Income Inequality and Social Stratification: Causes and Consequences (Vol. VII)
This book is a complete revision of Poverty and Wealth, the size of the gap between the "haves" and the "have-nots" has important social, political, and economic implications, and is at least as important as the number of "have-nots" in that society. It explicitly acknowledges that poverty and wealth are interdependent rather than independent phenomena, a fact that has important public policy implications. Finally, it emphasizes the need to think more broadly about the differences -- race, class, and income -- that separate us from one another.
The authors presented in this book are themselves a fascinating lot, aside from the many interesting and important things they had to say about the topic at hand. Almost to a person, they were integrative thinkers with intellectual histories that spanned multiple academic disciplines, philosophy being a common thread running through the entire group. They were a creative and courageous bunch, willing to challenge conventional wisdom and to take unpopular positions against overwhelming odds. Virtually all were intellectually gifted (almost frighteningly so), many were self-taught, and all were voracious readers. Most came from economically disadvantaged families and many were immigrants or the children of immigrants. They had an abiding faith in education, were fiercely opposed to injustice, cared deeply about human dignity, and were driven by a desire to make the world a better place in which to live. If you read closely and listen carefully to what they are saying, you will see that each, in his or her way, is searching for an answer to the question, "What is it that matters in life?"
As I reflect on all that I have learned in the process of preparing this book, I am more steadfast than ever in my belief that the analysis of inequality requires multiple disciplinary perspectives. This volume pulls together an eclectic set of readings -- classical and contemporary, from economics, sociology, political science, philosophy, and business -- on the subject of income inequality and social stratification. Considerable care was taken to ensure a balanced perspective. No one point of view is disproportionately represented by the authors included herein. The book is designed to stimulate discussion and spark debate, to raise questions but not necessarily to answer them. Some readers may be disappointed by the absence of essays advancing solutions to the problem being discussed. Unfortunately, space constraints precluded any examination beyond causes and consequences.
It may come as a surprise to learn that there is broad disagreement regarding the extent to which social and economic inequality is considered problematic. And there are not just two sides to this debate. People who consider inequality a problem, for example, may disagree with one another over the extent to which it is an individual problem versus a societal one. If not for people like Du Bois, Hacker, and Sinclair, we might easily forget that we are talking about people's lives when we talk about inequality and stratification. Regarding the social consequences of inequality, there is much that I wish could also have been included in this book. For example, Ted Gurr's (1970) argument, that inequality gives rise to a "frustration-aggression response"[1]. A similar argument in an international context opens the door to a discussion of the extent to which inequality contributes to transnational terrorism.
For people who believe that inequality is a problem, there is still the question of what to do about it. Here, the debate over the role of government in the marketplace assumes central importance. Friedman and Rand argue on both moral and economic grounds that government should not intervene, the Catholic bishops and Okun take the opposite position, and Bentham would weigh in with a decisive "it depends." Ultimately, however, the debate over policy turns back on itself, and we find ourselves once again talking about causes. Just as the questions we ask determine the kind of answers we get, so, too, the causes we identify influence the kind of solutions we adopt. The different policies adopted by liberals and conservatives, for example, reflect differences in the way the problem was defined rather than differences in the underlying economic, political, and social realities giving rise to the problem.
Banfield (1974) argues that individuals are poor because their decision-making time horizon is too short. While everyone discounts future events, i.e., diminishes their importance, people with very short time horizons are more likely to ignore them altogether. Such individuals are less likely to invest in education, for example, because they perceive the costs of going to school, which are borne largely in the present, to exceed the benefits of going to school, the majority of which do not materialize for quite a while. These same individuals are more likely to engage in criminal activity since they "see" the benefits but not the costs. To the extent that one's time horizon is determined at an early age through the process of socialization -- Banfield's contention -- public policies to ameliorate poverty, and thus inequality, are unlikely to change attitudes and behaviors in any meaningful way. This theory, which would probably resonate with Rousseau, drew harsh criticism in the 1970s because (a) some people saw it as "blaming the victim," (b) it challenged Lyndon Johnson's War on Poverty, and (c) it led Banfield to suggest removing babies from their families and placing them in an environment where they would be more appropriately socialized.[2]
It is here, too, that the difference between inequality and poverty becomes crucial. If redistributive policies that transfer wealth from the "haves" to the "have-nots" give rise to disincentive effects that inhibit work effort, the size of the economic pie might actually shrink as a result, leaving less for everybody. Smith and Rand would think this likely, but Mill and Marx might not. Even if equality comes at the expense of efficiency, as Okun suggests, is that a reason to forego redistributive policies? If Eitzen is right and inequality does give rise to undesirable consequences, what price should we as a society be willing to pay to reduce the damage it causes? How do we put a price on human dignity? How do we measure the economic and social consequences of diminished human potential? Is this something that government should do and, equally important, is this something government is capable of doing? Friedman and Rand would take one side on both these questions, while Sinclair, Hacker, Du Bois and the Catholic Bishops would take the other. Veblen and Thoreau might smile sardonically and shake their heads in dismay.
This book lacks an international perspective, which might strike some readers as unforgivable in light of the growing interconnectedness between our way of life and the events taking place elsewhere in the world. Interestingly, the jury is still out on the impact that globalization has on the distribution of wealth and power. The standard party line in economics, that free trade benefits all trading partners, has been subjected to considerable scrutiny, and is beginning to show some signs of strain. The need to do business in an increasingly competitive global economy places significant constraints on the ability of both corporations and governments to pursue social goals at the expense of economic efficiency. Satellite broadcasts of American television shows and global distribution of American movies have raised international awareness of the disparity between living conditions in the U.S. and those enjoyed by people in other countries, shifting the focus from poverty in absolute terms to poverty in relative terms.
[1] Gurr, T. R. (1970). Why Men Rebel
[2]Banfield, E. C. (1974). The Unheavenly City Revisited. Boston: Little, Brown and Co.
