Inequality and Indignation

I. Overview

Every society contains countless inequalities. Some people have more money than others. Employers have authority over the livelihoods, and many daily decisions, of their workers. Some people are well-educated, while others are not. In some nations, convicted felons are not allowed to vote. Many inequalities are found acceptable, but some produce indignation, which often is a function of perceived injustice. The perception of injustice is a frequent basis for contests over the appropriate content of law, which can, in turn, fuel indignation or diminish it. Even if law is rarely enforced, it might offer signals that will transform or entrench an unequal status quo. A key variable here is the moral authority of law within the relevant community. When the law lacks moral authority, it will not have significant behavioral consequences unless it is aggressively enforced.

In this article we use some simple tools from game theory and behavioral economics to cast light on the maintenance and disruption of unequal relationships through private action and through law. Unequal relationships are often sustained simply because it would be harmful, to the disadvantaged as well as the advantaged, to alter the status quo, and both sides are aware of that fact. Consider an imaginable system of sexual hierarchy, in which women are systematically subordinate to men, but which is to the benefit of women as well as men in the sense that both sides would lose if the status quo were changed. Or consider a system of labor-management relations in which a rebellion by low-income workers would lead to depressed wages or unemployment. In situations of this kind, unequal relationships tend to be stable and self-sustaining. Members of disadvantaged groups would suffer from a change, and they know it. Our argument is that while inequalities are often stable, because those seeking equality stand to lose still more from change, indignation can nevertheless lead to disruption by making members of disadvantaged groups willing to accept the material losses that are likely to accompany the disruption. We also contend that law, by virtue of its expressive function, can promote or undermine indignation, and hence encourage or discourage efforts to disrupt inequality.

We tell a tale of a successive chain of events. The first link in the chain consists of unequal but stable states of affairs. Under certain conditions, these states produce indignation among members of the group disadvantaged by the inequality. Next we show that indignation may pose a credible threat to the stability of an unequal status quo. Noting that those who are advantaged by the inequality will seek to weaken that threat, we turn to the problems faced by members of the disadvantaged group. We identify these as collective action problems, and we explore how the disadvantaged group might deal with those problems. The last step in the chain concerns the law, which the advantaged and disadvantaged will both attempt to use to their advantage. When the law is on the side of those seeking to entrench the status quo, we refer to it as entrenching law; when it is on the side of those seeking to upset it, we refer to it as transformative law. It is mostly in connection with transformation that we claim a role for the expressive function of the law, altering behavior through signals alone.

The first step in our chain requires focus. We note that inequality does not always generate indignation, and also that inequality is not the only possible cause of indignation. Even when indignation is generated by inequality, it need not be confined to those who are disadvantaged by the inequality: the privileged may be indignant too. In noting these points, we engage in clearing up some issues, both terminological and conceptual, involving the idea of indignation, as we understand it here. Our emphasis is on cases in which inequality is the cause of indignation among members of disadvantaged groups, and in which the indignation...