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Day 28 April, 2009

Why the rules have changed on income equality

What I find so great about the find­ings in The Spirit Level is that they com­pletely change the rules of the debate on income equality.

No longer does one need rely on grounds of fair­ness and justice, which fall on the deaf ears of a world suc­cumbed to the fal­la­cies of social Dar­win­ism, or “sur­vival of the fit­test,” and the idea of “wealth creators.”

Now, given the deluge of data, it’s a prac­tical ques­tion of whether you want to live in a soci­ety with low rates of social prob­lems or high rates of social prob­lems. A no-brainer as they say.

The Spirit Level has opened my eyes to a couple of things too. One is the import­ance of poor coun­tries to get richer. Wealth has a huge role to play in rais­ing liv­ing stand­ards in poor coun­tries. I used to think devel­op­ing coun­tries had some­thing we didn’t and that they would lose this some­thing as they became richer. What I now real­ise is that it’s not wealth that takes this some­thing away but inequality.

The other thing it’s opened my eyes to is the dif­fer­ent way in which some coun­tries have acheived greater income equal­ity. Sweden, for example, gets its greater equal­ity through redis­tri­bu­tion, through taxes and bene­fits, and pub­lic ser­vices provided by a big state. In con­trast, Japan has a greater equal­ity of incomes before redis­tri­bu­tion. Dif­fer­ences in Japan­ese earn­ings are smal­ler even before taxes and bene­fits. Check out the Equal­ity Trust’s ‘Rem­ed­ies’ webpage for more.

U.S. finally comes in from the cold

U.S. finally comes in from the cold, so to speak:

Clin­ton addressed the com­plaints of devel­op­ing coun­tries such as India and China that Amer­ica and the EU, by demand­ing bind­ing emis­sions cuts, want to saddle them with the bur­den of cli­mate change; they argue they did not cause the prob­lem and must pri­or­it­ise growth. She said the US recog­nised indus­tri­al­ised coun­tries bore a respons­ib­il­ity: “Some coun­tries like mine are respons­ible for past emis­sions.” She wanted China and India to grow their eco­nom­ies: “We want people to have a higher stand­ard of living.”

Obama had broken with eight years of denial under George Bush, Clin­ton said. “The United States is fully engaged and ready to lead and determ­ined to make up for lost time both at home and abroad … the US is no longer absent without leave.”

Bet­ter late than never.