Earlier this month, I wrote a two part article for the Library of Law & Liberty, critiquing the uncritical condemnation of income inequality by world religious leaders.
In part 1, I pointed out that “while the Pope, the Patriarch, the Dalai Lama, and others are right about the increase in [global income] inequality, they are wrong to conclude that this causes global poverty—the latter is demonstrably on the decline. And that, I would add, is a good thing.”
In part 2, drawing on the work of F. A. Hayek, I noted, “As societies learn to use their resources ‘more effectively and for new purposes,’ the cost of manufacturing luxury goods decreases, making them affordable to new markets of the middle class and, eventually, even for the poor.” I continue, “Such inequality not only accompanies the very economic progress that lifts the poor out of poverty, it is one essential factor that makes that progress possible.”
We may add to this two more ways in which focusing solely on income inequality can be misleading from article in the Wall Street Journal yesterday by Nicholas Eberstadt: increased equality in lifespan and education. He writes,
Given the close correspondence between life expectancy and the Gini index for age at death, we can be confident that the world-wide explosion in life expectancy over the past century has been accompanied by a monumental narrowing of world-wide differences in length of life. When a population’s life expectancy rises from 30 to 70, the Gini index drops by almost two-thirds—from well over 0.5 to well under 0.2.
This survival revolution—and the narrowing of inequalities in humanity’s life chances—is an epochal advance in the human condition. Since healthy life expectancy seems to track closely with overall life expectancy, a revolutionary reduction in health inequality may also have occurred over the past century. Improvements in global mortality for the poor have contributed to the very “economic inequality” so many now decry. This is another reason such measures can be deceiving.
The spread and distribution of education has had a similar impact. In 1950 roughly half of the world’s adults—and the overwhelming majority of the men and women from low-income regions—had never been exposed to schooling. By 2010 unschooled men and women 15 and older account for a mere one-seventh of the world’s adults, and about one-in-six from developing areas.
Thus, not only are the world’s poor significantly less poor today than, say, even 30 years ago (as I detail in part 1 of my Law & Liberty article), they also live longer and likely have received an education that would not have been available to them only 60 years ago. More poor people living longer means more poor people, which contributes to greater income inequality due to the increase in population. That is, for example, the inequality between three rich people and three poor people is smaller than that between three rich people and nine poor people, even when those nine are better off than the three poor people in the first comparison.
All this is not to say that, therefore, we need not care about global poverty. Rather, it is another caution against simply equating inequality with poverty and exploitation. Inequality can come from such exploitation, and in many cases (e.g. North Korea) it still does. But that is far from the whole picture. And unless we take the time to examine the actual state of the poor, how their lives have improved, and what still stands in their way, we will fail in our efforts to help them and fail to respect in them the dignity given to all people by God.
Read Eberstadt’s article here.
And for those who missed it, my article at the Library of Law & Liberty is here (part 1) and here (part 2).