Written by two epidemiology researchers, Richard Wilkinson and Kate Pickett, The Spirit Level has become the progressive publishing sensation of the last couple of years. Based on a broad range of cross-country comparisons, it takes the progressive championship of inequality to a new level.
According to Wilkinson and Pickett, greater equality doesn’t just produce better outcomes (life expectancy, educational performance, mental health etc) for the poor. They claim that (as their subtitle asserts) “equality is better for everyone”. In other words, even relatively well-off citizens are likely to achieve better outcomes in more equal societies than in less equal ones.
Why? Because, they say, more unequal societies suffer from higher levels of insecurity and status-related anxiety. This is associated with a focus on self-promotion and a weaker sense of community. These characteristics permeate the whole society, and afflict rich and poor alike. So even those who in a material sense may have ‘done better’ out of inequality may be sicker, less happy and generally less well-off as a result.
Such a theory strikes at the heart of anti-progressive political outlooks, in both their traditional-conservative and free-market manifestations. It is no wonder then, that while avowedly non-political (and occasionally cited approvingly by UK Conservative leader David Cameron), The Spirit Level has come under heavy barrage from the political ‘Right’. Policy Exchange and the Democracy Institute have each published counter-publications, by Peter Saunders and Christopher Snowden respectively, aiming to discredit it.
My main interest, however, is not the threat that The Spirit Level poses to the ‘Right’, but the challenges it presents to the theoretical foundations of much of modern progressive thinking.
Because another central plank of the Spirit Level platform is that the beneficial effects of economic growth in the advanced capitalist countries have now largely been exhausted.
The graph above illustrates that as countries develop economically, there is a reasonably close relationship with life expectancy — as the country grows and develops, its population lives longer. But the graph also suggests that, beyond a certain point, that relationship breaks down: among the rich countries life expectancy is not related to national differences in average income. The same pattern, say Wilkinson and Pickett, applies with happiness and other measures of wellbeing as well:
Sooner or later in the long history of economic growth, countries inevitably reach a level of affluence where ‘diminishing returns’ set in and additional income buys less and less additional health, happiness or wellbeing. A number of developed countries have now had almost continuous rises in average incomes for over 150 years and additional wealth is not as beneficial as it once was . . .
At the same time as the rich countries reach the end of the real benefits of economic growth, we have also had to recognise the problems of global warming and the environmental limits to growth . . .
We are the first generation to have to find new answers to the question of how we can make further improvements to the real quality of human life. What should we turn to if not to economic growth? (pp. 10-11)
Moreover, they go on to argue that the cultural logic of economic growth is intrinsically bound up with the unhealthy ’status anxiety’ that permeates unequal societies.
This, I would argue, is a major challenge to mainstream progressive thinking. Similar propositions have been put solely in ecological terms, but this takes the argument right into the heart of progressive territory: concerns about poverty and inequality.
It is hard to exaggerate how much of a departure this implies from standard Marxian, Keynesian and ‘third way’ prescriptions. (Although Marx, Keynes and Giddens themselves do each, in their own ways, conceptualise a post-materialist end-point).
This is particularly true of the ‘third way’. The success of Keynesian social democracy came from its perceived ability to keep the ‘motor’ of the economy going by acting as the ‘consumer of last resort’. As Przeworski writes, ”it was a theory that suddenly granted an universalistic status to the interest of workers” as a way of stimulating aggregate demand.
But the ‘third way’ went further, framing the idea of an ‘investment state’ whose job it was to work hand-in-glove with capital to achieve the most innovative, competitive, productive, successful national economy possible. Areas like education and science were seen more strongly than ever before as mechanisms to be used to attain national competitive advantage.
And social goals were largely seen as being achieved through the tax dividend from all this growth. Rather than worrying about an economy that was driving increasingly unequal conditions in the marketplace, the state would focus on ameliorating those effects through redistribution (via tax credits like Working for Families in New Zealand, other targeted assistance, and social spending designed to combat inequalities).
The theory and prescription of Wilkinson and Pickett stands starkly opposed to the logic of this approach, which can be seen as essentially Rawlsian.
John Rawls was perhaps the most important liberal political philosopher of the late 20th century. His “difference principle” held that inequality could be justified insofar as it contributed to general prosperity in a way that made even the poorest members of society better-off than they would be in a more equal society.
To be fair to Rawls, this could be interpreted as permitting only a very small amount of inequality. But, in practice, the Rawlsian approach was primarily taken up by those who accepted that there was a capitalist equality-prosperity trade-off, but that some of the fruits of that prosperity should be invested in making the poorest better off. They were, in other words, what John Kay has called ‘redistributive market liberals’.
And to a large extent ‘redistributive market liberalism’, and a Rawlsian view of economic growth, were at the heart of the ‘third way’.
The Spirit Level, on the other hand, seeks to turn the ‘difference principle’ on its head. Rather than inequality-generating growth being good even for the poorest, it is to be seen as detrimental even for the very richest.
Rather than the state trying to run ever faster to ameliorate inequality after the fact, Wilkinson and Pickett counsel us to abandon the culture of consumerism and reorientate towards a steady-state economy in which everyone has much more equal shares.
To this it might be objected that, even if such an approach were desirable, it is not feasible. The basic logic of a modern capitalist economy, it can be argued, is not compatible with a steady-state — without growth, it would become unstable and generate increasing levels of unemployment. This is the dilemma that Tim Jackson in his book Prosperity without Growth has sought to address with a new ecological macro-economics. And it is to this work I will turn in next week’s post.
Links:
- Wilkinson and Pickett’s Equality Trust website.
- Perhaps the best example of the debate over The Spirit Level — a session at the Royal Society for the Arts (RSA) where Wilkinson and Pickett squared off against Saunders and Snowden [audio and presentation slides].
- A recent policy forum at the Institute of Policy Studies in Wellington entitled Does Inequality Matter? started with a video-linked presentation from Wilkinson, and spurred me to write this post. [presentation slides plus audio/slides for Wilkinson] The presentation by Tony Blakely (University of Otago Wellington) is one of the best critiques of The Spirit Level I’ve come across (and comes from a broadly progressive perspective).
- My earlier post discussing Przeworski’s view of Keynes.
- Four posts I’ve written on the ‘third way’: (1) (2) (3) (4)
- Wikipedia on John Rawls’ A Theory of Justice.
- An earlier post I did on Tim Jackson.
- Two posts I did on James Purnell’s arguments about the limits of the redistributive strategy are also relevant: (1) (2).
Further Reading:
- Richard Wilkinson and Kate Pickett, The Spirit Level: Why Equality is Better for Everyone (revised edition, 2010).
- John Rawls, A Theory of Justice (1971).
Tags: 'investment state', economic growth, John Rawls, life expectancy, The Spirit Level, Third Way, Tony Blakely
The damaged goods that is the “cultural logic of economic growth” I think is a challenge for all society, not just Progressives. You could call this the soft side of the issue. The hard side – the (in)ability of our physical environment to meet the demands of economic growth – grabs most fo the attention. I reckon the soft cultural stuff will start to garner more attention. (It possibly is even doing so now with concern about exec salaries, though it does look a bit like a media issue du jour). Of course the physical environment will eventually constrain economic growth (at least as we know it) and culture will follow in its wake.
You’re right, BigCake — I’m focussed on it as part of the progressive policy dialogue, but there are also (more marginal) voices arguing the same thing on the other side of politics, and you can even see some of it in David Cameron’s rhetoric and positioning.
I recently read a book about R.H. Tawney’s “socialism as fellowship”, which essentially holds that higher levels of inequality is bad for the human community. I wonder if Tawney might provide some more arguments and ideas for defenders of The Spirit Level..?
I think the graph above shows that its hard to make 80 year olds live any longer no matter how rich they are… i.e. the leveling off is due to biology not a social or economic phenomenon.
I haven’t read the spirit level yet. I’m interested to see where the authors take this idea. I’m very open to the idea that inequality causes violence, ill health etc, and that humans are social animals so our place in hierarchies can induce subtle changes in our biology .
I think the left’s enthusiasm for this work should be tempered by awareness that it is a step away from an ideological argument against inequality, towards a utilitarian or empiric argument against inequality. One risk is that we are perpetually embroilled in a debate about whether the science is correct rather than keeping alive the idea that equality in social and economic means are the cornerstone of a just society.
Secondly I understand the authors favour a particular causal mechanism for these poor health outcomes that arise from inequality. They believe its due to its psychological impact, rather than any material difference in living standards and suggest cortisol as a possible mechanism. I think the left should be very careful before endorsing a psychological theory of inequality before a material theory.
sorry Ayesha I’m not sure what you mean when you use the word ‘ideological’ in that way. A utilitarian or an empiric argument against inequality can still be ideological – at least in my world. Not that they are the only arguments (which I think? is your point).
I get worried that I increasingly see ‘ideology’ used casually by journos and others as a synonym for ‘faith’ or worse, ‘faith in the face of contrary evidence’, in a political context. This conflation is dangerous, and anyone politically aware has to push back on this.
I hold my political ideology to be true because of empirical evidence, not in spite of it.
I agree that empiric arguments can have moral meanings, but not all moral questions can be answered empirically.
Certain ideological questions can’t be answered by science. Science can get you part of the way e.g. describing the relationship between inequality and health but it isn’t possible to prove inequality causes bad health outcomes in any definitive sense. That isn’t to say science is useless (I hope not, given some of my research includes social determinants of health) just that it can only help us answer certain types of questions. For example, I hope with colleagues to provide further support for the claim that housing conditions contribute to poor health outcomes in NZ. That can help inform our idea of what a house should be like to reduce deaths/hospital admissions, but it cannot answer the question of whether anyone else should care about their neighbours who suffer these problems. Ultimately we will still need to decide based on moral values what amount of inequality we will tolerate in our society.
David’s point in the original post was that the views expressed in the Spirit Level challenge Third Way economic prescriptions. That’s could be contrasted to their _methods_ which I suggest are very consistent with the Third Way’s technocratic emphasis on evidence over ideology.
To add a few of my own perceptions to Ayesha and James’s very interesting debate:
I think there are important distinctions to be made between opposing inequality and opposing poverty; and between opposition on a values basis or an a consequentialist basis.
The dominant strand of modern progressivism, which John Kay calls ‘Redistributive Market Liberals’ (and of which the ‘third way’ is important component) have a pretty fundamental opposition to poverty, but have been somewhat ambivalent towards inequality per se, especially at the top end.
To take two examples:
In 2008 (while clarifying his ‘rich prick’ outburst) Michael Cullen said, “I have no trouble with people being wealthy at all. What I have trouble with is people being poor.” http://www.nzherald.co.nz/agriculture/news/article.cfm?c_id=16&objectid=10538380
More notoriously, in 1998 Peter Mandelson, the ‘third man’ of New Labour in the UK, told a group of computer executives in Silicon Valley, “we are intensely relaxed about people getting filthy rich as long as they pay their taxes”.
Looked at in this context, the work of Wilkinson and Pickett (and others) in mounting a consequentialist argument, that inequality (and not only poverty) leads to negative outcomes, takes on a greater importance.
At the same time, however, we are seeing in the aftermath of the Financial Crisis and particularly the ‘bankers bonuses’ controversies, a reawakened argument against high-end inequality from a values-based or ethical perspective. We find this in some recent work by Michael Sandel, and it is a central theme of Will Hutton’s new book “Them and Us”.
A Melbourne businessman involved in a $500m NZ deal phoned me yesterday seeking advice on the kiwi playing feild. Sad to say my advice was- you can’t trust the politicians, lawyers, bankers and iwi managers. I suggested he invest in WA mining.
I honestly find having to give that advice very sad indeed. But based on my experience what else could I say.
He said he had been told the same and that a banker in Singapore described NZ as cowboys and villians in suits and said it was a view shared by most other investment funds and suggested he contact me to better understand the risk by my example.
When will NZ realise they need fiduciary law to control the conduct of those who control the arms of government. Afterall, they are the watchmen and to date they have failed. Rules on them will result in a safe investment environment. Until then, forget any form of recovery and watch the slide continue.
http://worldeconomy-wingate.blogspot.com/2010/08/billionaires-millionaires-why-invest-in.html
“Status anxiety”? There seems to be a pretty close relationship between money and power (choices). If most people want control over their life then I guess they’re going to want sufficient money to achieve that. And I guess more people would like just a little more power over their own lives so they’d like a little more money than the next person.
And then there are the buddhists . . .
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I have a problem with the very concept of a “steady state economy”, regardless of whether it is feasible. An economy is simply an aggregation of units of production (labour, capital, etc) producing an array of goods and services (cars, health services etc.). Neither side of the equation (input or output) can ever be “steady”. Take just one (of probably thousands) dynamic variable: the demographic structure changes with population ageing. So the quantity and quality of labour alters, as does the array of goods and services needed (say aged care facilities). Orchestrating a switch to match new output requirements with changed resource endowment is simply a conceptual nonsense, aside from envisaging the mechanisms through which that may be arranged. So growth provides a cushion for managing resource switching. It may not be required in its own right, it isn’t everything, it need not be maximised, and it should not be pursued at any cost. But it is required!
That a really good point, Peter! MInd you, my reading of Tim Jackson’s book (discussed in the subsequent post) isn’t completely incompatible with your reasoning here — I think he would say that the primary aim is reduced resource use (e.g. much low carbon emissions) and that de-growth is a means to this end, rather and end in itself. Therefore if, from time to time, measured GDP exceeds that of previous years, thereby providing your ‘cushion’, that’s not inherently a problem. But I guess it would be a pretty thin and intermittent cushion!
[...] progressive thinkers who challenge the ‘conventional wisdom’ about economic growth. Part one looked at Richard Wilkinson and Kate Pickett’s The Spirit Level and part two looked at Tim [...]