June 6, 2017
I’m so tired of hearing people say inequality doesn’t matter. I expect it of Conservatives, but even Liberals say this. They argue that people don’t care if a segment of society is wildly rich, so long as everyone else can enjoy modest advancement in income. I don’t believe that. Alternatively, they argue that mobility is the issue–that as long as people have the chance to rise up the ladder with hard work and intelligence, then inequality doesn’t matter. That suggests mobility is independent of inequality. In fact, mobility has fallen dramatically across the last 30 years, pretty much in tandem with the rise of inequality.
I was born into a poor family in the tobacco fields of North Carolina. I have been relatively successful. I paid all my taxes. I never cheated along the way. There are many like me. The successful of us baby boomers now have more than we need. Do we now have the sole moral right to our wealth, since we worked hard and played by the rules? We could just relax at the club. If the poor want wealth, we could remind them they have to go out and get it on their own. No matter their genetic inheritance as to height, health, intelligence, and other valuable human traits, their race, family situation, native language, neighborhood, role models, economic status? No matter that government has withdrawn a lot of services which paved my road to success? I don’t buy that, Ben Carson, Morgan Freeman, and others who makes such arguments.
I feel we do have an obligation to help others not so fortunate, and also an obligation to force government to take actions to correct the rise in inequality.
Being a white anglo-saxon protestant male didn’t hurt. Maybe my luck of birth gave me a slightly above average intelligence, and a predisposition to hard work. I probably didn’t originate these things. They were handed to me by my genetic inheritance and my community. I only further developed them. I didn’t singlehandedly pull myself up by the bootstraps. No one does. We all got a lot of help along the way–family, friends, and teachers, for example. And some luck.
We have an obligation to share what we have, to help those less fortunate, especially in this era, in which success and mobility is indisputably harder to achieve than when I started working in the 60s and 70s.
In his column of June 3, Nicholas Kristof makes a brief and powerful argument that inequality matters. He references a great book, The Broken Ladder, by Keith Payne.
Payne provides many examples illustrating that inequality matters. One example is the discovery that sports teams perform better when wage inequality between players is lower. Another asks how you feel as you walk through the first class section of the airplane on your way to your cramped coach seat? Do you feel congratulatory for those who have “made it,” or do you wonder how fair the system is, just a little? I do.
It is frustrating to see all the ways intelligent people find to avoid acknowledging the negative influence of inequality. I expect it of Republicans, but it’s also Democrats, Yes, inequality, separate and apart from mobility or having “enough,” whatever that means. And “shared prosperity” is not enough to me. That sounds too much like “trickle down,” which hasn’t worked.
Kristof references surveys showing that both liberals and conservatives would prefer the inequality of Sweden (Gini coefficient of 27) over that of the US presently (Gini coefficient of 41). Sweden is among many more egalitarian countries where there is healthy economic growth, some super wealthy individuals, but a significantly more shared national prosperity. Payne references abundant research showing inequality matters–in terms of health, longevity, happiness, social conflict, and much more. Even monkeys and rats care. People certainly do, too.
Inequality matters. It is not a natural or inevitable consequence of healthy economic growth. High inequality is the result of numerous political actions taken, over time, benefitting the wealthy over the working class. We need to roll back some of those.
6 thoughts on “Inequality Matters!”
Dale, I am really enjoying your writings. A brave man to put it out there on the internet.
We will miss you next week for sure.
Here are some ideas on ‘does inequality matter’?
1. Culture – without economic mobility, the hope, belief and trust that hard work ‘pays off’ diminishes significantly. That ‘pay off’ has been a huge part of the American culture and has led to great innovations and great societal leadership.
2. Economic growth – demographics and productivity growth are both playing against historical norms of American GDP growth. While I’ve not seen a study on this, my intuition is that rising middle class incomes will have a greater multiplier effect for our economy than if that income was concentrated in the top 1%.
3. Social stability – revolutions happen often catalyzed by issues around income inequality. There are many examples of this from history, most recently Aleppo as written in the NYT last week. It is certainly one reason why there is so much polarization now.
Tom Hedrick Operating Partner The Stephens Group 214-914-6674
All great points, Tom! Thanks for reading and coming up with so many sources and observations. Dale
You write this the day before our UK elections. What does Teresa May represent if not the Conservative MP millionaires, the fat cat bankers, the media moguls who own multiple organisations and distort the news, the internet companies who come to our country to benefit from unfairly reduced taxes? Yet when we are presented with a leader who speaks the truth and puts this unfairness into context, people are afraid to vote for him. Clearly the common man (or Joe Bloggs) tends to vote as he is told, and cannot trust his own judgement. Watch for the results on Friday! And wish for a coalition on our behalf!
Thanks, Liz. I’m watching your country’s leadership, and notwithstanding your reservations, I think the US has greater leadership problems just now! Best wishes, Dale