To Paul – the short answer is social stability, and reduction of risk. Whilst I know the Spirit Level has had a lot of its methodology criticised, that notwithstanding one of their observations is that the top 1% in a more unequal society will in general have less good outcomes than in a more equal society. i.e. if you need medical treatment you will be relying on some of the expertise of the dreaded 99% to help treat you and it is better for you if your income isn’t say 100 times theirs but perhaps 10 times.

Better to have them treat you without needing to bribe them or have them steal your wallet or extort money from your family while you are being operated on etc. etc. etc. so they can use the opportunity to make up for any real or perceived injustices.

Even the 1% can’t provide everything they want to each other so better have a bit of trust and stability with the great unwashed….

To Matt – I believe the OECD recently did some analysis on the % of income/wealth in each country that is attributable to labour and what is attributable to capital (I can’t find it online). Treasury also does these calculations I believe, and the split in NZ is something like (approx) 60% to capital and 40% to labour. Apparently only Mexico, Turkey and the Slovak republic have less going to labour than NZ.

Why is this? Is it because our productive base is primarily farming/Auckland property speculation etc.? Is it because we don’t tax gains on capital and as a result more activity flows to that side of the ledger?

I would really love to know if you are able to share any thoughts! 🙂

Indeed, cheers for the link I didn’t realise that was out yet!

Educational mobility is a big issue, and one that a number of people have been concerned about. This is part of the reason why the government has been putting increasing emphasis and funding into the “bottom 20%” in schools I think – something I’ve heard a number of positive comments about from teachers. However, I don’t know enough to give a good comment – I may try to find someone involved in the field to write about it though, as it does seem very relevant

Hi Paul,

That is a crux issue for sure – but I don’t know how I can tell people why they subjectively care about what they care about? Don’t we have to understand “what” inequality means and what it entails about other underlying issues before I can answer why we would care. That sort of sounds like the end stage!

I think we are in exactly the same camp, but I’d articulate our view as saying “targeting something without a reference to what it means and why doesn’t make any sense”.

Can you start by explaining why we care about inequality at all?

Consider two economies, one where the four people in it have incomes of 1,1,1 and 1 and the other where incomes of these people are 100, 1000, 10000 and 50000. Incomes have been scaled so that 0 is the least acceptable level of income, Assume for the argument that 0 means you are dead. If we care about inequality then the first economy is preferred to the second, but really? Do you want to live in the first rather than the second? If not, why not? If so, why?

In particular, I was struck by the evidence they provided on the extent to which our schools perpetuate inequality. If that is so (and it would be good to see some critical evaluation of it) then it seems to me that is a really major policy issue .