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Why Care About Economic Inequality?

photograph of skyscrapers behind a favela

Imagine a society where everyone is economically flourishing. Beyond the basic goods required for subsistence, individuals have access to a host of luxury goods and services as well. Opportunities currently only afforded to the upper middle class or wealthy, such as world travel, home ownership, and access to cutting-edge medical care, are accessible to all within this imaginary society. Despite this, there remains radical economic inequality. The top one percent of society’s earners have exponentially more financial resources than the rest of the population. However, the only material difference that results from this inequality is the capacity to own a multitude of vacation homes instead of one, the ability to space travel instead of merely to travel around the globe, and the ability to pass down greater amounts of wealth to one’s descendants.

For the purposes of this article, the salient point is not whether such a society is an actual economic possibility, but whether the kind of economic inequality present in this society constitutes an injustice. What gives many reason to suspect something has gone morally awry in societies with massive economic disparity is the suffering of the lower classes, including the inability of many to meet basic needs. It’s at least plausible that a society where everyone can fulfill both their basic needs as well as many of their wants, can tolerate significant disparity between the economically worst off and the best off without threatening any injustice.

Thus, let’s grant for the sake of argument that economic inequality, even radical inequality, is not intrinsically unjust. This simply means that a disproportionate economic distribution amongst individuals can be just. Do we still have reason to care about large-scale inequality, even in cases where the overall economic distribution is just? This article outlines a few reasons why we might still have strong reason to avoid severe economic inequality.

One such reason concerns the psychological impacts of economic inequality. Studies have shown that as the disparity between the top 1% and the rest of the population grows, there is also an increase in negative emotional experiences across the population. Additionally, the average person’s self-reported life satisfaction tends to decline in response to growing inequality. There are, of course, immense complications when trying to draw causal inferences at this scale. For instance, one outstanding theoretical question is whether it’s actual economic inequality that generates negative psychological consequences, or rather the mere perception of inequality that does this. Despite these kinds of ambiguities in the data, there remains significant evidence suggesting severe economic inequality comes with certain psychological and emotional costs that are worth further evaluation.

Another non-justice-based reason to care about economic inequality is due to its linkage with social trust. One way of glossing the notion of social trust is to say it involves the propensity of individuals to assume basically good intentions in other people, groups, and societal institutions. Social trust is an invaluable resource for political communities, as it engenders a number of benefits, including the promotion of governmental efficiency and improvements to public health. The very notion of democratic liberalism is at least partially constructed on the possibility of social trust amongst very diverse groups of people.

There is some evidence pointing to economic inequality as a detriment to social trust. At least within the context of the United States, there is particularly strong evidence that economic inequality causes those with less education and/or those who fall within the bottom third of earners to experience less social trust. Others cast doubt on this conclusion, arguing for a merely correlative relationship between rising inequality and declining social trust. For instance, perhaps it’s not inequality itself causing the decline in social trust, but it’s the fact that stark economic inequality frequently coexists with higher levels of governmental/legal corruption. This corruption causes a drop in social trust, which we then misattribute to inequality — or so the thought goes. As with the discussion of the psychological ramifications of inequality, drawing definitive causal connections between these kinds of metrics is complex, but there is at least some compelling evidence that rampant economic inequality and social trust are at odds.

Another reason one might object to extreme levels of economic inequality is due to its potential impacts on the very long-term future. This line of objection is a bit more philosophically dense than the previous two we’ve examined, but the basic thought goes something like this: The negative impacts of economic inequality might compound with time, resulting in an increase in certain existential risks. Such risks are those severe enough to threaten the continuation of humanity, including environmental disasters, global warfare, and the misapplication of AI.

To paint a clearer picture of how inequality might increase certain existential risks, we can consider a concrete example. There is some evidence suggesting that increases in inequality cause decreases in the quality of public institutions (e.g., institutions of higher education, governmental agencies, etc.). Such institutions are plausibly highly important in preventing certain existential risks, and thus we have strong reason to care about their quality. This gives us an indirect reason to prevent radical economic inequality. If the trend towards increasing inequality continues in particular societies, it is reasonable to think the damage done to institutions will only continue to aggregate, putting us at greater existential risk.

Whether or not radical economic inequality is intrinsically unjust, it seems we have significant reasons to care about it. Importantly, there may still be countervailing reasons to tolerate stark economic disparity (considerations of economic freedom, overall economic growth, national productivity, etc.). Thus, it is imperative that policy makers weigh the full array of pros and cons when it comes to permitting widespread economic inequality.

The Ambiguous Perspective of HBO’s ‘Succession’

photograph of cast of Succession after Golden Globes

Succession, one of the most popular recent additions to HBO’s stable of prestige dramas, dominated the drama category at the 2020 Emmys. But despite critical acclaim, the show inspired complicated and even unpleasant emotions in viewers. Equal parts pleasure and disgust contribute to Succession’s allure, and if articles like “How embarrassed should you be about your ‘Succession’ crush?” are any indication, guilt is the price fans often pay for their investment.

The Roys are a treacherous and amoral clan of one-percenters dominated by aging patriarch Logan Roy, a media mogul who made his fortune disseminating right-wing propaganda through a FOX-esque news network. The central conflict of the show, as its title suggests, is who will inherit his sprawling media empire. The main contenders are Logan’s three children, recovering drug-addict Kendall, cunning political analyst Shiv, and wisecracking playboy Roman. Other possibilities include various cronies and extended family members, like Greg, an unpolished (and impoverished) Roy cousin who stumbles into the family’s orbit in search of a job.

The closer we get to the family, the more our discomfort grows. We’re drawn in by Kendall’s perpetual sadness and vulnerability, Roman’s darkly funny sense of humor, and Shiv’s resentment at being passed over in favor of her brothers. We can’t help but identify with and even pity them, but our identification is constantly challenged by the wickedness of the Roy family. In the show’s first episode, Roman invites the young son of a staff member to participate in the family’s baseball game. When he seems reluctant, Roman writes out a check for one million dollars, offering it as a prize if the kid can hit a home run. Of course, he gets tagged out just inches away from home base. Roman rips up the check with a flourish and offers the boy a fragment, or a “quarter of a million dollars,” as he puts it. In his review of the show, writer Jorge Cotte asks if “As viewers, do we separate our ethical concerns from the conniving and calloused amorality of the Roys’ business machinations? This is related to another question: is there something suspect in feeling for these fictional power brokers who are so similar to those causing actual harm and systemic violence in the world?” In other words, how can we identify with the child and the spoiled billionaire taunting him at the same time?

The show’s engagement with wealth and privilege offers no clear moral perch for the viewers to situate themselves upon. The show seems to set up bumbling and well-intentioned Greg as an alternative to the Roys, yet he is purposefully difficult to identify with. His scenes, though invariably funny, are excruciatingly awkward. He can never read a room, and always seems to take up too much space. But over the course of the series, he proves to be as mercenary and self-serving as his cousins, illustrating the impossibility of achieving affluence without dirtying one’s hands. In Succession, we are never allowed to rest too comfortably in one place. The audience is situated everywhere at once, ricocheted from viewpoint to viewpoint.

This discomfort is built into the very fabric of the show. The camera is usually handheld, and its gaze feels shaky and restless. When characters move from one location to another, we often see them from a distance, as if through the perspective of the paparazzi. In this way, Succession borrows much from Veep, another show filmed in a mockumentary style without in-fiction justification. In Veep, the handheld camera is used for comedic purposes. It allows for quick reaction shots and zooms, which provide extra flair to jokes. But in Succession, the effect is disorienting, even nauseating. While the mockumentary style usually suggests verisimilitude, here it suggests voyeurism and instability. There is a fundamental clash between how the Roys see themselves and how they are perceived by the world, or on another level, a clash between how they perceive themselves and how the audience perceives them. We learn that as children, Kendall frequently locked Roman in a dog cage and made him eat kibbles. Roman insists that this was sadistic torture, but Kendall insists that Roman enjoyed it too. Storytelling is central to this family, which made its fortune spinning yarns, but even the Roys can’t agree on their own narrative.

Critic Rachel Syme points out that “While Succession does not glorify wealth, it also makes no apologies for it. The Roys are not like you and me. They have SoHo lofts and trust funds and cashmere everything, and they own theme parks and movie studios and shady cruise lines . . . They have everything anyone could want, but they are all empty and lonesome, neglectful and neglected.” Syme describes the ambiguity at the heart of the show, an ambiguity that is mirrored in audience reactions. While we may cheer them on, we derive equal pleasure from watching them fail. As a character from an equally rich but far more old-money family tells Kendall in season two, “Watching you people melt down is the most deeply satisfying activity on the planet.” The amoral world of Succession allows for both disgust and identification, which is perhaps a more honest way of depicting the rich and famous than complete disavowal or complete worship.

The California Housing Crisis and Collective Action

photograph overlooking San Francisco

The situation in California has become increasingly dire, and is even beginning to appear on the periphery of the 2020 presidential race. While there are factors that make California unique, it might be a sign of things to come for cities like Chicago, Austin, and Nashville. The political discourse currently taking shape may be indicative of the US’s future treatment of problems stemming from population growth and density.

California’s housing shortage places enormous pressure on tenants as supply shrinks and demand continues to expand. Strong economic growth, mostly in the tech sector, has created hundreds of thousands of new jobs, but has been met with inadequate construction of necessary housing. A report by the McKinsey Global Institute found that California needs to build 3.5 million more homes by 2025 to meet demand. This situation has seen the state’s home prices grow to 2.5 times the national average, while rents are 50 percent above average. As a result, nearly a quarter of the nation’s homeless population lives in California.

Current homeowners like Los Angeles resident Glenn Zweifel insist that “there is not necessarily a shortage of housing but an excess of people,” and attribute the problem to an attitude of entitlement: “Just because you want to live somewhere doesn’t mean you can.”

This, however, oversimplifies the problem. First, this is a matter of displacement; it isn’t simply a case of turning prospective residents away. Property values are skyrocketing which means that current tenants can’t earn enough to keep up with rising rents. It’s estimated that you’d need to make $34/hour in order to afford a two-bedroom rental home. Not everyone is in a privileged position to be able to uproot their lives. Tenants may not have much of a choice about where they live; their jobs, families, and financial, medical, or social situation may mean that relocation is simply not an option.

Second, the housing crisis is a byproduct of class and generational conflict. The interests of old, rich, white property owners are at odds with the young, poor, minority renters. The two main obstacles to increasing housing development are zoning laws and community opposition. Apartment buildings are banned in most of California, and single-family zoning laws prohibit higher-density housing construction in residential areas. Current residents don’t want affordable housing going up next door. They are intent on protecting the value of their assets, and know that environmental protections can be easily abused so as to protect their investment.

Conservative/libertarian writers, like Edward Ring, emphasize concerns of fairness:

“There’s a reason people work hard for decades to pay off their mortgages so they can own homes in spacious suburbs. It’s because they value the leafy, semi-rural atmosphere of an uncrowded suburban neighborhood. [Policy initiatives] will effectively double the housing density in these neighborhoods, violating the expectations of everyone living there who relied on the zoning rules that were in effect when they bought their homes.”

Property owners, they argue, have earned the right to restrict others’ access to those goods for which they have labored. To undermine that basic right of ownership and fail to reward these individuals’ hard work is manifestly unjust. And yet lawmakers continue to recommend the 

“forcible integration of people who, for whatever reason, require government assistance to support themselves, into communities of taxpayers, who, by and large, are working extra hard to pay the mortgages on overpriced homes in order to provide their children with safe neighborhoods.”

Market forces may be conspiring to put people on the street, but property owners, so the argument goes, are not the guilty party and are not obligated to make accommodations. In the end, they argue, it’s unfair to have homeowners shoulder others’ burdens.

This is a common sentiment. But the neighborhoods in California are, in effect, gated communities aimed at maximizing monetary gains and keeping out the undesirables. Even when residential communities are pried opened and new residents are admitted, those who’ve threaded the needle and somehow gained access to such a scarce resource are the very same that attempt to slam the door closed behind them. As San Francisco Assemblymember Phil Ting explains, “If you’re a city council, the people who vote for you oppose the housing you’re creating, and you’re creating housing for the people who have yet to move in. And when they do move in, they fight the next project.”

The political incentives all point in one direction. Homeowners are entrenched; they have ties in the community and their voices carry the weight of immediate political consequence. There are few other voices — certainly not the homeless or prospective residents — that might countermand it. This may change if businesses start feeling the effect of not having the necessary workers and talent to function. Being unable to attract necessary professions like nurses, teachers, janitors, and firefighters threatens to grind the economy to a halt. Property Shark notes that despite San Francisco paying nurses one of the highest wages in the US, a nurse would have to earn 10 annual incomes in order to afford a house there. The situation is no different for tech workers. But until businesses start feeling the pinch, there is more of a political incentive to protect current residents, slow development, and push the homeless to shelters elsewhere.

Conservatives are often partial to subsidiarity — the idea that actors closest to the problem are the best positioned to address it. They prefer local solutions which might limit government meddling and eliminate red tape. But the California Housing Crisis is a collective action problem; conflicts of interest between individuals encourage actors to pass the buck, while sustainable solutions require a concerted group effort. The consequences of doing one’s part to address the housing crisis encourage free-riding (that mirrors the immigration crisis at the national level). Those who flout their obligations are the ones who stand to reap the greatest rewards. Towns who haven’t built an apartment in a decade are also ones where the median home sells for $1.6 million. Given the incentives at play, a decentralized approach is unlikely to work.

There are a number of proposed solutions, but the two which have gained the most traction concern “upzoning” and rent control. SB 50 would allow apartment buildings to be built near major transit hubs, increasing housing capacity six-fold while also mitigating increased traffic congestion. It represents a market-based solution that looks to harness developer incentives in order to accelerate the development rate.

But critics contend that a market-based solution like SB 50 is unlikely to provide relief. Michael Storper, a professor of urban planning at UCLA, argues that the bill is essentially about “raising housing opportunities for highly skilled, relatively high-income people.” Upzoning may encourage more housing, but it will be housing designed to maximize the return on investment. The bill doesn’t make development in lower-income neighborhoods any more attractive or profitable. Instead, it may very well “gentrify what’s left to gentrify in highly desirable areas.” Francisco Dueñas, the housing campaign director at the Alliance of Californians for Community Empowerment, agrees: “We think that in general, similar to what happened in Chicago, [SB 50] is just going to increase the value of that land, fueling greater speculation, and then that gets translated into increased rent and more people getting pushed out.” Ultimately, while the bill may encourage development thus increasing supply, critics worry it does nothing to address the issue of displacement.

An alternative aimed directly at this issue is rent control. (One such proposal, Proposition 10, was on the ballot in 2018 and was defeated. Another measure, AB1482 is currently gathering steam.) As property values soar and wages stagnate, renters are unable to keep up with rising prices. By placing legal limits on what landlords can demand for rent and tying those figures to cost of living calculations, these measures hope to protect renters from effectively being forced out of their residences. Renters may no longer be victims of arbitrary market forces and suffer the consequences of prices which reflect whatever the market will bear.

Critics emphasize the negative effect expanding rent control will have on housing development, as it eliminates financial incentives to build new housing or develop existing properties. Given the magnitude of the housing shortage at hand, ensuring renters remain where they are might not be the most pressing objective. Rent control creates immediate gains, but, as a Brookings Institute study concludes, “in the long run it decreases affordability, fuels gentrification, and creates negative spillovers on the surrounding neighborhood.” Reduced profit margins discourage landlords from regular maintenance, renters bunker down in apartments that are too big or small for their needs, and the neighborhood housing market is depressed.

There are no easy solutions. At best, the crisis in California is a cautionary tale that might signal when to raise the alarm, and, if we’re lucky, where to look to find a way out.

Negotiating with Terrorists in Colombia

The thought of allowing a terrorist group who has committed human rights violations such as the murder, kidnappings and displacement of thousands to create their own political party, let alone be integrated into society, is terrifying. Immediately you get a bad taste in your mouth. But if it means ending a 50-year-old conflict, is it worth the risk?  After several failed negotiations throughout the years, the Colombian government is closer than ever to ending its ongoing civil conflict with its two top guerrilla organizations, the Revolutionary Armed Forces of Colombia (FARC) and the National Liberation Army (ELN).  The negotiations include land reform, the elimination of the drug trade, amnesty for combatants, and political participation through new political parties.

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