Wednesday, October 29, 2014

Envy in a Time of Inequality

Envy in a Time of Inequality:

Envy, I’ve often thought, is the very worst human emotion. The epic Biblical narrative of Cain’s slaying of Abel reminds us that people have been jealous of others’ successes and well-being from time immemorial. When mixed, however, with the near-obsession with inequality that dominates much public discourse these days, there’s a serious risk that envy — and desires to appease it — can start driving public policy in ways that aren’t economically wise or politically healthy.

Remarks like “you didn’t build that” or François Hollande’s notorious 2012 “I don’t like the rich” statement don’t of course come out of a void. On one level, they reflect long-standing ideological complaints about the nature and outcomes of market economies as well as animus against particular groups. But the current fixation with economic inequality has arguably made it easier for our political masters to say such things out loud and with less fear of electoral retribution.

The situation isn’t helped by the sheer looseness of contemporary discussions of economic inequality. Inequality and poverty, for instance, aren’t the same things. That, however, doesn’t stop people from conflating them. Likewise, important distinctions between inequalities in income, wealth, education, and access to technology are regularly blurred. As recalled in a paper recently published by the Federal Reserve of St. Louis, wealth inequalities can have greater impact upon people’s comparative abilities to build up capital for the future than income inequality. Yet we spend most of our time anguishing about the latter.

Debates about inequality are not made any saner by some of the wilder numbers thrown around. Take, for example, the endless denunciations of the gaps between the incomes of American CEOs and their employees. According to the AFL-CIO, it stood at 331-1 in 2013.

The Bureau of Labor Statistics, however, tells us that the average American CEO (i.e., not the outlier 200 CEOs of America’s largest companies) earned $178,400 in 2013. Taking this number together with the AFL-CIO claim that the average worker earned $35,239, it adds up to a vastly-smaller ratio of 5-1.

Nor, we should recall, are all forms of economic inequality unjust. Many people are born with skills that are in higher demand and shorter supply than others. That’s not unfair. It’s simply a reflection of the human condition. In other cases, some people are willing to work harder, take on higher risk, and assume more responsibility. It’s therefore just for a company to choose to pay them more than those employees who want to shoulder less risk, work fewer hours, and accept less responsibility.

My suspicion, however, is that the envy-inequality nexus is driven by something deeper than the confusions that permeate inequality debates or populist efforts to build up constituencies of angry voters. It also has something to do with the internal dynamics of democratic political systems.

As always, Alexis de Tocqueville had some of the best insights into this phenomenon. The dominant feature of democratic societies, he argued in Democracy in America, is the passion for equality. In several places, Tocqueville designated equality of conditions as “generative.” By this, he meant that the desire for equality in the young American Republic penetrated everything else: the economy, the law, even religion.

On the one hand, this focus on equality facilitates the breakdown of many barriers that typically inhibit the spread of markets and the growth of wealth. It wasn’t for idle reasons that one of Tocqueville’s philosophical inspirations, Montesquieu, designated commerce as the profession of equals.

As the democratic hunger for equality takes over, we become impatient with mercantilist efforts to limit competition. We cease viewing people through the lens of hereditary relationships and instead start seeing them from the standpoint of freely contracted associations. With democratic society leveling the old hierarchies, there’s more scope and incentive for change. The possibility for me to have a different future becomes more real. This is a boon for increased competition and entrepreneurship.

But while these features of democracy may complement and even accelerate the rise of economic freedom and prosperity, Tocqueville held that democratic society also embodies increasing intolerance for various inequalities typical of market economies.

People living in a democracy, Tocqueville noted, can’t evade its emphasis on equality. As a result, the same people can’t help seeing they still aren’t equal in many ways. Some people, we recognize, are more intelligent, possess greater power, and are wealthier than us. And many of us don’t like that.

Growing awareness of these facts leads to many people becoming envious. We start wanting more than just equality before the law. Instead we’re increasingly anxious to make our world conform to democracy’s promise of an equality of conditions. State power becomes seen as the means for realizing this end.

Faced with economic inequality, Tocqueville thought that people have two options in democratic societies. The American merchant’s reaction, he observed, was not to be overwhelmed by envy, but to try and shrink his inequality by working to raise himself to and beyond his competitor’s level. The second option, more typical of Tocqueville’s native France, was to bring the more fortunate or enterprising down to our own level, not least by changing the rules governing economic life.

According to perhaps today’s best Tocquevillian scholar, the French philosopher Pierre Manent, democracy tends to favor the second option. Democracies, he writes, gravitate towards a fascination with producing total equality because democratic systems oblige everyone to relate to each other through the medium of democratic equality. Envy follows because we start noticing — and resenting — all the differences that contradict this aspiration to an equality of conditions, particularly wealth disparities.

In Democracy in America, Tocqueville outlined ways in which democratic societies could try and tame the equalizing instinct and subsequent tendencies to envy. Many of these concerned constitutional restraints on government power. But in the long term, Tocqueville seemed dubious of these structures’ abilities to resist democracy’s equalizing impulses. Legislatures, he surmised, usually end up conforming to what those desiring further equalization want.

To this one could add that the big political problem with envy is that it’s essentially unappeasable by political methods. Even if the 5-1 income ratio cited above between average CEOs and average employees gained popular acceptance, does anyone doubt that legions of people would denounce this as fundamentally unjust and insist that governments should reduce the gap by all possible means? The envy, this suggests, has more to do with the simple existence of difference than the precise degree of economic disparity.

In the end, Tocqueville thought, the forces that diminish envy had to come from outside the political realm. Religion, he noted, had a powerful moderating effect upon the democratic craving for equality in America. After all, Judaism and Christianity list envy of those who possess what you want as a violation of the Ten Commandments.

Unfortunately most religious leaders today are deafeningly silent about envy. And that’s a shame because perhaps the most effective antidote to envy is constant reminders of what it does to us as human beings. No description of envy’s effects, I’d submit, exceeds that of the portrait of the goddess Invidia, the personification of envy, penned by the Roman poet Ovid in his greatest work, Metamorphoses:

Her sight is skewed, her teeth are livid with decay, her breast is green with bile, and her tongue is suffused with venom. She only smiles at the sight of suffering. She never sleeps, excited by watchful cares. She finds men’s successes disagreeable, and pines away at the sight. She gnaws and being gnawed is also her own punishment.
That’s the thing about envy. For all the externally directed resentment, it can’t help but torture and destroy us and society from within.

In such a world, everyone loses.