The question of inequality Donald Hay, Jesus College and Department of Economics, Oxford DCM Social Sciences stream, March 20 th and 21 st 2015.

The question of inequalityDonald Hay, Jesus College and Department of

Economics, OxfordDCM Social Sciences stream, March 20th and 21st

2015

1. Growth of inequality (Piketty)2. Explanations (Piketty, Stiglitz)3. Consequences of inequality (Wilkinson and

Pickett)4. Theological perspectives on inequality5. Biblical ethics from the OT: economic

justice, and justice for the poor

Outline of talk

Focus on growth of inequality of income and wealth in many of the rich economies since 1970

• Other inequalities: - gender, e.g. at work - race, e.g. questions about policing - sexual orientation, e.g. campaigns for gay ‘marriage’ - religious, e.g. minorities in Middle East and India

Types of inequality

Variations across OECD countries in ratio of income of top 20% to bottom 20% [next slide]

Income inequality: international comparisons

Evolution of income inequality in US and UK since the beginning of the 20th Century (Piketty): the share of the top 1%

The evolution of income inequality

Piketty, Capital in the Twenty First Century

Wealth inequality in Europe and the US since the 19th century

Top wealth holders in the world economy

The evolution of wealth inequality

Top wealth holders in the world economy:

Oxfam report: the number of top wealth holders in the world who have as much wealth as the bottom 50% was 388 in 2010, falling to 80 in 2014

The increasing share of top wealth holders since 1987 according to Piketty.

The evolution of wealth inequality

Piketty – the inexorable consequence of market capitalism:

- the ratio of capital to income (see next slide)

- the share of capital in national income- r>g- the role of inheritance in accumulation- critiques

Explanations for growth in inequality (1)

Political economy arguments (Stiglitz) - in US at least inequality is outcome of rent-seeking behaviour of wealthy elites: Government action favouring corporations

and the wealthy Actions by wealthy to protect their wealth:

lobbying Congress, capturing regulators, media campaigns

Electoral manipulation

Explanations for growth in inequality (2)

The correlation of inequality and social indicators across rich countries (see slide 17)

Social indicators: level of trust, incidence of mental illness and addiction, life expectancy, obesity, student scores in maths and literacy at age 15, birth rates among teenage girls, homicides and violent assaults, prisoners per 100000 population, social mobility

Consequences of inequality

Summary: Social indicators 3x to 10x worse in most

unequal countries than in most equal countries

Prevalence of social problems affects whole income distribution, not just the poorest groups

Greater equality can be result of earnings equality (Japan) or redistribution (Sweden)

Explanations?

Consequences of inequality (continued)

What is wrong with inequality? Is inequality is just how things are? Should we be concerned about the 1%? Is the issue poverty not inequality per se? Does it matter if inequality is associated with social

dysfunction?Are there ethical concerns about the processes by which inequality comes about? For example, the exercise of power by wealthy elites

to safeguard their wealth and income?

Ethical questions posed by inequality

Creation: Imago Dei, relational, the neighbour

The people of God: equality in the community of the people of God

Principle of solidarity Principle of the common good

Theological approaches

Applications: Inequality contravenes principle of solidarity

– implies that some members of the community are worth less than others, and creates relationships of power between people.

Inequality arising from exercise of power and influence by elites is not conducive to the common good.

Theological approaches

Leviticus 25: the allocation of the land in Ancient Israel - three key elements: The Land as God’s gift, v23 The initial distribution of the Land: Numbers

26 Loss of land, the Jubilee provisions, and

stipulations for the interim until the Jubilee

Biblical insights (1): Economic justice

Principles underlying the arrangements for the Land:

Equality of opportunities to work and access to resources

Work and the ability to provide for one’s household available to everyone

Systemic mechanisms to redress inequalities that develop over time

Poverty in the OT:

Most frequently linked to oppression Main bulwark against poverty was family

land, so problem if family had lost its land, or had no inheritance

Family experiencing crop failure or loss of livestock to disease

Biblical insights (2): justice for the poor

Provisions to address problems of poverty:

Triennial tithe, Deuteronomy 14: 28,29 Gleaning laws, Deuteronomy 24: 19 Interest free loans, Leviticus 25, a form of

mutual insurance

Principles for poverty alleviation: Systems of mutual support – triennial tithe, gleaning

laws Loans may be appropriate if poor person is expected

to be able to recover economically, but debts should not be allowed to accumulate

Systems are local, to avoid problems of moral hazard Mutual support characterised by equality (compare 2

Corinthians 8 and 9, especially 8: 13, 14)

Questions that need to be addressed: Should we be concerned about inequality

whatever form it takes? Should we be concerned about inequality in

wealth and income per se? Should we be concerned about the apparent

growth in inequality, and the processes that are driving that growth?

Are there specifically Christian ethical principles that help us to address these issues?

Conclusions