You might be familiar, if you are brave enough to stray over to the dark side of the UK press, with a book called The Spirit Level. It’s the sort of thing that Polly and the rest have been squealing over all year: proof positive that inequality, in and of itself, makes life worse for everyone.
There’s really only one slight problem with the book. None of the claims really seem to stand up. Just to show that there’s no ideological bias about this, a lefty (well, he’s just been selected as a Labor candidate for a safe seat) Australian economist:
In other words, countries that experienced big increases in inequality saw bigger improvements in health than those where inequality stayed stable or fell. In most cases, the effect isn’t significant, but the data certainly don’t support the hypothesis that rising inequality harms population health……After working on inequality and mortality, I have had similar experiences in looking at data on inequality and savings with Alberto Posso (we find no relationship), and in looking at inequality and growth with Dan Andrews and Christopher Jencks (we find that inequality has no impact on growth over the period 1905-2000, and conclude that inequality is good for growth over the period 1960-2000). In both cases, I had begun the project secretly hoping to find that inequality was bad, and wound up reluctantly reporting no such thing.
Not exactly a ringing endorsement of the idea that rising inequality harms either population health or growth there. Another economist looks at the claims here and here’s a view from Sweden, showing that some claims really aren’t capable of being upheld.
Now you might think that this is all just a bit of sour grapes but it is really a rather important point. The claim that inequality makes us all worse off would be important if true. If it isn’t true this is also important: for then we would know that increased inequality doesn’t make us all worse off. Whichever part is the truth has huge implications for the amount of redistribution (which of course has its own effects on things like long term growth) we do or don’t do.
The importance of that truth is why I’m giving this blogger’s new book a plug. The Spirit Level Delusion. It’s a detailed factchecking of the claims and evidence: one of the sort that I would have done if I had the necessary skills.
Let’s find out what the truth actually is, shall we?