Abstract

Why, if at all, should we object to economic inequality? Some central arguments – the argument from decreasing marginal utility for example – invoke instrumental reasons and object to inequality because of its effects. Such instrumental arguments, however, often concern only the static effects of inequality and neglect its intertemporal consequences. In this article, we address this striking gap and investigate income inequality’s intertemporal consequences, including its potential effects on humanity’s (very) long-term future. Following recent arguments around future generations and so-called longtermism, those effects might arguably matter more than inequality’s short-term consequences. We assess whether we have instrumental reason to reduce economic inequality based on its intertemporal effects in the short, medium and the very long term. We find a good short and medium-term instrumental case for lower economic inequality. We then argue, somewhat speculatively, that we have instrumental reasons for inequality reduction from a longtermist perspective too, because greater inequality could increase existential risk. We thus have instrumental reasons for reducing inequality, regardless of which time-horizon we take. We then argue that from most consequentialist perspectives, this pro tanto reason also gives us all-things-considered reason. And even across most non-consequentialist views in philosophy, this argument gives us either an all-things-considered or at least weighty pro tanto reason against inequality.

Introduction

After a steady decline until the 1970s, income inequality has been on the rise in nearly all wealthy countries in recent decades. What, if anything, is objectionable about such inequality? Political philosophers here supply us with a wealth of non-instrumental arguments, focusing on questions such as fairness, justice, equality of opportunity, and relational inequality.^[1] Instead, we here focus on instrumental concerns, zooming in on the external benefits economic equality might produce. For example, one classic instrumental argument is utilitarian: aggregate wellbeing will be higher with less economic inequality, because of the diminishing marginal utility of income.

However, such instrumental arguments typically focus on the static properties of income inequality, that is, on the effects inequality would produce during a somewhat limited time-slice. Yet income (in)equality likely has intertemporal consequences too. And it is far from clear whether such consequences will be good or bad. For instance, Tyler Cowen has recently argued that high economic growth should take priority: with a long enough timeframe, the exponential nature of growth ensures that future benefits will outweigh all other considerations (Cowen 2018). Moreover, if equality lowers longer-term growth rates – as some have argued – the dynamic instrumental case would speak against reducing inequality. In response, one might contest that there is a growth-equality trade-off. Or one could argue that equality comes with its own long-term benefits, such as better political institutions.

Such arguments would typically focus on effects within the next hundreds to, maybe, thousands of years. But we could go further and include inequality’s effects on all future well-being. Doing so moves us into the realm of longtermism, an influential idea in the Effective Altruism community. The central idea is that since the future holds the vast majority of potential value, the expected moral value of many actions is almost entirely determined by the action’s effects on the long-term future. Nick Beckstead writes: ‘what matters most (in expectation), is that we do what is best (in expectation) for the general trajectory along which our descendants develop over the coming millions, billions, and trillions of years.’ (Beckstead 2013, 1) Suppose reducing income inequality has non-negligible expected consequences for our far-future descendants. Longtermism would then imply that whether we should reduce economic inequality or not is primarily determined by such long-term effects.

So, we can assess the instrumental character of income inequality in three different ways: we can focus on effects in the short term, the medium term (hundreds to thousands of years), or – adopting longtermism – all its future effects. It is not obvious that these three approaches converge. The lack of work on these questions constitutes a surprisingly large and important gap in the literature. This article makes a start filling this gap. To assess the instrumental benefits of equality/inequality, we use a time-discounted instrumentalist framework. We do not look for an optimal level of inequality. Instead, we consider how, at the margin, reducing or increasing economic inequality in today’s richer countries (roughly, OECD countries) would impact expected aggregate human wellbeing, other things equal. We vary our discount rate to check inequality’s effects along three timeframes, short, medium, and long term. We find a good short and medium-term instrumental case for lower economic inequality. We then argue – somewhat speculatively – that we have instrumental reasons for inequality reduction from a longtermist perspective too, because greater inequality could increase existential risk. We thus have instrumental reasons for reducing inequality, regardless of which time-horizon we take.

We then argue that this pro tanto argument has important implications for how philosophers should think about economic inequality. Performing a ‘moral sensitivity analysis’, we argue that for most consequentialist views, the pro tanto argument also provides all-things-considered reason to reduce inequality. And even across most non-consequentialist views, the argument either provides an all-things-considered or at least a weighty pro tanto reason to reduce inequality.

Our results matter in several ways. First, most people believe we have duties towards future generations. Accordingly, when assessing policies that affect inequality, their impact on future generations should be a relevant dimension (when assessing proposals to reduce inequality, for example (Atkinson 2015)). Second, our longtermist argument makes for a new input into philosophical debates about equality and egalitarianism. While philosophers often focus on noninstrumental reasons against inequality, they acknowledge that instrumental concerns are important too.2 If longtermism is sound and the long-term future often decisive, our instrumental argument should thus matter greatly for debates around egalitarianism. Moreover, because our argument holds across the short, medium, and long term, it is also quite robust. Finally, in philosophy, there has been increasing interest in longtermism and existential risk but no work yet that connects this to economic inequality. Our article makes a start filling this gap.

We proceed as follows. In section 2, we describe our framework. In sections 3 and 4, we respectively analyse the short and medium-term effects of income inequality. In 5 and 6, we analyse the instrumentalist longtermist case for more equality. In 5, we first introduce longtermism and its relation to existential risk. In 6, we present arguments to the effect that higher income inequality can indirectly increase existential risk. In 7, we perform our ‘moral sensitivity analysis’ and conclude in section 8.

Read the rest of the paper