Individuals, not systems, silver bullet?
By | Sep 24, 2009
MAXIM writes:
Equality isn’t a magic solution
What’s the solution to our societal problems? According to recent social commentators it lies in making sure we all have roughly the same amount of stuff. Tapu Misa, writing in 7 September’s New Zealand Herald, joined the likes of John Minto in suggesting that reducing income inequality is the way to solve New Zealand’s endemic social ills. Minto is perhaps in another league to Misa, in advocating for government to even out income imbalances with a 100 percent income tax on earnings above $250,000. With 24 percent of our highly skilled workforce already ditching the country, surely we don’t want to give them another reason to leave.
Misa and Minto are getting excited by these familiar ideas because of a new book written by two British health researchers, Richard Wilkinson and Kate Pickett, called The Spirit Level. Using data for 23 wealthy countries, including New Zealand, they have investigated the statistical relationship between income inequality and a range of social outcomes, like health, educational achievement and mental health.
Contrary to what we might expect, they find that it isn’t necessarily the wealthiest countries that are the happiest or healthiest. In fact, some of the wealthiest countries have the highest levels of social problems, and—as the commentators emphasise—the highest levels of inequality. The authors of The Spirit Level claim this as evidence that higher economic growth has done all that it can for boosting living standards; once countries reach a certain level of prosperity, increasing economic growth does not seem to make their societies healthier or happier. They recommend politicians should instead reduce the “scale of the material differences between people” to improve everyone’s quality of life.
Wilkinson and Pickett’s study is thorough and original. But despite the commentators’ excitement about the apparent relationship between inequality and worsening social outcomes, this correlation is still just a correlation. In other words, seeing a relationship between two things doesn’t prove that one causes the other. We cannot be certain it is inequality that is causing a problem and not the other way around.
We should also be careful about concluding from such evidence that there is a single, neatly packaged solution to social problems. In this case, the research has declared inequality to be a problem, so commentators have decided that all we have to do is fix inequality and the world will be better. Sound familiar? From Communism to New Zealand’s “Think Big,” grand schemes have been tried in the past and they have been found wanting. Minto is misguided to suggest that we can cure social problems through tax-payer financed redistribution. Quite apart from the economic consequences, Wilkinson and Pickett themselves do not see a bigger hand for government as the only solution. They say “the argument for greater equality is not necessarily the same as the argument for big government.”
Like Misa and Minto, we all care about having a fairer society. But by claiming that reducing material inequality is the solution to our problems, Misa and Minto have ironically made the very mistake that Wilkinson and Pickett wrote The Spirit Level to condemn—reducing everything to economics. Just as economic growth won’t guarantee health and happiness, it is fair to say that making everyone’s material wealth roughly the same provides no guarantees. What we truly need is a society where we take responsibility for one another. In the past, New Zealand had a range of thriving friendly societies that dispensed welfare and education to the community. Now the government does it—often badly. If society lacks care and compassion, all the redistribution in the world won’t help.
We need a society that actually encourages people to thrive. That celebrates with the entrepreneur when they bank their first profit and encourages businesses as they create more jobs. We need the kind of society where a young person, unemployed for the third generation in their family, is not condemned to endless queuing for the dole. But this requires ordinary people doing the harder work of sticking with one another; providing people who have been given a rough deal a chance to turn things around, by driving them to work, helping them learn their trade and cheering for them as they stay in a job. Redistribution sounds easy—it lets us transfer money and feel like a good Samaritan—but in reality, a better commitment is needed.
There is no single solution for creating a fairer society. But there are about 4 million individual solutions if all of us decide to do what we can in our communities. You and I are the closest thing there is to a silver bullet.
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Read “It’s just not fair—why equality matters” by Tapu Misa |
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Read “Put a cap on eye-popping incomes” by John Minto |
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