Income Inequality and Societal Dysfunction

In the book “Inequality: A New Zealand Crisis” there is mention of another book entitled “The Spirit Level” by Richard Wilkinson and Kate Pickett which I blogged on last year. The Spirit Level argues that high levels of income inequality increase what is know as psychosocial stress: the psychological and physical effects of comparing oursleves to others and feeling inferior. Wilkinson and Pickett suggest that psychological stress is a powerful and insidious force, worseneing problems like mental health and obesity throughout society. When added to the effects of material poverty, psychological stress is likely to have a greater repercussions forthose on low incomes. From the garph below countries with low inequality have less health and social problems – Finaland, Norway, Sweden, Japan. Countries with high inequality do badly – USA, Portugal, UK.

Health Inequality

1 thought on “Income Inequality and Societal Dysfunction

  1. Simon

    Rather than the psychological effect how about the economic effect of inequality? If a significant percentage of the population can barely feed themselves where is the demand for new products and services going to come from? Trickle down was a huge con. The principle way money gets directed towards those at the bottom of the economic pyramid (where all the demand is) is by government regulation (minimum wages) and government spending. To do this the government must tax, spend and regulate. Its pretty simple. There are not very many Henry Fords out there. And those who say we can’t afford it are full of it. Productivity per capita has been increasing steadily not decreasing therefore consumption per capita should be increasing for all not just some.


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