02 December 2012

Inequality (2 of 3)

Do we know what inequality today is? Do we know what it means? After all, not all of us are equal, some are more equal than others, so should we strive for it? What are the benefits?

You might think that equality is a moral imperative, and perhaps you are right; something that seems instinctively right. Yet there are advantages that, at first sight, aren’t so obvious.

Any yet, evidence from some major economies suggests that, even as they become richer, they also become more unequal; the rich get richer, the poor if they don’t get poorer, certainly aren’t any better off. And not just the rich, it’s usually the mega-rich, a tiny cadre of people who own and control much of any countries wealth.

How rich does any individual need to be? Above a fairly modest level, increasing riches certainly don’t make you happier, only richer. Why do people go to such lengths to vastly enrich themselves? Influence certainly, and power; yet we know that power corrupts — perhaps they’ve forgotten this, or think that what we learn from history can be ignored. Don’t think you can tax such people down to “reasonable” levels of income — they can afford the best accountants and lawyers to thwart you at every turn.

Am I exaggerating? Currently, the minimum wage in the UK is £6.19, and is recognised as not even a “living wage”. And whereas 20 years or so the difference between the workers’ average wage and the CEO’s salary was about 1:20, today it can be 1:230. Do managers work 10 times more than they did? I doubt it. Do managers deserve it? I doubt it.

Look a bit sideways; which are the happiest countries, the ones that are best to live in, not necessarily the richest ones? You’re probably not surprised to learn that they are Scandinavian, with Denmark usually the “best”.

And if you check, you will also find that Denmark has one of the least unequal societies. True, the Danes have high taxation, but they also have good social care for all ages, good schools and health care. It’s almost as if they put people and families first. And perhaps they do.

And if you look across a range of social measures such as rates of teenage pregnancy, drug use etc as proxies for the “health” of the country, you will find that these problems are worse in more unequal countries, and less in equal ones.

An association of course, not a causation. So, why do these countries have few social problems, and better outcomes for schooling and care? Something in the genes? Or is it more their culture, their mores?

There doesn’t seem to be a clear-cut answer to this. But the message is clear; if you want to be happy, be well looked after, move to Denmark. You won’t have a super yacht or a private jet, though; and the weather could be better. But then it can hardly be worse than in the northern half of the British Isles.

See also: The Spirit Level, by Richard Wilkinson and Kate Pickett, available here from amazon.

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