V
ILLAGE has always tended to support a vision of equality of out-
come in society. Unfortunately, the most widely supported form of
equality is equality of opportunity. Since it has more of the quali-
ties of “freedom” than of “equality” even Margaret Thatcher revered it,
for example. Unfortunately, too many human rights these days are being
pursued on the back of equality of opportunity rather than equality of out-
come. One of the regrettable symptoms of this is that the victims of topical
forms of discrimination seem to have little empathy for, or solidarity with,
victims of other types of discrimination.
It is good to see a refocus of the equality debate on issues where out-
comes can easily be measured – on income, and wealth. Issues of equality
of opportunity cannot so easily be measured since opportunity can be
intangible. A lot of the re-orientation is down to Thomas Piketty and his
recent book ‘Capital in the Twenty-First Century’ which draws on extraor-
dinarily wide-ranging objective data and which is admirable too for
drawing attention to the influence of policy on inequality as manifest in
perverse income and wealth distribution.
Almost everyone in economics and (therefore) mainstream politics had
for years agreed that higher taxes on the rich and re-distribution to the
poor have hurt economic growth.
As Paul Krugman has noted “liberals had generally viewed this as a
trade-off worth making, arguing that it’s worth accepting some price in
the form of lower GDP to help fellow citizens in need. Conservatives, on
the other hand, have advocated trickle-down economics, insisting that
the best policy is to cut taxes on the rich, slash aid to the poor and count
on a rising tide to raise all boats”. But, because of the Great Recession and
Piketty, fashion has moved phenomenallyswiftly to a different view, that
there isn’t actually any trade-off between equity and inefficiency, that
inequality has become so extreme that it’s inflicting economic damage so
that redistribution – taxing the rich and helping the poor – may well raise,
not lower growth rates.
The latest manifestation of this surprisingly comes from economists
at Standard & Poor’s with their beguilingly titled “How Increasing
Inequality is Dampening U.S. Economic Growth, and Possible Ways to
Change the Tide”. The fact that a reviled Ratings Agency is addressing
economic inequality suggests that a debate that has been largely confined
to the academic world and left-of-centre political circles could become
practical.
Piketty analyses historical data to show that at the end of World War II
the top % in Ireland, the UK and the US, for example, collected about
% of all national income. The share collected by the wealthiest people
dropped in the subsequent decades and then rebounded from the mid-
s. At the start of the new millennium the concentration of income at
the top was back at around pre-war levels, though it dipped in the Great
Recession. In the US incomes of those in the top % have now recovered
and surpassed pre-crisis levels, though in Ireland the Gini Coefficient
seems to suggest that efforts over the last few years to redistribute wealth,
through taxation and welfare, have been successful, though absolute lev-
els of deprivation for the poorest are at crisis levels and shockingly, in
Budget for example, the lowest income group lost proportionately
more income than any other group.
On the back of the data, in ways that are redolent of Karl Marx’ views
on Capital, Piketty makes the case that it is inevitable that the returns to
capital will be higher than those to labour, and that since the richest already
have more capital, they will inevitably simply continue to get richer (at
least unless a global tax on capital is imposed). Piketty, a mild man, con-
siders this a problem for economics, but eschews the ethical issues it poses.
He therefore posits a theory that is fragile: in the event equality were once
again deemed bad for the economy, presumably it might be justifiable to
jettison equality. As an economist, Professor Piketty’s focus is too
narrow.
Village believes equality of outcome is an ethical not an economic imper-
ative. We are all equal from birth, and equal moral agents. If we designed
a social contract with these essentials as the starting point, with a veil of
ignorance as to our actual circumstances and prospects (or a radical open-
mindedness as to how nourishing society could be), we would see that
equality of outcome is the optimal politics. Society’s goal is to recognise
that, distributing resources to reinforce that underlying equality - by pro-
moting equal outcomes.
Unfortunately the debate about equality – and its different forms -
remains very crude, partly because those who benefit from inequality
want to keep their privileges.
We need to promote structures that address overall levels of inequality
but which also focus on pre-existing difficulties for the very least well off.
And we need to ground the structures in ethics, rather than economics. •
VILLAGEAugust/September
Equality of outcome:
an ethical imperative
EDITORIAL&LETTERS
Also in this section:
Ivana Bacik on women in prison 6
John Gormley on 2015 tsunami 7
Sinéad Pentony on tax cuts 8
EDITORIAL
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