One of the more intriguing features of anti‑capitalist sentiment, broadly described, is its persistence in light of robust criticisms of its varied aspects by the proponents of classical liberalism and libertarianism.
The arguments against spontaneously ordered free markets and strict limits to government intervention in the economic realm have, in one respect, changed over time.
Marx and Engels painted a picture of capitalist exploitation, whereby the bourgeois owners of capital financially benefited from increasing production at the expense of working classes receiving insufficient value for their labouring efforts.
Next, the likes of John Maynard Keynes argued that if left untouched by government intervention markets would destabilise incomes.
From the 1950s it was claimed that capitalism does nothing but lay waste to the environment and deplete our natural resources.
In the late twentieth century, anti‑capitalists had argued that market‑based economic growth had rendered a mass of unhappy individuals who felt both overwhelmed by cheap product choices and angered about the perceived need to keep up with the wealthy ‘Joneses.’ Now the latest accusation against capitalism is that it makes us all unhealthy.
In conjunction with the changes in arguments mounted against market capitalism, some critics have served to repackage old ideas about the inadequacies of market‑based, liberal‑democratic societies in ways that seem refreshingly new to current audiences.
An example of this is the best‑selling book by UK epidemiologists Richard Wilkinson and Kate Pickett entitled The Spirit Level: Why Equality is Better for Everyone.
The basic idea proferred by Wilkinson and Pickett is that societies with a lower dispersion of relative incomes perform better on a wide range of outcomes such as life expectancy, infant mortality, mental illness, teen births, obesity, homicides, imprisonment rates, educational performance, trust and social mobility. In other words, according to the Wilkinson‑Pickett view, relative inequality explains just about every malady one might care to find.
In its essence, The Spirit Level profiles a psychosocial mechanism by which the increasing anxieties of individuals in more unequal societies about their place in the social pecking order leads to lives that are solitary, poor, nasty, brutish and short. As I said in a critical review of the book recently, ‘those of us in equal societies are eating junk food, assaulting each other, landing ourselves in gaol, and leading ourselves to early graves because of frustration that we can’t all be as rich as Paris Hilton or LeBron James.’
For Wilkinson and Pickett the solution to all of our troubles seems obvious – through the aegis of government, income should be redistributed to achieve relative income equality for all. The two authors are not shy about this policy objective, exclaiming in their book that ‘it falls to our generation to make one of the biggest transformations in human history.’
While The Spirit Level seems to occupy a space among the bookshelves of public servant and academic types, the analysis proffered by Wilkinson and Pickett has not gone unchallenged.
Apart from my critical review of the Wilkinson‑Pickett thesis, some others who reside (or have resided) in this southern part of the hemispheres have undertaken their own critical appraisals of The Spirit Level.
On his former blog, now federal politician Andrew Leigh stated that ‘my own empirical work on the issue has convinced me that when you look at within‑country changes, the picture that emerges is very different to what you see when you look at a snapshot across countries over time.’ Specifically, ‘countries that experienced big increases in inequality saw bigger improvements in health than those where inequality stayed stable or fell. In most cases, the effect isn’t significant, but the data certainly don’t support the hypothesis that rising inequality harms population health.’
Peter Saunders, who lived in Australia for about nine years or so and has returned to the UK (hope he doesn’t mind, for this post, if I label him as an honorary Australian!!), has presented a comprehensive rebuttal of the Wilkinson‑Pickett analysis. Using data, in many cases, for a greater sample of countries, Saunders found that most of the statistical claims published in The Spirit Level are spurious or invalid.
In response to an article published in The Guardian claiming him to be little more than a ‘wrecker,’ Saunders responded by reiterating his chief concern that the analysis offered by Wilkinson and Pickett represents just plain social science done badly.
Across the ditch the executive director of the New Zealand Business Roundtable, Roger Kerr, has also entered the fray already presenting two solid critiques of the Wilkinson‑Pickett thesis (see here and here) from a Kiwi perspective. His coverage of information concerning the effects of government policies on unemployment, a key contributor to absolute inequality, in New Zealand is also highly relevant in the Australian context.
Kerr summarises his position by stating ‘my bottom line is that income equality may or may not promote well‑being in the manner claimed in The Spirit Level. Economic growth certainly does promote it. Attempts to promote well‑being by engineering equality via the compulsory curtailment of economic growth and economic freedom can fail, by gradually undermining prosperity. But the authors of The Spirit Level have more scope than they realise to promote their egalitarian ideals within the framework of economic freedom.’
With the authors of The Spirit Level seemingly content to continue on their merry way promoting their controversial ideas, there will remain opportunities for those supportive of free markets and limited government to rebut the arguments put forward by the likes of Wilkinson and Pickett. Indeed, to do so would represent an excellent practical example of that time-honoured phrase ‘the price of liberty is eternal vigilance.’
