling class is at the top of the hierarchy and uses its political and cultural power to shame and blame anyone that dares to challenge it. So more of the same will reduce status anxiety and oppressive hierarchy?
  • Sense of community. More politics will restore community? It is precisely the government takeover of many social and moral tasks that has torn the gut out of "community." Ordinary people are denied local cultural and social power by a centralized bureaucratic state. Reduce the power of the state and you will get more of a sense of community.
  • Global Warming. Whatever may or may not happen with global warming, the scientific consensus is that reducing our carbon footprint is going to do very little to reduce carbon dioxide. The left's program of big government to the rescue is likely to be an economic disaster.
  • Community of Colleagues. Yes, it sounds very nice, but this is the central error of the left, that everyone wants to get out in the evening for a nice political meeting. Some people want to be involved in management; some don't. It is certainly true that employee ownership exposes employees to significant risk, because it ties their entire prosperity to the success of their employer. Some people think that people shouldn't put all their eggs in one basket. And anyway, it is unlikely that center-left professors have a clue what will work in the economic sector. Even the people that are most successful in business haven't got a clue. And, of course, if economists knew what would work they would all be billionaires.
  • Non-monetized Economy. I'll tell you what you'd get in a non-monetized economy. Status and hierarchy; who you know, not what you know. The miracle of the money economy is that it is no respecter of persons. A product is a product; a service is a service. Remove money from the equation and you get people-to-people. Status not contract.
The big question in the years ahead is what to do about the monster state we have created over the last century. How are we going to reform it? How can we reform it? Wilkinson and Pickett do not address the question of government reform. Well, they wouldn't. They are professors from government universities tied into the educated ruling class. Why would they imagine that you can improve on a good thing? They don't even think about it. They just know that more power for the educated ruling class is a good thing.

Next: What About Equality?











1 comment:

  1. Nicholas Kristof has given a raving review of the book "The Spirit Level" in the NYT. He is clearly unaware of the debate in Europe, where the "Spirit Level" has largely been debunked due to poor scientific quality.

    The book is scientifically dishonest by never telling the readers that it represents a minority opinion within social sciences.

    http://super-economy.blogspot.com/2011/01/nicholas-kristof-makes-fool-of-new-york.html

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