1
Chapter 1: Setting the Scene ...............................................................................................................3
1. Opposed views ............................................................................................................................3
1.1. Good vs bad inequality ..........................................................................................................3
1.2 Equality of opportunity and merit ..........................................................................................3
2. Instrumental and ethical concerns ...............................................................................................3
3. Inequality is back on the agenda ..................................................................................................4
4. Non-trivial – long-term consequences: Surname research ............................................................5
4.1. Florence ...............................................................................................................................5
4.2. Sweden.................................................................................................................................5
5. Inherent normativity and different perspectives...........................................................................6
5.1. Introduction..........................................................................................................................6
5.2. Views on inequality differ over time, world regions and income deciles .................................6
5.2.1. Variations through time ..................................................................................................6
5.2.2. Variations across regions and income deciles ..................................................................6
5.3. Perceptions vs Factual inequality: Hvidbert, Kreinter & Stantcheva (2020) .............................7
5.3.1. Introduction ..................................................................................................................7
A) Definition of the reference groups ...................................................................................7
B) An example of an actual question asked ..........................................................................7
5.3.2. Perceived vs Actual position ..........................................................................................8
5.3.2. Perceived vs Actual position by reference group ............................................................8
5.3.3. Unfairness of inequality and importance of effort across large reference groups ...........9
5.3.4 Unfairness view by actual position and position misperception..................................... 10
5.3.6. Survey information experiment and unfairness views .................................................. 11
5.3.7. Eastern vs Western Europe; US exceptionalism (Judith Niehues, 2014) ........................ 12
A) Differences between countries regarding their view on inequality and redistribution .... 12
B) Explanations .................................................................................................................. 13
C) Policy implications ......................................................................................................... 13
5.4. Inequality as an illustration of the Thomas theorem ........................................................... 13
5.4.1. The Thomas theorem ................................................................................................... 13
5.4.2. Evaluation of income differences and actual income inequality (2009)......................... 13
5.4.3. Evaluation of income differences and perceived inequality .......................................... 14
5.4.4. Determinants of redistributive preferences ................................................................. 14
5.5. Conclusion: Inequality is inherently normative ................................................................... 15
6. Astrology is real......................................................................................................................... 15
6.1. Astrology in sports .............................................................................................................. 15
6.1.1. The relationship between birthdates and ‘tier’ in minor hockey ................................... 15
, 2
6.1.2. Number of FIFA World Cup players born each month .................................................. 16
6.2. Astrology in medical care: Birth month and diagnosis and receiving medication for ADHD . 16
6.3. Astrology in awards: Surname and Nobel laureates and Clark winners................................ 17
6.4. Explanation ........................................................................................................................ 17
7. Inequality of what? ................................................................................................................... 17
7.1. Inequality of opportunity .................................................................................................... 17
7.2. Inequality of what?............................................................................................................. 18
7.2.1. Introduction ................................................................................................................ 18
7.2.2. Multidimensionality ..................................................................................................... 19
7.2.3. Intersectionality........................................................................................................... 19
8. Conclusion ................................................................................................................................ 19
, 3
Chapter 1: Setting the Scene
1. Opposed views
1.1. Good vs bad inequality
The concept of inequality can be perceived in many different ways:
• Instrumental argument: Incentives vs Rent seeking
- Incentives: On some level, inequality is necessary because it provides incentives for people
to work hard and be productive (i.e. the ‘good’ inequality)
- Rent seeking: On the other side, there's the concern that excessive inequality can lead to
rent-seeking behavior: Individuals or groups using their wealth and power to manipulate
the system for their own benefit, rather than contributing to society (i.e. the ‘bad’
inequality)
• Effort vs Privilege: Another way to frame this debate is by considering whether inequality is
primarily the result of individuals' efforts and abilities, or if it's more about privileges that
certain groups or individuals enjoy due to circumstances like their background, race, or social
class.
1.2 Equality of opportunity and merit
= Everyone should have an equal chance to succeed based on their merit and effort, rather than
factors beyond their control, like race or gender. Two examples:
1. Down with Meritocracy (Michael Young): Argues against the idea of meritocracy: A system
where people are rewarded or given opportunities based on their skills, abilities and hard
work. Those who work the hardest are considered the most deserving of success and
advancement, regardless of their background and other factors. The idea is to create a ‘fair’
system where people are judged on their merit, rather than on things like social status,
gender or connections.
➢ Young: This creates a new form of inequality: Those with privileged backgrounds and
higher educational opportunities are favored. Meritocracy does not lead to equality of
opportunity, but rather entrenches social stratification.
2. The Case Against Equality of Opportunity (Dylan Matthews): Argues that equality of
opportunity is not enough to create a fair society. Simply giving everyone an equal chance to
succeed (making sure everyone starts at the same line in a race) is not enough. We also need
to fix bigger societal problems that make it harder for some people to succeed, even if they
work really hard. Structural and systemic issues like obstacles and unfair advantages must be
removed.
2. Instrumental and ethical concerns
• Individual level:
- In more equal societies, people tend to report higher levels of happiness and life
satisfaction. This suggests that less inequality can contribute to greater (subjective) well-
being for individuals. From a utilitarian perspective, excessive inequality reduces the
overall happiness and well-being of society because it concentrates wealth and resources
in the hands of a few, leaving many with fewer opportunities and resources.
- Wilkinson & Piketty: Show that higher levels of inequality are associated with various
negative social outcomes or ‘social bads’, like f. ex. higher crime rates, worse health
outcomes, more addictions, and so on
• Ethical concerns: Inequality raises ethical questions about fairness, justice, and how resources
and opportunities are distributed in society. It's a matter of what is morally right or wrong in
the way society functions.
Chapter 1: Setting the Scene ...............................................................................................................3
1. Opposed views ............................................................................................................................3
1.1. Good vs bad inequality ..........................................................................................................3
1.2 Equality of opportunity and merit ..........................................................................................3
2. Instrumental and ethical concerns ...............................................................................................3
3. Inequality is back on the agenda ..................................................................................................4
4. Non-trivial – long-term consequences: Surname research ............................................................5
4.1. Florence ...............................................................................................................................5
4.2. Sweden.................................................................................................................................5
5. Inherent normativity and different perspectives...........................................................................6
5.1. Introduction..........................................................................................................................6
5.2. Views on inequality differ over time, world regions and income deciles .................................6
5.2.1. Variations through time ..................................................................................................6
5.2.2. Variations across regions and income deciles ..................................................................6
5.3. Perceptions vs Factual inequality: Hvidbert, Kreinter & Stantcheva (2020) .............................7
5.3.1. Introduction ..................................................................................................................7
A) Definition of the reference groups ...................................................................................7
B) An example of an actual question asked ..........................................................................7
5.3.2. Perceived vs Actual position ..........................................................................................8
5.3.2. Perceived vs Actual position by reference group ............................................................8
5.3.3. Unfairness of inequality and importance of effort across large reference groups ...........9
5.3.4 Unfairness view by actual position and position misperception..................................... 10
5.3.6. Survey information experiment and unfairness views .................................................. 11
5.3.7. Eastern vs Western Europe; US exceptionalism (Judith Niehues, 2014) ........................ 12
A) Differences between countries regarding their view on inequality and redistribution .... 12
B) Explanations .................................................................................................................. 13
C) Policy implications ......................................................................................................... 13
5.4. Inequality as an illustration of the Thomas theorem ........................................................... 13
5.4.1. The Thomas theorem ................................................................................................... 13
5.4.2. Evaluation of income differences and actual income inequality (2009)......................... 13
5.4.3. Evaluation of income differences and perceived inequality .......................................... 14
5.4.4. Determinants of redistributive preferences ................................................................. 14
5.5. Conclusion: Inequality is inherently normative ................................................................... 15
6. Astrology is real......................................................................................................................... 15
6.1. Astrology in sports .............................................................................................................. 15
6.1.1. The relationship between birthdates and ‘tier’ in minor hockey ................................... 15
, 2
6.1.2. Number of FIFA World Cup players born each month .................................................. 16
6.2. Astrology in medical care: Birth month and diagnosis and receiving medication for ADHD . 16
6.3. Astrology in awards: Surname and Nobel laureates and Clark winners................................ 17
6.4. Explanation ........................................................................................................................ 17
7. Inequality of what? ................................................................................................................... 17
7.1. Inequality of opportunity .................................................................................................... 17
7.2. Inequality of what?............................................................................................................. 18
7.2.1. Introduction ................................................................................................................ 18
7.2.2. Multidimensionality ..................................................................................................... 19
7.2.3. Intersectionality........................................................................................................... 19
8. Conclusion ................................................................................................................................ 19
, 3
Chapter 1: Setting the Scene
1. Opposed views
1.1. Good vs bad inequality
The concept of inequality can be perceived in many different ways:
• Instrumental argument: Incentives vs Rent seeking
- Incentives: On some level, inequality is necessary because it provides incentives for people
to work hard and be productive (i.e. the ‘good’ inequality)
- Rent seeking: On the other side, there's the concern that excessive inequality can lead to
rent-seeking behavior: Individuals or groups using their wealth and power to manipulate
the system for their own benefit, rather than contributing to society (i.e. the ‘bad’
inequality)
• Effort vs Privilege: Another way to frame this debate is by considering whether inequality is
primarily the result of individuals' efforts and abilities, or if it's more about privileges that
certain groups or individuals enjoy due to circumstances like their background, race, or social
class.
1.2 Equality of opportunity and merit
= Everyone should have an equal chance to succeed based on their merit and effort, rather than
factors beyond their control, like race or gender. Two examples:
1. Down with Meritocracy (Michael Young): Argues against the idea of meritocracy: A system
where people are rewarded or given opportunities based on their skills, abilities and hard
work. Those who work the hardest are considered the most deserving of success and
advancement, regardless of their background and other factors. The idea is to create a ‘fair’
system where people are judged on their merit, rather than on things like social status,
gender or connections.
➢ Young: This creates a new form of inequality: Those with privileged backgrounds and
higher educational opportunities are favored. Meritocracy does not lead to equality of
opportunity, but rather entrenches social stratification.
2. The Case Against Equality of Opportunity (Dylan Matthews): Argues that equality of
opportunity is not enough to create a fair society. Simply giving everyone an equal chance to
succeed (making sure everyone starts at the same line in a race) is not enough. We also need
to fix bigger societal problems that make it harder for some people to succeed, even if they
work really hard. Structural and systemic issues like obstacles and unfair advantages must be
removed.
2. Instrumental and ethical concerns
• Individual level:
- In more equal societies, people tend to report higher levels of happiness and life
satisfaction. This suggests that less inequality can contribute to greater (subjective) well-
being for individuals. From a utilitarian perspective, excessive inequality reduces the
overall happiness and well-being of society because it concentrates wealth and resources
in the hands of a few, leaving many with fewer opportunities and resources.
- Wilkinson & Piketty: Show that higher levels of inequality are associated with various
negative social outcomes or ‘social bads’, like f. ex. higher crime rates, worse health
outcomes, more addictions, and so on
• Ethical concerns: Inequality raises ethical questions about fairness, justice, and how resources
and opportunities are distributed in society. It's a matter of what is morally right or wrong in
the way society functions.
