Do we need policies to reduce inequality, or should we simply allow economic growth to do so? This is the question posed by a recent paper by Andrew Clark and colleagues. They find that, in the UK and elsewhere, economic growth reduces inequality of happiness.
This isn't simply because it reduces the amount of abject misery. Growth also reduces the number of people who say they are very happy. This might be because wealth increases our options and hence the opportunity cost of our preferred choice. For example, work isn't too bad if it gets you out of a joyless slum, but it can be a misery if it keeps you off the golf course or guitar.
This finding is awkward for the left. If we believe that what matters most is people's well-being, it suggests that the most important inequality should be addressed not by redistribution by simply by promoting growth.
So, what answers might the left have to this? I can think of three:
1. Policies to promote growth require redistribution, to the extent that wealth inequalities are an obstacle to growth. This is the thinking behind wage-led growth and the asset redistribution ideas of Sam Bowles.
2. If people adapt their desires to their circumstances, or if other cognitives biases reconcile them to inequality, they might be content with injustice, but this would not necessarily legitimate the system: we would consider slavery wrong even if all slaves were content. As Amartya Sen said:
Consider a very deprived person who is poor, exploited, overworked, and ill, but who has been made satisfied with his lot by social conditioning (through,say, religion, or political propaganda, or cultural pressure).Can we possibly believe that he is doing well just because he is happy and satisfied? (The Standard of Living (pdf), p12)
Personally, I think these are good answers. But Clark's paper should force leftists to think more about why inequality matters.