Another indicator of how inequality increases the pressure to consume comes from the way working hours vary in different countries in relation to inequality. A study of working hours in OECD countries by Sam Bowles, professor emeritus of economics at the University of Massachusetts, showed not only that more unequal countries tend to have longer working hours, but also that differences in working hours changed in line with changes in inequality over several decades.352 The relationship between greater inequality and longer working hours is shown in Figure 15.3. People in more unequal countries do the equivalent of two or three months’ extra work a year. A loss of the equivalent of an extra eight or twelve weeks’ holiday is a high price to pay for inequality.
Figure 15.3 People work longer in more unequal societies.352
Another study, this time using data within the USA, found that married women were more likely to go out to work if their sister’s husband earned more than their own husband.353 A similar study suggested that the decisions married women make about taking paid work are also affected by less personal inequalities: it looked at women who were married to employed men and found that they were more likely to take a job themselves if they lived in an area in which men’s incomes were more unequal.354
The evidence we have described from a number of different sources on savings, debt, bankruptcy rates, spending on advertising and working hours, all concurs with the view that inequality does indeed increase the pressure to consume. If an important part of consumerism is driven by emulation, status competition, or simply having to run to keep up with everyone else, and is basically about social appearances and position, this would explain why we continue to pursue economic growth despite its apparent lack of benefits. If everyone wants more money because it improves self-image and status in relation to others, then each person’s desire to be richer does not add up to a societal desire for economic growth. How much people’s desire for more income is really a desire for higher status has been demonstrated in a simple experiment. People were asked to say whether they’d prefer to be less well-off than others in a rich society, or have a much lower income in a poorer society but be better-off than others. Fifty per cent of the participants thought they would trade as much as half their real income if they could live in a society in which they would be better off than others.355 This shows how much we value status and explains why (as we saw in Chapter 2) the income differences within rich societies matter so much more than the income differences between them.
Once we have enough of the necessities of life, it is the relativities which matter.
When Bowles and Park first demonstrated the relationship between inequality and working hours (Figure 15.3), they quoted Thorstein Veblen, who said: ‘The only practicable means of impressing one’s pecuniary ability on the unsympathetic observers of one’s everyday life is an unremitting demonstration of the ability to pay.’ Veblen’s Theory of the Leisure Class, published in 1899, was the first major work on the relationship between consumption and social stratification. It was he who introduced the term ‘conspicuous consumption’ and emphasized the importance of ‘pecuniary emulation’ and ‘invidious comparisons’.356 Because the advertising industry plays on insecurities about how we are seen, it has made us more aware of the psychology of consumption. But Veblen wrote long before we were so bombarded with advertising. So rather than blaming these problems entirely on advertising, we should recognize that it simply amplifies and makes use of vulnerabilities which are there anyway. Economists now use the term ‘Veblen effect’ to refer to the way goods are chosen for their social value rather than their usefulness. And research confirms that the tendency to look for goods which confer status and prestige is indeed stronger for things which are more visible to others.
Too often consumerism is regarded as if it reflected a fundamental human material self-interest and possessiveness. That, however, could hardly be further from the truth. Our almost neurotic need to shop and consume is instead a reflection of how deeply social we are. Living in unequal and individualistic societies, we use possessions to show ourselves in a good light, to make a positive impression, and to avoid appearing incompetent or inadequate in the eyes of others. Consumerism shows how powerfully we are affected by each other. Once we have enough of the basic necessities for comfort, possessions matter less and less in themselves, and are used more and more for what they say about their owners. Ideally, our impressions of each other would depend on face-to-face interactions in the course of community life, rather than on outward appearances in the absence of real knowledge of each other. That point takes us back to the discussion in Chapter 4 of the evidence that inequality weakens community life. The weakening of community life and the growth of consumerism are related.
If, to cut carbon emissions, we need to limit economic growth severely in the rich countries, then it is important to know that this does not mean sacrificing improvements in the real quality of life – in the quality of life as measured by health, happiness, friendship and community life, which really matters. However, rather than simply having fewer of all the luxuries which substitute for and prevent us recognizing our more fundamental needs, inequality has to be reduced simultaneously. We need to create more equal societies able to meet our real social needs. Instead of policies to deal with global warming being experienced simply as imposing limits on the possibilities of material satisfaction, they need to be coupled with egalitarian policies which steer us to new and more fundamental ways of improving the quality of our lives. The change is about a historic shift in the sources of human satisfaction from economic growth to a more sociable society.
In his speech accepting the 2007 Nobel Peace Prize on behalf of the Intergovernmental Panel on Climate Change which he chairs, Rajendra Pachauri described how global warming would reduce agricultural yields, food and water supplies for hundreds of millions of people and so lead to increasing conflict. (He spoke before the contribution of biofuel crops to rising world food prices had been clearly recognized.) The task of responding adequately to the threat of global warming needs to be seen as bigger and more important than any of us. But if everyone – individuals, corporations, whole nations – feels it is almost their duty to get round regulations, to exploit whatever loopholes they can (as has long been taken as the norm with taxation) then the task is lost. As we write, tankers of biofuels are crossing the Atlantic from Europe to the USA and back in order to pick up the US government subsidy paid when small quantities of petroleum are added, which could just as well have been added in Europe without every litre crossing the Atlantic twice. Reversing the intended effect of regulations for private gain is an expression of the dominance of attitudes which make it much harder to respond adequately to the threat of global warming.
Tackling climate change depends on world co-operation like never before: we cannot succeed if in practice everyone is trying to circumvent the regulations. Cheating on regulations and the pursuit of short-term sectional or self-interest becomes not just anti-social but anti-humanity. Policies to reduce carbon emissions depend on a wider sense of social responsibility, of co-operation and public-spiritedness. Here again the evidence suggests that more equal societies do better. We have seen (Chapter 4) that they are more socially cohesive and have higher levels of trust which foster public-spiritedness. We have also seen how this carries over into international relations: more equal societies give more in development aid and score better on the Global Peace Index. An indication that a greater sense of public responsibility in more equal countries might affect how societies respond to environmental issues can be seen in Figure 15.4, which shows that they tend to recycle a higher proportion of their waste. The data comes from Australia’s Planet Ark Foundation Trust.357 We show each country’s ranking for the proportion of waste that they recycle.
So rather than assuming that we are stuck with levels of self-interested consumerism, individualism and materialism which must defeat any attempts to develop sustainable economic systems, we need to
recognize that these are not fixed expressions of human nature. Instead they reflect the characteristics of the societies in which we find ourselves and vary even from one rich market democracy to another. At the most fundamental level, what reducing inequality is about is shifting the balance from the divisive, self-interested consumerism driven by status competition, towards a more socially integrated and affiliative society. Greater equality can help us develop the public ethos and commitment to working together which we need if we are going to solve the problems which threaten us all. As wartime leaders knew, if a society has to pull together, policies must be seen to be fair and income differences have to be reduced.
Figure 15.4 More equal countries recycle a higher proportion of their waste.
16
Building the future
Turning corporations loose and letting the profit motive run amok is not a prescription for a more liveable world.
Tom Scholz, Interview with the Sierra Club
Before discussing what should be done to make our societies more equal, it is worth pointing out that focusing attention on the inequalities within them does not mean ignoring the international inequalities between rich and poor countries. The evidence strongly suggests that narrowing income differences within rich countries will make them more responsive to the needs of poorer countries. In Chapter 4 we showed (Figure 4.6) that more equal countries tend to pay a higher proportion of their national income in foreign aid. Compared to the most unequal countries, some of the most equal devote four times the proportion of their national income to aid.
More unequal countries also seem to be more belligerent internationally. Inequality is related to worse scores on the Global Peace Index, which combines measures of militarization with measures of domestic and international conflict, and measures of security, human rights and stability. (It is produced by Visions of Humanity in conjunction with the Economist Intelligence Unit.)358
If we turn instead to the part countries play in international trade agreements or, for instance, in negotiations on reducing carbon emissions, we find that more equal countries take positions on these issues which are likely to be more beneficial to developing countries.
It looks as if the inequalities which affect the way people treat each other within their own societies also affect the norms and expectations they bring to bear on international issues. Growing up and living in a more unequal society affects people’s assumptions about human nature. We have seen how inequality affects trust, community life and violence, and how – through the quality of early life – it predisposes people to be more or less affiliative, empathetic or aggressive. Obviously these issues are closely related to the increased status competition and consumerism we discussed in the previous chapter. It implies that if we put our own houses in order, we may look more sympathetically on developing countries.
A TRANSFORMATION
But how can we make our societies more equal? Talk about greater equality worries some people. Trying to allay these fears at a National Policy Association conference on health inequalities in Washington, one of us pointed out that as all the data came from rich developed market democracies and we were only talking about the differences between them, it surely wouldn’t take a revolution to put things right. But when It Doesn’t Take a Revolution appeared as the title of the National Policy Association’s booklet from the conference, it was surprising to find a few people who thought it would.
As Bill Kerry, one of the founders of the Equality Trust, put it, if we are going to achieve a major narrowing of income differences while responding effectively to global warming, what is required amounts to a transformation of our societies, a transformation which will not be furthered by a departure from peaceful methods but one which is unlikely to be achieved by tinkering with minor policy options. A social movement for greater equality needs a sustained sense of direction and a view of how we can achieve the necessary economic and social changes. The key is to map out ways in which the new society can begin to grow within and alongside the institutions it may gradually marginalize and replace. That is what making change is really about. Rather than simply waiting for government to do it for us, we have to start making it in our lives and in the institutions of our society straight away. What we need is not one big revolution but a continuous stream of small changes in a consistent direction. And to give ourselves the best chance of making the necessary transformation of society we need to remember that the aim is to make a more sociable society, which means avoiding the disruption and dislocation which increase insecurity and fear and so often end in a disastrous backlash. The aim is to increase people’s sense of security and to reduce fear; to make everyone feel that a more equal society not only has room for them but also that it offers a more fulfilling life than is possible in a society dominated by hierarchy and inequality.
In the past, when arguments about inequality centred on the privations of the poor and on what is fair, reducing inequality depended on coaxing or scaring the better-off into adopting a more altruistic attitude to the poor. But now we know that inequality affects so many outcomes, across so much of society, all that has changed. The transformation of our society is a project in which we all have a shared interest. Greater equality is the gateway to a society capable of improving the quality of life for all of us and an essential step in the development of a sustainable economic system.
It is often said that greater equality is impossible because people are not equal. But that is a confusion: equality does not mean being the same. People did not become the same when the principle of equality before the law was established. Nor – as is often claimed – does reducing material inequality mean lowering standards or levelling to a common mediocrity. Wealth, particularly inherited wealth, is a poor indicator of genuine merit – hence George Bernard Shaw’s assertion that: ‘Only where there is pecuniary equality can the distinction of merit stand out.’359, p. 71 Perhaps that makes Sweden a particularly suitable home for the system of Nobel prizes.
We see no indication that standards of intellectual, artistic or sporting achievement are lower in the more equal societies in our analyses. Indeed, making a large part of the population feel devalued can surely only lower standards. Although a baseball team is not a microcosm of society, a well-controlled study of over 1,600 players in twenty-nine teams over a nine-year period found that major league baseball teams with smaller income differences among players do significantly better than the more unequal ones.360 And we saw in earlier chapters that more equal countries have higher overall levels of attainment in many different fields.
THE POLICY FAILURE
Politics was once seen as a way of improving people’s social and emotional wellbeing by changing their economic circumstances. But over the last few decades the bigger picture has been lost. People are now more likely to see psychosocial wellbeing as dependent on what can be done at the individual level, using cognitive behavioural therapy – one person at a time – or on providing support in early childhood, or on the reassertion of religious or ‘family’ values. However, it is now clear that income distribution provides policy makers with a way of improving the psychosocial wellbeing of whole populations. Politicians have an opportunity to do genuine good.
Attempts to deal with health and social problems through the provision of specialized services have proved expensive and, at best, only partially effective. Evaluations of even some of the most important services, such as police and medical care, suggest that they are not among the most powerful determinants of crime levels or standards of population health. Other services, such as social work or drug rehabilitation, exist to treat – or process – their various client groups, rather than to diminish the prevalence of social problems. On the occasions when government agencies do announce policies ostensibly aimed at prevention – at decreasing obesity, reducing health inequalities, or trying to cut rates of drug abuse – it usually looks more like a form of political window-dressing, a display of good intentions, inten
ded to give the impression of a government actively getting to grips with problems. Sometimes, when policies will obviously fall very far short of their targets, you wonder whether even those who formulated them, or who write the official documents, ever really believed their proposals would have any measurable impact.
Take health inequalities, for example. For ten years Britain has had a government committed to narrowing the health gap between rich and poor. In an independent review of policy in different countries, a Dutch expert said Britain was ahead of other countries in implementing policies to reduce health inequalities.361 However, health inequalities in Britain have shown little or no tendency to decline. It is as if advisers and researchers of all kinds knew, almost unconsciously, that realistic solutions cannot be given serious consideration.
Rather than reducing inequality 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, obesity or drugs.
Every problem is seen as needing its own solution – unrelated to others. People are encouraged to take exercise, not to have unprotected sex, to say no to drugs, to try to relax, to sort out their work–life balance, and to give their children ‘quality’ time. The only thing that many of these policies do have in common is that they often seem to be based on the belief that the poor need to be taught to be more sensible. The glaringly obvious fact that these problems have common roots in inequality and relative deprivation disappears from view.
The Spirit Level: Why Greater Equality Makes Societies Stronger Page 21