Inequality, Income, & Macaques

Suppose you had to choose between two pieces of legislation. One would reduce inequality between the incomes of the rich and the poor, making the nation more egalitarian, but would reduce the incomes of everyone, making everyone a little or a lot poorer. The second would raise the incomes of nearly everyone, but would raise the incomes of the rich faster than those of the middle and lower classes. If that's your only choice, which do you choose?

Conservatives will have little trouble with this question. Liberals, I suspect, will be at least a little conflicted. Liberals are talking a lot right now about rising inequality, but they run into a problem. It's easy to feel that there is something wrong when the gap between the incomes of the rich and not so rich widens, but not so easy to say what is wrong with it. I can spend the money I make. What can I do with the gap between my income and that of Oprah Winfrey?

Nicholas Kristof went fishing for an answer and hauled in a book. From the New York Times:

There's growing evidence that the toll of our stunning inequality is not just economic but also is a melancholy of the soul. The upshot appears to be high rates of violent crime, high narcotics use, high teenage birthrates and even high rates of heart disease.

That's the argument of an important book by two distinguished British epidemiologists, Richard Wilkinson and Kate Pickett. They argue that gross inequality tears at the human psyche, creating anxiety, distrust and an array of mental and physical ailments — and they cite mountains of data to support their argument.

Kristof surveys the evidence and the argument. The result is pretty murky. One problem is the confusion of correlation and causation, a persistent dilemma for social scientists.

Among rich countries, those that are more unequal appear to have more mental illness, infant mortality, obesity, high school dropouts, teenage births, homicides, and so on.

They find the same thing is true among the 50 American states. More unequal states, like Mississippi and Louisiana, do poorly by these social measures. More equal states, like New Hampshire and Minnesota, do far better.

All that tells you is that there is a correlation between poverty and social dysfunction. It doesn't tell you whether poverty caused the dysfunction or vice versa. It certainly doesn't tell you that inequality itself is causing the dysfunction.

The bigger problem is confusion between the influence of abstract numbers and the concrete experience of competition.

There's similar evidence from other primates. For example, macaque monkeys are also highly social animals, and scientists put them in cages and taught them how to push a lever so that they could get cocaine. Those at the bottom of the monkey hierarchy took much more cocaine than high-status monkeys.

Among primates, including macaque monkeys and software designers, success provides its own high. That's the way brains work. Successful dominance floods the mind with happy neurotransmitters. So I have no trouble believing that cocaine is more attractive to a macaque that has just lost his job, his pickup truck, and his girl to the monkey next door.

I do have trouble believing that the down on his luck macaque is much influenced by bar graphs illustrating the rising income inequality since the 1970's. What eats at one of us primates is not what some guy he never met on Wall Street is making. It's what the macaque who got promoted ahead of us is making. That stress is very real and no doubt it contributes to a lot of downward spirals.

There is no remedy to the stress of competition except to reduce or eliminate competition. That isn't altogether impossible. The New York Times explains how this worked out for young people in Southern Europe.

Even before the economic crisis hit, Southern Europe was not an easy place to forge a career. Low growth and a corrosive lack of meritocracy have long posed challenges to finding a job in Italy, Greece, Spain and Portugal. Today, with the added sting of austerity, more people are left fighting over fewer opportunities. It is a zero-sum game that inevitably pits younger workers struggling to enter the labor market against older ones already occupying precious slots.

As a result, a deep malaise has set in among young people. Some take to the streets in protest; others emigrate to Northern Europe or beyond in an epic brain drain of college graduates. But many more suffer in silence, living in their childhood bedrooms well into adulthood because they cannot afford to move out.

I won't comment on the differences between Northern and Southern Europe. See correlation and causation above. Notice instead the words "a corrosive lack of meritocracy." That means a restriction on competition. These governments have tried to guarantee a place to as many people as possible. Those who get a coveted job surely suffer from less stress. Perhaps they use less cocaine. Meanwhile you have a 29 year old university graduate with knowledge of five languages who has to live in her parent's home because she can't ever find a job.

Income inequality in America is largely worse than in Europe. Is Europe a model we should adopt? We may in fact be facing the choice described at the beginning of this post.

Comments

[William]

Unless one is taking the position that there is a fixed amount of wealth in the world and one person's gain is anothers loss, I don't see why tracking the percentages of who owns what is in any way a meaningful exercise.

[George Mason]

As Winston Churchill stated: "The problem with capitalism is the inequality of income, the problem with socialism is the equality of misery."

[Donald Pay]

The key here is that humans evolved within a society that was economically egalitarian, but had a merit-based hierarchy that depended on leadership traits that could use and coordinate the skills of a group of people to benefit the group, not themselves. Humans accepted leadership of others based on a stronger knowledge base or demonstrated abilities that lead to survival. The key was that no one in the group starved or went without necessary shelter from the elements. Leaders did not attempt to accrue for themselves a vast store of goods that set themselves apart from others.

[William]

Donald,

That may well be true, but that form of social organization doesn't scale well...

[larry kurtz]

In ecoscience the results you cited are of a trophic cascade: “Trophic cascades may also be important for understanding the effects of removing top predators from food webs, as humans have done in many places through hunting and fishing activities.”

In South Dakota, it could be said that the absence of Fortune 500 companies has allowed the number of mesopredators to emerge to eke out an existence within the parameters you have described and now we reap the result: social eutrophication.

“Often, the desired Trophic Index differs between stakeholders. Water-fowl enthusiasts (e.g. duck hunters) may want a lake to be eutrophic so that it will support a large population of waterfowl. Residents, on the other hand, may want the same lake to be oligotrophic, as this is more pleasant for swimming and boating. Natural Resource agencies are generally responsible for reconciling these conflicting uses and determining what a water body’s trophic index should be.”

Macaques have predators; humans have oligarchs.

Want a free market? Think Cuidad Juarez.

[Jimi]

Larry,

Rapid City is a prime example of what you speak. For many years a few people, names I don't wish to mention, controlled Rapid City with an Iron Fist. They prevented growth, prevented opportunity all in the name of maintaining power, and growing their own personal wealth.

I probably differ from you on the solution to that problem!

The focus and exposure to the decisions that prevented the large corporations and unique buisness from entering the area, including the regulatory envirnoment are the keys to turning that situation around.

[Jimi]

One problem South Dakota will always have though is it's Geographical Isolation. Cheap Labor is the only draw for new buisness.

[Donald Pay]

Finally, Jimi and I can agree on something. I knew a man who moved to Rapid City after a career with Raytheon. He came to Rapid City to start a small business that would manufacture military equipment. He wanted the best workers he could get, so he planned to pay them about double the going rate in Rapid in order to entice experienced workers from elsewhere to move to Rapid to train the rest of the work force. He was promised some government assistance to set up his business, but was told not to pay "California wages." The powers in Rapid City didn't want to have to start competing for workers with a company that was paying a living wage.

[KB]

Donald: I agree that the evidence points toward egalitarian social structures among our pre-agricultural ancestors. With no surplus to support an army, big men were limited by the fear their size inspired. It seems likely that early tribesmen were rather resistant to dominion by the big man.

The rest of your description sounds idyllic. I am sure some groups took good care of the weakest members, and that might have been the rule rather than the exception. Was it universal? I doubt it. I am very skeptical of your notion of leadership based on the good of the group. In hunter-gatherer societies, the best hunters tend to share liberally. That has a lot to do with the fact that sharing increased their status and status translated into more mating opportunities. Besides, there were no refrigerators.

At any rate, it seems very unlikely that human beings evolved to experience stress as a result of inequality. We experience stress as a result of losing. Let us suppose this situation: a tribe divides into two hostile factions, one without much distinction of rank among its members, and the other organized around a powerful and charismatic hero. There is a battle,the hero wins, and the egalitarians are exiled from the good lands. Who is likely to experience more stress: the followers of the victorious leader or the egalitarians who now get to live with less inequality? I expect its the former who will enjoy a little rush of serotonin.

[larry kurtz]

We call the gulch, "the Deadwood Triangle." Just try to leave and the crabs pull you back in.

Sound familiar?