The New York Times ran an article today about the poor state of social mobility in the United States. Those on the left have been making these points for such a long time that I was almost bored reading through it. As usual, the reactions of bloggers to the post were more interesting.

Matthew Yglesias wrote about an abandoned senior thesis project he considered surrounding the issue of income inequality within John Rawls’ theory of distributive justice:

My idea was to look at John Rawls’ famous Theory of Justice and make the case for the system he briefly dismisses as “natural aristocracy.” That’s a system in which we would care most about the absolute living standards of the poor but not worry at all about what he calls “fair equality of opportunity” which is roughly speaking a form of social mobility. I turned out not to have much original to say on this and never did it, but I think it’s an interesting issue. At a minimum, I think speaking in these terms might help clarify the debate a bit. My suspicion, living and working in mostly progressive circles, is that most of the people upset about “inequality” are actually bothered by what they see as missed opportunities to raise living standards at the bottom or at the median. But it’s not totally clear. There’s a lot of ideological diversity on the left, and perhaps some people are in fact saying that it would be a good tradeoff to make America more equal even if that meant lower absolute incomes for middle class and poor families. But I don’t think that’s really something most of the people who say they’re bothered by inequality are bothered by.

Interestingly enough, I too had an abandoned senior thesis project criticizing John Rawls theory of justice. In my abandoned project, I was going to argue exactly what Yglesias suspects few in progressive circles actually mean when they talk about income inequality: reducing inequality can be a net-positive even if “that meant lower absolute incomes for middle class and poor families.”

The crux of John Rawls’ theory is that if we were constructing a society in which none of us knew who we would be, we would adopt certain principles of justice for that society. On the economic front, we would favor a system that distributed primary goods equally except when distributing them unequally would result in a greater absolute level of those goods for each class (roughly). So in income terms, you can think of it this way: we ought to distribute income equally except where introducing inequality would actually increase the incomes of all, especially the poor.

Since economic production is not zero-sum, it is possible that allowing for inequality will create incentives for people to work harder, which will create more economic production that if distributed appropriately would improve the living standards of all. That is at least how the Rawlsian line goes. There is a lot to critique about this line, and I think G.A. Cohen’s critique of the idea that inequality would ever be necessary to increase the standards for all is pretty devastating.

This is not where my abandoned thesis project was going to go however. I was going to argue — and I think it is correct — that we might reasonably construct a society that opposes some introductions of inequality even if those introductions would improve the absolute incomes of everyone, including the poor. The basic omission on Rawls end is that he ignores the non-economic harms of inequality. There is evidence that suggests that relative inequality by itself contributes to problems like obesity, mental health, physical health, education, imprisonment, social cohesion, social trust, violence, teenage births, child well-being, and more.

Given that people value the things that are hurt by inequality itself — not just the absolute poverty it might create, but the inequality itself — there must be some limit to the amount of income-improving inequality that we would want to introduce. Assuming it were necessary (i.e. ignoring Cohen’s objection that it is not), we probably would want to introduce inequality that raised all of our incomes to the point where we had all our material needs met even if doing so caused the social ills listed above. From there, we might still favor introducing inequality to get more and more luxuries.

But at some point, an improvement in everyone’s absolute income level would not be worth the other damage the inequality required to create that increase would cause. For instance, at a point, we surely would value the foregone social cohesion that results from creating even more inequality than the amount of extra income that introduction of inequality might provide to us all.

What follows is that it would be totally reasonable in certain conditions to favor more income equality even if making it happen decreased the incomes of all. So, Rawls’ difference principle is an inadequate theory of distributive justice. This is a fun intellectual debate to have, but it really has no relevance to contemporary debates in the Unites States: our inequality is such that we can simultaneously create more equality through redistribution and improve the absolute income level of the poor. There is no trade-off between the two at the current moment.