Is the growing divide between rich and poor a danger for society?

I grew up in Southern Ontario with my parents and my five siblings in a very small three bedroom “wartime house.” My father was a labourer in a steel factory, and my mother did a tremendous job stretching his weekly pay cheque out to provide all the necessities for us. (I’ve always thought my mother would have been an excellent minister of finance.) We always had good food to eat, thanks to my mother being a great cook and a wise shopper. We had few frills. I was happy with one new hockey stick each year to replace the old one, which was either worn or broken. One year I got a hockey net as a Christmas present — what a thrill that was!

If there was a special occasion coming up, my sisters would ask my mother if they could buy fabric to make a dress. They were all able to sew their own clothes, again thanks to my mother.

So you can imagine what a big deal it was one year when I got a brand new pair of store-bought corduroy pants to celebrate going back to school again for another Fall. I must have been about 10 years old or so, and I absolutely loved these forest green (!) corduroy pants. I seem to recall that there was some hesitation on my mother’s part when she bought them for me, but in the end she splurged.

You can also imagine that she wasn’t too thrilled when I came home from the first day of school with my brand new pants ruined by having a big tear in one of the knees, thanks to a fall during a tackle obtained while playing football during recess. She was mighty unhappy that I ruined such a beautiful pair of pants the first time I wore them, but she stitched them up for me and I wore them for the rest of the school year. If my memory is correct, there were no further mishaps with that pair of pants, and I believe I even handed them down to my younger brother.

To this day I dislike wearing fancy clothes of any kind. I squirmed on Sundays when I had to wear church-going clothes, as I could barely do anything without getting warned every few moments to stop whatever I was doing so I wouldn’t ruin my “good clothes.”

I typically teach in blue jeans. When I was using a chalk-board, it was the easiest thing to clean my hands by wiping them on my jeans; the chalk didn’t show, and nobody was the wiser. I can’t do that when I wear dress pants (it’s not such an issue now that I use a tablet computer for teaching) … and besides, they feel unnatural, like I’m wearing pajamas in public.

I bring all this up as a reminder of how different life was just 40 years ago. We had few frills, but then neither did any of our neighbours. Yet we had lots of time to visit with friends and relatives, and as children we had lots of time to play. Life was good.

I also bring it up to support this passage from Raj Patel’s The Value of Nothing, which I am currently reading (see pages 35ff):

At an international level, one of the most important pieces of research on money and happiness is called the Easterlin paradox, named after economist Richard Easterlin. In a 1974 article, he found that people with higher-than-average incomes reported being happier than their poorer counterparts. No big surprise there, but he also found that once a country had moved beyond a level of income where basic needs for housing, food, water and energy could be met, average happiness did not increase. The paradox, in other words, is that after a certain point, more money doesn’t make us happier. Instead, we find ourselves on a hedonic treadmill, in which happiness is about matching our level of consumption with our peers, and when they do better and we don’t, even if we are better off in absolute terms, we are less happy.

Patel goes on to say that it is possible for a nation to increase its average happiness level, but it is very costly to do so: it takes great increases in average wealth to produce small increases in average happiness. Nevertheless, current economic thinking is still plagued by the misconception that utility is measured in monetary terms.

Patel continues:

In the meantime, of course, happiness within the economy is dictated by the difference between people’s expectations of relative income and their actual capacity to achieve it. Many people with BMWs and $3 million houses report that they are, in fact, happy, which is why those who are unhappy are encouraged to think of themselves as dysfunctional, and to seek psychotherapy. As Cornell economist Robert Frank argues, happiness achieved through the acquisition of yachts and Rolexes has profound social consequences, particularly when inequality is increasing. The gap between the richest and poorest has been growing steadily —between 1979 and 2005, post-tax income for the top 1 percent [nearly tripled], while for the poorest fifth of the population, it went up by 6 percent. More and more wealth is concentrated in th hands of a few, whose lifestyles are glorified by the media, which means that the expectations of the majority have become increasingly beyond their means. We become less happy with goods that, ordinarily, we’d have been overjoyed with. Think about your television —chances are that five years ago you’d have been more than happy with it, but today, not so much. Nothing has changed about your TV, but confronted by hours of brazen and subliminal advertisements for flatter, bigger, brighter ones, all of a sudden, it seems clunky.

The inflation of what are known as “positional goods” — the kinds of goods that reflect your social status back to you and to society — is why rising inequality makes the majority of people less happy. Worse, this inequality is rising internationally, which might explain the recent rise in crime in Bhutan — once the world’s happiest nation. The steep dive in the country’s gross national happiness, an index of how well its people are doing, independent of what they earn, coincided with the importation of satellite television by the new Oxford-educated king of Bhutan. Television’s images of impossible lifestyles, body shapes, clothes and accessories have resulted in not only a deep resentment but a crime wave, as young people steal in order to afford the trinkets sold on Rupert Murdoch’s Star Network. TV presents a world unattainable to the majority of people both in the United States and Bhutan and, in seeking to recover their happiness, the youth have gone shoplifting.

Makes sense, doesn’t it? But the larger point is that the growing income disparity is simply immoral; the deck is unfairly stacked in favour of the super-rich, and this is not right. Tax laws that are supposed to ease income disparity in fact help the rich to get richer. There are so many loopholes that only the rich can access that many rich individuals and corporations end up paying no income tax. A simple flat tax would be more fair than what we have now, and would free up an army of accountants (now dedicated to helping people avoid income taxes) to exert their efforts towards improving the world.

My aunt Caterina’s sarcastic mock-prayer is on point:

Dio / aiuti i aiutati / perche noi altre / ormai siamo abituati.

Translation: “God, please help those who have no need of help, because for the rest of us — well, by now we are accustomed to our lot.”

For two additional perspectives on income disparity and its danger to society, see Margaret Wente in yesterday’s Globe and Mail, and Carol Goar in the Toronto Star from the day before yesterday.

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About Santo D'Agostino

I have taught mathematics and physics since the mid 1980s. I have also been a textbook writer/editor since then. Currently I am working independently on a number of writing and education projects while teaching physics at my local university. I love math and physics, and love teaching and writing about them. My blog also discusses education, science, environment, etc. https://qedinsight.wordpress.com Further resources, and online tutoring, can be found at my other site http://www.qedinfinity.com
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