Inverting The Argument: Inequality Is The Product Of Diversity

Over on Stumbling And Mumbling, Chris Dillow writes about inequality, and refers to OECD Gini-charts on inequality and trust, in an effort to suggest it’s ‘how we believe’ one thing or another that determines redistributive policy. As if conservatives simply need to ‘feel differently’ in order to desire a more egalitarian society.

I try to show him that a tolerance for redistribution is a function of cultural homogeneity, and a lack of threats to the status economy.

Here is most of Chris’ article:

My chart shows that the correlation between big government and equality is weak. Yes, countries with big government spending tend to be more equal, but there’s a lot of variation around this. For example, France and Norway have similar levels of equality, but France spends 13 percentage points more of GDP. And the UK has the same inequality as Australia or Japan, but spends 10 percentage points more of GDP.

In fact, it could be that the positive correlation between equality and public spending doesn’t reflect causality from the latter to the former at all, but rather an omitted variable. Countries that combine big government and equality tend to be high trust societies. It could be, then, that the same high trust that makes people supportive of redistribution – because they believe “welfare scroungers” aren’t ripping them off – also makes them support big government as they trust politicians not to waste money.

This possibility hints at another – that perhaps it’s possible to combine small government and equality if the right cultural or institutional factors are in place. I mean, for example:

– Strong trades unions. These not only raise the pay of the worst off, but also help restrain top pay.

– A collectivist culture. A society that believes that corporate performance depends upon the abilities of all its employees will be more egalitarian than one which believes that organizations can be transformed by star managers.

– Education. A highly educated workforce might be more equal, if only because it creates more competition for top jobs. There is a correlation between education levels (pdf) and equality – the egalitarian Nordics do better than the inegalitarian US and latin Americans. And the causality mightn’t be entirely from inequality to poor education. However, high educational standards are achieved not by increased spending, but by a culture which values schooling – and the UK lacks this.

Herein, I fear, lies the big challenge for the Left. Although it is technically possible to reconcile small government or fiscal conservatism with greater equality, the UK lacks the cultural underpinnings which would permit this happy combination.

Despite the fact that for many of us equality of outcome is not a goal, but freedom, the difference between egalitarian and non egalitarian states is, driven by factors in addition to those you mention:

    a) Education — Yes, as you state, education, but that means education of the lower half in productive trades, rather than the USA, which educates with ‘equality’ as if all of its citizens will end up in the upper middle class, thus penalizing the lower classes. Education must be seen as a path to a better life. In the UK’s lower classes there is little incentive for class migration. (I’ve always found this amazing myself.)

    But b) Status Signals: cultural competition from diversity versus cultural reinforcement through homogeneity also matters for encouraging egalitarian sentiments using status signals. France has a highly centralized cultural ministry which disallows competition using status signals. This forces more compliance with cultural norms and because of that, allows the wealthy within the culture to feel that they are contributing to what they already value. Multi-culturalism discourages equality. Since minorities will try to create status signals counter to the norms of those in power, it creates a disincentive for redistribution.

    c) Access to power, Resistance to Changes In power: soem political systems allow radicals access to power and some do not. Cultures are more egalitarian if they deny disrupters access to political power through either formal or informal processes.

    [callout]…small homogenous Protestant countries with high median IQ’s are more distributive than factional, non-protestant countries with lower median IQ’s.[/callout]

    d) Size: it is easier for a small homogenous culture to create an environment that tolerates redistribution. This is the reason for the egalitarianism of the nordic countries. They’re small and homogenous and there are few if any external pressures from ‘unlike’ groups with different cultural and therefore status signals and different “property definitions.”

    e) Composition: IQ distribution matters. This difference affects the USA, and dramatically effects South America. South america is also highly tribal – as are Brits. The USA is a domestic empire over a set of different cultures consisting of different economic, religious, racial and cultural interests in various compositions, each with different IQ distributions, and this in turn correlates pretty consistently with performance of the groups, which in turn creates competition for status signals, and a desire for access to power in order to expand them, and a counter-desire for people who which to resist that expansion.

A number of these factors run counter to the progressive fantasy about the nature of mankind, and individual behavior in society. And failing to include them in your list, is simply a prescription for failing to accomplish your desired state of ‘equality’, by denying the factors that dramatically affect political preferences in redistribution.

The lesson to take away from any analysis of the tolerance for redistribution of one’s productive gains (‘equality’), is that **Human beings seek status as much or more than money, and that those who have money will redistribute it to the less advantaged if they perceive that they are not undermining their status as individuals, their status as a cultural class, or their status as a system of cultural manners, ethics and morals.**

In other words, if the proletariat has to behave and conform, (which it does in france and doesn’t’ in england or the USA) then people will tolerate redistribution. If the proletariat doesn’t have to behave or conform, then they will resist it.

That’s the difference between seeing people as disadvantaged and lazy and incompetent or threatening and destabilizing.

*Adherence to norms determines the tolerance for egalitarian sentiments. And cultural diversity reduces tolerance for egalitarian sentiments.*

Economists look only at the monetary economy. But the monetary economy is a Maslowian pyramid that exists first to support basic needs, second to provide individuals with the needs for reproduction, and third to provide the needs for status signals – which in turn provides access to mates, and ease of nesting/reproduction. As the economy improves, and the upper classes expand, the status signal economy dominates the monetary economy – ie: the society becomes politicized. The only solution is cultural homogeneity.

In other words, there are opposing curves that describe cultural homogeneity and the tolerance for monetary redistribution, which in effect describes the status signal economy.

Here are the charts the you’re referring to.

And from these charts, we are expected to deduce that ‘high trust societies’ are the most redistributive.

However, what these charts actually show, is that small homogenous Protestant countries with high median IQ’s are more redistributive than factional, non-protestant countries with lower median IQ’s.


And Charles’ argument is just another example, of why any economic argument that mentions the nordics is be definition, false.


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