Is there something morally wrong with inequality? Is inequality good or bad for economic growth? How does inequality affect political participation and engagement? Who decides in the politics of inequality? These four questions are in the centre of the promotional paragraphs at the back of the book. However, what is delivered is more than an attempt to answer these difficult questions. And less. At the same time.
More, because a number of topics beyond the major themes are also discussed in the text: measurement issues (of inequality itself and of the efficiency of the welfare state in reducing inequality), for example, receive relatively long chapters and sections. Less, because this is not a genuine research paper with a research question-hypothesis-empirical test-discussion-conclusions sequence in the focus. Rather, a number of issues related to inequality are discussed, with attention paid to a number of topics with more and less relevance to the four questions above. At the end of this review I will make suggestions to develop the material into a very promising direction. But let us start at the beginning!
When defining the problem, the authors argue that, from the philosophy literature alone, one cannot make a judgement about the moral merits or detriments of inequality. Arguments for the irrelevance of the concept of social justice (as in Nozick's libertarianism, Reference Nozick1974) but also for the lexicographic preferences to prioritize the least well off (as in Rawls's theory of justice, 1999) can all be morally well grounded and consistent, without having a genuine “moral” meaning on inequality. Hence, after discussing the pros and cons, arguments and refutations, the authors conclude that inequality is neither good nor bad per se (Chapter 2). Moreover, as they argue, it would be difficult to find a convincing answer to the question of why inequality in itself should be considered bad. Nor that it should be good, in fact. However, the authors take a consequentialist approach, arguing that it is not simply the existence but, rather, the effects of inequality that matter. And the consequences of inequality are found to be negative (chapter 3). They argue (after reviewing the relevant literature), that the consequences of excessive income differentials for income anxiety, for health status, and for life satisfaction are clearly negative. Inequality, therefore, is a social stressor that causes psychosocial stress and, as such, will not simply affect negatively the well-being of the worse off, but all members of an unequal society. Note: bivariate presentations of all kinds of social bads plotted against inequality abound – before, by and since Wilkinson and Pickett, Reference Wilkinson and Pickett2009. Fewer though are the systematic accounts and tests of the real causal chains. Nevertheless, they exist and accumulate, as also shown in the book. This finding is already a reason to be bothered. As a title to a section says: “inequality gets under our skin” – and this is a not very comfortable feeling.
In addition, as recent empirical evidence suggests, great inequality implies lower chances for social mobility – not simply because larger distances are more difficult to jump, but also because the really crucial period of individual development (the first few years of human life) is very much determined by family background – a fact having a strong effect on persistence at both ends of the social scale.
When turning to the large heterogeneity of the level of inequality tolerated by contemporary democracies, the authors carefully investigate a number of frameworks and models offered by the literature. They (fortunately and wisely) refuse to endorse the very simplistic theories of the assumed “straightforward and linear” relationship between economic growth and inequality. They do it not only with the optimistic view on inequality (according to which economic growth will tend to lower inequality), but also with the pessimistic view (i.e. that equality hinders growth). Actually, in chapters 6 and 7, the authors (rightly) underline that there is no universal relationship (nor a universal trade-off) between growth and inequality. Much depends on how the economic growth is achieved (and how the production and distribution process is organized) in various countries – the whole process being framed by the social context and by the institutional design of the social policies. There are “varieties of capitalisms” AND different welfare state regimes. Dependent upon which variety of capitalism (liberal, social, statist or post-communist market economy) prevails and how the man-made regulatory and organizational settings (defined by institutional backing of human capital formation, centralized or decentralized wage setting, and the business environment) are organized, the production process results in different inequality regimes, which then combine with variations of welfare states. The authors’ vote seems to be more in favour of the (mostly Nordic) social market regimes as the ones investing a lot of resources on human capital formation, with wage setting left to agreements between the partners and letting firms go for profits, and, via these practices, producing low inequality but relatively high growth regimes.
Further, the amount of public social spending alone does not say much on welfare state redistributive role – it can be more or less inequality preserving or reducing. Hence the forms, ways and techniques of social spending delivered matter a lot for results in terms of inequality and by the organization of the welfare regimes, the countries have different chances to achieve various inequality levels (chapter 8). Both the way of how production is organized (economic growth achieved) on the one hand and how spending is organized and managed (the kinds of the welfare states functioning) on the other hand will, therefore, matter for patterns of inequality. All in all, none of these are matters of fate; they are man-made, rather. Consequently, the politics of inequality is all about setting these institutional contexts.
This is the major argument of the book. Then, the politics of inequality entails the full cycle of preference formation and articulation, followed by the responses of the elite to the expression of these preferences via party politics and policy formation, leading to redistributive practices. Chapter 9 deals with how citizens’ preferences regarding redistribution are formed and how are they articulated. It is argued here that redistributive preferences can, to a great extent, be derived from the material position of the citizens (the rich support less, the poor support more redistribution). The argument, perhaps, over-emphasizes vertical differentiation in the determination of preferences over public spending (think of the fact that a large part of redistribution in existing welfare states is not between the rich and the poor but either between phases of the life cycle or between various demographic groups like those with children and those whose preference is to stay childless). However, the organization of the argument is very logical and clear cut, so it provides a very good introduction to and overview of the issues relevant to the understanding of redistribution, and preferences over it. In chapter 10, after reviewing bottom-up (with preference aggregation in the focus) and top down (with elite dominance mechanisms of policy formulation) aspects, the authors conclude that whatever is the formulation mechanism, it is good for democracy if the poor are better represented and the elites are constrained in their “inegalitarian pursuit”.
In a final conclusion, the analysis of the social consequences of the great recession highlights a wide variation: showing that societies cope differently with inequality shocks. As the authors say: “it is unlikely that we will witness path diverging developments in the liberal and statist market economies that will reverse inequality trends. In fact, there are huge challenges – fiscal problems, changing family structures, new social risks, mass migration and globalization – that reinforce, rather than moderate inequality, even in the social market economies” (p.7). Hence increasing distributional conflicts can be expected. Chapters 9 and 10 frame the understanding of the core political issues this way (putting the power resources theory interpretation of welfare state developments into the centre of the argument). Chapter 11 then outlines some future risks and potential responses of the polity.
The book, overall, definitely deserves a read. I agree with both endorsers at the back, that it offers important insights into the determinants of the politics of inequality. Those readings carefully will receive a grand tableau of theoretical and empirical arguments for and against inequality and various methodological choices to measure and different welfare state policies to tackle them. The book provides an excellent panoramic tour over major issues relevant for political science, sociology and economic policy students, so it could be easily transformed into a textbook reading for B.A. courses on “introduction to the politics of inequality” at various universities. I would definitely go for this option should I be in the authors’ place. The language (didactic explanations, patient tone, ambitions to synthesize, etc) already make it a perfect material to be developed this way. This would require some investments from the authors – inserting discussion topics and some selected further readings at the end of the chapters could be the first. Updating links to recent literature could be usefully assisted by the grand volumes edited by Atkinson and Bourguignon, Reference Atkinson and Bourguignon2015, in addition to analyses produced by Salverda at al., Reference Salverda, Nolan, Checchi, Marx, McKnight, Tóth and van de Werfhorst2014 and Nolan et al., Reference Nolan, Salverda, Checchi, Marx, McKnight, Tóth and van de Werfhorst2014 for empirics and interpretation of inequality developments. Also, perhaps, on the political processes there are some recent, not well-reflected literature items. But overall the investment would be worth being done. From the publisher, another round of review of the charts would be needed. At the current version there are some improperly labelled and difficult to read figures and tables in the book. There is a room for improvement in this respect, even if the book is not transformed into a textbook.
Thereafter, lay audience and members of the political class would also be advised to read this text. The basic message is that inequality comes about in systems that are man-made – hence, fixing it also relies on wishes and efforts to do so. The book even gives some guidance on which directions to start in.
