A spoonful of inequality helps the medicine go down

by Saurabh Jha

ON-BN562_RichFa_G_20151028112638The conventional wisdom in the circles I hang out in – pro-Hillary, morally conscious, happy bunnies who pretend to specially enjoy French wine, and opera – is that the greatest scourge visited upon humanity after the plague is inequality of wealth. These people worship Pope St. John Paul Piketty and canonize Bishop Paul Krugman. Not only is inequality bad for its own sake, they say, it actually makes people ill, like medically ill.

Their premise always struck me as being specious. I once took them through a thought experiment. Imagine, I said, you travel in time to the Bengal famine. There was a lot of equality then – people were equally malnourished. The muscle wasting from marasmus made sure that everyone’s ribs protruded equally. The loss of protein from kwashiorkor made sure everyone’s belly popped out without prejudice. Starvation because of poverty is a great leveler. It cares not about gender, caste or religion. It is non-judgmental.

You say to a starving Bengali: “I have a solution. It’ll give you food, occasional shelter, internet and a mobile phone. But here’s the catch. An ostentatious man called Mukesh Ambani will own the most expensive house in the world, and because you’ll always be reminded of his house, you might feel like crap. You’ll live longer, be well fed, but will feel like crap when you see someone driving a Mercedes. Want it? It’s called capitalism.” I suspect the starving Bengali might say “hell yes, please bring on this inequality. I want food. I don’t give a damn about this Ambani fellow.”

Inequality affects economics professors at Ivy League colleges in the US more than the rickshawallah in India. You can understand why. It’s painful for a tenured professor to sit in airline’s economy class, and drink Chivas Regal Red Label (it tastes hideous, BTW), whilst the undeserving 1 % drink Blue Label in business class. The rickshawallah in India doesn’t suffer from the maladies of the almost hyper affluent.

The response to my thought experiment was “yeah, yeah.” I was dismissed as a ranting, remorseless Scrooge. A landmark study by an economist, Raj Chetty, that just came out in a prestigious medical journal will give me the satisfaction of saying “told you so.” The study looked at the relationship between income and life expectancy and found that the rich live longer than the poor. The richest 1 % men live, on average, 15 years longer than the poorest 1 %.

This isn’t surprising, but the researchers found more and this is where the plot thickens. They found that the life expectancy of the poor depended on where the poor lived, not the degree of income inequality per se. The poor who lived in neighborhoods (commuting zones) of the highest life expectancy lived longer than the poor who lived in neighborhoods of the lowest life expectancy.

It is conceivable that those who stare at inequality constantly live longer than the poor who live near the poor. Whoa! Let me rephrase. The poor who live near equal brothers – i.e. in a milieu of equality – die sooner than the poor who are exposed to this toxic carcinogen called inequality. The difference in life expectancy for men of 5 years may not seem huge, but decimates a logic that pervades medical and public health circles, and has escaped scrutiny because the logic occupies a carapace of nobility. “You against inequality – you Ming the Merciless.”

In fact, Chetty’s study demolishes ideologues of all stripes. It finds that life expectancy doesn’t correlate with amount of medical care. Which means that the poor aren’t dying sooner, en masse, because they can’t access the emergency rooms on time, or because they lack insurance. Sorry Obamacare.

It finds that the rich are not just getting richer but more immortal. Between 2000 and 2014 the top 5 % gained an extra 3 years of life expectancy, and the bottom 5 % gained barely more than nothing. In some areas people have a lower life expectancy in 2014 than they did in 2000. So much for trickle-down economics. It found that the poorest 1 % Americans have the same life expectancy as the Sudanese. Sudanese exceptionalism, you might quip.

So why are the poorest 1 % not living as long as the richest 1 %? The easy answer is “habits.” The rich have different, better, habits. Conservatives might say the rich make better choices. But that answer is as pathetically naïve as blaming inequality. Habits don’t arise from thin air. It’s easier making cycling a habit when you have a bike path than when dodging bullets. It’s easier having a bike path in or near an affluent neighborhood. Affluent? There you go – it’s inequality all over again.

But bike paths alone won’t help. They’re necessary but not sufficient. The will to ride the bikes must exist. That will is driven by hope – hope about the future. Hope needs aspiration. To induce aspiration you need education – proper schools – and jobs.

What is the message for policy makers? It depends on the eye of the beholder. The perennially moralistic Vox is still, predictably, harping on about inequality. Vox has a peerless ability of missing the point. Let me state, in no order of personal prejudice, a few things which won’t help the poor: hospitals, bicycle helmets, screening, millennials fretting about names associated with historical wrongdoing, and occupying Wall Street. Sorry social justice warriors – all of that righteous rage may be for naught.

What the poor need is an infrastructure of hope. They need schools with top quality teachers who care. They need public parks. They need the government to invest in public works to revive jobs. In fact, there are only three reasons for connecting entire US with rail: jobs, jobs and jobs. They need the rich not to be segregated in enclaves where they self-flagellate about inequality drinking Dom Perignon. They need the rich to be living near them, using the same supermarkets, drinking in the same pubs, eating from the same salad bars, their kids attending the same school. Inequality is not bad if the poor can get on the conveyor belt to better opportunities. Don’t demonize the conveyor belt. Fix it.

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