Tapu Misa: It's just not fair - why equality matters

Here's an easy, if pessimistic, prediction: our latest OECD report card on children won't be our last bad one.

If we're lucky, we might get slight improvements in rates of child abuse, youth suicide, and teenage pregnancy. Our educational gap might narrow slightly. But none of these will last.

Why? Because a truckload of evidence tells us that child wellbeing is worse in unequal societies - and despite what many of us fondly imagine to be this country's egalitarian values, we are, thanks to some accelerated widening in incomes between rich and poor in the 1980s and 1990s, one of the most unequal countries in the developed world.

And that's not likely to change under a regime that seems unable to understand the drivers of our biggest social problems.

In their book, The Spirit Level: Why More Equal Societies Almost Always Do Better (2009), Richard Wilkinson and Kate Pickett present a compelling case for why inequality matters. They pick through 30 years of data to show that highly unequal countries, like ours, almost always pay with high rates of social dysfunction. And not just among the poor but across almost all levels of society.

There's more violence, ill health, mental illness, drug and alcohol addiction, infant mortality, obesity, homicides, teenage births, educational failure, imprisonment in highly unequal societies.

And less of the good stuff, like trust and social mobility (because as social distances become bigger, the gap becomes too wide for most people to jump).

The Spirit Level provides the evidence for what many of us know intuitively. It should be required reading for policy makers - including those who think a rise in GST is a good idea. Wilkinson and Pickett say that while economic growth benefits poor countries, it's a different story for rich countries. There comes a point when more money no longer makes us happy; it's the paradox of prosperity.

It's the gap, argue Wilkinson and Pickett: the bigger the gap, the bigger the problems.

"The problems in rich countries are not caused by the society not being rich ... but by the scale of material differences between people within each society being too big. What matters is where we stand in relation to others in our own society ...

"If inequalities are bigger, so that some people seem to count for almost everything and others for practically nothing, where each of us is placed becomes more important."

Greater inequality has been accompanied by a rise in anxiety levels and depression in the population. And, strangely, a rise in narcissism and self esteem, which some psychologists interpret as a defence mechanism against threats to one's social position. It makes sense. This may come as a surprise to the rich but the poor don't relish their lowly status. Even poor people try to keep up appearances.

The more hierarchical society becomes, the more sensitive people become to their social status. In fact, say Wilkinson and Pickett, much violence happens because people, especially males, feel disrespected and humiliated. What would cure this? Not piecemeal social spending. Until we tackle the root problems, we'll continue to spend more with diminishing returns.

Wilkinson and Pickett write that only by reducing inequality will we improve the quality of the social environment, and so the real quality of life, for all of us. "There is not one policy for reducing inequality in health or the educational performance of school children, and another for raising national standards of performance. Reducing inequality is the best way of doing both."

We all sense the deterioration in our social environment. Many have blamed it on a moral decline in society. They're right in a sense, although the moral lack is the kind the prophets of the Hebrew scriptures raged against: the economic violence of the rich against the poor.

It isn't irreversible. But change requires the kind of political will demonstrated by British governments during the first and second world wars - when a more equal Britain was seen as necessary for the war effort - and by Swedish Prime Minister Albin Hansson and his Social Democratic Party which swept into power in 1932 after violent labour disputes in which troops opened fire on sawmill workers. Hansson was determined to make Sweden a "classless society", and Swedes backed him.

It shouldn't be hard to shore up the public opinion needed to stiffen political spines. More than 40,000 customers deserted Contact Energy when it tried to double its directors' fees, and Telecom chief Paul Reynolds' $5 million package has touched a deep vein of disquiet.

Most of us want a fairer, more equal society. At least that's what we say.

I'm with the scientists from Sustainable Aotearoa New Zealand who think our current economic approach isn't sustainable for the planet or the human beings who inhabit it.

As they said in a paper released last week, we need new economics based on a different set of human ethics and values, which "maximise community wellbeing and the happiness of individuals within the limits of ecological principles". Or as economist Susan St John has said, one that doesn't view the world through a "paradigm that having more stuff will make us better off".