Beware False Prophets - Policy Exchange

Beware False Prophets

Equality, the Good Society and The Spirit Level

By Peter Saunders, edited by Natalie Evans

Beware False Prophets

Equality, the Good Society and The Spirit Level

Peter Saunders, edited by Natalie Evans

Policy Exchange is an independent think tank whose mission is to develop and promote new policy ideas which will foster a free society based on strong communities, personal freedom, limited government, national self-confidence and an enterprise culture. Registered charity no: 1096300.

Policy Exchange is committed to an evidence-based approach to policy development. We work in partnership with academics and other experts and commission major studies involving thorough empirical research of alternative policy outcomes. We believe that the policy experience of other countries offers important lessons for government in the UK. We also believe that government has much to learn from business and the voluntary sector. Trustees Charles Moore (Chairman of the Board), Theodore Agnew, Richard Briance, Camilla Cavendish, Richard Ehrman, Robin Edwards, Virginia Fraser, George Robinson, Andrew Sells, Tim Steel, Alice Thomson, Rachel Whetstone and Simon Wolfson.

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Contents

About the Authors

4

Executive Summary

5

1 Inequality, politics and social science

9

2 Are less equal societies more dysfunctional societies? 28

3 Income equality and social pathology in the USA

76

4 Propaganda masquerading as science

99

About the Authors

Peter Saunders was until 1999, Professor of Sociology at the University of Sussex, where he is still Professor Emeritus. Since then he has been Research Manager at the Australian Institute of Family Studies in Melbourne, and Social Research Director at the Centre for Independent Studies in Sydney. He is now back in the UK working as an independent consultant, specialising in social policy. He has written a number of reports for Policy Exchange on poverty and family policy. His website address is .uk

Natalie Evans is Deputy Director at Policy Exchange, responsible for the strategic direction and output of the research team.

Executive Summary

The ultimately possible attitudes towards life are irreconcilable, and hence their struggle can never be brought to a final conclusion... Science is organised in the service of self-clarification and knowledge of interrelated facts. It is not the gift or grace of seers and prophets dispensing sacred values and revelations... As science does not, who is to answer the question, 'What shall we do, and how shall we arrange our lives?'...Only a prophet or saviour can give the answers. If there is no such man,then you will certainly not compel him to appear on this earth by having thousands of professors, as privileged hirelings of the state, attempt as petty prophets to take over his role.

(Science as a vocation, reprinted in H.Gerth and C. Wright Mills, From Max Weber, Routledge 1948, pp.152-3).

In a book published last year, called The Spirit Level, RichardWilkinson and Kate Pickett argued that income inequality harms not only the poorest people at the bottom end of the income distribution, but almost everybody in society, no matter how prosperous they are. They backed up their claim with statistical evidence apparently showing that more unequal countries (and within the USA, more unequal states) suffer from higher crime rates, worse infant mortality, greater obesity, poorer education standards, lower average life expectancy, less social mobility, and much else besides. The authors concluded that we would all benefit from a more egalitarian distribution of income.

Their argument has major implications for public policy. For centuries, political philosophers have argued about what (if anything) should be done about unequal shares. On the one hand, it seems right to redistribute resources from people who have plenty to those who have little, but on the other hand, it seems wrong to take resources away from people who have worked hard or taken risks simply to

6 | Beware False Prophets

make others more equal. The Spirit Level seems to offer a resolution of this ethical dilemma, for it claims that rich and poor alike stand to gain from income redistribution. Once a society has achieved a modest level of prosperity,Wilkinson and Pickett suggest that people's wellbeing depends on sharing resources, so redistribution turns out to be in everybody's best interests.

Not surprisingly, this message has received an enthusiastic reception from politicians and pundits on the left who believeThe Spirit Level offers a rational, evidence-based justification for the radical egalitarianism to which they have long been emotionally committed. However, careful evaluation and analysis shows that very little of Wilkinson and Pickett's statistical evidence actually stands up, and their causal argument is full of holes.

They base their claims on two sets of statistics: international data on 23 of the world's richest countries, plus data on the 50 US states. On most of the indicators they examine, income inequality is found to correlate with social problems in both data sets. It is not just that more equal countries perform better than less equal countries, but that more equal states within the USA perform better than the less equal states. Any critique of Wilkinson and Pickett's analysis must therefore account for both their international findings and their US state data.

In this report, Wilkinson and Pickett's empirical claims are critically re-examined using (a) their own data on 23 countries, (b) more up-to-date statistics on a larger sample of 44 countries, and (c) data on the US states. Very few of their empirical claims survive intact.

Of 20 statistical claims examined, 14 are shown to be spurious or invalid, and in only one case (the association internationally between infant mortality and income inequality) does the evidence unambiguously support Wilkinson and Pickett's hypothesis. Contrary to their claims, income inequality does not explain international homicide rates, childhood conflict, women's status, foreign aid donations, life expectancy, adult obesity, childhood obesity, literacy and numeracy, patents, or social mobility rates. Nor

Execu ve Summary | 7

does it explain variations among US states in homicide, infant

mortality or imprisonment rates.

The statistical analysis in The Spirit Level is heavily flawed. There are

many instances where graphs are presented in which just one or

two extreme cases are used to support unwarranted generalisations.

For example, the claim that there is an association between a coun-

try's homicide rate and its level of income inequality depends

entirely on the high murder rate in the USA (which probably has

more to do with its gun control laws than its income distribution).

Across the other 22 countries, there is no association between

income distribution and murder rates.

Similarly, the claim that average life expectancy is linked to income inequality rests entirely on the longevity of people in Japan (which probably has something to do with their diet, genes or a mixture of the two). Take Japan out of the analysis, and the apparent association with income inequality again collapses.

In other instances, the authors' claims rest illegitimately on the influence of specific `clusters' of countries or states. For example,

"Contrary to their claims,

income inequality does not explain international homicide rates, childhood conflict, women's status, foreign aid donations, life expectancy, adult obesity, childhood obesity, literacy and numeracy, patents,

" or social mobility rates

the (more equal) Scandinavian nations routinely appear at one end of

many of their graphs, and the (less equal) Anglo nations often appear

at the other. But these differences probably reflect a deeper diver-

gence between Nordic and Anglo cultures, for when we look beyond

these clusters and search for evidence that might link inequality to

social outcomes in other countries, we search in vain. The argument

that women's interests are better served in more equal countries, for

example, rests entirely on the fact that women do better in

Scandinavia. But outside Scandinavia, women fare no better in egal-

itarian countries like Japan and Austria than in inegalitarian ones like

Portugal or Singapore.

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