Is Equality Good For You?

An article on the BBC website today commented on the rising inequality as a consequence of globalization. Here is a little snippet: snippet

"Perhaps the crucial question is whether unequal countries grow faster.

If they do, might a bigger cake, with unevenly divided slices, be better for the poor than a tiny cake cut into equal but tiny pieces?

After all, the most conspicuously successful economy of our times is that of the relatively unequal United States."

Now, I think it is debatable whether unequal countries grow faster than equal ones. The debate is really futile though, since equality is just one factor that contributes to a countries (sustainable) growth. I believe either could contribute to growth in the short run, depending on other existing factors such as the beginning level of development, population, health, infrastructure, political relations, just to name a few. For growth to be sustainable in the long run, you really need egalitarian growth. One reason that I think the United States has gotten away with the huge gains being received at the top without any real gains at the bottom is that those at the bottom are still able to subsist. The vast majority, which includes pretty much everyone except maybe the bottom 10-20% are able to live at least semi-comfortably. Since most are able to attain the basics needed for the lowest form of human existence, they may feel more content in their social and economic position as opposed to those who have no food or shelter or clothing. Not to say that those at the bottom of American society are well off or will forever be content. The increasing downward pressure on the lower class, compounded by health care and education problems may very well lead to drastic changes in the future, in the direction of a more egalitarian distribution. I suppose that the passion and urgency in which these changes are sought are higher when the basic demands of life are not met, which is usually not the case in this country.

I started this post wanting to comment on the idea of the United States being the most economically successful country in the world, but I have obviously digressed. I think I'll leave those thoughts for another post (maybe later tonight).