How much inequality?

How much inequality is too much?  Answers range from Gracchus Babeuf (all inequalities are unjust) to Ayn Rand (there is no moral limit on the extent of inequalities a society can embody). Is there any reasoned basis for answering the question?  What kinds of criteria might we use to try to answer this kind of question?

John Rawls offered a fairly simple criterion of the extent of inequalities that a just society can tolerate in A Theory of Justice.  His background assumption is that the wealth of a society is a joint product of all members of society.  The rules of distribution create more or less inequality among citizens.  Citizens are concerned to "protect" their interests in case they wind up being in the worst-off positions in society.  So justice requires that institutions should create the least degree of inequalities subject to maximizing the position of the least-well-off position in society.  (He also stipulated an equality of opportunity principle: positions need to be open to all through a fair system of competition.)  If the empirical theory is true that economic inequalities sometimes create more wealth (through incentive effects), then it is just to increase inequalities up to the point where any further increase would leave the position of the least-well-off member of society unchanged.  This is the least system of inequalities subject to maximizing the position of the least-well-off.  Rawls justifies this principle (the difference principle) on the ground that it expresses an important sense of fairness: everyone is fairly treated when higher incomes are assigned to some individuals only when doing so benefits all individuals.

By this principle, current inequalities in the United States and Great Britain are demonstrably unjust: it would obviously be possible to lower the incomes of the 1 percent without lowering the income of the bottom forty percent.  So current inequalities are plainly more extensive than they need to be for the purpose of increasing overall output and improving the condition of the least-well-off.

Joseph Stiglitz offers a different kind of theory of inequality in his recent The Price of Inequality: How Today's Divided Society Endangers Our Future. (Here is the anchor essay as it appeared in Vanity Fair; link.) His argument is a pragmatic one based on a theory of social stability.  Essentially he argues that when inequalities become too extreme in a given society they breed social conflict and instability. This happens perhaps because of raw deprivation -- the bottom 40% really do have pretty desperate lives -- but more because of what Stiglitz identifies as erosion of the social contract.  Here is how he puts the point in the Vanity Fair article:

Of all the costs imposed on our society by the top 1 percent, perhaps the greatest is this: the erosion of our sense of identity, in which fair play, equality of opportunity, and a sense of community are so important. America has long prided itself on being a fair society, where everyone has an equal chance of getting ahead, but the statistics suggest otherwise: the chances of a poor citizen, or even a middle-class citizen, making it to the top in America are smaller than in many countries of Europe. The cards are stacked against them. It is this sense of an unjust system without opportunity that has given rise to the conflagrations in the Middle East: rising food prices and growing and persistent youth unemployment simply served as kindling. With youth unemployment in America at around 20 percent (and in some locations, and among some socio-demographic groups, at twice that); with one out of six Americans desiring a full-time job not able to get one; with one out of seven Americans on food stamps (and about the same number suffering from “food insecurity”)—given all this, there is ample evidence that something has blocked the vaunted “trickling down” from the top 1 percent to everyone else. All of this is having the predictable effect of creating alienation—voter turnout among those in their 20s in the last election stood at 21 percent, comparable to the unemployment rate.

So for Stiglitz, inequality is not simply a moral issue, but is also an issue of social stability and cohesion.

Here is another way of answering the question: perhaps extreme inequalities are actually bad for a population's health.  There is one sense in which this is obviously true: extremely poor people have worse health outcomes than affluent people.  But maybe the simple fact of inequalities is itself a toxic influence on public health, for poor and rich alike.  This is the argument that Richard Wilkinson and Kate Pickett make in The Spirit Level: Why Greater Equality Makes Societies Stronger.  Their argument is a complex one that suggests several causal explanations for why this might be the case; but their core idea is that great inequalities create widespread "stress" that is harmful to each individual's health.  Wilkinson and Pickett are public health experts and their argument is a cross-national statistical one.

So we might adapt their analysis into an answer to the question posed above: inequalities should be reduced until there is not measurable harm to public health.  (These arguments are considered in earlier posts.)

There is even a utilitarian argument for greater equality of income.  If we accept the plausible point that income makes a diminishing marginal contribution to happiness as income rises (perhaps after some inflection point), then under many realistic circumstances a more equal society with lower GNP will have a higher level of happiness than a more unequal society with higher GNP.  Lower-income people have more to gain from an additional $1000 of income than higher-income people.  So if we think it is a good thing to maximize happiness, then we ought to regulate inequalities accordingly.  Benjamin Page makes some of these arguments in an Institute for Research on Poverty position paper, "Utilitarian Arguments for Equality" (link).

Are we forced to choose among these frameworks in order to conclude that our economy has generated vastly too wide a set of inequalities of wealth and income?  No, we aren't, because these arguments are mutually supportive.  A system of greater equality, regulated by a tax system designed for that purpose, would be more fair, more supportive of equality of opportunity, more harmonious, likely healthier, and likely happier.  We have lots of good reasons for preferring greater equality of wealth and income and lots of good reasons to reject the "anything goes" philosophy that currently drives much of the political discourse on the right.

Income inequalities and social ills

According to Kate Pickett and Richard Wilkinson in The Spirit Level: Why Greater Equality Makes Societies Stronger, income inequalities in a society are a source of a variety of social problems in that society, almost without regard to the absolute level of income in the society.

Their basic measure of inequality across countries and states in the United States is the ratio of income from the top quintile to the bottom quintile. (They also sometimes make use of the Gini coefficient.) The quintile income ratio varies across OECD countries from a low of about 4 (Japan) to a high of just under 10 (Singapore). The United States has the second highest ratio, at about 8.5 (figure 2.1).

In order to empirically evaluate the impact of a society's income inequalities on social well-being, they construct an Index of Health and Social Problems for each country and US state. The index incorporates --

• Level of trust
• Mental illness
• Life expectancy and infant mortality
• Obesity
• Children's educational performance
• Teenage births
• Homicides
• Imprisonment rates
• Social mobility

These ten factors are all weighted equally. Here is their most basic graph plotting the index against income inequality among OECD countries (figure 2.2):

A similar but looser relationship obtains between these variables for US states; figure 2.4. And they find similar relationships between the UNICEF index of child wellbeing and income inequality; figure 2.7. So their most basic claim is well substantiated: there is a strong negative relationship between social inequalities and social well-being. Most importantly, they maintain that this relationship is causal.

This is indeed a striking hypothesis. Their argument is not that material deprivation causes social harms and high inequality societies have more material deprivation; it is rather that the degree of inequality is itself an important cause of social harms. Further, they maintain that these relationships persist in affluent societies. And they are explicit in accepting that this implies a causal relationship between a structural feature of society and individual outcomes (chap 3).

Some of the most interesting content in the book comes in the form of specific empirical analysis of some of the kinds of social malaise that are rising in society, and some of the mechanisms through which inequalities contribute to this rise. Chapter 3 takes on stress and anxiety. Figure 3.1 documents a generally rising level of anxiety among men and women college students from the 1950s to the 1990s. The authors relate this rise to an increase in social anxieties: feelings of inadequacy, friendlessness, and separation from community (kl 745). And these features of social relationship, they believe, derive from rising hierarchy and inequality.

Another important mechanism of social harm is the erosion of trust that modern societies have experienced. This too the authors attribute to rising hierarchy and inequality and the pronounced separation this creates among members of society. Figure 4.1 illustrates this relationship.

Similar analysis and findings are presented for mental illness (chapter 5), health and life expectancy (chapter 6), obesity (chapter 7), educational performance (chapter 8), teen births (chapter 9), violence (chapter 10), rates of incarceration (chapter 11), and social mobility (chapter 12).

The data presented here are very striking: a standard set of scatter plots demonstrating a positive relationship between inequality and a variety of social harms. In each case the authors attempt to provide an account of a mechanism that plausibly leads from inequality to the higher incidence of the social harm.

It strikes me, though, that all the mechanisms amount to the same sociological idea: that extreme inequality leads to a set of psychological conditions that in turn produce the harm in question. They emphasize status differences on the one hand (inequality) and friendship on the other (equality) as powerful determinants of social well-being and harm (kl loc 2927).

Much of this argument seems to come down to some familiar hypotheses in sociology: that anomie is a social feature that produces social and individual harms (Durkheim) and that the strands of community are favorable to human wellbeing (Tonnies, Putnam). Inequalities are toxic, according to this line of argument, because they undermine the strands of social relationships and community among individuals; they produce a situation of rising anomie and separation among individuals in society. Societies with lower inequalities allow higher levels of trust and community to persist and this gives rise to fewer social problems.

It is an appealing argument, but in the end I find it monocausal and therefore less convincing than the authors would wish. I'm finding it to be "Durkheim on epidemiological steroids". Even if we accept the point that reciprocity and mutual respect are key components of a society's health, there are other factors that undermine these besides economic inequality -- racism, ethnic hatred, sexism, and other kinds of "othering" besides income inequality. I appreciate the book. But I'd like a more multicausal analysis of the findings.

It is also interesting to ask whether the authors think there is a tipping point when it comes to inequalities. Is there a level of income inequality where inequalities are a non-factor when it comes to the social ills that they highlight? Is the level of inequality current in Sweden just fine as a foundation for social cohesion and reciprocity? Or is the situation more analogous to exposure to second-hand smoke: every level creates a risk? In other words, is it only high inequality societies that create these harms, or does every society north of Babeuf do so to some extent?

Ethical thinking for global public health

Here is a fine recent book that brings together recent thinking about development ethics with some of the specific issues faced in the field of global public health. Madison Powers and Ruth Faden published Social Justice: The Moral Foundations of Public Health and Health Policy in 2008, and it represents a genuinely interesting extended essay on the topic of justice in global health policy.  Here is an early statement of their governing perspective:

Our central focus, only vividly appreciated in hindsight, was in a notion of social justice that went beyond issues of distributive justice, micro-allocational questions of priority setting in medical care, or any number of questions centered on how one individual fares relative to some other individual. Beginning, as we did, with moral questions in public health and health policy, it is perhaps not surprising that our focus in social justice is largely directed at the well-being of people in social communities or groups. (ix)

 What is evident here is that Powers and Faden are bringing the perspective of public health into the discussion of issues that have been raised in other contexts (development ethics, bio-medical ethics) without the population-based starting point.

A second important difference in approach taken by Powers and Faden is to take seriously the finding within public health studies that inequalities come into populations' health outcomes in ways other than inequalities of access.

We contend that it is impossible to make progress in our understanding of the demands of justice within medical care without looking outside of medical care to public health and to the other determinants of inequalities in health and indeed without situating an analysis of justice and health policy in the wider social and political context. (x)

This perspective brings Powers and Faden into a degree of connection to Kate Pickett and Richard Wilkinson in The Spirit Level: Why Greater Equality Makes Societies Stronger (link).

A third distinctive feature of the project is the authors' rejection of the goal of arriving at a simple, unified theory of health justice.

In place of some single theory of justice drawn from one of the leading contenders for being the "right" account of justice, we argue instead that most of these other contenders have it wrong.  Indeed, we use the term 'theory' somewhat  cautiously. ... We choose to steer a middle course on the question, and we agree with Thomas Nagel's conclusion that whatever we are likely to attach the label of 'theory' to in the realm of normative inquiry will reflect an aspiration to develop some systematic but noncomprehensive account of some part of the moral landscape. (x)

The job of justice, as we see it, is to specify those background social and economic conditions that determine whether certain inequalities, that may themselves result from the promotion of other indispensable moral aims, should be seen as unfair. Ours is an account of justice that denies that there are separate spheres of justice, within health policy or within social policy more generally. (x)

Ours is a nonideal theory of justice, intended to offer practical guidance on questions of which inequalities matter most when just background conditions are not in place. (30)

Their central concern is with justice in health; and this comes down to a theory about inequalities.

The central question we pose in this book is, Which inequalities matter most? The aim of this book is to develop a theory of social justice suitable for answering questions of this kind in a variety of concrete circumstances.  (3)

But they insist on the point that theirs is not an "ideal" theory of justice; rather, it is intended to provide the basis for reasoned decisions about the practical, real problems we face in a world of substantial inequalities in life prospects.  Moreover, their account does not begin with a principle of distributive justice, but rather with a conception of the human good.  They offer Amartya Sen and Martha Nussbaum as exemplars rather than John Rawls (4).

As Sen correctly notes, a theory of justice of this sort begins with some underlying account of what persons "can do and be" (Sen 1993). Theories in this tradition start with ideals, to be sure, but they are ideals of a very different kind from those that form the starting points of Rawlsian ideal theory. (4)

So their theory is one that begins with a rich conception of human well-being and flourishing, not with a contractual deliberation between hypothetical individuals behind a veil of ignorance.  Here is a general statement of their view:

Social justice is concerned with human well-being. In our view, well-being is best understood as involving plural, irreducible dimensions, each of which represents something of independent moral significance. Although an exhaustive, mutually exclusive list of the discrete elements of well-being is not our aim (and may not be possible), we build our account around six distinct dimensions of well-being, each of which merits separate attention within a theory of justice. These different dimensions offer different lenses through which the justice of political structures, social practices, and institutions can be assessed. Without attention to each dimension, something of salience goes unnoticed. (15) 

The six dimensions of well-being that they identify include health, personal security, reasoning, respect, attachment, and self-determination (16).

This approach has a lot in common with Amartya Sen's most recent thinking in The Idea of Justice (as well as Sen's earlier work and that of Martha Nussbaum).  Here is Sen's description of his work in The Idea of Justice:

What is presented here is a theory of justice in a very broad sense.  Its aim is to clarify how we can proceed to address questions of enhancing justice and removing injustice, rather than to offer resolutions of questions about the nature of perfect justice. (kl 183)

Here the emphasis is on "enhancing" justice rather than providing a conception of ideal justice.  Sen's work here is intended to be practical: it should assist policy makers in their deliberations as reforms are considered.  Sen refers to this approach as "comparative justice".

We are engaged in making comparisons in terms of the advancement of justice whether we fight oppression (like slavery, or the subjugation of women), or protest against systematic medical neglect (through the absence of medical facilities in parts of Africa or Asia, or a lack of universal health coverage in most countries in the world, including the United States), or repudiate the permissibility of torture ..., or reject the quiet tolerance of chronic hunger. (kl 225)

In terms of the analysis offered by Powers and Faden, we improve justice by moving a population forward in any one of the six (or more) dimensions of human well-being that were noted.

Inherent in the idea of comparing the justice of several different scenarios, is the idea of reasoning across different perspectives on justice.  Sen is committed to the notion that it is possible to engage in reasoned dialogue with people with whom you have deep disagreements about starting points.  And this theory of comparative justice is intended to help facilitate those reasoned discussions.

Sen contrasts his approach to justice with that of John Rawls in these terms:

In the approach to justice presented in this work, it is argued that there are some crucial inadequacies in [Rawls's] overpowering concentration on institutions (where behaviour is assumed to be appropriately compliant), rather than on the lives that people are able to lead. (kl 203)

Several things seem important to me in both books mentioned here.  First, each is an innovative contribution to issues that are core to what we might refer to as "global justice" -- hunger, health, abusive states, educational deprivation.  Second, each is aiming to create a philosophical framework within which practical, real-world issues can be handled in a reasoned way.  Third, each seeks to broaden the moral perspective of contractualism that has set the terms for discussions of justice for the past forty years.  And, finally, each shuns the goal of formulating a general system or a unified theory on the basis of which to judge all possible social arrangements in terms of justice.

These features make the moral ideas of Powers, Faden, and Sen particularly helpful when we turn our attention to trying to influence international practices and institutions in the direction of greater justice for the people of the world.  The arguments are pragmatic, modest in scope, and potentially less bound to a particular tradition of moral thinking.  (Sen makes this latter point quite explicitly: "Some of the reasoning of, for example, Gautama Buddha (the agnostic champion of the 'path of knowledge'), or of the writers in the Lokayata school (committed to relentless scrutiny of every traditional belief) in India in sixth-century BC, may sound closely aligned, rather than adversarial, to many of the critical writings o the leading authors of the European Enlightenment" (kl 268).)

Readers' list of innovative social science writing

Image: graph of relationships among the social sciences, Eigenfactor.org

To the readers of UnderstandingSociety,

I am writing directly to you to ask your thoughts about innovative work in the social sciences today. What books or new areas of inquiry in the social sciences are you particularly excited about right now?

The context --

One of the goals I have in this blog is to take note of interesting new developments in the social sciences and philosophy.  It seems to me very consistently that the social sciences still have a lot of important work to do in establishing goals, methods, and theories for understanding the social world, and creative and innovative contributions to new issues as well as old are very exciting.

In recent months I've written about books that I probably wouldn't have run across without the advantage of many conversations with some very good sociologists and political scientists on a regular basis, and this is a real source of intellectual growth.  I think of Pickett and Wilkinson's theorizing about economic inequalities and social harms, Neil Gross's sociological biography of Richard Rorty, Andreas Glaeser's account of the cultural conditions of the collapse of the Stasi in East Germany, McCarty, Poole, and Rosenthal's analysis of political polarization, and John Levi Martin's new thinking about social explanations as good examples, and there are many others.

    

I've also enjoyed going back to classic texts from the social sciences of the 1960s for a second look. People like Erving Goffman, Chalmers Johnson, G. William Skinner, Steven Lukes, and Karl Popper have come in for a second look over the past several years on UnderstandingSociety. In each case I feel that I've come to see some features of their work that seem particularly pertinent today, fifty years after their primary research, that somehow didn't emerge in my first reading years ago.  (I was definitely not a fan of Popper's in the 1970s.)

   

The invitation --

What books or new pieces of research in the social sciences and philosophy are you particularly excited about? What are some areas of research that you think are shedding significant new light on how we understand the social world?

If enough readers are willing to make a suggestion or two, it would be very interesting to compile a list of topics and books that are making a difference in the social sciences -- a kind of "crowd-sourcing" approach to mapping out the areas of innovation that are making a difference in how we think about the social world.

If you are willing, please post a few suggestions of books in the social sciences that have you excited in the comments section. You can also make your recommendations on the UnderstandingSociety Facebook page or tweet me at @dlittle30.

I have created a page in the sidebar, Readers' Recommendations, as a way of organizing these recommendations.

More on The Spirit Level

There are quite a few interesting comments on my earlier post on The Spirit Level on Economist's View. I can't respond in detail to all of them, but here are a few additional thoughts.

A few commentators seem to think I'm unsympathetic to the book, which isn't accurate. So let me be more direct in my assessment of The Spirit Level: Why Greater Equality Makes Societies Stronger. I find the empirical data presented to be highly suggestive and interesting. Pickett and Wilkinson demonstrate simple trend relationships between the income inequality score of a set of countries and states and a series of social problems. I myself do not have reason to doubt their statistical methods, though other critics have done so, including Lane Kenworthy in a balanced and reasonable critique in 2010. What troubles me about the central argument of the book is what I find to be a flatly unconvincing hypothesis, that the psychological states created in a country’s population by status conflict and income inequality suffice to explain the variation in health outcomes for individuals in these societies. There are many determinants of a person’s satisfaction with his/her life besides income inequality; and there are many social factors that influence health outcomes for individuals besides their perception of income inequalities and the level of stress that those inequalities create in them.

In my view, a good causal explanation requires an analysis of the mechanisms that bring about the relation between cause and effect. I find only one mechanism underlying their accounts of this relationship – essentially a psychological mechanism linking the individual’s perception of income inequalities to health and behavioral outcomes. They flesh this out with a description of the physiology of stress induced by rising income inequalities leading to rising mental illness; perceived status differences leading to decline in trust; stress based on perceived inequalities leading to increased “comfort eating” and obesity; status competition leads to increased violence; etc. This is what I mean by monocausal; there is just one causal process at the heart of their analysis.

The variety of causal mechanisms that seem pertinent to me in consideration of their data include several different kinds. First, as I mentioned in my post, there are serious and systemic sources of separation between individuals within societies that have nothing to do with income inequalities and that might be expected to have the same kinds of psychological and physiological effects on individuals: racism, ethnic hatred, sexism, economic conflicts that do not have to do with inequalities, and so on. For example, in the United States there are credible efforts to explain racial disparities in health outcomes on the basis of the effects on individuals living in circumstances of endemic racial discrimination and prejudice. (See, for example, Arline T. Geronimus, ScD, Margaret Hicken, MPH, Danya Keene, MAT, and John Bound, PhD, "“Weathering” and Age Patterns of Allostatic Load Scores Among Blacks and Whites in the United States"; link.) These effects are unrelated to income inequalities and derive instead from another aspect of social separation. So race rather than income appears to explain this set of health disparities. So perhaps this implies that if we had a way of measuring a “composite index of non-economic social separation” we might have a similar set of graphs, with societies with a lot of racism and ethnic hatred at the upper right quadrant of the graph. I don’t suppose that this index would be highly correlated with the quintile-quintile ratio that the authors use as their proxy for economic inequality.

Second, there are structural influences on a population’s health outcomes that do not derive from the degree of income inequalities that exist in a society but are nonetheless highly influential on health status of the population. For example, the quality and accessibility of rural healthcare has a large influence on the health status of rural people; the accessibility of health insurance to inner city residents has a large influence; the targeting of food marketing in favor of “comfort foods” has a large potential influence on the whole population; and differential treatments and discrimination within health systems for different populations of patients have large potential effects. None of these factors derive from the ratio of quintile incomes – the degree of income inequality – in the society; they are independent causes of differential health outcomes across sub-populations.

I’m not an expert on statistical reasoning; but of course every reader knows that evidence of correlation between two variables A and B is not conclusive evidence of a causal relation existing between those variables. There may be a common factor that causes variation in both A and B, or the correlation may be flatly spurious. It is necessary to frame a credible and testable hypothesis about how the putative causal condition leads to the putative effect. On the other hand, finding that a proposed mechanism is not in fact valid does not establish that there is not a causal connection between the variables; it only mandates that we then search further for a mechanism that does in fact obtain. Only if we are ultimately convinced that there is no possible mechanism would we come to the conclusion that the correlation is spurious. So my position in the posting under discussion is simply that the authors have not established a mechanism linking income inequalities to bad health outcomes that satisfies me.

One can be opposed to extreme and rising income inequalities in one’s society – as many of the readers of The Spirit Level are – without being convinced of the particular causal connections that the authors assert. And this matters quite a bit; if we want to reform society, we need to have well grounded theories of the causal processes that lead to the outcomes we want to reduce or avoid.

Tyler Cowen on global inequality

Tyler Cowen sounds a bit like Voltaire's Pangloss when he argues, as the New York Times headline puts it, that we are living "all in all, [in] a more egalitarian world" (link). Cowen acknowledges what most people concerned about inequalities believe: "the problem [of inequality] has become more acute within most individual nations"; but he shrugs this off by saying that "income inequality for the world as a whole has been falling for most of the last 20 years." The implication is that we should not be concerned about the first fact because of the encouraging trend in the second fact.

Cowen bases his case on what seems on its face paradoxical but is in fact correct: it is possible for a set of 100 countries to each experience increasing income inequality and yet the aggregate of those populations to experience falling inequality. And this is precisely what he thinks is happening. Incomes in (some of) the poorest countries are rising, and the gap between the top and the bottom has fallen. So the gap between the richest and the poorest citizens of planet Earth has declined. The economic growth in developing countries in the past twenty years, principally China, has led to rapid per capita growth in several of those countries. This helps the distribution of income globally -- even as it worsens China's income distribution.

But this isn't what most people are concerned about when they express criticisms of rising inequalities, either nationally or internationally. They are concerned about the fact that our economies have very systematically increased the percentage of income and wealth flowing to the top 1, 5, and 10 percent, while allowing the bottom 40% to stagnate. And this concentration of wealth and income is widespread across the globe. (Branko Milanovic does a nice job of analyzing the different meanings we might attach to "global inequality" in this World Bank working paper; link.)

This rising income inequality is a profound problem for many reasons. First, it means that the quality of life for the poorest 40% of each economy's population is significantly lower than it could and should be, given the level of wealth of the societies in which they live. That is a bad thing in and of itself. Second, the relative poverty of this sizable portion of society places a burden on future economic growth. If the poorest 40% are poorly educated, poorly housed, and poorly served by healthcare, then they will be less productive than they have the capacity to be, and future society will be the poorer for it. Third, this rising inequality is further a problem because it undermines the perceived legitimacy of our economic system. Widening inequalities have given rise to a widespread perception that these growing inequalities are unfair and unjustified. This is a political problem of the first magnitude. Our democracy depends on a shared conviction of the basic fairness of our institutions. (Kate Pickett and Richard Wilkinson also argue that inequality has negative effects on the social wellbeing of whole societies; link.)

The seeming paradox raised here can be easily clarified by separating two distinct issues. One is the issue of income distribution within an integrated national economy -- the United States, Denmark, Brazil, China. And the second is the issue of extreme inequalities of per capita GDP across national economies -- the poverty of nations like Nigeria, Honduras, and Bangladesh compared to rich countries like Sweden, Germany, or Canada. Both are important issues; but they are different issues that should not be conflated. It is misleading to judge that global inequality is falling by looking only at the rank-ordered distribution of income across the world's 7 billion citizens. This decline follows from the moderate success achieved in the past fifteen years in ameliorating global poverty -- a Millenium Development Goal (link). But it is at least as relevant to base our answer to the question about the trend of global inequalities by looking at the average trend across the world's domestic economies; and this trend is unambiguously upward.

Here is a pair of graphs from The Economist that address both topics (reproduced at the XrayDelta blog here). The left panel demonstrates the trend that Cowen is highlighting. The global Gini coefficient has indeed leveled off in the past 40 years. The right panel indicates rising inequalities in US, Britain, Germany, France, and Sweden. As the second panel documents, the distribution of income within a sample set of national economies has dramatically worsened since 1980. So global inequalities are both improving and worsening -- depending on how we disaggregate the question.

The global Gini approach is intended to capture income inequalities across the world's citizens, not across the world's countries. Essentially this means estimating a rank-order of the incomes of all the world's citizens, and estimating the Lorenz distribution this creates.

We get a very different picture if we consider what has happened with inequalities across the world's national economies. Here is a graph compiled by Branko Milanovic that represents the Gini coefficient for GDP per capita for a large set countries over time (link):

This graph makes the crucial point: inequalities across nations have increased dramatically across the globe since 1980, from a Gini coefficient of about .45 to an average of .54 in 2000 (and apparently still rising).

Finally, what about inequalities within nations? This OECD report provides comparative data for 27 countries during the period 1975 and 2010 (link). They find that income inequalities increased in most of the countries studied. This report does not cover all countries, of course; but the findings are suggestive. Here is their summary finding:

And this is the most important point: most of these countries are suffering the social disadvantages that go along with the fact of rising inequalities. So we could use the OECD report to reach exactly the opposite conclusion from the one that Cowen reaches: in fact, global inequalities have worsened since 1980.

Thomas Piketty's name does not occur once in Cowen's short piece; and yet his economic arguments about capitalism and inequality in Capital in the Twenty-First Century are surely part of Cowen's impetus in writing this piece. Ironically, Piketty's findings corroborate one part of Cowen's point -- the global convergence of inequalities. Two French economists, François Bourguignon and Christian Morrisson, made a substantial effort to measure historical Gini coefficients for the world's population as a whole (link). Their work is incorporated into Piketty's own conclusions and is included on Piketty's website. Here is Piketty's summary graph of global inequalities since 1700 -- which makes the point of convergence between developed countries and developing countries more clearly than Cowen himself:

So what about China? What role does the world's largest economy (by population) play in the topic of global economic inequalities? China's per capita income has increased by roughly 10% annually during that period; as a population it is no longer a low-income economy. But most development economists who study China would agree that China's rapid growth since 1980 has sharply increased inequalities in that country (link, link). Urban and coastal populations have gained much more rapidly than the 45% or so of the population (500 million people) still living in backward rural areas. A recent estimate found that the Gini coefficient for China has increased from .30 to .45 since 1980 (link). So China's rapid economic growth has been a major component of the trend Cowen highlights: the rising level of incomes in previously poor countries. At the same time, this process of growth has been accompanied by rising levels of inequalities within China that are a source of serious concern for Chinese policy makers.

Here are charts documenting the rise of income inequalities in China from the 2005 China Human Development Report (link):

So rising global income inequality is not a minor issue to be brushed aside with a change of topic. Rather, it is a key issue for the economic and political futures of countries throughout the world, including Canada, Great Britain, the United States, Germany, Egypt, China, India, and Brazil. And if you don't think that economic inequalities have the potential for creating political unrest, you haven't paid attention to recent events in Egypt, Brazil, the UK, France, Sweden, and Tunisia.

[revised 4:00 pm 7/21/14 to correct interpretation of Milanovic graph. Thanks to Graham Webster for catching the mistake.]

How can justice be causal?

Is social justice an empirical characteristic of a set of social arrangements? And can social justice be a causal factor in processes of social change or social stability?

Before justice could be considered an empirical feature of a set of social arrangements, we would need to have a more specific understanding of what we mean by the term. And we would need to be able to "operationalize" this complex concept in order to be able to apply it to different social arrangements. But neither of these tasks is insurmountable; certainly not more so than defining and applying the ideas of fascism, liberal democracy, or welfare state to specific societies.

So let's begin with a simple, applicable definition of justice. Let's focus on just three dimensions of a society's functioning: distribution of access to society's wealth; the degree of abuse of power and its contrary, reliable legal protections of the person; and the extent of individual freedoms. Injustice involves --

• exploitation and inequality
• unwarranted coercion by the state or private organizations
• the abuse of people's freedoms.

A society is more just when it involves less of any of these features. And each of these dimensions seems measurable.

But immediately a problem arises. Each of these features requires a key normative judgement. Exploitation is the unfair division of the fruits of productive activity among the participants. The qualifier "unwarranted" requires that we supply a normative theory of the state. And "abuse" of freedom isn't simply restriction on freedom; it is the unjustified or unequal restriction on freedom. So in order to measure any of these characteristics in a particular social context it isn't enough to know who gets what or who does what to whom; we need a background set of normative ideas that allow us to judge which kinds of treatment and inequality count as exploitation, coercion, or the abuse of freedom.

This is where Amartya Sen's ideas about capabilities, realizations, and freedoms are practical and useful. We might substitute "capabilities realization deficit" for exploitation. Here we might argue that a society that leaves a significant portion of its population in material conditions where they cannot fulfill most of their basic human capabilities is for that reason unjust. We might measure the gap in human development between the top quintile and the bottom quintile as an estimate of the degree of exploitation that is prevalent in a given society. We may not know in detail how the system of distribution works, but the severity of the gap gives reason to believe that a portion of the society is being treated unfairly.  The Human Development Index provides a basis for beginning to assess different countries along these lines (link).

Second, we might measure coercion and legality by the estimating the degree to which a society has effectively implemented a working system of law that is applied equally. The World Bank has made some efforts in this direction through its Worldwide Governance Indicators (link; working paper here).  This gives us an empirical measure of the degree of lawlessness and unchecked state power that exists in various societies.

We might measure freedoms by aggregating observable features of democratic participation in various societies.  The Economist has constructed a Democracy Index that was first implemented in 2006 (link). This gives us an empirical way of assessing the rough degree of involvement citizens can have in public decision-making; or in other words, it is a measure of the degree to which it is possible for citizens to exercise their freedoms in a public space.

So we might imagine a "justice index" for a society that aggregates measures like these into an overall assessment of the degree of justice the society currently demonstrates.  It would then be interesting to see how societies differ in this measure, and how other important social characteristics may be correlated with this measure.  I haven't done this experiment, but here's what we might expect: higher injustice ratings correspond to greater likelihood of social conflict, lower productivity, and lower community and civic engagement.

What mechanisms might be hypothesized that would originate in these core aspects of a society's justice profile and its various outcomes?  Here we can identify a couple of factors that would support a causal interpretation.  For example, absolute or relative deprivation can cause people to rebel as they struggle to create social changes that protect their interests.  Further, as Barrington Moore demonstrated in Injustice, the conviction that basic social arrangements are unfair can also move people to activism and resistance -- as we seem to be seeing in the Occupy Wall Street movement.  These factors derive from the distributive arrangements of a society: injustice can provoke resistance.  Similar statements can be made about state violence and lawlessness. We have seen in Libya, Syria, and Morocco that state violence against protesters can actually have the effect of strengthening and broadening resistance.

So these aspects of injustice can have effects on mobilization and resistance by a population. Are there other effects that injustice can have?  As noted earlier (link), Pickett and Wilkinson argue in The Spirit Level: Why Greater Equality Makes Societies Stronger that inequalities of income have surprisingly strong associations with a variety of social ills.  This could be developed into an argument that social justice and injustice lead to behaviors that either promote or undermine social welfare.

Finally, it seems plausible to imagine that the intangibles that accompany a harmonious society -- a population of people who generally feel that they are fairly treated by their basic institutions and their fellow citizens -- will lead to a variety of other social goods, including cooperation, civic engagement, and economic productivity.  Conversely, it is plausible to suppose that a dis-harmonious society would give rise to the negatives of these qualities: less cooperation, less civic involvement, and less economic productivity.

So two things seem true.  First, it does seem possible to "measure" injustice (supported, of course, by a normative theory of why various kinds of inequality are illegitimate).  And second, it does seem plausible that the features of a society that constitute its injustice may also have causal consequences for social unrest, social wellbeing, and social cooperation.  And these are certainly significant social consequences.

(Perhaps there is an analogous set of questions at the individual level: Is "virtue" a specific empirical characteristic of a person's character? And can virtue be a causal factor in the individual's life outcomes and level of happiness?)