Anderson on Economic Inequality, Domination, and Stigmatization

In her challenging reply essay, Elizabeth Anderson argues that economic inequality

(1) makes the less well-off vulnerable to domination, (2) makes them vulnerable to stigmatization, and (3) causes governments to favor the better-off at the expense of the worse-off.

In this post I’ll address the first two propositions. I’ll save the third, and I in my opinion the most compelling, for a separate post.

Domination

Anderson says that “People’s bargaining power is tied to their relative exit costs. This often enables people with superior wealth to dominate others.” I agree. However, it seems to me that most cases in which Jane Rich is able to dominate Joe Poor are cases in which Poor finds himself with no tolerable, feasible alternatives to submitting to Rich’s demands. Suppose Poor has open to him several perfectly decent, readily accessible courses of action that would put him out the reach of Rich’s domination. It seems that the problem is solved. Now suppose the wealth gap between Poor and Rich widens. It seems that the problem is still solved.

If, to use one of Anderson’s examples, the problem is that a low-wage worker, Joe Poor, is in too weak a bargaining position to negotiate a regular working schedule from his boss, Jane Rich, then what’s the solution? Suppose the government raises Jane Rich’s income tax rate 20 percent and then spends the revenue on bombs and health care for retirees. The disposable income gap between Poor and Rich will have narrowed considerably. Has it thereby become easier for Poor to negotiate regular hours from his Rich? It seems not. He still lacks decent alternatives, which suggests economic inequality is not the problem.

It may be that some government policy could both help Poor and reduce economic inequality. And it may be that some government policy could help Poor and increase economic inequality. For example, suppose Poor’s town reduces the tax rate on businesses, and this attracts new businesses that employ workers like Poor. The market for low-wage workers becomes a bit more competitive, and so Rich, worried about losing relatively experienced workers, starts giving Poor regular hours. Suppose Poor, now happier about his job, becomes a bit more productive and this makes Rich a little richer. I think that’s a good result!

Social Comparison and Stigma

Anderson argues that “as the general level of consumption increases, so does the level of consumption needed by each individual to be able to appear in public without shame.” This may be true, but I think it can be misleading. I think the question at hand is whether “the level of consumption needed by each individual to be able to appear in public without shame” has become easier or harder for the least well-off to attain. Anderson twice offers the example of clothes. The evidence suggests that it is easier than it has ever been for low-income households to buy affordable, quality, relatively fashionable clothes. School togs from Wal-Mart or Forever 21 may not have the cachet of designer gear. But if the status-conscious cool kids have to look close or check out the label to detect a bargain-basement designer knockoff, the kids with thrifty parents are doing just fine. However, some families can’t get to a good discount retailer and have no Internet connection. Even then, most cities have a Salvation Army, Goodwill, or St. Vincent’s within reach. The wealthier the society, the better the castoffs.

One of my worries about putting too much weight on the effects of social comparison is rooted in the fact that our habits of comparison and our reactions to our comparisons are to a fair degree up to us — or at least up to our parents and those who constitute our developmental milieu. I wouldn’t go as far as a Buddhist monk and say that our patterns of attention and reaction are almost entirely within control, but we do have some control over them, and we therefore bear some responsibility.

The story Anderson relates about the single mother who “couldn’t pay her utility bills because she spent her income on a pricey t-shirt for her daughter” strikes me not as a story about the toxic consequence of economic inequality, but a story about a mother with mixed up priorities. The mother did not have to be “desperate to see her daughter wear socially accepted clothes.” She was not compelled to care so deeply about the opinion of those among her daughters peers who would have found affordable clothes unacceptable. She did not have to leave unchallenged her daughter’s anxiety about fitting in. This is not to say that the mother bears all the responsibility. She didn’t get to pick her parents either. And there’s a good chance she would have chosen to pay her utility bill had she lived in a community in which missing payments is considered even less socially unacceptable than a child in perfectly decent but slightly dated clothes.

Finally, not to sound like a broken record, but it’s not clear what countrywide economic inequality has to do with this sad tale. The poorest households go broke trying to emulate the consumption patterns of slightly less poor households. Lopping off the top decile of the income distribution would leave this scenario entirely unchanged.

Also from This Issue

Lead Essay

  • Economic Inequality and the Mirage of Injustice by Will Wilkinson

    In his lead essay, Will Wilkinson observes what he believes is a poor chain of reasoning: Income inequality is rising; it is also a measure of injustice. To fix this injustice, we should redistribute incomes. Wilkinson attacks this reasoning on several fronts: Income inequality is less important than consumption inequality, and consumption inequality is probably lessening. But if income inequality is a problem, it is so only as a symptom of a different problem: substandard schools, perhaps, or our high incarceration rate, or CEOs who conspire to overpay one another. Rather than redistributing income, we should identify the underlying problem and fix it directly. This may well lessen income inequality, and it will also fix an undoubtedly serious problem somewhere else in our society.

Response Essays

  • Is Consumption the Grail for Inequality Skeptics? by Lane Kenworthy

    Lane Kenworthy argues that income inequality is indeed important, and that we should not be misled by the relatively reassuring data on consumption. Unconsumed income also adds to the quality of life enjoyed by the rich, even if that increase is still hard to measure. A more egalitarian society need not entail a radical social leveling, but it should entail better public services for the poor and the middle class.

  • Why Things Will Feel Worse As They Get Better: The Downside of Growing Consumption Equality by John V. C. Nye

    John Nye adds several considerations to the mix: First, positional goods may make us feel more unequal – there are only so many “top ten” schools for our kids, only so many “best” views or neighborhoods. Yet, with rising incomes, more of us feel that we should be able to afford them, even as they slip further from our grasp. As we become more equal, we feel less equal. Second, one other effect of relative equality has been to erode the security formerly enjoyed at the very top of the economic pyramid. This security itself was a form of compensation, and executive salaries may be rising in recent years in part because executive security has fallen. And third, much of human inequality is not directly measurable in money at all. Differences in appearance, intelligence, ability, and the like are all real and may translate into economic inequality as well. Consideration of these elements is curiously absent from many discussions on inequality.

  • What Should Egalitarians Want? by Elizabeth Anderson

    Elizabeth Anderson agrees with Wilkinson that the root causes of inequality are more troubling than inequality taken alone. But economic inequality is still a problem for two reasons: First, economic inequality of the sort we have today is not making the poor better off in absolute terms, but rather it is making them worse off. And second, economic inequality translates directly into inequality of political power, which in turn reinforces economic inequality. This is an unacceptable state of affairs.

The Conversation