In the past few weeks John and Henry have engaged in arguments with Tyler Cowen and Will Wilkinson on the subject of whether relative wealth matters. To be sure, that isn’t the ostensible focus of the dispute with Tyler, which is about demographics. But digging deeper, the crux of Tyler’s argument has been that Europe’s ageing population matters because it will lead to lower growth rates and that the compounding effect of these will be that Europe’s position relative to the US (and China, and India) will decline, and that that’s a bad thing for Europeans. Whilst Tyler insists that these global relativities matter enormously, Will suggests that domestic relativities between individuals matter hardly at all. Since I think of Will and Tyler as occupying similar ideological space to one another, I find the contrast to be a striking one, and all the more so because I think that something like the exact opposite is true. That is to say, I think that domestic relativities matter quite a lot, and that global ones ought to matter a good deal less (if at all) just so long as the states concerned can ensure for all their citizens a certain threshold level of the key capabilities.
Domestically, it seems to me that relativities in wealth and income matter because of the way that they can impact upon people’s absolute levels of well-being. There are a number of components to this, and I needn’t rehearse the arguments in grim detail. Amartya Sen goes through some of them in his well-know essay “Poor Relatively Speaking”: if wealthier people come to have access to new technologies, and if access to important goods get mediated through access to those technologies, then the poor who lack such access will find it harder and more expensive to supply their needs. You can run this one from everything from cars and out-of-town shopping centres to the internet. Second there are arguments about how inequalities in wealth and income undermine political equality. Third there are the Frank-style arguments about how relativities impact directly upon happiness. Fourth there are the Marmot and Wilkinson (the other one) arguments about how inequality impacts on health. Fifth, there arguments such as those put forward by Adam Swift concerning how people can translate their advantage in wealth and income into better educational opportunities for their children and place them better in the queue for jobs that those of poorer individuals. Some of these arguments may have flaws (I’m inclined to be more skeptical about the Frank ones than the others) but together they make a compelling case for the idea that inequality is bad for people, domestically.
By contrast, I see no good reason to think that analogues of these arguments hold for international relativities. If Germans end up poorer in wealth and income than Americans, this will not thereby undermine political inequality among Germans. Position in local rather than global hierarchies is what matters for health outcomes and self-esteem. Just so long as all Germans, say, continue to enjoy those capabilities that are important for full participation as citizens in their communities, something that can certainly be assured on the basis of a level of wealth and income such as Germans enjoy today, I see no special reason for moral concern about the relative decline of Germany compared to the United States. Of course, there may be a problem if there is mass emigration by talented and productive people in Europe to the United States (in the way that there is currently a movement from Eastern to Western Europe). That would be bad if it impacted directly on the access of Europeans to, say, health care, and it would be bad if the talented were able to use their opportunities elsewhere in a way that made European countries domestically more unequal. But just so long as European countries can give people adequate opportunities to live absolutely decent lives in Hamburg, Paris or Bristol, there will a limit on those who will leave just for increased wealth and income, especially if that wealth and income can’t be guaranteed to translate into a higher level of well-being.
Finally, it seems to me that any concern that some advanced capitalist countries might experience relative decline compared to other advanced capitalist countries ought to be greatly outweighed by the urgency of the absolute level of poverty that people experience in many countries. That people in sub-Saharan Africa die prematurely and preventably in large numbers matters far more that the fact that the populations of wealthy countries vary in their relative levels of wealth and income. All advanced societies are rich enough to secure for all their members the capability to participate as equal citizens, and only the internal maldistribution of their wealth means that some individuals face social and political exclusion. One of the texts that it is on my to-think-about-soon list is John Stuart Mill’s “On the Stationary State” from his Principles of Political Economy . I won’t comment further on that here, precisely because I need to think it through further. But Mill’s idea (endorsed by Rawls btw) that the goal of our policy ought not to be one of continual struggle for growth or for relative advantage once the threshold has been reached where we could all hope to enjoy a satisfactory level of well being seems to be right.