Fighting Inequality with Governance
If you feed a capuchin monkey a cucumber, he will be happy and excited … until that critter sees you feeding another monkey grapes instead of cucumbers. Then he will lose his shit (no, seriously; search for YouTube videos of this; it’s hilarious and we can all relate). The instinct to become livid in the face of perceived “unfairness” is programmed deeply into our DNA. This unconscious biological instinct has existed in us long before we were human. Governance structures can be utilized to systematize or erode structural inequality.
Counterintuitive as this may be, it is sometimes good for governments to create structural inequality. For example, the USA imposes open discrimination on employment opportunities based on age, straight up making it illegal for people under a certain age to hold most jobs. Heck, in addition to not being permitted to work, people under certain ages are not permitted to vote.
While there was a point in history at which governments’ systematic restrictions on individual rights were genuinely up for debate, we don’t think child labor laws present a hill on which many still wish to die. That said, the goal of most governance structures, be they corporate, family, or state, is to reduce inequality and increase fairness.
One thing to keep in mind in discussions of fairness is how hard fairness is to nail down and define as a concept. An analogy we used in The Pragmatist’s Guide to Life is that of a teacher splitting a cake fairly with her class. Does she:
- Split it into equal pieces
- Give more cake to the hungrier students
- Give more cake to the poorer students
- Give more cake to the harder working students
- Give less cake to the student who constantly disrupts class
- Give less cake to the student who already has a cake on his desk that he is eating
- Give less cake to the ten students who were given cake the last five times there was a cake
The type of inequality governance structures can take on can largely be divided into four categories:
- Inequality that results from bigotry: This is inequality that results from perceptions about certain groups. While it is typically thought of in the context of racism and sexism, bigotry can also be tied to subcultures (e.g., people with tattoos or goths), religious beliefs, sexuality, and even political beliefs. Nazis really went for the quadfecta of bigotry in the Holocaust, killing people for ethnicity, sexuality, religious beliefs, and political beliefs, however they themselves are now ironically also a political ideology subject to intense discrimination. (Socially, we try to differentiate forms of bigotry into different categories based on how ethical we see them as being, often categorizing bigotry based on something a person chose—like their political beliefs—as being systematically different from bigotry based on something they did not choose. While it might be true that these should be regarded as ethically different from a systems perspective, they function identically at the level of governance.)
- Systematic wealth/power differentiation: Inequality that exists as natural variation in wealth and power within a system is present within all governances but can sometimes reach levels that are destructive to the system itself. While in pop culture this is often seen as a flaw of capitalist systems and is measured through things like the Gini coefficient, systematic wealth and power gaps are often just as present in cashless systems. (Even if your company were to not pay the CEO any more than a janitor, the CEO would still have more structural power than the janitor, which would accrue them more opportunities.)
- Generational freeze out: This happens when bigotry combines with systematic wealth differences to create a compounding cycle of disenfranchisement and is uniquely deadly in terms of institutional knowledge transfer. In family offices, generational freeze out can be seen when a family waits too long to bring the next generation into management positions. At the state level, it can be seen when almost all ultra-wealthy individuals or individuals in certain branches of government are above a certain age.
Fortunately, this issue is easy to resolve when contrasted with other forms of discrimination: If over 70% of a governing structure’s members are from one generation, create a mechanism to ensure this can be smoothed out by adding individuals of other generations.
- Biological restrictions: Common biological restrictions include disabilities, pregnancy, and old-age.
Just as an unequal system can cause inefficiency within a governance body, putting too much emphasis on perfect fairness can generate enormous friction and burn off most of the system’s wealth and value creation, reducing quality of life for everyone living within it. Equality is always a balancing act between allowing for things like some degree of generational wealth transfer (people having the ability to be motivated by giving their kids a better life) while not allowing power and wealth to coagulate within certain families or ethnicities and clog the gears of the system.