I hadn’t really paid much attention to this Sunday Times piece by an American expat living in Oslo comparing Scandinavia with the United States, but this post from Brett Marston made me curious. Marston asks:
How can the New York Times get away with publishing a Week in Review piece on income in Norway and not even mention income distribution (except disparagingly), the GINI index, or the effect of income inequality on aggregate statistics?
Well, the first potential response is that it is, after all, an opinion piece, and the writer has the choice of what evidence to marshall or respond to. But I do think Marston has a point… at least to an extent.
Income inequality, of course, does bias some statistics like the mean income; comparisons of median income would be more helpful, since it is unbiased by outliers. My suspicion, however, is that median U.S. income is substantially higher than median Norwegian income, regardless.
I also think a focus on inequality (and the Gini coefficient, which is a measure of inequality) might be worthwhile… but what does inequality mean in this context. Is the poorest Norwegian better off than the poorest American? If so, that might be a problem. However, by most consumption measures, a large share of poor Americans are only “poor” relative to other Americans (consider that even many of the poorest Americans have cellular phones and cable TV, not to mention $100 tennis shoes), although certainly there are poor Americans who fall through the cracks—as, for that matter, there are poor Norwegians in the same situation.
Certainly income inequality can be viewed as a problem—consider, for example, the well-known problem of relative deprivation. I’m not sure the solution to that problem is to force rich people to have less money so poorer people feel better about themselves, which seems to be the implicit solution to the problem: giving the money the rich have to the poor, while a nice concept, probably wouldn’t materially help the poor that much—and they’d still be poor relative to everyone else, so relative deprivation would kick in again.
In other words, I don’t know that income inequality is prima facie bad; certainly, poverty is bad, and that is something most societies could do better at solving, the United States included. But I think a focus on inequality over objective conditions probably is counterproductive.
Update: Jason Kuznicki has nicer things to say about the piece, and also discusses the rather silly “constitution in exlie” piece that has all the lawprofs and law students atwitter.