Ill Fares the Land (3 page)

(From Wilkinson & Pickett,
The Spirit Level
, Figure 12.2, p. 161)

Even
within
individual countries, inequality plays a crucial role in shaping peoples’ lives. In the United States, for example, your chances of living a long and healthy life closely track your income: residents of wealthy districts can expect to live longer and better. Young women in poorer states of the US are more likely to become pregnant in their teenage years—and their babies are less likely to survive—than their peers in wealthier states. In the same way, a child from a disfavored district has a higher chance of dropping out of high school than if his parents have a steady mid-range income and live in a prosperous part of the country. As for the children of the poor who remain in school: they will do worse, achieve lower scores and obtain less fulfilling and lower paid employment.

(From Tim Jackson,
Prosperity Without Growth: Economics for a Finite Planet
[London: Earthscan, 2009], Figure 9.1, p. 145)

Inequality, then, is not just unattractive in itself; it clearly corresponds to pathological social problems that we cannot hope to address unless we attend to their underlying cause. There is a reason why infant mortality, life expectancy, criminality, the prison population, mental illness, unemployment, obesity, malnutrition, teenage pregnancy, illegal drug use, economic insecurity, personal indebtedness and anxiety are so much more marked in the US and the UK than they are in continental Europe.

The wider the spread between the wealthy few and the impoverished many, the worse the social problems: a statement which appears to be true for rich and poor countries alike. What matters is not how affluent a country is but how unequal it is. Thus Sweden, or Finland, two of the world’s wealthiest countries by per capita income or GDP, have a very narrow gap separating their richest from their poorest citizens—and they consistently lead the world in indices of measurable wellbeing. Conversely, the United States, despite its huge aggregate wealth, always comes low on such measures. We spend vast sums on healthcare, but life expectancy in the US remains below Bosnia and just above Albania.

(From Jackson,
Prosperity Without Growth,
Figure 9.2, p. 155)

(From Wilkinson & Pickett,
The Spirit Level
, Figure 10.2, p. 135)

(From Wilkinson & Pickett,
The Spirit Level
, Figure 5.1, p. 67)

(From Wilkinson & Pickett,
The Spirit Level
, Figure 6.2, p. 80)

Inequality is corrosive. It rots societies from within. The impact of material differences takes a while to show up: but in due course competition for status and goods increases; people feel a growing sense of superiority (or inferiority) based on their possessions; prejudice towards those on the lower ranks of the social ladder hardens; crime spikes and the pathologies of social disadvantage become ever more marked. The legacy of unregulated wealth creation is bitter indeed.
¹

—LEV TOLSTOY,
ANNA KARENINA

 

 

 

 

D
uring the long decades of ‘equalization’, the idea that such improvements could be sustained became commonplace. Reductions in inequality are self-confirming: the more equal we get, the more equal we believe it is possible to be. Conversely, thirty years of growing
inequality
have convinced the English and Americans in particular that this is a natural condition of life about which we can do little.

To the extent that we do speak of alleviating social ills, we suppose economic ‘growth’ to be sufficient: the diffusion of prosperity and privilege will flow naturally from an increase in the cake. Sadly, all the evidence suggests the contrary. Whereas in hard times we are more likely to accept redistribution as both necessary and possible, in an age of affluence economic growth typically privileges the few while accentuating the relative disadvantage of the many.

We are often blind to this: an overall increase in aggregate wealth camouflages distributive disparities. This problem is familiar from the development of backward societies—economic growth benefits everyone but disproportionately serves a tiny minority positioned to exploit it. Contemporary China or India illustrate the point. But that the United States, a fully developed economy, should have a ‘Gini coefficient’ (the conventional measure of the gap separating rich and poor) almost identical to that of China is remarkable.

It is one thing to dwell amongst inequality and its pathologies; it is quite another to revel in them. There is everywhere a striking propensity to admire great wealth and accord it celebrity status (‘Lifestyles of the Rich and Famous’). We have been here before: back in the 18th century, Adam Smith—the founding father of classical economics—observed the same disposition among his contemporaries: “The great mob of mankind are the admirers and worshippers, and, what may seem more extraordinary, most frequently the disinterested admirers and worshippers, of wealth and greatness.”
²

For Smith, this uncritical adulation of wealth for its own sake was not merely unattractive. It was also a potentially destructive feature of a modern commercial economy, one that might in the course of time undermine the very qualities which capitalism, in his eyes, needed to sustain and nourish: “The disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect, persons of poor and mean condition . . . [is] . . . the great and most universal cause of the corruption of our moral sentiments.”
³

Our moral sentiments have indeed been corrupted. We have become insensible to the human costs of apparently rational social policies, especially when we are advised that they will contribute to overall prosperity and thus—implicitly—to our separate interests. Consider the 1996 “Personal Responsibility and Work Opportunity Act” (a revealingly Orwellian label), the Clinton-era legislation that sought to gut welfare provision here in the US. The stated purpose of this Act was to shrink the nation’s welfare rolls. This was to be achieved by withholding welfare from anyone who had failed to seek (and, if successful, accept) paid employment. Because an employer could thus hope to attract workers at almost any wage he offered—they could not decline a job, however distasteful, without risking exclusion from welfare benefits—not only were the numbers on welfare considerably reduced but wages and business costs fell too.

Moreover, welfare acquired an explicit stigma. To be a recipient of public aid, whether in the form of child support, food stamps or unemployment benefits, was a mark of Cain: a sign of personal failure, evidence that one had somehow fallen through the cracks of society. In the contemporary United States, at a time of growing unemployment, a jobless man or woman is thus stigmatized: they are not quite a full member of the community. Even in social democratic Norway, the 1991 Social Services Act entitled local authorities to impose comparable work requirements on anyone applying for welfare.

The terms of this legislation should put us in mind of a previous Act, passed in England nearly two hundred years earlier: the New Poor Law of 1834. The provisions of this law are familiar to us, thanks to Charles Dickens’s depiction of its workings in
Oliver Twist
. When Noah Claypole famously sneers at little Oliver, calling him “Work’us” (“Workhouse”), he is implying, for 1838, precisely what we convey today when we speak disparagingly of “welfare queens”.

The New Poor Law was an outrage. It obliged the indigent and the unemployed to choose between work at any wage, however low, and the humiliation of the workhouse. Here, as in other forms of 19th-century public assistance (still thought of and described as “charity”), the level of aid and support was calibrated so as to be less appealing than the worst available alternative. The Law drew on contemporary economic theories that denied the very possibility of unemployment in an efficient market: if wages fell low enough and there was no attractive alternative to work, everyone would eventually find a job.

For the next 150 years, reformers strove to abolish such demeaning practices. In due course, the New Poor Law and its foreign analogues were succeeded by the public provision of assistance as a matter of
right
. Workless citizens were no longer deemed any the less deserving for the misfortune of unemployment; they would not be penalized for their condition nor would implicit aspersions be cast upon their good standing as members of society. More than anything else, the welfare states of the mid- 20th century established the profound
indecency
of defining civic status as a function of economic good fortune.