SOCIOECONOMIC INEQUALITY: THE HAVES AND THE HAVE-NOTS
Richard E. Johnson
BYU Today, September 1990
SOCIOECONOMIC INEQUALITY: THE HAVES AND THE HAVE-NOTS
Richard E. Johnson
BYU Today, September 1990
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EVERY
semester several students in my social problems course at BYU propose that
the extent or seriousness of certain social problems represents a sign
that the world is about to end and the Millennium is near. Their common
conclusion is based on a set of three shared beliefs or perceptions.
First, they believe that the “last days” will be characterized by
unprecedented displays of sin and evil. Second, they see the traditional
and highly publicized problems of crime, violence, drug abuse, and sexual
deviance as the primary (or only) indicators of sin and evil. And third,
they perceive America as now experiencing unprecedented levels of crime,
violence, drug abuse, and sexual deviance. |
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IT SEEMS
to me that if we are serious about contemplating the moral state of
contemporary American society, we might gain valuable insight by broadening
the measure of morality beyond the traditional sins (crime, sex, drugs,
violence) to include such variables as poverty, homelessness, and
socioeconomic inequality. It also seems that any speculation about “the
signs of the last days” must be based on observation of conditions both
within and beyond the borders of the United States. And finally, it seems
plausible that the traditional sins of crime, sex, drugs, and violence may
not be the most appropriate sins to focus on as we search for “unprecedented
evil” on a global scale. Perhaps the central moral problem of our time is
primarily economic or materialistic, involving behavior that is more often
than not perfectly legal and socially acceptable. |
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WHETHER
or not materialism and inequality are key signs of the moral battles that
are to make the last days, or whether they are evil at all, the fact is
that these conditions are flourishing in America today. Admittedly, there
is no better evidence for the view that modern America has the “worst
ever” case of materialistic greed and inequality than there is for the
view that we have the “worst ever” case of crime, violence, sex, or drugs. But neither is it merely coincidental that social commentators almost unanimously refer to the 1980s as “America’s Age of Greed.”
There is firm empirical evidence of several recent trends that are very troubling to many observers, regardless of the definitions of morality. First the distribution of income and wealth in America is growing more unequal. The rich are getting richer and the poor are getting poorer. The  Census Bureau reports that the richest one-fifth of American households now receive almost 10 times the average income of the poorest one-fifth, which is the highest ratio of inequality since they began keeping records following World War II. America’s inequality ratio is also the highest among Western industrial nations.
The expanding income inequality is occurring fastest among the very rich and the very poor, and it has not been slowed by “progressive” tax policies that are supposedly to result in some leveling of incomes after taxes. In fact, the U.S. tax structure is anything but progressive, and the major changes in taxation and Social Security over the past decade have been “regressive,” taking a larger share from those who already have less. The after tax real income (adjusted for inflation) of the bottom one-tenth of American families dropped from $3528 to $3157 (in 1987 dollars) between 1977 and 1988. The after tax income of the top one-tenth rose from $174,498 to $303,900 during that same period. Statistics on income inequality hide two important facts. First, abstract numbers can dehumanize the lives of real people. Income inequality represents more than mere differences in the sizes of the piles of “goodies” that families can afford. For millions of families at the bottom of the distribution (perhaps the 10 percent with total family incomes averaging $3157), we are talking about malnutrition, literal starvation, little or no access to healthcare or education, homelessness, and utter hopelessness. Infant mortality rates among America’s poor exceed those in many Third World countries and greatly surpass the rates in other Western democracies. All of this occurs while the rich get richer. I cannot divorce this reality from conceptions of morality. I am ashamed for my society. Income statistics also hide the fact that wealth—total assets, genuine access to goods and services—is much more unequally distributed than income. While the top one-fifth of U.S. households get about 45 percent of the income, the top one-tenth own 70 percent of the wealth. Moreover, the proportion of the total wealth controlled by the top one-half of one percent (the very rich) increased by 38 percent from the 1960s to the 1980s. At the other end of the scale, poverty and homelessness are more widespread in America today than a decade ago. The percent of Americans in poverty declined dramatically during the 1960s, remained stable through most of the 1970s, then jumped significantly during the recession years of the early 1980s. For the past few years, the rate has hovered around 13 to 14 percent poor, which translates to well over 30 million people. The profile of the poor and the types of people “at risk” of poverty have changed more dramatically than the number of poor. The fastest growing category of the poor is people who are members of single-mother families. Members of minority groups and members of single-mother families have always been at higher-than-average risk of poverty, but the sheer number of single-mother families has grown dramatically in recent years. Of America’s poor, the segment residing in single-mother families has risen from less than 20 percent to over 40 percent over the past three decades. Children, of course, comprise a large proportion of these families (as well as the families of high-risk minorities). The net result is that children now—for the first time—represent one of America’s highest risk poverty groups. Almost one-fourth of all children in this nation are living in poverty. If present trends continue, the figure will reach an appalling one-third within 10 years. It is more difficult to accurately determine the extent of homelessness, but it is nevertheless clear that recent changes in homelessness have  exceeded changes in general poverty. In 1990, probably two to three million Americans will know what it is like to be homeless, although many of them will not remain homeless for the entire year. A major study sponsored by mayors of America’s major cities found a 30 percent rise in homelessness between 1985 and 1987. Most experts believe the figure has risen by about 10 percent in each of the years that followed.
The profile of the homeless has changed as well. The “traditional homeless” (alcoholics, addicts, traumatized war veterans, unemployables) are being joined in increasing numbers by the “new homeless”—single mothers with children, working poor, throwaway teenagers, and deinstitutionalized mental patients. The fastest growing segment of the homeless population is families with children, estimated to now comprise one-third of the total. Millions of other poor and not-so-poor families are just “one bad day” from homelessness. That bad day could be caused by a fire, the death of a breadwinner, a divorce, an illness or accident, or the closing of a factory. |
| WHY have these trends occurred in inequality, poverty, and homelessness? At the risk of tremendous oversimplification, let me offer a “short list” of nine possible contributing factors. Some are quite obvious, and of only short-term significance. Others are more subtle and far-reaching. Each may or may not have anything to do with the moral quality of American society. |
| 1 The recession of the early 1980s, which followed the OPEC oil embargo of the late 1970s, led to increased unemployment and poverty. Bad times invariably hurt those on the bottom more than those on the top. |
| 2 There has been a prolonged and general decline in America’s “smokestack industries.” Basic manufacturing plants, which often paid relatively high union wages for unskilled or semi-skilled labor, have been closing in the face of increased international competition and movement toward hi-tech industries. Markets are now worldwide. Operations in other countries benefit from cheaper labor and more recently built--and therefore more modern and efficient--facilities. Indeed, most of the urban “underclass” areas of today were once healthy communities sustained by factories that are now closed and have not been replaced. Displaced American workers are often untrained for newer hi-tech jobs, which are located in different areas and do not pay as well even when they are obtained. |
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3 The inequality in salaries and wages within American industry has
increased. Simply put, the bargaining position of American workers has
been eroded by the availability of cheap foreign labor, the increasing
availability of American female labor, and the failure of labor unions
to gain a strong foothold in newer, hi-tech industries. Unions (or
non-union workers) rarely succeed in obtaining higher wages when others
will do the work for less. Nowadays, those “others” include desperate
workers all over the world. Successful labor movements also require
strong feelings of worker discontent. Meanwhile, discontent has been
diffused in America, in part through a tremendous increase in the number
of dual-income families. A low single income, which would be very
aggravating if it were the sole means of family support, does not seem
so bad when pooled with another low income. Corporate leaders seem disinclined to share the wealth with their workers when they can get away with not sharing it. Given the American value of getting all you can for yourself (and perhaps ”oppressing the hireling in his wages” along the way?), it should be no surprise that the top executives of U.S. corporations often make more than one hundred times the income of their factory workers. The ratio between top and bottom workers, which averaged 93 to 1 in one U.S. study in 1988 (up from 29 to 1 in 1979), is many times lower in many other successful capitalist countries. In other ways, too, evidence indicates a growing gap between advantaged and disadvantaged American workers. The gap between college-educated and high-school educated workers has widened the gap between older (established) and younger (new) workers. |
| 4 There has been a slowing or stagnation in the growth of the “American pie” (total wealth) from which all must derive their share. An ever-growing pie could be divided very unevenly without anyone being left with too small a piece to subsist. But an increasingly unequal division of a finite pie must eventually leave some with only crumbs. Real family income (controlling for the effects of inflation) doubled from 1950 to 1973, increased slightly between 1973 and 1978, and has leveled or dropped since 1978. The situation in general may not be as bad as it first appears, since the average family size has also decreased over the same period. Still, unlimited economic expansion no longer seems very likely or environmentally wise. Given current economic conditions, it is not reasonable to expect those with only crumbs to “scrape up enough” for a home, food, and health care without someone taking a smaller share. |
| 5 The large increase in the number of single-mother families, due primarily to increases in divorce and illegitimacy, has had a profound impact on family income and poverty trends. |
| 6 Sexism and racism still prevent members of high risk groups from escaping or avoiding poverty at the same rate that others do. In spite of public perceptions to the contrary, studies continue to show that equally qualified blacks and women are not afforded the same education, jobs, or pay that white males are afforded. Progress toward equal socioeconomic opportunity remains slow in numerous areas. |
| 7 The unavailability of affordable childcare or parental leave makes employment almost impossible for single mothers and very difficult for poor two-parent families. Among all industrial nations in the world, the United States ranks at or near the bottom in efforts to accommodate the needs of working parents. |
| 8 Public policies and programs in America are rarely directed towards helping the poor in significant and long-term ways, and the anti-poverty programs that do exist have been systematically gutted of funding during the 1980s. In addition to failing to implement a progressive tax structure, we spend far more tax money on “wealthfare” programs for the non-poor than we do on “welfare” for the poor. It is pure myth that government spending for the poor is a major expense that is somehow responsible for our national debt. Less than one-fifth of all federal “entitlement” programs are even directed at the poor (and the proportion is decreasing). Only about one-third of all poverty stricken Americans receive any cash assistance, and about 40 percent receive no assistance of any kind (cash, food stamps, Medicaid, housing subsidies, etc). Meanwhile, the total cost of all poverty programs could be completely paid for simply by taxing just those Social Security checks that go to non-poor recipients (at going tax rates, and leaving the payments themselves alone). Similarly, 85 percent of all Medicare payments are in behalf of the non-poor. Nevertheless, during the 1980s virtually all benefits to the poor were slashed, many more than 50 percent, while Social Security and Medicare benefits (not to mention military spending) were increased. |
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9 Public stereotypes and attitudes about wealth, poverty, and welfare go a
long ways toward explaining the policy trends just described. After all,
our government is (to some extent, at least) “by the people.” Frankly, I
am continually amazed at the strength and harshness of the anti-poor
attitudes exhibited by some of my students and their unwillingness to
reconsider their views on the basis of clear, contradictory evidence.
Anti-poor attitudes come in a wide variety of hues, but the predominant
theme is that the poor deserve their lot in life because they are lazy,
stupid, and/or satisfied with their way of life--that they “deserve” to
be poor. Numerous studies show that the poor as a group have the same goals, desires, work ethic, and work habits of the non-poor as a group. For every poor “freeloader” (who is likely to attract much attention and be publicly branded as such), there is a middle-class or wealthy “freeloader” whose easy lifestyle escapes scrutiny or stigmatization. Work ethic, hours worked, ambition, and IQ are very poor statistical predictors of adult socioeconomic attainment in the United States. By far the best predictor is the socioeconomic position of one’s parents. In short, poor Americans of any age are primarily poor because they were born poor. And the second major reason for poverty is similarly related to individual character: The poor have often “landed” in an unfavorable macroeconomic setting. Not unlike victims of earthquakes or hurricanes, victims of structural economic depression often have little control over their fate. |
IT MAKES
just as much sense to blame more than a small fraction of current
poverty on individual laziness as it does to ascribe the Great
Depression of the 1930s on an “outbreak of a lazy-bum virus.” Certainly,
some poor folks should heed the traditional advice to “get a job.”
However, well over 90 percent of all poverty-stricken Americans fall
into one or more of the following categories: under 18 or over 65 years
old, disabled, working (for poverty pay), or rearing infants or small
children. Evidence is clear that when the disadvantaged are given real
 opportunities to
succeed, the vast majority work hard and take advantage of those
opportunities. The opportunities can be provided publicly or privately.
For example, there is no longer any reasonable dissent to the conclusion
that federal Head Start programs for poor pre-school children are a
tremendous success. Head Start graduates do better in school, stay in
school longer, and get in trouble less than their fellow disadvantaged
non-Head Start classmates. Moreover, Head Start is a cost-effective
program. One study found that every tax dollar spent on Head Start saved
tax payers over seven dollars in future direct expenditures for
unemployment, welfare, and criminal justice costs. Because of such
favorable results, Head Start now receives bipartisan praise in
Congress, along with an annual budget large enough ($1.4 billion) to
provide services to only one-fifth of the children who are eligible.
Meanwhile, the current price tag on the savings and loan bailout is
estimated at hundreds of billions of dollars.On the private side, there is the case of Mr. Eugene Lang, who lowered the high school drop out rate in his old New York City neighborhood (which had become a rundown poor area since he left) from over 50 percent to about 10 percent by promising to fund a college education for every law-abiding, successful high school graduate. The missing ingredient in the lives of Mr. Lang’s recipients had not been the desire or  willingness to
work. It was hope. Most college students I meet have long taken for
granted that college was an expectation or at least a realistic option
for them. Are they—we—to be particularly admired for following the most
reasonable path to socioeconomic success, while others “fail” because
they see no realistic hope of even getting on the path?Today, more poor and minority high school seniors than ever before report that they want to and plan to go to college, yet fewer and fewer of them are enrolling. By far the leading reason for their “change of mind” is reported to be the high cost of school and the absence of financial assistance programs that were much more available in the 1970s. As hard as it seems to be for the “successful” to admit, there is very little evidence that our success is a sign of anything other than the fact that we were the ones who received the real head start. In spite of massive evidence to the contrary, many still cling to the notion that America is the land of equal opportunity. That belief, in turn, makes a convenient basis for the conclusion that the “haves” deserve their goodies and are not obligated to assist the “have-nots.” My response to this conclusion is twofold. First, LDS scriptures state clearly that the obligation to assist the poor remains intact whether or not the poor are judged to be deserving. Second, how can one reasonably view the growing millions of poor children as blameworthy, no matter what one thinks of their parents? |
ONE
of the most sorrowful aspects of all that is happening in our society is
that we are virtually abandoning millions of our children, relegating
them to lives of stunted physical, intellectual, emotional, and moral
development. Not all forsaken children, of course, are poor, but
 poor children are
certainly most at risk.The President’s Commission on Children recently called the poverty and despair facing many American children “a staggering national tragedy.” Happily, yet sadly, the resources needed to save America’s children are readily available, at an affordable cost. The price tag would amount to relatively small sacrifices of time and slight reductions in our consumption of goods and services. How can anyone in a position to help simply sit back and enjoy a life of ease? Is not the lack of social action in this regard an indictment of American society? It matters not whether remedial action is private or public, Republican or Democrat. What matters is that inaction is both moral and social suicide. Because of our selfish and short-sighted desires for immediate materialistic self-indulgence, mainstream America is nurturing the growth of a sub-population within society that will have little or no ability or desire to participate in conventional social or economic life. The prospects for a productive economy in years to come are thereby reduced. The prospects for flourishing drug and crime problems are thereby increased. Everyone’s quality of life will be affected by the current neglect of our children. I have absolutely no particular partisan or political agenda in mind presenting these observations on poverty and inequality. I do feel a need, however, to address another attitudinal theme that I often hear from LDS students, one that seems to dictate to them their choice of political action or inaction. That theme is the absurd notion that addressing problems through taxation and governmental programs is “socialism” and is therefore of the devil. If that were so, perhaps we have the devil to thank for public libraries, highway, and police departments. If we choose to recoil from the word “socialism,” we can likewise choose to refrain from using it, as we do with reference to Social Security and Medicare. If we believe that public funding of a basic “safety net” of minimal standards of decency in health, education, shelter, and opportunity are impossible to provide in a setting of political and religious freedom, we can ignore the existence of most European nations. Finally, if we believe that any curtailing of free-reign capitalism somehow violates the laws of heaven, we must significantly abridge or alter both the Doctrine and Covenants and the Book of Mormon, as well as reject outright suggestions such as the following: But since all capitalistic systems are founded upon the institution of private property, inheritance and the profit motive, great inequalities of ownership and income inevitably result. ...Among the more plausible suggestions offered to correct existing abuses without adversely affecting the productive system, is to continue the socialization of our service institutions through a system of progressive taxation based upon ability to pay...taking the bulk of their [captains of industry] profits to finance free education, free libraries, free public parks and recreation centers, unemployment insurance, old age benefits, sickness and accident insurance, and perhaps eventually free medical aid and hospital service. ...The average family may not have much more money, if any, to spend under such a system than now. But...then the meager family income can be devoted entirely to the necessities of life, plus some of the comforts now enjoyed by the higher income classes. ...To finance all of this, of course, will necessitate huge sums of money. ...And it will also require a carefully worked out tax system so that every one will contribute according to his financial ability. Inheritance and estate taxes will become progressively higher, until the present system of permitting large fortunes to be passed on from generation to generation will become extinct. And incidentally, the so-called idle rich who have been living on the earnings of past generations will be no more. The above “plan” for equalizing living standards and life chances for Americans may or may not be politically or economically desirable or possible. The point here is not to recommend a particular plan. The point here is to simply note that even such a seemingly radical plan as  this (students have
yelled, “Marxist!” upon hearing it read in class) cannot be written off
as un-Christian or anti-Mormon. It is perfectly consistent (as are
countless other approaches) with the gospel of Jesus Christ. Its source,
it turns out, is the LDS Melchizedek Priesthood Study Guide for 1939. I
cite it only to reject the notion that the eternal principle of “free
agency” somehow translates into an economic system of “free capitalism.”
Such an equation strikes me as terribly ironic and terribly sad,
especially if it gets used as an excuse to justify personally convenient
inaction in the face of tremendous injustice and suffering.I am often told by economics majors that providing such a social “safety net” of basic human rights (shelter, food, access to medical care, education) would not be an “efficient” system. It would remove incentive for work and advancement. The argument seems to be that the presence of suffering and deprivation is good because others will therefore try harder to avoid joining the sufferers. I cannot accept such a view of humanity, which is based on shaky assumptions and traditions. In fact, I can imagine a generous safety net acting to increase entrepreneurial incentive. I, for one, would be much more inclined to venture forth economically if I knew the consequences of failure for my family would not mean severe devastation. |
WHILE
I have no reason to believe that favoring or opposing any specific
political or economic proposal will necessarily be the cause for
repentance for readers of BYU Today, I can easily imagine a scene in the
hereafter in which the bulk of our repenting is due to the sin of
“keeping too much for ourselves” while so many have so little. Some
“hoarding” of personal resources, of course, seems necessary, primarily
because of the very
fact that our society chooses not to provide a minimal safety net for
anyone other than the aged (and many of those fall through the netting).
Our children may be robbed of important opportunities in the future
(such as education) if we are too generous with our resources today. It
becomes a difficult moral and financial dilemma that each of us must
work out individually. How much are we justified in
keeping to meet our
needs, and how much are we keeping selfishly to satisfy our wants?  Attitudes and values relative to helping or not helping the poor are the last factor in the list of possible contributors to America’s problems of poverty, homelessness, and inequality. Obviously, I believe our attitudes—and our behavior—have strong moral implications. I would like to believe that my material living standard is not a moral issue, as long as I am a “good person” in other ways. Given the national picture just outlined, however, such a belief strikes me as a wishful fantasy. The evidence is simply too clear that a great deal of the evil and suffering in our land can be traced to the individualistic and materialistic pursuit of happiness, and to the tremendous socioeconomic inequality that follows. Thanks primarily to glitzy and glamorous portrayals in American advertising and entertainment, selfish values are pervasive throughout our socioeconomic hierarchy. No one group has a corner on the market of greed, even though the rich (them? us?) have many more opportunities to display their selfishness. The poor man who yearns to win the lottery and live the opulent “American dream” lifestyle portrayed in the media has values no nobler than the “fat cats” he both condemns and envies. On the other hand, it is not impossible for the recipient of a high income to live a modest lifestyle and use the money to benefit others. But as the scriptures repeatedly remind us, a high income represents a temptation that very few can withstand. Moreover, the definition of “modest” can easily be stretched beyond recognition. A major point from the widow’s mite seems to be that the moral judgement over the use of money is based not on how much we give, but on how much we keep for ourselves. As a nation, we may not be in the most selfish of times. Indeed, there is some evidence from public surveys that Americans are turning away a bit from the private-gain values of the 1980s toward more public-service and family-centered values in the 1990s. By world standards, however, our lifestyles are anything but modest, and the future looks anything but rosy. Global problems of poverty, homelessness, and inequality make America’s troubles seem almost trivial by comparison. Of course, the typical American has limited political or logistical means to ease the world’s suffering. We can do much more about these problems at home. Still, it is the global scene that represents a more fitting context for speculating about the “signs of the last days.” Whether or not we are witnessing signs of the last days, we are certainly witnessing global trends and events unprecedented in world history. Never before have scientific and political developments allowed so many hundreds of millions of people to realistically seek the “good life” of physical ease and comfort already enjoyed by the American middle class. Millions seem to be on the verge of freedom from political oppression, while millions more are being freed by science and technology from virtual isolation from the “civilized” world and from the “oppression” of Mother Nature’s harshness. The materialistic “good life” is fast becoming a global aspiration. Recent events in Eastern Europe, for example, represent not only the unshackling of political and religious bonds, but the unleashing of materialistic striving. As the Berlin Wall came down, spending sprees were at least as common as prayer vigils or political rallies. |
 COULD
not the great
and unprecedented battle between good and evil that seems to be
predicted for the end of the world refer to the dual evils of insatiable
materialism and unspeakable inequality? Certainly, opportunities for
engaging in economic selfishness are expanding rapidly. It is relatively
easy to “do without” under conditions of universal destitution,
ignorance of alternatives, or political totalitarianism. Indeed,
throughout history only a relative few have been afforded the
“opportunity” to engage in selfish political or economic oppression.
Now, for the first time, the test seems to be underway on a truly massive
scale. There may even be more people alive today exercising substantial
political and economic agency—facing real choices between personal
luxury and Christian charity—than in all previous centuries combined.
How will they handle their “opportunity” to engage in direct or indirect
oppression, their choice to hoard or to share? How are we handling ours? It is no longer
possible to think or even pretend that material acquisitiveness can be
morally neutral. Never before has it been so clear that the earth’s
capacity to sustain life is limited. Never before did humankind realize
that a high standard of living must be purchased at the cost of
depletion of finite resources and pollution of a fragile environment.
While the earth can still sustain life for all of its current
inhabitants at a healthy but simple living standard (which it can, even
though over a billion are malnourished), it cannot sustain all of its
five billion inhabitants at the living standard of middle-class America.
And even if it could, what about the extra five billion that will be
added in 40 years?The inescapable conclusion is that when one person lives a life of luxury in a society or world of limited and finite resources, others are forced to have less. Many, in fact, have so much less that they will suffer and die, but only after watching their loved ones suffer and die. Increasingly, the dying—and the injustice—are becoming more difficult to ignore. Modern communications systems continue to shrink the world, bringing into greater light and clearer focus the juxtaposition of unprecedented abundance and unprecedented suffering. The rich have run out of excuses. What happens when the poor run out of patience? Is literal global war a necessary component of the last days? If so, my prediction would be an attack by “have-not” nations on the “haves” of the world rather than a superpower battle between East and West. After all, the have-nots have nothing to lose, by definition. Whether we become more willing to sacrifice and share out of fear, economic self-interest, or charity, it seems that the time has come to do so or face the consequences. How long can we ignore the scriptural description of socioeconomic inequality as evil? How long will we be guided by the “traditions of our fathers” instead of the Savior of humanity? How long will Church members join mainstream America in not only condoning, but promoting and admiring materialistic self-aggrandizement? Might not the great lesson for the last days be that in order for there to be a world of peace or a Zion with “no poor among them,” that there must also be no rich among them? |
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as the root from which the
more commonly viewed “sins” take nourishment and as the ultimate cause of
both personal and social destruction. In short, the prevalence of selfish
striving for the “lifestyles of the rich and famous” (by both those who
succeed and those who fail), and the consequent inequality that results,
appear to be the most appropriate as criteria for assessing a society’s
moral climate. 
