by Metiria Turei
“For over 90 per cent of our existence as human beings we lived, almost exclusively, in highly egalitarian societies.”
- from The Spirit Level by Richard Wilkinson and Kate Pickett
In the case of New Zealand, it has only been quite recently — the 1990s in particular — where inequality has emerged as a defining feature of our social landscape.
There are many ways to measure inequality. The Gini co-efficient is one of the more sophisticated as it measures inequality across the whole of society rather than comparing extremes in income. If all the income went to one person, the Gini co-efficient would be 100. If all income was evenly shared, the co-efficient would be 0. For most OECD countries, the co-efficient ranges between 30-50.
The graph shows rapid increases in the gap between the rich and the poor from 1986 until 2001 coinciding with a period of massive deregulation, labour reforms, and benefit cuts. Real incomes for lower and middle income families fell while rich households saw their incomes soar. Working for Families and an increase in the top tax rate to 39% reversed 15 years of rising inequality. The effect was short-lived, however, and we now seem to be caught in a period of rising inequality once again.
National’s planned tax changes will have a significant impact on inequality for many years to come. Watch this Budget announcement space closely.
Where does New Zealand rank amongst its peers? We’ve moved rapidly from one of the most equal countries in the OECD to one of the most unequal. The OECD now ranks us 23rd out of 30. The UN ranks us 18th out of 23.
Inequality has risen rapidly in the last two decades. The good news is that if inequality can rise this quickly, it can also fall just as quickly if we set our collective minds to it. And there is good reason to. Inequality is both damaging and costly for us all. In my next Inequality in Aotearoa blog, I’ll explore some of the specific costs associated with inequality.
In the meantime, check out this cartoon from this morning’s Dominion Post. Could it be that we are cottoning on to the negative impact rising inequality has on all of us?
Published in Economy, Work, & Welfare | Featured | Health & Wellbeing by Metiria Turei on Tue, April 6th, 2010
Tags: gini coefficient, inequality, Inequality in Aotearoa
More posts by Metiria Turei | more about Metiria Turei
on the trolls and those who are unable to keep on topic
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What is the problem with some inequality – ie, Poor and Rich are not equal for a reason , one has more purchasing power than the other, it sounds cynical but it’s true. Knighthoods which were brought back with accliamation create a from of inequality , so do PhDs and other Titles because the rest of population cannot indulge…
I agree that certain areas if there’s inequality we have to tackle it but there is a limit- this is not a communist society Ms Turei!
another inequality is the CSM legislation…*cough* A20 UN…
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Furthermore, the Fifth Labour Government also seem to get let off easily in this analysis with the sentence saying that the Labour Government’s policies ‘reversed 15 years of rising inequality’. This just isn’t accurate. For an alternative view, based on the most recent Ministry of Social Development’s annual Social Report, see this blog post:
http://liberation.typepad.com/liberation/2009/10/msd-social-report-2009-inequality-increased-in-labours-last-year-in-office.html
There’s heaps of other evidence of how the Labour-led governments failed to reverse inequality in any significant way. For example, a Statistics New Zealand document came out a few years ago, and it confirmed that under Labour the rich kept getting richer and the poor were getting poorer. It showed that the richest 10% of NZers own 52% of NZ’s wealth. This was up from 48% in 2001. The poorest half of NZ society now owns only 5% of the country’s wealth – down from 7%. What’s more, the wealth distribution is incredibly ethnic-based, with the average ‘European’ having a net worth of $87,000 compared to, for example, Pacific people with only $6,700. Here’s the breakdown of wealth in NZ:
Top 1% own 16% of wealth
Top 5% own 38% of wealth
Top 10% own 52% of wealth
Top 50% own 95% of wealth
Bottom 50% own 5% of wealth
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I have the feeling that not only can the top 5% pay far more tax than they do (heck they dodge most of it anyway), but they would still buy those ridiculous expressions of vanity, simply for the status value regardless of cost.
All that extra money could be put into tax breaks for middle to lower income earners to inject more into the economy, money for R&D and technology sectors and more for social services….
Unless someone beleives that some people are entitled morally to a ferrari, or cruise boat? *chuckles*
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@Drael
…So you are supporting further National Debt?
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and yes people are entitled morally to own those items if they have the income/means to procure them
If NZ taxes our rich too highly they’ll move offshore with their money and noone benefits at all, look at the way we are forcing companies overseas, the same will happen with our wealthiest.
Equality means everyone is treated the same, I would have thought under hat logic everyone should pay the exact same tax? any other way would be discrimination!
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@Drael
“I have the feeling that not only can the top 5% pay far more tax than they do (heck they dodge most of it anyway)”
Your “feeling” is wrong, the top 10% of income earners pay net 76% of the total taxation in NZ, a few dodge it, but would still individually pay more than most, and provide jobs and growth etc. If anything, the top income earners are paying too much tax.
Anyone that lives in NZ is still grouped as wealthy compared with the rest of the world, if you get at least a meal a day and have a roof over your head you already are in the elate, equality is a matter of perspective.
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You know alot of NZ’s industry relates to the “vanity” section, we do not make the cheap stuff here, the things that create jobs in NZ are the luxury goods
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Inequality is created by market led supply side economics?
The gap between rich and poor was far greater in the Soviet Union and Mao’s China than in any country in the market led West. The elite lived in luxury while the average people lived in poverty we can barely imagine.
And in State tyannies such as Zimbabwe the leaders have millions while the people starve.
During the last few decades in spite of all the crises you talk about, more people have been lifted out of poverty than in all of human history. Being equal and poverty stricken is not much fun and the Farmer in the American West around 1900 was about as rich (or poor) as the typical African villager today.
The gap between the Nobility and the peasantry in medieval times was massive but the average person today is wealthier than the Nobility of those times. If you don’t believe just tell me what time would you go back to permanently if I had a time machine for you. And before you even think about it just consider one word – dentistry.
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It seems a bit odd in the introduction of this post to pinpoint the 1990s, instead of the 1980s, as when inequality emerged as a defining feature of New Zealand.
The post clearly states the gap increased from 1986-2001, with the 1990′s being particularly bad. Can’t see what’s so wrong with that.
Unless this is a typo, it looks like the Fourth Labour Government and Rogernomics has been either strangely forgotten or willfully erased from this history of inequality in NZ.
Or maybe you missed the reference to 1986.
There is a strange tendency on the left to let the Labour Party off the neoliberal hook, and only refer to the Bolger-Richardson government of the early 1990s as the creators of inequality and today’s rightwing economic framework. How can this be explained?
Really? I’ve never seen the left do anything but slag the 4th Labour govt. Have you any relevant links? But in the case of the Greens at least, it doesn’t need to be explained, since it hasn’t happened.
Furthermore, the Fifth Labour Government also seem to get let off easily in this analysis with the sentence saying that the Labour Government’s policies ‘reversed 15 years of rising inequality’. This just isn’t accurate.
“Reversed”, as in was going in one direction, then went in the other. The post discusses the trend of the graph, pointing out as well that it started going up again rather than continuing downward, and with no claim the gap ever got near the 1986 level. So nothing inaccurate about these comments either.
Really Bryce, this isn’t up to your usual quality of conspiracy theory. There are endless examples of the Greens criticising the 5th Labour govt for not doing enough (let alone the 4th Labour govt for starting it all), for example over their refusal to restore National’s benefit cuts.
It also doesn’t fit with your usual meme that the Greens are really a centre-right party, in which case you might expect to see National being favoured over Labour, or even that we actually don’t care about inequality at all, just the environment, right?
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NZ’s dentistry is not that flash, if you ask me.
I have really crap teeth – no idea why, I brushed regularly as a kid (and still do), and had fluoridated water supply basically from birth, but they keep breaking and causing me ongoing pain. Pre-recession, I had a good-paying job and even then had to spend more money than comfortable just keeping them under control. Private insurance is useless – enough cover per year for about half a root canal, and that for a hefty premium. There is effectively no public option. Now that the recession has rather sharply dealt to my employment, I have only one option: ongoing pain relief. No sane dentist will let me run up thousands in dental bills which I will only pay back one day when I have an income again.
So from my perspective, there’s little difference between today’s dentistry and that of the middle ages. Today’s may be fancy, but it’s inaccessible!
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It’s called genetics, rainman, we were going to have you culled in the next round…
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Interesting blog title.. initial emphasis historical.. though I would surely hope that it extends to to several part series.. one of which would state the object of inequality. Then value this object.. what, for instance, aside from the blindingly obvious ‘victims’ of it, does it achieve for its perpetrators.?
Is it sustainable..?
Or is it an ideology which, as big broad human history teaches us, among those punishing peoples who pose no threat to it a goner in the enfeeblement its own lifetime…?
Keep on the good work… yes our word should be good since ‘better’ invites better than what..
ps: besides which I was a little surprised to see no mention of the shadow side (nay not the supply-side of Owen’s machination) which supposedly is laying off all the risks of capitalism’s inequality.
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Rainman: You have my utmost sympathy! A few years ago I went to a dentist in Canterbury who left a cotton swab inside my tooth and filled it up. I tried to lay a complaint with the Dental association but the dentist who discovered the error was covering up. I found it very difficult to even contact the dental association!
I clearly remember in the early eighties that those who couldn’t afford private dentistry could go to the public hospital (every city had them)and get your teeth seen to. The equipment wasn’t flash and it was performed by trainees under supervision but they did a good job.
Most subsidised dentistry are now performed by private dentists who charge an outragious fortune.
I can’t understand why we have a ‘free’ healthcare system that doesn’t include dental services after all if your mouth is rotten its going to poison the rest of your digestive system.
So wouldn’t it make sence to put dental services on an equal footing the rest of the health services? In fact it could even prevent a lot of medical problems.
Meanwhile my teeth are falling apart a note of advece to Rainman lay off the suger.
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Valis,
You highlight Bryce’s point nicely when you write: “The post clearly states the gap increased from 1986-2001, with the 1990’s being particularly bad. Can’t see what’s so wrong with that.”
When I look at the chart I see the steepest part of the curve starts in the 4th Labour government’s term. The 1990s were bad, but 1988-1992 (mostly Labour) is the worst part.
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Btw, I have no problem with your description of the graph. A third way of describing it is that in the 80′s we went from 27.5 to 32 and in the 90′s from 32 to 37.5, i.e. a bit more gap added in the 90′s than the 80′s. None of these angles is wrong and in my view none contain any of those deep ulterior motives that Bryce so likes to find.
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stephensmikm’s capital movement:
strikes me as further reason for a Tobin Tax on international capital movements.
Here’s a rule of thumb: if someone’s screaming about a proposal, then there’s probably a possibility that it will be effective. Consider our relationship to the nationalisation of the water in Canterbury as a (twisted) example.
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so you want a dictatorship then?
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Inequality is not the way. To have work, a decent income and the ability to afford a home or alternatively to rent- that is what it takes. I had a career for 40 years, lived modestly and saved for a home yet many of our youth have no means to get to those ends.
Happy people with a future tend to not get into trouble. Happy families equal happy children. That to me is equality. What our govt can do to help them is laudable.
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Why? Whats your argument to support this conclusion? Your honestly telling me people have a moral right to ferrari’s???!!! ridiculous. Youll need to do better than simple state your opinion here, you’ll need to justify it.
“If NZ taxes our rich too highly they’ll move offshore with their money and noone benefits at all, look at the way we are forcing companies overseas, the same will happen with our wealthiest.”
We are hardly forcing companies overseas. Other countries have cheaper labour, and resources, as well as the tax thing. Often those countries have poorer economies, or more inequality. not better. Hardly something to emulate.
I highly doubt paying more for luxury would force people overseas. They still get high incomes. Heck their income tax could be less. The tax only affects things no one needs – if people can live with the _horrific_ hardship of owning less mansions, or ferraris, they will still enjoy an extremely high standard of living, because this is neither a global tax, nor an income tax.
I find it bizarre really how some people find the idea of taxing luxury boats offensive. I can’t even imagine thinking that way, let alone what possible reasons one could have for such a perverted system of ethics.
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A person has the same moral right to own a ferrari as they do to own a 1980s Corolla, Just because one is more expensive than the other does not make it less moral
“I highly doubt paying more for luxury would force people overseas. They still get high incomes. Heck their income tax could be less. The tax only affects things no one needs – if people can live with the _horrific_ hardship of owning less mansions, or ferraris, they will still enjoy an extremely high standard of living, because this is neither a global tax, nor an income tax.”
You are advocating Communism?
People have the right to be wealthy, how dare you say that they should put their dreams aside. undertaking that sort of motion would be just as deterimental for an income tax, do you know how the investment markets work, NZ could go bankruppt by the mere notion that our welathy were not able to exchange funds between NZ and overseas accounts, it would damage our credibility within the western world as a country where people can live happily, Your proposals would kill the majority of the dreams of many NZers to own a nice big 6 bedroom house or penthouse suites and a bach.
And yes we are forcing companies overseas by the fact we are pricing ourselves now out of the middle range goods market, It was fine that McToys were made overseas but now almost everything is, NZ is now an Import nation for the majority of consumer goods, all you have to do is look around your house/flat etc to see that.
“I find it bizarre really how some people find the idea of taxing luxury boats offensive. I can’t even imagine thinking that way, let alone what possible reasons one could have for such a perverted system of ethics.”
It’s offensive because you are defining that because a person wants to be comfortable while fishing or travelling they have to pay several times more to the govt its the same with the Ferrari , you aren’t just taxing “luxury” you are taxing the essence of life to be happy and comfortable
People are morally entitled to own things because they or their family have put in the hard yards for NZ or the World for the purposes of having the ability to allow such accessories to their lifestyle to be available , I repeat again , any tax on luxury goods would hurt NZ because we make them and the profits go into NZ, if the profits are hindered because of a tax then less goods will be sold , meaning jobs will be lost, meaning higher unemployment
I think that’s a suitable rationale
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NZ does not have inequality problems if you look at a global context. We do not have the extremes of the poor, neither do we have the much in the way of extremes of the rich.
NZ has the 5th highest average (median) income in the world. The reason we are so far ahead of the likes of Hong Kong, UK, Scotland, and Australia is because we DO NOT have the same inequality problems.
To say we do sounds very much like champaign socialism to me.
and to quote back to Metiria who said..
“For over 90 per cent of our existence as human beings we lived, almost exclusively, in highly egalitarian societies.”
Exactly, everyone in NZ is in that highly egalitarian society if you bother to look globally.
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If you want to argue with the stats, you should produce your our stats that actually relate to inequality, as opposed to a median. Ideally these stats would prove that compared to other OECD’s we have equality of income.
Thats the way you counter an argument with an actual basis, not with a bunch of assertion….
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sprout – the Gini coefficient measures us in isolation, and does not compare NZ with the rest of the world.
This is why Drael, I was talking about median income levels.. even at the extreme levels of poverty in NZ it is nothing compared with poverty in other countries say, africa, china, india, brazil etc. In NZ even the poorest can get education, health, welfare, and often housing.
Inside NZ there is a mix of richer and poorer people, but globally we are all seen as richer.
Metiria Turei who is earning above $150,000 and is currently asking for more (children’s flying allowance) is in the top 1% of NZers – so yes, it does sound like champaign socialism to me.
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People who buy a Ferrari rather than a Skoda DO may much more tax – it’s called GST.
12.5% of $300,000 is $37,500.
12.5% of $20,000 is $2,500
What’s your beef.
The Ferrari buyer pays enough GST on that single purchase to fund a pension.
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Given so many people lost jobs in the late 80′s (the greatest income disparity is between those on benefits and those in work) with SOE’s being formed, free trade coinciding with high interest rates and floating the dollar (it went up from below 50 cents American to a much higher level – killing off domestic industry and a few exporters) – it was some achievement for National to further increase income disparity afterwards.
They achieved this by cutting benefits (because of a budget deficit) – bringing in the ECA and holding down the minimum wage so high levels of desperate beneficiaries would collapse award wages. So effective were they in this we fell way behind Oz wages. By the end of the 90′s the minimum wage was little more than the dole – providing little incentive, but work for the dole programmes, to encourage people to work. Don Brash was even talking about the unemployed working for less than the minimum wage when hired into work – contrary to ILO regulations.
They also encouraged the housing investment bubble by bringing in market rents for state housing (creating hardship) and accommodation supplements for landlords. Then they dispersed a budget surplus in tax cuts for those in higher incomes (rather than restore the benefit cuts they made beacuse of a deficit – but in “fairness”, they had little choice as to increase benefits back would have compromised their low minimum wage policy).
It’s interesting to note that the only thing holding up the median income in this country is WFF. So when people, trying to defend our high and to grow further (after this years budget) income disparity, cite this median, when they probably oppose WFF, well that is blatant hypocrisy.
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Hypocrisy, almost like when you are earning in the top 1% of a first world country and campaigning against inequality?
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Samuiela of 1988-1992, 3 of the 5 years were under Labour. 2 of the 5 were under National including, the “mother of all budgets” from the ruthless Richardson.
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This is true, we are still a bordeline firstworld country. Africa and china is largely to do with dictators and such. I think policy plays a role here. But Im not sure that its even relevant to compare poverty between countries in some ways, because first world infrastructure, business, social design etc is all different. It makes more sense to compare us to australia, UK, US, europe etc, than to compare us to china, or africa. And even further, the problems of inequality, are not effected by our median income, inequality itself is the variable, not extremes of poverty. Poverty, lack of education and freedoms are also factors in things like crime though of course, but that does not mean inequality is a non-issue.
“In NZ even the poorest can get education, health, welfare, and often housing.”
This is only because those services are provided by the government. If we didnt have those services, and relied totally on paid employment, youd see alot more of this countries poverty. And this really doesnt relate to inequality, because those in state housing, on a benefit, are still poles apart from say, a small business owner or property developer, let alone a CEO, or large business owner.
“Inside NZ there is a mix of richer and poorer people, but globally we are all seen as richer. ”
2/3′s of the world population live in third world conditions. I still dont dont think its right to compare a developed nation with these populations though, in terms on inequality, because fairness isnt about whether we are more fair than most, but whether we are being as fair as we could be – and the social aspects still remain. Having “Harry” on the unemployment, and “Jane” driving a BMW causes a tension that inclines to things like crime, and also segragates society into little isolated chunks.
When national puts such focus into basic education, social impacts on things like crime is part of the reason. But to do this without also looking into increased transparent democracy, decreased inquality, decreased poverty, increasing community values, and other such basic social science based strategies will not decrease our social problems.
And when they are looking into work testing for benefits (more poverty), and three strikes systems, you kind of wish they were taking a “before the cliff fall approach”, not an “after the cliff fall” one, so they might have an actual impact on the numbers….
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Oliver you wrote
“NZ has the 5th highest average (median) income in the world. The reason we are so far ahead of the likes of Hong Kong, UK, Scotland, and Australia is because we DO NOT have the same inequality problems.”
Perhaps the reason is, we have WFF. Do you support WFF?
PS – I would like to see some evidence we actually have the 5th highest median income in the world. I do know we have housing that is amongst the most unaffordable in the world – cost as to income. It would be surprising if both were true.
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Drael,your focus is on how we should not be comparing on a global scale, I argue – why not? inequality is most profound when comparing those that do not get (a “baseline” of ) access to health, food, education, welfare, and those that do. Everyone in NZ is above that baseline.
Someone earning $100,000 is getting three times more than someone earning $33,000 per year (rough sort of “inequality” levels in NZ). However someone earning $330 a year is earning 100 times less than someone earning $33,000 a year (comparing international levels of inequality). Our three times difference may not be great, but the 100 times difference across borders is the real elephant in the room, and it gets a bit nit picky to focus on the 3 times difference when everyone in NZ gets above the baseline.
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A few points. The median income is quite different to the average or mean income.
The median income is the income of the household (or the individual) that has as many households above it (on a higher income) as below it (on a lower income. The mean is the average and if Bill Gates came to live here it would generate a long upward tail – and hence would increase “inequality” which you seem to think would be bad. The median does reduce the long tail problem.
But make sure the comparisons use PPP rather than market exchange rates.
For example in my recent column about small being beautiful I wrote:
Switzerland is one of the world’s most stable nations. Its PPP per capita GDP of $US43,000 ranks 7th in the world, just behind the US. New Zealand’s per capita GDP of $US26,625 ranks 34th in the world, just behind the Bahamas.
From memory Hong Kong and Singapore had higher per capita PPP incomes than the US.
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Someone with a wife and one child
Earning $38,500 per year is getting net $704 per week
Earning $42,000 per year is getting net $711 per week
Earning $50,000 per year is getting net $722 per week
So why would a family that is trying to get ahead take on an extra $12,500 worth of workload (as expected for the salary increase) for an extra $18 per week? Looking at the numbers you can see why it is communism by stealth, it keeps people in an income box where harder work doesn’t pay extra.
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“Oh Oliver, when people champion the poor through the democratic process you call them socialists, when they get elected and continue to do so you call them champagne socialists – as if those on higher pay are supposed to abandon the poor in their greed for tax cuts …”
Actually, I feel its a bit hypocritical for someone that is earning in the top 1% of NZ (probably top 0.1% in the world) to on one hand campaign against inequality, and on the other (outstretched) hand be campaigning for extra benefits in their remuneration package.
It would be less hypocritical if Metiria wasn’t actively trying to get extra perks.
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@Oliver I
Well said.
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Oliver – what has harder work to do with it? Do you mean why would people work longer hours if WFF meant there was not much more money? Well then, WFF means the employer needs to find more workers – thus WFF increases employment and reduces welfare costs.
Or do you think people on higher pay work harder than those on less pay? Anyhow, I doubt that WFF prevents people from seeking promotions and better paid jobs – they know that improving their career will advantage them when their children have left home and they are saving for retirement.
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oh come on Oliver. Ad hominem
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SPC, yes or no, is it fair that someone getting a pay rise from $38,500 to $50,000 on this have an effective marginal tax rate of 91%?
rimu – actions speak louder than words.
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You then try and further claim that it is wrong for an MP to advocate for family friendly working pay and conditions if they are in a well-paid job and they would personally benefit – well not wrong, but only wrong if they are also concerned about the poor.
Let’s guess your ideology is centred around self-interest, and you have no problem about better pay and conditions for those on high pay provided they don’t advocate for the poor.
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Better, Oliver, that a well paid politician denigrate the poor, rather than champion them, eh!
We’ve certainly got plenty of that sort of politicians active at the moment.
Oliver’s criticism of Metiria for swimming against that tide is …
admirable! Eh!
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Oliver, you replied to my questions with a question, do you really expect me to answer?
Did the person on $38,000 object to earlier receiving WFF tax credits to help them support their family? Do they have a problem with the promotion which result in higher pay which continues after their children leave home/reach 18? Now why did National accept the continuance of WFF? While ideologically inconvenient for some of its supporters, and it costs revenues it would prefer to hand out in tax cuts, it is so effective in its purpose that it has widespread support from voters.
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again SPC, yes or no, is it fair that someone getting a pay rise from $38,500 to $50,000 on this have an effective marginal tax rate of 91%?
No, that is not my contention, If you read through what I have said then it is more about the claiming more and more once on that level of income (i.e. children’s flying allowance). The key driver here is greed.
If Metiria is claiming a problems with the richer people in society being driven by greed, and continues to claim more themselves (greed) then yes I do find that hypocritical. When you are a politician, your actions are what people judge you on.
I like to look at individual issues and make assessments of the individual issue and don’t tie myself down to any ideology, it’s not pragmatic to do so as a clear range of viewpoints is considerably more favorable to consider than just one.
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Bryce
So the top 10% pay 76% of NZ’s tax. Why didn’t you use the 1%; or the 5%; what are they paying? As little as possible and by the time Key and Douglas have finished with the money laundering ‘financial hub’ they’ll be paying even less.
The rich don’t have accountants for nothing. They employ them to remove any likelihood of paying tax. They move overseas and try and run our country from there with their tax-covered donations to National/Act.
They even pay cash under the table for trades people’s services, so avoiding paying money to New Zealand. But try and stop them using the full public services those creatively diminished taxes don’t pay for; oh no.
The fact that Douglas and financial backers came into Labour and changed New Zealand in a bad way and is doing so again in a National government proves my point about wealthy people controlling New Zealand’s future for their own gain, who have no moral right to any tax breaks. If anything they should be paying more to cover the damage they have done to our now much poorer, more unequal country.
An Act person once said WFF was to cover the gap between the wage workers were being paid and the decent wage that they should have actually earned, but business was too busy growing huge profits to be fair. Nothing like communism by stealth; more like a very clever caring finance minister wanting a decent country for people to live in.
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greenfly – Politicians dont set their salaries I accept that, it’s more the continual demand for more once in that elite group that is hypocritical.
National continued with Working For Families because once a benefit is provided (even if it was poorly thought out) of course it’s hard to take it away.
I’m not against what WfF is trying to achieve, but the way it is set out is overly complicated and has some huge EMTR issues. It would be better to reallocate tax cuts for certain groups to achieve the same (rough) outcome, but with less payment streams going back and forth, and bureaucracy around testing. I don’t know what the solution is exactly, but no doubt it could be much more elegant than the current mess.
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I agree with the hypocrisy that some individuals here are saying and hope that they rethink some of their arguments base don how they live their lives in comparison to others around the world and how they’d ideally live their lives too…I’ll still watch and comment again later if it moves back more to the equality issue
P.S (in the edit yay!) Salaries can rarely be lowered once set due to legislation ie, judicial security, GG security etc, they are only allowed wage raises not lowering…
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I think a raising and streamlining of the tax rates would go a long way, i.e.
$0 – $12,500 = Tax free
$12,500 – $20,000 = 10%
$20,000 – $40,000 = 20%
$40,000 – $55,000 = 30%
$55,000 – $70,000 = 40%
$70,000+ = 50%
GST = 10% (remove off food, electricity etc)
Add a FTT and CGT and use the extra funds to provide truly free Health Care (including optometry and dentistry) and free education (including early child care and University)…
In a generation the problem will be greatly reduced while still allowing capitalism to fluorish…
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Oliver
You wrote this “It would be less hypocritical if Metiria wasn’t actively trying to get extra perks.”
Your words indicate you think it is hypocritical to simply be an MP campaigning for less income inequality.
And as for the issue of “extra perks”, the issue is why cannot a MP travel with their child, like a MP with their partner, and receive the same perk – it is about equivalence. The answer is to allow both or allow neither. Those opposed to the idea had to choose one or the other. So is that seeking perks, or opening up debate on the perks themselves?
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Oliver – you say that
This must have slipped by me. Can you tell me what you are referring to?
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“Hypocrisy, almost like when you are earning in the top 1% of a first world country and campaigning against inequality?”
You simply see it as hypocritical for a person on high pay to be concerned about disparity of income. Even when pay comes from simply being engaged in the democratic process.
What next all people who study and qualify for work in a high paying profession being hypocrits if they were also concerned about income disparity?
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Because inequality is distinct from poverty, as a variable in social outcomes. We are talking about the social influence.
And you can’t say poverty in NZ isnt real, if it werent for our meager benefits and such, wed have hordes of homeless, and masses of crime.
Society is a delicate balance of inputs, perhaps like watering a plant. This is because human beings are social animals, emotionally complex, they respond better in the better society, or the better enviroment. You water with education, high overall average incomes, community values, zero poverty, fairness in work, and in societies rules – a right of freedom and fairness, the power to effect social changes.
Societies win out on these features and have less crime and problems. Science has studied all this well.
One way or another, we have to face the inequality. Does it make sense for someone to get 300k a year, and someone else 20k for putting in the same effort? Sure, we should reward special skills and talents, but need it be on such an absurd scale that it influences education and opportunities for whole sectors of society, causing crime and problems?
All in the name of the sacred “wealthiness”, who cant ever be accused of anything, god forbid! Why cant it all just be a bit more balanced? Supply and demand is not a moral argument, ethical system, or basis for ignoring problems that occur. Currency and wealth is just a system, its not a bible. We use it to make our lives better, we dont have to worship it, and give all the captalists gods penance. Society is about all of us, as a extended community like it or not. A better society means we dont put some imaginary economic moral system of beleif, before the welfare of our fellow people and society.
Total fairness, and a perfect balanced, crime free society is a long way away. Thats why we should always be striving to acheive it more, inch by inch, for the benefit of everyone.
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greenfly – http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=10636525 – as an ordinary NZer myself, I cannot see why MPs just pay for the kids themselves? Yes they have dynamic jobs, but paid accordingly.
Also note that yes, I did use a quick one liner highlighting the hypocrisy of demanding more perks, but to be honest, that’s politics so small personal jibs are expected both sides.
However that is not the substantive nature of what I have been saying, which is, that by international standards, all NZers are rich, so a bit of variation on who is richer amongst the richest is really a non-issue.
The real elephant in the room is poverty on a global scale.
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What would happen if people over a certain amount of income paid no tax but had absolutely no rights to any public support in NZ. They would be treated as homeless transients and anything they wanted they would have to pay for in full. If they were sick they would have to pay for all the equipment they needed to import from overseas and they would have to pay the foreigners’ equivalent for the nurses and doctors they engaged and an equivalent charge for taking those nurses and doctors out of public use would be added to the patient’s bill. They and foreignors could not own any property in New Zealand. They could lease it annually and if they lay off staff they would be responsible for the unemployment benefit. They could also be prosecuted if their financial affairs turned out to be criminally liable.
Whereas people under that income bracket would pay taxes and their taxes would give them free services in education, health, aged care, etc. Whatever service was subsidised in any way by these taxes would be unavailable to those over that income. My point is that since these 1, 5%ers avoid paying tax there would be little loss to the New Zealand tax department. We may gain. We don’t owe the world or the criminals purporting to be taxpaying New Zealanders. They have stripped us of our assets and our pride and they will continue to do so if we let them.
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OliverI, your comments on WFF being tax-heavy are a red herring. It is tolerated as a policy because it is very cost-effective to business, who would otherwise be forced to raise wages and salaries to Australian levels, or see the workforce flee overseas. Business fund National election campaign, get to keep their employee-costs subsidy.
And on the subject of whether ‘the elephant in the room’ is local or global poverty – if you think the bottom incomes level in NZ is ok, then you obviously have neither ever exerienced the effects of that level of poverty, nor do you ever even so much as drive through a suburb where the lowest socio-demographic groups live.
Try visiting a decile 1 school and asking the principal why a ‘breakfast in schools’ program was begun; or ask them how much it costs every year in loss-of-achievement for their school to be under-resourced in working capital such as library books for lending, internet and computers, textbooks for students, maintenance budget for the school.
Because those are the areas where higher decile schools can fund equipment by asking parents to contribute by fundraising (ever bought a whole box of fundraising chocolates from a school kid?), which doesn’t happen in low-decile communities simply ‘cos there’s no spare money anywhere.
‘Unfunding’ state schools by removing taxpayer contributions of those who send their children to private schools (a stated National policy) will seriously affect the lowest decile areas, as they get the most top-up from current funding paradigms.
That’s without even addressing the inequalities built in to MSD criteria for who can claim assistance in the event of unforseen circumstances.
Try getting unemployment assistance if you still have a credit balance anywhere in your bank account – they’ll tell you to drain your savings first, then probably suggest that you sell the house, boat, bach or second car before you’ll qualify for unemployment assistance.
Limiting access to unemployment assistence in the midst of a full-blown recession that is verging on a 30′s style global depression (if the figures are viewed without any nationalistic spin) is madness, and likely to see the government rolled faster than the Liberals were in the 30′s to bring in the first Labour Government, ushering in State Housing and guaranteed minimum wage levels.
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PM watcher – The problem with that is simple, taking out the impact of WfF, New Zealand Superannuation, and welfare, then the top 10% of income earners pay 76% of the total income taxation in NZ.
P.S. only limited time to edit this comment, Katie I was just trying to put an international perspective on it.
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Down with the monetary system!
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OliverI
The question remains; what do the 1%,5%ers pay in tax?
Actually pay, not should pay
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PM Watcher – Sorry I wouldn’t be able to speculate on the 1% or 5% either way.
Sprout – compare a decile 1 school in NZ, with an average school in Zimbabwe or Namibia, Iran, Pakistan or Kyrgyzstan.
To sum up (as am getting bored of circular arguments) Fred Dagg can show what I have been saying this whole time…..
http://www.youtube.com/watch?v=AYvMeT2GC14
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Oliver, is there any evidence source that we are 5th ranked on median income as you claimed?
As to taxation – does PAYE tax include GST, interest income, rent income, dividend income, partnership/small trader income, self-employed income (let alone company tax and excise taxes etc), – don’t stress the few pay so much line beyond its rubber band capacity.
As to the issue of income disparity – well the thing is, relative wealth is important when others are bidding up the price of housing beyond your reach. Many people in third world countries find their housing affordable out of income, many here cannot afford it or do, but at a struggle – we have some of the most unaffordable housing in the world (not OECD, world). Relative income/wealth matters.
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some general comments late in the game:
wouldn’t it be nice if the basics of life were easily affordable by everyone – no one having to attend underfunded schools, go without dental or health care or proper food? hands up if you don’t want to live in a society where that is the case. does anyone think there wouldn’t be massive positive benefits for everyone in the form of lower crime, a better educated more highly achieveng population, greater innovation, lower health costs?
there are quite a few people complaining about the proportion of tax paid by those on high incomes but none of them seem to think that there is a problem with the proportion of NZs disposable income those same people enjoy. (once again I point to http://publicaddress.net/6414 Keith Ng’s excellent post on Tax and Income distribution.
this isn’t an issue of tall poppy syndrome, but rather more like the rich forming a dense impenetrable canopy which prevents the sunlight reaching those of us trying to manage in the undergrowth.
this is why I like the idea of a progressive tax system which allows everyone to earn enough to live on tax free, those who earn a modest amount modestly and those who receive the greatest portion of NZs total income the greatest amount. kind of like how it was before national drummed up the chants of “TAXCUTSTAXCUTSTAXCUTS” and the slope of the graph turned upwards again, only more so…
finally, regarding whether it’s ok that our society is unequal because zimbabweans have it worse the answer is simple: it won’t be the zimbabweans burgling your rich house because they’re unemployed and have very few prospects for advancement, it will be some of your fellow New Zealanders. this is why we need to decrease the inequalities in our society.
(And P.S. I’m not justifying burglary just pointing out the obvious link between poverty and crime)
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“This is why I like the idea of a progressive tax system which allows everyone to earn enough to live on tax free, those who earn a modest amount modestly and those who receive the greatest portion of NZs total income the greatest amount”
It’s unfair to the people who have worked hard to get to that level to shove a big 39%-60% tax on their earnings, they pay enough of our budget as it is, maybe we should be looking at how we employ and train people rather than how we tax people…
Equality is essential in society- it is a two way street, Homophobes have the same right of expression as Gay Rights advocates, Skinheads the same as Communists, Rich have the same rights as poor, all NZers have the same right to vote (excluding indictment convicted prisoners), Labour Party Voters have the Same rights as National Party voters , I can go on but the thing is taxing a rich person will merely make them angry and they will leave; it’s forced charity at the most nicest sense. If you are rich you will support what you want to support and give to whatever charity you feel most comfortable with rather than just letting the government have it’s way with your hard-earned cash. At worst it is communism, trying to drag everyone down to the same level of mediocrity which will not satisfy the Problems in NZ. If you are one of NZ’s top earners then in watching the news every time there is a Govt. policy change or spendup that you disagreed with you’d be effectively thinking that you money was directly going into that such as the way parties can take tax payer money rather than get their own funding- what labour or National or indeed Green millionaire wants to see their money in the hands of their enemy. It is also rather assuming in the area of having a ‘higher achieving’ population that our wealthy would really want to be funding some of the ludicrous NCEA qualifications available – go to the NZQA website sometimes and scroll through the alphabetical listings, I did when I was at school and it gave me and my friends the hysterics looking at some of the ridiculous things you could pass out of school with that would let you into a university such as card dealing level 3 etc,
The basics of life are affordable for everyone, it’s just some people take the option of not wanting to make it affordable through either not working , having too many children/spouses and/or getting addicted to something, The Average flat rent in Chch for example is 100-250$ a week, benefit averages minimum at 300-800$ for just the dpb without any of the extra benefits offered such as working for families or other programs which can grant some families up to 100000$. Where is the problem if food costs 150-200 a week and a couple of one off’s for clothing and travel which are provided for under other grants in work and income, basic living taken care of , the problem is people want more and are not willing to go the extra yards for that.
you know if they’re earning under 50k they could just enrol at uni and get an extra 160 or so off the govt there…
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SPC you write:
“… 1988-1992, 3 of the 5 years were under Labour. 2 of the 5 were under National including, the “mother of all budgets” from the ruthless Richardson.
You’re doing exactly what many Labour supporters do: trying to minimise the role of the fourth Labour government in causing a massive jump in inequality in New Zealand, and shifting the blame to National.
The fact remains that Labour laid the ground work for the changes the National government introduced in the 1990s:
* Labour deregulated much of the economy.
* Labour introduced GST.
* Labour privatised many of the state assets and commercialised others
* Labour increased taxation on low income earners (with the introduction of GST).
* Labour massively reduced taxation on high income earners.
* Labour introduced student loans (hint: who introduced loans … what is he doing now?)
Would National have been able to achieve what it did without Labour? Maybe, but I suspect there would have been much more opposition.
One would not expect the results of any government policies to immediately show up in inequality indices (with the exception perhaps of taxation changes). There will always be a time lag. So if a government starts deregulating and privatising the economy (as Labour did), one would expect to see a lag of months or even years before the full effects flow through to inequality indices. Metiria’s graph shows this; there is a one to two year time lag (until about 1986) until the Gini coefficient starts rising. This is not saying that Labour were doing nothing in these first couple of years; far from it, they were gong full steam ahead laying the foundations for the subsequent changes. So some of the increases in the Gini index in the first period of the 1990s National government could probably be fairly and squarely blamed on Labour. In any case, even if we ignore this time lag, Labour presided over (during a mere six years) the largest equal (shared with the 1990s National government) increase in the Gini coefficient of any New Zealand government in the last 25 years (and probably the last 75 years, but the graph doesn’t extend that far back).
You may wonder why I have such a problem with Labour, and am not directing my attacks on National. Well one reason is that Labour claims to be the party for working people; National doesn’t.
Historians tell us that Labour has gradually been moving away from being a working person’s party since the 1930s. They tell us that Michael Joseph Savage was not quite the working class hero Labour supporters portray him as (saying bad things about a Labour “saint” such as MJS will get you shot in some Labour quarters). This may well be true. However, the fourth Labour government not only turned its back on working people and hopped into bed with big business, it knifed working people in the back and twisted the knife around to an extent not achieved by any previous National government. Would you rather be knifed from the front by National, or in the back by Labour?
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Finally, some commenters have attempted to point out the NZ doesn’t have inequality relative to other countries. I’m sorry but this relativistic line of thinking is the worst line of argument and one that is unfortunately very common. For a start, it suggests that the status quo is the best society can do and thus we shouldn’t strive for better. Secondly, it suggests that responsibility and ethics are relative, which they are not. Thirdly, it is a fallacious line of argument as you may as well say “country A have twice as many slaves as country B, so therefore Country B is morally justified in having slaves”. Such non-arguments are lame at best.
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“It’s unfair to the people who have worked hard to get to that level to shove a big 39%-60% tax on their earnings, they pay enough of our budget as it is,”
Did you read the Keith Ng link? They pay a high share of the tax because they earn a disproportionately high share of the income. The top 3% of earners bring in nearly the same portion of total income (16%) as the bottom 50% (17%).
what’s more a huge proportion of the income of the rich is coming from the poor. for all the complaints about dole bludgers there are quite a few people on high incomes pocketing that dole money as rent on the properties they own. the entire incomes of those at the bottom end are spent largely on New Zealand businesses owned by those at the top end and the only way money travels in the other direction is via tax.
“The basics of life are affordable for everyone, it’s just some people take the option of not wanting to make it affordable through either not working , having too many children/spouses and/or getting addicted to something”
if you don’t think that there are a huge number of people struggling on low incomes in this country, despite working really really hard then you probably live in a gated community somewhere.
the problems you cite such as drug addiction are a result of the inequalities of society. you’re right that we need to look at how we train and employ people but the fundamental problem is how we share the wealth. there is no room for those at the bottom to have a greater share without those above diminishing their share.
have you ever been on a low income and tried to save? hold down a minimum wage job while trying to further your education? get a job when you’re fifty and have little education or experience?
“the problem is people want more and are not willing to go the extra yards for that.”
that’s unfair and naive of you. there are tons of people who would love to work that can’t because of economic conditions. and a lot of people working really hard with no prospects for advancement. those earning more are not necessarily working ‘harder’ whatever that means. mostly higher income is recognition of greater responsibility but at some point there have to be limits. it’s a good idea for taxes to provide incentives against excessive income (ie. income ten or twenty times more than what is needed for a comfortable life) so that a greater proportion of society have some prospect of achieving that comfortable life.
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“It was fine that McToys were made overseas but now almost everything is, NZ is now an Import nation for the majority of consumer goods, all you have to do is look around your house/flat etc to see that.”
So we are forcing our companies into communist states (as this is where most consumer products in my house come from), is that what you’re saying? If that is the case: maybe we should try communism here to keep them?
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@kara
if you believe that I fell sorry for you…but anyway, lets be honest China is not really communist, Taiwan and Singapore certainly aren’t but they are cheap manufacturing zones, another reason why communism would never ever work in NZ is that simply NZ does not and will not want it- look at the election polls to show that viz the Workers party .
@nomopilot
a huge proportion of the rich take their money from the poor – as such a large proportion of the poor’s money comes from the rich through the jobs they create. If the Rich have capital they will invest, creating jobs or they will hire people to act on their behalf i.e cleaners, gardeners – a high taxation will mean these jobs will disappear meaning less income for NZers/ Yes, we can just give people money i.e Dole Bludgers but that would not solve any problem and increase the National debt OR we can allow our Businessmen and Wealthy to thrive by creating jobs and productivity within NZ and giving people the chance to , like them, get a good life.
You also say the wealth should be shared. why? if someone has worked their ass off for 40 years for A 150-500k job then why take that away, that person has contributed a huge amount already to society and will continue to do so through the market place, at the very least the GST our rich pay more than covers their costs.
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Yes Samuiela I wrote
“… 1988-1992, 3 of the 5 years were under Labour. 2 of the 5 were under National including, the “mother of all budgets” from the ruthless Richardson.
You reply “You’re doing exactly what many Labour supporters do: trying to minimise the role of the fourth Labour government in causing a massive jump in inequality in New Zealand, and shifting the blame to National.”
No, not at all – you wrote that most of the 5 years was under Labour – and yet it was only 3 of 5. And the mother of all budgets had a significant impact – you don’t think benefit cuts (when unemployment was truly very high) and market rents had significant impact?
You fail to note my earlier post covering the history of the issue, I responded to your post because you placed too much emphasis on Labour’s role in the 1989-92 period.
Labour’s role at that time – was in responce to the budget defcits emerging from loss of employment (student loans, a GST increase after they earlier cut tax rates too far – rather than reversing the tax cuts, and the sale of state assets). The source of their difficulty was in the reforms they made earlier.
You also fail to note context, that National kept Labour’s changes – whereas Labour reviewed some of National’s – ending market rents, returning Super back to a net level of average wage parity, increasing the minimum wage (albeit under NZF and Green prompting), and making adjustments to child tax credits (WFF) – even if excluding beneficiaries – which all as the OECD boted reduced income inequality after 2000 (after a 15 year increase in income inequality).
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PS Samuiela, it is a little unfair to say that GST was introduced without compensating tax cuts to those on low incomes – Family Support tax credits were introduced (the problem with them of course, is that they require annual adjustment because GST base costs go up with inflation – income inequality grows unless this occurs, and thus the WFF programme merely provided redress for a decade of neglect in inflation adjustment). This speaks to a need to be vigilant regarding annual adjustment to WFF or build in required annual adjustments into legislation. National’s PR of accepting WFF but returning to their practice of failure to adjust the amounts each year is of concern.
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This is a useful source.
http://www.oecd.org/dataoecd/45/43/41527985.pdf
Note: Australia has been ranked below New Zealand on median income. With the current rising value of their dollar that would have changed.
Our own high ranking is based, in part, on our over-valued currency (does not relate to the increasing struggle of many to pay domestic power charges, food costs, housing costs and of course GST as part of the tax system) – and another factor is our over 65 super being indexed to the NET average wage (they have kept pace with the international trend for tax cuts while there have been downward trends in gross wages) leaving us with a low level of “old” people in poverty compared to others.
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SPC,
Under the fourth Labour government’s tax changes (GST, lowering of PAYE), low income workers were worse off by a small amount. High income earners were better off by thousands of dollars. Do you remember the “Mrs Mop” advertisement? The government tried to convince us the cleaning lady was going to be better off than the executives she was cleaning up after; the ad was political propaganda at its worst, and a total lie.
WFF is no great thing either. It turns working people into beneficeries. Sure, the money is handy, but it would be better off spent on improving services which workers use, such as health and education. Why not use the money (for example) to fund a dental health care system; this would be of immense benefit to low income people?
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PPP is a better means of comparing incomes that market exchange rates. However, they are an estimate rather than a fact so different organisations using different methods come up with different outcomes.
Someone seemed to think that we lost industry to Singapore and Hong Kong because of their low wages. Both countries are much higher ranked than NZ.
Go to: http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita
Hong Kong 7, 6, or 8 depending on organisation.
Singapore 5, 3, 6.
USA 6, 4, 8.
Australia 14, 13, 17.
NZ 34, 27, 38.
When I first went to Singapore to promote NZ technology in the late seventies their dollar was worth 20 cents NZ.
Now it is close enough to parity. (O.97)
What is their equality index?
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samiuela
WFF replaced the family benefit – with targeting to those on lower incomes. Did the FB make people “beneficiaries” (or the then existing mortgage payment tax rebate to homeowners)? Your line of argument is surprisingly neo-liberal in tone – why are targeted payments now called benefits (and beneficiaries disparaged) and universal ones public good entitlements (like Super). It’s just part of looking down on the “lower class dependent on support from others”. That’s why we still have poverty amongst those on benefits and why we will soon see it again in working families if WFF is not inflation adjusted.
But otherwise, yes Labour bought into the post Laffer curve line economic theory that Keynesian economics should be replaced by monetary policy to combat inflation and tax cuts to stimulate growth while reducing the size of government. We can see that monetarist policy delivered us an over-valued dollar – destroying investment and undermining the economy. All the tax cuts did in that environment was stimulate consumption of imports and enable a binge on housing.
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Anyway, getting back to topic, I can see where people like stephensmikm are coming from, but disagree with the characterization of progressive tax meaning that someone who works hard and earns 100k+ per year effectively looses all they have worked for. If the wealthy are taxed they still remain wealthy – just slightly less wealthy, rather than non-plussed and destitute as you seem to imply. Arguing any less is merely dishonest. At any rate, the point is the super-inflated and out-of-touch-with-reality disproportion in pay between the low income earners and the high. If at one end of the spectrum someone is sitting on 20k a year, while at the other end someone is earning 400k per year, how on earth is such a gap defensible or justified? What job is worth such an astronomical sum that most cannot even fathom it? Is investment banking and property investment really much harder work than that of a mechanic or a nurse? Apparently, it is according to the rhetoric i’ve read on this board. The first place to start is to dispel the notion of only the rich as hard working. There are many reasons why someone can’t become rich which have nothing to do with aptitude: social background, culture, access to opportunities, career choice (perhaps teachers aren’t hard workers according to the economic ‘survival of the fittest’ rhetoric?). I guess those born into low income families are merely lazy? No, to argue such a flimsy and hole-filled line only denotes that the speaker is naive. Furthermore, trying to argue that the rich supply jobs such as gardeners and cleaners is like saying that 18th century cotton industrialists provided housing for their slaves, and worse, that these workers can supposedly acquire the same level of lifestyle as their employees! Obviously the example of slavery is an extreme one more to do with civil rights than economics, but the patronizing relativism inherent in it is exactly the same.
Finally, it seems to me fairly simplistic and one-eyed to see the relationship between workers and employees as simply a one-way street rather than cyclical. The rich provide jobs for the poor and in return the rich capitalise from the labour supplied by the poor. As I said earlier, the wealthy don’t make money in a social vacuum, they make it from the society they thrive within. Surely there is a reciprocal responsibility to share some of their wealth (again, not all by any stretch of the imagination) made to make the standard of living better for all rather than simply throwing scraps such as GST and cleaning jobs? Seems to me, cutting all of the patronizing rhetoric aside, without progressive tax many if not most of the wealthy would merely be taking from society like a parasite rather than putting anything of worth back into it. Economies serve people, not the other way around.
But that’s just my opinion.
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Owen there are major comparison difficulties with both per capita or median household income.
Specifically the problems of comparisons are
Median Household Income – how many live in each household. We have a younger population than most and larger families than many.
Per Capita – how many are employed in work. We are low here how much of this is because we have many not in work or because of our low wages?
Varying demographic factors occur overseas- which is why different countries show up well under either system.
I mentioned that old people here have very low rates of poverty – because our super is linked to net average wage (and thus the trend to cut tax rates has helped them). Thus we do well in that area. The problem for us is in child poverty – and that is related to benefit levels and low wages relative to living costs (thus the need for WFF).
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@edward
You also have to think about the mindset that some of these jobs entail. People either go for a career or something they enjoy ideally – generally a career will end up being a job which will result ina sizable income after decades of hard work while a job which they enjoy will be more for their joy at working so they will not get as much, a govt bureaucrat generally does not enjoy his/her job so they get money to compensate for the year they are wittling away while a person who decided to become a nurse, lion tamer, soldier, policeman gets paid less because they get a personal satifisfaction at the end of the day – what personal satisfaction can a person writing policy memos get?,
Yes I understand many people are not in the jobs they want or are career based jobs ie, those stuck in the McJob area but that was kinda their own choice- they could have chosen to study harder so as to get a job which would grant them extra opportunities or go back to university to study, it wouldn’t be that difficult
It is also unfair to say the rich woudl be parasites – they still pay gst tax, stamp duty even if they get past the personal taxes, they contribute to society in a way that a person with only 20-25 k cannot. remember they buy the luxury goods in NZ..
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Whichever major polotical party (Labour or national) carries the major responsibility (along with ACT which is behind many of the 2009 and 2010 changes which will exacerbate and deepen the pain and negative consequences of the rising inequality in NZ since the mid 1980s the reaility is that pain and damage is being inflicted not only on those directly affected but on the community/society at large.
The negative consequences of poorly treated and deteriorating health of children in homes with too little income at attend medical centres, transience as familkies shift when they get into rent arrears with the consequential fracturing of the children’s relationships with schols,classmates and teachers adds and adds.
It is luck that children get through this mess. The success stories of the likes of Key and Sir Robert Jones coming from HNZ backgrounds to become the rich and famous will become increasingly less likely, and our nation-state will be a mixture of “to the Manor Born only” becoming successful rather than we having a nation-state that rewards and encourages merit and maximises the chances of that merit being rewarded whatever the background.
We damn ourselves by not taking a more universal approach to assistance like child-care/family assistance as the targetted approach leads to high effective marginal tax rates, and we damn ourselves by subjecting families to the relative poverty they face in this country when the consequences are so easy to predict…. and were predicted back in the mid-80s/early 90s after the benefit custs Shiply reforms.
The 2009/10 welfare reforms will only exacerbate the situation.
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SPC
My point was NOT that we are rich but that we are poor.
Probably the best way to make everyone better off would be to make ourselves as rich as the people of Singapore.
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so you’re saying that people should be compensated for the mundanity of their work? because those cleaners that the rich are helping by allowing them to earn minimum wage for cleaning their mcmansions must be getting a lot of satisfaction from it by this line of reasoning.
perhaps people should be required to declare how much they enjoy their work and have that money deducted from their paypacket. it seems that teachers (whose work is so easy and rewarding) get about 50000 more job satisfaction than those government memo-writers you mention – that could be the beginnings of our scale…
but I hope that there are some bureaucrats who feel like they’re making a positive difference with their memos… that way we can halve their pay!!
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@nommopilot
Yes exactly – compensation for the fact hey lose their lives to the job!
yes, that it would be nice to halve some pay packets
but I did mention that there are some who are caught in the centre such as cleaners as I said they could go to uni?
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stephensmikm,
Yes, I suppose my use of the word ‘parasite’ is rather inflammatory. However, note that I did put the proviso of ‘many’, not all. Anyway, I feel like perhaps I haven’t articulated myself well enough as I feel you missed my point. Wealth doesn’t just appear from some abstraction of ‘hard work’ or aptitude. Wealth can only accumulate within a society, is supported by that society, and capitalises upon that society. I feel that the person who has benefited from said society in terms of wealth extraction therefore has a social, economical and ethical responsibility to put something back which is proportionate or representative of their income while still being balanced enough to give them the freedom to enjoy the results of their hard work or accumulated wealth. While a flat tax rate sounds like a nice idea, in practice it is not, as it stands, an egalitarian or equal way of redistribution or of raising the standard of living within our society. And that is what all societies ideally should strive for, a raised standard of living and access to opportunities. I think regardless of political persuasion most people would agree with this. As it stands, the gap between the rich and poor is widening, and it isn’t due to the poor getting lazier and the rich working harder – it’s due to an uneven distribution of opportunities (in the form of education, jobs, wealth and socio-political power) and the wealthy effectively producing an overinflated cap so far above most people’s heads that they’ll never be able to catch up.
Myself, I chose a career in science because this is what impassioned me. But like the police officer, the nurse, or the gardener next door, I work hard but will never be rich of the kind we see when we look at million dollar salaries paid to a select group of executives or others who comfotably sit on 200+k. And why is that do you think? Is it because their job is worth more or they work harder, or is it some other reason? My point is that these exorbitant salaries and the pay gap they induce are nothing more than a complete abstraction of reality, divorced from supply and demand in any meaningful sense of the term. In short, the wealth is generated on the back of society – why shouldn’t they put some proportionate capital back into it?
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the best way to make everyone better off would be to make ourselves as rich as the people of Singapore.
Owen, can I assume that you meant to say as rich as the rich people of Singapore..?
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Does humble not even get a look in here?
Happy and humble, with enough.
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Michael Leunig says:
HOW YOU WILL KNOW IF A PERSON
(PERHAPS A POLITICIAN, A POLICEMAN, A PARTNER OR A PRIEST) IS CORRUPT.
you must study the duck.
you must play with the duck.
you must talk with the duck.
you must know the way of the duck.
you must look deeply into the eyes of the duck
Then looking into the face of the person, how will you know if that person is corrupt?
You will know.
YOU WILL KNOW.
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Owen, we can agree that we have low wages, but the problem of income measurement such as per capita is that comparisons are misleading.
Some of the countires which figure highly have fewer people who are old and smaller families – thus a high proportion in work. Thus a higher GDP per person than a country with many in retirement and many people yet to work.
That was my point.
I also challenged the relevance of our high level of median income compared to others – we have larger families (supported by WFF) and good super cover etc, this places us above countries with higher wages.
Neither measurement speaks to income disparity, or poverty here, or comparsions to other nations – which is the topic.
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Isn’t the real problem here the balance of payments deficit?
While we, wether as individuals, or as a nation are spending more than we earn, isn’t all the above debate mere rearranging the deck chairs on the titanic?
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samiam, no and yes.
No, in that income disparity and poverty are issues for us to address because of the social consequences of not doing so. We can afford to do more to reduce both these problems.
Yes, in that the BOP deficit speaks to the economic problem we have. We are reliant on the savings and investment of others – this speaks to our lack of wealth creation and perversely our foolish wealth creation. Our wealth lies up in our property and farmland (which we specualte on because we have no CGT) – and yet we have mortgages (loans sourced overseas) to afford to buy them. Thus as we bid up the price of this residential and rural land with money we borrow overseas we make our BOP worse.
This results in our particular problem, private debt is so high, if government debt grows (and while it is low it adds to total debt) we have credit rating issues. So government is finally moving on property specualation – because it really has little other choice if it is to borrow throughout the next 3-5 years. If our public and private debt were to keep growing together in that period we would be in some financial trouble if this is a double dip recession and global credit
to us dries up.
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Points taken SPC but I look at the two graphics above…
The first lays the foundation of the blame on Rodgernomics, when the real blame lies with Muldoon/Birch. They squandered the family savings to such an extent that Rodger et al had to hock off the family jewels to stave off foreclosure. The graph should have started with England joining the (then) EEC. The accumulated (public and private) debt should be graphed against it
The second I lay squarely on balance of payments deficit. The inequality is as a result of that. The increase in crime a logical consequence.
I owe, I owe, so off to work I go! Actually WE go, as both mum and dad are forced to go to work. Result…
Neglected kids, family stress, crime, violence, environmental over-exploitation etc etc.
Inequality is just a symptom.
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@Edward
Why can’t that responsibility be voluntary?
oh and happy and humble is all good, but should never be forced on anyone- happy and extravagant is better – it creates jobs
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LIKE THROWING PETROL ON A FIRE!!
Samiam; You are right in that the original problem of NZ debt woes was Muldoon/Birch they practiced the economic ideals of Maynard Kaynes who preached borrowing big.
Which is OK if one could trade their way out with a quick turnover. I think Douglas could have traded NZ’s way out,(it would take longer) which would have been a traditional Labour/conservative? solution.
It’s funny isn’t it everybody thought that Muldoon was a financial genius!
There is a lot of very disturbing, violent crime which I think will be exascerbated more when the government increases GST on essential things like food.
The UK has no VAT on unprocessed food.
Those who have businesses can claim GST refunds for their expences, but can employees? eg. Travels to and from work? cloths like suite and tie etc.
I couldn’t think of a better way of making people very angry, it’s like throwing petrol on a fire!!
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“The UK has no VAT on unprocessed food.”
They also have very expensive court cases over what defines a luxury good eg the great chocolate biscuit debates which I think might have made to the House of Lords chamber not too sure though
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WHO SAYS DEMOCRATIC SOCIALISM DOESN’T WORK!!!
Stephen: British law is a mess, Britain claims to have a constitution?
as for what constitutes unprocessed food, well that should be very clearly defined from the start.
I was reading a very good article on the Green Left Australia site and this is very pertinent to the above blog.
Titled, ‘Venezuela: The People’s Fight for a fair hearing.’ by Pablo Navarrete.
The article tells how the Chevas government has been slated and misrepresented by the Rupert Murdock Fox and main streem media.
He has been accused of being a dictator when during his rule there were 12 elections!!! And he survived a coup, backed by who?
The real reasons for the capitalist chagrin was Chevas’ positive reforms on poverty – they were a sucess – his government has halved the rate of poverty from 46.5% in 1998 to 23% in 2009.
For this the BBC has likened him to Hitler!!!!!
We are not talking Marxism here; this is real Democratic socialism and who says that it doesn’t work?
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@Drakula
It does have a constitution like NZ and Israel it’s just a bit more different to everyone elses. it is impossible to define an unprocessed food, bread would be taxed, you could just say regular bread because what constitutes regular bread – you can’t monopolise to only home brand/budget bread because that is unfair and those companies will then proceed to make big bucks by changing the recepies and increasing the prices
the exact same thing in Britain would happen in NZ.
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How can you guarantee that more money spent on welfare doesn’t just mean more people on welfare?
.
.
“New British research, from the Institute of Fiscal Studies, has shown that increased welfare payments have coincided with a boost in births and drop in contraceptive use among the group most affected by the higher payments. New Zealand fertility trends reflect those in Britain and it is entirely possible that the same trend is occurring here.”
http://www.bristol.ac.uk/cmpo/news/2008/369.html
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and another thing, if your going to increase welfare for those with a no income lifestyle (as many could be described) the poor old people who chase the discretionary dollar (as in tourism) will be out scrapping the frost off the bus window in the early morning while Toodles on a benefit lies in bed all cosy and warm and takes home more for his/her effort….?
Chorus:
equality isn’t equality if two people have the same income while one goes out to work, and the other sits on their (rhymes with thumb).
this will be the (nub? = stuff up) the Green argument.
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Keynes is misunderstood. His ideas were for governments to run deficits to prevent recessions and run surplus when the economy was booming.
It is a reflection of the failings of capitalism that the world governments have had to run deficits for so long, afterall has the US had a government surplus since 1950? Any economic historians want to answer?
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And to return to the Gini coefficient. My recollection is that Brian Easton prepared some of these statistics in the late 1980s and it measures the differences in income distribution by percentile, and can be grouped in various ways – the top 10% compared to the rest, the top-bottom 20% and so on. Perfect equality would have us all earning the same.
The rising inequality in our incomes has far more to do with internal tax politics (flattening of the income tax tables, a move from income to consumption taxes) than external effects like Britain joining the EEC or changes in our balance of payments (in efect we exported low value goods with little if any added-value – or at least this was our export industry in the 20th C – yet we imported capital goods, manufactured goods etc – all value-added in essence).
Muldoons/Birch’s public debt in part was used on public works (in theory not a bad thing, but M/B choices were perhaps questionable), and in part trying to hold off a recession (Keynesian) in a trade environment turning to fetid cheese (previously we had trace surpluses thanks to mother england….).
The rise in the Gini can be squarely attributed to the Douglas economic (tax) policies which were further entrenched by Richardson. The jumps can almost be attributed to the quarters the tax laws took effect. Prior to then (1984) the inequality as measured by Gini was relatively low.
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“Why can’t that responsibility be voluntary?”
It would be great if it could be, but I have a sneaking suspicion it wouldn’t happen very often. Maybe that’s defeatist of me, but when I glance at the majority of the corporate world and financial sector, and see the disparity between the wealthy and poor as it is under the status quo, it doesn’t give me any reason to assume that making it even less regulated would make it better. Rather it would seem logical to assume it would make it far, far worse. History itself would attest to this. The feudal system in Europe; the industrial revolution which was heralded as the end to poverty and a means towards equality which merely ended up with the already wealthy getting wealthier and the rise of the nouveau riche; and, most recently, the widely publicised grotesquely inflated salaries and bonuses of the financial sector executives prior to the recession. Indeed, the weight of evidence seems to show quite clearly why progressive tax needs to be mandatory and regulations need to be put in place to protect societies from being capitalised upon for the benefit of the few. I thought as much would have been self-evident in the 21st century? The wealthy often have a way of locking wealth up at the expense of wider society. No one’s arguing for communism, merely pointing out why regulation is needed to address these disparities. They won’t fix themselves, and history and the present show that the wealthy sure as hell won’t do it.
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The rising inequality in our incomes has far more to do with internal tax politics (flattening of the income tax tables, a move from income to consumption taxes) than external effects like Britain joining the EEC or changes in our balance of payments (in efect we exported low value goods with little if any added-value – or at least this was our export industry in the 20th C – yet we imported capital goods, manufactured goods etc – all value-added in essence).
..
What about the big run up in house prices and the concentration of home ownership amongst fewer people. Most of the people i know who became wealthy over the last two decades did it through property. NZ’s property market became globalised and immigration (wealthier home buyers than native Kiwis) encouraged*.
* particularly by the green party
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jh, the refugees we advocate for can hardly be responsible for driving Kiwis out of up market homes.
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OUr unaffordable housing is a self inflicted injury resulting from importing the dreadful “Smart Growth” policies from California.
Curiously this is almost universally supported by so called Greens even though it is about the least green policy I can imagine.
And given that the end result is households spending about 50% of their income on mortgages rather than about 15% as in Non Smart Growth markets it also massively contributes to inequality, poverty and overcrowding.
Just what does it achieve? And gardens become rocks, yuks and sucs. No biodiversity at all?
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I agree with much that Graham states and also believe that our current financial culture appears to continually reward those who have money. Bank fees are waived and many tax dodging and bill payment opportunities support the wealthy. Family Trusts have also allowed protection of wealth and avoidence of personal culpability in the event of a business meltdown. Those involved in managing money claim excessive salaries and bonuses, which have no relationship to the level of real service they provide.
The poor, however, become trapped in a cycle of poverty and any attempts at pulling themselves out involves a battle with high study costs and the unfairness of secondary tax when attempting to make two or parttime positions add up to fulltime work. To deal with Inland Revenue, Work and Income and welfare agencies to seek redress or support is often beyond many of our struggling people. The fact that 35,000 people weren’t recieving benefits they were assessed as deserving is the real crime, not the handful who abuse the system.
An excellent article in the latest Consumer magazine questions the government’s work around regulating and overseeing the standards of financial advisors. There appears to be too many loopholes in what Simon Powers has been recommending;
-Advisors will continue to be allowed commissions, making a joke of the concept of independent advice.
-The costs and hurdles to become a truly independent advisor would discourage that career path and cause them to be too costly for the average person to access.
-”Authorised” Financial Advisors would still be able to exist who do not have the required knowledge or meet minimum standards.
-Previous criminal convictions don’t need to be included in disclosure documents.
The “Industry” have manage to influence the government and avoid the public consultation process to maintain the very culture that caused the financial meltdown. Nothing will really change!
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jh, the refugees we advocate for can hardly be responsible for driving Kiwis out of up market homes.
.
======
However you are pro immigration [and anti dams].
You’re pro immigration because you never raise concerns about it and make encouraging statements such as “our policy is the opposite of Winston Peters”. You may claim that this is a response to NZ First’s focus on Asian migration but as a party you’re response to immigration is pitiful… “we will objectively determine carrying capacity …….(yeah right)”
.
http://www.greens.org.nz/press-releases/greens-counter-peters-welcoming-immigration-policy
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“Home prices in Vancouver hit million-dollar landmark
Vancouver’s super-hot real estate market has hit an expensive milestone, with the average price of a home reaching $1 million for the first time.
Canadian real estate agents are orgasmic. I wonder if Chinese buying interest is a factor there too? At some stage all that easy Chinese money is going to stop overflowing into various satellite markets such as Sydney, Auckland and Vancouver.”
Bernard Hickeys site.
[refer quote in moderation]
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@ Srout
“our current financial culture appears to continually reward those who have money”
Er… Wrong….
our current financial culture continually rewards those who have other people’s money, more like.
Debt, debt, debt, that’s the only game in town. Borrow up to your eyeballs, preferably via a finance company structure, and then default. You get to live off others toil and suffering.
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Vancouver is another Smart Growth enthusiast city and has had some the least affordable housing in the Demographia surveys for some time. It ranks as one of the most attractive cities but not for young people who want to buy a home.
Its fault lies not with the Chinese or with other stars but within themselves. The Real Estate people may be going orgasmic but the hangover will come – but they never learn.
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Samiam-Hmm, I don’t quite understand your argument, who chooses to lend to those who can’t afford to borrow than disguises the bad depts, falsifies the true value of their companies and then turn belly up and lose all the money from honest investors while they live of their protected family trusts?
Who is ever rewarded for borrowing?
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You’re pro immigration because you never raise concerns about it and make encouraging statements such as “our policy is the opposite of Winston Peters”. You may claim that this is a response to NZ First’s focus on Asian migration but as a party you’re response to immigration is pitiful… “we will objectively determine carrying capacity …….(yeah right)”
I don’t expect you to support our position, just not to lie about it. Our response to Winston IS about his xenophobia. The fact that his approach fits with your goals is your problem, not ours, and it is a lie everytime you push that quote out of context. You are not without some reasonable arguments, but your infantile obsession with Keith’s response to racism does nothing for your cause. Learn how to deal with two issues at the same time already.
As for the numbers, it is true that we are not against all immigration. It is true we could do more work on what is a sustainable level. But to lump us with Labour and National, who use it as a means of generating economic growth you should well know is not true, yet you pretend otherwise.
You lose any credibility you might otherwise have in this debate and make yourself look like a racist to boot.
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Stop yer truth-bendin’ jh. Makes ya look like a dork!
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As for the numbers, it is true that we are not against all immigration. It is true we could do more work on what is a sustainable level. But to lump us with Labour and National, who use it as a means of generating economic growth you should well know is not true, yet you pretend otherwise.
You lose any credibility you might otherwise have in this debate and make yourself look like a racist to boot.
…..
Given the level of advocacy you give to various is issues, population/immigration is a feeble squeak.
“Our response to Winston IS about his xenopobia.”
But a little thought and NZ First policy (and it’s appeal) was “New Zealand for New Zealanders”. More people dilute the natural assets. Labour wasn’t importing Chinese because it liked Chinese, it was just that they came in bulk. It isn’t xenophobia to oppose large numbers of people (of another race) to migrate to your country; it’s just that you like it the way it is.
I just can’t find the statements from the greens where they express joy at our low population.
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and make yourself look like a racist to boot.
…..
What’s your test?
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A house is the biggest purchase most people will ever make. Michael Houton defended NZr’s right to sell to foreigners by saying “if that person can’t sell to a foreigner he can’t get a maximum price”. Chris Trotter responded by saying that people who sell out to foreigners used to be “hung drawn and quartered”. Essentially government policy means that real estate entrepreneurs can bring in wealthy buyers so they aren’t limited to the measly prices mouldy old kiwis can afford (and the Greens sit on the fence).
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I’m joyous at our low population (and I’d like to be joyous about a low ‘population’ of cows as well). I’d still be joyous if the human population was larger. There’s plenty of land here and if we ever have the wit to use it well, it will easily support many more people than it does now.
Your twisty interpretation of the meaning of xenophobia provided a light-hearted moment, jh, as does your interpretation of the message from NZFirst and Winston P (I know – one and the same).
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Your twisty interpretation of the meaning of xenophobia provided a light-hearted moment,
xenophobic.
…
I said:
It isn’t xenophobia to oppose large numbers of people (of another race) to migrate to your country; it’s just that you like it the way it is.
…..
Definition:
“Xenophobia is strong and unreasonable dislike or fear of people from other countries. ”
.
.
What I’m saying is that large numbers of people are fodder for the real estate industry, gardens disappear, traffic increases, house prices go up, and that the benefits are overstated, ie there is a down side which nobody advocates for*…. as they may be seen as
.
*Anti-immigration feeling has no place in the Green party Immigration and Population policies released today, Green MP Keith Locke says.
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How come Houston was able to absorb 130,000 refugee households from Hurrican Katrina without increasing house prices or destroying all their wonderful parks and gardens?
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Just my cynical 2c worth… no, make that 10c worth, the 2c disappeared, swallowed by debt fueled inflation.
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Samiam- It was the freeing up of lending that caused our problems, President Clinton unintentionally started the dodgy mortgage lending in an effort to allow more people to own their own homes and it grew beyond his intention. When I was a student you had to crawl into the bank manager’s office and survive an intense session of questions and justifications to get enough to buy your beer for the weekend. Now student loans are handed out on street corners (slight exaggeration). When I bought my first house I had to have over half the purchasing price already saved and now, when I went to get a slight extension to our current mortgage, we were offered the possibility of borrowing far more than we could possibly need. THE PROBLEM IS WITH THE LENDERS!!!!
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How come Houston was able to absorb 130,000 refugee households from Hurrican Katrina without increasing house prices or destroying all their wonderful parks and gardens?
…
When you fly into Christchurch you see houses surrounded by a patchwork of (mostly) productive farmland. Houston is surrounded by prairie?
…..
Banking regulation not real estate deregulation may have saved Texas
http://www.thebigmoney.com/articles/judgments/2010/03/30/lone-star-secret?page=full
http://www.lasvegassun.com/news/2010/mar/25/wanting-out-las-vegas/
If I recall the motivation behind the first person I knew who cut a garden in half was to make money , not provide a house: “the thing to do is buy a corner section and $ubdivide it..”
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That drum of yours, jh, must have the thinnest of skins by now!
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All the debates about the details of “how to make capitalism fair to everybody” is like the debates about how many angels can dance on the head of a pin!
Our capitalist-industrial-consumerist system was never MEANT to be fair or equitable! It was designed by the fat-cats for the ongoing benefit of the fat-cats.
Until the majority of us wake up to this simple fact and decide to ditch the system and replace it with something totally different, nothing of substance will change!
And, NO, I do am NOT advocating Soviet-style “socialism”, that is just a variation of capitalism, with a different set of fat-cats.
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Samiam and sprout are both right but talking across each other: Unscrupulous borrowers are/were able to borrow huge amounts of unsecured debt from unscrupulious banks and the lax laws permitted this situation; hence prime mortgages.
Wealth is only created by sustainable productivity.
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Drakula this isn’t a chicken or egg situation, unscrupulous borrowers thrive when money is made available, tighten lending criteria, problem largely solved.
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Greenfly says:
That drum of yours, jh, must have the thinnest of skins by now!
..
That’s right Green fly, as I said there is a down side to mass migration which no one advocates for. The green party view is “oh well let’s just let people pile in and see what happens”. The green party policy is “welcome what we have is yours!” You’re aim is political and social change and the place we call “New Zealand” you don’t give much of a fig for.
Can’t you find a green to make your spokesperson on immigration?
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And, NO, I do am NOT advocating Soviet-style “socialism”, that is just a variation of capitalism, with a different set of fat-cats.
—
I think the touting of The Spirit Level comes closest to any detailed look at how the greens see government policy improving society but what worries me is how you manage equality in a welfare state; one section gets a free ride and will not that section increase in size (it can’t be that simple)?
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New Zealand is less urbanised than the US and housing is more productive than farmland.
There is no such thing as productive land. There is fertile land and less fertile land but land is only made productive by human endeavour and knowledge.
The myth of being surrounded by productive farmland is why we have unaffordable housing.
And the reason the banks did not get into rapacious bubble financing in Texas is because there was no bubble to finance.
Financial bubbles always chase asset bubbles. From tulips, to the South Sea Bubble, to the dot.com bubble to Smart Growth housing.
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SPC you write:
“Your line of argument is surprisingly neo-liberal in tone – why are targeted payments now called benefits (and beneficiaries disparaged) and universal ones public good entitlements (like Super).”
I will argue that targeted payments actually increase inequality in society.
The government spends an awful lot of money on targeted assistance such as WFF. Is this the best use of such money? Maybe it would be better to spend the money on providing high quality education with no requirement of “voluntary” fees from parents. Or what about putting the money into building more state houses, and not providing supplements to private tenants which end up lining the pockets of landlords?
If money is spent on services such as these, there will be multiple benefits:
1) Working people will get the same quality of services as the wealthy. At present some wealthy families perceive (correctly) that state education (for example) is underfunded, so they send their children to private schools which few working class families would have a hope of affording, WFF payments or not. Well funded state education will help reduce inequality in the medium to long term.
2) By properly funding services such as education and health care, there will be no need for voluntary school fees, charges for medical prescriptions and so on. This is a direct saving to working people. If some medicines (for example) are too expensive, then it may be necessary to ration them, but not on the ability to pay. A poor person should receive an expensive medicine if they benefit more than a rich person (and vice versa of course).
3) Use of public money on building state housing is probably more efficient than providing subsidies to private tenants. Housing is probably the single biggest expense working families face. What happens with money targeted to help with rent payments is that landlords realise they can increase the rent they charge. Most of the supplement then ends up benefiting the landlord, and not the tenant. With state housing, the government can charge affordable rents, thus freeing up money for use to buy food etc. Surely this is a better way to help working people than providing monetary payments?
4) By providing services rather than handing out money is also a way to ensure the money gets spent on “useful” things. A monetary hand out might be spent at the TAB or on smokes; this is not a risk if the money is spent by the government on providing services instead.
And finally SPC, my arguments may sound neo-liberal to you, but I assure you I don’t vote for or support what would usually be viewed as neo-liberal political parties.
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For all those who want a comprehensive lesson on neoliberalism I would reccomend the BBC docco “The Trap” by adam curtis
http://www.documentary-log.com/d149-the-trap/
Even though it absolutely destroys neoliberalism I think some of the trolls might like seeing their intellectual godfather John Nash (the Nash equilibrium/ A Beautiful Mind) say that his assumptions about the way the world works (were all self interested) might have been a little biased by his paranoid szchizophrenia.
Well worth a watch for anyone who manages to read all the way down to this post
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Owen,
Your point in support of the free market would make sense if there were exactly and only two economic systems: communism or complete libertarian laissez-faire capitalism – and no possibility of social-democratic state whose economy was basically capitalist but which had a social welfare system, govt-funded education and health, and many other limits on the free market.
Have you somehow forgotten that we live in such a social-democratic state? The pro and anti free market positions in NZ aren’t at either extreme, because they’re both nutty: so please stop with the straw men.
Yes. And in the last 20 years a majority of those lifted out of absolute poverty have been in China, India and Indonesia. All of which have far more govt intervention in the markets than NZ. So your point is???
High income inequality within a nation is not a requirement for high economic growth. Look at the GINI for Japan and the scandinavian countries.
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A few notes about statistics:
Owen’s right to point out the important difference between mean and median income. What the typical, middle-of-the-road person earns is median income. One of the important signs that NZ’s become more unequal as a society is that median income is now well below mean income (and I’m trying to find the damn figures for that – I compiled them a year or two ago for a small rant to Idiot/Savant on the mean/median split).
Second, whether you should look at individual income vs household income can be more complicated that you expect. I’ve a friend looking at income stats in the UK: in some places they’re seeing increased household incomes as unemployment rises – and when they look closely that seems to go with having fewer but larger households. Looks like lots of young people moving back in with mum and dad. Of course, this is something you also see in housing – demand for housing is much more elastic than a naive reading of population and immigration figures suggest because when housing’s more expensive you get more people per household.
I’m told (and I’m sure Owen will correct me if I’m wrong, as this is his area of specialty) that most of the new housing stock in the UK in the last two decades was not because of population increase but to accomodate a decrease in the size of households.
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“For over 90 per cent of our existence as human beings we lived, almost exclusively, in highly egalitarian societies.”
Piffle.
Societies where people own almost no property obviously don’t have great differences in *wealth* or *income*. But that doesn’t make them egalitarian – injustice and inequality aren’t just about who owns what.
Tribal hunter-gatherer societies (and that was us for 90% of our existence) for very rarely egalitarian. They’ve almost all got very strong social dominance hierarchies. As you’d expect, since we’re primates and that’s what almost all the other primates do too.
A troop of chimpanzees (and this is just an analogy to make a point, I’m not saying that human hunter-gatherers of the distant past were stupid or chimps) doesn’t have noticable differences in wealth between its members, but that does not mean that it is egalitarian.
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sprout,
Uh, no. Sorry. Your history is wrong.
The US govt support for getting more people into houses was the CRA, which Carter created and Clinton extended. Basically what it said was: you can’t discriminate in mortgage lending to people just because of what suburb they live it. Lending standards have to be equal across suburbs. It didn’t say “you must lend to people with not enough income to replay”.
Can we have the next “the-dang-govt-musta-dunnit” conspiracy theory please. Owen, I believe your number is next…
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Wether lenders or borrowers, it’s irrelevant to me. My point was that, as a nation we have been going down the gurgler since Muldoon. The bucket has long since emptied out and we now live on debt. That has more to do with inequality than labour vs national.
The greenz pathway out of this mire is?
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Doing it differently.
It’s New, It’s Green and it’s a Deal better than anything from National or Labour!
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Samiam,
You are right that a country has to live within its means. But that fact that New Zealand’s means are not as great as other countries does not automatically mean that inequality will develop.
Labour apologists and history re-writers would have us believe that the fourth Labour government inherited such a mess from Muldoon (which is true) that they had no other option than to introduce the reforms they did (which is not true). They would have us believe that it was necessary to privatise state assets, increase student contributions for education, charge for prescriptions and so on because the government was so far in debt that there was no money left to support these. If so, then why did they cut the top income tax rates giving thousands of dollars to high income earners? Why did they sell state assets (e.g. Telecom) at cut price rates (and often their business mates benefited hugely from these sales; e.g. Fay-Richwhite, see http://en.wikipedia.org/wiki/Fay_Richwhite)? What Labour had to do was ensure New Zealand lived within its means; what it did was introduce an ideologically driven program of free market, neo-liberal reforms, and try to convince the public that this was the only option. The effect of these reforms has been hugely increased inequality within New Zealand society.
Rather than face up to their past, Labour supporters now try and minimise Labour’s role in the increasing inequality in New Zealand, and pass the buck to National.
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Icehawk
Have to rush – off to the airport.
Yes, I often illustrate the difference between mean and median by saying “If Bill Gates migrated to NZ and moved into your neighbourhood the mean income would rise dramatically while the median might not move at all. However, some definitions of poverty say one is in poverty if your income is less than half the mean. So having Bill Gates move into your neighbourhood would increase poverty in your neighbourhood. Which is surely a perverse outcome!
We are getting more careful with time and experience.
UK housing? Yes in most developed nations a large proportion of new housing is to accommodate smaller households – the divorced couple is a good example. One household becomes two.
Varies somewhat from location to location.
In some areas of high immigrant populations increased apartments cater for an increase in larger households. Indeed the frequently don’t. Many more people now work from home or telecommute.
We are a two person household but I have a separate office which includes a sleepout, and three office spaces. OUr cottage has only one bedroom (the second bedroom is a dressing/storage room. But the total floorspace of the cottage, the garage and the office/sleepout is larger than many 3 bedroom houses.
The real problem of UK housing is that is over priced and tiny – the average house built last year was only 78 sq metres and being two storied that included the stairs. In 1920 the average was 120sq metres. The average age of a first home buyer is now 38.
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>@kara
>if you believe that I fell sorry for you…but anyway, lets be honest China is not
>really communist, Taiwan and Singapore certainly aren’t but they are cheap
>manufacturing zones, another reason why communism would never ever work in NZ is
>that simply NZ does not and will not want it- look at the election polls to show
>that viz the Workers party .
stephensmikm: Al right then, China is not communism, Russia isn’t: where is the communist society that we don’t want? And just in case the answer is nowhere: how do we then know we don’t want it? You really seem to dread it – but based on what evidence, really? And please don’t give me Stalin now, as that most certainly wasn’t communism. Maybe – just as with capitalism – it would be nice to try it one day. You might be surprised that I am saying capitalism has never been tried, but that’s the whole truth. All we’ve ever seen is distorted versions of it, where some industries and some companies are heavily advantaged, while other businesses and sectors are massively disadvantaged; e.g cost of producing things are not carried by the businesses that produce them, but by society as a whole, who is left to clean up after these businesses, take care of their employees to restore them to proper business functioning when they fell ill as a result of their working conditions etc.
So, just as communism has never worked in the real world so far, capitalism hasn’t. Realisations of both these ideals did not produce more equal societies per se. Yet, it pays to look at systems in states that have a lower Gini coefficient, and learn from them. You will find high levels of social security and relatively high taxes there. And while Sweden or Denmark are certainly not paradise, the well-being of people is consistently rated better than in states with higher Gini coefficients, like ours. Now, this is a clear direction!
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I’m going to just pop in, state the frecking obvious, and pop out again :
Degree of inequality does, indeed, display a range of correlations with social functioning indicators. I would suggest, however, that inequality is not the causal factor, but rather both a moderating factor and a result.
Inequality is not a demon, but rather a daemon. It is something that is absolutely necessary in human society but, as with most things, comes with costs as well as benefits. Without inequality the man who has never opened a book or lifted a hammer is rewarded equally to the man who works to exhaustion every day of his life; inequality is a trait needed in order for a society to maintain its state or to improve its state. There is no society on earth which has survived long enough to be documented which has embraced total equality; even in the most primitive of hunter-gather tribes, those whom do not contribute loose out; often left to perish. Keeping account of contributions has been a major factor in the evolutionary brain development of social species simply because those societies which allow free-loaders perish.
This may seem like a straw-man so far as few here propose such equality, but it is necessary to establish that inequality does have benefits that, at least at moderate levels, far outweigh the costs.
In order for our society to maintain its present functional level we need to have people growing and harvesting, designing and manufacturing, learning and teaching. While people may enjoy these activities and may do them simply for the reward they provide, it is incredibly unlikely that such rewards alone would ever prompt enough labour that the required levels would be maintained. Thus, to maintain our present level we must differentially reinforce certain behaviours; in this instance we must reward those whom work in ways which those whom do not work are not rewarded. Those jobs which less people are attracted to or able to perform relative to the needed numbers must be rewarded relatively more highly. This moderate level of inequality is needed.
If we want to advance our society or keep in check with the other nations such that our workers do not flee to those areas with greater rewards then we must add to this jobs of great learning and development. These jobs require individuals with incredibly rare skill or skills which take a great deal of time and effort to cultivate. Again, while some will do this simply for the reward of doing such, to attract the numbers that we need we must offer further rewards. Given that the skills are incredibly rare and/or cost so much to cultivate, far greater rewards are needed for these jobs than for those jobs which require less skill. Great skill demands great reward. Large inequality is necessary so long as there are people contributing little. If we were to replace those making little contribution with machines then necessary inequality would decrease; but since the person would remain the inequality would increase unless the person up-skilled.
We need moderate to large inequality. It is the lifeblood of human society, and of all social mammals. Though, as I mentioned earlier, inequality does have costs.
Inequality tends to be associated with greater stress, greater crime, etc., etc., etc.. Inequality itself, however, cannot create such; it is an abstract concept. Rather it is the psychological reaction to the inequality that brings around these associations. While inequality motivates one to exert effort it can, if coupled with a sense of hopelessness in such effort and/or a sense of entitlement, increase the likelihood of someone resorting to crime and make them more susceptible to hazardous memes. The sense of hopelessness is not beneficial to non-religious society in any sense (though it is very positive for religions) nor is the sense of entitlement.
A sense of hopelessness results when an individual perceives that they have no means to achieve the ends they seek. In this application it tends to result from a lack of class mobility, especially in caste-like societies. It is for this reason that it is important to make it such that effort does get one somewhere. It is for this reason that we need to make it such that an individual willing to put in the effort can achieve a decent standard of living. This does not mean state hand-outs. This means free schooling and student loans. Student loans are of massive importance as it offers people without money the opportunity to improve their lives and to pay the cost of that improvement from the improvement when they are better able to afford that cost. It does not, in any way, justify subsidised tertiary; in fact it actually argues against it as by making the person pay it afterwards it means that people will adopt areas which are most needed by society, as indicated by pay rate, and allows a bonding scheme which means the money is recuperated if the individual leaves the society but the individual does not need to pay if the individual chooses to contribute to the society following the training; resulting in higher return with only moderate outgoings compared to a subsided scheme.
An excessive sense of entitlement is a problem because it results in the individual expecting more than they deserve for their contribution, or lack there of. This makes the individual far more likely to participate in underhand activities to gain what they perceive themselves to deserve, particularly when combined with inequality and lack of social movement. An excessive sense of entitlement also generally results in the individual making little effort towards anything as they often perceive themselves to deserve it all without the need for such effort. An excessive sense of entitlement is generally the result of the socialisation process. The way to tackle this is to install, during the socialisation process, a realistic expectation. The problem here is that the likes of Tariana Turia like to install such expectations. Unfortunately the benefit, and particularly those whom demand greater benefits be paid, also install such an expectation.
So, in summary; Inequality is good and its costs can be minimised by increasing movement among the social strata by things such as the student loan, by shutting Turia up, and by setting the benefit to a subsistence level and requiring work for that benefit.
I would add also that we do need to stay within our means, but not at any one time. A recession is not the time to be cutting benefits. A recession is when we should be drawing on savings from the good times. When the economy is good we should increase tax and save, when the economy is bad we should decrease tax and draw on the savings. The problem is that our spending is out of control and even during the good times we are not able to save; thus during the bad times some will hurt. We are only so large, it would be wonderful if we could fund everything we wanted but the simple reality is that we cant.
(don’t have much spare time to debate, have my masters papers to do and the equivalent of two masters theses.)
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Interesting thoughts, unfortunately neither based on any facts nor good reasoning. As you don’t have time to debate, I won’t burden you with an in-depth refutation, but rather state the obvious: of course inequality is not a causal factor of social functioning indicators, as it is such an indicator! The degree of functioning is directly proportional to the degree of equity in a society. Malfunctioning societies have a high degree of inequity.
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Kara,
Humour me, point out what is not based on facts. Refute my reasoning.
It is based on some of the most fundimental, universal, and well established psychological facts. The reasoning, while not sound in the logical sense, is far better than any this blog has ever promoted.
Malfunctioning societies display high inequality only as they struggle, once they fail they display high equality; do not mistake correlation for causation. Those societies which have high inequality but not so high standards are such not because of the inequality but because of the perceptions working through that inequality. You can point to no equal society of humans that has obtained any degree of success as none exist; equality and starvation go hand in hand. If you look at the societies at the top, they do tend to be less unequal, but only by a small margin. They are still highly unequal. It is not the lower inequality that results in the higher social indicators but the different attitudes and the different incentives that allow people to move up the ladder that result in a greater society that happens to have slightly less inequality than those without such.
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OK, thought you weren’t up for a debate (your own words), but here we go: I certainly did not mistake correlation for causation. I have clearly stated that I don’t see inequality as a causal factor!
Which failing society ever displayed high equality, please? I absolutely agree that an absolute equal society (Gini coefficient of 0) has never existed – and probably never will. We are talking degrees here. And there are some societies with a low Gini coefficient that are around for quite some time. Inequality has per se nothing to do with standards, so of course low standards have nothing to do with inequality – not sure why you need to point this out, as I never alleged the opposite. What societies are at the top, please, and at the top of what? You seem to be quite obsessed with ladders and climbing them, but let me tell you one thing: this has all the logic of a pyramid scheme. For few to be at the top, lots need to be at the bottom. And you might not believe this, but even once you are relatively high up on the rungs, it is easy to slide back again. The different incentives you talk about amount to survival – for the lower rungs – and greed -for the upper rungs. Neither is very inspiring to me, nor does it constitute a great society.
Now, if your top state is the one with most economic power, you should really stay in the US for some time – very sobering looking at the ubiquitous adds for anxiety pills, and reading the statistics of how many people are on them.
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The discussion wavers all over the place on this thread. In regard to inequality it seems to have got caught in a debate over inequlaity vs equlaity (raed some folks ideas of developed vs un-developed/tribal-hunter-gatherer)instead of the degree (and changes in the degree of inequality) that existed in NZ pre-1984 and now, and in, for example the English-language (UK, USA, Canade, nZ and Australia) OECD nations and the rest of the OECD Japan, Germany, the Scandanavian countries etc).
A knowledge of what Gini measures, and then looking at the time series of the inertnational statistics presents certain facts about the degree of inequality, and the changes in inequality.
I think Met’s point, and it is certainly my opinion, is that the change in the degree (that is, an increase in inequality as measured by Gini (and other stats) is disturbing.
The reality for those many of those most disaffected by the increased inequality (note disaffected not affecetd) is increased relative poveerty with all its social consequences (unemployment or under-employment, increased prevelence of certain diseases, poor housing and transience, reduced educational performance, stress ignited violence and criminal behaviour because of a perception of rewards from such activities).
The sad bit is that the social consequences of the increases in inequality were predictable, and that we had models that favoured greater equality as opposed to greater inequality to follow in 1984.
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Icehawk, you are obviously better informed than me on the history of the CRA but I’m sure I stated that the industry took things beyond the original intention. The subprime curruption was probably triggered by a perceived loosening of lending criteria whether intended or not. What it did all prove was that the industry can not be trusted and tight regulation and controls of financial institutions is a must.
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@Sprout
the (finance) industry can not be trusted
You are quite mistaken, young bean, They can be trusted implicitly…. to do the greedy thing and to consume everything sent their way and more! That’s why controls are needed.
To me the great villains in the recent financial meltdown were the ratings agencies. It was precisely their job to expose those excesses. Greedy scumbags are a given. Moodys, S&P etc should be out of business.
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Sapient,
While I agree with many aspects of what you say I do think you tend to stand on some fairly shaky ground on several aspects. Obviously you have a background in a field such as social psychology or similar which I find an interesting and very useful input to such a debate. However unfortunately you seem to be making some quite strong assertions about human history and cultural evolution and positing to the other commenters here that what you say is entirely factual.
For a start you define equality exclusively in terms of distribution of “reward” rather than considering equality in terms of the social, legal and opportunity factors, and cite lazy individuals or groups acquiring the same beneficial outcomes as hard workers as evidence of this so-called misfiring of equality. Such a definition is, in my opinion, far too narrowly focused.
I find it fallacious to try and argue that hunter-gatherer societies, for example, have moderate levels of inequality merely because those who do not contribute to group fitness are penalised. Equality in this instance would mean input as well as reward and as you point out, this noting of contribution is an important aspect in social species and development. Again, it seems you are associating equality only in terms of resource redistribution rather than also investment or input.
Many hunter-gather societies have relatively high levels of equality or egalitarianism (note: not complete, the sexual division of labour and of age-rank are exceptions) in that social hierarchies and access to resources are relatively fluid. There is a marked difference between this and today’s societies where access to opportunities is not evenly (i.e. equally) distributed and society is much more stratified.
Later, you comment that “Great skill demands great reward. Large inequality is necessary so long as there are people contributing little.” This seems like a teleological argument to me. Inequality is necessary because inequality exists!? If people contribute little but gain equal reward (which they don’t anyway, the example of beneficiaries is a strawman), this is obviously not equality. But at the same time if people don’t have equality in access to resources and opportunities then they will inevitably end up contributing less.
Here you say “We need moderate to large inequality. It is the lifeblood of human society, and of all social mammals.” Again, that’s quite a statement. I didn’t know that moderate to large inequality was the “lifeblood” of the !Kung people of the Kalahari, Central Australian Indigenous groups, and most pre-Holocene societies as well as other social mammals such as the famed Bonobo, Dolphins, Elephants and many other species and cultures.
You next speak of the ills and negative correlations of inequality, but then turn around and argue that moderate to high levels of inequality have benefits which outweigh the negatives? This seems paradoxical. And benefits or ‘state handouts’ aren’t by definition the result of a willingness to pay those who do not wish to contribute. Your argument that it is seems to only denote your own naivety with the welfare system and the circumstances under which many people are forced into benefits by a loss of income (does the recent recession ring any bells?) or through circumstances such family breakdowns. Likewise I would be interested to know why it is you think benefits are not set to subsistence levels? You imply that one answer to inequality is fluidity in social hierarchy and a setting of the benefit to subsistence levels coupled with working for it. I’ve known many beneficiaries in my lifetime who can’t afford rent coupled with a healthy diet let alone books or new clothes for their children, so if shelter, clothing, good food and education aren’t considered subsistence in your opinion then what is? The reason people are calling for an increase is due to the costs associated with transport, food, consumables, and rent increasing disproportionately to the benefit. As for working for the benefit, again you seem to assume that most people are on benefits from choice rather than circumstance, and that there is work out there for them to do. It seems to me you are calling entire systemic failure of a system which has only a few abusers.
Finally, you say to Kara “Humour me, point out what is not based on facts. Refute my reasoning.It is based on some of the most fundimental, universal, and well established psychological facts. The reasoning, while not sound in the logical sense, is far better than any this blog has ever promoted.” As I said, sweeping statements about social and cultural evolution in terms of moderate to large inequality being a central tenant of social animals is not based upon fact. As for your assertion that what you wrote is based upon fundamental psychological facts, i’m no psychologist but I think there are many (my psychologist partner included) who might differ slightly in opinion, especially where you range into systems theory of a kind which tangents into the sociology of economics. It doesn’t seem like an overly robust psychological framework to me, though again I may well be wrong.
Here you say (again, in sweeping generalisation form) “Malfunctioning societies display high inequality only as they struggle, once they fail they display high equality; do not mistake correlation for causation.” You earlier stated that no documented examples of societies with high egalitarianism exist (again, this is a false assertion), so can you please tell me how you can then state that only failed societies have high egalitarianism? If there is no example (i.e. evidence) then what are you basing this on? Also, if inequality only shows up when societies struggle, and if equality only shows up when societies fail, then what on earth would happen if a society were to succeed? Nothing?
Also, again you seem to like to play paleoanthropologist or archaeologist when you state “You can point to no equal society of humans that has obtained any degree of success as none exist; equality and starvation go hand in hand.” Do they now? So every egalitarian society that ever existed eventually starved to death? There are none in existence today? That’s quite a statement, and to be honest I don’t fancy your chances of this being even remotely a scientifically backed position, let alone a psychologically backed one. Or even logical. Also, you seem to assume that cultures live and die in a closed system, where history (i.e. colonialism), the environment (climatic shifts, suitability to agriculture and thus sedentism), or human agency (effect due to individual action) don’t have any relevance. Again, I don’t fancy your chances of trying to pass this off as good science.
In sum, while it may not seem so from my above comments, I do think much of what you say makes a lot of sense and I agree with many of your assertions. I also find your perspective interesting and think that the psychology of inequality is very useful in analysis. What I do have problems with however are your bold assertions as to human social evolutionary development, cultural evolution, a porous knowledge of prehistoric social organisation while asserting the opposite, and a lack of understanding of non-western and non-capitalistic modes of society. I also think many of your arguments are paradoxical and lacking in evidence. Perhaps, if you have the time at some stage, you might clarify some of these points or correct me where i’m wrong or have misunderstood you.
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Samiam-I guess it is human nature to be attracted to money as bees to honey (I think I have a potential rap here). The thrill of ready rewards as opposed to long term strategies is just too tempting and no one wants to be the first to turn off the tap. The ratings agencies just wanted to join in on the fun and when you are in the middle of a good party the morning after is never considered.
The latest New Internationalist has looked at Canada’s tar sands party. They are having a great ol’ time in Alberta and any party pooper is quickly shut down. http://www.greenpeace.org/canada/en/campaigns/climate-and-energy/what-we-do/international-negotiations/cop14mop4/canada_tarsands
Milk and mining are NZs equivalent and it is interesting that the workers in both industries don’t get party invitations.
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Kara,
It is true that I do not have time to be debating, but given it is like a drug to me I always find myself making time when I really should not.
I will admit my mistake. While I did notice that you mentioned you do not believe inequality to be a causal factor, I read your following paragraph as addressing inequality rather than inequity. My post was in reference to inequality as that is what was discussed in the topic. Given that I made a mistake of interpretation (as shown in that I said inequality in every instance instead of inequity), the rest of my reply to you was somewhat redundant.
If by equity you mean equality of opportunity then I agree entirely; that was one of the points I was trying to make in relation to the student loan being a positive. There are, of course, other factors needed to ensure equality of opportunity, but I have addressed those extensively elsewhere and regular readers will know my position strongly in support of such. Again, this blog post addresses equality of outcome rather than equality of opportunity; at least in so far as I understand the intention.
There is little more that I can say to your replies unless you make an actual critique of the article other than saying that the some of the points are obvious (and yet most of the commenter here talk of inequality is if it is a causal factor).
As to ladders, I do consider it important to strive forward as I consider survival to be of the utmost importance; something even our present societies cannot make sufficiently likely.
~~
Edward,
You are correct about my social psych background, though I am now training in cognitive neuroscience.
Yes, I address equality in relation to equality of outcome. In general discussion equality is used in relation to equality of outcome and equity is used in relation to equality of opportunity; thought the two do tend to be used semi-interchangeably. I admit that I may be mistaken, but this is the position from which the post has come. If this is not the case then I have used the words wrongly and the post meaning should be interpreted in light of such.
As mentioned further up, this thread addresses inequality in relation to outcome (e.g the graph). Inequality of this size can result even from perfect equity. It matters not how much effort is exerted; one cannot eat intentions (poor analogy, I know). What matters is the end product; specifically its value. Many hunter-gatherer societies do have equality relative to our resources, but relative to the resources they have available the inequality is much more profound. Again, I am talking about equality in relation to outcome; the reward for the good or service, not the effort exerted.
Equality of opportunity in our society is less than in hunter-gather societies, this is true. It is equality of opportunity which I support strongly. In NZ its not too bad, we could do a lot to improve it, but its not too bad.
By this I did not mean moderate to high inequality was the lifeblood but that inequality was; moderate to high inequality being desirable for advanced civilisation. Why inequality is desirable will be addressed latter. It has been some years since I last covered the !kung, it is true that they support each other when they are ill, pregnant, etc.. This is true of most functional societies. It is true also that they share that which is gathered or hunted around. I remember also that the largest amounts and the best go to those considered to deserve it. I remember that a lot of their culture focuses on the idea of fairness of input and that laziness is punished socially and materially. That which you receive is still very much attached to ones efforts and conduct; it is still a non-equal society. I may be wrong in calling it moderate (I thought I said low to moderate?) but the existence of inequality is hard to argue against. I wonder what would happen if a mutated child was born? Would it be support in entirety like any other member? I do not remember that being covered.
If I had of had more time I would have written more clearly and explained my reasoning better. But I did not. I had thought, however, that I was clear enough that I believe the ills correlated with inequality can be separated from inequality such that we can have much of the good without the bad; the prime mechanism of such a separation being the increase of equality of opportunity.
As to the benefit, I know well the situation. While my experience with it is only limited, I have many associates for whom it is their main source of subsistence. I find it ironic when they complain about the state whilst consuming alcohol and tobacco funded by the same entity, on the other side of the coin I have supported a number of my friends through hard times where the money was clearly insufficent. Benefits are needed; this is true. I recognise that it is not the result of a willingness to pay those whom desire to do nothing but a necessary social support structure. I say that benefits should be set at subsistence level, whatever that may be, because I know that at present it is not enough for some but too much for others and I know that we cant afford our present outgoings. I argue, elsewhere on this blog, that as many services as are able to be provided to the child directly should be. The present system holds far too much room for abuse and such a change would hurt only those whom abuse the system. I relate the benefit to a sense of entitlement; if you think that there is not a sense of entitlement in many on the benefits then your not operating on earth. That attitude is passed on and is reflected in work attitudes. People expect everything to be given to them. When it is not they feel shafted, this is a problem as that feeling of being shafted predisposes one to criminal activity. I suggest work for the dole (actually, full employment through state created work) for two reasons, one being because it decreases the feeling of entitlement whilst providing the psychological benefits of being in work and the other being because there is much industry which is not economical with the minimum wage at the present level. As the benefit would be paid regardless, any industry in which the product sells for more than the resources plus capital investment is made profitable. There is certainly industry there, particularly in displacing Chinese imports.
Statistics is the art of the sweeping generalisation. I make sweeping generalisations of necessity. Those generalisations in relation to social evolution are almost tautological. Reward structures are fundamental. A creature that did not respond in the appropriate manner would fail to survive. The way in which creatures, humans included, respond to rewards is well documented. There are literally tens of thousands of studies in to how humans and animals react to rewards; most resulting from the work of B.F. Skinner.
Actually, that’s almost a tautology, lol. It was intended as a humorous and self-evident point. A society which fails approaches a singular membership, once a society has failed its membership is equal to or less than one and is thus equal and simultaneously no longer a society.
I will spell out the reasoning here simply because I realise I’ve done a rather poor job of explaining my position thus far. In a society with complete or near complete equality of outcome an individual’s contribution to society is not related to their personal share of the social resources (tautology). Where an individual may obtain the same outcome through multiple routes the individual will tend to take the route perceived to deliver the greatest reward in relation to effort exerted (very well established). Thus, in society with complete or near complete equality the production of the society will tend to decline as a result of deference of path until the equality is broken or another society supersedes that society. Equality of outcome is like a antelope evolving to be slower than the others; it may seem like a good idea as it allows energy to be diverted to reproduction, etc., but that diversion is of little use if the antelope becomes substantially more likely than its pairs to be consumed as a result.
There is nothing I like more than being proven wrong. I would welcome you doing so, even if I am only able to participate (at a cost to my course work and programming) rarely (compared to my previous compulsive debating).
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Sorry, but no: I do not use equity as meaning equal opportunity, as this is utterly meaningless. A monkey and a fish might have equal opportunity to get to the top of a tree – and there are flying fish, and some ingenious fish who can build a watertank tied to a hot air balloon out of rubbish found on the floor of the ocean – but testing this with 1,000 monkeys and 1,000 fish, the outcome looks rather predetermined. Equal changes would be more like it! For this however your circumstances matter hugely, and therefore equality and equity cannot be looked at in separation.
A ladder would help in this example (at least the monkeys) but overall, I cannot possible see its importance for the survival of anyone!
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Some comments on beneficiaries and inequity and inequlaity.
Sapient’s generalisation…. “As to the benefit, I know well the situation. While my experience with it is only limited, I have many associates for whom it is their main source of subsistence. I find it ironic when they complain about the state whilst consuming alcohol and tobacco funded by the same entity, on the other side of the coin I have supported a number of my friends through hard times where the money was clearly insufficent. Benefits are needed; this is true. I recognise that it is not the result of a willingness to pay those whom desire to do nothing but a necessary social support structure. I say that benefits should be set at subsistence level, whatever that may be, because I know that at present it is not enough for some but too much for others and I know that we cant afford our present outgoings. I argue, elsewhere on this blog, that as many services as are able to be provided to the child directly should be. The present system holds far too much room for abuse and such a change would hurt only those whom abuse the system. I relate the benefit to a sense of entitlement; if you think that there is not a sense of entitlement in many on the benefits then your not operating on earth. That attitude is passed on and is reflected in work attitudes. People expect everything to be given to them. When it is not they feel shafted, this is a problem as that feeling of being shafted predisposes one to criminal activity. I suggest work for the dole (actually, full employment through state created work) for two reasons, one being because it decreases the feeling of entitlement whilst providing the psychological benefits of being in work and the other being because there is much industry which is not economical with the minimum wage at the present level. As the benefit would be paid regardless, any industry in which the product sells for more than the resources plus capital investment is made profitable. There is certainly industry there, particularly in displacing Chinese imports.”
And my generalised response, as drawing on individuual situations is hardly fair on the individual without their permission…
Beneficiaries are not a static group.
They are single people, couples and parents who for whatever period do not have a partner with sufficient income to support them or a paid job paying enough to mean they can support themselves and their depenedents without direct state support such as WfF or a benefit.
For some this is a short-term situation, although many go from being on a benefit and into paid work and on to a benefit several times as they face unpredictable employment made up of casual and a mix of part-time jobs. Many paid jobs pay insufficient to mean adequate living with state support via for example the accommodation supllment, WfF or whatever. Our sysmtems though are complex and not all transition between these states of paid employment and being unpaid.
A number of long-term beneficiaries become less attractive to employers because it is hard to answer questions about what one has been doing in the last month, six months, year, etc. As well, after having a number of rejections regarding potential jobs the drive to seek further rejection dims. Periods of depression intensify. And this is just for those on the UB. For those who are parents moving from benefit to insecure paid employment and back again a number of times there is the struggle with indeterminate income (source and amount), interfacing with public and private sector bureaurcrats (IRD and Work and Income, power company call centres, banks, credit company)results in real difficulties not least being the ability to pay rent weekly. The streesses are real. For those in the bottom 3rd of households (by income) you have high rents in relation to regular income (40-60%), inadequate housing (over-crowding and damp houses though poorly insulated/heated housing), child illnesses more noted for being present in developing countriss as opposed to developed ones and these flow on into poorer educational attainment than what might have been the case had the child been fit and healthy…. (and while I recognise most of the above are measures of outcome they can not divroced from the inputs.
In my opinion they all contribute to making a fraud of the idea we have anywhere near equity of opportunity for all our childrenin this land of ours.
Benefits are an entitlement paid to the ecipient. You simply have to meet criteria set out in the Social Security Act. That perovides an income which helps pay all the private landlords out there and employs low paid workers in supermarkets. Yes it does carry a cost, but that I guess is the cost of a society without people dying in te streets from starvation, or a state with people on $2/hour cleaning the toilets of nuerosurgeons of whatever.
The State also provides services on a semi-universal basis such as child health and education, but even here the private/public mix hardly results in equity as parents from the lower third or so of our income scales struggle ensuring their children’s human capital inputs are the same as the top third – the state certainly does not ensure it.
It would be extremely costly in terms of bureacracy to say the state will provide directly all the costs of education (or food vouchers) of the children of anyone on a benefit for what, one month continuously, two months, three months in a single year, six months in three years… what yard-stick of nanny-statism do people want – or is it from day one. We do need more state provision of the inputs though, but this shuold be done from a universal basis so that access to computers and books, visits to museums, taking part in sports teams in team events is far better facilitated for everyone.
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Sapient,
Thanks for the reply. I too have a hard time keeping myself from entering into debates, and when I was doing my Masters I too probably entered into them a little too often driving myself to distraction.
You have clarified many of your points well so I think I understand you a little better. I accept your points about greatest reward in relation to effort being a well established fact, and in general the psychology behind entitlement as well as social effect at the other end of the spectrum. I also agree with you on the score of equality of opportunity (your student loan example). Again I do however take some issue with your statements about equality (or relative lack thereof) within hunter-gatherer societies as a general rule.
Of course no one will argue that complete egalitarianism or equality has existed in the past and it is unlikely to exist in the future. Inequality in some measure is not what i’m arguing against. What I take issue with are claims that many of these mobile societies can be defined as unequal rather than relatively equal. It is focusing upon a very select part of the overall package if you will, effectively creating a taxonomy based upon a minor feature. For example, the so-called ‘Big Man’ societies of PPNG have leadership, but such leadership is not tied up with authority or assets and is highly fluid. Of course it is still a big ‘man’ society rather than a big ‘woman’ society, but the equality of outcomes is still high as well as equality of opportunity. In the same vein I have difficulty seeing how pointing out that the !kung people not rewarding failure to contribute articulates with the notion of that society therefore being defined as unequal, even based within its own context. There is a huge variability in input, and I find some points of your argument generalise too greatly to the point where inequality strongly correlates with healthy competition and equality strongly correlates with laziness. But perhaps this is my own abstraction.
Similarly, it is difficult for me to see how your characterisation of pre-agricultural societies as having high equality of opportunity while a much lower equality of outcome is justified. I think this could be a case where modern concepts of social organisation are projected into the past in a fairly careless manner. I would suggest that while inequality may exist in the form of differentiation in ability, this, by itself, need not be a central driver of evolution in social animals or culture in humans. It seems to rest far too heavily on the oft-muddled concept of survival of the fittest as meaning the individual competing with other individuals, and ignores group fitness through cooperation and equality in resource distribution. I think it a bit misleading to indicate that our evolution, biologically, cognitively, and culturally, and complexity in general, are driven primarily by inequality. The majority of material culture prior to the advent of sedentism, for example, does not indicate status items associated with hierarchy, but rather items which provide functional answers to real world problems. In certain cases there may be a possibility of these items acting as an extension of the phenotype, adding advantage in a social context, but nevertheless the disproportionate accumulation of wealth as a marker of inequality does not really feature in the early record.
Finally, while I completely agree that ‘successful’ cultures, in terms of longevity and population size, tend to have high levels of inequality, I think it may be prudent to remember your own wise advice earlier that correlation need not mean causation. There is an argument to be made again for a dynamic relationship between history, agency, and environment rather than just individuals as repositories of cognitively hard-wired inequality behaviours.
At any rate, i’m sure i’ve made a rather large tangent away from the actual topic, so my apologies. I just find a psychological perspective an interesting one but think there are a few issues with what you’ve put forward. The notion of ‘Habitas’ or of cultural and environmental background as major mechanisms preventing an ability to succeed does not seem to factor in your argument.
Anyway, good luck with the thesis.
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Oh, one last thing, just to clarify. The point of my last post was ultimately to question the premise that inequality is a healthy aspect of society or an integral part of our evolutionary behaviour. I think it important as the current social atmosphere seems to like to reference ‘human nature’ as being hyper-competitive. From my perspective this is simply not the case.
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Kara,
Then, please, define equity as you see it.
What you describe is not equality of opportunity; it is closer to equality of freedom, but considering predictors they have not even that. The monkey and the fish are equipped with massively different abilities. The idea behind equality of opportunity is that people should be given an equal start in life; while this is not possible under our present nature, it is, in my view, an ideal worth pursuing. The principle of equality of opportunity would advise that children, even those of the poor, are provided for. That is, they should be feed, clothed, looked after medically, given access to education, and be alleviated of suffering as much as is plausible. Under the principle of equality of opportunity children are given as much of a equal starting point in life as society is able to provide; differences in latter life being attributable not to inheritance but to personal traits.
It is, of course, true that different children will be equipped differently genetically and that these differences will show themselves. In this way we can not have true equality of opportunity. Likewise, it is hard to eliminate all abuse from a child’s life, but it is worth trying in so far as we are able to without causing more harm than good.
In my ideal world no-one would need to work if they did not desire, but we live in a state of labour scarcity. I work everyday toward improving the lives of humanity and ending this scarcity but until that state is reached, or at least approximated, we live in a society where resource access is limited by labour. If we tax too much to pay for the goods that we desire then we hurt the economy and compromise our ability to generate future revenue with which to provide the goods; by trying to help too much we hurt. The hard reality is that we spend too much relative to our income or any income practicable from our transactions; we can not afford to increase our spending, thus we must trade goods in some areas for greater goods in others. It may be nice to support beneficiaries better but it is far more vital to support the children; part of the support to children will be through benefits but there are ways to support children without the need for such and the gamble involved. With limited resources comes limited use of resources.
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Graham,
Yes, my statement was a generalisation. Generalisations are necessary in a world where one lacks complete knowledge of every incident.
Yes, I realise that beneficiaries are not a static group, merely a group with a minority of static members. I have no problems with what you have posted. I only point on which I disagree is that of it being an entitlement.
I am not suggesting that these services be provided to beneficiaries only, rather to all. Although I do like the Australian model where people are charged a set percent for health and those earning over a certain threshold pay extra on top of that unless they hold private insurance. As a side-point, I would like to see far more state housing and other state accommodation. I would like to see food in schools simply because it ensures that the kids are well fed and, if they are tasked with part of the preparation and part of the growing, teaches them to utilise food that is not overly processed.
Furthermore, what I propose is not so much a work for the dole scheme (though it is convenient to call it that) but actual employment provided by the state in areas which are not practical for private organisations as a result of, legitimate, minimum wage laws. The workers would be fully provided for for a period after they become unemployed but should they fail to find work they will have essentially guaranteed work in these state run organisations. They would be paid fairly and, since they would otherwise be paid via the unemployment benefits, there is a vast array of industry that is profitable to the state that would not be generally. I would tackle WfF in another matter entirely and would use a synthesis approach for the DPB, but those can be discussed at another point.
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Edward,
I can certainly see where you are coming from in relation to these other cultures. The point that I am trying to make is that in these societies the people only really have access to a limited volume of resources. These societies are highly egalitarian in relation to equality of opportunity (at least within sexes) but they do distinguish, very much, between those whom create results and those whom do not. Be it through natural ability or effort. My point is that, while the difference between individuals is small in absolute terms, the difference in relation to the resources they have available to them is relatively large. Probably larger in PPNG than among the !Kung. Again, it has been a long time since I covered the tribes of PPNG, but I remember a study on their systems of farming, land allocation, and trade. Its a little murky in my head but I seem to remember that the members had strips of land allocated to them which were cleared by the males and cultivated by the females, pigs playing a large part also. I may be wrong but I remember that land allocation was based, very much, on social status.
You seem to have a working knowledge of the more common anthropological case studies. My minor was sociology; unfortunately for this discussion, anthropology was of tertiary importance. If Katie is reading this she can probably shine some light on the matters anthropological.
Anyway, my point is that, just as micro-evolution and macro-evolution are the same thing over different time spans, the inequality in these societies and the inequality in westernised societies differ in degree only because of massive differences in resource availability.
I do not mean to argue that it is natural selection within-group that drives societies to accept inequality; even if I thought this was the case I would not argue that just because we are the way we are because of an event in the past, that we should continue to act in a way appropriate to that event. What I mean to say is that some memes (e.g. equality of outcome) will tend to result in a decrease in group fitness. If you look at contemporary discussions of religious evolution you might touch on what I am getting at. Groups compete, a group that acquires more resources and breeds more profusely will tend to dominate and eventually eliminate the competition just as a violent group will tend to dominate a pacifist group; equality of outcome will tend to make a society less viable for the previously discussed reasons.
At heart I am a communitarian, but I am a thoroughly logical person (at least I try to be) and thus I recognise that the ideal of communitarianism severely compromises the survivability of the species and of other Gaian life. Because of this I accept an egalitarian post-scarcity society as an idealised social form though, again, my logical nature tells me this is not immediately practicable and that, at least at the moment, we must work within the constraints of labour and resource scarcity. A constraint that necessitates compromise.
P.S. I do not consider human nature to be hyper-competitive; we are a social animal and have great need of cooperation and sacrifice for others. I think social darwinism, despite my attraction to eugenics, is not something conductive of a well functioning society.
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Sapient,
An opportunity is just that – it doesn’t say anything about your chances of actually grabbing it. Your definition is more benevolent – you want everyone to have an equal starting point – fair enough! In my picture that could mean asking the monkey to climb the tree and the fish to cross the lake to the other shore. Now, leaving the animal kingdom, for humans that would require children to grow up under very similar circumstances, a precondition of which would be a high degree of socio-economic equality, would it not? As for the student loans: nice to have. But having the direct comparison (my parents paying for my first education, and student loans getting me through the second), I have to say it was a lot easier in the first round. So kids with mommy and daddy paying for everything while they are at uni will naturally have better chances in the exam, as they could have spend the night over textbooks instead of working in a bar.
What I am saying amounts to this: for equity defined as equal chances, equality is a determinant.
And in another analogy: Opportunity always knocks – as the real estate agent will tell you, but oppportunity doesn’t make houses more accessible.
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Kara,
This does not requre that the children grow up under similar socioeconomic circumstances. That is the beuti of free schooling, especially kindergarten and the early years of school; here it is the peers and the teach that make the most substantial contributions. In the absence of deprivation this will generally hold. I have proposed several ways of decreasing and eliminating that deprivation, the only further thing that needs be done is the confiscation of the child in the case of abuse. With the right schooling anyone within a standard deviation of the norm can excel. Though, criminality is highly genetic and there is a growing amount of evidence that even hobbies are heavly influenced by genes, so it is questionable wheather true equality of opportunity can ever be established, even with total equality.
As to the student loan issue, my parents never funded me through uni. Heck, I hadint seen my dad in years when I started and my mum was still strugling supporting my brother and sister. I worked to support myself, if I had wanted to I could have sat on the student loan and gotten a decent enough amount. The options are there, even working through undergrad and masters is not that much of a problem. Heck, most psychology masters students hold down a job and voulenteer for a substantial number of hours in social services. Those whom have their parents to pay for them do have an advantage but that advantage is incredibly small. The fact that so many students are out on the town most nights would seem to indicate that they are receiving more than enough money, be it from work or allowence or loan.
I see what you are trying to say, but the loan arguement just doesint hold up when there is the option of a student loan. Even more so when you take into account that those from families under about 60k(?) get a fairly decent allowence and a accomodation suppliment such that if they do need to work it will be very few hours.
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“if they do need to work it will be very few hours.”
Quite true and the more true because of the higher minimum wage (and the ability to save earlier with the end of the youth rate) – so here a higher minimum wage enables greater equality of opportunity for those training (and supporting themselves via part-time work). Even though the purpose of their achievement is relative inequality with others (not trained).
As to the issue of inequality, any society has some inequality within it, what is unique in our time is that this inequality is being exacerbated by relativity with a greater inequality within the wider world (global market) resulting in upward reward pressure for the few and downward reward pressure for the many. Each society has a choice about how it reacts to this, attempting to constrain the increase in local inequality or choosing not to bother and if anything, embrace the change as part of a modernisation of its own society (deconstruction of any
sense of national socio-economic community – apart from taxation to finance government, residual public services and debt).
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PS My position is that those nations attempting to minimise the disparity will do better in maintaining equality of opportunity, whereas those which do not will retain only a shadow of their former equality of opportunity – which will change the nature of their community. But this is all relative, as nations will react to the globalisation trend influence based on their cultural disposition. Those nations which are unable to maintain their former level of egalitarianism (and which valued it) will be the most aware of what they have lost – and some amongst them will still embrace globalisation as modernisation.
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Sapient
I am not sure what the basis is for the claim that societies with greater inequality lasted longer. I do note that the more powerful nations tended to form empires and these were necessarily heirarchial and the power being unequal, so was the wealth share.
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wow just looked back at this thread now, very interesting comments from everyone – edward – maybe we can as a society put some trust in people – whether inherently good or bad, most people will comply I think out of moral obligation or brownie point to give – and they’l give where they feel it is best – private schools or cancer charities or arts centre , maybe donate an ambulance rather than payout to keep defunct ministry offices afloat, but yeah that’s all
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Sapient,
I think I understand what you are trying to say, but find myself choking on semantics. Reasonably egalitarian societies distinguish those who create results from those who do not. Ok. But i’m non-plussed as to what this has to do with an argument against relative equality. I do see what you mean insofar as you are referring to equlaity of opportunity, but dissagree with you on the score of many of these mobile societies not having very high levels of equality of outcome. The equalising in redistribution of resources is documented, and my example of the Big Man societies is one such example. I’m also not too sure I agree with your memory of the horticultural lots as reflecting social status or hierarchy, but that’s another topic.
At any rate, you’re correct in assuming I have an anthropology background, though it has been several years since I took any social anthropology classes – my training is as an archaeologist, hence my unfamiliarity with some sociological terminology and a general distrust of modern frameworks of social organisation projected into the past, my own included.
While I agree with you that some memes which may be reinforced or adopted can have negative effects upon group fitness, I am interested as to the reasoning behind the assertion that equality of outcome results in a decrease in group fitness. Surely this is only true at an extreme end of the spectrum (i.e. not enough subsistence resources for the population, yet what resources are available are eveny distributed to the point where everyone eventually ends up with no resources and, to loosley parapharase your earlier comment, starves to death.) I don’t find such polarisation very useful in debates of this kind.
Anyway, I agree with you that as it is we must work within the constraints of labour and accept some level of compromise. I just don’t think equality of outcomes (or, in a practical sense, as near as possible equality of outcomes) is an aim which is as dangerous to society as it seems you imply. Especially when it is balanced out with other factors (as is the case with progressive tax anyway). To be honest, I think this might have been more an issue of semantics than anything too substantive.
I think i’ll leave it at that, but it is interesting reading your replies and trying to understand your perspective.
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toldya – the Sap is back!
was saving a lovely troll for ye
didn’t keep well
but that’s the quality of trolls all over these days,
don’t makem like Kel Tremain anymore.
brazilian students milk all our cows for around about nought.
Trust: a quality best invested in thine true self!
(hell it cain’t get worse)
run up the slave galleys…..
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If you want worthwhile discussion, you have to have tension and conflict.
Likewise, communities need divisions to foster liveliness.
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Bill commits $1 billion of our money in case everything turns to custard.
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SPC,
Regarding the minimum wage, I believe I have conceded this point previously; at least regarding the elimination of youth rates. As to the number of hours the students would need to work, it is true that they need work less than were the minimum pay rate lower. That said, as I have maintained, this wage rate must be set at a level at least high enough to provide the basic subsistence while not being so high as to decrease the availability of jobs to such a degree as to hinder more than help. What that range is in actuality is open for debate, though my intuition is that it falls bellow $15 per hour but above –generally- $10 per hour. We would be doing students no favours by raising the wage such that they only need work half an hour but have only a quarter hour readily available.
Yes, our present capitalist system results in a downward reward pressure for the many relative to those whom go up. I would seek to change this through the modification of social institutions but I would also point out that this decrease is only relative; on the whole people are becoming a lot richer, at least in terms of increases in health, etc. if not in free time as I would prefer.
I do agree that extreme inequality of outcome compromises equality of opportunity and that the factors that go along with extreme inequality will lead tend to societal collapse. I am not positing that extreme inequality is desirable. In all honesty I prefer a Nordic level. My suggestion is rather both that inequality itself tells us very little and that some degree of inequality is desirable, even necessary. I would rather our society be more equal but I do not see the inequality, or factors that follow directly from inequality (i.e. major differences in inequality of opportunity), as being the major issue for our quality of life statistics.
~~
Edward,
Yes, matters of the semantic agreement often require a lot of chewing.
Yes, it is at the extremes that both equality and inequality become bad. The point here is to acknowledge that inequality is not always bad and can be good. In doing so the critique must then move from “oh, its unequal thus bad” to “What level of inequality is optimal for social functioning internally and externally”. As aforementioned, I prefer a Nordic level but I do not see this as immediately practicable with our present resources; particularly with our present modes of production and the goods we create.
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Sapient,
With all the cars on the road, it is inevitable to have accidents – yet a system should strive to minimise the number of accidents – wouldn’t you agree? I do agree that some inequality is inevitable. I am not sure what you conclude from this? Are you saying: yes, and that’s fine by me, as this is what propels societies upwards, or are you suggesting to minimise this by all available means? If you think that inequality gives buoyancy for a society at large, I can’t see why you would then suggest counter movement. My guess is that you believe to be able to come up with just the right amount of inequality to give you the perceived best of the two options. I do not think this to be feasible. Inequality can be ameliorated if a consensus in society exists that inequality is not in the interest of the majority (you cite the Nordic countries as an example for this consensus); I don’t think it is even conceivable that we ever agree on just the right degree of inequality to strive for (and personally, I believe it to be zero).
I do not follow your justifications for the benefit of inequality, but even if there was something to it – how would balancing be possible?
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I think you dismiss the evidence cited in the Spirit Level too easily.
“I would rather our society be more equal but I do not see the inequality, or factors that follow directly from inequality (i.e. major differences in inequality of opportunity), as being the major issue for our quality of life statistics.”
Our major quality of life statistics issue is the failure to close the gaps. A 1980′s comparative study by the BSU of the FBI noted that it was in less egalitarian societies where the inequality was centred in ethnic difference (underclass ethnic communities) that crime was high – thus in a mono-cultural egalitarian society crime was less. Generally crime is linked to poor quality of life.
Barriers to equality of opportunity centred on identifiable underclass profile impact on our quality of life statistics – one reason is lower expectation and another is rationalisation of “giving up the attempt” to succeed because there would be too many/further difficulties to overcome.
One reason for seeking greater equality in society (having this goal) is to sustain effort to maintain equality of opportunity, once the attempt to do this is lost, then inequality will not only exacerbate, it will result in social disharmony and loss of quality of life.
It is egalitarian goals – such as common provision of public services such as education and health, power and water to homes, libraries and pools etc which underpin quality of life.
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Kara,
My arguement is that we should strive for equality of opportunity but allow inequality of outcome as inequality of outcome, within a limited range, provides a substantial benefit to society.
Your car analogy is a interesting one. The use of a car is the use of a potentially deadly device, but the use of that device provides a substantial benefit to the population. Because the device is dangerous but also beneficial we do what we can to decrease the danger while maintaining the benefit. We have laws to regulate behavior because we perceive this to decrease the danger. Likewise I propose that we increase equality of opportunity as this minimizes many of the dangers associated with moderate to high levels of inequality of outcome while maintaining the benefits it may provide.
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SPC,
The ethnic inequality is something I have addressed already both when I mentioned equality of opportunity and when i touched on the issue of how perception effects the social indicators.
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Just one problem with this: there isn’t just equality of opportunity and equality of outcome, but also equality of starting point to consider. Again: opportunity is hollow. We can all bath in the opportunity of being very rich when we buy a Lotto ticket. But what are the chances of actually winning? And yes, in this country all citizens have equal opportunity to run for Prime Minister – does the immigrant from Azerbaijan and the kiwi banker from Auckland have equal chances? Not likely.
I know that there are many factors contributing to that. What I am saying is that equal opportunity is an ingredient, but not the cake, and not enough to give equal chances of a successful outcome.
As to whether cars are beneficial – that’s another story. In NZ currently, they are the only option for most of us. I felt much better not owning one in Europe. Here of course that would immobilise me. Mobility is good, cars – on balance, not in my view.
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Kara,
Again, the pursuit of equality of opportunity IS the pursuit of that equality of starting point.
As to the chances of winning, the point here is that we do as much as we can to reduce the gamble of your birth so that getting that jackpot is a result, rather, of ones actions.
I have been saying this whole time that there are many ingredients, my point though is that inequality of outcome can make the cake much more tasty and easier on the thighs; you just have to change the ratio on some of the other ingredients. Besides, its a lot easier to change the ratio than find the fairy dust needed for the other recipe.
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Yeah, if you then actually eat it and be done with it! However, inequality tends to get passed on. I’d be with you if you’d propose to tax all inherited and gifted possessions at a 90% level. As for the fairy dust: I was always wondering what they are using in Denmark… na, its simply taxes! And just to counter the inevitable argument: no, Swedes and Danes are not migrating in hordes, and Volvo and Ikea are still Swedish companies!
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I guess the ingredients are all important. This includes the tax regime we have and the underlying property law settings. Look at the miss-match of tax-residental property, the tax changes since 1984 – remember the graph at the top of this thread homosaps. Property law is interesting. How did ownsership ever become individiualised. Force of power, the ablity to employ soldiers to deman peasants gave a share of the gathered/grown crop to the leader/owner…. An awful lot of todays wealth/ownership is predicated on what Dad had, and in trun we can trace it to who helped the winner of the fight between he who claimed to be King and usurper. To get back to NZ and the rest of the OECD. Check out the changes in inequality since 1984, 1975, or whenever, and see how NZ suffers (my term) and see the suffering that results (MSD Social Report, Salvation Army Social Policy Unit Reports, whatever – even NZ’s Treasury). This includes the reletive drop in mean incomes (read real per capita income) compared to those nations with a lower Gini since 1984, 1975, whenever. Not causal, certainly, but very much related to an under-pinning of social, economic and political policies.
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Lev,
This is a cake that is being remade and consumed constantly. Though, these cakes tend to take awhile to bake.
I would love to be able to propose such a tax, but it would only ever work for those on medium to low incomes; those on medium to high would just transfer the money out of the country and then transfer it to the descendants or would hold it in trust. Besides, the vast majority of the benefit received by the children of the well-off is not monetary transference; it is the options they have available in their formative years. That is why I propose to do what can be done to even the playing field.
The Nordic countries work with human nature and in doing so provide a very high standard of living and development. I want to emulate them as far as we are able and have expressed this desire at many points. They are certainly not countries with high equality of outcome, though. They have just over 70% of our level of inequality; still substantial. This is approximately the level I seek. To obtain a well functioning society with levels of equality of outcome substantially lower than this one would need a fundamental shift in human nature. I would say that the shift can be done, but it will take a great deal of time and fore planning; for now, at least, it remains fairy dust.
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Question is what we are striving for? Nordic countries level of equality seems a good start! I maintain that they are getting there based on a consensus that inequality is undesirable. And again, I doubt that there will ever be a consensus of exactly the desirable degree of inequality.
As to human nature: evidence is amounting that we are in fact not the selfish individualists that consumerist brainwashing wanted to make us believe we are. People are basically good, and very uncomfortable with inequality – as are many mammals and other animals. So it seems we should be more concerned with removing the dust from our eyes than adding dust – fairy or not!
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Kara,
As to human nature, the evidence is mounting that we are fundamentally self-orientated. We do what we perceive to benefit us. We help others not because we are fundamentally good but because the socialization process has made it such that if we do so we feel good and if we fail to do so we feel bad. This appearance of good is but the internalization of societal interpretation. I say we can function at near complete equality but that the socialization process required would be incredibly complicated and alien; fairy dust in a world with scarcity of labour.
You are correct that humans do have an inherent eye for fairness. This is incredibly evident in young children, but ultimately as their cognition develops they grow out of such nativity. You are wrong about its presence in many other animals or even many other mammals. It is a trait exclusively of social mammals and almost exclusively of primates. One theory is that part of why our brains became more complex, and why we are capable of math, is such that we may better keep account of social reciprocity; its not by any means a drive for equality, but it is an expectation of giving back to those that have helped you out. The evolution of the fairness expectation among youth would be a very interesting area of study.
As to what I strive for; I may be classified as a Gaian Eudaimonist. My first concern is the survival of Gaian Life, my second is the greatest satisfaction among that life. The third being the maitenence of the greatest satisfaction relative to suffering.
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Rainman,
You have my sympathy for your dental predicament. I am not a dentist, but it sounds to me like you probably have a bad case of night-time bruxism. If so, you might well benefit enormously by using a mouthguard at night, which would protect your teeth from further damage (though see my further comments below). Such a mouthguard is best made by a dentist, and should cost all up somewhere around $200 – $500, depending on the type. It is a small piece of plastic that should fit comfortably and surround your upper (or lower) teeth. You insert it before you go to bed at night, and remove it when you get up in the morning.
It sounds like you might need to change your dentist, and make sure you see someone who knows about mouthguards. In the long run you might benefit from orthodontic/TMJ treatment costing thousands of dollars, but a mouthguard might be a good interim (or perhaps long term) solution that could stabilise your jaw at night, and stop the pain and damage caused by bruxism.
Now some further comments about using a mouthguard at night. To use a mouthguard at night you need to floss and clean your teeth well, and possibly gel particularly the gumline, also gums and exposed parts of teeth – anything that can get dry – with dry mouth gel, before putting the mouthguard on, to prevent acid erosion of teeth. Ask the dentist to show you how to do the cleaning and make sure you get a tube of gel at the same time as the mouthguard. It’s not rocket science, but it’s something that just has to be done.
I wish you the very best, and trust that your breakages and pain can become a thing of the past.
My very best wishes.
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Hi all
I apologise for posting not on topic, but I could not let Rainman suffer like this …
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