The Spirit Level: why equality is better for everyone

Authors: Richard Wilkinson and Kate Pickett

The Spirit Level is an important book, for it undermines one of the most important myths of modern social policy - that inequality is good for us. Instead, the authors argue that the weight of evidence demonstrates that income inequality is not good for any of us - not the poor, not the rich, not society as a whole. To a surprising extent we find that, where inequality has flourished in order to drive up economic growth, then the impact has been to worsen outcomes for everyone.

This is important because for many years it has been accepted - on both the Left and the Right - that a high degree of income inequality may be necessary in order to promote economic growth - and growth was seen as the primary engine for positive social change. This then led to a consensus between policy-makers that we shouldn’t worry too much about growing income inequalities; instead we should focused on redistributing the benefits of economic growth to the advantage of the poor.

But if it is inequality itself that damages society then simply spending more money on public services that supposedly benefit the poor will be futile. Many initiatives are described as efforts to reduce inequality, (for example, to ‘reduce health inequalities’) yet these initiatives are flawed and consistently fail in their fundamental purpose:

Rather than reducing inequalities itself, the initiatives aimed at tackling health or social problems are nearly always attempts to break the links between socio-economic disadvantage and the problems it produces. The unstated hope is that people - particularly the poor - can carry on in the same circumstances, but will somehow no longer succumb to mental illness, teenage pregnancy, educational failure or drugs.

Of course like anything good and interesting the book has created enormous controversy and it leaves many questions unanswered. It is also clear from the data in the book that there are other factors - which the book does not explore - that shape wellbeing in our societies. Nevertheless, the power of the central findings are worth repeating - and at the very least they shift the burden of proof for policy-makers and theorists:

  • In society where there is more income inequality the poor are worse off than in a society with less income inequality
  • In a society where there is more income inequality the average person is worse off than in a society with less income inequality
  • In a society where there is more income inequality the rich are worse off than in a society with less income inequality

Perhaps this last fact - given that our politicians and civil servants are 'of the rich' - will be the key fact that will help change social policy in the UK. However, for most of us, the first fact should be a powerful enough incentive to demand change.

Part of the reason that this pattern is becoming clearer is that there is more and more available data about many aspects of wellbeing; and it is when we begin to focus on these other aspects of wellbeing - rather than on money itself - that the negative impact of inequality becomes clearer. Instead of focusing on wealth, the authors looked at:

  • Trust - percent of people who respond positively to the statement “most people can be trusted”
  • Life expectancy - life expectancy at birth for men and women 
  • Infant mortality - deaths in the first year of life per 1,000 live births
  • Obesity - percentage of the population with BMI > 30, averaged for men and women
  • Mental health - prevalence of mental illness
  • Education - combined average of maths literacy and reading literacy scores of 15-year olds
  • Teenage birth rate - births per 1,000 women aged 15-19 years
  • Homicides - homicide rate per 100,000
  • Imprisonment - log of prisoners per 100,000
  • Social mobility - correlation between father and son’s income

They analysed this data against income inequality data for developed economies and for US states and in both cases they found that there was a strong correlation between the degree of income equality in each society and better performance against all these measure. Fairer societies are better societies.

The authors also tried to find some kinds of explanation for what may still seem a surprising conclusion, given that more equal societies may have lower levels of overall income than less equal societies. Their central hypothesis is that it is the psychological damage of excessive inequality that causes problems for the poor and the rich: we are all poorer if we feel that we are looked down upon by others, if we fear that we could be looked down upon by others, or even if we do look down on others. The book cites a range of interesting research findings on this relationship between status and well being - one particularly striking example is given here:

In 2004, World Bank economists Karla Hoff and Priyanka Pandey reported the results of a remarkable experiment. They took 321 high-caste and 321 low-caste 11 and 12 year-old boys from scattered rural villages in India, and set them the task of solving mazes. First the boys did the puzzles without being aware of each other's caste. Under this condition the low-caste boys did just as well with the mazes as the high-caste boys, indeed slightly better.

Then, the experiment was repeated, but this time each boy was asked to confirm an announcement of his name, village, father's and grandfather's names and caste. After this public announcement of caste, the boys did more mazes, and this time there was a large caste gap in how well they did - the performance of the low caste boys dropped significantly.

In a sense we might say that undue income inequality is a threat to our citizenship and our citizenship is essential to our well being.

This idea is not new - although it may have been forgotten. Older thinker always knew that it is our attitude to wealth and property that determines their impact on our lives. For example, Dante describes how an individualistic notion of property, combined with envy, impoverishes everyone:

You set desire where sharing with one's fellows
Means that each partner get's a smaller share,
Wherefore you sigh, and envy works the bellows.

Did but the love of the most lofty sphere
Turn your desires to take the upward way,
Your hearts were quit of all this fearful care;

Because the more there are who can say
'Ours', the more good each has, and charity
Burns in that cloister with a larger ray.

[Dante, Purgatory, Canto XV]

So, if inequality is bad for all of us, and very bad for the poor, what should we do about it? The book is perhaps at its weakest here - but that is no significant criticism. The authors explore the possible advantages of mutualism and they note that the size of the welfare state itself does not correlate with inequality - both more and less equal societies can spend a lot on the welfare state:

For countries in our international analysis, we collected OECD figures on public social expenditure as a proportion of GDP and found it entirely unrelated to our Index of Health and Social Problems. Perhaps rather counter-intuitively, it also made no difference to the association between inequality and Index. Part of the reason for this is that governments may spend either to prevent social problems or, where income differences have widened, to deal with the consequences.

My own view is that, for the UK at least, we will need to make more effective use of the tax-benefit system in order to create more equality, security and positive incentives for the poor. And this would be possible if:

  1. We integrate tax and benefits into one universal and non-stigmatising system
  2. We create a clear and universal right to a decent household or family income - below which we will allow nobody can slip
  3. We tax everyone at a level sufficient to generate that decent income for everyone - while leaving everyone with a positive incentive to earn, save and grow

This seems to me to be a fair system for the 21st Century - one that recognises our mutual interdependence and need for security - and yet still encourages citizenship and personal responsibility. This would be a very direct route to ensuring a higher degree of income equality - although it would need to be underpinned by a firm and clear constitutional guarantee.

Finally - on a more local note - it is worth noting that income inequality is a much bigger problem for some societies than for others. In the league table of developed countries the UK is the 3rd most unequal society after the USA and Portugal. It is time to recognise that this is a choice that we make - it does not have to be this way - and it is not a good choice

The publisher is The Centre for Welfare Reform

Review of The Spirit Level © Simon Duffy 2011.

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