Nancy Folbre, economist at UMass-Amherst, has a thought-provoking piece on yesterday's NY Times Economix Blog, "Born to Lose: Health Inequality at Birth."
In the post, she summarizes some of the work by Princeton's Janet Currie and others, on the relationship between health disadvantages at birth, and future economic well-being and educational achievement. One of the most fascinating and important interdisciplinary research agendas of the last decade has been the effort by economists, sociologists and epidemiologists to understand how inequality is reproduced in the developed world, and how/why inequality matters. To the extent that I have any optimism left about the possibility of a more just America, it is based on my reading of this literature. Of course, as a theoretical and empirical matter this question (inequality) is hardly new; the reproduction of capitalist class relations has generated some of the most insightful intellectual work of the past 150 years, starting with Marx.
But this work -- typified for me by the vital work of Richard Wilkinson and Kate Pickett in Great Britain, and James Heckman, Thomas Shapiro/Melvin Oliver, and Annette Lareau in the US -- is different. It isn't theoretical, at least not primarily. Rather, it seeks to understand how inequality is partly rooted in such things as pre-natal and and infant health, the environmental factors shaping cognitive development, social capital, nutrition, exposure to violence, the correlation of all of these things with place, and the overall income and wealth inequality in the society in which children are raised. It acknowledges the vital importance of resources, of course (family income and wealth), and the power that shapes their distribution. But it also attempts to show us why and how a lack of wealth and income matters -- how it shapes places, families, bodies, minds, and ways of seeing the world. In the context of the US, as I have argued elsewhere (and will argue further here in the future), the ubiquity of racial and economic segregation also appears to profoundly shape all of these things, and thus the distribution of primary social goods. It is (and will be) my contention that untying the knot of metropolitan segregation is likely to unravel many more things. But more on that later.
I see 3 absolutely vital (and interrelated) insights coming from this stuff:
1. International comparisons (see Wilkinson's work with Kate Pickett) reveal that income inequality within developed societies tends to have enormous impacts on health, culture and quality of life for all citizens, not just the least privileged. In other words, citizens living in societies with great inequalities of income tend to have worse outcomes in terms of mental health, obesity, social trust, exposure to violence, life expectancy, and social mobility. The statistical correlations are simply too strong and consistent not to be at least in part causative. The graph below comes from Wilkinson and Pickett, and can be found on their website. Note the strong relationship between income inequality and infant mortality, which appears to be recursive -- in other words, inequality leads to high infant mortality rates, which tends to reproduce inequality, etc.

2. Policy matters, because those developed nations with less inequality (and the improved quality of life that seems to stem from it) are more equal because they have chosen it -- its not culture that matters here, or economic growth. And just as the circle of inequality is vicious, the circle of equality is virtuous: in so far as a society chooses to be more equal, it tends to be more willing to make decisions (even sacrifices) that will benefit the collective good.