When people talk about economic development and how rising incomes increase happiness, you often hear this objection: absolute income doesn’t tell the whole story. What really matters is the relative gap in income—inequality.
Some people believe that Confucius got to the heart of happiness with his famous saying: “Rather than worry about having too little, worry about things being unevenly distributed.” Even if your absolute income goes up, if the gap between you and the people around you keeps widening, you may develop what is called “relative deprivation”—and you won’t feel happy.
And one basic fact about the world today is that even after passing the peak of the Kuznets curve, wealth inequality remains quite high. The gap in wealth between the rich and ordinary people is still astonishing in absolute numbers. So when ordinary people think about this massive inequality, how could they possibly feel happy?
So, does inequality really make people suffer?
Sociologists Jonathan Kelley and Mariah Evans analyzed survey data covering 200,000 people in 60 countries over a span of 30 years. They found that, overall, inequality did not make people miserable. On the contrary, it was inspiring: most of the time, people were actually happier in more unequal societies (with some exceptions, such as certain formerly communist countries).
When people think about inequality, do they feel anxious? Yes.
Do they feel envy, jealousy, and resentment? Yes.
But all these negative emotions are overwhelmed by one positive emotion: hope. People actually see inequality as an opportunity. Inequality means that education and other paths to upward mobility may bring rewards for themselves and their children.
In fact, many people confuse “inequality” with “unfairness” when discussing this issue. What people care more about is unfairness: whether “inequality created through privilege” vastly outweighs “inequality created through talent, effort, and opportunity” in society.
In other words, what really affects happiness is how people interpret inequality. If “inequality = opportunity,” people will strive to move forward. If “inequality = privilege,” people will become discouraged and angry.
So both halves of Confucius’s saying, “Rather than worry about having too little, worry about things being unevenly distributed,” are wrong: there is no happiness to be found in abject poverty, and inequality is not necessarily a bad thing. What increases happiness is higher absolute income and a fair system.
Note
- This article in the “New Psychological Insights” series was a short popular-psychology essay and miscellaneous reflection written at the time in connection with Zhichao Wei: New Psychological Insights Course. It was published on the now-closed platform Fantuan, and the original link no longer exists.
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