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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
In psychology, for someone to shift away from an undesired behaviour there are two separate requirements. First, they need the self-awareness to recognise the issue. Second, they need the self-management skills to act on that knowledge. Having the former without mastering the latter is arguably worse than having neither: painful awareness of a flaw extending into perpetuity.
If we swap people for countries and personal flaws for societal ills, I fear America may be in just this predicament when it comes to income disparities.
There are fierce debates over exactly how much US income inequality has grown in recent decades, but what is not in doubt is that inequality is wider in the US than in other developed countries. The average American agrees, with one in five describing the US income distribution as “very unfair”, higher than the share in any other wealthy western country.
But according to a fascinating new working paper, while Americans may recognise their country’s problem with inequality, they have less desire for something to be done about it than their counterparts elsewhere in the west. More striking still, being shown how wide national inequalities are has no impact on US desire for the gaps to be narrowed — in fact, if anything it reduces appetite for redistribution. In other western countries that same prompting results in more calls for redistribution.
The study, led by Pepper Culpepper, professor of government and public policy at Oxford’s Blavatnik School of Government, looked at the US, UK, Australia, France, Germany and Switzerland. In these countries, people were given a news article that used inequality data to argue that the economic system in their country was rigged. Outside the US, reading the article reliably increased beliefs that society is divided into haves and have-nots, which in turn boosted support for redistribution. In the US, it did neither.
Why the exceptionalism? I think there are two dynamics at play. The first is what I call the two sides of the American dream. Data show that Americans see themselves as more upwardly mobile than people from other western countries (in reality the inverse is true), and are more likely to say hard work is essential for getting ahead in life. These are aspirational, meritocratic beliefs, but the flip side is that Americans are also the most likely to say low-income people need to pull themselves up by their bootstraps.
If Americans view extreme incomes with more aspiration than anger relative to their counterparts in other countries, this could explain reactions to the inequality article. If seeing inequality can equate to seeing opportunity, the American dream makes US society more tolerant of large disparities.
The second dynamic, highlighted by Culpepper and his co-authors, is Americans’ distrust of government, and in particular their belief that government is inefficient.
It’s more than 42 years since Ronald Reagan told Americans in his 1981 inauguration speech that “government is not the solution to our problem; government is our problem” — and it appears the nation took his words to heart.
While Americans are the most likely to say income inequality in their country is unfair, fewer than half see this as the government’s responsibility to address. This compares with two-thirds or more in the UK, France and Germany. Where other societies see inequality as something that is done to people and must be tackled by helping them, Americans see it as something that people are responsible for themselves.
The tragedy here is that the American dream continues to fail so many. The US struggles with more extreme poverty than any of the five countries with more collectivist attitudes. According to the International Social Survey Programme, Americans are the most likely to say they have to skip meals because there is not enough money for food. This finding is corroborated by the latest Programme for International Student Assessment (PISA) results which found one in eight US children skip meals at least once a month.
All this speaks to one of the fundamental tensions within US society: are extreme wealth and extreme hardship two sides of the same coin? A culture of aspiration and individual responsibility doubtless drives entrepreneurialism and wealth generation, but it also appears to engender apathy towards inequality and especially towards government intervention, leaving the poorest to fend for themselves.