The Progressive Economics Forum

The Spirit Level: Why More Equal Societies Almost Always Do Better, by Richard Wilkinson and Kate Pickett, is an important book. It is not a huge tome, as one might expect from such a broad topic, weighing in at just 265 pages of text (including lots of figures mapping inequality against some health and social statistic, and some clever cartoons). That space, however, offers up a rich synthesis of empirical findings and some theorizing about how unequal societies – largely (except for the poorest countries) irrespective of per capita income – do worse on almost every important health and social indicator we might care about.

But first off, I need to once again question the title. In spite of the gravitas and policy importance of the subject matter, the Spirit Level just sounds kinda hokey, in a way that many people will never pick the book up. I hope I’m wrong about this, having been persuaded to pick it up (at the local library) after being mentioned by a number of people whose opinion I deeply respect. But there is NO discussion of “the spirit level” in the book. I could envision some text that would talk about the end of consumerism and materialism that inevitably leads to a higher form of consciousness (the spirit level) among us humans that reshapes the very foundations of how we think about and design economies – but in fact, I don’t think the word “spirit” appears in the text, even once (though perhaps for the best). So I’m left wondering if some publisher decided to change the title after the manuscript was accepted for publication, or whether the authors thought that the title should hang there to induce deep thoughts among readers.

That quibble aside, at least there is the subtitle, which gives us a very clear statement about what this book is about. Before getting into the hows and whys, it is worth summarizing the breadth of empirical findings, which typically are addressed as within-country inequality for the 50 richest countries in the world, and for the 50 US states, with the occasional time series. Inequality is negatively correlated with trust, women’s status, spending on foreign aid (ch. 4); positively correlated with mental illness and drug use (ch. 5); negatively with life expectancy and infant mortality (ch. 6); positively with obesity (ch. 7); negatively with average math and literacy scores, and positively with high school drop out rates (ch 8); positively with teenage birth rates (ch 9), homicides, children’s experience of conflict, perceptions of how well one would do in a fist fight (ch. 10), and imprisonment rates (ch. 11); and negatively with social mobility (ch. 12).

Putting it together, they create an index of social and health problems, which is positively correlated with inequality. The Nordic countries and Japan almost always appear at the healthy end of the scale, while the USA (by a large margin) is the worst, followed by Portugal and the UK; Canada is middling. The same empirical relationship holds for US states, with new Hampshire, Minnesota, North Dakota and Vermont doing the best; Mississippi, Louisiana and Alabama the worst.

The authors consider a number of causality issues and competing explanations, but arrive at one key explanation for why inequality has this effect: social status. They write:

It’s hard to disregard social status because is comes so close to defining our worth and how much we are valued. To do well for yourself or to be successful is almost synonymous with moving up the social ladder. Higher status almost always carries connotations of being better, superior, more successful and more able. … [T]he further up the social ladder you are, the easier it becomes to feel a sense of pride, dignity and self-confidence. … Pride is the pleasure and shame the pain through which we are all socialized, so that we learn, from early childhood onwards, to behave in socially acceptable ways.

… Greater inequality seems to heighten people’s social evaluation anxieties by increasing the importance of social status. … If inequalities are bigger, so that some people seem to count for almost everything, and others for practically nothing, where each of us is placed becomes more important. Greater inequality is likely to be accompanied by increased status competition and increased status anxiety.

… Not only do large inequalities produce all of the problems associated with social differences and the divisive class prejudices which go with them, but, as later chapters show, it also weakens community life, reduces trust, and increases violence.  (pp. 40-45)

That inequality should be reduced is inescapable, and polling suggests that people would like this (save for the very richest few percent). This is more than just the right thing to do morally, but is likely to produce a healthier economy and may indeed be a precondition for action on climate change. But because of the linkage to health and social problems, the book argues that reducing inequality would improve quality of life – most notably for the poorest, but due to “gradients” also for the richest – by much more than could be achieved through economic growth. The latter point builds on work on happiness and life satisfaction (Richard Layard’s excellent book, Happiness: Lessons from a New Science, is highly recommended, and he in turn gets the cover quote) that above a minimum amount of income, our happiness is determined by a range of other things like our health, education, the quality of our communities and family relationships.

How a radical reduction in inequality should be achieved is perhaps the weakest part of the book. The authors note that there are different routes, one of which involves large redistributive efforts through taxes, transfers and public services (the Nordic model); another is by achieving greater equity in incomes before taxes and transfers (Japan). Economists of social democratic persuasions have been more enamoured of the Nordic model, and generally make the argument to simply transfer resources to those who need them. I’m up for this, but I have always thought that it would be a superior outcome for the labour market to do more of the heavy lifting. Given the role of social status as stated above, this would seem to make sense, and such moves would be more difficult for a right-wing government to dismantle in a fury of spending cuts. The two strategies, of course, need not be mutually exclusive.

So, in the dying pages of the book, the authors cite greater unionization, reducing corporate power, and empowering the non-profit and cooperative sectors, with a big plug for worker ownership. There is clearly a lot more that could be said, but perhaps the authors figured they had already taken on enough. The point is that, having made the case for greater (though not necessarily perfect) equality, if we were to accept it as a fundamental plank of political strategy and public policy development, and focus our attention on what really would change the nature of the game, the authors will have made a substantial contribution to a better world.