Posted by Bob Lord
Statistics identifying the corrupting nature of inequality to our society are abundant. The crime rate, mental illness, divorce, or you name it, all can be shown statistically to increase with increasing inequality.
More interesting is why this is so. Salvatore Babones at inequality.org presents a logical, easily understandable explanation in a short blog post, Inequality, Greed, and the Demise of our Better Natures. The starting point, explains Babones, is basic human nature:
Contrary to popular wisdom, most people are basically descent. Most people want to do good in their lives, to be useful, to make the world a better place. All other things being equal, most people will work for the good of society, their neighbors, and their loved ones.
Of course, all things are not equal. It pays to behave badly. Greedy, selfish, self-promoting people get more money and other rewards than those who behave honorably. This applies to equally to everyone from plumbers to politicians.
But look at this another way. You have to pay people more to be bad than to be good. Yes, people will be greedy and selfish — but only for a price. You have to compensate people for being evil. People will be good for free.
Thus, inequality drives greed:
That’s where inequality comes in. When the inequalities in rewards between doing good and doing bad are small, most people will choose the good. In a world of equal wages, there would be no incentive for evil. The more inequality there is, the larger the incentives for greedy behavior become.
This is because rising inequality means that the rewards of those activities that are already at a premium get larger and larger relative to the rewards of those activities that are not.
Why should doctors serve rural community with basic healthcare when the rewards for catering to the whims of the rich — or worse, the pharmaceutical industry — are so much greater?
Rising inequality is inexorably leading to the demise of our better natures. Inequality corrupts because inequality fuels greed. With today’s levels of inequality, there’s just much more to be greedy for.
Ultimately, when we balance this agaisnt the desirability of some inequality, we undoubtedly have become too unequal:
Most people believe that there should be some amount of inequality in society. No one knows what the “right” level of inequality is. But it’s hard to believe that in the 1950s and 1960s America was dangerously too equal. Whatever level of inequality we had back then, it was certainly enough.
Now we have twice as much inequality. Is that good? I think the obvious answer is no. Forget about asking whether or not inequality is good. Ask instead how much inequality is good. Whatever the answer is, it’s less than we have now.