A Pragmatic Argument Against High Inequality

“It is important not to think that pragmatic arguments about inequality always support the status quo. There are also strong pragmatic arguments against high levels of inequality. Excessive inequality can have all sorts of undesirable practical consequences. Two considerations are particularly important here: the impact of inequality on the costs of social control and the impact of inequality on democracy.

First, high levels of inequality can be costly to a society in a variety of ways. High inequality fosters resentment and conflict. It undermines community and erodes a sense of common fate and mutual obligation among people. This situation in turn fuels crime and social disorder, which negatively affect productivity and economic efficiency. Social conflict and disorder are costly because of their directly destructive effects as well as the social control costs needed to contain them: police, prisons, security guards, and so on. These drains on the economy are all linked to inequality. The social resentment and erosion of a sense of social solidarity generated by inequality also undercuts general values of cooperation and mutual obligation, thus reducing productivity within work itself. Where inequalities and competition are intense, more managers and supervisors are needed to ensure work discipline—and this, again, reduces economic efficiency. There is, finally, compelling empirical evidence that high levels of inequality undermine average levels of health and well-being in a society, not just the well-being of people at the very bottom.[1]

The second critical effect of high levels of inequality concerns its impact on democracy: high inequality concentrates material resources in the hands of elites in ways that enable them to have a vastly disproportionate influence in political life, both at the local level and at higher levels of the political system. Furthermore, because high inequality erodes the sense of everyone being in the same boat—we are all in this together—the influence of wealthy elites on state policy tends to serve their interests over those of the broader public.”

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[1] A thorough discussion of the impact of inequality on average health and well-being using a wide variety of indicators can be found in Kate Pickett and Richard Wilkinson, The Spirit Level: Why Greater Equality Makes Societies Stronger (New York: Bloomsbury Press, 2010).

Wright, Erik Olin and Joel Rogers. 2015. American Society: How It Really Works, 2nd ed. New York: W. W. Norton & Co. [From Chapter 11, Thinking about Fairness and Inequality, pp. 245-256; Section 4, A Pragmatic Argument against High Inequality, pp. 255-256. Picture added. Footnote in original.]