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Inequality, Greed, and the Demise of our Better Natures

Research & Commentary
April 20, 2013

by Salvatore Babones

Contrary to popular wisdom, most people are basically descent.  Most people want to do good in their lives, to be useful, to make the world a better place.  All other things being equal, most people will work for the good of society, their neighbors, and their loved ones.

Of course, all things are not equal.  It pays to behave badly.  Greedy, selfish, self-promoting people get more money and other rewards than those who behave honorably.  This applies to equally to everyone from plumbers to politicians.

But look at this another way.  You have to pay people more to be bad than to be good.  Yes, people will be greedy and selfish — but only for a price.  You have to compensate people for being evil.  People will be good for free.

The for-profit sector has to pay market rates for its workers.  The non-profit sector pays much less, when it pays at all.

Pro-corporate think tanks pay high salaries.  Pro-public think tanks are staffed mostly with volunteers.

Tea Party rallies are organized by paid hacks.  Occupy rallies are self-organized by people who contribute money as well as time to their causes.  Often they contribute their bodies as well, putting themselves at risk of police brutality and even imprisonment.

If all people were paid the same salaries regardless of their behavior, regardless of the goodness or badness of their work, anti-social industries would have a hard time surviving.  Very few people actually want to do the devil’s work.

That’s where inequality comes in.  When the inequalities in rewards between doing good and doing bad are small, most people will choose the good.  In a world of equal wages, there would be no incentive for evil.  The more inequality there is, the larger the incentives for greedy behavior become.

[pullquote]No one knows what the right level of inequality is, but it’s hard to believe that in the 1950s and 1960s America was dangerously too equal.[/pullquote]

This is because rising inequality means that the rewards of those activities that are already at a premium get larger and larger relative to the rewards of those activities that are not.

Instead of paying 10% more than the non-profit sector, corporations start to pay 20% more, 50% more, 100% more.  At some point, the gap is so large that almost no one is willing to work in the non-profit sector.  Nearly everyone has a price.

That is why it is becoming harder and harder to get people to go into teaching and nursing.  These are tough jobs requiring high levels of education.  Why should people train as teachers or nurses when they can go into sales with hardly any training at all, and sales careers pay better?

Why should doctors serve rural community with basic healthcare when the rewards for catering to the whims of the rich — or worse, the pharmaceutical industry — are so much greater?

Rising inequality is inexorably leading to the demise of our better natures.  Inequality corrupts because inequality fuels greed.  With today’s levels of inequality, there’s just much more to be greedy for.

Most people believe that there should be some amount of inequality in society. No one knows what the “right” level of inequality is.  But it’s hard to believe that in the 1950s and 1960s America was dangerously too equal.  Whatever level of inequality we had back then, it was certainly enough.

Now we have twice as much inequality.  Is that good?  I think the obvious answer is no.  Forget about asking whether or not inequality is good.  Ask instead how much inequality is good.  Whatever the answer is, it’s less than we have now.

Greed is not good, and high inequality is making all of us greedier than we should be.  Greedier than we could be.  Would you leave a high-pressure professional job for the non-profit sector?  Probably not if it involved a 50% pay cut.  But if doing good involved just a 5% pay cut, we would all probably be better people.

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