My freshman sociology course includes a lot of empirics. One of the basic ideas I teach is that if you want to know about inequality, you need to measure it. I always include a discussion of the Gini coefficient. In summary, the Gini coefficient is a number from zero to one. If you are close to zero, everyone in your society has the same income, wealth, or whatever you measure. If you are close to one, it means a single person owns almost all the wealth.
As a dogged empiricist, I then discuss the Gini Index of various nations and the global trends. According to the World Bank, the US has a Gini Index in the .4 to .5 range. In recent years, it is .48 and it’s been rising. Then, I discuss a rough correlation: wealthy countries tend to be more equal according to the Gini Index. This is an important empirical lesson. The US is an outlier - wealthy nations trend toward equality. You really need global data to see this fact.
Source: Our World in Data.
When I was discussing this in class, people started to ask about the Gini Index of various countries other than the US. One country came up: Cuba. Not surprisingly, Cuba is not included in many data sets, but academic researchers have often tried to estimate a Gini Index for that nation. For example, the Spanish language website El Estado Como Tal cites The Guardian with a 2017 estimate of .40. Reuters reported that estimates of the Cuban Gini index were in the low 20s (.22) in 1986 and increased as Raoul Castro’s government allowed some market reforms.
At this point in the discussion, my TA raised her hand and asked, “What is the point of the Gini index if an impoverished nation like Cuba and a wealthy nation like Sweden (.25) can have the same index?” Excellent question.
The answer is that any measurement reflects an idea of what the researcher thinks is important. In stratification research, the Gini index ONLY measures how close you are to an ideal world where everyone has EXACTLY the same income. It says nothing about the baseline level of wealth or how you achieved this equality. Cuba achieved its equality level by instituting a socialist command economy that impoverished people equally. Sweden allows for private enterprise but taxes people a bunch and redistributes wealth. I think most folks would prefer living in Sweden than Cuba.
This leads to a crucial point about inequality research. Inequality research is certainly important, but the mechanisms behind inequality and equality are probably more important. My problem with a lot of inequality research is that it often exists in isolation from discussions of other processes that seem to matter a whole lot. Take the Cuba/Sweden example - if we only cared about equality, we’d look at Cuba and say, “Mission accomplished!” But the comparison with Sweden shows that’s grossly inadequate. Equality made through economic growth and redistribution surely must be better than the equality emerging from the “levelling down” of life in a socialist state.
The bottom line: Inequality measures, by their nature, measure relative status and wealth, but not baseline levels of well-being or the institutions that lead to particular outcomes. If you really care about human well-being, then you need to consider this, or you’ll end up listening to five-hour long Castro speeches in jail.
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