7.2 Thinking point: the spirit level hypothesis
The ‘spirit level hypothesis’ has been widely read and debated. For example, the UN report ‘Inequality Matters: Report on the World Social Situation 2013’, that you heard about earlier, acknowledges the validity of the ‘spirit level hypothesis’.
In this report , the view of American economist Joseph Stiglitz was included:
There is growing evidence and recognition of the powerful and corrosive effects of inequality on economic growth, poverty reduction, social and economic stability and socially-sustainable development … the many adverse consequences of inequality affect the well-being not only of those at the bottom of the income distribution, but also those at the top. Specifically, inequality leads to a less stable, less efficient economic system that stifles economic growth and the participation of all members of society in the labour market.
Activity 5
There are arguments for and against the ‘spirit level hypothesis’. Find some coverage of the debate and summarise it, with a link to your source.
Discussion
So, for example, Christopher Snowdon, at the Institute of Economic Affairs has disputed the statistics, alleging selection bias and has written ‘The Spirit Level Delusion’ – you can see it here.
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