Income Unfairness May be as Important as Inequality

There is no question that the level of income and wealth inequality in the world--and in the U.S. more particularly--has skyrocketed over the past few decades (see graph below). Thomas Piketty's book Capital helped to move the conversation along, as I have noted before. Three Yale University psychologists have just put a new spin on the issue in a paper published online at Nature Human Behavior (and from which the graph below is drawn). They argue that it is not really inequality that bothers people. Rather, it is unfairness that is the problem. Inequality is an accepted part of nearly every human society and this is one reason why the utopian idea of true communism (total equality for everyone) has such a poor track record. 

Drawing upon laboratory studies, cross-cultural research, and experiments with babies and young children, we argue that humans naturally favour fair distributions, not equal ones, and that when fairness and equality clash, people prefer fair inequality over unfair equality. Both psychological research and decisions by policymakers would benefit from more clearly distinguishing inequality from unfairness.

Thus, the issue that we face today is that the concentration of income and wealth among a very small number of people is viewed as intrinsically unfair. It is OK for some people to have more than we do, but it is not OK when the gap seems too large and, in essence, has come at our expense.