Inequality and Well-being.
‘Feel-good’ Politics or Socialism?
By Chris Winch
The ‘happiness agenda’ was taken up a few years ago by some Blairites and by Cameron, but the fashionable concern with GNW (Gross National Well-being) is likely to bring up political consequences that are most unwelcome to both Cameroons and Brown and this point needs to be pressed home vigorously. A few years ago, one of Cameron’s advisors ventured into controversial territory, arguing that the Churchillian idea of a welfare safety net is no longer appropriate and that the Tories should take a leaf out of Polly Toynbee’s book and concern themselves with relative inequalities of income, rather than with a basic welfare floor. Not surprisingly, this theme quickly got overtaken by the need to remove inheritance tax, showing that the Tories’ priorities are still those of making the rich even richer. However, this is a theme that is beginning to move out of the academic research on the economics of happiness and epidemiological research on life expectancy, into the fringes of political concern. For socialists it is quite interesting as the implications of the claims of the academics are quite radical. Beyond a floor of material comfort it is argued, human well-being depends more on the distribution of income than it does on absolutely how much one has. The less the differences between peoples’ incomes, the more well-being the mass of the population is likely to feel and the greater the differences, the greater the human misery. Few things in politics are certain, but that the rich will defend their interests however possible is one. How Cameron hopes to reconcile the politics of well-being with the interests of the rich should be entertaining to see. But what will Labour do?
Social Democracy and Equality: the Crosland/Hattersley legacy.
The Croslandite social democratic right of the party has long claimed to favour equality as a political goal. For Roy Hattersley, a latter day Crosland supporter, the obsession has been with equality of outcome. But the aim seems muddled. Unless you specify what kind of outcome is required, the aspiration is too vague. Equality of educational outcomes seems unrealistic (given human diversity) and undesirable (given that a modern society wants different kinds of skills and functions). Furthermore, their means of getting it were extremely muddled. The thought that it could be done by making schools comprehensive, without first dealing with the advantages to the ruling class posed by the independent schools. In any case, the means (equality of treatment) were inappropriate to the end (equality of outcome). Given income and social inequality, not to mention human diversity, it was inevitable that the result of partial equality of treatment should be heightened inequality of outcome, as the middle and upper classes learned to take advantage of a non-exam based system of selection. Instead of improving the standard of working class education and ensuring that there were good vocational education opportunities, together with measures to make employers provide jobs that required skills, the Croslandites dismantled an avenue for working class advancement without actually improving the prospects of working class children.
Brown/Blair and Equality of Opportunity.
For Brown, as it was for Blair the issue is equality of opportunity (the level playing field of competition). As we have seen, the Crosland legacy ensured that this could not occur, as the way in which comprehensive schools were introduced conferred a huge advantage on the middle and upper classes. Brown until recently seemed unmoved by relative inequalities and, influenced by the American political theorist John Rawls, thinks that only the absolute status of the least well off matters and that it would be rational to seek a set-up in which one compares one’s hypothetical best absolute state with less good absolute ones. But there is no reason to assume that humans view things in this way. If our main concern is not to be disregarded by our fellows, then we will select a state which minimises our relative inequality. The rage felt at the antics of Fred the Shred and others of his ilk have also tended to undermine the idea that relative inequalities of income don’t matter.
There are two reasons: first the lack of esteem that comes from low status, second, the lack of power that comes from relative income inequality. The first is the really striking feature of the recent epidemiological research: being low in an elongated pecking order really hurts us. We get both mentally and physically ill, fat, self-medicate ourselves with drugs to dull the pain. Second, if money is congealed labour power, then the rich have battalions at their disposal which they can use to command scarce resources, thus restricting the freedom of access of the less well off. We can see how this has happened under the Blair regime, with some elimination (but not too much) of absolute poverty, but growing relative inequality. This consideration alone drives a coach and horses through Rawlsianism, which maintaing that you can deal with questions of liberty first and then move on to distribution. In fact, distributive inequality restricts liberty, meaning distribution is at the heart of ensuring social justice. The Rawls-based New Labour consensus is hopeless in both its psychological assumptions and in its underestimation of the practical consequences of inequality. Interestingly, Hattersley appears to endorse Rawls, thus betraying a complete lack of understanding of both Rawls and the importance of relative equalities. At one level these ideas are not new. Plato in the Laws proposed a maximum relative income ration of 4:1, similar to that of contemporary Japan, which comes out as one of the best performers on the epidemiological indicators associated with income inequality. Rousseau was another writer who drew attention to the powerful pscychological distress caused by heightened inequality. The difference is that we now have good evidence that these philosophical intuitions were based on a profound appreciation of the human condition.
The New egalitarians: Layard and Wilkinson.
Economists who became dissatisfied with the use of GDP as a measure of economic success have turned to other measures, such as indices of happiness. Richard Layard claims that post war rises in GDP have not been matched by rises in happiness (as measured by surveys). One problem with this is his Benthamism – happiness is pretty well equated with pleasure rather than with well-being. People don’t just want more pleasure, they want to lead worthwhile lives in which happiness is a by-product (the pursuit of happiness is a futile pastime). Although Layard had drawn attention to the role of taxation in eliminating unhappiness in a series of lectures in 2003 , in his recent book ‘Happiness’ (2005) he seems content to avoid the big questions about redistribution.
A better approach would be to try and understand the well-being both of individuals and of the society in which they live. Well-being includes the conditions of being happy and also the idea that what one is doing is worth doing and that society values what one is doing. It’s not just a question of flourishing in terms of having a job, material possessions, status etc., but of living well. Well-being can’t be measured directly, but there is a powerful way of doing so, namely by looking at the effects of lack of well-being. These include crime, ill health and low life expectancy. When the indicators of these are high, we may reasonably assume that this is because some people are unhappy as a result.
The work of Richard Wilkinson (The Impact of Inequality 2005; The Spirit Level 2009 written with Kate Pickett) takes this approach, and, reviewing the epidemiological evidence, suggests that there is a causal link between income inequality and lack of well-being as measured by crime, health and death statistics. These links are extraordinarily clear, demonstrating, in most cases, a linear relationship between income inequality and morbidity statistics. More inequality leads to more ill health, greater disparity of life expectancy and more crime which are all concentrated at the lower ends of the income scale. These connections can be demonstrated at all levels down to the local neighbourhood (where the inequalities are assumed to diminish due to segregation according to income). They can be traced between states, within states (data is available from individual US states to bring this out clearly) and even to towns. Eastern Europe post Stalin up to the early 60s showed very favourable levels of health compared with the developed capitalist countries but lost this advantage after the Kruschevite reforms in the early sixties (Albania bucked the trend as it did not participate in these reforms).
These effects occur at relatively low levels of GDP when absolute poverty, such as lack of food, shelter, access to health care or sanitation cease to be major causes of ill health. Beyond a certain low threshold, relative inequalities of income seem to be the prime determinant of health in a population. Wilkinson produces interesting figures showing that the availability of consumer goods is not that different between the poorest and the richest – the difference is that the rich have bigger and better goodies and the poor suffer from this relative deprivation.
Why is there this connection? Wilkinson thinks that the main condition of well-being is our perception of our status (echoing Plato, Hobbes and Rousseau among others). The lower our status, the more harried by the higher status members of society we perceive ourselves to be and the more stressed we get. This has well-documented physical effects linked to the process of ageing. Hence relative inequality leads to faster ageing and to the faster development of disease associated with ageing. Interestingly, Wilkinson thinks that the data shows that income equality is more important than whether one drinks, smokes etc. in determining life expectancy, although he does not suggest that these are good for you. The 2005 book appeared with little fuss, the more recent one inspired a large feature in the Guardian and an approving, though vague, editorial. It seems that the current crisis has given rise to an atmosphere more inclined to take such ideas seriously, although they are light years away from anything that would be contemplated by Tories, Labour and Liberals at the moment.
The general background to this argument is an ethological one, influenced by a book published in 1974 by Marshall Sahlins, called ‘Stone Age Economics’. Sahlins argued that Stone Age societies were accustomed to affluence and were strongly egalitarian in their social structure. Eventually population pressure led to the development of the division of labour and inequality. The argument has obvious parallels with Marx’s historical speculations. Wilkinson argues that we are not ‘naturally’ status conscious animals like baboons or dogs, but will react to status loss in a similar way to these animals if it happens to us, by becoming stressed, getting ill and dying early. So it is open to us from an evolutionary point of view to return to egalitarianism. This is a sort of ‘left darwinism’ as opposed to the ‘right darwinism’ that emphasises the human search for high status as a means of securing genetic dominance.
The arguments here are complex, but Wilkinson speculates that the continual sexual alertness and fertility of humans makes the dominant male behaviour characteristic of status-based apes unrealistic and that a better evolutionary strategy, for the group at any rate, is for status to be reduced.
These are quite startling but very favourable to socialists. The key claim that Wilkinson makes and which his evidence points to is that relative income inequality is the main determinant of well-being. It is not the Blair/Brown view of absolute material welfare, nor equality of opportunity. Neither is it the Croslandite view that what matters is cultural and educational equality. One can have a society with different groups and classes which is, nevertheless egalitarian with respect to income. Social mobility is not the issue, as both these groups of social democrats seem to think. This should be obvious, since if the scale is unequal, movement up and down it alters the relative positions of individuals and not the underlying causes of well-being. It is no complaint against relatively egalitarian societies which are functionally diverse that they have low social mobility. Indeed, the more egalitarian they are, the less relevant to the individual’s well-being is social mobility. An interesting feature of the Wilkinson/Pickett book published this year is that it shows evidence that the rich are harmed by inequality as well as the poor, thus suggesting that it may be in their interests to be relatively less rich. This effect probably comes from the much-vaunted ‘social mobility’. What goes up can also go down, and the fear of going down induces harmful stress.
How do we reverse the massive income inequalities that we are faced with today? Layard suggested that taxation is the greatest instrument of attaining happiness and that one should be taxed extra according to the distress that one’s own relative rise in income causes to other people. Wilkinson worries that egalitarian taxation is easily reversible and looks to a more long-term solution in terms of the diffusion of ownership through some form of worker’s control, which would entrench egalitarian distributions.
It seems to me that there are a number of steps that socialists could take to champion the idea of greater income equality. I list them below, not necessarily in order of importance.
The first is to champion progressive taxation, particularly through the use of progressive scales of income tax and to clamp down on excessive boardroom pay.
The second is to take up Wilkinson’s suggestion and bring industrial democracy back onto the political agenda. The prospects are for the long term at best, but there is no time like the present for bringing it to the public’s attention particularly as there is ample evidence of its economic efficiency as well as the contribution that it makes to social justice, as can be seen for example, in the well-established Mitbestimmung system in Germany.
The third is to make employers demand higher skills from their employees by requiring training levies and a licence to practise in an increasing range of occupations. The supply of better education needs to be matched by a demand for it if people are to become engaged with improving their position.
The fourth is to improve the dreadful levels of literacy and numeracy amongst the young and the adult population. The government’s own strategies seem to have stalled, leaving at least 20% of young people and a similar proportion of adults without functional literacy and numeracy and a much greater number with mediocre levels. Socialists at their best have a good record on this, witness the recent achievements of West Dunbartonshire Council and the far more significant achievement of left wing governments in Kerala, southern India over decades. However, Wilkinson and Pickett suggest that higher levels of literacy are associated with low relative income inequalities, presumably because children feel more of a stake in a society in which they are valued.
The British economy largely survives through our living off the world through financial manipulation. Taxing the rich and encouraging activities that require a highly-paid and highly-skilled workforce goes against everything that the City holds dear and there will be dire warnings of the threat to our prosperity if their privileges are threatened. I hope, though, that it should be clear that astronomic boardroom and executive pay rises and the ‘flexible’ labour market actually harm our well-being. We shouldn’t worry about annoying the City, but should worry far more about what inequality is doing to our people.
Cameron and Co may well flirt with the politics of well-being, but they know in their hearts that this is a road that they dare not go down in any more than rhetorical terms. Can the non-Trotskyite left and the trade unions rouse themselves from their stupor and take up this opportunity for restating socialist ideas? So far there has been little sign.
Richard Layard (2005) ‘Happiness’ Penguin.
Richard Wilkinson (2005) ‘The Impact of Inequality: How to Make Sick Societies Healthier’ London, Routledge.
Richard Wilkinson, Kate Pickett (2009) ‘The Spirit Level’, London, Penguin.