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Archive for July 2nd, 2016

Given that it still seems as though we have a long way to go on this issue is seems worthwhile republishing this post to follow the one from yesterday.

The Spirit Level: Why More Equal Societies Almost Always Do Better has just come out. This is not to be confused with a book of the same title and no subtitle by Seamus Heaney (1996). His is a book of poems: this one is about economics. Whether this coincidence is indicative of some deep connection between poetry and economics I am not competent to judge.

The core concept of unity in the Bahá’í Faith conveys a spiritual truth about the nature of God, the essence of religion and the reality of humankind. From that central  idea various principles are derived, one of which relates to the economy.

The essence of the matter is that divine justice will become manifest in human conditions and affairs, and all mankind will find comfort and enjoyment in life. It is not meant that all will be equal, for inequality in degree and capacity is a property of nature. Necessarily there will be rich people and also those who will be in want of their livelihood, but in the aggregate community there will be equalization and readjustment of values and interests. In the future there will be no very rich nor extremely poor. There will be an equilibrium of interests, and a condition will be established which will make both rich and poor comfortable and content.

‘Abdu’l-Bahá (Promulgation of Universal Peace: page 132)

The key sentences are:

In the future there will be no very rich nor extremely poor,

and

. . . a condition will be established which will make both rich and poor comfortable and content.

This idea of economic equality has so far not been greeted with great enthusiasm by most influential people including policy makers, though it has always made sense to ordinary people, I suspect. Not surprisingly, then, I was delighted to find a book that pulls together and examines a huge body of evidence that supports this whole idea, including the bit about the rich as well as the poor being better off in many important respects  in a more equal society.

Wilkinson and Pickett (I came very close then to typing Wilson Picket – not a name that will mean much to the under fifties) cover a huge amount of ground in a thorough and well balanced treatment of the topic.

To compact their case into the density of a singularity, they produce evidence to substantiate their claim that inequality underlies many of the problems in society that we insist on picking off one by one: these include violence, diabetes and a widespread distrust that corrodes community life.

This is in their view largely because, the greater the degree of inequality, the more spirit-levelstressful life becomes for everyone, rich and poor alike. Increased stress brings numerous other problems in its wake, not least in terms of health. The tensions in the pecking order that inequality brings are at the heart of the social stresses involved, and social stresses, they argue, are the most damaging forms of stress both for individual health and social cohesion.

They look at a number of possible objections to their thesis and find good reasons, in their view, for dismissing them. For example, they find evidence to suggest that the direction of causation is from inequality to the problem, not from some other variable such as an English speaking culture. Portugal, a very different culture, is at the negative end of the problem spectrum along with the U.S. and the U.K. and shares inequality as the most plausible potential explanation. Scandinavian society along with Japan, also very different, is at the positive end of the problem spectrum and shares high levels of equality along with Norway, Sweden and the rest as the most plausible potential explanation.

Nor is it convincing in their view to promote one of the problems caused by inequality to become the cause of inequality and all the other problems they describe. The predictive power of inequality to tell us what other problems we will find has been repeatedly tested on different sets of data and been confirmed.

The only way to decide for oneself about the value of their hypothesis is to read this excellent book. It is written for the lay reader (it would have to be for me to understand anything at all about economics) and carries its learning lightly.

I would like to draw particular attention to the possible remedies they outline towards the end of the book. They focus considerable attention on the nature and functioning of our major economic institutions, suggesting a more radical reshaping than simply improving regulation. They make it clear (page 247) that the kind of institutions they favour have as their primary purpose ‘to provide a service while remaining economically viable.’ They also emphasise (ibid) that ‘further improvements in the quality of life no longer depend on further economic growth: the issue is now community and how we relate to each other.’ They continue: ‘[W]e need to find ways of ensuring that greater equality is more deeply rooted in the fabric of our societies and less vulnerable to the whim of successive governments.’ To this end they advocate (page 24) ‘democratic employee ownership.’ This must involve two components: ownership and participatory management. They quote a 2005 review of the research (page 249): ‘Ownership seems to provide the cultural glue to keep participation going.’

The Bahá’í International Community make a similar point in the booklet The Prosperity of Humankind:

Despite acknowledgement of participation as a principle, the scope of the decision making left to most of the world’s population is at best secondary, limited to a range of choices formulated by agencies inaccessible to them and determined by goals that are often irreconcilable with their perceptions of reality.

(The Prosperity of Humankind: Preamble)

smal-sp-levRegardless of our position on the hierarchical ladder of our society, we can all benefit from a better understanding and systematic implementation of these ideas. This book deserves not only to be read but to be used.

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