6.7.2.1  Conflicting Viewpoints on Economic Inequality

(This is an archived extract from the book Patterns of Power: Edition 2)

Income inequality data is available by country, showing that it is highest in South Africa; it also shows that America is more unequal than the Nordic countries, for example.[1]  Overall economic inequality might be thought of as a broader concept: including education and health care, for example.  Attitudes towards inequality vary: Americans are less inclined than Europeans to make political interventions to reduce inequality for example, with Republicans much more sceptical than Democrats.[2] 

Some, but not all,[3] collectivists (6.2.3) want to reduce economic inequality, and some use the term 'distributive justice' to describe the concept of sharing a society’s total wealth more equally than would be the case if everyone were allowed to retain the whole of their earnings.  The next section (6.7.2.2) lists some justifications for reducing inequality.

The individualist counter-argument (6.2.2), based on a belief in property rights, is that it is unfair for a State to take money from some people and give it to others.  Individualists might argue that envy is a negative emotion,[4] and that allowing inequality provides the incentive to generate more wealth.  They suggest that this would benefit others through a 'trickle-down’ mechanism when the wealthy spend their money,[5] although the evidence suggests otherwise (3.5.6.4).  They argue that the poor may be better off in absolute terms with this approach, whilst acknowledging that there will be more inequality.

This is a conflict which has to be resolved politically: a compromise has to be reached.  People can contribute to the negotiations if they have ‘a hand on the joystick’ (6.2.6).

© PatternsofPower.org, 2014                                                 



[1] The OECD Factbook 2013: Economic, Environmental and Social Statistics reported on income inequality in different countries; it noted that:

“There is considerable variation in income inequality across OECD countries. Inequality as measured by the Gini coefficient is lowest in Slovenia, Denmark and Norway and highest in Chile, Mexico and Turkey. It is above-average in Israel, Portugal and the United States, and below-average in the remaining Nordic and many Continental European countries.

…non-OECD countries have higher levels of income inequality than OECD countries, particularly in Brazil and South Africa.”

This report was available in May 2014 at http://www.oecd-ilibrary.org/sites/factbook-2013-en/03/02/01/index.html?containerItemId=%2Fcontent%2Fserial%2F18147364&itemId=%2Fcontent%2Fchapter%2Ffactbook-2013-25-en&mimeType=text%2Fhtml

The complete table of results showed that South Africa had the highest level of inequality, at 0.7, compared to 0.24 for Slovenia.  This table was available at http://www.oecd-ilibrary.org/sites/factbook-2013-en/tables/factbook-2013-table63-en/index.html?contentType=&itemId=/content/table/factbook-2013-table63-en&containerItemId=/content/chapter/factbook-2013-25-en&accessItemIds=/content/chapter/factbook-2013-25-en&mimeType=text/html.

[2] On 14 April 2013 The Guardian published a YouGov-Cambridge poll, in an article entitled Britons favour state responsibilities over individualism, finds survey.  This article compared attitudes, towards inequality and the redistribution of wealth, in America, Britain, France and Germany. It also made comments about the differences in attitude between Republicans and Democrats. One finding, for example, was:

“Most Britons, 52%, regard it as the government's job to redistribute income right the way across the income spectrum, as against the distinct minority of Americans, 32%, who take the same view.”

This article was available in May 2014 at http://www.guardian.co.uk/society/2013/apr/14/britons-sympathetic-unemployed-france-germany?CMP=twt_fd.

[3] On 24 October 2013, IPPR published an essay entitled Deep freedom: Why the left should abandon equality, by Roberto Mangabeira Unger.  He argued that the “empowerment of the ordinary person – a raising up of ordinary life to a higher plane of intensity, scope and capability” is more important than “a rigid equality of outcome or circumstance”.  This essay was available in May 2014 at http://www.ippr.org/juncture/171/11414/deep-freedom-why-the-left-should-abandon-equality.

[4] As an example of this argument, Richard Epstein (a professor of law at the University of Chicago) quoted, as an example of envy, a Russian proverb: “My neighbor has a cow, I do not. Genie gives me one wish. It's not for me to have two cows, but for him to have none.”  This came from an EconTalk interview, for which the podcast notes were available in May 2014 at http://www.econtalk.org/archives/2008/11/richard_epstein.html.

[5] An article by Richard Epstein entitled Let the Rich Get Richer, published by a Hoover Institution Journal Defining Ideas on 19 April 2011, gives an example of the individualist argument:

“In the end, it is growth, and only growth, that can cure the national malaise. And that means letting the rich get richer so that they can bring the rest of us along with them.”

This article was available in May 2014 at http://www.hoover.org/publications/defining-ideas/article/75711#nogo.