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Psychiatrist J.M Balter writes a long e-mail to me in response to my Barron’s review of Thomas Piketty’s Capital in the Twenty-First Century [2]. Here’s the relevant passage (shared with Dr. Balter’s kind permission):
I’m concerned that if we as a society ignore what you [Boudreaux] ignore as an individual that our health will get worse over time. I can assure you that inequality gives rise to dangerous levels of stress in many people. I dare say most people…. [S]tress is responsible for a number of serious illnesses…. Income redistribution to my mind is justified mainly on public health grounds.
I’m no physician so I cannot – indeed, I do not – question Dr. Balter’s claim that excessive stress is unhealthy. Nor do I question here the proposition that greater inequality, all else held constant, leads to a greater incidence of excessive stress. But I do emphatically reject the notion that (1) the trend of market economies over time is to increase inequality in ways that promote greater stress, and (2) that government-orchestrated income redistribution will in any way that is relevant to this discussion about health reduce stress. The very opposite might occur.
As I suggest in my review, and as I’ve pointed out many times here at the Cafe (for example here [3]), as well as in this essay [4], consumption equality is growing (regardless of what is or isn’t happening to monetary wealth and income equality). The differences in life-styles between the superrich and the poor in America, although very real, are shrinking over time. (I’ll mention also that the absolute standard of living of even the poor in America is rising – surely a positive force, ceteris paribus, for reducing stress.)
Also, even if my claims in the previous paragraph are wrong, it does not follow that even successful efforts by government to ‘redistribute’ wealth and incomes in ways that create greater (even perfect!) equality among all people in a country will have the positive health benefits that Dr. Balter supposes that they will have. Monetary incomes and wealth are not the only dimensions in which people compete with each other; nor is money the only determinant or measuring rod of status. If government somehow managed to reduce or eliminate money as a determinant and as a measuring rod of status, some other determinant and measuring rods would arise in its place. You’ll forgive me if, to drive this point home, I again reproduce [5] here a letter of mine that appeared in an April 2008 issue of The New Yorker:
John Cassidy bolsters the hypothesis that people’s health is harmed by relative (rather than absolute) deprivation by citing evidence from the animal kingdom (“Relatively Deprived [6],” April 3). For example, “dominant rhesus monkeys have lower rates of atherosclerosis (hardening of the arteries) than monkeys further down the social hierarchy.”
Contrary to Cassidy’s suggestion, however, such findings do not support policies to redistribute income. After all, animals with social hierarchies have no monetary income. Because status among humans is determined not only by income but also by traits such as political power, athletic prowess, military heroics, intellectual success, and good looks, equalizing incomes will intensify the importance of these non-pecuniary traits as sources of status. And there’s no reason why persons with low status in these non-pecuniary categories will not suffer all the stress and envy now allegedly suffered by people with low incomes.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Fairfax, VA
And another point (which I make here by asking a rhetorical question): Would you prefer to live in a society in which people compete for high status by earning lots of money through the creation, production, and sale of better mousetraps, or in a society in which people compete for high status by being indifferent to money but focused intently on conquering foreign territories or accumulating terrifying amounts of political power?