Objections to large material inequalities are probably as old as mankind itself. In numerous ancient legends and folk tales, the downfall of a key character is related to possessions and greed. So the MPs who signed the motion to reduce income inequality presumably perceive themselves to be part of a long tradition, or in fact as just applying plain common sense.

But one wonders whether they are all fully aware of what they are signing up to. The motion is explicitly based on the brand of egalitarianism promoted by the Equality Trust, set up by the authors of The Spirit Level. As we have noted previously on this blog, Spirit Level egalitarianism is radically different from earlier egalitarian positions.

Most conventional egalitarians are worried that large inequalities are a symptom of the rules of the game being rigged. Their concern is that some people are playing with loaded dice, enriching themselves at the expense of others.

No such claim is made in the Spirit Level, or on the pages of the Equality Trust. The authors are not claiming that the rich are exploiting the poor. They do not describe the market economy as a big zero-sum game, nor are they claiming that the living standards of the poor are not rising with economic growth.

They make an entirely different point instead. Spirit Level Egalitarianism is a spin-off product from of the more extreme end of Happiness Economics (mixed up with Malthusian doomsday-environmentalism). Some happiness economists have long postulated that increasing levels of consumption fail to make people any happier, as long as others around them raise their levels of consumption too. This is because they assume that the purpose of consumption is not enjoyment, but status-signalling. In the words of Robert Frank:

‘consumption spending has much in common with a military arms race […] the results tend to be mutually offsetting, just as when all nations spend more on armaments. Spending less – on bombs or on personal consumption – frees up money for other pressing uses, but only if everyone does it.’

In this interpretation, it is the exposure to living standards exceeding our own which explains stagnant levels of happiness. Spirit Level Egalitarians accept this as a starting point, but then go much further. According to them, it is this very exposure to high living standards which makes us physically and mentally sick, as well as aggressive and distrustful towards others. The accusation levelled against the wealthy is not that they have gained their wealth at the expense of others. The accusation is that they are making others miserable by exposing them to their wealth.

However, if exposure to wealth, rather than wealth per se, is seen as the cause of misery, would it not be more efficient to decrease the level of exposure rather than to diminish wealth itself? If so, it would be entirely consistent with this mindset to, for example, impose a heavy tax on television. Or why not just ban it outright? Happiness researchers from the University of Milan have found out:

‘by watching TV people are overwhelmed by images of people richer and wealthier than they are. This contributes to shifting up the benchmark for people’s positional concerns: income and consumption levels are compared not only to those of their actual social reference group, but also to those of their virtual reference group, defined and constructed by television programs. Television viewing makes people less satisfied with their income and wealth levels. In this perspective, TV can be seen as a powerful factor in speeding up the positional treadmill, through comparison with higher benchmark groups.’

Dr Kristian Niemietz joined the IEA in 2008 as Poverty Research Fellow, becoming its Senior Research Fellow in 2013 and Head of Health and Welfare in 2015. Kristian is also a Fellow of the Age Endeavour Fellowship. He studied Economics at the Humboldt Universität zu Berlin and the Universidad de Salamanca, graduating in 2007 as Diplom-Volkswirt (≈MSc in Economics). During his studies, he interned at the Central Bank of Bolivia (2004), the National Statistics Office of Paraguay (2005), and at the IEA (2006). In 2013, he completed a PhD in Political Economy at King’s College London. Kristian previously worked as a Research Fellow at the Berlin-based Institute for Free Enterprise (IUF), and at King's College London, where he taught Economics throughout his postgraduate studies. He is a regular contributor to various journals in the UK, Germany and Switzerland.

2 thoughts on “An alternative to Spirit Level egalitarianism”

  1. Posted 05/08/2011 at 16:10 | Permalink

    L.P. Hartley’s ‘Facial Justice’ purveyed a similar message. People who were handsome or beautiful were deliberately uglified. It’s a disturbing story from the author who wrote: ‘The past is another country: they do things differently there.’ If this kind of Spirit Level Egalitarianism were to catch on, it sounds as if the future would be another country too.

  2. Posted 08/08/2011 at 10:06 | Permalink

    Indeed, the authors do quote from a paper providing survey evidence that people would be prepared to pay money in order to see other people’s income reduced (i.e. they would prefer to be worse off in absolute but better off in relative terms). The authors quote this as evidence that their proposals are in line with the public’s preferences.
    However, I’ve then looked up the original paper and found something rather disturbing which W&P don’t tell their readers: Accrding to this paper, people would also be willing to give up intelligence and physical attractiveness, provided other people were losing even more of these…

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