Tuesday, August 28, 2007

Positive Inequality

I have assigned a good article, "The Rise and Fall of Narratives of Benign Inequality," the lead essay by David Grusky and Szonja Szelenyi in their fine Inequality Reader. They start with functionalist arguments made in the 1940s and 1950s that inequality serves a social purpose. They review several arguments that inequality is benign because it is declining. Then they outline some of the more recent arguments that inequality is bad in ways previously unexplored, such as in creating terrorism or environmental degradation.

Yet they never really take up the challenge of the functionalist argument. What Kingsley Davis and Wilbert Moore argued in their famous article of 1945, for example, is that inequality serves a positive good. Society needs to get people with rare talents and/or training into hard, socially useful jobs. Therefore, it is good for society if such positions carry more rewards. Hence, inequality is functional for all. The later studies that Grusky and Szelenyi consider are not arguments for the social necessity of inequality, but empirical studies of declining inequality. Since income inequality did not flatten out, as the Kuznets curve predicted, and has been rising lately in the age of Bill Gates, those optimistic studies of a generation ago seem naive.

Yet empirical studies of the rise and fall of actual inequality, especially of something so elastic as income, or wealth, does not address the main point raised by Davis and Moore: is inequality, in some form and to some degree, ultimately beneficial for all?


Anonymous said...

Without a doubt it is. For example I am a handyman and make a very good living serving wealthy people in and around the Dallas area. Wealth inequality is vital to my business and to the feeding and sheltering my family. Ayn Rand I think also speaks to this point.

Edith OSB said...

I grapple with this one too. I've seen arguments presented that focus on (a) how do we know that it's really "the best" who flourish as poverty keeps many high-IQ people from fulfilling their potential or (b) the housekeeper who disinfects the operating room is as important to the outcome as the brain surgeon.

The argument in (b) is a false comparison. In general, those who clean operating rooms are paid more than those who clean, say, fast food restaurants or motel rooms, and probably have better benefits. Not having devoted 12+ years of expensive post-high school education, the pay gap with the surgeon is appropriate.

The argument in (a) is more complex. There is a real loss of potential benefit to society. It is not inequality directly that generates it, but the side effects of poor schools, sometimes less attention from parents working two jobs (or single parenting), crime, and other poverty-related elements.

One rarely hears talk of David and Moore in discussing either the collapse of communism in Eastern Europe or China's economic surge when some capitalist elements were introduced. Soviet productivity simply failed to keep up in part due to a lack of incentives; China's burgeoned when the possibility of personal benefit entered the picture.

Thanks for this posting.

Gruntled said...

In a different Grusky reader, Social Stratification, he has an article by Szelenyi about the experience of socialist societies (the Szelenyis are Hungarians). They found exactly what you expected, Edith: the attempt to treat all jobs equally meant that the jobs that were hard to train for and stick with, such as surgery, could not keep and hold competent people when they were rewarded the same way easier jobs were.

Stuart Gordon said...

"Some men excel in keenness; others are superior in judgment; still others have a readier wit to learn this or that art. In this variety God commends his grace to us, lest anyone should claim as his own what flowed from the sheer bounty of God. For why is one person more excellent than another? Is it not to display in common nature God's special grace, which, in passing many by, declares itself bound to none?"

John Calvin, Institutes of the Christian Religion, II.ii.17.