Wall Street Journal

COMMENTARY

Happiness and Inequality

By ARTHUR C. BROOKS

October 22, 2007; Page A18

Nothing in the Democrats' current domestic platform is more prominent than redressing income inequality. All of the major Democratic candidates believe that conservatives have purposively rolled back income equality -- which liberals equate to social equality -- since 1980. Liberal columnists routinely express this conspiratorial point of view, suggesting that conservatives want to dismantle all of the institutions of the New Deal and Great Society.

Assuming a Democrat wins the White House in 2008, we can expect steeper tax rates to take more from higher income earners, and more government spending to redistribute resources to low-income earners and the middle class.

The Democrats are correct that income inequality in America has increased over the decades. The U.S. Census Bureau, for example, measures this by using a "Gini coefficient," in which zero indicates no inequality (all incomes are the same) and one is perfect inequality (one person has all the income). Over the past 40 years, the Gini coefficient in this country has increased by a quarter, to .47 today from .39 in 1970. In European countries, Gini coefficients generally sit below .30, indicating substantially less income inequality.

Yet income is just one item of importance in the lives of Americans. There are many others -- from love to faith to happiness -- that we care about, some of them far more. Egalitarians never ask if we suffer from inequality in these areas. If they did, they might be pleasantly surprised.

Many national and international surveys ask people questions such as, "would you say that you are very happy, pretty happy or not too happy?" They assign quantitative values to the responses (for example, "very happy" gets three points, "pretty happy" gets two points, etc.), and thus we can use the same tools (Gini coefficients) to gauge "happiness inequality" as we do to measure income inequality. It turns out that in terms of happiness -- unlike income -- Americans are really quite equal.

For example, the 2004 General Social Survey's measure of happiness generates a coefficient for the inequality of American happiness of .18, while the 2002 International Social Survey Programme produces a coefficient of .20. These are lower than are found anywhere else in the world. Moreover, while the average happiness level in America has not changed much since the early 1970s (and remains above that of most of our European allies), the inequality in our happiness has fallen by about a point since then.

Americans enjoy similarly low inequality with regard to other quality of life measures, such as optimism about the future (.20). In terms of what really matters most to Americans, we may be more equal than we thought.

Why don't those who denounce economic inequality so strenuously focus on these nonfinancial items? There are two plausible reasons. First, egalitarians might believe that money truly is the most important thing for American society (in other words, that the European caricature of the shallow, money-obsessed American is accurate), in which case we can redress inequality simply by moving some cash around through redistribution. If that is the reason, it would be ironic, coming as it does from people who usually take a dim view of what they characterize as American materialism.

The second reason egalitarians might ignore non-monetary inequality is that it is irrelevant. They could argue that making people equally happy is less important than trying to help those who are unhappy to get happier. For example, it might make more sense to help depressed people than to worry because some folks are enjoying a disproportionate share of our nation's happiness.

But if one believes that "happiness inequality" is irrelevant, why is income inequality so different? If greater income inequality is our end goal, bringing the top down is as useful as bringing the bottom up. This is about as sensible as depressing the happy for the sake of the sad -- which reminds us of the old proverb, "The misfortune of the many is the consolation of fools." It does precious little for the living standards of poor people simply to confiscate the resources of those at the top. On the contrary, it lowers the incentives of successful people to produce, and thus to create jobs and generate tax revenues which benefit the poor.

I have no doubt the egalitarians among our politicians and pundits want the best for America. And if creating opportunities to prosper requires public resources and thus taxes to pay for them, so be it. But to focus on inequality -- and then only inequality in income -- creates policies based on either rank materialism or raw envy. These motivations do little to inspire, and even less to lead.

Mr. Brooks, a professor at Syracuse University's Maxwell School of Public Affairs and a visiting scholar at the American Enterprise Institute, is the author of "Who Really Cares" (Basic Books, 2006).