Enlightenment Now: The Case for Reason, Science, Humanism, and Progress

Most damagingly, the sociologists Jonathan Kelley and Mariah Evans have snipped the causal link joining inequality to happiness in a study of two hundred thousand people in sixty-eight societies over three decades.¹⁶ (We will examine how happiness and life satisfaction are measured in chapter 18.) Kelley and Evans held constant the major factors that are known to affect happiness, including GDP per capita, age, sex, education, marital status, and religious attendance, and found that the theory that inequality causes unhappiness “comes to shipwreck on the rock of the facts.” In developing countries, inequality is not dispiriting but heartening: people in the more unequal societies are happier. The authors suggest that whatever envy, status anxiety, or relative deprivation people may feel in poor, unequal countries is swamped by hope. Inequality is seen as a harbinger of opportunity, a sign that education and other routes to upward mobility might pay off for them and their children. Among developed countries (other than formerly Communist ones), inequality made no difference one way or another. (In formerly Communist countries, the effects were also equivocal: inequality hurt the aging generation that grew up under communism, but helped or made no difference to the younger generations.)

The fickle effects of inequality on well-being bring up another common confusion in these discussions: the conflation of inequality with unfairness. Many studies in psychology have shown that people, including young children, prefer windfalls to be split evenly among participants, even if everyone ends up with less overall. That led some psychologists to posit a syndrome called inequity aversion: an apparent desire to spread the wealth. But in their recent article “Why People Prefer Unequal Societies,” the psychologists Christina Starmans, Mark Sheskin, and Paul Bloom took another look at the studies and found that people prefer unequal distributions, both among fellow participants in the lab and among citizens in their country, as long as they sense that the allocation is fair: that the bonuses go to harder workers, more generous helpers, or even the lucky winners of an impartial lottery.¹⁷ “There is no evidence so far,” the authors conclude, “that children or adults possess any general aversion to inequality.” People are content with economic inequality as long as they feel that the country is meritocratic, and they get angry when they feel it isn’t. Narratives about the causes of inequality loom larger in people’s minds than the existence of inequality. That creates an opening for politicians to rouse the rabble by singling out cheaters who take more than their fair share: welfare queens, immigrants, foreign countries, bankers, or the rich, sometimes identified with ethnic minorities.¹⁸

In addition to effects on individual psychology, inequality has been linked to several kinds of society-wide dysfunction, including economic stagnation, financial instability, intergenerational immobility, and political influence-peddling. These harms must be taken seriously, but here too the leap from correlation to causation has been contested.¹⁹ Either way, I suspect that it’s less effective to aim at the Gini index as a deeply buried root cause of many social ills than to zero in on solutions to each problem: investment in research and infrastructure to escape economic stagnation, regulation of the finance sector to reduce instability, broader access to education and job training to facilitate economic mobility, electoral transparency and finance reform to eliminate illicit influence, and so on. The influence of money on politics is particularly pernicious because it can distort every government policy, but it’s not the same issue as income inequality. After all, in the absence of electoral reform the richest donors can get the ear of politicians whether they earn 2 percent of national income or 8 percent of it.²⁰

Economic inequality, then, is not itself a dimension of human well-being, and it should not be confused with unfairness or with poverty. Let’s now turn from the moral significance of inequality to the question of why it has changed over time.

The simplest narrative of the history of inequality is that it comes with modernity. We must have begun in a state of original equality, because when there is no wealth, everyone has equal shares of nothing, and then, when wealth is created, some can have more of it than others. Inequality, in this story, started at zero, and as wealth increased over time, inequality grew with it. But the story is not quite right.