He is mistaken in equating inequality and povertyby AC Grayling / February 18, 2016 / Leave a comment
There is now a consensus—not a belief, not an hypothesis, nor a policy position—but a consensus among informed observers that excessive social and economic inequality is a danger to society. There is a further consensus that, while a certain degree of inequality is desirable to encourage enterprise, wide inequality is not an inevitable outcome of economic processes, but the result of conscious choice in economic policy. If both are right, it follows that the threat to society posed by excessive inequality can be averted by public policies designed to reduce it. So the answer to the question “Can we render inequality less iniquitous?” is, as someone once put it, “Yes we can.” It is a matter of political will.
Note that considerations of inequality are not the same as considerations of poverty. Its dangers do not arise in a society where everyone is equally poor, nor where income disparities are relatively modest. In a society where those on the lowest incomes are not poor in absolute terms, yet where income disparities are enormous, the problems of inequality still arise. It is the gap, not the top and bottom rates, that is the cause of the problem.
Writing about inequality in the London Review of Books 4th February issue, Ed Miliband, the former Labour leader, cited well known studies by both the International Monetary Fund and the Organisation for Economic Co-operation and Development showing that inequality inhibits economic growth. The explanations offered differ and have the disadvantage that as soon as talk of inequality begins, the assumption is made that it exists because those on the lowest incomes are low-paid. As noted, that need not be true. But the conflation of inequality with poverty means that the solutions offered—higher minimum wages, more redistribution through taxes and benefits—only address part of the problem.
It is not an inconsiderable part, of course; investing in the provision of opportunities for…