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Don't Give Up on Equality of Opportunity

Noah Smith is a Bloomberg View columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.
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I recently had a debate with my Bloomberg View colleague Megan McArdle on the question of which kinds of inequality we should care about. We’re far from the only people thinking about this important issue. Last year, Dylan Matthews of Vox made a long and well-argued case that we shouldn’t worry about equality of opportunity. Since this concept is a hallowed American ideal, promoted by everyone from President Barack Obama to House Speaker Paul Ryan, Matthews’ thesis is both bold and contrarian. Is it really time to throw out one of our guiding principles?

Matthews mainly highlights one big problem with the concept of “opportunity” -- it’s hard to define. Do natural talents count as opportunities? No matter what I did in life, no matter how hard I worked, I could never have been as good a basketball player as LeBron James. But I was born into a two-parent middle-class family, while James was born to a low-income single teenage mother. I’m also white. If I had James’ natural physical and mental talent for basketball, I’m sure it would have been much easier for me to reach his level of stardom than it was for him. So did I have more opportunity, or less?

Lots of factors that determine life outcomes -- work ethic, depression, interpersonal trust, mathematical ability -- are heavily influenced both by genetics and by early childhood upbringing. It isn’t at all clear which of these differences the government should try to cancel out in the name of “opportunity.” It’s easy to imagine a dystopia in which the government tries to negate every asymmetry of birth and childhood. But where do we draw the line?

The difficulty of defining opportunity also makes it hard to measure. Matthews rightly criticizes the focus on income mobility, which measures how likely people are to be in a different income stratum than their parents. But if this is high mainly because of pure luck -- if people’s incomes fluctuate wildly due to the changing fortunes of careers and health -- does that indicate equality of opportunity? That doesn’t sound right.

Income Inequality

Matthews explores this problem in depth, and he’s not wrong. Opportunity is a vague concept, and it can be interpreted in some ways that would be very bad for society. But I still think that equality of opportunity, despite its ambiguity and contradictions, remains an ideal worth striving for and a good moral foundation for the American economy.

First, it seems clear that any ideal of equality is subject to the same problems Matthews highlights. Take equality of outcomes, the usual alternative ideal. When are outcomes equal? Is it when everyone has the same amount of money in the bank? Or an equally fun and engaging job? How about equal romantic success, or equal likability in social interactions? Does equality of outcome mean we all have to be identical? That’s a nightmare in the making. But take any big sweeping notion of equality, and you’ll run into the same thorny questions and absurd extrapolations.

The purpose of an ideal of equality isn’t to serve as a blueprint for the creation of a utopia, but to nudge us in the direction of policies that will make society feel more fair. And it’s here that I think equality of opportunity shines.

What the focus on opportunity has consistently led to is prioritizing children rather than adults. The result is that more resources have been devoted to education, child-care assistance and childhood health. This has been good, because children’s mental and emotional plasticity means that their lives can be improved a lot with early intervention. Universal public education is one of government’s greatest successes, and it’s an institution that has been adopted in almost every society. Public health is certainly another. Nowadays, the emphasis on child care has led to policies like paid parental leave, which other developed countries have already adopted.

Equality of opportunity also entails more government investment, instead of consumption. When the government transfers income between groups of people, it’s a zero-sum game -- think of Medicare, or welfare or other transfer policies. Some of that is inevitable and necessary. But when the government invests in public goods that the private sector can’t or won’t fully provide -- highways, electrical grids and basic research -- it can boost all incomes in the future. In other words, investment can create a positive-sum game.

Redistribution is important. But during the last two centuries, government has been at its most effective when it concentrated on investment and on children. Medicare and Social Security Disability payments have eased the suffering of many poor, elderly and ill people. But schools, roads, electrical grids, public health and research transformed the country. Without those public goods, it’s doubtful that the U.S. would be able to afford much of the redistribution that goes toward creating equality of outcomes.

Thus, let’s hold on to the notion of equality of opportunity. For all its faults, it has been very good at keeping the country pointed in the right policy directions.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Noah Smith at nsmith150@bloomberg.net

To contact the editor responsible for this story:
James Greiff at jgreiff@bloomberg.net