A good deal of popular liberal political and economic commentary treats a country’s level of economic inequality as a rough indicator of the justice or injustice of its institutions. This kind of pop liberal egalitarianism would suggest that the results laid out above should put our minds at ease. But I think the inequality-as-justice-barometer view is based on a mistake and is bound to confuse and distract us. The reason not to get up in arms about the United States’ level of income inequality is not that it’s really pretty decent, considering. The reason not to worry about it is that the level of income inequality is a fact astonishingly devoid of morally relevant information and at best shares a common cause with real problems.
As Wilkinson points out, the US and Ghana have approximately the same level of income inequality and yet no one would doubt that the US is superior in almost any measurable way. Moreover, whatever differences in take-home pay might exist in the US, consumption inequality in the US is much lower than income inequality. As has often been noted, but little discussed when liberals are in the room, poor people in the US have a much higher standard of living than the vast majority of the outside world. Doesn't mean I want to be a single mother working the night-shift somewhere, but lower income Americans have much more purchasing power thanks to low-price outlets like Wal-Mart. OK, so that's not the same as shopping at Whole Foods or Neiman's, but is that really a social injustice, the correction of which ought to be the focus of progressive politics, economics, and media interest?
The idea that income inequality = social injustice is a fundamental tenet of the Left. Maybe Paul Krugman, Barack Obama, Nancy Pelosi, et al. are not literally Marxists, but their world-view is certainly marxist in a sort of "Pop Marx" kind of way. If there is some maladjustment in American society leading to an unjust level of income inequality, then of course (naturally!) the government should do something about it. That's the reasoning, anyway. But this speaks to a world view that - for all of its Princeton-approved rhetoric - that is almost pitifully stunted. I well remember years ago (I think during Bush 41's term) that Ted Kennedy, while agitating for an increase in the minimum wage, said "We need to give these people a raise!" As if minimum wage workers were sitting around waiting for the gummint to step in and "give" them raises! I realized Kennedy was either (1) an idiot who didn't know how employers determined their employees' wages or (2) was a cynical a**hole manipulating the resentments of the credulous poor. It's been years, and I still haven't answered that question.
Of course, there may be a limit to how much this sort of class resentment can work. I live in a very economically mixed neighborhood with professional couples, retired civil servants, Russian & Chinese immigrants, and mansion-dwelling folks like Robin Williams all living within a half mile of one another, if not next door. If there is any sort of broiling resentments in our neighborhood, I have never heard of it. Ultimately, whatever we may believe we are "owed" as members of an economic class, we never forget our common humanity and recognize that we are not frozen in place but in flux (economically speaking) with people moving up and down the ladder as they age, learn skills, etc.
Paul Krugman, or whoever, wandering in and declaring that we live in an unjust society might work in the abstract, but it certainly doesn't reflect the everyday experience that average Americans have with one another. That he and his cadre would seek to inflame resentments that would not otherwise exist is yet another reason to not listen to them at all.
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