The Spirit Level – Why more equal societies almost always do better (2009) by Richard Wilkinson and Kate Pickett is an interesting book. The book looks at the link between inequality and various social measures across countries and between individual US states. The authors go through their data and then present a prescription for how they think the problems should be tackled.
The start by pointing out that as income rises from very low levels life expectancy shoots up and then plateaus at around the 20-30 thousand dollar per person per year mark. They then construct a measure for inequality, the ratio of the bottom quintiles earnings compared to the top quintile. The also construct a synthetic benchmark to construct an index of health and social problems that includes level of trust, mental illness, life expectancy, obesity, children’s educational performance, teenage births, homicides, imprisonment rates and social mobility that are all equally weighted. Japan does best overall on the index. When the two are compared it becomes apparent that income inequality correlates very well to their combined score. The present a graph that shows the relationship. It, and other graphs for social mobility do not come with labels on the axes, which is disconcerting. The graph also does not present the correlation between inequality and the index. For the first graph presented this does not present a big problem, but for later graphs that do not appear to correlate nearly as well it does. For a book that hinges on the relationship presented it would be really good to go into more detail about how strong the relationships are. Some are clearly very strong, others look fairly weak. Also the income inequality measure used for the US state comparison is the GINI coefficient.
There are also some interesting implications in comparing countries. The US is about 100 times larger than Ireland and is about 30 times larger than the largest Scandinavian country.
Income inequality is then compared to many social ills. The parts of the bench mark are compared to income inequality and the relationship from the original graph is, as it were, shown in piece. The correlation doesn’t appear to be as good, but when all the indices are added together becomes clearer. The authors give explanations as to why they believe income inequality causes each of the problems.
The growth of inequality in the US and the UK is looked at, which is worth doing because the US and UK have seen inequality rise substantially since the mid 1970s while the other countries compared have seen it stay at similar levels. It would have been good to see a historical comparison with the other countries. There is surprisingly little exploration about why inequality in the US and UK should have increased so substantially while in many others it has hardly changed. It would also surely be worth looking at how reducing the vast US prison population or improving US health outcomes would have on inequality.
The authors then go on to present their idea of policies to change things. They also present very silly comparisons of companies against states. They quote UN Conference on Trade and Development as saying: “Exxon is biggest in terms of value added 63Bn making it comparable to Chile or Pakistan.” This is interesting, Chile’s value add, or GDP is 169Bn and is ranked 41st in the world and Pakistan’s is 167Bn and is ranked 45th. The go on further to say that by other measures half the world’s largest economies are companies and how Daimler Chrysler ( now Daimler AG ) with an operating income of 2.3Bn Euros is comparable to Poland with a GDP of 525Bn.
The book goes on to state that economic growth should not be such a big goal and that reducing inequality should be a major goal. They also want to enshrine this in ways that are not changeable by a change of parties. These are curious ideas. Given that by their own statistics economic growth and wealth does not correlate with inequality which they then correlate with a range of social ills it should be possible to have more wealth and more equality.
The book is very interesting, it reminded me of Gross National Happiness, a book from the right that had different conclusions to this one. Both books combine what are appear, at least to a layman, as fairly solid results and then go on to make far less solid prescriptions for society based on the author’s beliefs. The Spirit Level could have been a better book if it had some more exposition on some of the graphs and more labeling and more exploration of why some countries have become more unequal than others. But it is nonetheless an interesting view of statistics across countries.