A common theme among the Occupy Wall Street crowd and its supporters is that inequality in the United States has skyrocketed over the last thirty years.  Often, statistics about increasing inequality – and income inequality in particular – are put forward as examples of self-evident injustice.  In this post, I want to suggest that things are not this straightforward.  Recognizing that much more could be said about each of these points, here are a few thoughts to bear in mind when thinking about the relationship between inequality and social justice.

• There is very little reason to think that inequality of outcome is necessarily unjust.
  • Sergey Brin makes more money than I can ever hope to make.  Is this unjust?  I don’t think so.  He made his money by making the world a much, much better place than he found it.  Ken Lay’s wealth was a very different story.  In general, whether inequality is unjust seems to depend on how the inequality came about, not just (not at all?) on the absolute magnitude of the inequality.
  • My sense is that the position I express here is a non-idiosyncratic – perhaps even the dominant – position among political philosophers.  For example, very few philosophers today are simple egalitarians.  Many more are luck egalitarians.  But luck egalitarianism is distinguished from simple egalitarianism just by holding that inequality of outcome is not per se morally objectionable – only inequality that is the product of brute luck is.

• Often when we think inequality of outcome is bad, it is because we are confusing inequality with insufficiency – we are confusing having less than someone else with not having enough for a decent life.
  • Would income or wealth inequality be troubling in a society of people who all had the purchasing power of billionaires?
    • (Aside: isn’t this exactly how the United States looks to most of the rest of the world today?)

• Even if inequality of outcome as bad, there’s no good reason to think that income inequality is the right way to measure it.  Why not inequality of wealth?  Or inequality of consumption?  Or happiness?
  • After all, if income matters morally, isn’t it because of the way it contributes to our overall wealth?  Is there anything morally objectionable about a society in which very wealthy people have very low incomes?
  • Even wealth, though, is just a means to an end.  If wealth matters, it’s because of what it can buy us.  And if Aristotle was right, then what we can buy matters only insofar as it contributes to our happiness.  So isn’t happiness inequality what really ought to trouble us.
  • While income inequality has arguably increased dramatically over the last thirty or so years, however, inequality of consumption and happiness have not.
    • (Aside: Some people think relative wealth makes a bigger difference in people’s happiness than absolute wealth.  Does the relatively flat trend of happiness inequality combined with the relatively steep increase in income inequality tend to undermine this claim?)

• Even if income inequality does matter, it’s not clear that we are measuring it correctly.
  • I’m no economist, but the message I get from listening to them is that a lot depends on the details – whether we’re measuring income before taxes and transfer payments, or afterwards.  Whether we’re tracking households or individuals.  Or whether we’re correctly adjusting for inflation.

• Even if income inequality matters, and even if we’re measuring it correctly, none of this is relevant unless we take into account economic mobility.
  • Here’s a scary-looking fact: between 1975 and 1997 the wealthiest 20% went from receiving 43.2% of the national income to receiving 49.4% of it.  The bottom 20%, in contrast, went from receiving 4.4% to receiving 3.6% (US Treasury Dept., via Steve Horwitz)
  • But this is much less scary once you recognize that the people who constituted the bottom 20% in 1975 are by and large not the same people who constituted it in 1997.  In fact, most of the people who were in the bottom quintile in 1975 had moved out of it by 1997.
  • (It’s even less scary when you take into account economic growth.  4.4% of the total national income in 1975 is probably a much smaller figure than 3.6% of the total national income in 1997.)
  • For more on mobility and economic growth, take a look at Steve Horwitz’s excellent short video here.

None of this is to suggest that the OWS crowd is wrong in thinking that there are serious injustices in our political/economic system.  And it’s certainly not meant to cast doubt on the claim that much of the inequality that we actually find in the United States is the product of injustice – of processes that would be identified as unjust, moreover, but almost any political theory, libertarian, Rawlsian, socialist, or otherwise.  But there’s a sense among the OWS protesters (though it’s common among protesters for other social causes as well) that the nature and existence of the injustice they seek to eliminate is obvious.  An apparent corollary of this belief is that those who disagree with their prescriptions are stupid or evil.  And that all that’s required to make positive change is to develop the willpower to do what we already know is right.

Maybe it’s the philosopher in me, but this kind of attitude always rubs me the wrong way.  Things are rarely so simple.  Here, as in so many other involving complex social issues, there is room for reasonable people to disagree not merely about what ought to be done to correct injustice, but about what really ought to count as an injustice in the first place.

UPDATE: My original post failed to include a link to Will Wilkinson excellent Policy Analysis report on Inequality.  Wilkinson actually makes many of the same points I do, though with much more supporting detail and evidence.  My only excuse for omitting the link is that I read it so long ago and found it so compelling that the arguments just slipped into the background of my mind in the set of “things that are clearly true.”