The Economics of Enough_ How to Run the Economy as if the Future Matters - Diane Coyle [67]
Wilkinson and Pickett’s book is not in the same category, being a more scholarly study. But it overclaims on the basis of the evidence presented. Some of the correlations they describe show great variation in the relationship with inequality, or patterns strongly suggesting that other factors apart from inequality are playing a causal role. Social and cultural norms are the likely explanation. The causal mechanism is unclear as well, particularly for their claim that even the best-off in unequal societies suffer from the inequality. If the low status that comes with poverty in an unequal society explains why people on low incomes are more likely to be obese, say, why are people on high incomes in that society more obese than high-income people in a more equal society? What is it about American inequality that makes rich Americans fatter, on average, than rich Danes? Other social factors must surely be involved (as economists have indeed shown).44
Having said that, in some of the areas these and other authors explore, the extremes of status resulting from income inequality clearly do have an adverse impact on many people. The evidence is strong that stress-related illnesses such as heart disease and depression are more prevalent in situations where people on low incomes have a correspondingly low status and lack of control over their lives. Wilkinson and Pickett present this evidence in chapters 6 and 7 of their book, including a description of the classic “Whitehall Studies,” long-term studies of the health of male civil servants in the United Kingdom. Although all the people in these studies were in white-collar jobs, those in the lower ranks were found to have significantly worse health outcomes, overturning the earlier presumption that it was top businessmen who were most likely to suffer heart attacks because of the stress and responsibility of their positions. On the contrary, it is the lowliest who suffer the most damaging stress, and it is lack of control rather than excess of responsibility that causes it. Perhaps the most damning piece of evidence in this vein is research from 1990 showing that black men in Harlem were less likely than men in Bangladesh to reach the age of sixty-five.45
So there’s little evidence to support the view that inequality harms the rich elite, but it certainly harms the less privileged. As the economist John Kay put it, inequality means that
rich Americans may suffer more stress and greater risk of crime and be surrounded by a crumbling public infrastructure. But affluent people in the US believe that their higher material standard of living and the greater opportunities available to their children make them better off and it is very difficult to present a convincing argument that they are wrong. So we shall just have to continue believing that bankers’ bonuses and preposterous remuneration packages for chief executives are bad for society, not that they are bad for the bankers and chief executives.46
THE SOCIAL CORROSIVENESS OF INEQUALITY
The second area in which there is evidence for the damage caused by great inequality is trust. As I will point out in chapter 5, “trust,” an abstract concept like social capital, is hard to define and measure. The figures used derive from the World Values Survey, or similar national surveys, which ask respondents whether they agree that “most people can be trusted.” Wilson and Pickett present cross-country correlations (and also for U.S. states) showing a negative correlation between levels of trust and the degree of inequality, although with quite wide variation around the line of best fit between these two variables.
The reported level of trust in the United States and elsewhere has declined substantially over time.47 Much of the attention on this point has focused on the United