Post-Peak Liberal: The Spoils of Inequality

Post-Peak Liberal

....... Life on the Downslope

The Spoils of Inequality

It is a remarkable paradox that, at the pinnacle of human material and technical achievement, we find ourselves anxiety-ridden, prone to depression, worried about how others see us, unsure of our friendships, driven to consume, and with little or no community life. Lacking the relaxed social contact and emotional satisfaction we all need, we seek comfort in over-eating, obsessive shopping and spending, or become prey to excessive alcohol, psychoactive medicines and illegal drugs.

How is it that we have created so much mental and emotional suffering despite levels of wealth and comfort unprecedented in human history? Often what we feel is missing is little more than time enjoying the company of friends, yet even that can seem beyond us. We talk as if our lives were a constant battle for psychological survival, struggling against stress and emotional exhaustion, but the truth is that the luxury and extravagance of our lives is so great that it threatens the planet.

So opens The Spirit Level (Bloomsbury Press, 2010), a remarkable new book by Richard Wilkinson and Kate Pickett, two British medical and epidemiology researchers/professors.

Inequality is the socioeconomic elephant in the room. It is the most important, but least discussed macrotrend of the last 40 years. As we continue to wallow in our current malaise, it seems astounding to recall that the US has seen steady economic growth for decades. How can we have gotten so much richer, but have so little to show for it? After all, the economy has essentially quadrupled in overall size since the mid-1970s:

What happened to all of that loot? Why can't we use that economic windfall to create new jobs, build green infrastructure, achieve energy independence, and rebuild our crumbling schools, roads and bridges? Well, because it's gone. While we have all been working hard, commuting longer distances, adding workers to the household, and improving our productivity, the vast majority of the fruit of our labor has gone to a small slice of the population.

The top 1% of Americans control around 35% of the country's net worth. The top 20% control almost 85%. The financial wealth picture is even more skewed, where the top 1% have more than the bottom 95% combined (from http://sociology.ucsc.edu/whorulesamerica/power/wealth.html):

Now, it may be theoretically possible to have a productive, healthy, strong, and unified society with disparities like this. Maybe the hyper-concentration of wealth can coexist with socioeconomic stability, as long as the people at the bottom of the pyramid are doing okay in absolute terms: i.e., they have enough to eat, and have a car to drive, and have 67 kinds of toothpaste to choose from.

But in the real world, inequality matters, because disparities of the kind we currently have in the US are profoundly damaging to the mental and physical health of the populace. This is what Wilkinson and Pickett demonstrate in The Spirit Level. They have complied hundreds of global studies on inequality, life expectancy, disease, mental illness, crime, antisocial behaviors, social mobility, and the like. And to keep things focused in even more tightly, they largely concentrated on the 50 richest countries, to ascertain how different societies handled their advanced industrial economies.

Please see http://www.equalitytrust.org.uk for more of their work. There are plenty of resources on this site, including a good PowerPoint presentation of data, and a downloadable version of their statistics. We won't reproduce the slides here, because it would be better for readers to go in and look at the data on the original site. But the overall finding is that when levels of inequality increase, virtually all social and economic indicators get worse: people live shorter lives, have higher levels of chronic disease, commit more crimes, experience more depression, abuse more drugs, do worse in school, have more teenage births, and so on.

Sounds boilerplate so far, right? But the stunning finding was that the distribution of wealth and income inequality itself made the difference, not the absolute economic conditions of the societies involved. That is, countries that were far poorer than the US in average absolute terms, but that still had fairly equitable distributions of wealth, did far better on almost all indicators. So poorer people are actually living qualitatively better lives than their counterparts in much richer countries, provided that the poorer country's spread of wealth is more even.

I hate to belabor this point, but it runs counter to what many conservatives and even liberals believe. We tend to think that citizens of poorer countries are really worse off, especially if they do not have dynamic economies with lots of millionaires and billionaires. And while things might be tough in the US at the moment, the thinking goes that we're about to turn the corner and find better economic times, which will return us to our rightful position as the planet's best-off people.

But Wilkinson and Pickett found that not only does long-term inequality erode the physical and mental health of a populace, it also destroys the social fabric and social capital that would allow these countries to create productive change, from educational capacity to legal structures to levels of business investment. In short, by allowing the fruits of four decades of economic growth to accrue to a smaller slice of the American elite, we have painted ourselves into a corner and thrown away the tools that might save us.

I encourage everyone to go to the Spirit Level website, and also to buy the book. Lots of good work has been done on income and wealth inequality through the years, but this is the first broad, global study that analyzes hundreds of different research projects across many topics, from health to law to politics to culture. Their work is exhaustive, careful, meticulously-argued, and basically unassailable. In a time of bluster and hyperbole, it is occasionally good for people to familiarize themselves with scientific endeavors, where variables are controlled and competing hypotheses disproved. That is what we find in The Spirit Level.

Wilkinson and Pickett do deal with many of the institutional mechanisms by which inequality corrodes societies, from declining welfare programs to starved schools to parasitic financial institutions. But I wanted to highlight a couple more things with respect to our current economic unraveling.

First, the sheer scale of our wealth maldistribution (1% controlling 43% of the country's financial wealth is a truly staggering statistic) renders all mainstream media coverage of political and economic 'issues' virtually meaningless. We are not going to spend our way to better health care, or green jobs, or energy independence, or anything else useful, unless we are willing to look concentration of wealth dead in the face and fix it. Unless we decide to tax the bejeesus out of wealthy individuals and corporations, we are never going to have the money do anything from the top down. It just can't happen. [Thus my repeated urgings to look at bottom-up solutions]
Even if we tax the super-wealthy one time (which is itself a highly doubtful proposition, considering that this class owns the government anyway), we would then still need either a long-term, highly redistributive tax structure, or a complete overhaul of the legal standing of corporations. The immortal, superhuman status granted to corporations is one of the main pillars of wealth concentration. And considering the recent Supreme Court decision to grant more leeway to corporations in the electoral landscape, it seems highly doubtful that we'd do a complete 180 and start reducing corporate privilege.
Even if we did the above, we would then need to completely rebuild our educational and employment infrastructure to take advantage of the new opportunities for equitable sharing of economic productivity. Decades of de-skilling in agriculture and manufacturing have left us a hollow shell of a country, with precious few skills in actually doing something constructive outside of the service industries and information sectors. And considering the bloated national inventory of residential and commercial real estate, we're not going to build our way to equality via the condo, the McMansion, and the strip mall. In the near future, real skills and trades will become crucial to survival, and we have decimated the conditions that cultivate these features.
Culturally, we have been papering over our increasing inequality with excessive debt, cheap products from China, and with epidemic levels of addiction, from legal and illicit stimulants to escapist entertainment of all kinds. We're living inside a kind of stimulant-soaked simulacrum, a parallel reality where the winner of American Idol is an important cultural milestone, and where uber-corporate Democrats can be called 'socialists.' We are becoming unhinged mentally and culturally, a nation of hopeful lottery winners and iTunes downloaders. This may not be a serious-enough country to deal with the heavy lifting that will be required to craft an equitable society. We would rather stick to our scripts, shouting about the idiocy of our enemies and pretending that success is just around the corner, provided that we enact the same moldy ideologies that have consistently failed us in the past, sometimes very recently. An amnesiac society is ripe for exploitation by demagogues and tyrants.

I could go on, but you get the idea. We probably just don't have the intellectual and social chops to acknowledge the corrupt plutocracy we have become. 'America is the greatest country in the world' is a lot easier to say than to prove, especially when looking at the dismal statistics that Wilkinson and Pickett compile in The Spirit Level. The first step to recovery is being truthful about yourself, and until we can do that, we will go nowhere.