At the Telegraph, TD argues that Labour’s definition of poverty—household income below 60 percent of the median—confuses inequality with genuine deprivation. By this relative metric, even a millionaire among billionaires would be deemed “poor,” while a society where everyone is equally cold and starving would count as poverty-free. He says that such thinking leads to bad policy, fosters resentment, and even encourages a perverse preference for general decline, since recessions reduce inequality.
The difference between relative and absolute measurements is important in medicine as well as economics. Let me give a purely hypothetical example. Suppose the infant mortality rate in the richest tenth of the population were 3 per thousand, and in the poorest tenth 6. Let us then suppose that both could be lowered respectively to 2 and 5 thousand. Everyone would be better off, but inequality would have increased: the difference in mortality rates between the two deciles would have increased from 200 to 250 per cent. The benefit, though the same per thousand for both deciles, would have lowered the infant mortality rate by 33 per cent in the richest tenth, but by only 20 per cent in the poorest.
Would anyone reject such a lowering of mortality rates on the grounds that it increased inequality? (I rather fear that some might, because envy and hatred are by far the strongest political emotions.)
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