Growth saves the poor
ANGER about economic inequality in the US dominated the presidential election. But while polemics about the issue have flourished across the political spectrum, clarity has not.
Look, for example, at the Illinois state constitution, adopted in 1970. It sought to “elimin a t e p ov e r t y a n d inequality”.
Note the linkage of poverty and inequality. It sounds good. Who wouldn’t want to eliminate both? But think it through.
Eliminating poverty is obviously good. And, happily, it is happening on a global scale. The World Bank reports that the basics of a dignified life are more available to the poorest among us than at any time in history, by a big margin.
We need to finish the job. But will we really help the poor by focusing on inequality?
Anthony Trollope, the great English novelist, gave an answer in Phineas Finn in 1867. His liberal heroine suggests that “making men and women all equal” was “the gist of our political theory”. No, replies her radical and more farseeing friend, “equality is an ugly word, and frightens”. A good person, he declares, should rather “assist in lifting up those below him.” Eliminate poverty, and let the distribution of wealth work.
Economic growth has been accomplishing exactly that since 1800. Equality in the most important matters has increased steadily, through lifting up the wretched. The enrichment in fundamentals for the poor matters far more in the scheme of things than the acquisition of more Rolexes by the rich.
What matters ethically is that the poor have a roof over their heads and enough to eat, and the opportunity to read and vote and get equal treatment by the police and courts. Restraining police violence matters. Equalising possession of Rolexes does not.
Princeton philosopher Harry Frankfurt put it this way: “Economic equality is not, as such, of particular moral importance.” Instead we should lift up the poor, in the style of Trollope’s radical liberal, to a level Frankfurt labelled “enough” – enough for people to function in a democratic society and to have full human lives.
Eminent philosopher John Rawls articulated what he called the Difference Principle: If the entrepreneurship of a rich person made the poorest better off, then the higher income of the entrepreneur was justified. It works for me.
It is true conspicuous displays of wealth are vulgar. But they are not something that a nonenvious principle of public policy needs to acknowledge.
Poverty is never good. Difference, including economic difference, often is. It is why New Yorkers exchange goods with Californians and with people in Shanghai, and why the political railing against foreign trade is childish. It is why we converse, and why today is the great age of the novel and the memoir. It is why we celebrate diversity – or should.
A practical objection to focusing on economic equality is that we cannot actually achieve it, not in a just and sensible way. Dividing up a pizza among friends can be done, to be sure. But equality beyond the basics in consumption and in political rights isn’t possible in a specialized and dynamic economy. Cutting down the tall poppies uses violence for the cut. And you need to know exactly which poppies to cut. Trusting a government of selfinterested people to know how to redistribute ethically is naive.