Republicans and Democrats Engage in Silly Debates, While the Modern Whigs Propose Real Solution to Inequality

In the aftermath of the Panic of 2008, it appears that the inequality between rich and poor has begun to ease just a little bit. While that may give those who believe in a more egalitarian society a silver lining in the recession cloud, the more important issue is that of access to opportunity.

A decrease in the gap between the wealthy and the poor because of falling asset values for the rich does not go the real issue: access to opportunity for the poor. While Democrats and Republicans both succumb to the joys of bashing the wealthy, there is a dearth of proposals for a long-term solution to inequality. This is important because of the link to the wealth of families and the subsequent wealth of their children, as related here:

More or less equal?

There might also be an argument in favour of wealth disparities if social mobility was high and the sons and daughters of office cleaners could fairly easily rise to become chief executives.

But America and Britain, which follow the Anglo-Saxon model, have the highest intergenerational correlations between the social status of fathers and sons; the lowest are found in egalitarian Norway and Denmark. Things are even worse for ethnic minorities; a black American born in the bottom quintile of the population (by income) has a 42% chance of staying there as an adult, compared with 17% for a white person.

As a result, talent is being neglected. Of American children with the highest test scores in eighth grade, only 29% of those from low-income families ended up going to college, compared with 74% of those from high-income families. Since the better-off can afford to keep their children in higher education and the poor cannot, breaking out of the cycle is hard.

Perhaps Americans put up with this system because they have unrealistic expectations of their chances of success. One study found that 2% of Americans described themselves as currently rich but 31% thought that they would become rich at some stage. In fact only 2-3% of those in the bottom half of the income distribution have a chance of becoming very well off (defined as having an annual income of more than $340,000). Just over half of those earning $75,000 a year think they will become very well off, but experience suggests that only 12-17% will make it.

Health outcomes too are decidedly unequal; the gap between the life expectancy of the top and bottom 10% respectively rose from 2.8 years to 4.5 between 1980 and 2000.

That does not meet the definition of a fair society by John Rawls, a 20th-century philosopher, who described it as one in which a new entrant would be happy to be born even though he did not know his social position ahead of time.

While we may never be able to completely remove the link between parental wealth and the wealth of their children, we can reduce it by encouraging upward mobility, if we are truly to move to a more equal society.

Therefore, the Modern Whig proposal to link affirmative action policies to familial income rather than race is a policy that is much more far-reaching solution to our economic problems than the current grand-standing over bank bonuses we are getting from the Democrats and Republicans.

Previous posts on this topic:
Spreading Opportunity
In Praise of Competition