I Will Pay Money To Make You Poorer


Actually I wouldn't, because I like to see people be successful. But one study shows that many people will harm themselves economically in order to harm the wealthy in the same way. It all has to do with improving relative status.

Participants in laboratory games are often willing to alter others' incomes at a cost to themselves, and this behaviour has the effect of promoting cooperation1-3. What motivates this action is unclear: punishment and reward aimed at promoting cooperation cannot be distinguished from attempts to produce equality4. To understand costly taking and costly giving, we create an experimental game that isolates egalitarian motives. The results show that subjects reduce and augment others' incomes, at a personal cost, even when there is no cooperative behaviour to be reinforced. Furthermore, the size and frequency of income alterations are strongly influenced by inequality. Emotions towards top earners become increasingly negative as inequality increases, and those who express these emotions spend more to reduce above-average earners' incomes and to increase below-average earners' incomes. The results suggest that egalitarian motives affect income-altering behaviours, and may therefore be an important factor underlying the evolution of strong reciprocity5 and, hence, cooperation in humans.

FuturePundit has some excellent commentary on the issue.

To put it another way: Think of societies as having inequality budgets. A society has a fixed amount of inequality to spend. In my view it is better to spend that inequality on policies that cause economies to generate the most wealth per person and the most new technology and science. Policies that generate a lot of inequality with little increase in productivity of wealth creators (e.g. immigration of people who have low skills and low earnings power) essentially waste inequality that would be better spent on incentive systems for those with the most potential to generate wealth.

I think that technology will initially exacerbate this problem, as the lower end of knowledge work will eventually be automated. In the end, maybe some virtual reality will let us all live seemingly real lives as rock stars, celebrities, or whatever it is that we want to be. Our own private Lake Wobegones.

  • Lord

    This makes sense to me. Unlimited inequality leads to shifts in political power that move away from democracy towards a society of privilege. Heaven knows we see a lot of that already.