Talking about inequality

Economic inequality has been in the news a lot lately.  In several speeches since last summer, President Obama has said it was his "highest priority" to halt growing inequality and then called it "the defining issue of our time." It is also my understanding that Obama's State of the Union address on Tuesday will focus on income inequality and economic mobility.  Other politicians, including Bill de Blasio, the recently inaugurated mayor of New York City, have also latched on to this theme. 

We are seeing a shift in the conversation about economic inequality.  But where will it take us?

Eye-catching statistics

Oxfam recently released a report that has also been getting a lot of attention, pointing out that the world's 85 richest people have more accumulated wealth than the poorest 50 percent of the world's population (3.5 billion people).

In the U.S. in 2010, about 20 percent of all income went to the richest 1 percent of the population while the bottom 90 percent grabbed slightly more than 50 percent of the income (a good graph illustrating this is here). The Economist recently reproduced a graph by Janet Gornick of the Luxembourg Income Study Center showing that, among a group of the world's wealthiest countries, the U.S. has the most unequal distribution of income. And recent evidence suggests that greater income inequality leads to less social mobility. 

Inequality in the newspaper

The national newspapers display not only the degree of attention being given lately to inequality but also the widely divergent views of its significance. One recent Monday morning I was catching up on the news and was struck by the number of pieces talking about inequality. Here is a sample of the stories found in the Jan. 20 online version of the New York Times:

·      Two of the Times' prominent op-ed columnists took on contrasting views of inequality.  

David Brooks argued we should not be distracted by rising incomes for the wealthy and instead need to focus in improving social mobility for the poor by having honest conversations about the cultural, social and behavioral problems that contribute to economic inequality.

Paul Krugman, on the other hand, seemed to be arguing that the "undeserving rich" are largely responsible for the lack of opportunity facing the poor and "American capitalism as currently constituted is undermining the foundations of middle-class society."

·      In a different section of the paper (I still like to call it that, even when I read it on a screen) one article discussed how poverty creates many problems for the poor, including increased emotional and behavioral problems.  

Another article a few pixels away discussed how wealth creates many problems for the rich, including increased emotional and behavioral problems.

You do not have to read these articles (although I urge you to do so) to see that the topic of economic inequality is ripe for discussion.   

But are we prepared to do so?  I see two potential problems.

Can we talk about this?

The first is a lack of a mutual understanding about what we mean by inequality. A mutual understanding is especially hard here because when we ask, "inequality of what?" There are many legitimate answers. Wealth? Income? Opportunity? Resources? Political access? Legal treatment? Liberty? Happiness? I suspect I missed some, and most of the options I listed are subject to multiple meanings. A discussion of economic inequality must begin with a discussion about what "economic inequality" means.

The second potential problem has nothing to do with inequality itself but instead with our ability to talk about it. I occasionally teach a course for first-year students where we practice the art of dialogue. On the first day of class we discuss an essay, "Notes on Dialogue," by Stringfellow Barr that seems relevant here. He begins:

Everybody is loudly demanding dialogue, and there is not much evidence that most of us are prepared to carry one on.

Although he is speaking specifically about television, Barr's elaboration seem to apply to much of public discourse:

There is a pathos in television dialogue: the rapid exchange of monologues that fail to find the issue, like ships passing in the night; the reiterated preface, "I think that . . .," as if it mattered who held which opinion rather than which opinion is worth holding; the impressive personal vanity that prevents each "discussant" from really listening to another speaker and that compels him to use this God-given pause to compose his own next monologue; the further vanity, or instinctive caution, that leads him to choose very long words, whose true meaning he has never grasped, rather than short words that he understands but that would leave the emptiness of his point of view naked and exposed to a mass public.

I do not mean to imply that Barr is describing the writers I cited earlier, although each is probably guilty of at least one of these transgressions.  Instead, Barr's general critique of public dialogue gets at the source of my concern about inequality - that we are left longing for a dialogue that we are ill prepared to carry on, on a topic we have not yet been able to define. 

Dialogue in the liberal arts

There are many reasons I love places like Luther, and here is another one: if meaningful dialogue on economic equality can take place anywhere, it is here.

The first-year students that read the Barr essay were also asked, early in the semester, to prepare rules for class discussion. These were essentially their list of best practices for good dialogue. Here is a paraphrase of the rules set down by my class in the fall of 2011:

·      Listen

·      Participate

·      Prepare and keep focused

·      Be open minded

·      Keep at it

·      Disagree constructively

·      Have fun

Wouldn't it be great if we could have a dialogue about inequality constrained only by these rules? If inequality is truly one of the defining issues of our time, we ought to try.

Holland Steve 2012Steve Holland, Luther associate professor of economics, has taught in the Economics and Business department since 2005, focusing on the topics of microeconomics, environmental economics and public policy. He was traveling and teaching in the southeastern European nation of Montenegro for the 2012-13 academic year as a recipient of a Fulbright award. Some of his course topics at Luther include intermediate microeconomic theory, principles of economics, environmental economics, and law and economics.

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Comments

  • February 6 2014 at 5:58 pm
    John Lavender

    I can understand how discussions concerning inequality can and did cause people to lose their heads. As an antidote to these such problems, I would like to propose a model based on the nonexistence of money.  I am suggesting that all economic discussions be based on a barter system.  This is to suggest that whether one discusses supply & demand curves, equilibrium, The General Theory by J.M. Keynes, price system and resource allocation, Free to Chose by M. Friedman or even the Price of Civilization by J.D. Sachs; it is done within the framework of no common unit of exchange.  How does one develop a real world model of economic theory with out using money? Perhaps this is not possible, yet I believe that truly understanding inequality and what can be done about it requires a model to understand the issues of inequality.

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