by Daniel Choi
On March 1, 1932, Charles Lindbergh, 20-month-old son of aviator Charles and Anne Lindbergh, was abducted from the crib in the upper floor of his home in Highfields, New Jersey with a ransom note demanding a payment of $50,000, or roughly $1.4 million in today’s terms. Two weeks later, the baby’s corpse was found, and a German immigrant carpenter named Richard Hauptmann was arrested for the crime. At the time, the Lind - bergh Kidnapping was touted as the Crime of the Century, for its heinous disregard for common decency. As an illegal immigrant to the United States with previous criminal record, Hauptman struggled to make his living in America, is presumed to have commit - ted the crime over economic grievances.
For centuries the correlation between poverty and crime was tacitly accepted by the so - ciety. It was presumed that the poor were predisposed, or at least more prone to serious offenses and crime. But it was Gary Becker, a Nobel-prize winning economist, who first advanced the argument that all crime is economic, and all criminals are rational, making a cost-benefit assessment of the likely rewards from breaking the law against the prob - ability of being caught and punished. Becker’s “Crime and Punishment: An Economic Approach” (1974), posits that in a society of utility-maximizing, would-be delinquents, the more pronounced the economic inequality and material gap between the rich and the poor, the more likely it is for that society to be rife with all sort of criminal misdeeds.
A study conducted by Gallup last year affirms Becker’s theory. The survey asked 148.000 people in 142 countries about their perceptions of how safe they feel across four meas - ures: (1) whether they feel safe walking alone, (2) whether they trust the local police, (3) whether they have been assaulted in the past year, and (4) whether they have had money or property stolen. Comparing the results of the survey with levels of income inequality measured by the Gini index indicates a strong correlation between lower perceptions of safety and higher levels of inequality. For example, in Venezuela 83% of responders answered that they do not feel safe walking alone, and theft and violence is common in the country. Its income distribution, as measured by the Gini coefficient, is the 25th most unequal in the world. Meanwhile, 95% of responders in Norway answered that they feel safe walking alone, and Norway’s income distribution is the 8th most equal in the world. Research by Daniel and Joan Hicks published in 2014 similarly demonstrates that American states with greater inequality in visible expenditure had higher rates of violent crime over a 20-year period.
In 2009, Kate Pickett and Richard Wilkinson published their research linking inequality with all manner of social ills, such as crime, violence, obesity, poor health, low level of education, and more. Recently, the duo shifted their focus to explain the relationship between inequality and mental illness. At the heart of their argument lies status anxiety, or defined by Alain de Botton, the constant tension or fear of being perceived as “unsuccessful” by the society in materialistic terms. Pickett and Wilkinson initially demonstrate that anxiety decreases with increase in absolute income. Yet, anxiety appears to be higher across all income groups in more unequal countries, so much so that the richest 10% in countries with high inequality are more anxious than the poorest 10% in countries with low inequality. Anxiety then leads to a myriad of mental-health issues, such as depression and schizophrenia, which are alarmingly prevalent in Western countries with high levels of inequality.
Pickettt and Wilkinson argue that rising inequality feeds to this malicious cycle by accentuating the visible differences in status and material worth, which in turn exacerbates status anxiety by lowering one’s sense of self-respect and value within the society. Such anxiety manifests as mental illnesses, and soon after that: alcoholism, drug addiction, obesity, self-harm, gambling addiction, or crime, as people seek to compensate for the apparent lack of self-worth. As an example, drug abuse appears to be higher in more unequal parts of the world, such as in San Francisco, where streets looming below the majestic heights of the Silicon Valley are littered with used up syringes and needles thrown away by the city’s growing homeless population.
Inequality alone cannot explain all manner of social ills, as Pickett and Wilkinson attempt to do. Yet, evidence suggests a linear relationship with higher levels of inequality, such that at least for the time being, a degree of caution is raised regarding the direction capitalism is taking around the world. Inequality has always existed in the developed economies, but its levels are highest in decades, while the trend of inequality has been rising in many developing countries. The World Inequality Report authored by the Paris School of Economics notes of rising inequality in most of the world’s regions, particularly in developing India and China, and the capitalist powerhouse, United States. Pickett and Wilkinson, meanwhile, have gone as far as to declare “(capitalist) growth has largely finished its work”, citing that “higher average material standards in the rich countries no longer improve well-being”.
For decades, capitalism was the driving force behind the dynamics of modernization and globalization, lifting billions out of poverty and creating thousands of thriving communities around the world. However, unfettered capitalism without proper checks and balances has led to a growing trend of inequality. At the same time, societies with widening wealth gap are reporting higher rates of crime, mental illness, and other adverse conditions that diminish quality of life. Thus, countries are inevitably faced with two contradictory impulses, one trying to sustain and replicate the steep-growth curve of capitalism, and other conceding to the need for more equitable wealth distribution. Compromise between the two will be very difficult to achieve.
