BEZRUCHKA’S BLOG #8: Inequality Kills, Even The Environment
|With all this talk about the bad things inequality does, such as harming and killing us, I am occasionally asked what inequality is good for since we have so much of it. Is there some good in having a few people being so incredibly wealthy and the rest of us making do with the droppings that trickle down? It used to be said that it was good for economic growth. But even that shibboleth, mostly voiced by those rich, has been shown to not be true. The International Monetary Fund and other experts no longer give this explanation as a reason to have such a huge hierarchy.Economic inequality does nothing good for the planet? Wilkinson and Pickett in their book The Spirit Level document many environmental impacts of inequality. Much research points out that markers of planetary health such as CO2 and other greenhouse gases concentrations, municipal waste, recycling, fish and meat consumption are worse in more unequal nations. Business leaders in more equal countries are more likely to comply with international environmental agreements, and more equal countries are more likely to recycle waste materials. A study from India and China relates income inequality to CO2 emissions.An important study in the United States looked at political power distribution, the environment and public health among the 50 States. Their conceptual model for power distribution included income distribution, income per capita, race and ethnicity. Power distribution was measured by voter participation in the 1992 presidential election, tax fairness (how much the poorest fifth of a state spend on sales & excise taxes as well as the tax burden of the top 1% to the bottom 60%, and state personal and corporate tax policies. Also included for power distribution were measures of access to Medicaid (state healthcare program for the poor) and educational attainment. Manufacturing, urbanization and population density affected environmental policy and environmental stress. Environmental stress was measured by air and water pollution, energy use and production, toxic chemical release, hazardous and solid waste production, workplace conditions, agricultural production, as well as forestry and fishery resources.Outcomes were infant mortality, premature death (under age 65) and a composite public health index. At the state level, a measure of income distribution, low per-capita income, and race/ethnicity were significantly associated with worse health outcomes. The concept of federalism in the U.S. means that any powers not directly in the Federal Government (Executive branch, Congress and Supreme Court) go to the state. Thus U.S. states have considerable latitude in their various policies that impact human welfare and the environment. State policies and policy domains range from liberal to conservative with liberal ones more likely to have favorable environmental policies.Studies looking at individuals show that household income inequality is a major driver of carbon emissions with the top 10% income households emitting considerably more carbon than the bottom 10%. When wealth is considered the top 10% wealthiest households emit more than the bottom 10%. This makes logical sense as people with more income or wealth can consume more products and services that harm the environment.Capitalist societies are focused on economic growth, namely increasing the total of goods and services, typically measured by GNP (gross national product). One way to grow the economy is to use more fossil fuels as energy sources and emit more carbon. Missing from market price calculations (that is what we pay for a good or service) are what are termed externalities. If you buy a gallon or liter of gasoline for your car, you are not charged for the environmental pollution or depletion of fossil fuels use that fuel causes. These are externalities and are not factored into the price you pay. Fossil fuel producers (and the consumers) thus receive huge subsidies by not having these costs factored into prices. Even today with concern for the global climate crisis, regulation of fossil fuel production in the United States has not been successful. A recent Supreme Court decision limits environmental protection.Simon Kuznets was an influential American economist who considered that with more economic growth income inequality would increase until it reached a peak. Then it would decline with further growth. This hasn’t happened. This is the so-called inverted U Kuznet’s curve. Similarly an environmental Kuznet’s curve has been postulated, namely that initially the environment would deteriorate with increasing economic growth but eventually it would reach a turning point so further growth leads to a better environment. In the early 1970s I came across Kenneth Boulding’s work on economic growth. I remember his words today: “anyone who believes that exponential growth can go on forever in a finite world is either a madman or an economist.” Or as Edward Abbey quipped back then: “growth for growth’s sake is the ideology of the cancer cell.” So-called green growth is another pacifier we are told to stick in our mouths. Given the huge rise of income and wealth inequality in the last years coupled with the lack of much economic growth, it is abundantly clear that inequality is not good for growth.There are now many more arguments made for the harms arising from increasing inequality. The number of threatened species on the planet, at the country level, increase with increasing inequality.Inequality is about political power and how it is distributed. Consider power as the capacity to cause pain or pleasure in others at relatively little cost to oneself. There can be direct power such as wielded by the US President who has been at liberty to invade other nations and kill several million people as in Afghanistan and Iraq. Another form is agenda setting power, the ability to keep discussion on or off the table, as with the various types of media. Consider that most Americans would like to see inequality decrease or to have a single-payer health care system. Not on the table. Another is framing power, the capacity to make the outlandish seem reasonable and the unappealing seem desirable. Tax cuts for the rich are an example. They are presented as good for us. I’m reminded of a cartoon in which a banker and a worker dude are in a bar. The worker says to the banker: “I’m all for tax cuts for the wealthy as I might win the lottery someday.”Power has been called the ultimate aphrodisiac. Power is most effective when least observable. Those with great power prefer to see their power as conferred by the market or ordained by God. And those of us with less or no power prefer to not see ourselves as subject to forces beyond our control.Big corporations have the most power in the U.S. and increasingly around the world. Corporate CEO pay has skyrocketed (now over 600X the least paid) and there is no serious intent to lower it. Instead there is discussion of increasing the minimum wage. This won’t do much for the maximum wage which will continue to balloon. Consider inequality or power as a highly toxic odourless, colourless, invisible gas that kills us through various diseases or trauma that we are almost entirely unaware of. Corporations are getting away with murder.One recourse for poorer white Americans is to acquire various weapons. This gives them a sense of power. The recent spate of mass shootings in the U.S. is related to income inequality. Counties with more inequality as well as high incomes have more such events. More inequality may foster anger and resentment leading to these shootings. It is also a weapons issue as there are more assault weapons in the hands of civilians than in the U.S. army. And more guns than people. The recent atmospheric rises in inequality leads to the purchase of more weapons, a huge business. It is unlikely much will be done to control guns in the U.S.If we agree that inequality is bad for us, then what will we do with the resources recovered when we decrease inequality? Next month we will look at early life as the part of the lifespan that needs help.|
Inequality is good for the growth of CEO income. And if inequality is not good for growth, then it is also not good for the environment.Would emissions rise if inequality declined, as the poor get richer and consume more?