One set of arguments suggests that we should care about inequality for what are called ‘instrumental reasons’. Inequality, some contend, is associated with worse outcomes in areas that society cares about, such as health, crime, savings and growth. This argument is put most strongly in The Spirit Level, by Richard Wilkinson and Kate Pickett. It is an argument that I used to believe. Indeed, I deeply want to be true, but my own research persuades me otherwise.[25]The closer you get to these asserted effects, the more fragile are the findings. If there are negative effects of inequality on those social outcomes, they must be extremely small. (There are also small positive effects. For example, my own work shows that inequality boosts growth, though the trickle-down process is slow.)New Zealand's Labour Party seems to care more about mood affiliation than about sound evidence, at least given the number of posts over at Red Alert lauding Wilkinson and Pickett, most recently here.
There are better and worse arguments against inequality. Why does New Zealand Labour have to go for the dumb ones? The comments thread on the last link over at Red Alert, the New Zealand Labour Party Blog, has Labourites dismissing any criticism of Wilkinson and Pickett as being only ideologically driven. The Standard, the unofficial Labour Party blog, is at least as bad.
Guys, please go and read Andrew Leigh. And NZIER's Bill Kaye-Blake. Neither of these guys are ardent ideological righties, and I'd expect neither of them to shy away from endorsing Wilkinson-Pickett if they thought the argument was supported by evidence.
