Yesterday I appeared on the Radio 4 Sunday Programme. The programme is available online on the BBC iplayer at http://www.bbc.co.uk/programmes/b006qnbd until 2 January. It begins with a discussion of the work of Charles Booth and William Booth. The debate with Philip Booth comes about 36 minutes in.
Part of the programme looks at a book by Wilkinson and Pickett called The Spirit Level which suggests that more unequal countries lead to much worse outcomes for everybody. Wilkinson himself said on the programme that it would be better to tax the rich and throw the money away because the resulting increase in equality would be good for society. In my view, policies based on institutionalising envy should have no place in a civilised society. But, notwithstanding this, his premise about taxing the rich is based on the results of a great deal of statistical modelling about inequality which raise many questions.
I must confess that I have not read the book – I would genuinely welcome comments from those who have read it, or indeed from the authors. I have read some detailed summaries and reviews and the following points come immediately to mind.
– There is much made of the relationship between inequality and infant mortality – in particular the high rates in the US and the very low rates in the “equal” societies of Japan and Sweden. However, when I looked into this, I discovered that, in the US, every baby who is delivered and dies counts in the statistics, no matter how premature or how small. In Japan, deaths within 24 hours of birth are recorded as miscarriages; in Sweden, deaths under a certain birth weight are not recorded in infant mortality statistics. Apparently this, together with the higher number of migrants in the US (see below), explains the differences in recorded infant mortality.
– The authors make much of the relationship between crimes of violence and inequality – again the US being the outstanding example. However, we would expect crimes against property to be associated more with inequality and these are 2.5 times higher in Europe than in the US…Why are the authors so quiet about this?
– When problems are positively associated with equality (such as suicides) these are regarded as anomalies (to the authors’ credit they are not brushed under the carpet, they do try to explain this).
All in all, the message seems to be that homogeneous and closed societies that are not very receptive or attractive to migrants score well on equality. Large heterogeneous, dynamic economies that are attractive to migrants score badly. Migration, of course, helps cause inequality – as migrants are often moving to avoid poverty and they start poor, but this leads to some important questions. Why are migrants attracted to countries that are so unequal if all other quality of life indicators are worse in such countries as well? Why are migrants not clambering to get into Japan and Sweden? And why, in many respects, is Japan, if it scores so well on equality and so many other lifestyle measures, burdened with a huge debt and a catastrophically low birth rate that seems to reflect a huge degree of pessimism?
“Revealed preference” seems to suggest a desire to live in the US and the UK rather than in Japan, whatever the statisticians might think is rational.