Quote of the day: Sen on inequality and rhetoric

I am currently disappointingly short on time, I apologise.  So I will take this chance to quote from smart people, in this case Amartya Sen on inequality again.  This time at the end of chapter one from ‘Inequality Reexamined’.

The tendency to assume away interpersonal diversities can originate not only from the pragmatic temptation to make the analytics simple and easy (as in the literature of inequality measurement), but also, as was discussed earlier, from the rhetoric of equality itself (e.g. ‘all men are created equal’).  The warm glow of such rhetoric can push us in the direction of ignoring these difference, by taking ‘no note of them’, or ‘assuming them to be absent’.  This suggests an apparently easy transition between one space and another …

But this comfort is purchased at a heavy price.  As a result of that assumption, we are made to overlook the substantive inequalities in, say, well-being and freedom that may directly result from an equal distribution of incomes (given our variable needs and disparate personal and social circumstances).  Both pragmatic shortcuts and grand rhetoric can be helpful for some purposes and altogether unhelpful and misleading for others.

The purpose of thinking about this is not to say there is nothing that should be done.  But instead that, as was made clear here, these moral issues are too important to just relate to some vague partially related factor and pretend we have a silver bullet.  If we genuinely care, we need to try to understand why and about what – instead of using ‘grand rhetoric’ to simply make others think about how thoughtful we really are 😉

Now apologises to those who don’t want another series of paragraphs on inequality and fairness – if you are uninterested feel free to stop here, I understand.  However, you’ll miss out on me mentioning trickle down mkII if you don’t read on …

The Spirit Level’s call to solely focus on inequality was not just inappropriately argued.  It was inappropriate.  The decision to try to ram the link between society and inequality solely into a positive form of social capital was not just vague, but showed a lack of nuance about what social capital is (here, here).  Note:  This is not to rule out meso or macro social structures having an influence, I find a lot to be recommened by these types of views.  It is to rule out a naive intepretation that there is this single, unexplained, intermediate variable that we can view as causing a myriad of social ills without any further thought.

I find it mildly humorous that the same people attacking “trickle down” proponents for stating that ‘giving money’ to the wealthy would create wealth for the poor are comfortable saying that ‘giving money’ to the middle classes would create wealth for the poor – I term this ‘trickle down mkII’.  While ‘trickle down’ relied on investment in physical and human capital, ‘trickle down mkII’ relies on a mystical set of social capital that “just happens” to support the middle classes case to transfer resources towards themselves.

Maybe it is just the fact that I’m a bit simple minded, but I would think concentrating directly on the factors holding back the worst off in society – and using government as a tool that society can use to show it cares about the worst off, appears to be the most direct, sensible, and sincere mechanism to achieve the aim of helping the worst off in society.  In truth, we have limited knowledge about spillover effects and institutional structure over a wide economy and society (trickles).  Again as Sen says:

An approach that can rank the well-being of every person against that of every other in a straightforward way, or one that can c0mpare inequalities with any room for ambiguity or incompleteness, may well be at odds with the nature of these ideas.  Both well-being and inequality are broad and partly opaque concepts.  Trying to reflect them in the form of totally complete and clear-cut orderings can do less than justice to the nature of these concepts.  There is a real danger of overprecision here.

However, we can at least have a modicum of certainty about the costs and benefits of giving people who are facing a hard time resources, or the value in terms of someones quality of life from giving someone with a disability or someone facing discrimination a hand up.

If we actually wanted to argue for the poor, we would argue for the poor right – not the middle classes.

For a more concrete example – if we were to roll around thinking solely about inequality of transferred income, we may decide to give the same amount to someone with a disability as we would give to someone who is unemployed but otherwise not suffering from a disability.  We can already see in this example that something doesn’t sit right, the person with the disability is endowed with a cost, potentially more limited opportunity, and a different way of ‘translating’ income into happiness.  When we start thinking this way (involving heterogeneity), the idea we can ping one loosely related variable (one that would involve interrupting the mutually beneficial trade of heterogeneous individuals) and that it will improve everyone’s lives (this is indeed the direct argument made in the Spirit Level) becomes untenable.

Note:  You may already believe that we do enough, or shouldn’t do as much, I am not so much trying to tell people ‘how much we should do’ – that is not my place.  In fact, this very issue is a extremely difficult one, and I am not sure if I will ever have a totally pinned down a view on what I think is fair or just – let alone whether other people should think the same way!

I am more pointing out that if you believe we should do more, standing on a soap box to fight for middle income people to be able to buy more things is beside the point.  I have noticed some ‘inequality fighters’ like to compare themselves to the recent movie version of Les Miserables – but to quote from that “It is time for us all to decide who we are.  Do we fight for the right, to a night at the opera now.” – raising your flag against some vague concept of inequality is no more than signalling to others that you are a caring and upstanding sort of person, one who wouldn’t mind receiving a bigger WFF payment so you can indulge in the pleasures of those on higher incomes (eg opera) as well.

Those who more genuinely care about injustice would be the people who work in areas and communities to help societies worst off at present, or the people who spend their lives trying to alleviate poverty overseas – the question we need to ask instead is, as a society, do we see more value in that endevour than we currently admit?

You may point out I am not doing anything except being writing a blog and helping firms with risk management through advice – and you would be right.  But I’m not trying to get the government to turn around and change policy based on my own interests and moral urges.  Instead I am just writing to a small group of people here, talking about how when we look at these issues we should think about trade-offs and whether our arguments are consistent 😉