Just how equal, how equitable, do we want the Bangladesh of the future to be? This newspaper says, editorially, that we do desire that “equitable Bangladesh” One where there's equity of opportunity, yes, of course.
But equity of outcome, that's more questionable. As the same editorial goes on, the poverty rate is plummeting like a stone as the country generally gets richer. But it's a standard economic observation that we've got to have some inequality of outcome in order to gain economic growth. Why would anyone strive if they just end up with the same rewards as someone who doesn't so work away at things?
Another way to put this is that equity depends upon exactly what we mean by it. Fair rewards? Fair outcomes -- they're not quite the same thing.
Meraj Mavis also gives us, again in this newspaper, details of inequity in the country. The Gini Index rose roughly from the UK sort of level to the US from 2010 to 2022. But that's measuring market income -- before taxes taken off, before benefits paid out.
For consumption -- which is also real income, your real income is what you can have, not the amount of money -- it's much lower, again around the UK level and so lower than the US.
But still a bit higher than it was in 2010.
We also find out that real incomes doubled over that period of time -- average household income did at least.
The go-to philosopher on these sorts of points these days is John Rawls. He invites us to consider matters through the veil of ignorance. We are that soul about to arrive after the usual nine months.
We know nothing of what position we'll have in the society we're going to arrive in. Male, female, black, white, rich, poor. So, what sort of society would we like to arrive in?
The obvious answer is a pretty equal, egalitarian one. Unfortunately, that's as far as most modern egalitarians go with the argument, and in stopping there, they've forgotten something about humans.
We do an awful lot for our children. Certainly give up income, time, effort, and possibly most of our sex lives for the couple of decades it takes to raise them.
We also tend to want our kids to have a better life than we do or did -- thus the parental insistence that the homework must be done.
That increases the weight we need to put on the desirable society being one that is getting richer. If our own lives were all that we were considering, we opt for greater equality now and less future growth. But add in our children and we might well put up with less joy now for better later -- because we do that with the raising of our children anyway.
We might also call into play the standard claim about climate change. That we must do more now for the sake of those future people -- we owe it to them.
Fine, it's a position. But the implication of that position is also that if we do assert that, then we should be willing to have a little more inequality now to aid those in the future. That's just how logic does work -- logic being something philosophers are really quite keen on.
Another way to put this: We want Bangladesh to be more equal and equitable but when and at what general standard of living?
There is one more level to this argument and I tend to be about the only person globally who does make this point. That consumption inequality -- what we can actually have, not the amount of money -- is falling like a stone globally.
Anyone with a $50 Android gets the same amount of Twitter as Elon Musk, Facebook as Mark Zuckerberg, and Bing as Bill Gates. In terms of what we can consume, the world is becoming ever so much more equal and our usual economic statistics just don't reflect that. As the economist at Google, Hal Varian, has pointed out, GDP doesn't deal well with free.
The central question is still a matter of ethical choice -- how much equity do we really want beyond an equality of opportunity?
I argue that once we include the multi-generational nature of human society, actually rather less -- and rather more growth -- than is commonly assumed.
Sure, disagree with me on that if you wish -- but it is a point that has to be included in the discussion.
Tim Worstall is a senior fellow at the Adam Smith Institute in London.
