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THE RICH AREN'T THAT MUCH HAPPIER. So says Tyler Cowen in a New York Times opinion piece which argues that income inequality in the United States isn't such a bad thing, really. Cowen presents many arguments but the one I want to highlight here is the idea that inequality in happiness is not as great as inequality in income, and, my friends, it is happiness that really counts! Cowen states:
A man earning $500,000 a year is not usually 10 times as happy as a man earning $50,000 a year."Perhaps not. Who knows, really, given that interpersonal comparisons and the very measurement of happiness are fraught with all sorts of problems? I myself would prefer to cry in a Rolls-Royce if cry I must, actually, but I get the point Cowen is trying to make: Money may not make you happier, so no need to envy the rich or to worry about income inequality.Funnily enough, Cowen's argument also works in the opposite direction: If increasing income produces smaller and smaller increases in happiness overall happiness might be maximized by reducing income inequality. Think of it this way: Suppose that we make the man earning $500,000 a year give $10,000 of this to the man who makes only $50,000 a year. Given Cowen's happiness thesis, the loss of this amount to the richer man won't make him much unhappier, but the gain of the amount to the poorer man might make him dance on the table with joyful singing heard in the background. A net increase in happiness!This is all fairly silly. There are better ways of judging the consequences of increasing income inequality, and these include its impact on equality of opportunity, social cohesion and democracy.
--J. Goodrich
