The Curious Irrelevance of Inequality

Here’s a fascinating post by Don Arthur at Club Troppo that asks how would a “progressive fusionist” answer the question “How much inequality is too much?” It turns out that my “Rawlsekianism” is an example of progressive fusionism. And Arthur rightly says:

From this perspective, it’s not possible to decide on a correct distribution in advance. That’s because the question isn’t a purely philosophical one. On its own, Rawls’ theory doesn’t tell you what shape the income distribution should be.

The income distribution among a selected group of people (are you sure the residents of a country compose the right group of people?) is a pattern. The same pattern can in principle be determined by many different mechanisms. The pattern that emerges from an unimpeachably just set of rules and one created by violence, theft, corruption, and oppression might turn out the have the same Gini coefficient, which is how you know that Gini coefficients convey approximately zero information of normative significance.

No shape is the right shape. If perfect equality is achieved through expropriation, then one might be tempted to say that there is too little inequality, but the problem is really too much confiscation, too much abuse of illegitimate authority, too little respect for rights. Likewise, if high levels of inequality are generated by the predation of an elite class, as is the case in much of the world, one might be tempted to say that there is too much inequality, but the problem is really rampant criminality, of which inequality is a side-effect. If I burn down your house, the problem is not that housing inequality has increased. The problem is that I have burned down your house. And when scholars tell us that inequality tends to be negatively correlated with economic growth, they are telling us, in an oddly roundabout way, that theft and corruption are not the path to prosperity.

There is no “too much” inequality. If there is any injustice or wrongdoing, it is too much. You don’t have to wait until you observe inequality to start caring about them — as if the smoke was the problem with a house on fire. But if a pattern of incomes is the result of fair-dealing among free people acting within just institutions, then there can be little objection, except from those who make equality a pointless fetish. Poverty is bad, whether or not it is a consequence of injustice, whether or not it exists alongside wealth, and the fact that it is bad alone gives us sufficient reason to do something about it.