Mathematically, the crucial assumption for Layard’s argument to hold is that other people’s income increases the marginal utility of my consumption. Technically, you’re correct to say that this is distinct from the “pollution” argument, because the latter requires only that others’ income decrease my utility – it doesn’t necessarily have anything to say about the marginal utility of my own consumption. However, it turns out that in the most of the standard ways of parameterising the utility function, the “pollution” assumption does in fact imply that my marginal utility of consumption increases. Indeed, it’s more the case that you have to make special assumptions about the form of the utility function to avoid this implication, than to generate it – which is why (even if it’s not completely transparent) Layard isn’t being utterly ridiculous here.

Also, FWIW in these standard formulations, income is the pollution, so I don’t quite know why you’re taking such issue with that. Again, it’s possible to argue for alternative formulations, but the standard one is far from obviously implausible.

Mathematically, the crucial assumption for Layard’s argument to hold is that other people’s income increases the marginal utility of my consumption. Technically, you’re correct to say that this is distinct from the “pollution” argument, because the latter requires only that others’ income decrease my utility – it doesn’t necessarily have anything to say about the marginal utility of my own consumption. However, it turns out that in the most of the standard ways of parameterising the utility function, the “pollution” assumption does in fact imply that my marginal utility of consumption increases. Indeed, it’s more the case that you have to make special assumptions about the form of the utility function to avoid this implication, than to generate it – which is why (even if it’s not completely transparent) Layard isn’t being utterly ridiculous here.

Also, FWIW in these standard formulations, income is the pollution, so I don’t quite know why you’re taking such issue with that. Again, it’s possible to argue for alternative formulations, but the standard one is far from obviously implausible.

As you point out, I did not by any means provide an exhaustive list of “possible reasons” that the wealth-poor should “get over it” for Coasian reasons. But notice that many of your conservatives’ concerns have to do with effects on the economy.

It would probably be foolish for policy makers to set out uninformed to save us from a purportedly immiserating rat race. But social scientists could do relevant studies. So far happiness studies tend to just ask people roughly “How happy are you?” We could ask more nuanced questions. Also, the study Will cites just studies beliefs about income mobility. We could study a sample of people who actually have achieved inter-quintile mobility (or suffered downward movement). Was downward movement as bad as feared? Did income-position gains correlate with expected happiness gains? One of the first happiness studies, by Easterlin, found (to the contrary) that individuals predicted accurately that they would get wealthier but inaccurately that they would get more happy throughout their lives.

How could policy makers know that the rate race is actually immiserating us if social science is incapable of detecting the immiseration? Or do you define immiseration in terms distinct from subjective well-being?

There’s another possible reason against state efforts to reduce economic equality. It could be that the policies that the state would embark upon in order to reduce inequality are morally unacceptable on other grounds, aside from economic considerations.

For instance, one way to reduce inequality in American society is to crack down on immigration, as immigration is a sizable source of domestic economic inequality. But to do so seems counterproductive because the United States might successfully reduce domestic inequality, but global inequality would increase.

Similarly, conservatives frequently argue that welfare programs that redistribute income encourage dependency, crowd out civil society and social capital, or promote some other bad outcome. Thus, we might reject state efforts to reduce inequality because of harmful effects that specific redistributive policies generate and these effects might be harmful for the economy, as you suggest in (1), or harmful for other reasons.

If I were ranking those possible reasons, I would say that (1) and (3) are by far the most plausible and that its quitedifficult to decide between them. (4) also plays an important role. (2) is a piss poor justification of inequality.

Also, the study does cannot encompass all of the ways that wealth inequality negatively impacts the poor. Studies like that (few and number and incomplete as they are) make good intellectual ammunition and food for thought, but do little to justify world views.

(To his credit, Will just says that this is a possibility. Of course it is THAT.)

Possible reasons:

(1) Wealth inequalities are endemic in any highly productive economy. We could find no way to equalize wealth without ruining the economy, thus costing the low/middle income people so much consumption-possibility that it’s better for them just to deal with their wealth-inferiority complexes.

(2) High wealth people get so much benefit from being such that redistributing their wealth to the less wealthy would have overall costs to average utility.

(3) High wealth people have so much political power, that it would cost more to organize a way of redistributing their wealth than the benefit to the redistributees.

(4) Most everybody accept for the REAL LOSERS thrives on “the rat race” and a more egalitarian arrangement would plunge everyone into existential dread… a utility crusher.