For a long time now, rich countries have been getting richer. As countries get richer, a lot of good things happen on the back of it. The population’s health improves, life expectancy rises, education improves, more people can get an education, and unemployment rates lower.
At a certain point, this pattern stops. A lot of rich countries today are now so rich that economic growth and increasing the average material living standards no longer directly impacts health, education, and unemployment. As countries reach this threshold there’s something else that starts driving these important metrics, and it’s the level of equality among their citizens.
More equality is better for everyone. It doesn’t matter if you’re talking about a country, a state, a city, or a company. When inequality among citizens of a country lowers, the health expectancy rises. Not just among the poor and not just on average. Even the life expectancy of the rich rises. In The Spirit Level, the authors compare data about 21 developed countries, as well as the states of the US. They looked at several indicators of health and well-being. The most interesting ones for me being:
- Level of trust
- Mental Illness (including drug and alcohol addiction)
- Life expectancy
- Children’s educational performance
- Imprisonment rates
- Social mobility
How is it that we have created so much mental and emotional suffering despite levels of wealth and comfort unprecedented in human history? None of this has been a conscious choice. We didn’t set out to become this rich. We are continuously trying to improve our situation. That’s true for people but also countries and companies. When you add up all these small incremental improvements you eventually end up in our current world of plenty.
Because we never made a conscious decision about this growth, we also never considered the impact of all this material wealth. Nor did we think about how it should be spread out across the world population. Everyone is making their own small improvements and because of that feels that the results of these improvements are theirs. We fail to recognize that we are lucky. Living in a part of the world without any major natural disasters is lucky. (Mind you, this could change when sea levels rise as my house is already below sea level.) Having a good education is lucky. Being able to learn in the way the education system demands is lucky. Living in a mostly functioning democracy is lucky. I didn’t do anything to deserve any of this. I just got lucky.
The COVID-19 pandemic and the economic crisis that it caused has made it even clearer how much luck is involved in leading a good and easy life. Many people who had a very good job 6 months ago are out of work today. If your job was in the tourism or event branch the pandemic has pretty much killed your line of work. If you are working as a contractor the economic crisis might mean that you lost your assignment without much notice. None of us have chosen our line of work thinking “what job would be the safest bet during a pandemic?”. If you still have a job you’re lucky. And we have to share that luck or at least the income that we are enjoying because of it, with the people who aren’t as lucky.
Intuitively it makes sense that more equality is better for everyone but when it becomes personal it’s less straightforward. A majority of people want society to move away from greed and access towards a way of life more centered around values, community, and friendship. But to adjust your own life is a different thing altogether.
Personally, I’m happy paying all of my taxes and I regularly give money to charities but voluntarily giving away large amounts of money or accepting a lower income would require me to take several long hard looks at myself. I can only assume that this feeling doesn’t change when you have millions or even billions (although I can’t say this from personal experience).
So how do we ever get to a society with less inequality? The earlier in the process we start, the more impactful and less painful it is. The best place to start is education. Ensuring that everyone has access to quality education, regardless of the color of your skin or the amount of money your parents earn is a good start. Investing in pre-school for all kids can be a huge equalizer. Primary schools that are funded based on the average income (or tax being paid) in the neighborhood where the school is located significantly increases inequality. Schools and pre-schools should be properly funded by governments. Unfortunately, few governments make this a priority. In the end, it might be a choice between paying for social benefits to limit inequality and using public expenditure to cope with social harm like increased health problems and larger prison populations.
Another option is to limit inequality in salaries or redistribute money through taxes. You can argue that some jobs should make a bit more money than others but the differences that we see today can’t be defended, nor are they beneficial for the well-being of anyone, rich or poor.
Structural policy changes will be hard to achieve but the first step is to raise awareness of the impact of inequality on our societies and the people living in it. This starts with all of us. I encourage you to look into the impact of inequality in general and the level of inequality around you. Think about it and talk about it with others. There won’t be a quick fix but everywhere we are able to limit inequality we will improve the well-being of everyone involved.
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