Tim Duy on R-E-S-P-E-C-T: Monday Focus (January 6, 2014)

Let me turn the microphone over to Tim Duy…

Tim Duy: On Respect and Income Equality:

Noah Smith laments the days of yore, hypothesising that what we need is not a redistribution of income, but of respect:

I want this to change. I want to move back toward a society where the hard work of an unskilled laborer is considered worthwhile in social interactions, regardless of how many dollars it brings home. I want to move back toward a society where being a good parent or a friendly neighbor earns as much respect as making a hundred million dollars on Wall Street.

In other words, I want our “democracy” back. We need to redistribute respect.

My first thought was “Did such a world ever exist?”

Perhaps someone with a little more vintage than me can add to that conversation, but I worry that such an idyllic view of the past is what one gets watching sitcoms of the 1950’s that leave out inconvenient issues like apartheid in the American South.   

My second thought was that if respect was more equally distributed in the past, this was almost certainly because incomes were more equally distributed. Chris Dillow at Stumbling and Mumbling latches onto the theme:

I fear that Noah is under-estimating the extent to which inequality of respect is endogenous. It arises out of the forces that generate and sustain inequalities of power and wealth.

My third thought was that this is not exactly a new topic.  The underlying tendency to treat the poor with contempt has been around a long, long time.  Indeed, it seems like an opportunity to curl up with an old friend, Adam Smith’s Theory of Moral Sentiments.  Smith recognized that inequality of incomes would result in inequality of respect:

This disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect persons of poor and mean condition, though necessary both to establish and to maintain the distinction of ranks and the order of society, is, at the same time, the great and most universal cause of the corruption of our moral sentiments. That wealth and greatness are often regarded with the respect and admiration which are due only to wisdom and virtue; and that the contempt, of which vice and folly are the only proper objects, is often most unjustly bestowed upon poverty and weakness, has been the complaint of moralists in all ages.

Adam Smith continues in a paragraph so beautiful it can be read time and time again:

We desire both to be respectable and to be respected. We dread both to be contemptible and to be contemned. But, upon coming into the world, we soon find that wisdom and virtue are by no means the sole objects of respect; nor vice and folly, of contempt. We frequently see the respectful attentions of the world more strongly directed towards the rich and the great, than towards the wise and the virtuous. We see frequently the vices and follies of the powerful much less despised than the poverty and weakness of the innocent. To deserve, to acquire, and to enjoy the respect and admiration of mankind, are the great objects of ambition and emulation. Two different roads are presented to us, equally leading to the attainment of this so much desired object; the one, by the study of wisdom and the practice of virtue; the other, by the acquisition of wealth and greatness. Two different characters are presented to our emulation; the one, of proud ambition and ostentatious avidity. the other, of humble modesty and equitable justice. Two different models, two different pictures, are held out to us, according to which we may fashion our own character and behaviour; the one more gaudy and glittering in its colouring; the other more correct and more exquisitely beautiful in its outline: the one forcing itself upon the notice of every wandering eye; the other, attracting the attention of scarce any body but the most studious and careful observer. They are the wise and the virtuous chiefly, a select, though, I am afraid, but a small party, who are the real and steady admirers of wisdom and virtue. The great mob of mankind are the admirers and worshippers, and, what may seem more extraordinary, most frequently the disinterested admirers and worshippers, of wealth and greatness.

I think the tendency to equate poverty with “vice and folly” is a long-standing tradition.  What may have changed is this:

In equal degrees of merit there is scarce any man who does not respect more the rich and the great, than the poor and the humble. With most men the presumption and vanity of the former are much more admired, than the real and solid merit of the latter. It is scarce agreeable to good morals, or even to good language, perhaps, to say, that mere wealth and greatness, abstracted from merit and virtue, deserve our respect. We must acknowledge, however, that they almost constantly obtain it; and that they may, therefore, be considered as, in some respects, the natural objects of it.

I am not sure that it is now considered “scarce agreeable to good morals” to openly proclaim that wealth and greatness by themselves deserve respect.  Or worse, that poverty alone deserves our contempt. Indeed, the “War on the Poor” seems now to be pretty much out in the open.  This I think is a result of ever greater income inequality and the need of the wealthy to justify that inequality.  One such justification is that which Adam Smith lamented: Wealth must be an indication of moral superiority, luck doesn’t have anything to do with it.

Moreover, Noah Smith points to the 1980’s as the time respect disappeared from the public discourse:

I feel like the America I grew up in could learn a thing or two from Japan in this regard. I don’t know if the word “loser” was a common insult before the 1980s, but in recent decades it has become ubiquitous. People who work in the service industry almost always seem ashamed when they tell me what they do for a living. Low-skilled workers are treated in a peremptory way, constantly reminded that they are “losers”.

It shouldn’t be a surprise that disrespect toward the poor grows beginning in the 1980s – that is also when inequality starts to explode. It doesn’t take long for the rich/poor theme to appear in popular culture.   I just watched “Trading Places,” a 1983 movie that leverages off the disrespect for the poor on the part of the rich.  That theme is also critical to the 1986 movie “Pretty in Pink.”  A memorable scene, after Blane attempts to take the “girl from the wrong side of the tracks” Andie to the rich Steff’s party:

Steff: Look, that was very uncool of you last night, Blane.
Blane: What?
Steff: [mockingly] What?
Blane: You mean Andie?
Steff: Yeah, I mean Andie.
Blane: What’s the big deal? I like her. Matter of fact, I was pissed off at you guys for being so nasty to her.
Steff: It was way out of order for you to force her on the party.
Blane: [disbelievingly] Steff, do you hear yourself? Do you hear the same asshole shit I hear?
Steff: What, do I have to spell it out for you?
Blane: [pissed off] I guess so.
Steff: Nobody appreciates your sense of humor, you know. As a matter of fact, everyone’s just about to puke from you. If you’ve got a hard-on for trash, don’t take care of it around us.

The social pressure becomes too much for Blane:

Blane: What do you want to hear?
Andie: Tell me!
Blane: What?
Andie: You’re ashamed to be seen with me.
Blane: No, I am not!
Andie: You’re ashamed to go out with me. You’re terrified that you’re goddamn rich friends won’t approve.
[Andie hits Blane]
Andie: Just say it!
[Andie hits him again]
Andie: Just tell me the truth!
Blane: You don’t understand that it has nothing at all do with you.
[Andie runs away]
Blane: [wipes a tear] Andie!

As movies often conclude, Blane comes to see Adam Smith’s point that he should not automatically equate wealth and greatness with virtue and wisdom:

Blane: You couldn’t buy her, though, that’s what’s killing you, isn’t it? Stef? That’s it, Stef. She thinks you’re shit. And deep down, you know she’s right.

Since, 1986, however, income inequality has only grown, and with it contempt for the poor.  Life rarely ends in the way of a John Hughes movie.

So while I agree with Noah Smith that we should seek equality of respect, I think, like Chris Dillow, that this will come only after greater equality of incomes.  Greater income equality would reduce the ability to make moral comparisons against one another on the basis of income alone.  It forces us to look toward other factors (“… real and solid professional abilities, joined to prudent, just, firm, and temperate conduct…”) as a basis for respect.

Addendum I:  In the past, my students were required to use “Pretty in Pink” to explain Marx.  The obviously well-trained students soon revolted, pointing out that it was a much better fit with Smith.

Addendum II:  I now dutifully await the smackdown to be delivered by Gavin Kennedy for what will be shown to be a questionable understanding of Adam Smith.

Tim Duy is Professor of Practice and Senior Director of the Oregon Economic Forum at the University of Oregon Department of Economics. Previously he held positions as an international economist at the US Department of Treasury and at the G7 Group, an economic and political consultancy for clients in the financial industry. He blogs at Tim Duy’s Fed Watch