Why Inequality Matters

Sociologists tend to assume inequality matters; economic liberals tend to assume it does not, saying inequality generates dynamic incentives in competitive markets. It is not that there is nothing to this argument, as regards mild degrees of inequalities. However grave inequality has a corrosive effect on social foundations. Why is it that there is a consensus of the need to eliminate poverty, but division over the need to address serious inequality? Beyond this, what are the key reasons for grave inequality being anti-social? This paper engages the economic liberal paradigm, arguing that grave inequality is as socially incapacitating as, and often constitutive of, extreme poverty. It makes a distinction between the ‘foundational’ problems of grave inequality and its consequential effects.

The foundational problems are that grave inequality: denies the social identity and agency necessary for realising the right to self-determination; blocks individual citizens’ active participation in society, necessary for democratic development; excludes children as respected members of society; and is constitutive of poverty and similarly incapacitating. The consequential problems (both as effects and as feedback to the foundational problems) are that grave and persistent inequality: is perceived as illegitimate and thus generates resentment, crime and insecurity; creates disadvantage in a range of key social fields such as education, health and social security; and it drives anti-social feedback effects by undermining social cohesion and entrenching inequity across generations. Identifying these principal or ‘foundational’ anti-social features of grave inequality, this paper argues, is important to building a broader on the idea that inequality does matter.