Is income inequality one of the most significant threats to justice in our age? Some voices in the marketplace say so. They argue that the wealthy are becoming wealthier at the expense of the poor. If this were true, it would truly be one of the most significant justice issues of our day. However, this version of reality relies on the zero-sum myth of economics.
Debunking the Zero-Sum Myth
In her book, More than Enough, Lee Hull Moses illustrates the zero-sum myth with the scarcity of sleds during a surprise North Carolina snow storm. There weren’t enough sleds to go around (inequality) until those with sleds yielded their sleds to those without sleds. Everyone was able to have a good time once the inequality was leveled.
Moses shares this illustration to make a point about the broader economic world. One person’s wealth comes at the the price of another person’s poverty.
Hull’s example works for the narrow example of sleds during a Southern storm. It works because of extreme scarcity of sleds and the fact that the desired wealth in this limited scenario is entirely material. Hull’s illustration is not, however, a good example of the problem of poverty in the broader economic world because economics is more complicated than a few sleds in a snowstorm.
Jay Wesley Richards debunks the zero-sum myth by noting it relies upon the notion that all wealth is bound to matter. Thus, he argues in Money, Greed, and God, according to the zero-sum myth, when someone has wealth, she is directly depriving others of that wealth. For activists like Lee Hull Moses who are grieved by economic inequality, this is the source of great guilt. However, Richards explains it just isn’t true.
For example, Richards tells the story of a simple trading game. In this game, each child in a classroom is given a trinket of approximately equal cost, such as gum, candy, toys marketed to girls, toys marketed to boys and more. Each child is asked to score the value of their trinket. Next, they are offered the opportunity to trade and then to score the value of the trinket again. Interestingly, if you add the children’s scores together, the scores go up after the trade.
The total cost of the toys stays the same, but the value of the toys increases.
Why? Because value is not always tied to the number or configuration of molecules. The boys in Richards’ classroom are much happier when they trade their Barbie memorabilia for the boys’ toys (that the girls were only too glad to get rid of). The total value goes up because nearly everyone either likes what they started with or has something they like better.
However, in this situation, absolute equality remains out of reach because the value of objects is not fixed. There will be always be inequality when someone prefers what another person has.
Though he views income inequality as a justice issue, Ryan Avent of the Economist offers another illustration of the non-materiality of wealth in his book, The Wealth of Humans. He argues that one of the most significant forms of capital in our present age is “social capital.” For the individual worker, social capital can take the form of a network of family and friends, a set of behaviors or a knowledge of how a system works. For a company social capital is the ethos of the company, which includes its brand and the culture of the company.
Both for the individual and the corporation, there is something immaterial that adds value. Clearly having a culture of productivity at one company does not mean that another company cannot have the same, nor does it mean that the other company is impoverished because its rival has a better internal vibe. There may be some competitive advantage involved, but this merely proves that value is not limited to molecules.
Income inequality is not necessarily the cause of poverty.
Income Inequality is Not Our Biggest Problem
There are a couple of clear lines of evidence that demonstrate that income inequality isn’t as much of a problem as some would like you to believe. First, despite the rapid growth of wealth at the top end of the income scale, the percentage of the world population living in abject poverty has actually drastically decreased over time. Second, though income inequality is growing, the life expectancies and per capita gross domestic product have gone up drastically for the entire world since the Industrial Revolution.
The world still has many problems, but income inequality is not necessarily the cause of poverty. In fact, though income inequality is on the rise, the poor are significantly better off now than at any time in human history.
As we work for a more just society, we need to ensure we are seeking the appropriate solutions to existing problems. If income inequality does not result in direct deprivation of the poor, then eradicating inequality is not a worthy goal. Instead of trying to take down the top income bracket, our energies would be better spent in providing greater opportunities and just social structures for those in lower income brackets to enable them to improve their standards of living.
Alleviating poverty is a worthy goal that reflects true justice. We should look for ways to accomplish that goal that encourage cooperation by all stakeholders rather than inciting guilt and conflict.
Comments and Pingbacks
2019-10-12 10:45:48
Christian Vanderbeck
"Next, they are offered the opportunity to trade and then to score the value of the trinket again." While an interesting perspective, the example falls apart and actually scores the problem with income inequality. Even in this example, there's a fixed number of trinkets (even though the value isn't fixed) so it is a zero sum game. Imagine if the teachers gave ALL of the trinkets to 3 of the 20 children and then asked those 3 people to distribute them however they liked, or none to anyone. Any of the trinkets they don't give out they get to take home. Even if they were forced to give all but one away, it is impossible to believe that those 3 children would distribute them equally among their classmates. They would give the most to their friends and the weird kid at the back of the class would get nothing. We see this play out with Valentines day cards. Even 30 years ago my teacher forced us to buy a card for EVERYONE, otherwise there were some children that wouldn't get a card at all. The example played out when it WASN'T a zero sum (fixed number) of cards (although some gave an extra valentine to people they liked). The reason that Jesus preached about charity is because we (all animals) are biologically driven to acquire and accumulate. It is why greed is part of the deadly (original) sins. God recognizes this as a failing and knows people have to be TOLD to be charitable. Please don't just delete this comment. I'd be interested in hearing your opinion on this.
2019-10-14 12:44:43
Andrew J Spencer
Christian, Thank you for taking the time to write such a lengthy comment. I appreciate the question. This post highlights the fact that inequality is not the primary issue with poverty. The concern that you raise about the trading game and your counter example of the Valentine's Day cards deals with the issue of scarcity. As I note in the brief summary of the problem with sled distribution in paragraphs 2-4, scarcity is a problem that leads to poverty (in that case the poverty of not being able to sled). That is a different issue than inequality. This post deals with inequality. Inequality and scarcity can be contemporary issues, most often with relation to material goods. Inequality on its own is much less a problem than many critics make it out to be, as this post argues, in part because value is more often ascribed based on non-material characteristics in our idea economy. We should certainly be concerned about material scarcity. As Christians we are called to work to see the basic needs of our neighbors met. How we meet those needs should be tempered by the situation. In cases where immediate scarcity of basic goods is the problem, such as in areas with significant famines or undergoing natural disasters, aid-type charity is certainly a necessary approach. In general, aid is for crises, development work tends to be for longer term concerns. In skills-poor areas, development-type charity might take the form of some sort of education or training, which is designed to help the population enter into the marketplace and become self-sufficient. Access to markets is often one of the most significant contributors to long-term poverty in developing economies. If you are particularly interested in this dynamic between aid and development, you might find the video series, "Poverty Cure" helpful, or the series of books from the Chalmers Institute by Brian Fikkert and several of his colleagues in the "When Helping Hurts" series. Much of this is also discussed in David Jones' book, "Every Good Thing." At the same time, in situations when scarcity is not the main problem, attacking those who hold more value (and have acquired it honestly) is likely to undermine incentives and lead to injustices. As Leviticus 19:15 reminds believers, we are not supposed to favor either the rich or the poor, but to pursue justice. Mere inequality does not indicate an injustice that must be remedied, which is the point of this post. Thank you again for your comment. I encourage you to read through more of the Intersect posts, since other authors have, I think, dealt with scarcity in greater detail than this post was intended to address.