Manzi's Questions on Inequality

Besides being a brilliant guy, Jim Manzi is to my “right” politically, which I think makes his worries about inequality particularly interesting. He has kindly taken the time to read my paper and has some questions. I'll take them in turn.

1. Let’s assume that the social mechanisms that produce some highly skewed income distribution do not violate any norms of justice. Can a sufficient degree of inequality be itself a violation of a norm against very high inequality? If our minds are evolved instruments, and have evolved to regard such an outcome as inherently wrong, then is it valid in Will’s philosophy of justice to declare a norm against it?

I think there is good evidence that there is an evolved sense of “fairness” relevant to questions of distributive justice. But distributive justice, in the first instance, deals with the distribution of the gains from cooperation in small groups. It's not clear that this capacity has any relevance to questions of the pattern of holdings in the vast populations of contemporary nations states–questions light-years from any posed by life on the Pleistocene savanna. And, in any case, that a capacity evolved, and was adaptive at some point in the history of the human lineage, does not even establish a presumption of normative authority for the outputs of that capacity. So, my answer is a very strong No.

2. Given my views on social science, I think that it would be all but impossible to build a convincing analytical case for any non-obvious phenomenon that can not be subjected to controlled experimentation because it extends across all of society over a long period. So I agree that an analytical proof that sufficient inequality will lead to a political dystopia does not exist and will not be forthcoming. But that is different than saying I do not believe it to be a problem. Is it Will’s judgment that, in our current social and political context, current levels of economic inequality are not dangerous?

First, let me emphasize that a main point of my paper is that real material inquality is much lower than nominal income and consumption measure lead many people to think. The reason is that these measures aren't measures of real material inequality. I argue that there is good (though not drop-dead) reason to believe that standards of living have become more equal over time. That said, given my views on social science, I think it's wrong to think of levels of inequality, measured anyway you like, as a cause of anything in the absence of auxilliary hypotheses about the relation of the inequality level to real mechanisms of social change. As I argue in the paper, inequality and other very bad things often have a common cause. For instance, places with a great deal of corruption and political predation often have, for those very reasons, extremely high levels of economic inequality. When distribution is determined primarily through political means, there will be a great deal of conflict over control of the state. So these kinds of places tend to be marked by strife and instability. And thus you will in fact find a reasonably strong correlation between income inequality and instability across countries. But inequality doesn't drive the instability. Rather, the causes of instability also drive up inequality.
So, to answer Jim's question, (1) real material inequality in the U.S. is lower than most people think and (2) the level is not dangerous. (3) Some part of the level is surely driven by dangerous mechanisms (e.g., political redistribution with little perceived legitimacy), but then the injustice and danger lies in the mechanism, not in the mechanism's knock-on effects on equality.

3. To put my cards on the table, I think that inequality, as it interacts with other facts about contemporary American society, is a problem. But, I think that, even more fundamentally, it is an indicator of a much more severe problem. As globalization continues inexorably (in practical terms, this has very little to do with McDonald’s in France, and almost everything to do with the economic rise of Asia), U.S. income inequality is a demonstration that many — probably most — Americans don’t have the capabilities required to maintain anything like their current standard of living in competition with a global labor force. Does Will think this is accurate, and if so, is it a problem?

I don't think this is even close to accurate. I see most signs pointing in the direction of a rising standard of living for most Americans. The worry makes sense only if you (1) see world economic growth as a zero-sum game, which it most certainly is not, or if you (2) think the standard of living of most Americans is, like the standard of living of Michigan autoworkers, a result of direct of indirect subsidies that cannot be sustained in the face of increasing global competitiveness, which it is not. Globalization does squeeze out the kind subsidies that do prop up many people's wages. Maybe a declining standard of living due to disappearing subsidies is a source of social instability–or at least a source of new demand for inefficient protectionism. This is, in fact, why some scholars think “trade adjustment assistance” and other forms of redistribution are so important. But then, again, inequality is a symptom here, not the disease. If people get out the pitchforks when their subsidies are removed, inequality per se has nothing to do with it. What people are angry about is a declining standard of living. (And, yes, some people care about relative decline, but their frame of reference is generally local, not national.) If some other form of subsidy is needed to buy civil peace and/or buy out resistance to good trade policy, then that might be a good reason for redistribution. In my view, to see it as an issue of inequality is simply to lose focus.

Author: Will Wilkinson

Vice President for Research at the Niskanen Center

12 thoughts

  1. Excellent essay. I’m a socially-liberal Democrat and I’ve had this exact discussion with several of my liberal friends. Like you, I’m fairly emotional for a guy – enjoy being moved by books, movies and music. But I find too much emotion *in politics* a bit dangerous. It often seems to result in group think. Even worse, the emotive impluse in politics causes “supporters” to turn into “fans” and to then lose their objectivity. For instance, over the past two years I’ve found many instances where I thought Obama crossed the line with mixing too much religion into politics (which only helps keep our de facto religious test for political participation soundly in place – other Western Democracies have outgrown this). Some of the things Obama said and did would have been strongly objected to by my liberal friends if a conservative had done them. But they kept their voices silent. He could do little wrong in their eyes.

    1. The partisan impulse in politics is a tough challenge to sound governance. But is this not the equilibrium of a democratic political system? We saw this clearly over the last eight years — Republicans ran a tight, partisan ship, and Democrats got creamed until they hunkered down and did the same (one of their first political successes was the party-line defeat of Bush’s Social Security reform).
      In other words, partisanship succeeds, and begets more partisanship. Politics is ugly.
      And yet, (1) we agree that governance is important, and (2) we each want our ideas to win out. So what’s an intellectually honest person to do?
      If all the intellectually honest people avoided politics, or didn’t vote out of cynicism, that would be a terrible result. So what’s the right thing to do? I don’t quite know.
      Certainly one can support a set of ideas, but remain willing to give one’s own side grief when it’s not living up to those ideas. That’s fine.
      But that’s not enough. Partisanship, romance, hero-worship — these things work, politically. They are part of the equilibrium of democratic politics. What if you really care that policy XYZ is enacted? What if that’s your passion? Is a sacrifice of some intellectual independence, of some rationality, so wrong? It’s a prisoner’s dilemma — if only one side is willing to sacrifice some rationality, that group has a political advantage. Do you want to yield that advantage in the name of rationality and independence?
      I agree that politics would be different in a perfect world. But given this world, are you really sure that you can justify non-participation in the uglier side of politics, even at the cost of undermining the policies you advocate for?
      I’m not saying this is an easy decision. And we can fight for more rationality in general even as we suspend it for this or that particular battle. Will (and Brad and other commenters) make good points. But I’m saying there are believable arguments on both sides of the question.

      1. Yeah, I certainly agree that there are “believable arguments on both sides of the question”. In my initial post I said that “too much” emotion in politics is bothersome to me – and stated why. I’m not saying that I want all emotion ripped out of politics. It’s not an all-or-nothing issue, at least not to me. Did Obama incite (I mean inspire) too much emotion? We each as individuals have to decided that on our own. For me, he was pushing the line. For others he wasn’t.
        Drew Westing just wrote an essay that touches on this subject on CNN’s web site today:
        Westin basically concludes that Obama is the both of best worlds, in that he can think like a professor and “inspire like a preacher.” Again, we each have to determine the amounts of those two items (think vs. inspire) that we feel comfortable with coming from our candidates and poltical leaders. I lean more toward the former and less toward the latter. As a liberal who often votes Democratic, I did find this passage from Westin to be a little disturbing:
        “And (Democrats) finally abandoned the approach to campaigning that has been their downfall for generations: peppering voters with facts, figures, and policy positions and assuming they will see what a rational choice the candidate is.”

  2. Bluntly, what a bunch of crap.
    Obama is to our leader. So are our Congresscritters and mayors. We elect them to lead with certain limitations. That is what representatives do in our form of goverment.

  3. Excellent post.
    I note that Andrew Sullivan gave it an “amen”, which is interesting given that he is completed besotted with the president-elect.

  4. Excellent post. I was going to donate $25 bucks to Cato to put my money where my thoughts are. Minimum contribution is $50 bucks which is over my hi5 limit during these difficult times.

  5. Great article. I think the big irony is that Obama is talking about “yes, we can.” He’s talking about “us” changing. And, whether or not on purpose, he has created a huge cult of personality around himself. We cannot do anything right now. He can.
    In fact, at the same time, I think that Obama’s election has changed this country for the better. And, the fact that it was Obama, and that race played (at least on the part of the official campaigns) such a small part in the race itself is also a very positive thing. Obama was not elected because he was going to be America’s first black president. There are plenty of people out there who would love to run specifically to become America’s first black president, and I’m glad that Obama beat Jesse, Louis, and the rest of them to it. Eventually, America would get so self-conscious of not having had a minority of women president that just race would have been enough to get someone elected, and to define their presidency. I don’t think that will be the case with Obama. I don’t think that Obama, the press, or the people of this country, will let “being the first black president” be enough. He will have to, and hopefully will, achieve more.

  6. John Kass in the Chcgo trib of Thurs Nov. 13, read it! We have progressed very little. We have just shifted to a new Idol. Tolerance is only the fad of the moment. Now we are challanged if we dare to wear an O T shirt!

  7. typo last comment, the Kass article, 13 yr old challanged when she wore a “I’m a MacCain Girl” next day she wore an O T shirt, and suddenly she was correct. Even one teacher asked about her choice! tolerence?> not yet!!

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