Cowen on Inequality

In today's NY Times, Tyler Cowen (economist at George Mason) makes the following astonishing claim about economic inequality:

The broader philosophical question is why we should worry about inequality — of any kind — much at all. Life is not a race against fellow human beings, and we should discourage people from treating it as such. Many of the rich have made the mistake of viewing their lives as a game of relative status. So why should economists promote this same zero-sum worldview? Yes, there are corporate scandals, but it remains the case that most American wealth today is produced rather than taken from other people.

What matters most is how well people are doing in absolute terms. We should continue to improve opportunities for lower-income people, but inequality as a major and chronic American problem has been overstated.

The notion that we should only care about "how well people are doing in absolute terms" appears to be completely untethered from any plausible conception of human flourishing and its relationship to distributive justice. One reason that Catholic teachings on economic justice are so powerfully persuasive is that they are rooted in a realistic conception of human nature that rejects the unstated individualistic premises about human nature underlying Cowen's op-ed.

Cowen is surely correct that "life is not a race against fellow human beings." But neither is it the case that individual lives are hermetically sealed pursuits in which our absolute well being can even be measured in isolation from what happens to others. For starters, as Cornell economist Robert Frank has argued, most people actually care about their relative position in society -- so making someone at the top even better off than they already are by itself makes other people less well off in a real and measurable sense.

The connection between our own well being and the well being of others does not depend just on the fact that we might be envious of the wealthy, but also on the fact that conventions of social participation are sensitive to the well being of others. Adam Smith understood, for example, that what we legitimately consider to be a necessity will depend upon our particular cultural and social context. Drawing on Smith's insight, Amartya Sen has argued that -- even for someone who accepts an objective and universal account of human flourishing -- the resources human beings need to flourish will vary from culture to culture and, within the same culture, from era to era. As societies become wealthier, what each individual needs in order to meaningfully participate in that society will also become more elaborate and expensive.

So, for example, not having indoor plumbing in this country in the mid-19th century or a telephone in the early 20th century did not make you shamefully poor. Today, when our society as a whole is much wealthier and virtually everyone has indoor plumbing and a phone, not having either one would inescapably place you on the margins of society, substantially hindering your ability to participate meaningfully in the social life of your community. Insensitivity to inequality -- reflected in Cowen's insistence that we should focus narrowly on absolute well-being -- ignores the social dimension of human flourishing and, by extension, the social dependence of the answer we give to the question which resources we need in order to flourish.

Relatedly, but perhaps more deeply, Cowen ignores the extent to which society is a joint venture -- that we are all, rich and poor, in this together. Maintaining this joint venture as a going concern requires a degree of social cohesion and other-regarding concern, what the Church calls "solidarity." And, as the Second Vatican Council put it in Gaudium et Spes, excessive economic inequality, by itself, undermines that solidarity, and therefore weakens the viability of the social order:

[E]xcessive economic and social differences between the members of the one human family or population groups cause scandal, and militate against social justice, equity, the dignity of the human person, as well as social and international peace.

When the richest are allowed to rise too high above the poorest, even when those poorest are not thereby made worse off in absolute terms, they tend no longer to see themselves as having anything in common with the rest of us or having much at stake in the satisfaction of the needs of the poorest. When inequality exceeds certain bounds, the rich are able to structure their lives so that they never have to interact with the poor and so that the poverty of the poor has almost no impact on their own well being. They insulate themselves from life in society and can come to fool themselves into thinking that their fate is not bound up with the rest of us. You see this very concretely when you travel to highly unequal societies, where the rich live their lives in little bunkers and simply try to keep the poor from intruding. I think you can see similar tendencies emerging in this country.

In the 1980s, the American Bishops forcefully addressed the problem of inequality in the specific American context, arguing:

Catholic social teaching does not require absolute equality in the distribution of income and wealth. Some degree of inequality not only is acceptable, but also may be considered desirable for economic and social reasons, such as the need for incentives and provision of greater rewards for greater risks. However, unequal distribution should be evaluated in terms of several moral principles we have enunciated: the priority of meeting the basic needs of the poor and the importance of increasing the level of participation by all members of society in the economic life of the nation. These norms establish a strong presumption against extreme inequality of income and wealth as long as there are poor, hungry, and homeless people in our midst. They also suggest that extreme inequalities are detrimental to the development of social solidarity and community. In view of these norms we find the disparities of income and wealth in the United States to be unacceptable. Justice requires that all members of our society work for economic, political and social reforms that will decrease these inequities.

And the inequality the American bishops found unacceptable in the 1980s has only worsened in the ensuing years.