What's wrong with inequality?

One of the great issues of our day is inequality. Whether it is the Greek debt crisis, anxieties about Sydney real estate prices, the continuing resonance of “Occupy” and cries about the “1%”, or the publishing phenomenon of Thomas Piketty’s “Capital” – a concern about inequality has worked its way into mainstream political debate. Even Hilary Clinton is putting it at the heart of her presidential campaign.

This focus on inequality (and thus equality) is welcome. It’s a big issue and one that requires big ideas to address it. It will be a challenge for our political culture – prone as it is to easy point scoring and suffused in a clickbait mediasphere – to do it justice. But it also allows us to connect these emergent public concerns with the kinds of things many political philosophers have been arguing about over the past few years.

Equality and its discontents

The obvious question is: What is actually wrong with inequality?

It might seem obvious, but when you pause to really pose the question, it quickly becomes clear the answer isn’t so straightforward. First of all, if you are opposed to inequality, then it follows that you think everyone should be equal. But equal in relation to what? And equality of what?

If you are committed to equality, does it follow you think everyone should be equal in relation to everything? That would be absurd. Some of us are tall, some short. Some of us are ordinary looking, others beautiful. No one is talking about equality in relation to our height or our looks (although…maybe we should be).

Where it gets tricky is in relation to what we call equality of resources – that is, the opportunities, income and wealth that people have. Is any differentiation in income and wealth between persons justified? And if it is, then on what grounds? Shouldn’t brain surgeons earn more than philosophers? Doesn’t Bill Gates deserve the billions he has if he’s taken the risk to invest what he started with?

Many people reach for a familiar idea at this point. Maybe if everyone starts off with roughly similar amounts of wealth, and everyone has genuine equality of opportunity, any subsequent differences are ok. Political philosophers have devised a whole range of arguments and thought experiments to test how far we are willing to go on this one.

Liberty and equality

One initial challenge is the relation between liberty and equality. For example, if people are free to pursue whatever career they want, then if someone is able to earn a much greater income or accumulate much greater wealth than others because of their special talents, hard work and ingenuity, then what’s wrong with that?

The American philosopher Robert Nozick developed his famous “Wilt Chamberlain” argument to test this thought. Chamberlain was a hugely talented NBA basketball star in the 1960s and 70s – the LeBron James of his day. Nozick argued that if, for example, 1 million fans were willing to pay an additional 25 cents to see Wilt play, then he can earn $250,000 more than anyone else.

On what grounds is the state justified in taking a proportion of this additional income to redistribute to others, who have less? If Wilt or Lebron is the reason fans come to the game, and they willingly pay their hard earned cash to see him play, how can it be justified to take any of that income away on the basis of some principle of equality or distributive justice?

Le Bron James is clearly gifted, but is it fair that he reap the benefits of its gifts?Keith Allison/Flickr

Nozick’s argument was developed, in part, in response to his Harvard colleague John Rawls’s hugely influential A Theory of Justice – probably the most important statement of liberal principles of social justice in the modern era. Rawls had developed his own thought experiment to test what kind of principles we would agree to if we genuinely wanted to treat each other as “free and equal”. His famous example involved each of us starting from what he called the “original position” – a kind of cone of ignorance. Assume that you didn’t know if you were rich or poor, smart or stupid, hard working or lazy, Catholic or atheist: What kind of principles should govern the “basic structure” of society?

Rawls argued that first, we would choose a principle that protected our basic liberties. And second, that we would choose a principle that maximised the situation of the worst off, just in case we found ourselves in that group. In other words, we would choose principles that ensured that if there were inequalities, they existed only to make the situation of the worst off as best as they could be. So it’s not that a brain surgeon really deserves to earn more than a philosopher. But it’s better for all of us if incentives exist for people to want to become brain surgeons.

Thus even the most famous liberal social democrat of the 20th century thought there would still be inequalities in an ideally just society. But Rawls thought they would be ones we could live with.

Not all inequalities are alike

But this returns us to the core question with which we began: What is wrong with inequality? Almost no one defends pure egalitarianism. Instead, political philosophers have tried to identify which inequalities matter, and why.

No one denies that absolute poverty, for example, is a bad thing. Although there are intense debates about where, exactly, to draw the line in defining poverty, everyone agrees that poverty is a bad. But after a certain point, usually above where it is assumed that people have enough resources to lead a “decent” life, why care about the levels of inequality between, say, a banker and a nurse?

As I’ve argued elsewhere, the short answer is that persistent and rising levels of inequality makes the worst off in our society even more worse off overall. And that is unfair. We know the inequality is closely related to a host of outcomes with regard to health, crime, education and employment. None of this would matter as much if there were a lot of mobility between the different income levels – if knowing the position of your parents, for example, didn’t tell us much about where you eventually ended up in the distribution of social goods.

But alas, this isn’t the case. To allow for vastly different starting points in relation to people’s ability to make the most of their opportunities -– to get a decent education, a well-paying job, to enjoy good health – is unjust.

The politics of inequality

This logic applies to the political community too, as those on the highest incomes and with the greatest amount of wealth are usually better able to exercise their ability to influence political parties with regard to their interests. Segments of the community then become more disconnected from each other, as wealth enables people to literally buy themselves out of public institutions – whether it be public transport, education, healthcare or indeed housing. It is very difficult to feel solidarity with people with whom you never interact or even see – except, perhaps, on sensationalist TV programs

Of course, one response to this kind of concern is to say that inequality is required to provide incentives for the talented and hard working to create the economic growth that we all benefit from. In other words, that we need to grow the economic pie, and not simply come up with new ways to fine-slice it. We do indeed need economic growth, but not at any price, and not on any terms.

First of all, there is the need to balance growth against environmental capacity. If we exhaust our common planet, then we are all doomed. Second, we need to think about how the gains from economic reform can be more justly shared through the tax and transfer system. And it is here that we need to have an open debate about equality. And maybe – just this once – political philosophers can help.

Disclosure

Duncan Ivison receives funding from the Australian Research Council.