The Formula

Photo by bplanet

On the evening of August 18, 2011, viewers of The Daily Show were treated to a droll but distressing lesson in statistics. “The United States is not a Third World country by any measure,” Jon Stewart told his audience, “except, perhaps, income inequality.” To Stewart’s left, a ranked list of countries flashed on the screen, topped by Sweden. Then, in a blur, the list scrolled down to its middle-bottom reaches. “We rank worse than the Ivory Coast, worse than Cameroon: 64th!”

After a few moments trash-talking the nations just below us on the list (“In your face, Uruguay, Jamaica, and Uganda! … Keep trying, Rwanda!”), Stewart pulled away from his desk, covered his mouth, and uttered a disconsolate “Wow.”

What the graphic next to Stewart showed was an obscure statistical list called the Gini Index, which is used by the CIA and the World Bank as a standard gauge of family-income inequality in a country. The index gives each of the world’s countries a score somewhere between zero (perfect equality) and 100 (the most unequal).

The Gini renders what everyone has been talking about for the past couple of years—inequality—in terms of a single, elegant number. In 1979, the top 1 percent of Americans took home almost 10 percent of the nation’s income; today the top households get 20 percent of the nation’s paycheck. That change, which became a heated part of the presidential election, boosted the U.S. Gini by at least six points, to 45. The increase landed us in uncomfortable company, as Stewart pointed out on The Daily Show. But the only thing more bizarre than America’s income inequality exceeding Cameroon’s is the fact that the hoary old Gini Index—previously embraced only by spooks and wonks—had become a punchline on late-night TV.

The Gini Coefficient, which can measure inequality in any set of numbers, has been in use for a century, but until recently it rarely left the halls of academia. Its one-number simplicity endeared it to political scientists and economists; its usual subject—economic inequality—made it popular with sociologists and policy makers. The Gini Coefficient has been the sort of workhorse metric that college freshmen learn about in survey courses and some PhD statisticians devote a lifetime to.

Corrado GiniCorrado Gini

It’s been so useful, so adaptable, that its strange history has survived only as a footnote: the coefficient was developed in 1912 by Corrado Gini, an Italian sociologist and statistician—who also wrote a paper called “The Scientific Basis of Fascism.” After running Italy’s Central Institute of Statistics under Mussolini, Gini eventually had a falling-out with the fascist state, but he remained a control freak to the end of his life. In the 1950s, at his own statistics institute in Rome, he made his professors and assistants work “in small glass boxes, fitted with a microphone which Gini could use to listen and talk, but the occupier of the box could only reply if spoken to,” according to a professor who worked there. To Gini, statistics—including his famous coefficient—were a way for states to see beyond the “noise” of individual feelings and agendas, channeling human and material resources to become more powerful.

And yet, nearing its 100th birthday, the Gini Index became part of the noise in the streets. When crowds at Occupy Wall Street events shouted “We are the 99 percent,” the media reached for the Gini to explain and evaluate the broad narrative of inequality. Not to be left out, the 1 percent—specifically, the ultrarich at this year’s annual do in Davos, Switzerland—voted “Severe Income Disparity” as the top probable global risk for the next 10 years. Through it all, the Gini Index has been both the measurement and the messenger, offering a simple way to talk (or joke) about a complex subject.

It’s been a strange journey for this versatile metric, which was conceived as a way to create statistical correspondence between newly rich urban Italian industrialists and the illiterate peasants who were isolated in the countryside, beyond the reach of roads or radios. Now we are all enmeshed in electronic correspondences—the Internet, Twitter, comedy shows reporting the news—that cover the globe, reflecting and refracting us into a state of hyper-awareness. Sure, the Gini Index lets us compare ourselves to far-off Africa, but what does that mean anymore?

THE GINI COEFFICIENT is no Zagat guide for tourists, because although the metric looks simple, inequality is a complicated subject. I discovered this when, in 2012, I visited Namibia, the country with a Gini score of 70.7, the world’s highest.

I had already been to the country with the lowest Gini number—Sweden, 23. I was impressed by the tidy streets, the picturesque town squares, the contentment of the citizens out on a Sunday-afternoon walk. All were in similarly spiffy stonewashed jeans (it was 2002) and looking naturally healthy and optimistic. There seemed to be little crime, and certainly no homelessness. But Sweden was no bland socialist paradise: with the base of Maslow’s needs pyramid covered, including health care, education, and breakfasts of rye crackers and fish paste, the Swedes were free to purchase tea lights, booze, and quirky shoes. I was there to write about that infectiously middle-class purveyor of pragmatic furnishings, ikea. The Swedes took consumerism to a new level: I learned, from the windows of the small shops in town, that expensive chainsaws were considered sporting goods. I concluded that equality was working as well for Sweden as it was for ikea.

When I saw Namibia’s soaring Gini score of 70.7, I expected the country to be Sweden’s opposite: chaotic, noisy, unsafe, full of beggars. I had, after all, been to Nigeria, where the Gini score was 42, and found it a mad jumble of rich and poor, fighting over a sinking infrastructure; wealthy people’s houses were surrounded by walls and guys with AK-47s. One morning I looked up a 20-foot-high garbage pile and saw a man in a suit, carrying a briefcase, cresting the heap and descending to the street where urchins played with the debris. Safety, both physical and psychic, is in short supply in Nigeria. Sitting at a nice restaurant, one is always aware that the shadows conceal armed guards, ready to defend your privilege to drink a quiet cup of tea. A simple trip across town is impossible by bus, and taxis are likely to be caught in traffic, so I climbed on the back of a motorcycle driven by a daredevil member of the middle class, and went blasting through crowds and puddles of unknown depth. There is a pervasive sense that getting anywhere means (literally) pushing someone else down. The haves and the have-nots are engaged in a daily, circular struggle, like in those old cartoons of Andy Capp and his wife.

….

Read the rest of the article at The Pacific-Standard

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