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Egalitarianism is an ideal that motivates many normative political visions and many social movements. It is a relatively modern concern because it is only in relatively advanced nations that states have the capacity to redistribute systematically on a grand scale. Indeed, they have had the capacity to tax incomes effectively only since the early nineteenth century. Most contemporary discussions of equality are reformist and addressed to reducing inequalities, but many earlier movements were radical and addressed to remaking society. There are two classes of obstacles to achieving egalitarianism: causal problems and value theory problems. The chief causal problems are that, in achieving equality, we typically must affect other things, such as productivity (Rawls 1971, Okun 1975, Bowles and Gintis 1998). We cannot achieve equality while holding all else equal. The chief value-theory problems are suggested by the questions: equality of what? and; how do we measure it?
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The philosophical literature on egalitarianism is deeply equivocal on the questions of what we should equalize and how we could measure it. Social scientists most commonly suppose that the answers are simple; we should equalize incomes, measured in monetary terms only. The most conclusive arguments are about obstacles to achieving equality or even to reducing inequality very much. These causal arguments are about the tradeoffs that we must make if we are to have complete or even greater equality. I will first address these tradeoffs and then turn to measurement issues. Finally, I will briefly comment on international inequality.
1. Tradeoffs
The chief appeal of the market organization of an economy is that it enhances production—but it does so by introducing massive inequalities of benefit from social organization. Most of the concern with tradeoffs in achieving greater equality is with the effects on incentives for production. Having strict equality of incomes is equivalent to turning national production into one vast problem in which the collective national income is produced by collective action. That income would then be divided equally among all citizens (or all families or producers) independently of the scale of their personal contributions to the total product. Hence, individuals would have no incentive to contribute much to the collective good beyond altruism or public-spiritedness. Even if we merely wish to reduce inequality of income, we must tax away part of the higher incomes to transfer money to those with the lowest incomes. As we do that, the highest earners may increasingly prefer to substitute leisure for income, because their effective hourly wage is reduced so that leisure, which is untaxed, costs less than other things their income could buy for them. Consequently there will be lower overall production and there will be less to tax and transfer, so that greater equality will entail lower average income. If government transfer is inefficient, not least because it requires labor that is otherwise not productive, the reduction of average income will be exacerbated. There are other detrimental incentive effects. Personal investment in human capital to be productive will not be rewarded if incomes are equal, and it may therefore be substantially reduced. Also, the incentives to entrepreneurs to take large risks will be eliminated.
For many collective achievements, a hierarchical organization seems to be necessary. Although hierarchy without inequality of wealth or income is conceivable, high status in a sharp hierarchy is likely to be an unequal reward in its own right. Very generally, we require extensive division of labor if our society is to be prosperous, diverse and interesting, and such division is itself likely to be hierarchical and unequal in its rewards of status and other nonmonetary emoluments. Emile Durkheim (1933) argued that the equality that fits with relatively primitive conditions of mechanical solidarity gives way to the division of labor and the organic solidarity that it entails. The emoluments from hierarchy and many other things cannot be equalized (Hirsch 1976). Finally, inequality of wealth may actually be enormously beneficial to technological progress in many areas, because the relatively wealthy will buy new technologies while their prices are far too high for a mass market. Their early entry into the market often then drives down the costs of production so that the new technologies become much more widely available, as has been true for computers in the 1980s and 1990s. The green revolution of developing nations was made possible by the prior investment in wealthy nations in agricultural innovations that, as they became cheaper, became attractive to much poorer nations. For example, chemical fertilizers, highly productive seeds, and light tractors have all become cheap. Similarly, after wealthy nations had eliminated smallpox infection in their own populations, they worked successfully to eliminate it everywhere, in part for their own benefit. They now attempt to do the same for polio and there are promising prospects for malaria, cholera, and other pervasive diseases. F. A. Hayek (1960, p. 40) supposes that ‘if all had to wait for better things until they could be provided for all, that day would in many instances never come.’
Finally, the evidence of twentieth-century experiments in national programs of reducing inequality suggest a grim tradeoff. Because incentives can be extraordinarily powerful in stimulating unequal efforts, any substantial degree of equality in a whole society is likely to require strong government control over distribution and wages and perhaps even over production. If government is empowered to intervene in such ways to make major redistribution, it is very likely also to be empowered to do other, generally harmful things. Stalin and Mao sat in capricious, brutal judgment of artists and their work. Many national leaders, including Nehru and many revolutionary idealists, have supposed that they should design and run the economy even though none of them has been a competent economist. Indeed, even the seemingly best economists historically had theories that, if put into policy, would have been destructive. As David Hume, Adam Smith, and James Madison insisted, weak government has many appeals.
2. Measurement
Conceptually, perhaps the first instinct is that we should equalize welfare or well-being as far as possible. In the days of cardinal utility theory, comparing welfares was a simple matter in principle, although impossible in practice. In the twentieth century, economists largely rejected cardinal welfare theory and adopted an ordinal theory in which it is not even possible to make interpersonal comparisons. If we can make at least ordinal comparisons, then we can compare whole states to each other, so that we might be able to say that India is worse off than China, or vice versa, or that one very general policy is more egalitarian than another. Such ordinal evaluation can have seemingly anomalous implications. For example, an inegalitarian Bangladesh can be compared to Iceland if its 250,000 best off citizens are better off than the citizens of Iceland, while a Bangladesh with the same resources overall, but more equally distributed, might not be comparable one way or the other to Iceland. Hence, the inegalitarian Bangladesh might be found to have greater welfare than Iceland, while the egalitarian Bangladesh might be found to be, on a Rawlsian or other assessment, more just than the inegalitarian Bangladesh. The egalitarian Bangladesh might, however, not be comparable to Iceland either on a Rawlsian or an ordinal utilitarian assessment. The first of these pairs permits a welfarist comparison, the second permits a Rawlsian justice comparison, and the third permits neither comparison. Although such implications may sound strange on first hearing, they are likely to be commonplace in an ordinal world. If such implications sound very strange, we may find it difficult to redirect our understanding to think in ordinal terms. But that is what we must do if we wish to make consequentialist sense of our real world.
Because welfare is hard to measure, many analysts focus on other things that might be equalized. Perhaps because they seem like a reasonable proxy for welfare, resources are the most common alternative focus. Among the earliest visions of an egalitarian society was that of the seventeenth-century Diggers in England, who wanted equal plots of land for each family to farm (Winstanley 1973). They thought that even the wealthy should be reduced to simple farming, because such a life of hard work would make them better Christians. Hence, theirs was a program of equalization both up for the poor and down for the wealthy. (Many political movements and regimes from the Diggers to Pol Pot and the Taliban have sought to achieve equality by reducing the welfare of the best off rather than by raising the welfare of the worst off.) The central focus of much of the debate on equality has long been private ownership of property, especially of the means of production. For Karl Marx, such ownership meant that nonproductive owners gained much of the profits of production. The route to greater equality was public ownership of such property so that all income would be in the form of wages from labor.
3. International Inequality
In the twentieth century, several major societies attempted to achieve greater equality in the midst of other societies that were highly inegalitarian or to overcome their own poverty by closing themselves off from the world economy and centrally directing their own development. Such autarky can have substantial costs. The Soviet recourse to autarky was partially imposed from outside, but Nehru’s relatively autarkic policies in India were plausibly motivated by desires to keep India out of the commercial mold of the West and to maintain control over the prospects for greater equality. Unfortunately, one nation cannot be as creative and innovative as the entire rest of the world, and impoverished Indians were made relatively worse off internationally during the 40 years of Nehru’s legacy. When a nation blocks inequalities that other nations allow, many citizens have strong incentive to emigrate. Some states have blocked such emigration with harsh controls on movement, so that again egalitarianism forces a grim tradeoff.
In much of the contemporary public discussion of the poverty of developing nations, the focus is often on achieving greater equality through straight redistribution from the wealthy nations, as though the issue were the static problem of current distribution of what is already available. This is almost entirely wrongheaded. The crux of the problem of grievous inequality between very poor communities and prosperous communities is dynamic; it is to enable people in impoverished communities to become engaged in productive work that will raise their level of welfare. Transfers that are aimed at providing work opportunities make sense, as do transfers that are aimed at momentary emergencies such as drought and starvation in the Sahel. Transfers that merely equalize static distributions cannot be practically justified in a world in which the problem is inherently dynamic.
What impoverished nations need is investment in production facilities, such micro-lending institutions as the Grameen Bank, human capital, and good legal systems. The chief differences between the advanced and impoverished economies are not natural resources but human capital and the social capital of relevant institutions. The truth of this claim is now revealed to an extreme degree by the wealth-generating information industries whose inputs are almost exclusively human and social capital (and, of course, intellectual property). The actual contribution of natural resources to production in the advanced economies is very slight (apart from energy resources, which are not found in many of the most advanced economies). Any move to address inequality that ignores this issue of production is hardly of any interest. We must consider institutions for improving the prospects for internal economic production. Indeed, apart from emergency cases, this should be the first and primary focus for reducing international poverty and gross inequality.
Bibliography:
- Bowles S, Gintis H 1998 Recasting Egalitarianism: New Rules for Communities, States, and Markets. Verso, London
- Durkheim E 1933 The Division of Labor in Society. Macmillan, New York
- Hardin R 1988 Morality Within the Limits of Reason. University of Chicago Press, Chicago
- Hayek F A 1960 The Constitution of Liberty. University of Chicago Press, Chicago
- Hirsch F 1976 Social Limits to Growth. Harvard University Press, Cambridge, MA
- Okun A 1975 Equality and Efficiency: The Big Tradeoff. Brookings, Washington
- Rawls J 1971 A Theory of Justice. Harvard University Press, Cambridge, MA
- Roemer J E, Arneson R J Equal Shares: Making Market Socialism Work. Verso, London
- Winstanley G 1973 The Law of Freedom in a Platform or, True Magistracy Restored. Schocken Books, New York