Homogeneous societies and income equality (the 1950s vs Now)

Who would want the income equality observed in the 1950s and 1960s? According to most datasets, the lowest point of income inequality was achieved in those years, during the heydays of the welfare state. These years were also years of great economic growth (although I have my doubts on the speed of growth because of the way national accouting statistics estimate the input of female workers) and technological advance. Most people would want to go back to those days, I really don’t.

Why? Because everyone was the same and because everyone was the same, inequality was low! At that time, most workers were employed in industrial activities, had very similar consumption habits, similar time spending habits and very few opportunity for leisures. According to Michael Cox, you entered the workforce below age 18 and spent roughly 49 years on the job. In short, mostly everyone worked 45% of their “awake lives”. We were a homogeneous society.

Where was the time for hobbies? In fact, what were the hobbies of those days? Limited in numbers, the choices about where to spend your remaining free time (under the constraint of having to meet some basic needs) did not leave great room for personal self-accomplishments. Now, we spend 28% of our awake lives at work. The rest of the time, we are studying, travelling, reading, drawing, painting, exercising, competing in sports, relaxing, cooking for fun, etc.

In the growing multiplicity of choices offered to individuals as productivity increased (we now need fewer and fewer hours to meet our basic needs), we have become a society where preferences are more heteregeneous than ever before. Isn’t it completely normal that “income inequality” has increased in such a society? With so much free time and opportunities, income is not the best measure of the utility derived by individuals. True, we need to be rich as a society to be happy in order to possess the luxury of free time and personal accomplishments, but dollar signs do not measure the gap in inequality of “pleasure”, “happiness” or “life satisfaction” enjoyed by many.

I would trade “Homogeneous Egalitaria” for “Heteregeneous Inegalitaria” any day of the week.  In the second, income inequality rises as happiness inequality diminishes. In the first, income is better spread but utility and personal wellbeing is not…

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