Why is inequality bad?

Politics and religion
561

Who your ancestors were counts for a lot, even in the Nordic countries. Researcher summarizing results in the NY Times:

Let’s start with Sweden, which — like Denmark, Finland, Iceland and Norway — is one of the world’s most equal societies in terms of income. To our surprise, we found that social mobility in Sweden today was no greater than in Britain or the United States today — or even Sweden in the 18th century.

Sweden still has a nobility. Those nobles no longer hold de facto political power, but their family records are stored by the Riddarhuset (House of Nobility), a society created in 1626. We estimate that about 56,000 Swedes hold rare surnames associated with the three historic tiers of nobles. (Variations on the names of the unfortunate Rosencrantz and Guildenstern of “Hamlet” are on the list.)

Another elite group are Swedes whose ancestors — a rising educated class of clerics, scholars, merchants — Latinized their surnames in the 17th and 18th centuries (like the father of the botanist Carolus Linnaeus). Adopting elite names was limited by law in Sweden in 1901, so a vast majority of people holding them are descended from prominent families.

Given the egalitarian nature of Swedish society, one would expect that people with these elite surnames should be no better off than other Swedes. That isn’t so. In a sample of six Stockholm-area municipalities in 2008, rich and poor, we found that the average taxable income of people with noble names was 44 percent higher than that of people with the common surname Andersson. Those with Latinized names had average taxable incomes 27 percent higher than those named Andersson.

Surnames of titled nobles (counts and barons) are represented in the register of the Swedish Bar Association at six times the rate they occur in the general population (three times the rate, for untitled-noble and Latinized surnames). The same goes for Swedish doctors. Among those who completed master’s theses at Uppsala University from 2000 to 2012, Swedes with elite surnames were overrepresented by 60 to 80 percent compared with those with the common surname prefixes Lund- and Berg-.

Personally, I don’t think this has much to do with someone deciding that you have a ‘noble-sounding’ name and giving you the promotion. Rather, someone born into a family with a noble background is more likely to have a very supportive environment, that values achievement, a good financial basis and good informal connections.

So if even in Sweden who your grandparents are has a huge effect, how far would you have to go to nullify these effects? Make every child a ward of the state from the moment they are born, with randomized names? No thanks! Maybe we should aim for “95% of the time, within a factor of 3 or 4” equality of opportunity.

562

Yes, of course, no society is perfect, but research shows some Nordic countries are among the countries where there is less correlation between the parents and the offspring’s income. By far. Not at a computer, so I can’t find links, but what the above article says about Sweden is much worse in most other societies, iirc…

Edit, quick link

Or in other words, depending on what you standards are, you can find fault with every system, however, comparing system can show some of them tackle certain issues better (if not perfectly).

The NYT quoted study sample surnames and associates thnm with income. It’s an interesting outlook, but baffling since there are much better ways to measure short time social mobility. Most serious social mobility studies check the income of the progenitors against that of their children to see how much one determines the other (the above graph). In the Nordic countries this relationship is the weakest of any developed country, that seems more solid to me that checking a century old surname (with have had to be previously selected).

Of course, one study is looking at social mobility at the highest scale (checking surnames, talking about true nobility in the oldest sense of the word) while the others are looking at social mobility in the most common classes where income matters (working, middle and high, but not elite, elite classes don’t depend on income -labor income-). Mobility at the nobiliary level will need taking away somebody’s wealth if you want to achieve it. Most meaningful nobility doesn’t.

2nd edit. Went and read the original paper you quote. First of all, it measures social status against last names, defined by the author as either being a lawyer, a physician, an university student or a professor. That’s certainly a weird definition of status that imho doesn’t hold at all (basically it ignores the existence of family traditions, where children will take on the profession of the parents, even though it might not necessarily be as profitable. It is obvious there would be continuity of professions looking at last names, but that says nothing about either opportunity or outcome). Saying that physicians have “status” in a country where doctors and lawyers make on average less than twice what a primary school teacher makes says more about the underlying assumptions of the researcher than anything else.

When it gets into income or more measurable indicators of social class, it basically sees very similar results between noble and not noble names (even though the author seems to claim the contrary hoping we don’t look at the numbers he provides)

563

While I broadly agree with all of that, I think that you can’t have equality of opportunity without to some degree reigning in the massive discrepancy between the haves and the have nots. We’ll never see a perfectly even distribution of wealth, nor is that a desirable outcome due to all the excellent reasons you listed, but when the richest have millions of times the wealth as the poorest we can’t have equality of opportunity. Human nature is to exploit the power of that wealth to rig the game in all sorts of subtle ways for their own friends and family. We have to safeguard against that, and I think that requires moving in the direction of a more even distribution of wealth.

564

Agree with the above 100%. A more even (but not perfect) distribution by cutting both extremes is necessary to reign in inequality of opportunity. However, 95%-99% equality of opportunity is possible in some systems (probably not the most unequal societies, but those already doing good on this) without really redistributing much. Of course, one could argue that’s also possible in the most unequal systems as well, with 95% having equality of opportunity (none but poverty), but that’s not really the cases we are discussing.

565

How some families survive on $2 a day.

In early 2011, 1.5 million American households, including 3 million children, were living on less than $2 in cash per person per day. Half of those households didn’t have access to in-kind benefits like food stamps, either. Worst of all, the numbers had increased dramatically since 1996.

Those are the astonishing findings Johns Hopkins’ Kathryn Edin and the University of Michigan’s Luke Shaefer discovered after analyzing Survey of Income and Program Participation (SIPP) data in 2012. In the intervening years, Edin and Shaefer sought out Americans living in this situation, with basically no cash income, relying on food stamps, private charity, and plasma sales for survival.

Another common strategy we saw was cashing out food stamps. This is not something the poor typically do, and I want to emphasize that, but in the world’s most advanced capitalist economy, you gotta have cash. When it comes time to pay for the kids’ underwear, or to buy a school uniform, you’re gonna do that. Families have a very intense moral dialogue about that. They feel it’s wrong and only do it in certain circumstances. It really leaves them hungry at the end of the month, though, since food stamps never come in a surplus, and they only get 50 to 60 cents on the dollar, depending on the region they’re in. It’s a ripoff for them and for the taxpayer, and really exposes the family to hardship.

Beyond that, there’s selling plasma. You can only do it a couple times a week, and it can leave you physically debilitated. You make about $30 a time. It’s fascinating sitting in front of the Cleveland Plasma Clinic, watching busload after busload of people get off at the bus stop, and the entire bus walks right into the plasma clinic. Scrapping [collecting and selling discarded metal] was the other common survival strategy that we documented. It doesn’t pay well if you’re only using a grocery cart, which is what most of our families are doing.

Everything that we found in other places was magnified and maybe a decade more advanced in the Mississippi Delta. The place is really a world apart. The difference is that whole systems were failing people. To the extent that nobody was looking out for the families we followed anywhere else, it’s doubly so there. It allows these exploitative relationships to go on to a degree that surprised us both, as people who study American poverty and have studied American poverty for a long time. The Mississippi just seemed an order of magnitude worse in a lot of ways.

566

I was going to bump the journalism thread for this, but its kind of relevant to this thread as well. Hans Rosling explains why you can’t shouldn’t trust the medias view of the world by comparing it to statistics and data.

567

Just watched Four Horsemen on Amazon Prime. Excellent documentary on just how fucked our children will be if we continue down our current path.

Spoiler Alert: Massive economic inequality is very, very bad.

568

Why that, and not instead having government do what it’s supposed to be doing and discovering if and when people “rig the game” and coming down on them like a ton of bricks?

A limited government isn’t a weak government, it’s a government that’s actually particularly strong in what it’s supposed to be doing - diminishing force, fraud, social engineering, etc., in society.

That has nothing to do with equality, and doesn’t require rich people having stuff taken away from them, it just requires catching and punishing rich people who misuse their wealth to sustain their economic position through political advantage and otherwise “rig the game”.

IOW, one roots that sort of thing out because it’s bad, not because of its contribution to an abstract equal distribution of something; and a redistributive effort isn’t what’s necessary to counter it - I mean, if it’s just the wealth per se that’s the devil that’s making people do bad things, wouldn’t giving the distributed wealth to the poor just be encouraging them to do whatever they can to “counter-rig” the game? If so, isn’t that going to result in a mess of attempted rigging and counter-rigging? (I’m not saying that’s what would happen, that’s what the theory that appears to be being used here would seem to logically predict, based on the assumption that when you have wealth you’re irresistibly tempted to use it to rig things in your favour.)

No: go after the thing that’s actually wrong (rigging the game via crony capitalism, etc., etc.), directly and for its own reason (which is what I said at the end of my screed).

569

While I see the merit in this position, I’m at a lost on how it would be implemented. Take education and health (two of the biggest boosters of equality of oportunity). One could argue rigging the game would be buying better education or better health through private means, and therefore that the only solution to that particular problem is to limit the extent of private enterprises in those areas (limiting the existence of top private schools were the wealthy bring their kids for networking at tender ages, for example), while boosting the public investment. Which does away with the small government principle, and is pretty invasive if you think of it.

There are non aggressive ways to deal with these issues (that don’t imply forbidding anything) but they do fall under the social engineering label you speak of.

I don’t think the solution can be unipolar, and that a little bit of both approaches is probably the saner thing.

570

As with any market-driven solution, there is going to be inequality of some kind - but I think here even a minimal state could propose a curriculum that no form of education, however cheap, should fall below. Yes, the rich will be able to afford “better” education - to a degree. But also, to a degree, “better” in that sense would just mean “better frills”, the cheaper education would do the job, just as a hearty, cheap meal does the job, even if its savour isn’t as refined as a Lobster Thermidor (and if you think about how it would attract more dedicated teachers - that would be precisely the place for a kind of activism amongst socially-minded teachers who could put their money - or rather the cost of the less money they’d earn - where their mouth is).

Of course the networking side of such “better” education would be unavoidably better than the kind of networking that the cheaper education could offer. But then, to compensate, there would also be a kind of networking for the Great Unwashed (self-help, unions, etc.).

I think when people espouse libertarianism, they need to bear in mind that a certain degree of self-help and solidarity for the poorer echelons is just as necessary as the freedom of the market for all. There has to be a “safety net” in any civilized society, and again, even for a minimal state, simple compassion and a sense of civil society demands that there be some absolute minimum below which no-one should fall. But beyond that, a good deal of the “safety net” can be self-organized. For example, saga period Iceland is sometimes held as an example of a kind of free-market law system that worked pretty well, as indeed it did - but let’s not forget that Iceland also had a parallel “insurance” system that the poor self-organized amongst themselves.

We may admire the market, and we should - but we also need to be aware that when buggy whips go out of fashion, there needs to be some social structure in place to tide people over till they can re-educate, re-skill, etc. But should that be wholly organized by the state? That’s the question: how much of it can be self-organized? That should be preferable, and the state should first of all get out of the way (i.e. remove any impediments to self-organization that may be littering the place due to historical/cultural accident) and only then fill in the gaps.

But self-help and solidarity grows naturally when there’s no opposition to it (i.e. when the rich are forbidden from preventing it). It actually happened naturally in the UK towards the end of the 19th century (unions were mutual aid and insurance organizations, originally - as well as providing the necessary collective counter-weight to the power of the employers), but unfortunately that movement was hijacked by doctrinaire socialism as the supposed spearhead of its “revolution”.

Wrt the question of education specifically, the early laws nationalizing education in the UK were jumping on a horse that was already galloping. This can be seen from the fact that there were no new state school builds for quite few decades after the introduction of the laws that first introduced the state education system - IOW, a substantial number of schools had already been built by the free market plus charity, and they were simply taken over by the state system. That is actually quite telling. (The state school system advertised itself as supposedly of help to the poorest, but in fact, its raison d’etre was to provide factory fodder and cannon fodder, following Bismarck’s system. Can’t have the working classes educating themselves, can we? ;) )

On the general point though, I agree that there’s no point pretending to any more certainty about these things than we have. As a logical system, libertarianism is incontrovertible - if it doesn’t work out every time in practice the way theory would lead us to expect, then we have to bow to the facts, admit that there might be other factors that occasionally have more weight, and allow that the state might have a place (but even then, that can’t be taken for granted - again, self-help, self-organization should be looked to first). But at the same time - the market does work out in practice a lot of the time, the way theory would lead us to expect. Enough to have skyrocketed the general standard of living way beyond the mean for most of human history, in only the last few hundred years!

571

I don’t think we are disagreeing, just coming at the same point from different angles. The only way for massive inequality on the scale we see today to happen is for the game to be rigged, so removing the rigging automatically reigns in the inequality.

The problem is that inequality of wealth and inequality of opportunity are synergistic. Each feeds the other. It’s almost two sides of the same coin. So to attack the problem one can tackle either side. Tackling the inequality of wealth with very direct means, such as taxation, is probably faster which is why I favor it.

572

I think there’s plenty of historical examples of non-governmental organizations stepping up to provide the kind of safety net you discuss, but I’m curious why you seem to consider the distinction between “self-organized” safety nets and government ones. Why is a democratically elected government not just as self organized as a labor union or a church in this regard? Maybe I’m just reading too much into your choice of phrases, but I’m always suspicious when someone starts to mentally categorize everything by government as automatically inefficient or tyrannical or a bad idea.

573

I can think of a few reasons why I might contend self-organized private organizations are preferable:

  1. They’re voluntary. This point is personal preference, but I think a system which, whenever possible, does not require individuals to go along with the herd when they’d rather not is morally superior to one which does. That is to say, if $100 of my taxes each month goes to feeding the poor, I would prefer to spend the same $100 on charity directly.
  2. My perception is that they’re frequently better stewards. Although bureaucracy is not unique to the public sector, it’s certainly more common in large organizations, and that’s what national governments are. No single person can keep track of all of the spending in a largish government. It’s a whole lot easier to be on top of how your church or union chapter is disposing of its funds. I suppose it’s difficult to say for sure, though, without hours of crawling through whoever aggregates nonprofit records.
  3. They’re a positive force for social order. Your self-organized safety net group is also usually a good third place.
574

I like the third place argument, can’t disagree with that. I can and do disagree with the first two.

Social safety nets should not be in any way voluntary. Look at the mess voluntary health insurance got us in. I’m of the belief that letting selfish people opt-out of the path of greater good just weakens society and should not be allowed for something as vital as a social safety net.

I’m also suspicious that any charity group with a narrower focus than just helping all people all the time is going to be selective in who qualifies as “deserving” of their assistance. In addition, a lot of the biggest most public charities have well documented problems with how much of the donated funds that they gather actually get spent on assistance. A lot of it gets retained for “marketing” and “administrative costs” so I’d contend that that’s no more efficient than a public bureaucracy.

575

Fishbreath’s reasons are good 'uns, but I’d also add what I view as a more fundamental reason: the more “steps” there are between the elected and the voters, the bigger the likely gap between what people vote for and what they get, for unavoidable reasons. Also, the greater the degree of rational ignorance possible (i.e. unlike with buying a car, your voting decision doesn’t guarantee you’ll get your choice, so it actually doesn’t pay you very much to be informed - which is why elections at the more general level are usually decided by either sheer tribal affiliation or the “feel” of the candidate, rather than their policies).

This is also one of the several reasons why governments should be limited: if there is such a thing as a General Will, it can only be about things that the vast majority (way more than a bare majority - let’s say something like 70-80% of the people) agree on. And that’s only going to be the most basic things in principle, like military, police and courts, umpiring market relations, and some basic safety net. Any more tendentious detail than that, and you’re going to get factional disagreement to the extent that you have the situation you have nowadays, where governments seldom actually have an actual majority of the people behind them on any given issue.

The best way to think of democracy on a large scale (state, nation) is not as a tool to effect change (far less as a tool to do good with), but as the best method of avoiding civil war - for that is essentially all it does really well, and that only so long as the process is accepted by nearly everyone. So long as the hot potato of large-scale government can be passed from cheek to cheek, it’s kind of ok, and at least it’s a stable platform of some kind from which progress can proceed. But I think it’s unwise to expect such a blunt instrument to exert any kind of refined control over things - it’s more likely just to muck things up.

If you think about it, it’s absurd to imagine that the computing power of any lesser number than 7 billion brains, with second and third hand, often abstract knowledge, is going to be better than 7 billion brains, working on the problem of what’s good for 7 billion people in a network (like the market, but as I say, there are other possibilities - and some possibly undreamed-of yet, if we weren’t so fixated on the state as a tool to do good with) - even if that lesser number is a bunch of geniuses, the disparity is simply ridiculous. There are simply too many steps, and the knowledge necessary to make centralized decisions on a grand scale is not even centrally gatherable in principle (much of it is tacit, localized to those 7 billion brains, with knowledge of their several circumstances).

So the upshot is: the more localized the democracy, the better it’s likely to work. A local-level democratic decision, made by people who know each others’ asses, is far more likely to produce a result that those concerned vote for and want, than higher and higher levels, with more and more distance between voters and voted-for.

The only valid counter-argument to all this, I think, is that there are indeed some instances of negative externalities and public goods that can only be caught, and possibly ameliorated, from a position with an overview and some granted use of force. But I think that has to be argued for case-by-case, it can’t be just assumed that the state is likely to have that overview, have it accurately, or come up with the best solutions to problems at that level (nor does it make sense to expect voters to understand what’s required, especially given rational ignorance - it would probably be better for governments at that level, in relation to that type of question, to be elected at random, do what they think is right, and have people vote on them retrospectively, as a judgement on their performance, rather than in advance).

576

Interesting map of where poverty has fallen since 1960, and where it has not.

577

It seems there’s a lower limit to poverty in our systems though. As it approaches 10% it seems harder and harder to reduce. 10% still feels too much, though…

578

Inequality is ahead of schedule - as of late 2015 the top 1% now have more wealth than the rest of world combined. This beat forecasts that it would happen in 2016 or 2017.

http://business.financialpost.com/news/economy/richest-1-are-now-wealthier-than-the-rest-of-the-world-combined-oxfam-says

579

Wow, that’s out of whack. Pareto’s law would have predicted 51% held by 0.8% of the population.

(Jeez I thought I was mathing wrong but I wasn’t. Bad case of the Mondays.)

580

But imagine how many jobs they’re creating!