Migration and Human Rights (44): Welfare State Incompatible With Multiculturalism?

David Miller has argued in favor of an affirmative answer to this question. My view is different. Miller’s story goes somewhat like this. The welfare state predates multiculturalism: most western countries have adopted some form of welfare state in the late 19th century or during the first half of the 20th century, whereas these countries only have become truly multicultural in the second half of the 20th century (as a result of decolonization, guest worker programs etc.).

According to Miller, a welfare state requires a strong sense of national solidarity. People will only contribute to the welfare system if they know that others contribute as well and that they themselves will be protected by the contributions of others when things turn bad, when they get sick or old or when they lose their job. Hence, everyone should contribute in the same way and rules about reciprocity and fairness should be respected. A welfare state is only possible when society is a warm nest where everyone cares for everyone, looks after everyone and uses the system in a fair and reciprocal manner. Free riders by definition don’t care about others and if there are too many of them, the welfare system breaks down.

Miller fears that a multicultural society can undermine support for the welfare state because large immigration flows can undo the fairness of the system. This fairness is based on the assumption that you can only withdraw from the system if first you have contributed to it (reciprocity). Newcomers are often seen as people who withdraw without contribution.

In a sense, this is the classic welfare tourism argument. It’s a popular argument against multiculturalism and immigration, especially on the right of the political spectrum, and it’s disappointing to see a noted philosopher give credence to it. He should know better. Why? Well, first, it’s simply not true that immigrants abuse the welfare system. Some do, of course, but in many cases immigrants withdraw comparatively less than natives and they often have higher labor force participation. Furthermore, many of the native poor withdraw a lot more than they contribute, over a lifetime. This “unfairness” is identical to the supposed unfair use of the system by immigrants, and raises similar complaints about the “undeserving poor”. And yet, even though the unfairness is the same, it doesn’t result in arguments that all welfare states are impossible. Or is unfairness only a problem when colored people are unfair?

Hence, Miller seems to be rushing to accept defeat in the face of xenophobia. He preemptively gives up the attempt to widen the circle of empathy and to correct misinformation about unfairness. If it is really the case that a population loses trust in and withdraws support from a welfare system because it believes that solidarity is only something for “people like us” or because it believes that rules of fairness and reciprocity are violated, then perhaps we should try to change people’s minds rather than hastily agreeing with them.

Something about a similar argument by Milton Friedman – “you cannot simultaneously have free immigration and a welfare state” – is here. More on the role of group identity in public support for redistribution is here. More posts in this series are here.

Measuring Poverty (14): Measuring Income Inequality

Income inequality may or may not be the best definition of poverty,  but it’s certainly one that is often used. In many European countries, you’re counted as poor when your income is below 50% or so of the median income. Maybe this is the wrong way to measure poverty, but if you use absolute measures for poverty (such as a basic income, minimum consumption etc.) you’ll also face some problems. So it’s worthwhile to examine some of the usual methods for measuring income inequality and see how they hold up, while at the same time bracketing the discussion about poverty as either absolute deprivation or unequal distribution.

Methods for measuring income inequality

The Gini coefficient is the most widely used. It’s based on the proportion of the total income of a population that is cumulatively earned by a % of the population; a value of 0 expresses perfect equality where everyone has equal shares of income and a value of 1 expresses maximal inequality where only one person has all the income. A low Gini coefficient indicates therefore a more equal distribution. (The complete formula is here).

A disadvantage of the Gini measure is that it doesn’t capture where in the distribution the inequality occurs: is a society unequal because the top 1% has astronomically high incomes, because the poor are very poor, because there is practically no middle class, or because of some other reason?

Other measures are

  • the ratio of the incomes of the top 10% (best paid) to the bottom 10% (worst paid)
  • the proportion of a population with income less than 50% of the median income
  • a population may be split into segments, e.g. quintiles or deciles, and each segment’s income share is then compared to each other segment’s (for example, the top 10% of the population – “top” in income terms – has x % of total income)
  • some other measures are here.

These different measures can give contradictory numbers: two societies with the same Gini score can have different ratios of top-bottom, top-middle or middle-bottom incomes (see an example here). Hence, no single measure will tell us the last word about inequality in a society.

What is income?

The focus of all these measurement systems is income, but we should first decide what to count as income. Income doesn’t have to be cash or currency. A farmer in a poor country who grows his own products has non-cash income. Perhaps public services such as healthcare or education should count as income. And how about tax reductions, tax refunds, government benefits such as unemployment insurance, food stamps and various vouchers?

All those forms of non-cash or non-labor income are important when measuring income inequality because the poor profit disproportionately from those non-cash or non-labor related forms of income. Hence, including them in total income can make a large difference in income inequality numbers. (Higher income groups may have less or different tax refunds and their education may represent a smaller portion of their total income – the returns of their education may of course be higher, but those returns are typically cash based in the sense that they lead to higher labor compensation).

We should also decide if we want to use income before or after taxation; depends if we want to measure the effectiveness of redistribution or simply gross inequalities. And what about capital gains, imputed house rents from home ownership, inheritance etc. In general, how should wealth be included in income? Or shouldn’t it be?

How do we measure income?

Once we’ve solved the difficult problem of defining income, we’re still left with the practical problem of measuring it. Most cash income is captured in tax return data, but not all, and not equally well in all countries. Sometimes, you’ll need to use consumption data as a proxy for income data, or surveys about living standards. “Informal” income typically does not show up in tax data, but does in consumption data.

Another problem with measures of inequality is that they may be contaminated by notions of fairness. Some deliberately design their measurement system in such as way that inequalities look bigger than they actually are. For example, they use pre-tax inequalities because those are often larger than post-tax inequalities – a lot of tax systems are redistributive towards the poor (e.g. progressive taxation systems). Or they focus on income inequality when consumption inequality may have diminished. Others may mistakenly deduce evaluations of fairness or injustice from the simply fact of income distributions and forget that measures of income inequality are silent about who is on which side of the divide. If person A in a two person economy has twice the income of person B, then the measurement of inequality would be absolutely the same when B switches places with A. Measures of income inequality say nothing about who deserves what, about how income has been acquired, about whether some occupations should yield higher compensation (for example because we want the right incentives), or about how income should ideally be distributed.

And then there is the opposite mistake: assuming that income inequality is always necessary and just because it’s the automatic result of the fact that people have different levels of human capital and productive abilities. This is a mistake because it ignores a number of facts: no one has ever been able to prove that some abilities or occupations deserve higher wages from a moral point of view, and a lot of inequality is the result not of different abilities or efforts but of differences in luck and connections. Hence, fairness remains a legitimate concern. Contrary to the “left-wing mistake”, the “right-wing mistake” will not distort the measurement of inequality: if you believe inequality is not a problem you hardly have a reason for measuring it, let alone distort the measurement.

What I want to stress is how difficult it is to measure income inequality and how many mistakes we can make. This doesn’t mean that the numbers are rubbish. We should just be careful when drawing sweeping conclusions, that’s all.

Something more about the causes of income inequality, rather than the measurement of it, is here.

What is Equality? (2): Or, Equality of What?

As I mentioned before, when people talk about equality they mean equality of something very specific. The problem is, they hardly ever agree on the specifics. So it’s not uncommon to see two people talking about equality and actually talking about something completely different. And even when they’re talking about the same specific type of equality, they often disagree about its importance, its definition and its (lack of) merits.

Here’s a list of some of the types of equality that are frequently discussed:

  1. equality of respect and/or dignity
  2. equality of income or wealth (sometimes equality of consumption)
  3. equality of a bundle of basic resources needed for a minimally decent human life
  4. equality of capabilities
  5. equality of power (political and other power)
  6. equality of rights
  7. equality of luck or opportunity, i.e. equality of natural and social endowments.

I’ll skip the first one for now (I may come back to it in a later post) because it’s vague in its policy implications, and it’s those implications I want to focus on here. In fact, what do we want to do when we say that we want to promote one of the remaining 6 types of equality? And what are the likely problems we’ll face? Let’s go over them one by one.

2. Equality of income or wealth (sometimes equality of consumption)

Few people actually want to strive towards complete equality of income, wealth or consumption, for several good reasons.

  • First, people have different consumption needs and hence different income or wealth requirements. And I’m talking about needs, not preferences. People who prefer expensive stuff will have a hard time justifying the inequality of income or wealth that they require to satisfy their tastes. On the other hand, a blind person will have no difficulties making the case for a higher income. Preferences may also be problematic when they aim too low rather than too high. People who are born into deprivation and only see deprivation around them may adjust their preferences and expectations so that they are satisfied with their lives. However, it would be wrong to follow their preferences rather than their real needs.
  • And secondly, equality of income or wealth creates an incentive problem. See here. If people are not rewarded for their efforts, they may decide that their efforts aren’t worth their while, and society as a whole may be worse off as a result.

So equality of income is in fact shorthand for reduced income inequality. As we don’t want this type of equality to collapse into the next one (see number 3 below), let’s assume that we’re not talking about a society in which income inequality means that the people at the wrong side of the inequality are poor – poor in the sense that they lack the basic resources needed for a minimally decent human life. So, instead picture a society in which all prosper but some prosper a lot more than others.

Is that kind of inequality a problem? Many say it isn’t. Why should a university professor care about how much a business tycoon earns? However, income inequality in this sense can be problematic. It can, for instance, shock people’s notions of fairness and justice. If the professor successfully teaches her students about morality, and the business tycoon earns his wealth by polluting the earth, it may seem unjust that the professor should be rewarded less. Merit and desert are powerful ideals, and a society that systematically violates these ideals through its system of rewards may not be the ideal place to live.

Even if the tycoon earns his wealth by way of morally sound activities, there can be a problem of justice: perhaps he started life in an advantaged position compared to the professor, and therefore doesn’t (entirely) earn his rewards. Maybe the professor also wanted to become a tycoon, but her blindness forced her into a different career. (See point 7 below). And even if the starting positions are equal, the result of the tycoon’s wealth may be that he, compared to the professor, has a larger influence on democratic politics. (See point 5 below). This may destroy democracy, or at least result in a highly fragmented and therefore also unstable society.

So we have some good reasons to do something about this type of inequality. However, when we try to reduce – not eliminate – income inequality, we’ll probably reach a point at which redistribution starts to discourage people from being productive (the incentive problem mentioned above). Or not. Perhaps the loss of income they suffer because of redistribution makes them want to be more productive. Higher productivity can be the means to compensate for the loss of income. It’s not clear how strong these two possible effects are.

In any case, many of the problems caused by income inequality don’t need to be solved by way of reductions in income inequality. Unequal political influence generated by unequal wealth can be solved by limiting the influence of wealth on politics, rather than by limiting wealth.

More on income inequality here.

3. Equality of a bundle of basic resources needed for a minimally decent human life

Let’s now drop the assumption that we’re talking about a society in which all prosper, albeit unequally. That’s unrealistic anyway. Even in the richest countries on earth, there are many people who are unable to secure the bundle of basic resources necessary for a decent human life. There’s a theory called sufficientarianism that wants to focus, not on income inequality or relative poverty, but on absolute destitution. It claims, correctly I think, that all have a right to an equal bundle of basic resources and that this is what equality means.

The easiest way to make sure that people possess these basic resources is to give them enough money to buy them. For example, there’s a political movement advocating a guaranteed basic income (an income people receive whether they work or not; Philippe van Parijs is a notable supporter of this policy). But also employment benefits, healthcare benefits etc. aim to provide people with access to the basic resources necessary for a decent life.

The advantage of giving people money is of course that money is fungible: people can use it the way they want. That means it takes into account the fact that different people need different and different amounts of basic goods (take again the case of a blind person). If you give people basic goods directly, rather than the money necessary to buy them, then it becomes difficult to tailor the given goods to the specific and variable needs of individuals. An all-purpose means such as money is clearly better.

However, you’ll still have the problem that some people may need more money than others because they have basic needs that are more expensive, again not because of differences in taste or preferences, but because of different abilities. A blind person does not only need different resources but also more resources in order to lead a minimally decent human life. So we’ll have to factor in capabilities (see point 4 below). Hence, equality of basic resources, outside of the capabilities approach, isn’t enough. If that’s your goal, you won’t do justice to everyone.

An additional difficulty is that the composition of the bundles has to be different from one country to another, and not just from one individual to another. A minimally decent life in one society is more costly than in another one. In a highly industrialized and technological society, it’s more expensive to earn a living than in a society where, in a manner of speaking, you can just pick the fruit from the threes. If you add up all these differences in the content and quantity of the bundles you risk ending up with something very arbitrary. The whole concept of a basic bundle may lose its meaning.

Even if we assume that this type of equality does retain some meaning as a separate type of equality, we’re faced with the same incentive problem as in income equality, depending on how costly the bundle of resources is and how heavily we have to tax to produce it.

A final problem with this type of equality is one of fairness. The guaranteed basic income approach, as well as all other forms of unconditional provision of basic resources, seems to reward the lazy and punish the hard working. It’s reasonable to provide basic resources to people who are poor because of bad luck, lack of talents, bad health etc., but not to those who voluntarily choose not to be productive.

4. Equality of capabilities

So let’s turn to this next type of equality, which can be seen as a fine-tuning of the previous type. Why do we say that people need a bundle of basic goods for a minimally decent life? Because a minimally decent life means something. It means having the capabilities to engage in certain functionings that are part of a minimally decent life. These functionings include “beings and doings” (in the words of Amartya Sen), such as being nourished and in good health, taking part in community life, culture and thinking etc. People’s capabilities to achieve these functionings should be equalized. That doesn’t necessarily require a fixed and equal basic income. On the contrary, because a fixed basic income does not take into account the different levels of incapability across individuals. Some people need no help whatsoever. Others may need a lot. The blind person mentioned a few times already may need more than the average poor person, but perhaps less than a particular person who’s very deep in poverty.

The problem with this type of equality is the precise determination of the list of functionings and capabilities that really matter and that should be equalized. There’s a risk of paternalism, a lack of neutrality and a sectarian bias. Maybe a democratic approach to this determination can solve that problem. And that’s the link to the next type of equality.

5. Equality of power (political and other power).

In a democracy, people have – formally at least – equal political freedom. They all have the right to vote, to voice criticism or support, to campaign and demonstrate, to assemble and associate, and to stand for office. However, a lack in some of the other types of equality mentioned above may reduce the fair value and effectiveness of this democratic equality for a certain number of citizens, e.g. the poor, the blind, etc. As already argued, even prosperous citizens can have unequal power in a society with large income discrepancies (remember the professor and the tycoon).

So, if we want to promote this kind of equality of power, we first need to promote other types of equality. People may need access to basic resources in order to have the time and energy to devote to politics. And some of these resources are directly necessary for political participation (people have to drive to the polling station, read the newspapers etc.). However, equality of power can also be promoted without first promoting other types of equality. We can regulate campaign financing and access to the media and thereby limit the influence of wealth on politics. We don’t necessarily need to reduce wealth inequality to do that (although there may be other reasons to limit wealth inequality, see above). Equality of power, therefore, doesn’t necessarily collapse into other types of equality. It’s a concept that merits a separate existence.

Equality of power isn’t just equality of political power. Slaveholders have power over their slaves, husbands may have (had) power over their wives etc. Again, equality of power in these contexts can be promoted by first promoting other types of equality. If slaves and women are given basic resources then we reduce the cost of exiting the oppressive relationship as well as the power of the counter-party to keep them in that relationship. We may also want to given them equal rights.

However, I see that this post is dragging along and is now way past the saturation level, I guess. So I’ll stop here and just link to some previous posts dealing with the two remaining types of equality:

6. Equality of rights: here
7. Equality of luck or opportunity, i.e. equality of natural and social endowments: here

The Ethics of Human Rights (33): Different Types of Justice and the Link to Equality

What I want to do here is list some of the types of justice that are commonly identified, and see how they are connected to the concept of equality in order to find out if the traditional link between justice and equality holds up to scrutiny. So let’s first have a look at some possible meanings of the word “justice”.

1. Distributive justice

Distributive justice (often called social justice) is about the allocation of resources and burdens. Justice may require that this allocation is done in accordance with certain rights (e.g. an equal right to a basic standard of living), merit or other criteria. This type of justice is about the fairness of what people get (e.g. basic goods, recognition, rewards etc.).

2. Contributive justice

Contributive justice is the opposite: it’s about what people are expected or able, not to get, but to contribute to society. It’s mainly about work: should people be required to be productive members of society, and if they are, should they have a right to organize their contribution in a fair and just way (for example, is it fair or just that some people are bound to menial tasks while others have much more interesting work?).

3. Criminal justice

Criminal justice is about rectification of interpersonal harm, about the restoration (when possible) of an initial position disturbed by harmful behavior, about retribution and punishment, and about restitutions or reparations of previous harm. Criminal justice is therefore often called corrective justice, rectificatory justice or punitive justice. And sometimes these words are supposed to refer to entirely different (sub)types of justice because there can indeed be substantial differences: criminal punishment may be intended to correct or rectify a wrong (e.g. theft), but it can also be used as plain retribution or even vengeance when the wrong is such that it can’t be corrected (e.g. murder).

Some argue that criminal justice is a type of distributive justice. One interpretation of distributive justice sees it as the distribution or allocation of rewards and punishments according to merit or desert. Punishment for a crime is then distributive justice. But that seems to be stretching the meaning of the word “distribution”. A judge in some case does not distribute anything from the offender to the victim and the victim recovers nothing (e.g. in the case of murder). Those are precisely the cases in which criminal justice is not corrective. I think it’s preferable to keep these concepts separated.

Criminal justice includes the work of the Courts, but also less formal corrective or reparative models, such as truth commissions, apologies etc. Transitional justice, some forms of transgenerational justice, mob justice or vigilante justice also fall under this header.

4. Procedural justice

Procedural justice, unlike the previous types, isn’t about certain just or fair outcomes (just distributions, contributions or punishments), but about fair procedures. The focus is on the processes of arriving at a certain decision (judicial, political etc.). The rules governing the fairness of trials are an example of procedural justice, as are the rules governing legislation in a democracy. People will differ over the fairness or correctness of the legal or political decisions, but they can agree on the fairness of the process. In many cases, defendants in criminal trials or losers in democratic elections may be disappointed in the outcomes but accept them nonetheless because they see that there was fairness in the process; for example, they were allowed to make their case in public with equal resources, there was an impartial judge who weighed the different arguments and so on.

5. Other types

Other types of justice include divine justice (usually a mix of distributive justice for the poor and criminal justice for the sinful), poetic justice (the fateful infliction of harm upon the harm-doer), instrumental justice (doing justice in order to achieve something else, e.g. deterrence) etc.

The link to equality

How are these different types of justice linked to equality?

Distributive justice is often seen as the most egalitarian type of justice, because most interpretations of distributive justice see it as a kind of equalizer of basic goods. Everyone needs a fair share of basic goods, and that means an equal share. Poverty reduction is typically seen as an exercise in distributive justice. However, distributive justice doesn’t need to be egalitarian. Aristotle for example claimed that justice wasn’t merely equality for the equal but also inequality for the unequal: we usually sense that there is an injustice when a teacher gives the same grades to everyone, the meritorious as well as the lazy. However, you could say that even this merit-based type of distributive justice implies equality, namely equality between reward and merit.

Contributive justice as well focuses on an equal contribution in life’s pleasant and unpleasant tasks. Regarding criminal justice the picture is more blurred. Originally, criminal justice focused heavily on equality. The biblical lex talionis – an eye for an eye – was an explicitly – and horrendously – egalitarian form of punishment. The wrongdoer should suffer the same injury as his victim. That’s not fashionable anymore, but still we see that criminal justice strives towards some degree of equality or at least proportionality or correlation between the type of harm inflicted and the nature or weight of the punishment. It’s unfair to impose a life sentence for the crime of not paying your debts, or a fine for murder. Strict equality is, of course, often impossible: you can’t execute Hitler 6 million times. But sometimes it’s possible – i.e. in the case of theft or property damages – and we can demand full correction or rectification from the criminal. Most of the time, some kind of proportionality is more appropriate, not only because we want to avoid cruel punishments but also because we don’t have any other choice.

Procedural justice as well relies heavily on equality: an equal right to call witnesses, equal weight given to testimony, equal duration of arguments, equal access to courts and media etc. Even poetic justice is a form of equality because the wrongdoer suffers the same harm as he inflicted on or intended for someone else. In the story of Esther, for example, Haman is executed on the gallows he prepared for someone else. Something similar can be seen in all examples of poetic justice.

So, whereas justice is not the same as equality, the links between these two concepts are quite strong.

Lies, Damned Lies, and Statistics (19): Fun With Percentages

A certain company discovered that 40% of all sick days were taken on a Friday or a Monday. They immediately clamped down on sick leave before they realized their mistake. Forty percent represents two days out of a five day working week and is therefore a normal spread. Nothing to do with lazy employees wishing to extend their weekends. They are just as sick on any other day.

A more serious example, now, more relevant also to human rights:

The stunning statistic that 70% of black babies are born out of wedlock is driven, to be sure, by the fact that many poor black women have a lot of children. But it turns out it is also driven by the fact that married black women have fewer children than married white women. (source)

The fact that married black women have fewer children than married white women obviously inflates the percentage of black babies born out of wedlock. If married black women had just as many children as married white women, the proportion or percentage of black babies out of wedlock would drop mechanically. But why do they have fewer children? It seems it’s a matter of being able to afford children.

It’s well known that the black middle class has a lot less in the way of assets than whites of similar income levels – hardly surprising, given the legacy of generations of discrimination and poverty. But that also means that things that a lot of white middle class people take for granted – like help with a down-payment on a house when you have your first kid – are less available. Middle class black parents have less in the way of a parental safety net than their white equivalents, so they’re less likely to have a second kid. (source)

The 70%, when compared to the national average which is about 40%, may seem high, but it’s artificially inflated by the relatively low number of black babies in wedlock. So before you go out yelling (see here for example) that all the poverty and educational problems of African-Americans are caused by the fact that too many of their children are born and raised out of wedlock, and presumably by single parents (although the latter doesn’t follow from the former), and that it’s better to promote “traditional marriage” instead of affirmative action, welfare etc., you may want to dig a bit deeper first. If you do, you’ll paint a more nuanced picture than the one about dysfunctional black families and irresponsible black fathers.

Nevertheless, while the percentages may not be as high as they seem at first glance, it remains true that black babies still make up a disproportionate share of kids born out of wedlock. And if “born out of wedlock” means “single parents” (usually mothers) then this can be a problem. Although many single parents do a great job raising their children (and often a better job than many “normal” families), it can be tough and the risks of ending up in poverty are much higher. And yet, even this is not enough to justify sermons about irresponsible black fathers. Maybe the misguided war on drugs, racial profiling and incarceration statistics have something to do with it.

Measuring Human Rights (8): Measurement of the Fairness of Trials and of Expert Witnesses

An important part of the system of human rights are the rules intended to offer those accused of crimes a fair trial in court. We try to treat everyone, even suspected criminals, with fairness, and we have two principal reasons for this:

  • We only want to punish real criminals. A fair trial is one in which everything is done to avoid punishing the wrong persons. We want to avoid miscarriages of justice.
  • We also want to use court proceedings only to punish criminals and deter crime, not for political or personal reasons, as is often the case in dictatorships.

Most of these rules are included in, for example, articles 9, 10, 14 and 15 of the International Covenant on Civil and Political Rights, article 10 of the Universal Declaration, article 6 of the European Convention of Human Rights, and the Sixth Amendment to the United States Constitution.

Respect for many of these rules can be measured statistically. I’ll mention only one here: the rule regarding the intervention of expert witnesses for the defense or the prosecution. Here’s an example of the way in which this aspect of a fair trial can measured:

In the late 1990s, Harris County, Texas, medical examiner [and forensic specialist] Patricia Moore was repeatedly reprimanded by her superiors for pro-prosecution bias. … In 2004, a statistical analysis showed Moore diagnosed shaken baby syndrome (already a controversial diagnosis) in infant deaths at a rate several times higher than the national average. … One woman convicted of killing her own child because of Moore’s testimony was freed in 2005 after serving six years in prison. Another woman was cleared in 2004 after being accused because of Moore’s autopsy results. In 2001, babysitter Trenda Kemmerer was sentenced to 55 years in prison after being convicted of shaking a baby to death based largely on Moore’s testimony. The prosecutor in that case told the Houston Chronicle in 2004 that she had “no concerns” about Moore’s work. Even though Moore’s diagnosis in that case has since been revised to “undetermined,” and Moore was again reprimanded for her lack of objectivity in the case, Kemmerer remains in prison. (source)

Income Inequality (18): No Such Thing – Good Thing – Necessary Evil – Gone Thing?

Attitudes towards income inequality in the U.S. differ widely.

  • There are those who deny that there is any, or better that there is enough to be worried about (see here for an example, or here).
  • Others say that it’s a good thing, and that there should be more of it. People are very different in their talents and work ethic, and rewarding the highly productive and creative ones for their efforts – which is only “fair” – automatically results in income inequality, because the unproductive and uncreative will not be rewarded, or less generously.
  • And then there are those who believe income inequality is a necessary evil. They don’t particularly like huge differences in rewards for activities which are, after all, often hardly comparable in any quantitive sense (is it so much more worthwhile to invest your efforts and creativity in the development of the iPhone than in the education of your children?). But they do believe that financial rewards stimulate productivity, and that higher rewards stimulate more. And increased productivity ultimately benefits us all, even those who are worse off and on the wrong side of the income inequality. (This is a version of “trickle down” economics).
  • Still others think that income inequality isn’t a problem any longer, given the effect of the recession on high earners.

Note: these 4 views aren’t necessarily incompatible. One and the same person can, as I see it, hold at least 3 of them at the same time. (E.g. you can believe that there isn’t much inequality, that what is left will soon be gone, and that you hope it will be back one day).

I think only the third view has some relation to the truth. Regarding the first view:

The basic conclusion of this data, that the nation [the U.S.] suffers from extreme and growing income inequality, is essentially irrefutable. Bruce Judson (source)

Regarding the second view: I object to it not because I don’t want to reward people or because I think justice has nothing to do with merit. On the contrary. I object to it because it assumes that different people and different activities can be placed on a single scale of merit and reward. It’s impossible to compare activities and say that one deserves a $10.000 per year reward (i.e. income) and another activity, compared to this first, is 10 times more deserving and hence deserves a $100.000 per year reward. Merit isn’t just a financial or quantitative thing, and hence it cannot – at least not exclusively – justify income inequality. Moreover, the income inequality that we see in the real world has little or nothing to do with merit. Most people aren’t paid according to any definition of merit. In the best case, they are paid because of their talents, which isn’t anything anyone deserves. In all other cases – and in the large majority of cases – people’s pay or income is determined by factors such as luck, family, networks, playing on the stock exchange etc., and none of these things are even marginally related to merit. In a society that rewards people for their creativity and productivity, you expect to see high levels of social mobility, and that’s precisely what you don’t see in the U.S.

Regarding the third view, I do believe that it is essentially correct, but it obfuscates many of the problems caused by income inequality. Hence, even if economic efficiency doesn’t justify efforts to limit income inequality, other things do.

The fourth view would seem to make sense intuitively. A lot of the income of the very wealthy comes from the stock markets, and the recession has pushed these markets down.

Professor Saez concludes that “the most likely outcome is that income concentration will fall in 2008 and 2009.” But, he follows this conclusion by stating that in the absence of significant policy actions such declines will be temporary: “Based on the US historical record, falls in income concentration due to recessions are temporary unless drastic policy changes, such as financial regulation or significantly more progressive taxation, are implemented and prevent income concentration from bouncing back. Such policy changes took place after the Great Depression during the New Deal and permanently reduced income concentration till the 1970s. In contrast, recent downturns, such as the 2001 recession, lead to only very temporary drops in income concentration.” Bruce Judson (source)

Moreover, the poor are also suffering as a result of the recession, not in the same absolute measures as the rich, but that is because they have less to lose in the first place. However, what they do lose as a result of the recession is for them relatively more important.

Recent data show that income inequality hasn’t actually decreased in 2008. Maybe in 2009… The recession only got started late in 2008.

Income Inequality (11): Why Should We Care?

It’s a fact that many rich countries – rich in terms of total GDP – have a substantially unequal distribution of income; or, to put it in other words, these countries accept that there is huge inequality of wealth between people. It’s also a fact that, in many countries and particularly the U.S., these inequalities in income or wealth have become wider over the last decades.

What’s the problem, you may ask. Well, according to me this inequality poses some problems. But these problems are of relative importance. More important to me is the problem of absolute poverty. Absolute poverty is a lack of certain resources that are necessary to meet certain basic needs. This is not a problem of inequality. People may live in a very unequal society and at the wrong end of inequality, but they may nevertheless have no problem whatsoever meeting their basic needs.

More important as well, in some aspects at least, are the problems posed by other types of inequality. Gender inequality in some countries may be much more of a problem than income inequality (although these different types of inequality are probably connected).

Nevertheless, income inequality engenders some important problems. One is self-esteem. People suffering from relative poverty – i.e. finding themselves on the wrong end of an unequal income distribution – may suffer psychologically and emotionally. It’s also likely that their relative disadvantage isn’t very fair. In other words, it’s probably not solely based on questions of merit and desert. We don’t live in a world of equality of opportunity and level starting conditions. There’s also a correlation between relative and absolute poverty, so we may have to worry about relative poverty as a cause of absolute poverty.

Income inequality can also cause a problem for democracy. The rich can use their financial means to pervert the democratic procedures and to distort the equal influence on which democracy is based. Another way in which income inequality may pervert democracy is its divisiveness. It polarizes societies and it can antagonize regions within countries. None of this is helpful for the adequate functioning of democracy.

More on income inequality here and here.

The Causes of Human Rights Violations (5): Lack of a Fair Trial

A characteristic element of modern democratic states is their ability to offer fair trials to those accused of crimes. We try to treat everyone, even suspected criminals, with fairness, and we have two principal reasons for this:

  1. We only want to punish real criminals. A fair trial is one in which everything is done to avoid punishing the wrong persons. We want to avoid miscarriages of justice.
  2. We want to use court proceedings only to punish criminals and deter crime, not for political or personal reasons, as is often the case in dictatorships.

One important condition for a fair trial is publicity. Justice must not only be done, it must also be seen to be done, not only to deter other criminals and to give consolation to victims, but also because publicity makes it more likely that the real perpetrator is punished. Every trial is therefore a show trial. The publicity of a trial makes it possible to judge the judge and hence to correct mistakes if necessary.

The secret trial is typical of authoritarian regimes because it allows for abuses of power. It makes it easier to use the justice system for other purposes than the identification and punishment of proven criminals. It is very hard to use a public trial for power games or oppression.

On top of that, false accusations or false testimonies are more likely to remain undiscovered in a secret trial. After all, it is not only the state that can gain from a secret trial. Interested third parties can also benefit from an unfair trial.

However, publicity alone does not guarantee that trials and verdicts are fair and just (which is clear from the phenomenon of communist show trials). The following elements are just as important (as with publicity, most of them are included in the main human rights instruments, for example articles 9, 10, 14 and 15 of the International Covenant on Civil and Political Rights):

  • No punishment or imprisonment without an indictment and without swift information on the nature of the indictment. If the purpose of the justice system is to punish criminals, it’s very easy to tell the suspect who we want to imprison before his or her trial about the crime he or she is suspected of having committed. After all, the crime has been committed and the accusers surely must know the nature of this crime. It must be awful to be imprisoned without knowing why. The absence of indictments indicates that the authorities merely wish to use the justice system to terrorize the population, not to punish crime.
  • No excessively long detention on remand (detention without a lawful and fair trial and conviction). We do not want to incarcerate innocent people.
  • The possibility of an appeal to a higher court. Mistakes can be made.
  • A competent and impartial judge; fairness, according to the dictionary, means impartiality. A partial judge is an absurdity. Such a judge would be completely useless, and people would be better off fighting their cases amongst themselves, one against one instead of one against two.
  • The possibility to defend yourself and to receive free legal assistance. The possibility to argue and to give counter-arguments, to call witnesses for the defense and to question witnesses for the prosecution. This requires time, hence this must be balanced with the point mentioned earlier about the excessively long detention without a trial. Swift justice can be as unjust as detention without a trial.
  • Innocent until proven guilty. The burden of proof rests on the accusers. This is necessary to discourage wrongful accusations and also because the purpose of the trial is precisely the establishment of guilt. If guilt is assumed beforehand, then why have a trial in the first place?
  • No forced confession, because that would defeat the purpose of convicting the real perpetrator. And no obligation to incriminate yourself (the right to remain silent), which is linked to the rule that the burden of proof rests with the accusers.
  • No excessively tough penalties. The purpose is to punish, to prevent repetitions of the crime by the same criminal and to deter other criminals, not to balance the wrong that has been done by an equally painful punishment.
  • “Ne bis in idem”: no two trials for the same offense. If people can be retried continuously for the same crime, then the purpose is obviously not the punishment of proven criminals, but punishment per se. Anyway, if all the rules listed here are respected, there is no need for a retrial. This rule is also called double jeopardy.
  • “Nulla poena sine lege”: no crime or punishment without a law voted and published before the criminal deed. In other words, no retroactive laws, no laws with retroactive effect (laws which make deeds punishable after they have been committed). One cannot punish people for acts that were not a crime at the time when they were committed, because people should know what is or is not allowed so that they can plan their lives as law-abiding citizens.
  • For the same reason, laws should be predictable and should not change all the time. Nobody is responsible for a violation of a law if the law changes from day to day, because if the law changes constantly, then nobody knows the law and then nobody can respect the law. Predictability and permanence of the law are prerequisites for obedience, just as knowledge and publicity.
  • There should not be too many rules, otherwise the judges and the police will not have enough time to enforce them all or to punish all violations of all rules, which leads to injustice. Too many rules also leads to involuntary violations of rules, because citizens do not know what they are or are not allowed to do. The purpose of the justice system is to punish crimes, not mistakes; criminals who knowingly violate rules, not law-abiding citizens who unknowingly do what they shouldn’t.

All these elements put together make the justice system just, and protect the citizens against the state or against fellow citizens that want to abuse the justice system. If one element is missing, then all the others may become useless.