Income Inequality, Positional Goods, Identity Multiplicity, and Functional Convergence

The national conversation regarding social justice seems to become more obtuse, irrelevant and anemic over time while, paradoxically, becoming more intense and heated.

Here are a series of observations that would be nice to reconcile.

Observation 1: Income inequality - As measured by the Gini coefficient, income inequality has become greater in the US and other OECD countries. Paradoxically, the durable goods/capital profile of those in poverty in the US has never been higher. Those in poverty are better fed, have higher home ownership, car ownership, computer ownership, cell phone ownership, etc. than ever in the past. In fact, the durable goods profile of the bottom quintile of Americans is about that of the middle income quintile European. How is that possible? A big part of the explanation is that the American safety net, derided as it often is, can often be remarkably generous in terms of food, utilities, and other in-kind transfers. The net effect is that while the average household income of the bottom quintile is something on the order of $11,000, their actual expenditures are roughly $30,000. Not luxurious by any means but hugely mitigating.

Observation 2: Identity Multiplicity - There is tremendous volumes of conversation in national media around various aspects of identity. Groups of people are held to be victims of disparate impact beyond their control. Typical popular identity groups are by Gender, Race, Orientation, Income, and Disability. Occasional additional identities are Religion, Class, Ethnicity, Geographic Region, Occupation, Familial Status, Education Attainment, Immigration Status, Employment Condition, etc. There are disparate impacts associated with each and all groupings but the relative aggregate impact of each group identity is highly contingent on which desired dependent variable is selected as a goal and the complexities of interaction among the nominally independent variables. These conversations around disparate impact are usually bereft of avenues of documented discrimination though that is the explicit or inferred mechanism for the observed disparateness of impact.

There are more elements of identity (as indicated above) as well as more degrees of identity. For example, Race is one variable to measure that might have some explanatory value in terms of outcome. But not only is Race a variable, but there are an increasing number of categories. Where once it might have been broken down as White and People of Color (i.e. a binary category), there are now multiple degrees including African-American, Asian, Native American, Hispanic, Pacific Islander, Mixed Race, and others. As more and more degrees of identity are shown to have a material predictive capability regarding outcomes, it becomes less and less clear what the relative importance of each variable might be.

I suspect that one of the greatest challenges to social justice arguments is the issue of identity multiplicity: by which identity do I affiliate under what circumstances and with what intensity? I may be on the outside of the group by ethnicity but on the inside at the top by income. Do I affiliate with my income identity or my ethnicity identity. Usually, I suspect, the identity that gives me the greatest psychological reward. If I have an increasing number of vehicles by which to identify, there is an increasing probability that there is one such identity that allows me to differentiate myself preferentially.

Observation 3: Functional Convergence - Manufactured goods, whether as simple as a box of cereal or as complex as an automobile or cell phone, have become, owing to Six Sigma, exceptionally precise, accurate and consequently reliable. The measured differentials between best and worst in a category have narrowed dramatically in the past thirty years. As an example, the measured quality differentials on US versus Japanese manufactured automobiles (and high end versus low end cars), used to be on the order of 10 and 20 percentage points. Now, the variance tends to be within 5%.

This functional convergence increases the importance of positional goods. If the functional variance within a class of cars has disappeared, then the positional importance between classes of car (example, Lexus vs. Civic) becomes more distinguishing.

With these observations in mind, here is my explanation for the increasing irrelevance of the arguments over social justice.

As Functional convergence and Identity multiplicity occur and expand, there is an increasing emphasis on the importance of Positional Status. It is a little like the sentiment attributed to Henry Kissinger that "one of the reasons academic infighting is so vicious is that the stakes are so small." In many ways this is ironic evidence of progress made. One of the reasons that affirmative action is less and less supported is its increasing irrelevance. When 60% of black students in the most competitive universities are from the top two income quintiles, and the remaining 40% are international students, then the importance of affirmative action to address class discrimination is vestigial.

The problem with positional status as evidence of disparate impact is that it is irresolvable. We can make sure people have enough safe food to eat (a material good with a measurable absolute goal). We cannot do anything about the fact that there is a positional spectrum of food from plain fair to elaborate cuisine. There is nothing that can be done from a social justice perspective to address that there is always someone in the bottom quintile.

Social justice as a concept has some pertinence when we are talking about material absolute goals (food, shelter, health, etc.) It has little pertinence in positional discussions.