Many people consider the reduction of economic inequalites as a basic aim of society. Such ideas are, however, largely nonoperational, sterile, and even meaningless, as long as what is called inequality is not stated with precision. This is so because, as well appear below, different measures of inequality give widely different, and even opposite, results. Such policy which diminishes some apparently reasonable measure increases other ones.
This is no small point. While it is nice for us to bang on about “reducing inequalities”, it is nothing more than empty platitudes if we aren’t willing to discuss the trade-offs associated with individual policies.
Also, let’s not forget this quote:
Few concepts are as meaninglessly used as that of inequality.
But this is not because he thinks analysing issues of social justice don’t matter – in fact it is the complete opposite! He believes that multi-dimensional ethical issues deserve careful and specific analysis, rather than being thrown into one broad, and close to meaningless, term.
Like exchange rates, productivity, GDP, and inflation, inequality is a broad macro(social/economic) term that can be used as a touch stone to go on to think about other real issues. But it should not be allowed to become more important than these issues, and an understanding of the trade-offs that do exist when we go to make policy choices.