For most of human existence, humans lived in hopelessly egalitarian societies. Hunter-gatherer bands, and even early agricultural communities, were very egalitarian.
If you want to go evolutionary, humans evolved in egalitarian surroundings. We were not chimpanzees, living in terrible authoritarian structures full of fear.
Inequality is interpreted by humans as a THREAT. This causes a chronic fight or flight response, which causes health and performance issues.
This is true even of the people on the top of the hierarchy. Those who have more power or money fear those below them.
The data on this, which is extensive in the book The Spirit Level is unambiguous. Even when people’s needs are met, the more unequal a society, the more unhealthy everyone is and the more unhappy they are.
Those who feel lower on the totem pole also perform worse than they would otherwise would. Remove the feeling of inequality, and they perform better.
This is before we get to the social effects, which are pernicious. Those at the top of the heap distort politics to keep themselves at the top of the heap, and engage in repression.
In middle agricultural societies like Egypt, and even late ones like medieval Europe, you see vast amounts of resources going into ideology, which is to say religion. The Pharoah is a God, he owns everything. Medieval kings (and beyond) have the “Divine Right of Kings”, they are chosen by God. The Indian caste system, and even Confucianism (slightly better because you can lose the mandate of Heaven), are other examples.
What would Egypt have been like if all the resources which went into making Pharoah look like GOD, had gone into general welfare? It was a vastly rich society, which produced floods of crops; the wonder of the ancient world.
All inequality is, in part, the result of an ideological push. When we examine societies transitioning to higher inequality, it always includes the creation of an ideology which justifies it.
This is because all power within a human society (not between societies) is ideological at base. It may be enforced by men with weapons, but if those men stopped believing in the justifying ideology, or, in many cases, if most of the subjects stopped believing in it, the inequality would end. Power over people requires power over their imaginations, over what they think is right, their ideas about the natural order, and so on.
The 1980s were the “Greed is Good” decade. What followed was the most unequal industrialized society in modern history–but the ideology came first.
You must convince humans that large amounts of inequality are justified.
This is patent nonsense in most cases. The bankers, who are the best paid people in our society, destroyed more value than they created in the 2000s, even by their own accounting methods. Compensation has nothing to do with real value, and at this point it is probably negatively correlated. A teacher or nurse produces far more value than almost all bankers. Indeed, so does a janitor or a garbage collector. Not that this is difficult to pull off, as bankers, frankly, produce negative value.
The rich, as a class, are parasites. They arrogate to themselves the right to give permission for others to do things. That being the case, their only existential justification is if more beneficial work occurs because of their “management” than would otherwise. In the history of the world, this has been more rare than not.
Inequality is thus a political and organizational negative. It ensures that more effort goes into unproductive and destructive activities, which are of benefit to very few.
Inequality is unhealthy, makes people unhappy, and distorts politics in terrible ways.
These negatives are intrinsic to inequality. Beyond a relatively low level, there is no such thing as “good” inequality.
More on this in future pieces, including discussing the “incentive effect.”
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Bill H
And this is the problem that I have with the current promotion of the minimum wage. I’m all in favor of better wages, but let’s make them the result of better jobs. We should be focused on bring back the good jobs that have been shipped overseas.
Instead, we seek only to make meaningless jobs pay better wages, divorcing the amount of wages from the value of the job performed. That’s not okay in terms of the richer classes, apparently, we must not pay them more than the job is worth, but we’re all in favor of it for the working class.
I have none of the typical problems with minimum wage; do not claim, for instance, that it harms business. So long as all businesses are subject to it they are playing on a level field. It may raise prices, but I am unconvinced that that would be harmful.
What it does do is break down the connection between the value of work performed and the amount of pay. It weakens the motivation to achieve better for one’s self, to move upward to better things, and that is detrimental to the fabric of the nation. We are becoming a nation willing to settle for minimum wage and dependent on what we can persuade government to do for us.
Bruce Wilder
It has occurred to me that the use of “inequality” as a label for a set of social and economic problems associated increasing elite corruption and extraction has been chosen by the chattering classes precisely because it hides the sharp end of the stick. It reflects the ambivalence of people conscious of their own privilege, the privilege of collaboration and passive acquiescence.
Almost hypnotic in an amorphous lack of conceptual bounds, “inequality” suggests no practical standard, ideal, policy or program. We can grasp its antonym, “equality”, which term has positive normative connotations for many, and suggestions of a repulsive uniformity, a leveling homogeneity for others — thus, it is a term that encourages earnest hand wringing in search of a consensus, but supplies instant opposition, without exposing responsible elites or dysfunctional features of political institutions to criticism.
Any society with a deep division of labor and specialisation of resource use — in other words, any highly productive society — benefits from close cooperation, but has many, many points of conflict. Resolving those multiplying conflicts justly and efficiently and intelligently is essential to realizing the benefits of cooperation.
Just acknowledging the extent of conflict and the difficulty of routinely resolving it is frightening. The complexity is bewildering. Authoritarian expedience has a natural appeal. So does the libertarian’s glib denial of reality.
We live in a culture of fear and atomistic individualism, which is a by-product of the same political degeneration driving increasing inequality and unchecked elite corruption. And, we do not understand the architecture of breakdown, because the experience of the breakdown obscures it for us.
nihil obstet
@Bill H
You seem to be arguing for continued inequality, just improved so that the inequality reflects your idea of what’s valuable. The point of the post as I understand it is that inequality is always bad — there’s no such thing as good, improved inequality.
Barry
I agree that inequality is not the norm in the scope of human existence; and I completely agree about the ideology, having been in college while the ‘greed is good’ dogma was being spread (often with that exact phrase).
But I believe inequality is an emergent property of our population and/or resource state. That is to say, it is a property of post-hunter-gatherer civilization. To grow beyond a certain size, a society or organization must adopt different structures.
If this is so, then the question is how do we minimize the negative effects of inequality while reaping the benefits of ‘civilization’? How do we guard against ideologies that allow inequality to spin out of control?
Dan Lynch
Inequality is one of *the* issues of our time, up there with global warming and nuclear Armageddon. Thanks for pointing out the ideological role.
The generation that lived through the Great Depression and WWII understood that capitalism was not perfect and that people needed to look out for each other, otherwise we end up with the Bonus Army and or even Mussolini and Hitler.
My generation did not get that memo, we’ve had to learn the hard way, and the lesson is not over yet.
gnokgnoh
Bill H, your analysis appears patronizing, at best. Your views, taken to their logical ends, imply that no arbitrary minimum value should be set for labor. Why stop there? Let’s aim for indentured servitude, or slavery. No reason for the laborers to get uppity, what real value do they have anyway?
Setting the minimum value of work at an arbitrary level is only one of many ways that society attempts to mitigate inequality, because inequality does not work. One of many reasons why a number of states (29), cities, and towns have increased the minimum wage above the federal level is that data illustrate that laborers simply cannot live on the federal minimum wage, which has not budged since 2009. The state ends up paying for many things these laborers cannot afford, and the economy suffers in many other ways, as Ian repeatedly describes.
DMC
We need some combination of higher minimum wage(the average wage earner has lost purchasing power steadily since the mid-1970’s), guaranteed income(for the huge numbers of people long term unemployed/unemployable) and Eisenhower-era upper tax rates to get some of the money back from the financial class and back down to the bottom of the food chain to people who go out and spend it, thus generating actual economic activity that drives DEMAND. And Bill, I think you’re whistling for the wind if you think the old horse collar and buggy-whip industries are coming to this country. As to the value of “work”, I think you’ll find that those paid the least often work the hardest. Talk to somebody who picks vegetables for a living sometime. Or anybody in food service. They bust ass on overtime for peanuts.
EmilianoZ
Giovanni Battista Caproni: Which world would you choose, a world with pyramids or without?
Jiro Horikoshi: I just want to build beautiful airplanes.
The wind rises. Miyazaki, 2013.
High inequality might be the price we paid for the huge gains in productive capacities since the industrial revolution. Hunter-gatherers might have been happier than us but they didn’t give us quantum mechanics or the theory of relativity. They did leave us beautiful paintings on cave walls but that was hardly Michelangelo or Cezanne.
A complex society is necessarily an unequal society. When individuals’ contributions are not strictly equivalent, the valuation of these contributions will necessarily be arbitrary and people will game the system.
There’s no free lunch. The exquisite flowers of complex civilizations, the arts and sciences, came at the price of high inequality.
However, now that we have the technology, I dont see why we couldn’t move towards a more equal society. On the other hand, all our advances could also be lost in a general collapse as happened with the collapse of Rome.
Jeff Wegerson
@EmilianoZ
It is possible that inequality slowed down the creation of even more complex organizations that might have us now in an even more sophisticated and flowered civilization. It appears to be slowing us down now. So why do you believe that we could not have gotten the bests of civilization even sooner had we not had to deal with the inefficiencies of inequality?
Russ
Lots of Randroid idiocy in this comment thread.
Inverness
EmilioZ: I’m reminded of this quotation by Stephen Jay Gould: “I am, somehow, less interested in the weight and convolutions of Einstein’s brain than in the near certainty that people of equal talent have lived and died in cotton fields and sweatshops.”
IDG
Is no coincidence that inequality happens in large surplus societies, the recurring theme is that our cultural and social evolution has been (is) orders of magnitude slower than our technological progress.
We lack ‘social intelligence’ compared to abstraction capacities (to which we owe both technological progress AND ideological fabrications to legitimate inequality). This ultimately leads to recurring violence in many forms from the individual to the institutional level and broad failure.
We as species are not yet prepared to live in large societies of millions or billions, our brain has and the different mechanisms we use for socialization has not evolved for that task, there is even the possibility that strong self-consciousness and intelligence is highly problematic for large balances functioning societies (and collapse is a guaranteed result). Let’s hope not.
Ian Welsh
Yes, see this thread:
https://twitter.com/iwelsh/status/683975945447948288
Hugh
It all comes down to what kind of a society we want. The economy just provides some of the things we need for that society and is bound by the limits of our resources. We need to understand that, in some sense, there will always be inequality. We are all different from each other. We have different talents and different dreams. So the question we should be asking along with what kind of a society do we want is how much is enough? How many of society’s resources, that is our resources, can any one person amass to him or herself without taking away resources from the rest of us? How many resources should be provided to each of us to give us the building blocks for a full and decent life? Why should these be provided? Because this is the commitment we make to each other and the undertaking we take together.
As in all discussions of this type, I return to my favorite passage of Reinhold Niebuhr from Moral Man and Immoral Society written more than 80 years ago in 1932.
“The moral attitudes of dominant and privileged groups are characterised by universal self-deception and hypocrisy. The unconscious and conscious identification of their special interests with general interests and universal values, which we have noted in analysing national attitudes, is equally obvious in the attitude of classes. The reason why privileged classes are more hypocritical than underprivileged ones is that special privilege can be defended in terms of the rational ideal of equal justice only, by proving that it contributes something to the good of the whole. Since inequalities of privilege are greater than could possibly be defended rationally, the intelligence of privileged groups is usually applied to the task of inventing specious proofs for the theory that universal values spring from, and that general interests are served by, the special privileges which they hold. The most common form of hypocrisy among the privileged classes is to assume that their privileges are the just payments with which society rewards specially useful or meritorious functions. ”
What I find especially perceptive about Niebuhr’s comment is that elites don’t just inflate and lie about their value to society but, much more insidiously, they substitute their good for our good, and sell us the notion that whatever is good for them is good for us and society in general. This is how they usurp the public discourse, crowd us and our needs out of it, and leave us, as we see because it is all we are left to see, a competition between various elite agendas on the best ways to loot the rest of us.
John Poynton
My goodness! Have we reached the post post-communist era already?
The problem with equality is that it provides no incentive for initiative or risk taking. Neither are there any investors rich enough to put up risk capital. In any society is the Left is largely made up of the less able who want to be looked after, whereas the Right tends to consist of the more talented who want the freedom to be creative and ambitious. As Adam Smith pointed out, and this has never been disproved, provided you have an open competitive market the interests of the entrepreneur are brought into line with those of society as a whole.
As regards wages you might like my post at http://jepoynton.com/2015/11/02/janet-daley-misfires-on-tax-credits.
Ian Welsh
There were far fewer rich people in the post-war period, much lower inequality, and higher economic growth. So much for that silly argument. Capital is easily enough raised from an egalitarian society, either from the people en masse or from government.
As for Smith, neither has it been proved, but I will take the right’s Smith worship seriously when they engage with the entirety of his work, which called for vast swathes of the economy to be kept out of the private market and which railed against merchants as conspirators against the public good.
More money making people do more things is a net bad when those things are a net bad, by the way. Might wish to cogitate long and hard on that.
John Poynton
Sounds like you favour high taxation? How come the far eastern economies have done so well, then?
Also intrigued by your interpretation of Adam Smith. Would you care to be more specific? Your reply is quite aggressive, which is always a sign of weakness!
ChadH
“As for the Pyramids, there is nothing to wonder at in them so much as the fact that so many men could be found degraded enough to spend their lives constructing a tomb for some ambitious booby, whom it would have been wiser and manlier to have drowned in the Nile, and then given his body to the dogs.”
–Henry David Thoreau