Why we can’t (usefully) dismiss concern about the income of others as envious

I.

The Easterlin paradox is the observation that country level happiness does not seem to increase overtime with income- even though there are many reasons to think it should- for example, income gives us choices, security, additional consumption and so on. The paradox grows even weirder when we reflect that individual increases in income do raise happiness.

In 2008 a group published a paper entitled “Relative Income, Happiness and Utility: An Explanation for the Easterlin Paradox and Other Puzzles“. The paper argued quite persuasively in my opinion that this phenomena can be explained through the relative income effect- that is to say much of the happiness we derive from additional income is to do with changes in our status relative to others.  Consequently, simply increasing income won’t do much- indeed if it is accompanied by increases in inequality it may lower average happiness, even if it increases everyone’s income.

There are subtleties in how relative incomes are thought to work(1), but on one plausible model, relative income effects indicate that less inequality will mean higher aggregate welfare. If so, the existence of relative income effects give a reason to favour higher taxation and redistribution.

II.

Here and there one encounters thinkers who argue that relative income effects represent envious preferences that should be disregarded because they are morally illicit and are tantamount to a sadistic desire to level down. Although this argument hasn’t yet achieved great prominence, as the literature on relative income effects as an argument for egalitarianism becomes larger, objecting to “envious” preferences will no doubt become more popular as an anti-egalitarian defence.

It is perhaps not clear that relative income effects do represent envy. They may, for example, reflect legitimate concerns about their economic security or the security of democracy in the face of rising inequality, or legitimate or outrage over a genuinely unjust distribution.

I want to argue though that regardless of whether relative income effects truly do represent envy, attempts to blame people for their “envious” feelings about the incomes of others are futile. They are futile because very plausibly, the need to not to be lower status than others is deeply hardwired into us. An ethics that enjoins us to ignore these feelings is simply stuffing its fingers in its ears.

In making this argument I am mindful that we must steer between the Scylla of the naturalistic fallacy (“X is natural, therefore X is justified”) and the Charybdis of taking no account of the composition of human psychology in considering how we should order society. Our argument is not that society should indulge these drives just because they are natural, but rather that that, because they are hardwired, if they not indulged they will nonetheless always remain as unmet needs. Since unmet needs prevent flourishing not indulging them would be a major impediment to flourishing. This is true even if we would prefer on the whole that such drives or needs not exist.

Does our scheme justify monstrous behaviour? I doubt it. Let’s take violence as an example. If our scheme justifies violence that’s a major problem- I don’t think it does justify violence. We need to distinguish between the tendencies that evolution has given us and the needs and drives that evolution has given us. It is important for human happiness to make peace with our drives and needs. It is not so important to make peace with our behaviour tendencies. There is a great deal of evidence that humans have a tendency towards violence in many situations, but with the possible exception of a few psychopaths, very few humans have a need to be violent- they may choose to be violent in more circumstances than would be wise, but being violent so does not meet important and non-instrumental desires or make them happier. On the other hand, the desire to not be at the bottom of the ladder reflects a drive or need- not fulfilling it will lead to suffering, or at least a reduction in happiness.

Thus, insofar as we care about human flourishing, we have a reason to meet this human need not to be far below others. If we call this “envy” intrinsically evil or try to ban gratifying it, we condemn people to a less rich and flourishing life and will not, in any case, change this aspect of human nature. That seems like a good reason not to ignore these preferences.

Footnotes:

(1): Note that if relative income effects are purely about rank order reducing income inequality won’t help at all, at least not if any income inequality remains whatsoever, because in the presence of any level of income inequality there will be ranks. I find the notion that it’s purely about rank order implausible. Also note that if the rich derive as much happiness from their extra status as the myriad poor derive unhappiness from their lower status, reducing inequality will not increase overall happiness. Again, I find this implausible. I doubt the zero sum model of relative income effects- it seems to me probably true that at high levels of income inequality more utility is lost to relative income effects, while at lower levels, less utility is lost. However some authors endorse a zero sum model, so caveat emptor.