This is just a short post seeking, for the purposes of mutual clarification, to highlight where I think the real differences lie between someone like me and “left neoliberals” like Matt Yglesias. I think that something like Yglesias’s general stance would be justifiable if you believed in two things: (1) prioritarianism in the Parfit sense and (2) that real (that is, inflation adjusted) income levels reliably indicate real levels of well-being, at least roughly. For those who don’t know, prioritarianism is a kind of weighted consequentialism, such that an improvement in real well-being counts for more, morally speaking, if it goes to someone at a lower rather than a higher level of well-being. So prioritarism is a bit like a utilitarianism that takes a sophisticated and expansive view of utility and weights gains to the worse-off more highly. This view assigns no instrinsic importance to inequality as such. If the best way to improve the real well-being of the worst off is to incentize the talented (thereby increasining inequality) then that’s the right thing to do.
Now inequalities in wealth and income can matter for a prioritarian. But not because they are of intrinsic significance, but rather because they can translate into lower levels of real well-being for the worse off. Cue Amartya Sen’s famous article “Poor Relatively Speaking” (arguing that the relatively poor get cut off from technologies increasingly central to societal functioning), cue Fred Hirsch on positional goods, cue Michael Marmot and Wikinson & Pickett on health (and other welfare) outcomes consequent on inequality as such. Likewise if you think that high levels of inequality undermine social solidarity and political equality and that those also have impacts on real well being, then you’ll have a further reason to be concerned about the consequences of inequality for real lives of ordinary people. People like me think these things matters a lot for real levels of well-being, but others, such as Yglesias’s friend Will Wilkinson (and any number of others) are sceptical. If you think like me that those factors are very important, then you’ll be doubtful about whether increases in real income will translate into increases in real levels of well being if inequality is also growing; if you think they aren’t, you won’t. Add to these concerns some worries about the natural and social environment. If you think that neoliberal policies are also often associated with an erosion of the natural environment and of the social commons (I do) then you’ll have further reason to believe that rises in inflation-adjusted income don’t give you the true picture about real levels of well-being.
There’s some stuff that cuts the other way. When I said that Matt has to believe that inflation-adjusted income tracks real levels of well being, he doesn’t have to believe that all the way up the income scale. Given familiar facts about the diminishing marginal utility of income, it is probably the case that extra money does very little for the rich. But it really does make the lives of the poorest better off, other things being equal. The trouble is, that as far as I can see, other things aren’t equal and their inequality leads to all the bads in the preceding paragraph.
There’s a risk in the points I’ve made and one that has recently been exploited (at least rhetorically) by Britain’s Conservative-led government. That is to say, that, since there’s a disconnect between income and well-being, we should not worry about the former. This then gives the right-wing a license to cut programmes that tranfers to the worst off on the grounds that you can’t solve their problems with money, etc. Naturally, I don’t agree with that. My point is not that we shouldn’t care about the real incomes of the worst off, but rather that we shouldn’t pursue policies that have the effect of increasing their incomes but which also have side-effects involving inequality and natural and social deterioration that swamp the gains and actually make them worse off, all things considered.