What if someone told you that a single reform could reduce this country’s rates of mental illness, obesity, and homicide by two-thirds; teenage birthrates by half; and prison populations by three-quarters? What if you were told that the same reform would raise life expectancy by four years, increase social mobility and civic engagement, and give the average American worker an additional five weeks of annual vacation?

In The Spirit Level: Why Greater Equality Makes Societies Stronger, the British epidemiologists Richard Wilkinson and Kate Pickett are careful to argue for the social benefits of economic equality in terms of correlation, not cause and effect. But, like nearly all scientists, they do draw inferences from their correlations; and their message is that income inequality is a powerful yet largely ignored force in most of the social problems Americans face.

The book presents data about a wide array of obstacles to human well-being, including poor health (for example, obesity, mental illness, hypertension, diabetes) and social dysfunction (educational failure, murder, violent crime, drug use, teenage births, incarceration rates). The statistical exposition relies heavily on graphs and should be accessible to any general reader: there are no references to t-tests or confidence intervals. (Social scientists may wish to delve into the scores of studies cited in the book’s footnotes.)

It is generally accepted that lower incomes coincide with higher incidences of disease, crime, and other social problems. For this reason, poor nations improve the lives of their citizens simply by increasing per capita income. But once a country becomes as rich as today’s industrialized nations, this rule no longer holds. The wealthiest of these wealthy nations do not have better health or less crime than the others. As Wilkinson and Pickett tried to understand why some industrialized nations do better than others, they discovered something peculiar: that among wealthy nations, it is not higher income but lower income inequality that correlates with better outcomes.

Among the industrialized nations, Norway and Switzerland have the highest per capita income, Israel and Portugal the lowest. The United States ranks near the middle. As a further test of their thesis, the authors do the same kind of analysis for the fifty states within the United States, where Connecticut and New Jersey are at the top and Mississippi and West Virginia at the bottom. Among states as among wealthy nations, differences in per capita income do not explain differences in the various indices of social well-being. The richest societies don’t do better than merely rich societies.

But Wilkinson and Pickett then order the wealthy nations according to income inequality. Singapore, the United States, and Portugal have the most inequality; Japan, Finland, and Norway have the least. To measure inequality, the part of a country’s total income that goes each year to the richest 20 percent of its population is compared to the part that goes to the poorest 20 percent. This ratio is more than eight to one for the United States and Singapore, less than four to one for Japan and Finland. Connecting this ranked list with scores of studies done by social scientists and medical researchers, the authors find a remarkably consistent correlation between income inequality and health and social problems. The same correlation is evident within the United States. In general, people who live in states like New York and Mississippi, which have little in common apart from high income inequality, are less healthy and less safe than those who live in states with less inequality, such as Utah and Wisconsin.

Most remarkably, not only do the poor in nations and states with high income inequality do worse than the poor in states and nations with less inequality; the wealthy also do worse in places where the gap between themselves and the poorest members of their society is the greatest. This last finding struck me as counterintuitive at first. I used to think the problems with the U.S. health-care system had their main effect on those at the bottom of the income ladder. But Wilkinson and Pickett cite a recent study in the Journal of the American Medical Association that found rates of diabetes, hypertension, cancer, lung disease, and heart disease are all higher for highly educated non-Hispanic white men in the high-inequality United States than for the same groups in the relatively low-inequality United Kingdom. (Given the strong correlation between higher education and higher incomes, one might have thought that highly educated American men would have better health than highly educated Brits.) If you’re inclined to think that the real difference here is that the British state provides health care to everyone, you must then confront the next study the authors cite, which compares the United Kingdom to the very low-inequality Sweden. Both have universal health care, but the Swedes do consistently better on both infant and adult death rates—and in all social classes. Similarly, international educational data indicate that the children of highly educated parents in the United States have lower literacy scores than the children of similarly educated parents in less unequal nations. Inequality, the authors conclude, hurts people at both ends of the income gap.

Might these results be a coincidence? They might, but the studies the authors have collected show such a strong correlation that this seems unlikely. (Here more information about standard statistical measures of “fit” would have sharpened the argument, though it might also have confused the nonexpert.) Experiments are hard to come by, but Wilkinson and Pickett do remark on two important changes that seem to support their conclusion. The first is the transformation of Russia after the fall of the USSR in 1991. Russian GDP has steadily grown in the past twenty years, but so has inequality; meanwhile, life expectancy has dropped. The second change is the recent general rise in inequality in the United States: it is now nearly 40 percent greater than it was in 1970. During the same period, health and social problems have also increased.

How do the authors explain the connection between inequality, sickness, and social dysfunction? Economic inequality, they argue, exacerbates the thoroughly human condition once described by the psychoanalyst Alfred Adler: “To be human means to feel inferior.” Research has long shown that psychological stress and the many problems it engenders correlate closely with low status, social isolation, and a difficult early childhood. Inequality raises “status anxiety” and leads us to pay increased attention to social status in our relationships. Studies have shown that potential marriage partners in more unequal nations are motivated less by romantic considerations and more by financial prospects. Inequality, the authors contend, promotes “an insecure narcissism,” a heightened impulse for self-promotion, and a deep fear of failure.

In one study the authors cite, people were asked whether they agreed with the statement “Most people can be trusted.” Those who lived in places with less inequality were more likely to think others trustworthy. With greater trust comes less anxiety about one’s own status and well-being. The guard at the entrance of a gated community who is supposed to reassure the residents instead confirms their anxieties.

It isn’t until halfway through the book that the authors address a question that occurred to me as soon as I started reading it: Don’t most states with high income inequality also have significant minority populations? If so, might we not attribute to racial factors at least some of what the authors attribute to income inequality? Their response is elegant. Prejudice against racial and ethnic minorities does generally lead to worse outcomes for those groups; but it also leads to higher income inequality, and this leads to lower well-being through the process explained above. Thus, the authors argue, inequality and racial or ethnic divisions “should not be seen as alternative explanations.” Racial discrimination is one of the factors heightening income inequality, but not the only one. Portugal, which lacks the racial divisions of the United States, nonetheless ranks near the bottom in several indices of health and social well-being. And it ranks low not only on average and not only for the poor, but also for the wealthy—a fact that racial discrimination wouldn’t explain.

Wilkinson and Pickett argue that it’s not the causes of inequality but the inequality itself that matters. Japan has low inequality not as a result of government policy, but because its market outcomes are less unequal: it simply doesn’t have the huge wage gap that America does. Sweden also has low inequality and good scores on health and social indices, but Sweden’s low inequality is the result of government intervention—a combination of high taxes and generous entitlement programs. Similarly, Vermont has the highest state taxes in the nation, while its neighbor New Hampshire’s taxes are among the lowest; but both have low inequality and both score well on most health and social indices.

In the last third of the book, Wilkinson and Pickett propose several policies for achieving greater economic equality. They stress the negative effects of undemocratic corporate power and the benefits of worker ownership and management. The authors’ outline of possible reforms is certainly serviceable, but there is nothing especially original about it, and it may limit the book’s appeal to conservatives. That would be a shame. One of the great illusions that dominate our politics today is the idea that taxation is both destructive (a job-killer) and morally offensive (it’s “your” money that “they” spend). Market forces have stretched the gap between the prosperous and the poor, but tax policy has also contributed to our country’s growing inequality. We have reduced the only really progressive tax we have, the income tax, and are forced to rely more and more on regressive taxes like sales and Social Security taxes.

Much more research still needs to be done before we’ll know for sure, but if it turns out that Wilkinson and Pickett are right, we’ll know why it’s so difficult to reduce obesity, drug addiction, hypertension, violent crime, and a host of other problems with programs targeted at each problem separately. In that case, it will make sense to refocus our efforts on policies and programs designed to close the enormous gap between the richest and poorest citizens in this country. It may be impossible for us to recover that early-nineteenth-century “equality of conditions” that Alexis de Tocqueville admired, but the authors of this outstanding book repeat and refine Tocqueville’s conviction that issues of economic inequality exert “enormous influence…on the workings of society.”

Daniel K. Finn teaches economics and Christian ethics at St. John’s University and the College of St. Benedict and is the director of the True Wealth of Nations research project at the Institute for Advanced Catholic Studies. His latest book is Consumer Ethics in a Global Economy: How Buying Here Causes Injustice There.

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Published in the 2010-07-16 issue: View Contents
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