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The Redistribution Delusion

July 9th, 2010 Posted in Culture, Economics by

One of the most important books for left liberals in recent years has been the “The Spirit Level: Why More Equal Societies Almost Always Do Better“. It’s important for number of reasons, however the main one is that it appears to provide an empirical basis to justify policies that redistribute income for no purpose other than redistribution.

In some Liberal Democrat and Labour circles it has been treated with a sense of uncritical reverence usually reserved for religious tracts.

This is not entirely without reason, it is a good read, and the weight of statistical evidence, both comparisons between countries and between US states, across multiple social trends do seem to point to unarguable case that more equal societies are, on the whole, nicer places to live.

Those then claiming to seek “evidence-based politics” should be pleased by the detailed rebuttal issued by Policy Exchange todayBeware of False Prophets.

The 125 page white paper is also a cracking read and debunks the Spirit Level correlation arguments almost entirely, bar in the one instance of infant mortality, often using their own evidence. A table at the end summarises the problems


The rest of the paper goes through each of the claims in detail and provides comparative analysis, showing what happens when extreme cases are removed (for example the US heavily distorts murder rate correlations, Japan life expectancy).

Clusters of nations that do not explain inequality relationships elsewhere, but might reflect the result of cultural history (Remove Scandinavia and most inequality relationships collapse between the rest).

Highlighting selective use of evidence, such as country choice, and which social statistics they regard as important (they ignore all trends where more equal societies have it worse for example suicide rates, HIV, boozing and divorce).

That socialism encourages suicide does not surprise me, who aspires to be an arbitrary average? But I remain respectful of people’s right to choose the miserable philosophy for themselves. The Spirit Level also ignores rapid improvements in life expectancy in countries where inequality has also been rising.

The Spirit Level does not look a correlations that better explain social trends than income inequality. In their US data for example the uncomfortable conclusion of the counter-analysis is that “the proportion of African-Americans in a state is often a much stronger predictor of social outcomes than the level of income inequality”. True or not, it is a stark warning against using isolated social trend correlations to drive prescriptive policies.

On a smaller note within the same theme, when I had the opportunity to put a question to the author of the Spirit Level at a meeting last year, I asked him whether if his or similarly modelled data showed ‘rich’ countries with less freedom had better social outcomes than those with more freedom, he would advocate policies that reduce freedom. His prickly non-response did not suggest the kind of critical open mind that separates genuinely curious researchers from political activists.

An approach evident in his Equality Trust response to the Policy Exchange paper today, which does little more than reiterate previous points, rather than answer the challenges raised.

Prior to this publication I had thought the main problem with the Spirit Level was that it confuses correlation with causation, and suffers the delusion that very different states can simply be planned into better shape by state action if only we knew the right lever to pull. But this powerful rebuttal also makes clear that the correlations used are highly suspect, selective, and in many cases simply wrong.

As the report notes “Despite the enthusiastic reception this book has received from social commentators, its claims are unsupported. The ethical debate over inequality remains unresolved.”

This is not an argument that inequality doesn’t matter, or conversely that it’s a good thing. It is an argument against the distributionalist position that it is the only thing that matters or automatically more important than other social goods.

It is against the notion that by throwing money at redistribution all other things improve. General social trends it would seem are bad at improving your health for you, you may need to make some effort yourself.

To believe the Spirit Level has ended the left/right distribution/aspiration debate in politics, let alone within liberalism, is a delusion.

14 Responses to “The Redistribution Delusion”

  1. Charlie Says:

    Scandinavian countries have the advantage of never having large heavy industrial bases with large unskilled-semi-skilled populations. The development of computer and electronic controls systems in the late 70s and early 80s together with the rise of the asian economies led to the large reduction in the employent of unskilled people in the steel, coal, dock, shipbuilding, textile and car industries. In the 40s , Sweden sold iron ore to the Germans while the UK sold her industries and became indebted fighting a war. The Scandinavian countries were not particularly heavily bombed during the war and therefore needed little re-construction afterwards. In the mid 19 century the large scale emigration from Sweden to the USA did much to reduce the agricultural workforce.

    When talking about inequality it is not so much the highest paid which needs to be reduced but the percenatge of poorly educated unskilled and poorly paid people. Reducing someone’s salary from £1m to £0.5m does little for the poor. Educating and training people so that they become skilled and their salary increases from £12K a year to £30K a year and the tax threshold is increased from £6k to £10K, greatly increases their disposable income.

    The Labour Party and the Unions have not considered the impact of technology and globalisation on business. The independence of India, Pakistan and Sri Lanka did much to reduce Lancashire cotton expports to these countries .
    Technology in general reduces the need for unskilled and semiskilled labour and creates new industrie often requiring higher levels of skills. Globalisation increases competition. Germany has a much large and better educated workforce which enables an advanced manufacturing sector to export high value goods. German car workers can earn $41 /hr but the overall labour costs compared to the value of the goods produced enables are low enough to still make the goods value for money. To reduce inequality, we need a large highly educated and skilled workforce with high productivity, low total wage costs, producing high value goods for export, which enable indvidual salaries to be high.

  2. Jon Says:

    Even without having read The Spirit Level it would be easy to point out many problems with your post. But let’s keep it reasonably snappy, and point out just one faulty criticism of yours, one ridiculously faulty criticism of the Spirit Level which is in fact addressed quite directly, and one passage from the Saunders piece that is pure ignorant, ideological bollocks.

    You say his response to a clearly hostile questioner was a non-response, but don’t actually say what it was. You say the response doesn’t answer the challenges, except it does in multiple clear instances. You seem very keen to position yourself as an “evidence based” thinker but, well, the evidence suggests the complete opposite.

    Saunders talks about rapidly increasing life expectancy despite income inequality. But he has added rapidly growing economies to the dataset. Any economist with half a brain could tell you this changes things significantly – rapidly increasing prosperity means rapid improvements in life expectancy. Change the premise, change the dataset, and then challenge the conclusion?! Oh, I see, he’s a sociologist. OK, so let’s assume logic isn’t his strong point.

    How about this passage: “When people are happy, confident and optimistic, fertility rates are likely to be strong, for having children is an affirmation of faith in the future. When people feel pessimistic and fatalistic, on the other hand, fertility rates are likely to be lower.” Spare me the cliched Christian fundamentalist commandments from on high to keep ’em barefoot and pregnant, thanks, I thought this was a liberal site. In reality, affluent countries have lower fertility rates because he’s got it exactly the wrong way around. I mean, just how ignorant is this guy?

    How anyone on a site called Liberal Vision can praise to the heavens a document that includes such cliched tripe I have no idea. Although that might explain why you’re going on about uncritical reverence. Listen, I think you might be suffering from a nasty case of projection. Sit down, take a few deep breaths and have an aspirin. You’re going to be ok.

  3. Andy Mayer Says:

    “You say the response doesn’t answer the challenges, except it does in multiple clear instances”

    Perhaps you could summarise these clear instances and their relevance. My reading of the Equality Trust repsonse is it simply repeats quick summaries of the evidence base the PE report criticised in detail.

    Cutting through some of your other presumably calm and considered invective, personally I’m a secular humanist and I have no idea what Professor Saunders chooses to believe, but I would be very surprised if I agreed with all his views. It is though not very liberal or evidence-based to attack someone on your assumptions about their beliefs.

  4. Graeme Kemp Says:

    Liberal Vision?

    well, I’m a fan of ‘The Spirit Level’ and the previous books by Richard Wilkinson: ‘Unhealthy Societies’ and ‘The Impact of Inequality.

    What has impressed me about these books is their detailed thoroughness, high regard for facts, ability to refute alternative explanations – and global search for evidence.

    It’s not just Wilkinson’s or Pickett’s own research that’s included – but academic research loads of other people, in peer-reviewed journals. Are they all wrong? are they all mis-representing data? It seems unlikely.

    A very divided, unequal societiy does indeed tend to have worse physical and mental health, higher homicide rates, worse levels of obesity and more teenage pregnancies. Levels of trust and social mobility aren’t as good as more equal nations. Denmark has better social mobility than the USA. The claims of ‘The Spirit Level’ hold up.

    It’s worth both reading the books above and looking at the web-site for The Equality Trust at:

  5. Graeme Kemp Says:

    The third paragraph should read:

    “…but academic research from loads of other people…”

  6. Dave Atherton Says:

    Sorry to spoil the party but Wilkinson and Pickett’s book is what we have come to expect from the left. Junk science, manipulated statistics and complete b0ll0cks.

    Author and historian Chris Snowdon has done a wonderful fisking this tawdry piece of modern day Marxism.

    “The Spirit Level Delusion not only successfully and dramatically undermines much of the evidence in The Spirit Level, but also takes on the other fashionable opponents of economic growth… His engaging discussion unpicks the evidence of the anti-growth brigade and demonstrates that it is selective and partial. This book is excellent “tube reading”.

    — Professor Philip Booth, City AM

    “Snowdon picks so many holes in the theory that were it a building it wouldn’t be passed as structurally sound by the most crooked of third world local government surveyors… Next time someone starts spouting off about “equality” – a goal that has dug more graves than all the gods in history combined – send them a copy of Snowdon’s excellent book and make sure they read it from cover to cover.”
    — Ed West, The Telegraph

  7. Geoffrey Payne Says:

    There is a lot to be said about this, but I just want to make some quick points.
    On the very high murder rate in the US, it was acknowledged in the Spirit Level that this was also to do with the very high availability of guns. The same is also true in Finland which has an unusually high murder rate. Even taking that into account, the correlation between murder rates and inequality between the remaining countries is still high.
    Also on equality for women, countries such as Italy, Austria and Japan do particularly badly and in the Spirit Level it is acknowledged again that cultural factors are more important than inequality on this issue.
    The alternative hypothesis proposed by Peter Sanders is alarming. He claims the correlation is stronger around ethnocentricity and we should look at that instead. He is entitled of course to make objective studies that may reach uncomfortable conclusions, but he should also make clear that his research does not make the same mistakes as the eugenics movement in the past, and in more recent times the flawed research linking IQs to ethnic groups.
    In the ensuing debate;
    I do not see that Peter Saunders responds to the reference Wilkinson makes to the BMJ report, he mostly just repeats his previous opinions.

  8. Geoffrey Payne Says:

    I mention the BMJ research in my last comment. anyone who thinks the Spirit Level is fatally flawed, please explain how this research is also flawed as published in the BMJ;

  9. Andy Mayer Says:

    There’s a reference to the BMJ debate here:

    I followed your BMJ link. It’s unrelated to the Spirit Level debate specifically, affirms conclusions in the health/inequality debate are highly contested due to lack of consistent data, shows no causality, other summarising speculations, and draws their own conclusion of a very modest link, based on aggregating selected studies from several thousand, and that conclusion should be taken with a great degree of caution. Nor do they claim to be the last word in this debate. I’m unclear then why you think this report needs to be debunked, it doesn’t agree with the hardline certainties of the Spirit Level.

    On your first comment I don’t think Saunders is proposing race as an ‘alternative hypothesis’. What he’s doing is showing how dangerous it is to try and reduce complex and contestable social problems to a single highly-correlated driver, particularly using selective data, which is what the Spirit Level does.

    He is saying you cannot conclude from the Spirit Level that governments should persue highly interventionist policies to reduce inequality, anymore that they should pursue highly interventionist policies to increase racial homogeniety. That is the implication not your rather unworthy suggestion that he needs to make some sort of statement about not being a fan of eugenics.

    The competing values point though was also the reason for my question to Wilkinson on freedom.

    On both race and freedom a liberal would not find it difficult to say that certain rights and liberties matter more than outcome equality.

    Even if for example it could be proven homo-ethnic societies were on average for exeample happier and healthier than plural socieities we would still favour pluralism.

    Liberals that respect economic freedom, whilst we agree with redistribution to prevent absolute poverty, insure against harms like unemployment and ill-health, and provide good access to opportunity through education, do not agree it is a good in itself, and see the level of redistribution as a contestable political point requiring democratic consent to resolve.

  10. Sara Scarlett Says:


    I take it, in regards to murder, there are presumably no statistics cited in The Spirit Level as to why countries such as Canada and Switzerland have similar levels of gun ownership as the US and the same rate of murder as the UK. The premise that more guns automatically = more murder is not entirely sound.

    Even if more equal societies are the be-all and end-all it still needs to be justified whether or not socialism is the best way to accomplish this. Japan, for instance, is one of the most economically egalitarian country in the world and is probably the most capitalist.

  11. Charlie Says:

    Japan has a highly developed respect for crafstmenship and hard work with a very low percentage of the populace having low academic achievement and being unskilled. Britain probably has 40% of the population having low levels of numeracy, literacy combined with being un-skilled or semi-skilled. Generally speaking a certain educational standard is required to become skilled and enter better payed employment. If the 40% of the population who were unskilled or semi-skilled could beome skilled and enter employment earning over £25K we would greatly reduce social inequality.

  12. Ed Joyce Says:

    In order to get the benefits alluded to in the spirit level we do not need to tax and then transfer funds to those who have less wealth. Instead we should eliminate tax for those with low incomes (Lib Dems in government are working on this – Labs and Cons would not do this alone without us). This will equalise without increasing state involvement.

    We are starting at the bottom of the income tree and working up. This should be done to reduce welfare spending and to reduce the involvement of the state in the lives of citizens.

    Where tax is necessary it should be paid on unearned windfalls. A good place to start would be to remove tax on income an place it on land values.

    Taxing low levels of income increases the poverty trap. In my experience ‘Spirit Levellers’ don’t like the idea of paying tax on land. They would rather tax low earners (if the choice is a stark one between those two options). This makes me question their commitment to the idea.

    Ed Joyce

  13. Tom Papworth Says:

    Andy Mayer: ‘The Spirit Level does not look a correlations that better explain social trends than income inequality. In their US data for example the uncomfortable conclusion of the counter-analysis is that “the proportion of African-Americans in a state is often a much stronger predictor of social outcomes than the level of income inequality”. True or not, it is a stark warning against using isolated social trend correlations to drive prescriptive policies.’

    Geoffrey Payne: “The alternative hypothesis proposed by Peter Sanders is alarming. He claims the correlation is stronger around ethnocentricity and we should look at that instead. He is entitled of course to make objective studies that may reach uncomfortable conclusions, but he should also make clear that his research does not make the same mistakes as the eugenics movement in the past, and in more recent times the flawed research linking IQs to ethnic groups.”

    What occurs reading these two paragraphs is that Andy’s passage implies (or seems to) that Prof. Sanders believes that there is a causal link between ethnicity and poor outcomes. My understanding of the evidence is that there is a causal link between ethnicity and poverty (blacks in America are still living with the legacy of discrimination; immigrants on average are poorer than natives) and a causal link between poverty and poor outcomes, but that it is a false syllogism to assume that ethnic minorities “predict” poor outcomes.

    However, this may depend on what Sanders means by “predict”: he may just be saying that in practice – because of the factors I mention – one can use ethnicity as a proxy for poor outcomes because of the frequent correlation with poverty.

  14. Alun Says:

    “Those then claiming to seek “evidence-based politics” should be pleased by the detailed rebuttal issued by Policy Exchange today… The 125 page white paper is also a cracking read and debunks the Spirit Level correlation arguments almost entirely”

    You are no less guilty than those you accuse on the left. You accept without criticism the conclusions of those who’s political ideology you already share.

    Let’s look at the facts, The Spirit Level was written by two academics. This so called “rebuttal” is by a right wing think tank with a political axe to grind.

    Your right wing ideology is showing. You don’t sound like a Liberal, so much as an unreconstructed Thatcherite ideologue.