What I found was that economic inequality doesn’t frustrate Americans at all. It is, rather, the perceived lack of economic opportunity that makes us unhappy…
If the egalitarians are right, then average happiness levels should be falling. But they aren’t. The GSS shows that in 1972, 30 percent of the population said that they were “very happy” with their lives; in 1982, 31 percent; in 1993, 32 percent; in 2004, 31 percent. In other words, no significant change in reported happiness occurred—even as income inequality increased by nearly half.
I think this guy is on to something, but I think he makes a mistake in his rush to prove the egalitarians wrong. While I would agree with the notion that people prefer (when given the option) opportunity to equality, I think there are scenarios in which Americans would become frustrated with economic inequality.
In a situation of declining opportunity and rising inequality, I suspect that people would quickly develop a desire for greater equality. If people in the last 30 years are happy despite rising inequality, I would say that that’s because opportunity has kept pace with inequality. But the moment the middle and lower classes stop advancing and the rich continue to prosper, I think that happiness (that is, happiness with economic status) will decline. Of course, you could still say that, in such a scenario, any unhappiness is the result of a lack of opportunity and not of a lack of equality.
But our history doesn’t support that view, particularly when you look at the last century, which witnessed the creation of a handful of huge entitlement programs, antitrust and civil rights legislation, and a more progressive tax structure. In other words, if we’re cool with economic inequality, why have we worked so hard to reduce it over the last 100 years?
Yes, Americans prefer opportunity to equality when given the option. I would also contend that they have an egalitarian streak as well. And I think that stems from the idea that public policy can be shaped to allow for greater opportunity, which, in turn, leads to greater equality.
What a lot of free market proponents assume is that economic opportunity is a purely natural phenomenon, and that policymakers ought to just get out of the way. They also imply that egalitarians seek to step on the rich in order to help the poor, but egalitarianism isn’t simply redistribution of wealth. It’s about creating a level playing field, where economic opportunity is available to the greatest number.
Hat tip: Marginal Revolution
