Book Review: Advance Australia Fair?

April 23, 2014

Reviewer: Alison Woof

Andrew Leigh’s book Battlers and Billionaires asks the question, Is Australia fair enough? Leigh looks at the history of inequality in Australia, and poses some challenging questions for policy-makers about the impact of the growing gap between the haves and the have-nots in Australia today.

Leigh’s contention is that Australians have an egalitarian spirit—evidenced in such diverse ways as Australian prisoners of war sharing their rations while Brits divided them along lines of rank; our lack of formal respect for class and social status; sitting in the front seat of taxis; our troops’ effectiveness as peacekeeping forces because of a willingness to mix with and listen to the locals; and even the salary caps and handicapping systems that operate in our sporting codes.

He also argues that given the choice, most of us would prefer society to be relatively equal (although not, he hastens to add, completely equal, so that hard work is not rewarded). Leigh uses John Rawls’ notion of the ‘veil of ignorance’ to ask what kind of distribution of income an individual would prefer if he or she had an equal chance of being in any of the five income brackets. Unsurprisingly, from behind the veil of ignorance, most people would prefer a fairer distribution to one where the richest fifth have a disproportionately higher share.

And yet, according to OECD figures, Australia has the ninth highest level of inequality among 34 developed nations (p66). Leigh claims that Australia’s level of inequality was high in the 19^th century, then dropped steadily from the 1920s to the 1970s, but has been increasing again since the 1980s. ‘[F]or the past thirty years Australia has become more unequal, with the income share of the top 1% doubling and that of the top 0.1% tripling.’ (p140)

The drivers of this rise in inequality, according to Leigh, have been technology and globalisation, which have given people at the very top access to a global market and hugely increased the income of CEOs and celebrities; the decline of unionism, which tends to be an equalising force; and the move away from progressive income taxes and towards more indirect taxation.

As an economist turned Labor politician, Leigh’s aim is to stir up debate about inequality and its effects on society. He writes, ‘One of my greatest fears is that we will sleepwalk into a more unequal Australia without realising what is being lost…We need to be careful that we do not unwittingly lose something that past generations of Australians have held sacred.’ (p141)

Does inequality matter? Leigh claims it does for both instrumental (because it affects something else we care about) and intrinsic reasons. On the instrumental side, more unequal countries have faster economic growth, but the ‘trickle-down’ effect works more slowly, and there is less social mobility (ablity to move from ‘rags to riches’). The rich are more likely than the poor to engage in political activity, and there is ‘reason to think that rising inequality may skew political outcomes towards the interests of the most affluent’ (p89). Furthermore, a strong democracy depends on social mixing between different income groups (p89).

Intrinsically, Leigh argues that people recognise that our personal economic success is significantly shaped by factors we cannot control, so that justice and fairness are important. To maximise wellbeing, redistribution of wealth makes sense, because ‘a dollar brings more happiness to a poor person than to a rich person’ (p92). Leigh also cites a number of studies which show that ‘humans feel a palpable discomfort at high levels of inequality’ (p92), and that relativities matter at least as much as absolutes—our perception of what is a good income depends as much on ‘fairness’ as on actual monetary value (p93).

Leigh’s economic research is impressive—there are over 40 pages of endnotes—so it is disappointing that he presents statistics in support of his case with less attention to precision than to emotive effect, sometimes changing the terms of reference when making a comparison. Nevertheless, the mass of his analysis makes for disturbing reading, particularly when he documents some of the extremes at both ends of the economic spectrum.

Should Christians care about inequality at a public policy level? As individuals, and as church communities, the gospel of God’s generosity to us clearly teaches us to be generous with our wealth, to look after widows and orphans (Jas 1:27), and to renounce greed, which is idolatry (Col 3:5). But ought we to be worried about the growing inequality in our society and advocating for policies that would redistribute wealth more evenly? As Christians should we buy into our country’s perceived egalitarian spirit and seek to Advance Australia fair(er)?

I don’t think the Bible teaches us to aim for an equal distribution of wealth. That there are both the well off and the not-so-well off in our society should not disturb us per se. Christians might need to speak out, however, when inequality of income results in injustice, oppression of the poor or entrenched intergenerational disadvantage;[1] when basic human needs are denied to people because economic status at birth rigidly determines future prospects; when lack of income means a lack of opportunity, or access to adequate education, or legal representation, or ability to negotiate fair working conditions, or ability to participate in political processes.

Leigh’s analysis of the achievement gaps between the children of richer, better educated parents and those of poorer, less educated ones is sobering. That he is willing to raise the thorny issue of the effects of differing family structures and parenting styles, however politically unpalatable in today’s climate, is laudable.

Not all family structures and parenting styles are equally effective—at least as measured by children’s academic and economic outcomes. (p108)

The stark facts are that children from poor families are less likely to live with both parents (p113), children raised in lone-parent households do worse than children raised in two-parent households (p114), de facto relationships are less stable than marriages (p116), and a parenting style that prioritises interaction with children produces better academic and economic results (p118-121). These are areas where Christians—with their commitment to strong marriages and families—can be a godly model to communities.

Battlers and Billionaires is helpful in directing our attention to the negative impacts of inequality, which Christians can and should seek to redress—individually where we see need and have the means to alleviate it, and at a public policy level where we can speak up for the voiceless, the powerless and the vulnerable against injustice and the corruption that so often accompanies great wealth.

[1] E.g. Ps 82:3-4, 146:9; Pro 31:8-9; Amos 5:11-15; Jas 1:27, 2:1-9, 5:4.