One of the sub-titles of this book ("Why Equality is Better for Everyone") is a little uninspiring as it hints at some kind of "Can’t we all be nice" outreach. But the content is deceptively methodological.
Ambitious is it is to simplify a plethora of social negatives into one and tie them uniformly to variance in incomes (and ignore all other social strata, incidentally), the authors do this surprisingly well. Their story: Above some income-per-head threshold, social welfare (life expectancy, health, mental health, education, crime, trust, others) no longer improves much, but the more uneven the income distribution gets (which appears to happen as average income continues to rise) the more aggregate social welfare seems to unravel—and not solely for the unlucky relative poor but across society. Thus, countries enter a sweet spot where they are rich enough to support first-world living standards and to afford the redistribution necessary to score highly on social welfare too. (Over countless graphs—admittedly conspicuously lacking axis units—the reader quickly has it drummed into her that Japan and Scandinavia invariably occupy the "Here is where you should be" zone, with the USA nearly always ending up in the naughty corner).
Income inequality is consistently measured as a ratio of top-fifth to bottom-fifth of population (except for US states where the more informative Gini coefficient is used). This is reportedly for simplicity and because UN data avails the authors of it readily. However, all the countries studied are rich (IE OECD) ones, and the OECD similarly provides Gini coefficients of all its members. Most of the measurements of social welfare ills lack a scale, with only a very sparse data annex in the back. The web-site of the NGO (the Equality Trust
) that powered the authors’ analysis may have the missing detail.
After journeying through to chapter 13, it becomes pretty compelling that the links between income inequality and problematic outcomes are most unlikely to be spurious. Along the way explanations are offered which make intuitive sense, most of them built on a negative relationship between relative material wealth and fraternity, empathy and even tolerance (think gated communities next to slums, a common sight even in poorer countries not covered by this). This reviewer felt that the regression lines on some of the copious charts probably did not have R-squared values honourable enough to justify their presence, but there are many that do, and she applauds the inclusion of so many results, since the volume could have been slimmed down to contain a still impressive number of tighter associations. The causality part—more fully covered later in the text—is passable too, although the authors too readily dismiss it working in reverse (not that that weakens their argument). They also somwehat over-stretch themselves with the argument that the rich folk in unequal societies suffer too. They do, but would not be the major winners from the redressing of social bads. Moreover, this reviewer suspects that most or all of the analysis is heavily—if not completely—influenced by the incidence of welfare failures at the low income end, such that addressing this would be the main inference. And to the extent that social ills are directly driven by have/have-not antipathy, she questions whether it is any government’s legitimate task to legislate economic policy to minimise jealousy.
Wilkinson and Pickett's policy recommendations—mostly collected in the last chapter—are generally tentative, low-key and dignified. This will not insulate them from challenge though. They offer routes to greater income equality via a larger state (with increased transfers) but also point to societies where the economic model favours more equal results before that step (partly obviating it)—such as Japan, whose social-market structure dampens the ability of labour (and capital) to exert influence on its claim of national output. Nonetheless, in either case there appears to be no way for an unequal country to transform itself into more equal other than via quite hefty policy engineering. And all of this seems to work to rebalance the value-doctrine of Liberty, Equality, Fraternity away from the first term--a retrograde step that is insufficiently acknowledged as a trade-off. The authors bravely delve into the chartering of corporations with a discussion of shifting their legal mandate away from allegiance to owners and more to employees, but their putative mechanism looks iffy (greater employee ownership is a somewhat bland route to this; and the desire for a means of preventing enfranchised employees from voluntarily selling their interest for material gain—thus reverting the structure to how it plays currently—was a red flag that perhaps hints at the hard-to-avoid requirement for a distinctly less liberal regime).
The call for greater "political will" likewise smells like a desire for increased state intrusion—maybe with positive social intentions, but the reader may certainly have heard that before, and seen unfulfilled hopes and unintended consequences a plenty. The focus on income inequality as the bottom line also (presumably deliberately) leaves the case for reform shorn of applications to concentrate on simply addressing the economic plight of the poorest cohort (and not worrying about bringing down their wealthy neighbours as an objective in itself), and leaves the text devoid of recommendations that are not directly redistributive as well. This reviewer suspects that the final prognosis of "The Spirit Level
" thus leaves itself open to concerns that it is a step too far, as well as probably in the wrong direction. The welfare state has much unfinished work in efficiently providing the public goods that actually raise incomes overall, and can disproportionately increase opportunity at the bottom simultaneously. The implication that rich nations are at the effective pinnacle of average income, such that they can concentrate on the contentious and restrictive matter of re-routing it via transfers, rather massively diminishes the social good delivered by the relatively recent journey to prosperity.
(Review originally posted
to JREF forum in Feb 2010)