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.
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.
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.