Wealth Effects

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Paul Piff, a social psychologist, presented some of his collabarators’ recent research on the disturbing situational effects of wealth in a recent TEDx talk.

Michael Lewis’s recent piece in The New Republic summarizes some of that research and some related findings.  Here’s an excerpt:

What is clear about rich people and their moneyand becoming ever cleareris how it changes them. A body of quirky but persuasive research has sought to understand the effects of wealth and privilege on human behaviorand any future book about the nature of billionaires would do well to consult it. One especially fertile source is the University of California, Berkeley, psychology department lab overseen by a professor named Dacher Keltner. In one study, Keltner and his colleague Paul Piff installed note-takers and cameras at city street intersections with four-way stop signs. The people driving expensive cars were four times more likely to cut in front of other drivers than drivers of cheap cars. The researchers then followed the drivers to the city’s cross walks and positioned themselves as pedestrians, waiting to cross the street. The drivers in the cheap cars all respected the pedestrians’ right of way. The drivers in the expensive cars ignored the pedestrians 46.2 percent of the timea finding that was replicated in spirit by another team of researchers in Manhattan, who found drivers of expensive cars were far more likely to double park. In yet another study, the Berkeley researchers invited a cross section of the population into their lab and marched them through a series of tasks. Upon leaving the laboratory testing room the subjects passed a big jar of candy. The richer the person, the more likely he was to reach in and take candy from the jarand ignore the big sign on the jar that said the candy was for the children who passed through the department.

Maybe my favorite study done by the Berkeley team rigged a game with cash prizes in favor of one of the players, and then showed how that person, as he grows richer, becomes more likely to cheat. In his forthcoming book on power, Keltner contemplates his findings:

If I have $100,000 in my bank account, winning $50 alters my personal wealth in trivial fashion. It just isn’t that big of a deal. If I have $84 in my bank account, winning $50 not only changes my personal wealth significantly, it matters in terms of the quality of my lifethe extra $50 changes what bill I might be able to pay, what I might put in my refrigerator at the end of the month, the kind of date I would go out on, or whether or not I could buy a beer for a friend. The value of winning $50 is greater for the poor, and, by implication, the incentive for lying in our study greater. Yet it was our wealthy participants who were far more likely to lie for the chance of winning fifty bucks.

There is plenty more like this to be found, if you look for it. A team of researchers at the New York State Psychiatric Institute surveyed 43,000 Americans and found that, by some wide margin, the rich were more likely to shoplift than the poor. Another study, by a coalition of nonprofits called the Independent Sector, revealed that people with incomes below twenty-five grand give away, on average, 4.2 percent of their income, while those earning more than 150 grand a year give away only 2.7 percent. A UCLA neuroscientist named Keely Muscatell has published an interesting paper showing that wealth quiets the nerves in the brain associated with empathy: if you show rich people and poor people pictures of kids with cancer, the poor people’s brains exhibit a great deal more activity than the rich people’s. (An inability to empathize with others has just got to be a disadvantage for any rich person seeking political office, at least outside of New York City.) “As you move up the class ladder,” says Keltner, “you are more likely to violate the rules of the road, to lie, to cheat, to take candy from kids, to shoplift, and to be tightfisted in giving to others. Straightforward economic analyses have trouble making sense of this pattern of results.”

There is an obvious chicken-and-egg question to ask here. But it is beginning to seem that the problem isn’t that the kind of people who wind up on the pleasant side of inequality suffer from some moral disability that gives them a market edge. The problem is caused by the inequality itself: it triggers a chemical reaction in the privileged few. It tilts their brains. It causes them to be less likely to care about anyone but themselves or to experience the moral sentiments needed to be a decent citizen.

Or even a happy one. Not long ago an enterprising professor at the Harvard Business School named Mike Norton persuaded a big investment bank to let him survey the bank’s rich clients. (The poor people in the survey were millionaires.) In a forthcoming paper, Norton and his colleagues track the effects of getting money on the happiness of people who already have a lot of it: a rich person getting even richer experiences zero gain in happiness. That’s not all that surprising; it’s what Norton asked next that led to an interesting insight. He asked these rich people how happy they were at any given moment. Then he asked them how much money they would need to be even happier. “All of them said they needed two to three times more than they had to feel happier,” says Norton. The evidence overwhelmingly suggests that money, above a certain modest sum, does not have the power to buy happiness, and yet even very rich people continue to believe that it does: the happiness will come from the money they don’t yet have. To the general rule that money, above a certain low level, cannot buy happiness there is one exception. “While spending money upon oneself does nothing for one’s happiness,” says Norton, “spending it on others increases happiness.”

If the Harvard Business School is now making a home for research exposing the folly of a life devoted to endless material ambition, something in the world has changedor is changing. And I think it is: there is a growing awareness that the yawning gap between rich and poor is no longer a matter of simple justice but also the enemy of economic success and human happiness. It’s not just bad for the poor. It’s also bad for the rich. It’s funny, when you think about it, how many rich people don’t know this. But they are not idiots; they can learn. Many even possess the self-awareness to correct for whatever tricks their brain chemicals seek to play on them; some of them already do it. When you control a lot more than your share of the Fruit Loops, there really isn’t much doubt about what you should do with them, for your own good. You just need to be reminded, loudly and often.

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