Inequality is natural

The moot in a debate organised and run by VILP (Victoria International Leadership Programme) students on 15 October 2013 was: “Is inequality natural?”

I was on the affirmative team with Harry Berger and Even Bain, two smart and articulate Victoria students.

We won the debate 49-43. Once you adjust for the home ground advantage to the negative side (organised following the inequality symposium in Victoria earlier in the year, and debate opened by Max Rashbrooke, author of Inequality: A NZ Crisis – link to book here!), I reckon that pretty much counts as a land-slide victory 😉

Natural versus equitable

Our argument was very simple. Inequality is natural – as in it is in nature. We appealed to biology, evolution and human behaviour. But that it does not make it fair or equitable. We have to appeal to our humanity and empathy to deal with negatives of inequality – but those are defined in many cases by normative judgements that society has to agree on. 

The extreme political left believe in equality as a mantra: some kind of equal utopia. Even though history shows there is always inequality, although the extent and their manifestation vary. It can also become politics of envy and jealousy – how dare those rich have so much – rather than a cohesive set of strategies that balance incentives for innovation, safety nets, social mobility and equity of access to opportunities.

The extreme political right deny there is a problem. They argue there are necessary and sufficient incentives for the poor to pull themselves out. Social welfare is seen as molly coddling and excessing investment in education and health in poor areas itself unequal.

The reality is more complex and somewhere in the middle of these positions. The political tensions are real.

Tensions

The tensions are deep and not always on the same logical plane. Political tension is clear, less so in NZ in my view than in the US. There is broad consensus in NZ on social welfare, although there is debate on what size, style and method is most effective.

So are the tensions between sufficient incentives for innovation to occur, and the ugly end of inequality: poverty. They aren’t quite on the same plane, but somehow they seem to run together. Mainly related to, I suspect, aggressive redistribution policies that can discourage innovation by reducing the reward for effort.

The tensions run deep amongst us as individuals and society. A number of game theory experiments that show big differences between altruistic intent versus actual behaviour. While we like the idea of looking after the poor, given the power to act, we tend to look after number one.

Income inequality

Even though much of the inequality debate in practice is about income inequality, we did not address is directly. It was strategic from a debating perspective, because we knew the opposition team would argue the unfairness of income inequality. But they resorted to ad hominem arguments and contradiction without supporting evidence rather than refuting the central point.

We discussed a little bit of income prospects on the back of education. Income growth over the past decade has been strongest for those with higher levels of education. For long term and enduring social mobility good quality education is key.

A complex problem with no easy solutions

It is tempting to boil problems down to one or two things. But inequality is too big and too important an issue to treat with such contempt.

In the debate, our contention was simply this: inequality is pervasive in nature and natural. In being natural, it requires unnatural interventions to reduce the ugly parts of inequality. But it also makes it very hard to change.

In accepting that inequality is natural, we can work towards achievable goals with a comprehensive suite of complementary policies that balance incentives for innovation, social mobility, safety nets and equity of access to opportunities.