The Spirit Level

3. "Research from the Harwood Institute for Public Innovation (commissioned by the Merck Family Foundation) in the USA shows that people feel that 'materialism' somehow comes between them and the satisfaction of their social needs. A report entitled 'Yearning for Balance', based on a nationwide survey of Americans, concluded that they were 'deeply ambivalent about wealth and material gain'. A large majority of people wanted society to 'move away from greed and excess toward a way of life more centred on values, community, and family'. But they also felt that these priorities were not shared by most of their fellow Americans, who, they believed, had become 'increasingly atomized, selfish, and irresponsible'. As a result they often felt isolated. However, the report says, that when brought together in focus groups to discuss these issues, people were 'surprised and excited to find that others share[d] their views'. Rather than uniting us with others in a common cause, the unease we feel about the loss of social values and the way we are drawn into the pursuit of material gain is often experienced as if it were a purely private ambivalence which cuts us off from others.

        Mainstream politics no longer taps into these issues and has abandoned the attempt to provide a shared vision capable of inspiring us to create a better society. As voters, we have lost sight of any collective belief that society could be different. Instead of a better society, the only thing almost everyone strives for is to better their own position - as individuals - within the existing society."

8. "...the [graph] curves for both happiness and life expectancy flatten off at around $25,000 per capita, but there is some evidence that the income level at which this occurs may rise over time.[4]"

10. "Heart disease was regarded as a businessman's disease and it used to be the rich who were fat and the poor who were thin. But from about the 1950s onwards, in one developed country after another, these patterns reversed."

11. "What should we turn to if not to economic growth? One of the most powerful clues to the answer to this question comes from the fact that we are affected very differently by the income differences 'within' our own society from the way we are affected by the differences in average income 'between' one rich society and another.

        In Chapters 4-12 we focus on a series of health and social problems like violence, mental illness, teenage births and educational failure, which within each country are all more common among the poor than the rich. As a result, it often looks as if the effect of higher incomes and living standards is to lift people out of these problems. However, when we make comparisons between different societies, we find that these social problems have little or no relation to levels of 'average' incomes in a society."

12. "Figure 1.3 shows just the rich countries and confirms that among them some countries can be almost twice as rich as others without any benefit to life expectancy. Yet 'within' any of them death rates are closely and systematically related to income."

13. "What sense can we make of this paradox - that differences in average income or living standards between whole populations or countries don't matter at all, but income differences with those same populations matter very much indeed? There are two plausible explanations. One is that what matters in rich countries may not be your actual income level and living standard, but how you compare with other people in the same society. Perhaps average standards don't matter and what does is simply whethere you are doing better or worse than other people - where you come in the social pecking order.

        The other possibility is that the social gradient in health shown in Figure 1.4 results not from the effects of relative income or social status on health, but from the effects of social mobility, sorting the healthy from the unhealthy. Perhaps the healthy tend to move up the social ladder and the unhealthy end up at the bottom."

17. "Typically, the poorest half of the population get something like 20 or 25 per cent of all incomes and the richest half get the remaining 75 or 80 per cent. Other more sophisticated measures include one called the Gini coefficient. It measures inequality across the whole society rather than simply comparing the extremes. If all income went to one person (maximum inequality) and everyone else got nothing, the Gini coefficient would be equal to 1. If income was shared equally and everyone got exactly the same (perfect equality), the Gini would equal 0. The lower its value, the more equal society is. The most common values tend to be between 0.3 and 0.5. Another measure of inequality is called the Robin Hood Index because it tells you what proportion of a society's income would have to be taken from the rich and given to the poor to get complete equality."

19. "To see whether these problems were more common in more unequal countries, we collected internationally comparable data on health and as many social problems as we could find reliable figures for. The list we ended up with included:

* level of trust

* mental illness (including drug and alcohol addiction)

* life expectancy and infant mortality

* obesity

* children's educational performance

* teenage births

* homicides

* imprisonment rates

* social mobility (not available for US states)"

"As Lyndon Johnson said, 'America is not merely a nation, but a nation of nations.'

        To present the overall picture, we have combined all the health and social problem data for each country, and separately for each US state, to form an Index of Health and Social Problems for each country and US state. Each item in the indexes carries the same weight - so, for example, the score for mental health has as much influence on a society's overall score as the homicide rate or the teenage birth rate. The result is an index showing how common all these health and social problems are in each country and each US state. Things such as life expectancy are reverse scored, so that on every measure higher scores reflect worse outcomes. When looking at the Figures, the higher the score on the Index of Health and Social Problems, the worse things are."

25. "The problems in rich countries are not caused by the society not being rich enough (or even by being too rich) but by the scale of material differences between people within each society being too big. What matters is where we stand in relation to others in our own society."

26. Different Problems - Common Roots

"The health and social problems which we have found to be related to inequality tend to be treated by policy makers as if they were quite separate from one another, each needing separate services and remedies. We pay doctors and nurses to treat ill-health, police and prisons to deal with crime, remedial teachers and educational psychologists to tackle educational problems, and social workers, drug rehabilitation units, psychiatric services and health promotion experts to deal with a host of other problems. These services are all expensive, and none of them is more than partially effective. For instance, differences in the quality of medical care have less effect on people's life expectancy than social differences in their risks of getting some life-threatening disease in the first place. And even when the various services are successful in stopping someone reoffending, in curing cancer, getting someone off drugs or dealing with educational failure, we know that our societies are endlessly recreating these problems in each new generation. Meanwhile, all these problems are most common in the most deprived areas of our society and are many times more common in more unequal societies."

27. "Where income differences are bigger, social distances are bigger and social stratification more important."

Future research: "It would be nice to have lots of different indicators of the scale of hierarchy in different countries - to be able to compare inequalities not only in income, but also in wealth, education and power. It would also be interesting to see how they are related to social distances, to indicators of status like people's choice of clothes, music and films, or to the importance of hierarchy and position. While additional measures which can be compared between countries might become available in the future, at the moment we must rely simply on income inequality. But what is perhaps surprising is how much this measure tells us even on its own."

33. Anxiety. "Jean Twenge, a psychologist at  San Diego State University, has put together impressive evidence that we really are much more anxious than we used to be. By reviewing the large number of studies of anxiety levels in the population carried out at different dates, she has documented very clear trends. She found 269 broadly comparable studies measuring anxiety levels in the USA at various times between 1952 and 1993.[11] Together the surveys covered over 52,000 individuals. What they showed was a continuous upward trend throughout this forty-year period. Her results for men and women are shown in Figure 3.1. Each dot in the graph shows the average level of anxiety found in a study recorded against the date it was undertaken. The rising trend across so many studies is unmistakeable. Whether she looked at college students or at children, Twenge found the same pattern: the average college student at the end of the period was more anxious than 85 per cent of the population at the beginning of it and, even more staggering, by the late 1980s the average American child was more anxious than child psychiatric patients in the 1950s.

        This evidence comes from the administration of standardized anxiety measures to samples of the population. It cannot be explained away by saying that people have become more aware of anxiety. The worsening trend also fits what we know has been happening in related conditions such as depression. Depression and anxiety are closely connected: people who suffer from one often suffer from the other, and psychiatrists sometimes treat the two conditions in similar ways. There are now large numbers of studies showing substantial increases in rates of depression in developed countries. Some studies have looked at change over the last half century or so by comparing the experience of one generation with another, while taking care to avoid pitfalls such as an increased awareness leading to more frequent reporting of depression.[12] Others have compared rates in studies which have followed up representative samples of the population born in different years. In Britain, for example, depression measured among people in their mid-20s was found to be twice as common in a study of 10,000 or so people born in 1970 as it had been in a similar study carried out earlier of people in their mid-20s born in 1958.[13]

35. In regard to inequality affecting anxiety and depression. "We are not suggesting that they were triggered by increased inequality. That possibility can be discounted because the rises in anxiety and depression seem to start well before the increases in inequality which in many countries took place during the last quarter of the twentieth century. (It is possible, however, that the trends between the 1970s and 1990s may have been aggravated by increased inequality.)"

36. "Twenage says that in the 1950s only 12 per cent of teenagers agreed with the statement 'I am an important person', but by the late 1980s this proportion had risen to 80 per cent.

        So what could have been going on? People becoming much more self-confident doesn't seem to fit with them also becoming much more anxious and depressed. The answer turns out to be a picture of increasing anxieties about how we are seen and what others think of us which has, in turn, produced a kind of defensive attempt to shore up our confidence in the face of those insecurities. The defence involves a kind of self-promoting, insecure egotism which is easily mistaken for high self-esteem. This might seem like a difficult set of issues to pin down, particularly as we are talking about general trends in whole populations. But let us look briefly at the evidence which has accumulated since the self-esteem movement of the 1980s, which shows what has been happening.

        Over the years, many research groups looking at individual differences in self-esteem at a point in time (rather than at trends in population averages over time) began to notice two categories of people who came out with high scores. In one category, high self-esteem went with positive outcomes and was associated with happiness, confidence, being able to accept criticism, an ability to make friends, and so on. But as well as positive outcomes, studies repeatedly found that there was another group who scored well on self-esteem measures. They were people who showed tendencies to violence, to racism, who were insensitive to others and were bad at personal relationships.

        The task was then to develop psychological tests which could distinguish between people with a healthy and those with an unhealthy kind of self-esteem. The healthier kind seemed to centre on a fairly well-founded sense of confidence, with a reasonably accurate view of one's strengths in different situations and an ability to recognize one's weaknesses. The other seemed to be primarily defensive and involved a denial of weaknesses, a kind of internal attempt to talk oneself up and maintain a positive sense of oneself in the face of threats to self-esteem. It was (and is) therefore fragile, like whistling in the dark, and reacts badly to criticism. People with insecure high self-esteem tend to be insensitive to others and to show an excessive preoccupation with themselves, with success, and with their image and appearance in the eyes of others. This unhealthy high self-esteem is often called 'threatened egotism', 'insecure high self-esteem', or 'narcissim'. During the comparatively short time over which data are available to compare trends in narcissism without getting it mixed up with real self-esteem, Twenge has shown a rising trend. She found that by 2006, two-thirds of American college students scored above what had been the average narcissism score in 1982. The recognition that what we have seen is the rise of an insecure narcissism - particularly among young people - rather than a rise in genuine self-esteem now seems widely accepted."

38. "They [Sally Dickerson and Margaret Kemeny] collected finding from 208 published reports of experiments in which people's cortisol levels were measured while they were exposed to an experimental stressor. They classified all the different kinds of stressor used in experiments and found that: 'tasks that included a social-evaluative threat (such as threats to self-esteem or social status), in which others could negatively judge performance, particularly when the outcome of the performance was uncontrolable, provoked larger and more reliable cortisol changes than stressors without these particular threats' [16] (p.377). Indeed, they suggested that 'Human being are driven to preserve the social self and are vigilant to threats that may jeopardize their social esteem or status' (p. 357). Social evaluative threats were those which created the possibility for loss of esteem. They typically involved the presense of an evaluative audience in the experiment, a potential for negative social comparison such as scoring worse than someone else, or having your performance videoed or recorded, so creating the potential for later evaluation. The highest cortisol responses came when a social evaluative threat was combined with a task in which participants could not avoid failure - for instance because the task was designed to be impossible, or because there was too little time, or they were simply told they were failing however they performed."

42. 'From Community to Mass Society' "Why have these social anxieties increased so dramatically over the last half century - as Twenge's studies showing rising levels of anxiety and fragile, narcissistic egos suggest they have? Why does the social evaluative threat seem so great? A plausible explanation is the break-up of the settled communities of the past. People used to grow up knowing, and being known by, many of the same people all their lives. Although geographical mobility had been increasing for several generations, the last half century has seen a particularly rapid rise. At the beginning of this period it was still common for people - in rural and urban areas alike - never to have travelled much beyond the boundaries of their immediate city or village community. Married brothers and sisters, parents and grandparents, tended to remain living nearby and the community consisted of people who had often known each other for much of their lives. But now that so many people move from where they grew up, knowledge of neighbours tends to be superficial or non-existent. People's sense of identity used to be embedded in the community to which they belonged, in people's real knowledge of each other, but now it is cast adrift in the anonymity of mass society. Familiar faces have been replaced by a constant flux of strangers. As a result, who we are, identity itself, is endlessly open to question.

        The problem is shown even in the difficulty we have in distiguishing between the concept of the 'esteem' in which we may or may not be held by others, and our own self-esteem. The evidence of our sensitivity to 'social evaluative threat', coupled with Twenge's evidence of long-term rises in anxiety and narcissism, suggests that we may - by the standards of any previous society - have become highly self-conscious, obsessed with how we appear to others, worried that we might come across as unattractive, boring, stupid or whatever, and constantly trying to manage the impressions we make. And at the core of our interactions with strangers is our concern at the social judgements and evaluations they might make: how do they rate us, did we give a good account of ourselves? This vulnerability is part of the modern psychological condition and feeds directly into consumerism."

44. "Surveys have found that when choosing prospective marriage partners, people in more unequal countries put less emphasis on romantic considerations and more on criteria such as financial prospects, status and ambition, than do people in less unequal societies.[21]

'Self-Promotion Replaces Self-Deprecation and Modestry'

Comparing Japan with the USA, that is, the most equal with almost the most unequal of the rich market democracies (see Figure 2.1), research has revealed a stark contrast between the way people see and present themselves to others in the two countries. In Japan, people choose a much more self-deprecating and self-critical way of presenting themselves, which contrasts sharply with the much more self-enhancing style in the USA. While Americans are more likely to attribute individual successes to their own abilities and their failures to external factors, the Japanese tend to do just the opposite.[22] More than twenty studies in Japan have failed to find any evidence of the more self-serving pattern of attributions common in the USA. In Japan people tended to pass their successes off as if they were more a reflection of luck than of judgement, while suggesting their failures are probably attributable to their own lack of ability. This Japanese pattern was also found in Taiwan and China.

        Rather than getting too caught up in psychological terminology, we would do well to see these patterns as differences in how far by not using their successes to build themselves up as more able than others. As greater inequality increases status competiton and social evaluative threat, egos have to be propped up by self-promoting and self-enhancing strategies. Modesty easily becomes a casualty of inequality: we become outwardly tougher and harder in the face of greater exposure to social evaluation anxieties, but inwardly - as the literature on narcissism suggests - probably more vulnerable, less able to take criticism, less good at personal relationships and less able to recognize our own faults."  

50. Alexis de Tocqueville. "...travelled throughout the United States in 1831.[23] He met presidents and ex-presidents, mayors, senators and judges, as well as ordinary citizens, and everywhere he went he was impressed by the 'equality of conditions' (p. 11), 'the blending of social ranks and the abolition of privileges' - the way that society was 'one single mass' (p. 725) (at least for whites). He wrote that 'Americans of all ages, conditions, and all dispositions constantly unite together' (p. 596), that 'strangers readily congregate in the same places and find neither danger nor advantage in telling each other freely what they think', their manner being 'natural, open and unreserved' (p. 656). And de Tocqueville points out the ways in which Americans support one another in times of trouble:

'Should some unforeseen accident occur on the public highway, people run fromall sides to help the victim; should some family fall foul of an unexpected disaster, a thousand strangers willingly open their purses . . .' (p. 661)

De Tocqueville believed that the equality of conditions he observed had helped to develop and maintain trust among Americans.

51. "Inequality, not surprisingly, is a powerful social divider, perhaps because we all tend to use differences in living standards as markers of status differences. We tend to choose our friends from among out near equals and have little to do with those much richer or much poorer. And when we have less to do with other kinds of people, it's harder for us to trust them. Our position in the social hierarchy affects who we see as part of the in-group and who as out-group - us and them - so affecting our ability to identify with and empathize with other people. Later in the book, we'll show that inequality not only has an impact on how much we look down on others because they have less than we do, but also affects other kinds of discrimination, such as racism and sexism, with attitudes sometimes justified by statements like 'they just don't live like us'.

        De Tocqueville understood this point. A lifelong opponent of slavery, he wrote about the exclusion of both African-Americans and Native Americans from the liberty and equality enjoyed by other Americans.[23] Slavery, he thought, could only be maintained because African-Americans were viewed as 'other', so much so that 'the European is to other races what man himself is to the animals' (p. 371). Empathy is only fet for those we view as equals, 'the same feeling for one another does not exist between the different classes' (p. 650). Prejudice, thought de Tocqueville, was 'an imaginary inequality' which followed the 'real inequality produced by wealth and the law' (p. 400).

        Early socialists and others believed that material inequality was an obstacle to a wider human harmony, to a universal human brotherhood, sisterhood or comradeship. The data we present in this chapter suggest that this intuition was sound: inequality is divisive, and even small differences seem to make an important difference."

53. Trust. "People trust each other most in the Scandinavian countries and the Netherlands; Sweden has the highest levels of trust, with 66 per cent of people feeling that they can trust others. The lowest level of trust is seen in Portugal, where only 10 per cent of the population believe that others can be trusted. So just within these rich, market democracies, there are more than sixfold differences in levels of trust, and, as the graph shows, high levels of trust are linked to low levels of inequality."

54. "In this survey ['General Social Survey'], just as in the international surveys, people are asked whether or not they agree that most people can be trusted. Within the USA, there are fourfold differences in trust between states. North Dakota has a level of trust similar to that of Sweden - 67 per cent feel they can trust other people - whereas in Misssissippi only 17 per cent of the population believe that people can be trusted. Just as with the international data, low levels of trust among the United States are related to high inequality."

"In Norway it is not unusual to see cafes with tables and chairs on the pavement and blankets left out for people to use if they feel chilly while having a coffee. Nobody worries about customers or passers-by stealing the blankets. Many people feel nostalgic for time past, when they could leave their doors unlocked, and trusted that a lost wallet would be handed in. Of all large US cities, New Orleans is one of the most unequal. This was the background to the tensions and mistrust in the scenes of chaos after Hurricane Katrina that we described above."

55. "In a study with his colleague Bo Rothstein, Uslaner [author of 'The Moral Foundations of Trust] shows, using a statistical test for causality, that inequality affects trust, but that there is 'no direct effect of trust on inequality; rather, the causal direction starts with inequality'.[28, p.45] Uslaner says that 'trust cannot thrive in an unequal world' and that income inequality is the 'prime mover' of trust, with a stronger impact on trust than rates of unemployment, inflation or economic growth.[27] It is not average levels of economic wellbeing that create trust, but economic equality. Uslaner's graph showing that trust has declined in the USA during a period in which inequality rapidly increased, is shown in Figure 4.3. The numbers on the graph show for each year (1960-98) the relation between the level of trust and inequality in that year.

        Changes in inequality and trust go together over the years. With greater inequality, people are less caring of one another, there is less mutuality in relationships, people have to fend for themselves and get what they can - so, inevitably, there is less trust. Mistrust and inequality reinforce each other. As de Tocqueville pointed out, we are less likely to empathize with those not seen as equals; material differences serve to divide us socially."

57. "Trust was also crucial for survival in the Chicago heatwave of 1995. Sociologist Eric Klinenberg, in his book about the heatwave,[31] showed how poor African-Americans, living in areas with low levels of trust and high levels of crime, were too frightened to open their windows or doors, or leave their homes to go to local cooling centres established by the city authorities. Neighbours didn't check on neighbours, and hundreds of elderly and vulnerable people died. In equally poor Hispanic neighbourhoods, characterized by high levels of trust and active community life, the risk of death was much lower."

58. "...hitch-hiking started to decline just as inequality started to rise in the 1970s. As one anthropologist has observed, people attempt to shield themselves from the threats of a harsh and untrusting society 'by riding in SUVs, which look armoured, and by trying to appear as intimidating as possible to potential attackers'.[33] Pollster Michael Adams, writing about the contrasting values of the USA and Canada, pointed out that minivans outsell SUVs in Canada by two to one - the ratio is reversed in America (and Canada is of course more equal than America).[34] Accompanying the rise of SUVs were other signs of Americans' increasing uneasiness and fear of one another: growing numbers of gated communities,[35] and increasing sales of home security systems.[32] In more recent years, due to the steeply rising cost of filling their fuel tanks, sales of SUVs have declined, but people still want that rugged image - sales of smaller, tough-looking 'cross-over' vehicles continue to rise."

62. "The relationships between inequality and women's status and between inequality and foreign aid also add coherence and plausibility to our belief that inequality increases the social distance between different groups of people, making us less willing to see them as 'us' rather than 'them'.

63. 'It is no measure of health to be well adjusted to a profoundly sick society.' -Krishnamurti

"A million British children - one in ten between the ages of 5 and 16 - are estimated to be mentally ill.[39] It has been suggested that in any secondary school with 1,000 students, 50 will be severely depressed, 100 will be distressed, 10-20 will have an eating disorder.[40]" Affirmed by the 2008 Good Childhood Inquiry. "...over a quarter regularly feeling depressed, mostly as a result of family breakdown and peer pressure."

"In the USA, 6 er cent of children have been diagnosed with Attention Deficit Hyperactivity Disorder, a behavioural syndrome characterized by serious distractibility, impulsivity and restlessness.[42] In a national survey, almost 10 per cent of children aged 3-17 had moderate or severe difficulties in 'the areas of emotions, concentration, behaviour, or being able to get along with other people'.[43]"

65. Adult mental health.

"In the UK in a national survey conducted in 2000, 23 per cent of adults had either a neurotic disorder, a psychotic disorder, or were addicted to alcohol or drugs, 4 per cent of adults having more than one disorder.[44] In 2005, doctors in England alone wrote 29 million prescriptions for anti-depressant drugs, costing over P400 million to the National Health Service.[45] In the USA, one in four adults have been mentally ill in the past year and almost a quarter of these episodes were severe; over their lifetime more than half will suffer from a mental illness.[46] In 2003, the USA spent $100 billion on mental health treatments.[47]"

What is a healthy mind? in the pamplet "'How to Improve Your Mental Well-being'. It begins with the premise that: 'Good mental health isn't something you have, but something you do. To be mentally healthy you must value and accept yourself.'[48] It concludes that people who are mentally well are able to look after themselves, see themselves as valuable people and judge themselves by reasonable, rather than unrealistic, standards. People who don't value themselves become frightened of rejection; they keep others at a distance, and get trapped in a vicious circle of loneliness.

        It is also important to note that although people with mental illness sometimes have changes in the levels of certain chemicals in their brains, nobody has shown that these are 'causes' of depression, rather than 'changes' caused by depression. Similarly, although genetic vulnerability may underlie some mental illness, this can't by itself explain the huge rises in illness in recent decades - our genes can't change that fast."

67. "In Germany, Italy, Japan and Spain, fewer than 1 in 10 people had been mentally ill within the previous year; in Australia, Canada, New Zealand and the UK the numbers are more than 1 in 5 people; and in the USA, as we described above, more than 1 in 4. Overall, it looks as if differences in inequality tally with more than threefold differences in the percentage of people with mental illness in different countries."

70. "Economist Robert Frank observes the same phenomenon and calls it 'luxury fever'.[56] As inequality grows and the super-rich at the top spend more and more on luxury goods, the desire for such things cascades down the income scale and the rest of us struggle to compete and keep up. Advertisers play on this, making us dissatisfied with what we have, and encouraging invidious social comparisons. Another economist, Richard Layard, describes our 'addiction to income' - the more we have, the more we feel we need and the more time we spend on striving for material wealth and possessions, at the expense of our family life, relationships, and quality of life.[3]

72. "The results of this experiment [on monkeys] were remarkable. Monkeys that had become dominant had more dopamine activity in their brains than they had exhibited before becoming dominant, while monkeys that became subordinate when housed in groups showed no changes in their brain chemistry. The dominant monkeys took much less cocaine than the subordinate monkeys. In effect, the subordinate monkeys were medicating themselves against the impact of their low social status. This kind of experimental evidence in monkeys adds plausibility to our inference that inequality is causally related to mental illness."

75. "The Whitehall I Study, a long term follow-up study of male civil servants, was set up in 1967 to investigate the causes of heart disease and other chronic illnesses. Researchers expected to find the highest risk of heart disease among men in the highest status jobs; instead, they found a strong inverse association between position in the civil service hierarchy and death rates. Men in the lowest grade (messengers, doorkeepers, ect.) had a death rate three times higher than that of men in the highest grade (administrators).[62-3]"

76. "The relationships we have with other people matter too. This idea goes back as far as the work on suicide by Emile Durkheim, one of the founding fathers of sociology, in the late nineteenth century.[69] Durkheim showed that the suicide rates of different countries and populations were related to how well people were integrated into society and whether or not societies were undergoing rapid change and turmoil. But it wasn't until the 1970s that epidemiologists began to investigate systematically how people's social networks relate to health, showing that people with fewwer friends were at higher risk of death. Having friends, being married, belonging to a religious group or other association and having people who will provide support, are all protective of health.[70-71]

        Social support and social networks have also been linked both to incidence of cardiovascular disease and to recovery from heart attacks. In a striking experiment, researchers have also shown that people with friends are less likely to catch a cold when given the same measured exposure to the cold virus - in fact the more friends they had, the more resistant they were.[72] Experiments have also shown that physical wounds heal faster if people have good relationships with their intimate partners.[73]"

77.  "Taken together, social status, social networks and stress in early childhood are what researchers label 'psychosocial factors', and these are of increasing importance in the rich, developed countries where material living standards, as we described in Chapter 1, are now high enough to have ceased to be important direct determinants of population health."

'Life is short where life is brutal'

"Evolutionary psychologists Margo Wilson and Martin Daly were interested in whether adopting more impulsive and risky strategies was an evolved response to more stressful circumstances in which life is likely to be shorter. In more threatening circumstances, then, more reckless strategies are perhaps necessary to gain status, maximize sexual opportunities, and enjoy at least some short-term gratifications. Perhaps only in more relaxed conditions, in which a longer life is assured, can people afford to plan for a long-term future.[77] To test this hypothesis, they collected data on the murder rates for the seventy-seven community areas of Chicago, and then they collected data on death rates for those same areas, subtracting all of the deaths caused by homicide. When they put the two together, they showed remarkably close relationship, seen in Figure 6.1 - neighbourhoods with high homicide rates were also neighbourhoods where people were dying younger from other causes as well. Something about these neighbourhoods seemed to be affecting both health and violence."

78. "There are sixfold differences in levels of trust between developed countries and fourfold differences among US states." "More than forty papers on the links between health and social capital have now been published.[78]"

"In the United States, epidemiologist Ichiro Kawachi and his colleagues at the Harvard School of Public Health looked at death rates in thirty-nine states in which the General Social Surveys had been conducted in the late 1980s.[79] These surveys allowed them to count how many people in each state were members of voluntary organizations, such as church groups and unions. This measure of group membership turned out to be a strong predictor of deaths from all causes combined, as well as deaths from coronary heart disease, cancers, and infant deaths. The higher the group membership, the lower the death rate."

79. 'Health and Wealth'

"Let's consider the health of two babies born into two different societies.

        Baby A is born in one of the richest countries in the world, the USA, home to more than half of the world's billionaires. It is a country that spends somewhere between 40-50 per cent of the world's total spending on health care, although it contains less than 5 per cent of the world's population. Spending on drug treatments and high-tech scanning equipment is particularly high. Doctors in this country earn almost twice as much as doctors elsewhere and medical care is often described as the best in the world.

        Baby B is born in one of the poorer of the western democracies, Greece, where average income is not much more than half that of the USA. Whereas America spends about $6,000 per person per year on health care, Greece spends less than $3,000. This is in real terms, after taking into account the different costs of medical care.

        And Greece has six times fewer high tech scanners per person than the USA.

        Surely Baby B's chances of a long and healthy life are worse than Baby A's?

        In fact, Baby A, born in the USA, has a life expectancy of 1.2 years less than Baby B, born in Greece. And Baby A has a 40 per cent higher risk of dying in the first year after birth than Baby B. Among developed countries, there are even bigger contrasts than the comparison we've used here: babies born in the USA are twice as likely to die in their first year than babies in Japan, and the difference in average life expectancy between the USA and Sweden is three years, between Portugal and Japan it is over five years. Some comparisons are even more shocking: in 1990, Colin McCord and Harold Freeman in the Department of Surgery at Columbia University calculated that black men in Harlem were less likely to reach the age of 65 than men in Bangladesh.[80]"

84. "A dramatic example of how reductions in inequality can lead to rapid improvements in health is the experience of Britain during the two world wars. Increases in life expectancy for civilians during the war decades were twice those seen throughout the rest of the twentieth century. In the decades which contain the world wars, life expectancy increased between 6 and 7 years for men and women, whereas in the decades before, between and after, life expectancy increased by between 1 and 4 years. Although the nation's nutritional status improved with rationing in the Second World War, this was not true for the First World War, and material living standards declined during both wars. However, both wartimes were characterized by full employment and considerably narrower income differences - the result of deliberate government policies to promote co-operation with the war effort. During the Second World War, for example, working-class incomes rose by 9 per cent, while incomes of the middle class fell by 7 per cent; rates of relative poverty were halved. The resulting sense of camaraderie and social cohesion not only led to better health - crime rates also fell."

84. "We also found that living in a more equal place benefited everybody, not just the poor. It's worth repeating that health disparities are not simply a contrast between the ill-health of the poor and the better health of everybody else. Instead, they run right across society so that even the reasonably well-off have shorter lives than the very rich. Likewise, the benefits of greater quality spread right across society, improving health for everyone - not just those at the bottom. In other words, at almost any level of income, it's better to live in a more equal place."

87. "The dramatic changes in income differences in Britain during the two world wars were followed by rapid improvements in life expectancy. Similarly, in Japan, the influence of the post-Second World War Allied occupation on demilitarization, democracy and redistribution of wealth and power led to an egalitarian economy and unrivalled improvements in population health.[95] In contrast, Russia has experienced dramatic decreases in life expectancy since the early 1990s, as it moved from a centrally planned to a market economy, accompanied by a rapid rise in income inequality.[96] The biology of chronic stress is a plausible pathway which helps us to understand why unequal societies are almost always unhealthy societies."

89. Obesity. 'Wider incomes, wider waists'

"In the USA, in the late 1970s, close to half the population were overweight and 15 per cent were obese; now three-quarters of the population are overweight, and close to a third are obese. In the UK in 1980, about 40 per cent of the population were overweight and less than 10 per cent were obese; now two-thirds of adults are overweight and more than a fifth are obese.[97-100] This is a major health crisis, because obesity is so bad for health - it increases the risk of hypertension, type II diabetes, cardiovascular disease, gallbladder disease and some cancers. Trends in childhood obesity are now so serious that they are widely expected to lead to shorter life expectancies for today's children. That would be the first reversal in life expectancy in many developed countries since governments started keeping track in the nineteenth century.[101]"

91. "By the early 1990s obesity was more common among poorer women, compared to richer women, in all twenty-six countries, and among poorer men in all except five. As journalist Polly Toynbee declared in a newspaper article in 2004: 'Fat is a class issue.'[108] Pointing to the high rates of obesity in the USA and the low rates among the Scandinavian countries, which prove that we don't find high levels of obesity in all modern, rich societies, she suggested that income inequality might contribute to the obesity epidemic."

92. "The differences between countries are smaller for overweight children than for adult obesity. In the country with the lowest level, the Netherlands, 7.6 per cent of children aged 13 and 15 are overweight, which is one-third the rate in the USA, where 25.1 per cent are overweight."

"Within the USA, there are no states with levels of adult obesity lower than 20 per cent. Colorado has the lowest obesity prevalence at 21.5 per cent, compared to 34 per cent in Texas, which has the highest." "One study found that higher state-level income inequality was associated with abdominal weight gain in men, [111] others have found that income inequality increases the risk of inactive lifestyles.[112]"

95. "In experiments with rats, when the animals are stressed they eat more sugar and fat. People who are chronically stressed tend either to over-eat and gain weight, or under-eat and lose weight. In a study in Finland, people whose eating was driven by stress ate sausages, hamburgers, pizza and chocolate, and drank more alcohol than other people.[121]"

96. "Studies using brain scans have shown that obese people respond both to food and to feeling full differently from thin people.[127]"

100. "A recent 12-year study of working-age men in the USA found that if they became unemployed, they gained weight.[136] When their annual income dropped they gained, on average, 5.5 lbs."

'The Thrifty Phenotype'

"Put simply, this theory suggests that when a pregnant woman is stressed, the development of her unborn child is modified to prepare it for life in a stressful environment. It isn't yet clear whether stress hormones themselves do the damage, or whether stressed foetuses are less well nourished, or both things happen, but these 'thrify phenotype' babies have a lower birthweight and a lower metabolic rate. In other words, they are adapted for an environment where food is scarce - they are small and need less food. In conditions of scarcity during our evolutionary past this adaptation would have been beneficial, but in our modern world, where stress during pregnancy is unlikely to be due to food shortages and babies are born into a world of plenty, it's maladaptive. Babies with a thirfty phenotype in a world where food is plentiful are more prone to obesity, to diabetes and to cardiovascular disease."

101. "After the fall of the Berlin Wall, inequality increased in the former East Germany,[141] and there is evidence from studies following people over time that this social disruption led to increases in the body mass index of children, young adults and mothers.[142]"

102. "But these approaches overlook the reasons 'why' people continue to live a sedentary lifestyle and eat an unhealthy diet, 'how' these behaviours give comfort or status, 'why' there is a social gradient in obesity, 'how' depression and stress in pregnancy play a role. Because behaviour changes are easier for people who feel in control and in a good emotional state, lessening the burdens of inequality could make an important contribution towards resolving the epidemic of obesity."

103. Education. "In 2006, according to the US Department of Labor, if you had been to high school but didn't graduate with a diploma, you earned an average of $419 per week. That sum rose to $595 if you had the diploma, up to $1,039 if you'd gone on to college and got a bachelor's degree, and rose to over $1,200 for an advanced degree.[144]"

111."...economists Robert Frank and Adam Levine, of Cornell University. They showed that in the United States, counties that had the largest increases in income inequality were the same counties that experienced the largest rises in divorce rates.[154] Children living in low-income families experience more family conflict and disruption and are more likely to witness or experience violence, as well as to be living in more crowded, noisy and substandard housing[155] - the quality of the home environment is directly realted to income.[156] The way parents behave in response to relative poverty mediates its impact on children - there is evidence that some families are resilient to such problems, while others react with more punitive and unresponsive parenting, even to the extent of becoming neglectfulor abusive.[157-8] It is important, once again, to note that difficulties in family relationships and parenting are not confined to the poor. Sociologist Annette Lareau describes how parenting differs between middle-class, working-class and poor families in America: there are key differences in the organization of daily life, the use of language, and the degree to which families are socially connected.[159] We have found that within the UK Millennium Cohort Study, a large survey of children born in 2000 and 2001, even mothers in the second from the top social class group are more likely to report feeling incompetent as a parent or having a poor relationship with their children, compared to those in the topmost group."

112. "Using data on the duration of paid maternity leave, provided by the Clearinghouse on International Developments in Child, Youth and Family Policies at Columbia University, we found that more equal countries provided longer periods of paid maternity leave.

        Sweden provides parental leave (which can be divided between mothers and fathers) with 80 per cent wage replacement until the child is 18 months old; a further three months can be taken at a flat rate of pay, and then another three months of unpaid leave on top of that. Norway gives parents (again either mother or father) a year of leave at 80 per cent wage replacement, or forty-two weeks at 100 per cent. In contrast, the USA and Australia provide no statutory entitlement to paid leave - in Australia parents can have a year of unpaid leave, in the USA, twelve weeks."

116. "More children reported low aspirations in more equal countries; in unequal countries children were more likely to have high aspirations."

113. "In 2004, World Bank economists Karla Hoff and Priyanka Pandey reported the results of a remarkable experiment.[163] They took 321 high-caste and 321 low-cast 11 to 12-year-old boys from scattered rural villages in India, and set them the task of solving mazes. First, the boys did the puzzles without being aware of each other's caste. Under this condition the low-cast boys did just as well with the mazes as the high-caste boys, indeed slightly better.

        Then, the experiment was repeated, but this time each boy was asked to confirm an announcement of his name, village, father's and grandfather's names, and caste. After this public announcement of caste, the boys did more mazes, and this time there was a large caste gap in how well they did - the performance of the low-caste boys dropped significantly (Figure 8.5).

129. 'Where justice is denied, where poverty is enforced, where ignorance prevails and where any one class is made to feel that society is in an organized conspiracy to oppress, rob and degrade them, neither persons nor property will be safe.' Frederick Douglas, Speech on the 24th anniversary of emancipation, Washington, DC, 1886

131. Fear of violence. "Fear of violence disproportionately affects the vulnerable - the poor, women and minority groups.[199] In many places, women feel nervous going out at night or coming home late; old people double-lock their doors and won't open them to strangers. These are important infringements of basic human freedoms."

132. "Violent crimes are almost unknown in some societies. In the USA, a child is killed by a gun every three hours. Despite having a much lower rate than the  USA, the UK is a violent society, compared to many other countries: over a million violent crimes were recorded in 2005-2006. And within any society, while it is generally young men who are violent, most young men are not. Just as it is the discouraged and disadvantages among young women who become teenage mothers, it is poor young men from disadvantaged neighbourhoods who are most likely to be both victims and perpetrators of violence. Why?"

133. " 'IF YOU AIN'T GOT PRIDE, YOU GOT NOTHING.'[201, p.29]

James Gilligan is a psychiatrist at Harvard Medical School, where he directs the Center for the Study of Violence, and has worked on violence prevention for more than thirty years. He was in charge of mental health services for the Massachusetts prison system for many years, and for most of his years as a clincial psychiatrist he worked with the most violent of offenders in prisons and prison mental hospitals. In his books, 'Violence' and 'Preventing Violence', he argues that acts of violence are 'attempts to ward off or eliminate the feeling of shame and humilation - a feeling that is painful, and can even be intolerable and overwhelming - and replace it with its opposite, the feeling of pride'. Time after time, when talking to men who had committed violent offences, he discovered that the triggers to violence had involved threats - or perceived threats - to pride, acts that instigated feelings of humiliation or shame. Sometimes the incidents that led to violence seemed incredibly trivial, but they all evoked shame. A young neighbour walking disrespectully across you immaculate lawn . . . the popular kids in the school harassing you and calling you a faggot . . . being fired from your job . . . your woman leaving you for another man . . . someone looking at you 'funny' . . .

        Gilligan goes so far as to say that he has 'yet to see a serious act of violence that was not provoked by the experience of feeling shamed and humiliated . . . and that did not represent the attempt to . . . undo this "loss of face"',[202, p110] And we can all recognize these feelings, even if we would never go so far as to act on them. We recognize the stomach-clenching feelings of shame and embarrassment, the mortification that we feel burning us up when we make ourselves look foolish the eyes of others. We know how important it is to feel liked, respected, and valued.[203] But if all of us feel these things, why is it predominantly among young men that those feelings escalate into violent acts.?"

134. "...evolutionary psychologists Margo Wilson and Martin Daly helps to make sense of these patterns of violence. In their 1988 book 'Homicide'[204] and a wealth of books, chapters and articles since, they use statistical, anthropological and historical data to show how young men have strong incentives to achieve and maintain as high a social status as they can - because their success in sexual competition depends on status.[77, 205-8] While looks and physical attractiveness are more important for women, it is status that matters most for sexual success among men. Psychologist David Buss found that women value the financial status of prospective partners roughly twice as much as men do.[209] So while women try to enhance their sexual attractiveness with cloths and make-up, men compete for status. This explains not only why feeling put down, disrespected and humiliated are the most common trigger for violence; it also explains why most violence is between men - men have more to win or lose from having (or failing to gain) status. Reckless, even violent behaviour comes from young men at the bottom of society, deprived of all the markers of status, who must struggle to maintain face and what little status they have, often reacting explosively when it is threatened."

134. 'Inequality is 'Structural' Violence.'

"The simple answer is that increased inequality ups the stakes in the competition for status: status matters even more. The impact of inequality on violence is even better established and accepted than the other effects of inequality that we discuss in this book.[203] In this chapter we show relationships between violence and inequality for the same countries and the same time period as we use in other chapters. Many similar graphs have been published by other researchers, for other times periods or sets of countries, including one covering more than fifty countries between 1970 and 1994 from researchers at the World Bank.[207,210] A large body of evidence shows a clear relationship between greater inequality and higher homicide rates. As early as 1993, criminologists Hsieh and Pugh wrote a review which included thiryt-five analyses of income inequality and violent crime.[211] All but one found a positive link between the two - as inequality increased so did violent crime. Homicides and assaults were most closely associated with income inequality, and robbery and rape less so. We have found found the same relationships when looking at more recently published studies.[10] Homicides are more common in the more unequal areas in cities ranging from Manhattan to Rio de Janeiro, and in the more unequal American states and cities and Canadian provinces.

        Figure 10.2 shows that international homicide rates from the United Nations 'Surveys on Crime Trends and the Opertions of Criminal Justice Systems[212] are related to income inequality, and Figure 10.3 shows the same relationship for the USA, using homicide rates from the Federal Bureau of Investigation.[213]"

136. the US "...murder rate is 64 per million, more than four times higher than the UK (15 per million) and more than twelve times higher than Japan, which has a rate of only 5.2 per million."

137. "Louisiana has a murder rate of 107 per million, more than seven times higher than that of New Hampshire and Iowa, which are bottom of the league table with murder rates of 15 per million. The homicide rate in Alaska is much higher than we would expect, given its relatively low inequality, and rate in New York, Connecticut and Massachusetts are lower. In the United States, two out of every three murders are committed with guns, and homicide rates are higher in states where more people own guns.[216] Among the states on our graph, Alaska has the highest rate of gun ownership of all, and New York, Connecticut and Massachusetts are among the lowest.[217] If we allow for gun ownership, we find a slightly stronger relationship between inequality and homicides."

137. Fatherless households. "We have already seen some features of more unequal societies that help to tie violence to inequality - family life counts, schools and neighbourhoods are important, and status competition matters.

        In Chapter 8 we mentioned a study which found that divorce rates are higher in more unequal American counties. In his book, 'Life Without Father', sociologist David Popenoe describes how 60 per cent of America's rapists, 72 per cent of juvenile murderers and 70 per cent of long-term perisoners grew up in fatherless homes.[218]"

"One researcher has described the behaviour of boys and young men who grow up without fathers as 'hypermasculine', with boys engaging in 'rigidly overcompensatory masculine behaviours'[219, pp.1-2] - crimes against property and people, aggression and exploitation and short-term sexual conquestions. This could be seen as the male version of the quantity versus quality strategy in human relationships that we described in relation to teenage mothers in Chapter 9. The absence of a father may predispose some boys to a different reporductive strategy: shifting the balance away from long-term relationships and putting more emphasis on status competition."

138. "Fathers can teach boys, just by being present in the family, the positive aspects of manhood - how to relate to the opposite sex, how to be a responsible adult, how to be independent and assertive, yet included with, and connected to, other people. Particularly important is the way in which fathers can provide authority and discipline for teenage boys; without that security, young men are more influenced by their peers and more likely to engage in the kinds of anti-social behaviour so often seen when groups of young men get together. But fathers can also be negative role models. One study found that, although children had more behavioural problems the 'less' time they had lived with their fathers, this was not true when the fathers themselves had behavioural problems.[220] If the fathers engaged in anti-social behaviour, then their children were at higher risk when they spent 'more' time living with them."

140. Trappings prevent violence. "Even within the most violent of societies, most people don't react violently to these triggers because they have ways of achieving and maintaining their self-respect and sense of status in other ways. They might have more of the tappings of status - a good education, nice houses and cars, good jobs, new cloths. They may have family, friends and colleagues who esteem them, or qualifications they are proud of, or skills that are valued and valuable, or education that gives them status and hope for the future. As a result, although everybody experiences disrespect and humiliation at times, they don't all become violent; we all experience loss of face but we don't turn round and shoot somebody. In more unequal societies more people lack these protections and buffers. Shame and humiliation become more sensitive issues in more hierarchical societies: status becomes more important, status competition increases and more people are deprived of access to markers of status and social success."

145. Prison. "In the USA, prison populations have been increasing steadily since the early 1970s. In 1978 there were over 450,000 people in jail, by 2005 there were over 2 million: the numbers had quadrupled. In the UK, the numbers have doubled since 1990, climbing from around 46,000 to 80,000 in 2007. In fact, in February 2007, the UK's jails were so full that the Home Secretary wrote to judges, asking them to send only the most serious criminals to prison.

        This contrasts sharply with what has been happening in some other rich countries. Through the 1990s, the prison population was stable in Sweden and declined in Finland; it rose by only 8 per cent in Denmark, 9 per cent in Japan.[236] More recently, rates have been falling in Ireland, Austria, France and Germany.[237]"

"The number of people locked up in prison is influenced by three things: the rate at which crimes are actually committed, the tendency to send convicted criminals to prison for particular crimes, and the lengths of prison sentences. Changes in any of these three can lead to changes in the proportion of the population in prison at any point in time."

147. "Criminologists Alfred Blumstein and Allen Beck have examined the growth in the US prison population.[238] Only 12 per cent of the growth in state prisoners between 1980 and 1996 could be put down to increases in criminal offending (dominated by a rise in drug related crime). The other 88 per cent of increased imprisonment was due to the increasing likelihood that convicted criminals were sent to prison rather than being given non-custodial sentences, and to the increased length of prison sentences. In federal prisons, longer prison sentences are the main reason for the rise in the number of prisoners. 'Three-strikes' laws, minimum mandatory sentences and 'truth-in-sentencing' laws (i.e., no remission) mean that some convicted criminals are receiving long senences for minor crimes. In California in 2004, there were 360 people serving life sentences for shoplifting.[239]"

"The prison system in the Netherlands has been described by criminologist David Downes, professor emeritus of social administration at the London School of Economics.[241] He describes how two-thirds of the difference between the low rate of imprisonment in the Netherlands and the much higher rate in the UK is due to the different use of custodial sentences and the length of those sentences, rather than differences in rates of crime."

148. According to the United Nationas Survey on Crime Trends and the Operations of Criminal Justice Systems... "In the USA there are 576 people in prison per 100,000, which is more than four and a half times higher than the UK, at 124 per 100,000, and more than fourteen times higher than Japan, which has a rate of 40 per 100,000."

151. David Downes in regard to the Netherlands method 'the offender must be treated as a thinking and feeling fellow human being, capable of responding to insights offered in the course of a dialogue with therapeutic agents.[241. p. 147]

In regard to the Japanese system, a criminologist writes 'the vast majority [of those prosecuted]... confess, display repentance, negotiate for their victims' pardon and submit to the mercy of the authorities. In return they are treated with extraordinary leniency.'[250, p. 495]

154. "...there appears to be a trend towards higher rates of re-offending in more punitive systems (in the USA and UK, reoffending rates are generally reported to be between 60 and 65 per cent) and lower rates in less harsh environments (Sweden and Japan are reported to have recidivism rates between 35 and 40 per cent)."

155. "Criminologists David Downes and Kirstine Hansen report that this phenomenon of 'penal expansion and welfare contraction' has become more pronounced over the past couple of decades. In his book 'Crime and Punishment in America', published in 1998, sociologist Elliott Currie points out that, since 1984, the state of California built only one new college but twenty one new prisons.[264] In more unequal societies, money is diverted away from positive spending on welfare, education, ect., into the criminal and judicial systems. Among our group of rich countries, there is a significant correlation between income inequality and the number of police and internal security officers per 100,000 people.[212] Sweden employs 181 police per 100,000 people, while Portugal has 450."

159. "Figure 12.1 shows that countries with bigger income differences tend to have much lower social mobility. In fact, far from enabling the ideology of the American Dream, the USA has the lowest mobility rate among these eight countries. The UK also has low social mobility, West Germany comes in the middle, and Canada and the Scandinavian countries have much higher mobility."

161. "...among the eight countries for which we have information about social mobility, public expenditure on education (elementary/primary and high/secondary schools) is strongly linked to the degree of income equality. In Norway, the most equal of the eight, almost all (97.8 per cent) spending on school education is public expenditure.[273] In contrast, in the USA, the least equal of this group of countries, only about two-thirds (68.2 per cent) of the spending on school education is public money. This is likely to have a substantial impact on social differences in access to higher education."

162. "Jargowsky estimates that in 1970 about one in four poor blacks lived in high-poverty neighbourhoods, but by 1990 that proportion had risen to one in three. Among whites, poverty concentration doubled during the two decades, while income differences were widening. When poverty concentration is high, poor people are not only coping with their own poverty but also the consequences of the poverty of their neighbours. Between the 1990 and the 2000 census, Jargowsky reports a decline in poverty concentration, particularly for black Americans in the inner cities, which goes along with the improvements in the relative position of the very poorest Americans which we described at the end of Chapter 10.[277] Even as poverty concentration has declined in the inner city, though, it has grown in the inner ring of suburbs and, with the recent economic downturn in America, Jargowsky warns that the gains of the 1990s may have already been reversed."

164. "Bourdieu calls the actions by which the elite maintain their distinction 'symbolic violence'; we might just as easily call them discrimination and snobbery. Although racial prejudice is widely condemned, class prejudice is, despite the similarities, rarely mentioned."

"In her book, 'Watching the English', anthropologist Kate Fox describes the social class markers of the English - in conversation, homes, cars, clothes, food and more.[287] Joseph Epstein does the same for the USA in 'Snobbery: The American Version'.[288] Both books are amusing, as well as erudite, and it's difficult not to laugh at our own pretensions and the poor taste of others.

        In the UK, for example, you can tell if someone is working class, middle class or upper class by whether they call their evening meal 'tea', 'dineer' or 'supper'. By whether they call their mother 'mam', 'mum', or 'mummy', by whether they go out to a 'do', a 'function' or a 'party', and so on."

166. "When people react to a provocation from someone with higher status by redirecting their aggression on to someone of lower status, psychologists label it 'displaced aggression'.[291] Examples include: the man who is berated by his boss and comes home and shouts at his wife and children; the higher degree of aggression in workplaces where supervisors treat workers unfairly;[292] the ways in which people in deprived communities react to an influx of foreign immigrants;[293-4] and the ways in which prisoners who are bullied turn on others below them - particularly sex offenders - in the prison hierarchy.[295]

168. "In more unequal societies, more people are oriented towards dominance; in more egalitarian societies, more people are oriented towards inclusiveness and empathy."

"In a powerful illustration of how discrimination and prejudice damage people's wellbeing, research shows that the health of ethnic minority groups who live in areas with more people like themseles is sometimes better than that of their more affluent counterparts who live in areas with more of the dominant ethnic group.[298] This is called a 'group density' effect, and was first shown in relation to mental illness. Studies in London, for example, have shown a higher incidence of schizophrenia among ethnic minorities living in neighbourhoods with fewer people like themselves,[299] and the same has been shown for suicide[300] and self-harm.[301] More recently, studies in the United States have demonstrated the same effects for heart disease[302-3] and low birthweight.[304-8] Generally, living in a poorer area is associated with worse health. Members of ethnic minorities who live in areas where there are few like themselves tend to be more affluent, and to live in better neighbourhoods, than those who live in areas with a higher concentration. So to find that these more ethnically isolated individuals are sometimes less healthy is suprising. The probable explanation is that, through the eyes of the majority community, they become more aware of belonging to a low-status minority group and perhaps encounter more frequent prejudice and discrimination and have less support. That the psychological effects of stigma are sometimes strong enough to override the health benefits of material advantage tells us a lot about the power of inequality and brings us back to the importance of social status, social support and friendship, and the influence of social anxiety and stigma discussed in Chapter 3.

        Bigger income differences seem to solidify the social structure and decrease the chances of upward mobility. Where there are greater inequalities of outcome, equal opportunity is a significantly more distant prospect."

174. "Internatioanlly, at the healthy end of the distribution we always seem to find the Scandinavian countries and Japan. At the opposite end, suffering high rates of most of the health and social problems, are usually the USA, Portugal and the UK. The same is true among the fifty states of the USA. Among those that tend to perform well across the board are New Hampshire, Minnesota, North Dakota and Vermont, and among those which do least wella re Mississippi, Louisiana and Alabama."

176. "Across 'whole' populations, rates of mental illness are five times higher in the most unequal compared to the least unequal societies. Similarly, in more unequal societies people are five times as likely to be imprisoned, six times as likely to be clinically obese, and murder rates may be many times higher. The reason why these differences are so big is, quite simply, because the effects of inequality are not confined just to the least well-off: instead they affect the vast majority of the population. To take an example, the reason why life expectancy is 4.5 years shorter for the average American than it is for the average Japanese, is not primarily because the poorest 10 per cent of Americans suffer a life expectancy deficit ten times as large (i.e., forty-five years) while the rest of the population does as well as the Japanese. As epidemiologist Michael Marmot frquently points out, you could take away all the health problems of the poor and still leave most of the problem of health inequalities untouched. Or, to look at it another way, even if you take the death rates just of white Americans, they still do worse - as we shall se in a moment - than the populations of most other developed countries."

179. "We compared the relationship between county media income and county death rates according to whether the counties were in the twenty-five more equal states or the twenty-five less equal states. As Figure 13.5 shows, in both the more and less equal states, poorer counties tended - as expected - to have higher death rates. However at all levels of income, death rates were lower in the twenty-five more equal states than in the twenty-five less equal states. Comparing counties at each level of income showed that the benefits of greater equality were largest in the poorer counties, but still existed even in the richest counties."

180. "In more equal Finland and Belgium the benefits of greater equality were, once again, bigger at the bottom of the social ladder than in less equal UK and USA. But even the children of parents with the very highest levels of education did better in Finland and Belgium than they did in the more unequal UK or USA."                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          182. "Suppose death rates are 60 per 100,000 people in the bottom class and only 20 per 100,000 in the top one. If you then knock 50 per cent off death rates in all groups, you will have reduced the death rate by 30 in the bottom group and by 10 at the top. But although the poor have had much the biggest absolute decline in death rates, there is still a threefold relative class difference in death rates."

184. "Although the states which perform well are dominated by ones which have more generous welfare provisions, the state which performs best is New Hampshire, which has among the lowest public social expenditure of any state. Like Japan, it appears to get its high degree of equality through an unusual equality of market incomes. Research using data for US states which tried to see whether better welfare services explained the better performance of more equal states found that although - in the US setting - services appear to make a difference, they do not account fully why more equal states do so much better.[309]"

197. 'Gifts make friends and friends make gifts.' Marshall Sahlins, 'Stone Age Economics'

201. "...as Sahlins pointed out, they had other ways of keeping the peace.[324] To avoid the 'warre of each against all', social and economic life was based on systems of gift exchange, food sharing, and on a very high degree of equaity. These served to minimize animosity and keep relations sweet. Forms of exchange involving direct expressions of self-interest, such as buying and selling or barter, were usually regarded as socially unacceptable and outlawed.

        These patterns demonstrate the fundamental truth: systems of material or economic relations are systems of social relations."

202. "In practice, [when the 'ultimatum game' is played] the average offer made by people in developed societies is usually between 43 and 48 per cent, with 50 per cent as the most common offer.[327] At direct cost to ourselves, we come close to sharing equally even with people we never meet and will never interact with again.

        Responders tend to reject offers below about 20 per cent. Rejected offers are money which the responder chooses to lose in order to punish the proposer and prevent them benefiting from making a mean offer. The human desire to punish even at some personal cost has been called 'altruistic punishment', and it plays an important role in reinforcing co-operative behaviour and preventing people freeloading."

203. "They are concerned with what people feel is a proper way to treat others (even when there is no direct contact between them and they bear the cost of any generosity). The egalitarian preferences people reveal in the ultimatum game seem to fly in the face of the actual inequalities in our societies."

203. "Around six or seven million years ago the branch of the evolutionary tree from which we have emerged split from that which led to two different species of ape: chimpanzees and bonobos. Genetically we are equally closely related to both of them, yet there are striking different species of ape: chimpanzees and bonobos. Genetically we are equally closely related to both of them, yet there are striking differences in their social behaviour and they illustrate sharply contrasting wave of solving the Hobbesian problem of the potential for conflict over scarce resources."

204. "Bands of chimpanzees are headed by a dominant male who gains his position largely on the basis of superior size, strength, and an ability to form alliances - often including support from females. Dominance hierarchies in any species are orderings of access to scarce resources, including - as far as male are concerned - reproductive access to females. Rankings within the dominance hierarchy are established and maintained through frequent contests, displays and assessments of strength. In the words of primatologists Frans de Waal and Frans Lanting:

'Chimpanees go through elaborate rituals in which one individual communicates its status to the other. Particularly between adult males, one male will literally grovel in the dust, uttering panting grunts, while the other stands bipedally performing a mild intimidation display to make clear who ranks above whom.'[328, p.30]

Bonobos, on the other hand, behave very differently. Not only is there much less conflict between neighbouring groups of bonobos than between neighbouring groups of chimps, but bonobos - again unlike chimps - have a high degree of sex equality. Females are at least as important as males, and dominance hierarchies are much less pronounced. Although males are slightly larger than females, females are usually allowed to eat first. Often dubbed the 'caring, sharing' apes, they engage in sexual activity - including mutual masturbation - frequently and in any combination of sexes and ages. Sex has evolved not only to serve reproductive functions, but also to relieve tensions in situations which, in other species, might cause conflict. As de Waal says, 'sex is the glue of bonobo society'.[329, p.99] It eases conflict, signals friendliness, and calms stressful situations. Bonobos use sex to solve the problem of how to avoid conflict over access to scarce resources. Feeding time is apparently the peak of sexual activity. Even before food is thrown into their enclosure, male bonobos get erections and males and females invite both opposite and same-sex partners for sex. Possible conflict over non-food resources is dealth with in the same way."

208. "For perhaps as much as the last two million years, covering the vast majority of the time we have been 'anatomically modern' (that is to say, looking much as we do now), human beings lived in remarkably egalitarian hunting and gathering - or foraging - groups.[332-5] Modern inequality arose and spread with the development of agriculture. The characteristics which woud have been selected as successful in more egalitarian societies would have been very different from those selected in dominance hierarchies."

208. "Rather than reflecting an evolutionary outbreak of selflessness, studies of modern and recent hunter-gatherer societies sugest that they maintained equality not only through the institutions of food sharing and reciprocal gift exchange, but also through what have been called 'counter-dominance strateies'.[331] Sharing was what has been described as 'vigilant sharing', with people watching to see that they got their fair share. The counter-dominance strategies through which these societies maintained their equality functioned almost as alliances of everyone against anyone whose behaviour threatened people's sense of their own autonomy and equality. The suggestion is that these strategies may have developed as a eneralized form of the kind of alliances which primatologists often describe being formed between two or three animals to enable them to gang up on and depose the dominant male. Observational studies of modern and recent foraging societies suggest that counter-dominance strategies normally involve anything from teasing and ridicule to ostracism and violence, which are turned against anyone who tries to dominate others. An important point about these societies is that they show that the selfish desires of individuals for greater wealth and preeminence can be contained or diverted to less socially damaging forms of expression."

213. Mirror neurons. "Usually, of course, there is no visible sign of the internal processes of identification that enable us to put ourselves inside each other's actions. However, the electrical activity triggered by these specialized neurons is detectable in the muscles. It has been suggested that similar processes might be behind our ability to empathize with each other and even behind the way people sometimes flinch while watching a film if they see pain inflicted on someone else. We react as if it was happening to us.

        Though equipped with the potential to empathize very closely with others, how much we develop and use this potential is again affected by early childhood."

214. Oxytocin. "...affects social attachment and bonding, both bonding between mother and child, and pairbonding between sexual partners. Its production is stimulated by physical contact during sexual intercourse, in childbirth and in breastfeeding where it controls milk let-down. However, in a number of mammalian species, including humans, it also has a role in social interaction more generally, affecting approach and avoidance behaviour.

        The effects of oxytocin on people's willngness to trust each other was tested in an experiment involving a trust game.[339] The results showed that those given oxytocin were much more likely to trust their partner. In similar experiments it was found that these effects worked both ways round: not only does receiving oxytocin make people more likely to trust, but being trusted also leads to increases in oxytocin. These effects were found even when the only evidence of trust or mistrust between people was the numerical decisions communicated through computer terminals.[340]"

215. "Evoluntionary psychologists have shown that the tendency to ostracize people who do not co-operate, and to exclude them from the shared proceeds of co-operation, is a powerful way of maintaining high standards of co-operation.[343] And, just as the ultimatum game showed that people were willing to punish a mean allocator by rejecting - at some cost to themselves - allocations that seemed unfair, so we appear to have a desire to exclude people who do not co-operate."

217. "Ever since the Brandt Report in 1980 people have suggested that social and environmental sustainability go together. It is fortunate that just when the human species discovers that the environment cannot absorb further increases in emissions, we also learn that further economic growth in the developed world no longer improves health, happiness or measures of wellbeing. On top of that, we have now seen that there are ways of improving the quality of life in rich countries without further economic growth."

220. "The circle in the top left hand corner of Figure 15.1 shows (again on the basis of current technology) the area in which societies seem to be able to gain good health at the minimum environmental cost. As the vertical line through the centre of the circle is a rough estimate of world average CO2 emissions, the graph suggests that all countries of the world have the potential to achieve high life expectancies without exceeding current world CO2 emissions."

"Figure 15.2 uses WWF data to show the relation between each country's ecological footprint per head and its score on the UN Human Development Index. Scarcely a single country combines a quality of life (above the WWF threshold of 0.8 on the HDI) with an ecological footprint which is globally sustainable. Cuba is the only one which does so. Despite its much lower income levels, its life expectancy and infant mortality rates are almost identical to those in the United States.

        The fact that at least one country manages to combine acceptable living standards with a sustainable economy, proves that it can be done. However, because the combination is achieved without access to the greenest and most fuel-efficient technology means it could be done more easily in countries with access to more advanced technology than Cuba has. With the advantage of power generation from renewables, environmentally friendly new technologies and greater equality, we can be confident that it is possible to combine sustainability with a high quality of life."

224. Steady State Economy. "When Daly developed the concept of a steady-state econoy people were more concerned about using up the earth's finite mineral and agricultural resources than they were with global warming. He suggested that we should have physical quotas on the extraction of minerals and that the use of the world's resources should be prevented from growing. Limiting world oil and coal production might turn out to be a very effective way of limiting global warming. Innovation and change would then be concentrated on using finite resources more effectively for the benefit of humankind.

        Think of material living standards as given by the stock of goods in use, rather than the rate of flow from consumption to waste. The faster things wear out and need replacing, the more they contribute to the flow and to waste. If material living standards depend on the goods we have in use, then each thing that wears out is a subtraction from that. Rather than serving as consumers, helping business to keep sales up, we need incentives to build and maintain longerlasting goods of every kind.

        Clearly any system for tackling these problems has to treat rich and poor countries differently. India, producing 1.6 tonnes of carbon per person annually, cannot be treated the same as the USA, producing 24.0 per person. Any regulatory system has to include policies for 'contraction and convergence' or 'cap and share'. Both approaches propose a year-on-year contraction in permitted emissions levels, leading to an eventual convergence on equal per capita emissions across the planet."

225. "Trying to get more from the limited resources available has always been one of the funamental drivers of innovation and technical change.[349] Fixing limits on resource consumption and emissions would require innovation as never before. As we shall see in the next chapter, continued rapid technological advances, such as digitization, electronic communications and virtual systems, creating 'weightless' sectors of the economy, make it very much easier to combine high living standards with low resource consumption and emissions."

225. Innovation improves with equality! "It is often suggested that invention and innovation go with inequality and depend on the promise of individual financial incentives. However, Figure 15.3 suggests the contrary - that more equal societies tend to be more creative. It shows that there is a tendency for more patents to be granted per head of population in more equal societies than in less equal ones. Whether this is because talent goes undeveloped or wasted in more unequal societies, or whether hierarchy breeds conformity, is anyone's guess. But it does suggest that greater equality will not make societies less adaptable."

227. Richard Layard, 'Happiness'. "...based his calculations solely on the loss of satisfaction, or happiness, among the rest of the population and concluded that a 60 per cent tax rate on the better-off might cover that cost (presumably that should be over and above the tax rates other people pay)."

Inequality increases consumption. "The idea that inequality ratchets up the competitive pressure to consume is not just speculation. It has observable effects. While inequality has been rising in the USA and Britain, there has been a long-term decline in savings and a rise in debt. Robert Frank notes that in 1998, even though the American economy was booming as never before, one family in sixty-eight filed for bankruptcy - four times the rate in the early 1980s before the most dramatic rises in inequality.[351] By 2002, unpaid credit card debt was $9,000 for the average card-holder. Looking at changes over a ten-year period, Frank found that bunkrutcy rates rose most in parts of the USA and New Zealand spending twice as much as Norway and Denmark."

228. "A study of working hours in OECD countries by Sam Bowles, professor emeritus of economics at the University of Massachusetts, showed not only that more unequal countries tend to have longer working hours, but also that differences in working hours changed in line with changes in inequality over several decades.[352] The relationship between greater inequality and longer working hours is shown in Figure 15.3. People in more unequal countries do the equivalent of two or three months' extra work a year. A loss of the equivalent of an extra eight or twelve weeks' holiday is a high price to pay for inequality.

        Another study, this time using data within the USA, found that married women were more likely to go out to work if their sister's husband earned more than their own husband.[353] A similar study suggested that the decisions married women make about taking paid work are also affected by less personal inequalities: it looked at women who were married to employed men and found that they were more likely to take a job themselves if they lived in an area in which men's incomes were more unequal.[354]

        The evidence we have described from a number of different sources on savings, debt, bankruptcy rates, spending on advertising and working hours, al concurs with the view that inequality does indeed increase the pressure to consume. If an important part of consumerism is driven by emulation, status competition, or simply have to run to keep up with everyone else, and is basically about social appearances and position, this would explain why we continue to pursue economic growth despite its apparent lack of benefits."

229. "How much people's desire for more income is really a desire for higher status has been demonstrated in a simple experiment. People were asked to say whether they'd prefer to be less well-off than others in a rich society, or have a much lower income in a poorer society but be better-off than others. Fifty per cent of the participants thought they would trade as much as half their real income if they could live in a society in which they would be better off than others.[355]" "Once we have enough of the necessities of life, it is the relativities which matter."

229-30. "When Bowles and Park first demonstrated the relationship between inequality and working hours (Figure 15.3), they quoted Thorstein Veblen, who said: 'The only practicable means of impressing one's pecuniary ability on the unsympathetic observers of one's everyday life is an unremitting demonstration of the ability to pay.' Veblen's 'Theory of the Leisure Class', published in 1899, was the first major work on the relationship between consumption and social stratification. It was he who introduced the term 'conspicuous consumption' and emphasized the importance of 'pecuniary emulation' and 'invidious comparisons'.[356] Because the advertising industry plays on insecurities about how we are seen, it has made us more aware of the psychology of consumption. But Veblen wrote long before we were so bombarded with advertising. So rather than blaming these problems entirely on advertising, we should recognize that it simply amplifies and makes use of vulnerabilities which are there anyway. Economists now use the term 'Veblen effect' to refer to the way goods are chosen for their social value rather than their usefulness. And research confirms that the tendency to look for goods which confer status and prestige is indeed stronger for things which are more visible to others."

231. "Instead of policies to deal with global warming being experienced simply as imposing limits on the possibilities of material satisfaction, they need to be coupled with egalitarian policies which steer us to new and more funamental ways of improving the quality of our lives. The change is about a historic shift in the sources of human saitsfaction from economic growth to a more sociable society."

"As we write, tankers of biofuels are crossing the Atlantic from Europe to the USA and back in order to pick up the US government subsidy paid when small quantities of petroleum are added, which could jsut as well have been added in Europe without every litre crossing the Atlantic twice. Reversing the intended effect of regulations for private gain is an expression of the dominance of attitudes which make it much harder to respond adequately to the threat of global warming."

232. "We have seen (Chapter 4) that they are more socially cohesive and have higher levels of trust which foster publicspiritedness. We have also seen how this carries over into international relations: more equal societies give more in development aid and score better on the Global Peace Index. An indication that a greater sense of public responsibility in more equal countries might affect how societies respond to environmental issues can be seen in Figure 15.5, which shows that they tend to recycle a higher proportion of their waste. The data comes from Australia's Planet Ark Foundation Trust.[357] We show each country's ranking for the proportion of waste that they recycle. Another indication of a stronger sense of public responsibility comes from an international survey of opinions of business leaders. As our colleauges, Roberto De Vogli and David Gimeno, pointed out, business leaders in more equal countries are more strongly in favour of their governments complying with international environmental agreements than business leaders in more unequal countries.[404, 405]

233. "...rather than assuming that we are stuck with levels of self-interested consumerism, individualism and materialism which must defeat any attempts to develop sustainable economic systems, we need to recognize that these are not fixed expressions of human nature. Instead they reflect the characteristics of the societies in which we find ourselves and vary even from one rich market democracy to another. At the most fundamental level, what reducing inequality is about is shifting the balance from the divisive, self-interested consumerism driven by status competition, towards a more socially integrated and affiliative society. Greater equality can help us develop the public ethos and commitment to working together which we need if we are going to solve the problems which threaten us all. As wartime leaders knew, if a society has to pull together, policies must be seen to be fair and income differences have to be reduced."

235. "Compared to the most unequal countries, some of the most equal devote four times the proportion of their national income to aid. More unequal countries also seem to be more belligerent internationally. Inequality is related to worse scores on the Global Peace Index, which combines measures of militarization with measures of domestic and international conflict, and measures of security, human rights and stability. (It is produced by Visions of Humanity in conjunction with the Economist Intelligence Unit.)[358]"

236. "A social movement for greater equality needs a sustained sense of direction and a view of how we can achieve the necessary economic and social changes. The key is to map out ways in which the new society can begin to grow within and alongside the institutions it may gradually marginalize and replace." "Rather than simply waiting for government to do it for us, we have to start making it in our lives and in the institutions of our society straight away."

237. Equal rights vs. sameness "It is often said that greater equality is impossible because people are not equal. But that is a confusion: equality does not mean being the same. People did not become the same when the principle of equality before the law was established. Nor - as is often claimed - does reducing material inequality mean lowering standards or levelling to a common mediocrity. Wealth, particularly inherited wealth, is a poor indicator of genuine merit - hence George Bernard Shaw's assertion that: 'Only where there is pecuniary equality can the distinction of merit stand out.'[359, p71] Perhaps that makes Sweden a particularly suitable home for the system of Nobel prizes."

"We see no indication that standards of intellectual, artistic or sporting achievement are lower in the more equal societies in our analyses. Indeed, making a large part of the population feel devalued can surely only lower standards. Although a baseball team is not a microcosm of society, a well-controlled study of over 1,600 players in twenty-nine teams over a nine-year period found that major league baseball teams with smaller income differences among players do significantly better than the more unequal ones.[360]"

239. Trends in Inequality. "Inequality has risen in many, but not all, developed countries over the last few decades. Figures 16.1 and 16.2 show the widening gap between the income of rich and poor in Britain and the United States over a thirty-year period. The figures show the widening gap between the top and bottom 10 per cent in each country. Both countries experienced very dramatic rises in inequality which peaked in the early 1990s and have changed rather little since then. In both countries inequality remains at levels almost unprecedented since records began - certainly higher than it has been for several generations. Few other developed countries have shown quite such dramatic increases in inequality over this period, but only a very few - such as The Netherlands - seem to have avoided them entirely. Others, like Sweden, which avoided them initially, have had steep rises since the early 1990s.

        The figures showing widening income inequality in Britain and the United States leave no room for doubt that income differences do change substantially over time and that they are now not far short of 40 per cent greater than they were in the mid-1970s.

        If things can change so rapidly, then there are good reasons to feel confident that we 'can' create a society in which the real quality of life and of human relationships is far higher than it is now." "In the early 1990s a World Bank report pointed out that rapid economic growth in a number of East Asian countries was underpinned by growing equality.[366] In trying to explain why government had adopted more egalitarian policies, the report said that it was because they faced crises of legitimacy and needed to gain popular support. The governments in Taiwan and Hong Kong faced rival claims from the Communist Chinese government. South Korea faced North Korea, and the governments of Singapore and the Philippines faced guerrilla forces. Describing policy in these countries, John Page, writing in a 1994 World Bank publication, said:

'Very explicit mechanism were used to demonstrate the intent that all would have a share of future wealth. Korea and Taiwan carried out comprehensive land reform programs; Indonesia used rice and fertilizer price policies to raise rural incomes; Malaysia introduced explicit wealth sharing programs to improve the lot of ethnic Malays vis-a-vis the better off ethnic Chinese; Hong Kong and Singapore undertook massive public housing programs; in several economies, governments assisted workers' cooperatives and established programs to encourage small and medium sized enterprises. Whatever the form, these programs demonstrated that the government intended for all to share in the benefits of growth.[367]"

242. "Japan owes its status as the most equal of the developed countries partly to the fact that the whole establishment had been humiliated by defeat in the Second World War, and partly to the support for political and economic reconstruction - including drawing up a new constitution - provided by disinterested, and remarkably far-sighted, American advisers working under General MacArthur.[95]

        Other examples of increases in equality have similar origins. Bismarck's early development of forms of social insurance were part of his attempt to gain popular support for his project of unifying the German states. Britain became substantially more equal during both the First and Second World Wars as part of an attempt to gain support for the war effort by making people feel the burden of war was equally shared. As Richard Titmuss put it: 'If the cooperation of the masses was thought to be essential [to the war effort], then inequalities had to be reduced and the pyramid of social stratification had to be flattened.'[368]

        Sweden's greater equality originated in the Social Democratic Party's electoral victory in 1932 which had been preceded by violent labour disputes in which troops had opened fire on sawmill workers. As prime minister almost continuously from 1932 to 1946, Per Albin Hansson was able, during Swedish rearmament and the war, to push through his aim of making Sweden 'a classless society' and 'the people's home'.

        Turning now to examples of where income differences have widened rather than narrowed, the central role of politics is no less clear. In Figures 16.1 and 16.2 we saw the widening of income differences in Britain and the USA which took place particularly during the 1980s and early 1990s. Paul Krugman, the Nobel Prize winning economist, analyses the reasons for rising inequality in the USA. He says that the conventional explanation is that it was driven by a rising demand for skilled labour, resulting mainly from the spread of information technology, and by the import of cheap goods, such as textiles, replacing less skilled labour. However, he dismisses these explanations saying that econometric research suggests that they are only a small part of the picture. He also points out that factors such as these do not explain the runaway incomes at the top - for instance among CEOs - which was one of the main features of the growth in inequality, and add that although these forces have been at work in all rich countries, income differences widened in only some of them. Countries in which inequality did not increase during the 1980s and early '90s include Canada, France, Japan, Netherlands, Spain and Switzerland.[406, 407]"

243. "Confining his attention largely to the USA, Krugman argues that, rather than market forces, rising inequality was driven by 'changes in institutions, norms and political power'. He emphasizes the weakening of trade unions, the abandonment of productivity sharing agreements, the influence of the political right, and government changes in taxes and benefits. He could also have added the failure to maintain adequate minimum wage legislation.

        Despire substantial differences between countries, the basic trends in income distribution seen in the USA throughout the twentieth century can be seen in many countries. After inequalities rose to a peak just before the Great Crash of 1929, they then narrowed so dramatically in the later 1930s and early '40s that the period is sometimes referred to as the 'Great Compression'. Income differences then remained narrower until the later 1970s or the mid 1980s. They then started to widen rapidly again until just before the most recent financial crash, where they reached levels of inequality not seen since just before the 1929 crash.

        Most research on changes in income distribution is concerned with dividing up the components of the overall trends: how much is due to widening differences in earning? How much to changes in taxes and benefits? How much is due to simultaneous growth in workless and two-earner households? And then, at the next causal level down, how much of the widening differences in earnings is due to weaker trade unions and how much is due to a decline in demand for unskilled labour? But the truth is that the major changes in income distribution in any country are almost never attributable simply to market forces influencing wage rates. What we see instead is something much more like the changes in institutions, norms and the use of political power which Krugman describes in the USA. Differences in pre-tax earnings rise, tax rates are made less progresive, benefits are cut, the law is changed to weaken trade union powers and so on. Together these are a fairly clear sign of a change" 244. "in norms and political outlook."

"To recognize how political attitudes sweep across the international scene, we have only to look at the way revolutionary upheavals of 1848 shook half a dozen different European countries, or remember the radicalism of the 1960s, or how many communist governments collapsed in 1989-90. An indicator that the widening income differences of the 1980s resulted from another such change in the political wind is that, with the exception of Canada, they widened most rapidly in English speaking countries - in Britain, the USA, New Zealand and Australia - accompanied in each case by a free-market ideology and by policies designed to create a more 'flexible' labour force. Stronger linguistic and ideological connections meant that English speaking countries caught the disease quickly from each other and caught it badly."

244. Trade unions greatest factor of inequality? No! "A study which analysed trends in inequality during the 1980s and 1990s in Australia, Canada, Germany, Japan, Sweden, the United Kingdom and the United States, found that the most important single factor was trade union membership.[370] Although high levels of unemployment weaken the bargaining power of labour, in this study, declines in trade union membership were most closely associated with widening income differences."

245. "In the countries of the European Union the earning of some 70 per cent of employees are covered by collective agreements, compared to only 15 per cent in the USA. At 35 per cent, the figure for the UK is among the lowest in the EU."

"In Chapter 13 we showed that although the more equal countries often get their greater equality through redistributive taxes and benefits and through a large welfare state, countries like Japan manage to achieve low levels of inequality 'before' taxes and benefits. Japanese differences in gross earnings (before taxes and benefits) are smaller, so there is less need for large-scale redistribution. This is how Japan manages to be so much more equal than the US, even though its social security transfers were a small proportion of GDP than social security transfers in the USA.[362] Although, of all the countries included in our analyses, the USA and Japan are at opposite extremes in terms of inequality, the proportion of their GDP taken up by government social expenditure is small in both cases: they come second and third lowest of the countries in our analysis."

246. "Similar evidence that there are very different routes to greater equality can also be seen among the American states.[363] The total tax burden in each state as a percentage of income is completely unrelated to inequality. Because Vermont and New Hampshire are neighbouring New England states, the contrast between them is particularly striking. Vermont has the highest tax burden of any state of the union, while New Hampshire has the second lowest - beaten only by Alaska. Yet New Hampshire has the best performance of any state on our Index of Health and Social Problems andis closely followed by Vermont which is third best. They both also do well on equality: despite their radically different taxation, they are the fourth and sixth most equal states respectively. The need for redistribution depends on how unequal incomes are before taxes and benefits."

"An example of this balance shifting in the wrong direction can be seen in the USA during the period since 1980, when income inequaality increased particularly rapidly. During that period, public expenditure on prisons increased six time as fast as public expenditure on education, and a number of states have now reached a point where they are spending as much public money on prisons as on higher education.[364]"

247. "...policies to support families in early childhood would have meant that many of those in prison would have been earning and paying taxes instead of being a burden on public funds."

249. "...we referred to a research report called 'Yearning for Balance', which showed that three-quarters or more of Americans felt that society had lost touch with what really mattered.[1] Consumerism and materialism, they felt, were winning out over more important values to do with friends, family and community. Although politicians recognize a deep-seated malaise, and so campaign for votes, saying that they stand for 'change', they sometimes seem to have a few ideas for change which go deeper than differences in the personal images they project. There is no suggestion that they have any view of how to begin changing daily life into something more joyful and fulfilling." "In Britain over the last twenty years polls have shown that the proportion of the population who think that income differences are too big has averaged around 80 per cent and has rarely dipped below 75 per cent - even though most people underestimate how big income differences actually are. In the USA, the 2005 Maxwell Poll on Civic Engagement reported that over 80 per cent of the population thought the extent of inequality was a problem, and almost 60 per cent thought the government should try to reduce it. Gallup polls between 1984 and 2003 which asked American whether income and wealth were fairly distributed or should be more evenly distributed, found that over 60 per cent of the population thought they should be more evenly distributed.[369]"

250. "In 2007 chief executives of 365 of the largest US companies received well over 500 times the pay of their average employee, and these differences were getting bigger. In many of the top companies the chief executive is paid more in each day than the average worker is in a year. Among the Fortune 500 companies the pay gap is 2007 was close to ten times as big as it was in 1980, when the long rise in income inequality was just beginning."

"...the annual survey of chief executives' pay carried out by the 'Guardian', boardroom pay in the 100 companies included in the Financial Times Stock Exchange index in Britain has risen in successive years by 16 per cent, 13 per cent, 28 per cent and most recently (2006-2007) by 37 per cent at a period when inflation was rarely more than 2 per cent.[373] The average pay (including bonuses) for the chief executives of top companies stood at just under P2.9 million. After reviewing empirical research, the International Labour Organization concluded that there is little or no evidence of a relationship between executive pay and company performance and suggested that these excessive salaries are likely to reflect the dominant bargaining position of executives.[374]

        Top business pay has far outstripped anything in the public sector. In the USA, the twenty highest-paid people working in public traded corporations received almost 40 times as much as the twenty highest-paid people in the non-profit sector, and 200 times more than the twenty highest-paid generals or cabinet secretaries in the Federal Government.[375]

        It seems likely that the denationalization of major industries and the privatization of large numbers of friendly societies, mutuals, bilding societies, provident societies and credit unions, which had been controlled by their members, may have made a substantial contribution to the widening income differences shown in Figures 16.1 and 16.2. It was common practice for CEOs and other senior managers to receive huge salary increases shortly after conversion to profit-making corporations. This probably explains some of the sharp rise in inequality which Figure 16.1 shows took place in Britain around the mid-1980s. British Telecom was privatized in 1983, British Gas is 1986, followed by a flood of major companies in 1987. The international extent of the widening of income inequality is also consistent with a contribution from privatization.

        Numerous corporations are now bigger than many nation states. In the words of the United Nations Conference on Trade and Development (UNCTAD):[376]

'Twenty-nine of the world's 100 largest economic entities are transnational corporations (TNCs), according to a new UNCTAD list that ranks both countries and TNCs on the basis of value added. Of the 200 TNCs with the highest assets abroad in 2000, Exxon is the biggest in terms of value added ($63 billion). It ranks 45th on the new list, making it comparable in economic size to the economies of Chile or Pakistan. Nigeria comes in just between DaimlerChrysler and General Electric, while Philip Morris is on a par with Tunisia, Slovakia and Guatemala.'

Using different measures, other estimates suggest that half of the world's largest economies are multinationals, and that General Motors is bigger than Denmark, that DaimlerChrysler is bigger than Poland; Royal Dutch/Shell bigger than Venezuela, and Sony bigger than Pakistan. Like the aristocratic ownership of huge tracts of land, which in 1791 Tom Paine attacked in his 'The Rights of Man',[377] these productive assets remain effectively in the hands of a very few, very rich people, and make our claims to real democracy look pretty thin."

252. "In his book, 'America Beyond Capitalism: Reclaiming our Wealth, our Liberty and our Democracy', Gar Alperovitz, a professor of political economy at the University of Maryland, summarizes the variety and scale of the alternatives operating in the USA.[378] He emphasizes the huge size of the non-profit sector. In the twenty largest US cities almost 40 per cent of 200 largest enterprises are non-profit organizations like universities and medical institutions. He mentions the 2,000 municipal electric utilities which supply 40 million Americans with electricity. Largely because they are not having to make profits for shareholders they are often cheaper - an average of 11 per cent cheaper, Alperovitz says - than profit-making companies, and many pay particular attention to sustainability and the development of renewable sources of power. Also at the local level, he discusses organizations like the 4,000 or so Community Development Corporations which support local communities by setting up low-income housing schemes, providing finance for local businesses which they sometimes own and control. There are 48,000 co-ops in the US and some 120 million people are members of them. There are around 10,000 credit unions, with assets totalling $600 billion, providing financial services for 83 million Americans. Around 1,000 mutual insurance companies are owned by their policy-holders, and 30 per cent of American farm products are marketed through co-operatives.

        In Britain institutions like  universities, hospitals and local government are also often the largest local employers. Because medical care and universities - like the rest of education - are almost entirely publicly funded, they are governed by bodies accountable to the public. The governing bodies of Oxford and Cambridge colleges are democratically comprised of all fellows. Dispite a stampede to cash in the profits to be made by selling off friendly societies and mutuals, there are still 63 building socities (with over 2,000 branches and 38,000 employees), 650 credit unions, 70 mutual insurance companies as well as 250 friendly societies in Britain, providing various financial services to their members. There are almost 170,000 charities with a combined annual income of over P44 billion. In 2007 the Co-operative Bank, with P40 bilion of assets, was recognized as the most corporately responsible company in the UK, according to Business in the Community, an influential charitable association of British companies. The recently revamped 6,300 Co-op shops stil have a market share of about 5 per cent of all food retailing and they remain the UK's largest 'neighbourhood' retailer with a share of almost 8 per cent of the market. Even Britain's experience of nationalized industries (which once covered electricity, gas, water, telephones, railways) was not all bad. Throughout the 1950s and 1960s, as the economist and journalist Will Hutton has pointed out, productivity in the nationalized industries matched or exceeded the private sector.[379] He says they began to get a bad name when governments raided their profits and held down their prices to help reduce inflationary pressures in the national economy."

255. "In the UK, share-ownership schemes now cover almost a quarter of all employees and some 15 or 20 per cent of all UK companies.[380-81] In the US, the 2001 Tax Law increased the tax advantages of Employee Stock Ownership Plans (ESOPs), and they now cover 8 million employees in 10,000 firms with an average employee-ownership of 15-20 per cent.[382]" "...employee share-ownership, on its own, is not enough to make much difference to company performance. Patrick Rooney, an economist at the universities of Indiana and Purdue, found that employee share-ownership did not necessarily mean that employees were more involved in the running of the companies in which they worked.[383] He compared the extent of employee participation in a wide range of decisions in companies with and without employee share-ownership schemes. In general, employee involvement was low, but even in companies with employee shareownership schemes staff members were often not informed or consulted, and the majority of these companies did not enable employees to have a significant input into decision making." 256. "The studies show repeatedly that substantial performance benefits come only when employee share-ownership schemes are accompanied by more participatory management methods.[380, 383, 388-9] Research that looked at a large number of British companies during the 1990s found that employee share-ownership, profit-sharing and participation each make an independent contribution to increased productivity.[380]

'We can say with certainty that when ownership and participative management are combined, substantial gains result. Ownership alone and participation alone, however, have at best, spotty or short-lived results.(p.11)

... the impact of participation in the absence of (share) ownership is short-lived ... Ownership seems to provide the cultural glue to keep participation going.(p.3)'

257. "Robert Oakeshott, a British authorit on employee-ownership, say that employee-ownership 'entails a movement from business as a piece of property to business as a working community'. " [In my view with money changing hands, it is not a working community, but a working society, less alienated, but hardly gift relations that underpin community]

258. "Co-operatives and employee buy-outs have often originated as responses to desperate circumstances in which traditional systems of ownership and management have failed. Employees have used them to avoid closures and unemployment in the most difficult market circumstances. Even then they have sometimes succeeded beyond expectations - as did Tower Colliery in South Wales when, in 1995, miners used their redundancy money to buy the pit and ran it successfully until the coal was worked out thirteen years later. Many fully employee-owned companies have a proud record. Examples include, or have included, the London Symphony Orchestra, Carl Zeiss, United Airlines, Gore-tex, the Polaroid Corporation, and the John Lewis Partnership (one of Britain's most successful retailers with 68,000 employee-partners and annual sales of P6.2bn). In the USA, among the largest majority employee-owned companies are Publix Supermarkets, Hy-vee Supermarkets, Science Applications International Corporation (SAIC), the international engineering and construction company CH2M Hill and Tribune which, among other media operations, publishes the 'Los Angeles Times' and 'Chicago Tribune'. These companies average 55,000 employees each.

        One of the best-known co-operative groups is the Mondragon Corporation in the Basque region of Spain. Over half a century it has developed into a group of over 120 employee-owned co-operatives with 40,000 worker-owners and sales of $4.8 billion US dollars. Mondragon co-operatives are twice as profitable as other Spanish firms and have the highest labour productivity in the country.[388]"

260. "David Erdal, former chair of the Tullis Russel Group and Director of the Baxi Partnership, once studied the effects of employment in co-operatives on the communities in which they were situated.[393] He compared three towns in northern Italy: Imola, which has 25 per cent of its workforce employed in co-operatives, Faenza, where 16 per cent work in co-operatives, and Sassuolo where there are no co-operatives. On the basis of rather a small survey and low response rates, he concluded that health, education, crime and social participation were all better in the towns with a larger proportion of the population employed in co-operatives."

262. "...Milgram showed that people were willing to deliver what they believed were not only very painful, but also life-threatening electric shocks to a learning partner whenever the partner gave the wrong answer to a question.They did htis at the request of a man in a white coat conducting the experiment, despite hearing what they thought were the screams caused by the shocks they delivered.

        However, witin a framework of employee-ownership and control, people specifically regain ownership and control of the purposes of their work. If, for instance, you get to know that some aspect of a design or manufacturing process is harming children's health, you would want to change it and would probably start by finding out what colleagues thought about it. There would not be the same presure to keep your doubts to yourself. Nor would you be able to shrug it off, dismissing it as none of your business. Neither would you fear that your job would be in jeopardy if you raised awkward questions. Although employee-owned firms would not be above all anti-social behaviour, [after all, it's still 'busi'ness] it is likely that they would succeed in making it at least a little less common."

263. "Equality was the bastion against arbitrary power. This was expressed in the historical demand for 'No taxation without representation', and 'No legislation without representation'. The American Declaration of Independence says that all men are born equal and endowed with liberty as an inalienable right, just as the French revolutionaries demanded liberty, equality, fraternity. The complementarity of liberty and equality has been proclaimed in the writings of many democratic thinkers, including the social philosopher L.T. Hobhouse, who believed that liberty depended, in all its domains, on equality - equality before the law, equality of opportunity, equality of parties to a contract.[395]"

264. 'Running with the Technological Tide' "In her book, 'The Weightless World', Diane Coyle points out that although people in most industrialized countries experienced something like a twentyfold increase in their real income during the twentieth century, the weight of all that waas produced at the end of the century was roughly the same as it had been at the beginning.[396] She also says that the average weight of one dollar's worth of US exports (adjusted for inflation) fell by a half between 1990 and 1996. While the trend towards 'weightlessness' is partly a reflection of the growth of the service sector and the 'knowledge' economy, it is also a reflection of changing technology and the trend towards miniaturization. That so much of modern consumption is actually lighter on the use of material resources than it was, is presumably good news for the environment. But the underlying nature of the changes contributing to weightlessness may also have important implications for equality.

        Introductory economics courses teach students the distinction between 'fixed' costs of production on the one hand, and 'marginal' or variable costs on the other. Fixed costs are the costs of the factory buildings and machinery, and the variable costs are the additional costs of making one more unit of output - traditionally made up largely of the costs of the additional labour and materials needed, on the assumption that the plant and equipment are already there. Economic theory says that prices in a competitive market should fall until they equal marginal (or variable) costs. Prices higher than that would mean that by producing and selling more, a manufacturer could still earn a little more profit, whereas at a lower price making even one more item would add more to costs than it gained in income from sales.

        Throughout large swathes of the modern economy technological change is rapidly reducing variable costs. For everything that can be copied digitally, additional copies cost little or nothing either to produce or to distribute over the internet. This applies to all music, to all computer software and games, to films, to all books and to the written word in any form, to all information and to pictures. That covers a large part of what is produced for entertainment and leisure, for education at all levels, and for many economic and professional applications of computer software - whether for stock control, statistical analysis or computer-aided design.

        So low are marginal costs of digital products that there is a growing 'free' sector. Efforts are made to enforce patents and copyright protection in an attempt to restrict access and enable companies to hold on to profits; but the logic of technological progress is difficult to resist. Systems of copy protection codes are cracked and goods 'liberated'. In some cases free access is supported by advertising, in others it is genuinely free, as with 'freeware' or 'shareware' computer programmes. The internet has already provided free access to almost unlimited information, not only books, encyclopaedias, dictionaries, newspapers, but increasingly to on-line journals. Whether legally or not, music and films are downloaded free. Some service providers now provide unlimited free storage space. Phone calls can cost only a fraction of what they used to and, when using computer links, are increasingly free. Emails and instant messaging also provide effectively free communications."

265. "Though less dramatic than in the digital economy, the trend towards rapidly diminishing variable costs may also apply to many other areas of technology, including the products of nano technology, biotechnology, electronically printed components and genetic engineering. These new technologies hold out possibilities of more efficient solar power, cheaper medicines and more economical new materials."

267. "Perhaps we need charities to fund the development of software for free worldwide use. We certainly need a complete revision of copyright and patent laws so that those who produce valuable goods and services can be paid in ways which do not restrict acces to their products."

268. "...if the United States was to reduce its income inequality to something like the average of the four most equal of the rich countries (Japan, Norway, Sweden and Finland), the proportion of the population feeling they could trust others might rise by 75 per cent - presumably with matching improvements in the quality of community life; rates of mental illness and obesity might similarly each  be cut by almost two-thirds, teenage birth rates could be more than halved, prison populations might be reduced by 75 per cent, and people could live longer while working the equivalent of two months less per year.

        Similarly, if Britain became as equal as the same four countries, levels of trust might be expected to be two-thirds as high again as they are now, mental illness might be more than halved, everyone would get an additional year of life, teenage birth rates could fall to one-third of what they are now, homicide rates could fall by 75 per cent, everyone could get the equivalent of almost seven weeks extra holiday a year, and the government could be closing prisons all over the country."

269. "What is essential if we are to bring a better society itno being is to develop a sustained movement committed to doing that. Policy changes will need to be consistently devoted to this end over several decades and that requires a society which knows where it wants to go. To help with this we provide - and will continue to provide - our research findings, graphs and other information on the Equality Trust's web site (www.equalitytrust.org.uk)"

296. "...there is now evidence that inequality played a central causal role in the financial crashes of 1929 and of 2008.

        We suggested (p. 228, 270) that inequality leads to increases in debt. It turns out that they are intimately related. Using figures for the 40 years from 1963 to 2003, Matteo Iacoviello, an economist at the Federal Reserve Board and Boston College, has recently shown a very close correlation between increasing debt and increasing inequality in the USA and concludes that the longer term increases in debt can only be explained by the rise in inequality.[447] Using the latest international data from OECD on debt, we have also found that both short-term household debt as a proportion of household assets, as well as government National Debt as a proportion of Gross Domestic Product, are higher in more unequal countries.[448]

        Aided by some of the world's most respected economists, the story of the way rising inequality and debt led to the financial crashes of 1929 and 2008 is well told in a documentary film called 'The Flaw'.[449] Both crashes happened at the two peaks of inequality which had led to rapid increases in debt.[450-1] As Figure 17.5 shows, their trends over time are strikingly similar. Robert Wade, professor of political economy at the London School of Economics, estimates that growing inequality meant that in the years before the 2008 crash about 1.5 trillion dollars per year were being siphoned from the bottom 90 per cent of the US population to the top ten per cent.[449] As a result, the richest people had more and more money to invest and to lend, but people outside the very wealthiest category found it increasingly difficult to maintain their relative incomes or realize their aspirations. Both for speculators and for ordinary householders rising property prices made investment in property look like a band wagon everyone had to get onto. People bought into the housing market wherever they could and remortgaged precariously as prices rose. The financial sector handling and speculating on these debt found its share of all US corporate profits rising from 15 per cent in 1980 to 40 per cent in 2003. As the bubble grew bigger, the wose its eventual and inevitable burst became."