A serious moral question arose during today’s seminar: Is inequality in wealth a problem, in and of itself?
Specifically, if there are two individuals or states where one is poor and one is rich, and both are getting wealthier but the richer state is getting even richer faster, is this a problem?
Within the question, there are two sub-cases. In the first of those, the growth in the rich state is completely separate from that of the poor state. Imagine they are completely disconnected and have no engagement with one another. Does the fact that the GDP of the rich state has risen by 50% and that of the poor state by only 5% matter, in a moral sense?
The other case is that the 50% growth in the rich state is somehow causally tied to the 5% growth in the poor state. Specifically, the latter would be higher if the former was lower. Now, that is entirely possible, but this is a different moral category. In the first case, one would have to appeal to general moral cosmopolitanism. In the latter case, we can refer to a moral tradition akin to that of the law of tort: you have harmed me, and you owe me something. This does not speak to the fundamentally immorality of inequality.
All contributions to this discussion are encouraged.
[Update: 7:00pm] To be clear, I do not dispute the fact that it is virtuous for the rich to help the poor. I am a firm believer in the moral value of philanthropy. The question above is about obligation, not charity.
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Rawls. If the best possible arrangement for the weaker state is the one of inequality, then the inequality is justified. However, there is no standard against which to justify anything other than the two levels of wealth (one for each respective state). Thus, the dilemma about whether inequality is a problem in itself is truly a problem about whether standards have any meaning in themselves. This is certainly the case for starvation, but not the case for size of TV screens, speed of cars, etc… these standards are arbitrary because they are based on preference and desire. Therefore, inequality is a moral problem as soon as the living conditions surpass by a sufficient margin abject poverty.
Read Rawls on inter-state justice. He has a very weak position on moral obligations.
Many people (like Rawls) think this is a totally different question if it’s about two individuals in the same state or two different states.
I think your update also ignores the fact one may think inequality bad without thinking we have an obligation to redistribute.
Personally I wouldn’t be too worried by inequality in sub-case one (though I might be worried about poverty).
In the second, I think I’d have to know more about the connection - e.g. is it exploitative? It may be possible that the people in the poorer country are choosing a pleasant, environmental way of life and importing the few industrially-produced goods they need, rather than developing economically themselves. If they weren’t able to do this, it may well be that their economic growth would be higher, but they’d be worse off all-considered. In such a scenario, it doesn’t seem objectionable.
I think it really depends how the wealth is derrived. If the richer country and/or its citizens rely somehow on the poorer one, be it for labour, inexpensive goods, resources, etc., then they certainly do have an obligation to the poorer country that they are exploiting. This obligation would also apply to poorer and richr citizens within a nation. I suppose your scenario 1 wouldn’t fit here, but I can’t think of a situation in the actual world that works like that, thus for all practical purposes, I think there is a moral obligation.
I didn’t mean to bring up Rawls as a person, just the veil of ignorance argument, as it quite obviously could be made to apply to inter state situations. Unless you believe in the metaphysical significance of borders, which is to involve yourself in the discourse of romantic nationalism which is not good for much other than genocide in my opinion, you can’t differentiate between moral obligations within a state and intra-state obligations and remain consistent. Rights won in democratic revolutions are inherent and thus must be accorded to all humans if we are not to be hypocrits about our own freedom.
Tristan,
I think the fact that Rawls does not see his veil of ignorance argument as internationally extensible is rather important. The point of that thought experiment is to legitimate governmental authority, through the application of moral principles derived under conditions of fairness. Where no joint polity exists, this dynamic gets complicated a great deal.
I don’t believe in the “metaphysical significance of borders” but I do believe that they have huge significance in the world we occupy. Our approaches to international justice must take that into account.
I’m not sure that interrogating morality is the way to analyse inequality. Rawls is ultimately a fantasist because he refuses to engage with the real world: he will only work with deracinated individuals who are stripped of their actually existing identities, interests, and beliefs. In the absence of these things, he says, people would agree to more egalitarian distribution. Sure, but that’s like saying if money grew on trees no one would be poor. If no one had identities, interests and beliefs, inequality wouldn’t be an issue. The reason we have inequality is that prevailing political and economic order enacts and legitimises a system of distribution that allocates resources unequally.
Distribution is not primarily a moral question but a political one. The key question is not whether inequality is immoral but whether it is politically justifiable given that wealth is always created socially and via the extraction and acquisition of surplus. So to ask in a situation where the top 10% see a 50% rise in income while the bottom 10% see a 5% rise is that moral or immoral is to miss the point. The fact is that the benefits of economic activity have always been skewed unevenly as a result of political choices - the 50% vs 5% data is a simple reflection of that. The question is, what should we do about it politically.
Incidentally I heard your remarks caused quite a stir. They also disproved an argument someone made at Nuffield over lunch the other day that no one is willing to defend inequality explicitly.
What you really want is the levelling down objection. It’s pleasing to see though that despite Lee’s little misrepresentations - what matters is whether it’s politically, not morally, justifiable: exactly how are you going to justify something with appeal to some sort of evaluative idea, anyway? - IR people do actually get political theory.
To some extent, I think people are misunderstanding the Rawlsian project. I see it primarily as an attempt to rescue consent based theories of political legitimacy from David Hume’s extremely forceful critique. Taking just the difference principle as the defining feature of Rawlsianism ignored the lexical priority of the equality principle. You could certainly have a discussion about inequality that operated entirely above the level of the difference principle in Rawls’ moral hierarchy.
Incidentally I heard your remarks caused quite a stir. They also disproved an argument someone made at Nuffield over lunch the other day that no one is willing to defend inequality explicitly.
I am glad, but somewhat surprised, to hear this. Arrighi et al assume that ‘development’ means ‘convergence with the rich world.’ The possibility that they are developing as well seems to be absent from the fraction of his analysis we read.
If you want to read a good critique of Rawls, Habermas, and other fantasy world liberals, see Stephen Hopgood’s ‘Reading the Small Print in Global Civil Society: The Inexorable Hegemony of the Liberal Self’, Millennium: Journal of International Studies, 29:1 (2000), pp. 1-25.
“IT’S the rich wot gets the pleasure, it’s the poor wot gets the blame.” The soldiers who sang that ditty in the first world war may have been reflecting on the contrast between their lice-ridden, shell-shocked existence and the creature comforts available to aristocrats back home.
There was an enormous disparity between the income and wealth of the top and bottom classes of society in the early days of the 20th century, as there is today, another era of boisterous global trade. The issue of inequality prompted Ben Bernanke, the Federal Reserve chairman, to make a speech on February 6th calling for improvements in education and training to help displaced workers.
Ajay Kapur and Niall Macleod, two Citigroup strategists, have invented the term “plutonomy” to describe an economy where the spending power of the elite holds sway. They argue that American savings data are distorted by the top 20% of the population. Whereas many Americans are reasonably thrifty, the wealthiest group spends more than it earns.
The rich need not save because financial markets are doing their savings for them. Rising equity and house prices drove up the net-worth-to-income ratio of the wealthiest tenth of Americans from 5.8 in 1989 to 8.4 in 2004. That gives them a licence to spend and makes them immune to petty worries like higher petrol prices.
Furthermore, Messrs Kapur and Macleod say the rise of wealthy elites in Russia and Asia may help explain why America finds it so easy to fund its current-account deficit. Emerging-market plutocrats are nervous about keeping their fortunes at home, lest the political winds change. So they seek to move as much of it as possible to richer countries. This, together with reserve management by the central banks in Asia and oil-exporting countries, provides a steady source of demand for American assets.
But what has caused this great dispersion of wealth? It is not happening in all countries. The gap has been widening in America, Britain and Canada but has barely budged in France, Japan or the Netherlands. The two strategists cite numerous factors, including rising executive pay and technological innovation, which have rewarded high-skilled individuals. Globalisation, which seems to have lowered the relative cost of unskilled labour and boosted the return to capital, has also played its part.
Actually, if one looks at a broad sweep of history, it is the relatively egalitarian 20th century that seems the exception. Mass democracy is only 100 years old and it ushered in both the welfare state and redistributive taxation. The rise of democracy, in turn, was driven by the economic power of workers, especially those gathered in large groups to work in mining, manufacturing and transport. As those industries have ebbed, so have the forces of economic equality.
But although the workers have lost some of their economic power, they have not lost their votes and may yet use them to redress the balance. Messrs Kapur and Macleod suggest there may even be a link between the growth of profits as a proportion of national income and the rising popularity of far-right European parties such as the National Front in France.
If there were such a backlash, it could be a threat not just to globalisation, but to democracy itself. Opinion polls and low voter turnout at elections may indicate widespread public disillusionment with politicians. There is also scepticism about the fairness of the political process, given the role companies play in financing political parties. And this is during strong economic growth: imagine what a recession could do.
The prospects for a tax grab on company earnings are limited, given the ability of corporations to move quickly across national boundaries. But even in countries (like America) without extremist parties on the left or the right, politicians will be tempted to deflect the voters’ wrath away from their corporate paymasters and towards an easier target—“foreigners” of all types. Hence the potential appeal of protectionist and anti-immigrant policies.
In time, this could undermine globalisation and reverse the relative advantages of the rich (and the higher trend in profits). Although many might welcome a more egalitarian world, the risk is that protectionism would usher in a deep global recession, as it did in the 1930s.
It is easy to assume, with globalisation, that a rising tide lifts all boats. And most people do gain, even if the improvement in their way of life can sometimes be hard to discern. But workers whose factories are shut are unlikely to see it that way. For them, it must seem these days that a rising tide lifts only all yachts.