by Bruce Hood
With statistics like these, you might think that a second American revolution is long overdue, but the truth is most Americans prefer inequality. In one study of over 5,000 Americans who represented all strata of the wealth divide, adults were shown three anonymous pie charts that reflected the real wealth distributions of the US and Sweden as well as a fictitious communist country where all wealth was evenly distributed.3 Each pie chart was divided into five quintiles that showed how much each 20 per cent of the population owned in terms of the nation’s wealth. Participants were then asked to imagine moving to one of the countries and being randomly assigned into one of the quintiles. Which country would they prefer to live in? Very few chose the fictitious communist country. But they did not want to move back home either, because they did not recognize the gross imbalances of the US pie chart as representing the country’s actual wealth distributions. Rather, nine out of ten Americans said they would prefer to live in Sweden, based on the Swedish pie chart that showed a much more even distribution of wealth compared to the inequality of the US. This preference for some degree of inequality is not just restricted to Americans. In a 2018 online study of another 5,000 adults, when presented with the opportunity to play Robin Hood, the majority of both Americans and Germans preferred not to take from the rich in order to redistribute wealth to the poor.4 Clearly, we expect and prefer inequality in life.
We do not start out accepting inequality. Simple experiments suggest not only an early sensitivity to inequality but an aversion to it. Infants as young as fifteen months are surprised when crackers are not shared evenly between two recipients.5 Toddlers know to share equally between third parties, even though they still keep most for themselves.6 When there is an odd number of treats to be dispersed between two recipients, six- to eight-year-olds would rather dispose of the odd treat in order to maintain an equal share.7 Children also prefer individuals who have been shown to share equally compared to those who show favouritism.8
The psychologist Christina Starmans points out that there is no contradiction between the research studies that demonstrate children’s aversion to inequality and the evidence that adults prefer to live in unequal societies. It is not the unequal distribution of wealth that upsets people, but rather whether that distribution is considered fair.9 This is because fairness and equality are not the same thing. Studies claiming to show a natural disposition towards fairness have typically set up a situation where recipients are equally eligible to receive rewards. If you divide resources among individuals who have worked for them, it is unfair if you give everyone the same amount even though some worked hard while others lazed about. When differences of effort are taken into consideration, the lab studies start to look more like real life. Children who are told that one child has worked harder to clean up, reward them with more because they consider it fairer.10 They believe in rewarding merit.
Perceived fairness also explains attitudes towards wealth distribution. The reason most residents of capitalist countries are content with the unequal state of economic distribution is that they believe that people who work harder than those who don’t should be rewarded more. Meritocracy is central to the capitalist ideology that if you work hard, you will succeed and benefit from the fruits of your labour. If citizens are unhappy about the current state of affairs then it is not because of inequality per se, but rather because they think the distribution is unfair. From the richest to the poorest, everyone wants to see less inequality, but not a totally equal society (apart from communists, of course, but no communist society has yet to achieve this full equality).
One problem for this perspective on fairness is that, just like when estimating other people’s salaries, we are not very good at predicting the actual distribution of resources. The same participants from the study above, who revealed a preference for Sweden versus the US, were asked what they thought would be an ideal fair distribution, and to estimate the real distribution of wealth in the US.11 Respondents thought life would be fair if the top 20 per cent owned around a third of a nation’s wealth and the bottom 20 per cent owned around one-tenth of the wealth. When it came to estimating the actual US distribution of wealth, they were correct in guessing that the top 20 per cent in the US own most of the nation’s wealth compared to the poorest, but they grossly underestimated the extent of that inequality. In fact, the top 20 per cent own around 84 per cent and the bottom 20 per cent own only 0.1 per cent of the nation’s wealth. Clearly the perception of equality and fairness is much greater than it really is. One of the reasons for this misperception is the common belief in the ‘American dream’.
The American dream is one based on meritocracy – that people are justly rewarded for their efforts. If so, it naturally follows that anyone can be successful if they work hard enough. This leads to the assumption of social mobility, where anyone can reach the top and should be rewarded for their efforts. People prefer unequal societies because without the motivation to succeed no one would strive to better their lives and the lives of their children.12 Why bother if you do not reap the benefits of all your hard work? The fairness principle explains the general tolerance of inequality in the US, and less support for the redistribution of educational resources or wealth by taxing the richest more heavily in comparison to countries such as Sweden.13 We all want to live in fairer societies, just so long as we are the ones at the top. The UK may not have the equivalent British dream, but there is still income inequality. We have better social-support systems than the US, especially with welfare and the National Health Service, but again the top 10 per cent benefit from around 45 per cent of the total UK wealth whereas the bottom 50 per cent have only around 8 per cent of the national wealth.
The meritocratic ideal partly explains the rise of the political right during the modern era and the appeal of Donald Trump. Although many commentators considered his election to the presidency as an economic protest vote from the poorest in society, economic inequality is not the only factor operating across the political spectrum where populism has arisen, as we saw in the first chapter. Indeed, there are few politicians as privileged and wealthy as Donald Trump, and yet many economically disadvantaged voters voted for him because they viewed him as a product of the American dream – a self-made man. His opponent, Hillary Clinton, on the other hand, represented the establishment, her husband being a former US president. Even though Clinton’s Democratic Party has traditionally promoted more egalitarian policies to distribute wealth that should have favoured the least well-off in society, many of the poorest resented this continuity of privilege from one political dynast to the next. They felt that their economic predicament was due to the elite classes controlling the system that kept them subjugated. They wanted to take back ownership and control of their lives.
History will tell if the shift to the right produces a better world, but one thing is clear: people do not always behave in their best self-interests – as the current political upheavals demonstrate – but, rather, make decisions based on principles. This is particularly relevant in the case of ownership. If ownership is the exclusive control over resources that enable individuals to thrive, then there is a strong moral component as to what society considers acceptable ownership inequalities. We can accept inequalities when individuals have deservedly earned their wealth, but ownership is inherently unfair because life is not a level playing-field.
Each of us benefits to a greater or lesser extent depending on who our ancestors and relatives are. And it is not just through financial inheritance but genetic dispositions too. If someone works hard then maybe they are physically more capable than others to begin with. Some of our top athletes are paid exorbitant salaries, but is it fair if they were born that way? If someone is naturally more numerate, do they deserve a higher salary than someone who is not? Then there is financial luck and windfalls as much as bad luck and disasters – events that are out of our control but change our lives. How do we respond to the inequalities that make or break our fortunes as a result of lif
e’s random events? As individuals, we must decide what is fair and just, but how?
Ownership creates inequality and, by the advantage of inherited privilege, it perpetuates unfairness in society. But it also empowers individuals to share their resources with those who have less, and so the imbalances created by ownership can be corrected by the moral compass that guides our generosity towards others. Contrary to the competitive instinct, humans can be remarkably kind to strangers; but if life is simply a competition, why? To get a better understanding of this, we turn to the field of behavioural economics to discover how our generosity is determined by a developing sense of morality and fair play.
THE DICTATOR GAME
Nicholas is a dictator. He is not the leader of a fascist regime, nor does he deliver strident nationalistic speeches like Hitler or Mussolini. After all, Nicholas is only seven years old. But he is the one calling the shots and has the power to decide what he can keep for himself – in this case, some shiny animal stickers.
Nicholas has just taken part in a study where he talked about his friends while my graduate student Sandra Weltzien drew a picture based on his description. After the interview, she thanked him for his time and said that, as a treat, he could choose six stickers from a bag of goodies to take home. After he’d selected the six best ones, Sandra told Nicholas that he could keep them all, or, if he wanted, he could share some of them with the next child who was coming into the lab by leaving some in a blank envelope. It was entirely up to him. He really liked the stickers and wanted to keep them all. What should he do?
After Nicholas left with his mother, Sandra opened the envelope and tipped out three shiny stickers on to the table. Why did Nicholas give away half his stickers? After all, no one would have known if he’d taken all of them, and it wasn’t as if he knew the child who would receive them. By the time they reach seven or eight years old, most children share when asked to even though they do not know the recipient. Is it because they have learned that they must share, or do they think that it is the right thing to do? Why do we share or help others? Is it out of the goodness of our hearts or are there other motives for kindness?
In 2017, Americans donated $250 billion to charity, while Britons donated £10 billion.14 When it comes to charitable donations, there is no expectation to receive something in return. Why do people share and give away their resources if not for pure altruism? Such kindness is a concern that has preoccupied our greatest thinkers since Socrates, the father of moral philosophy. It constantly arises across the humanities, sciences and theology, but selfless generosity has not occupied a central role in economic theories because it is illogical from a purely rational viewpoint. Kindness is difficult to reconcile with classical economic models that are largely influenced by thinkers such as John Stuart Mill and Adam Smith.
In The Wealth of Nations, Smith wrote: ‘It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.’ In other words, humans operate rationally to maximize what they can get by contributing as little of their resources as possible. They are motivated by commerce to buy low and sell high, and, so long as the market exists to adjust to the needs of buyers and sellers, Adam Smith’s invisible hand of economic influence that we discussed earlier will guide citizens towards prosperity. This idealized consumer who always operates rationally has been called ‘Homo Economicus’, an individual who has evolved solely to maximize their own interest.15
It is ironic then, that the major problem with Homo Economicus is ownership. This is because we make ownership decisions that reveal that most of us fail to maximize our own interests – and can act against our best economic interests when it comes to valuing things. Individuals are prone to over-value certain items, such as personal possessions or objects associated with significant others, which we address in later chapters. More problematic for Homo Economicus, however, is charity and generosity. Humans regularly give away resources to others even when there are no opportunities for payback. We share when we see others in need. Just like Nicholas and his gift of stickers to the unknown child, we are often kind to strangers, which runs counter to the business principles of Homo Economicus.
If our economic drive is self-maximization and our biological imperative is to make copies of our genes at the inevitable cost to others, then why is there altruism at all, if life is just a competition? Why is the world full of generous people and kind acts? Why do charities exist? What motivates people to be kind? To address these questions, we need to look to biology for answers.
I’LL SCRATCH YOUR BACK
As we have already seen, biology can explain patterns of generosity to others, especially those who are kin. Kin selection predicts we are more likely to help our relatives because they carry varying proportions of our individual genes, but it cannot be the only mechanism. The problem for kin selection is that we often engage in pro-social acts that are not accounted for by genetic relatedness. For example, many of us donate blood even though we will never know the recipients. What is the advantage of helping a total stranger with whom you do not share genes?
One answer is pooled benefit. Co-operation is one of the major characteristics and strengths of social species. Working together, our ancestors learned to hunt animals as massive as mammoths that no lone hunter could easily bring down on their own. Other social animals have also learned the benefits of mutual effort. Wolves and other pack predators co-ordinate to capture prey larger than any one individual member. Our nearest cousin, the chimpanzee, is a group hunter when it comes to tracking and capturing red colobus monkeys for meat. Frisky colobus monkeys are swift and difficult to catch unless cornered by multiple chimps working together. Sometimes prey is so small and numerous that a group effort is more efficient. One of the most unusual and spectacular examples of this collaborative effort is ‘bubble net’ fishing by humpback whales. They swim in circles around shoals of fish to confuse and corral them by blowing out bubbles of air through their blow holes, before each whale takes their turn to swim up the centre of the column to gulp down the amassed prey.
All these examples of hunting require co-ordinated activity in order to achieve a common goal. However, animals also share food even when their bounty does not require co-ordinated hunting. Take the South American vampire bat. Vampire bats must feed off the blood of other animals at least every forty-eight hours or they will starve, but not every bat will have a successful hunting trip on each outing. When this occurs, other bats will regurgitate blood to help their neighbour even when they are not related as required by kin selection.
This form of altruism seems charitable, but it is really a strategy to bank favours. Bats keep track of those who helped them in the past and give them preferential treatment if they need food in turn. Studies of bats kept in zoos reveal that individual bats who are deliberately segregated and starved by experimenters will benefit from neighbours if they have donated blood previously to others, whereas bats with a reputation for being selfish tend to be ostracized when they themselves require food.16 This ‘reciprocal altruism’ is an evolved strategy to get individuals through lean times.
In our human history, reciprocal altruism would have been a necessary mechanism for survival. The evolutionary psychologist Michael Tomasello thinks the origins of human morality evolved from our capacity to share the spoils from our collaborative efforts.17 This co-operation arose from interdependence, where we depended on each other. Sometime in our evolution, early humans discovered the truth of the proverb ‘many hands make light work’. We were interdependent because it was more beneficial for us to work together. We learned that it was in our interest to forego some personal goal for the potential of greater rewards through collaboration.
Reciprocal altruism depends on keeping track of those who return favours and those who cheat. Otherwise, freeloaders would come to dominate the group. This is especially true with ownership where we need to keep in mind who owns what and which individua
ls owe a favour in return. This is also motivated by emotions of anger and outrage, as we seem to be especially sensitive to someone who breaks the rules. Keeping track of others requires a social brain that is characteristically found in species that not only co-operate and live together in small groups but also spend a long period of time rearing their young. Long childhoods provide ample opportunity to learn about helpers and cheats. Consider the vampire bat again. It is a particularly social animal, rearing its young on average for nine months, in contrast to other species of bat that are usually independent by one-month-old. This extended childhood is also true of other species that form enduring social bonds, providing learning opportunities to discriminate between other members of the group as well as how to behave reciprocally. This may be why social animals spend long periods engaged in grooming each other; this is also true of the vampire bat, which grooms fourteen times longer than other bat species.18 This grooming is not promiscuous but rather selectively directed to those who have shown past reciprocity. The same is true of humans and other primates. Chimpanzees will groom longer and more often a partner who has previously groomed them.19 Grooming is the original reciprocal act of ‘I’ll scratch your back, if you scratch mine!’
HONEST HYPOCRITES
If young children recognize and expect fairness in others, then it seems hypocritical that they appreciate the fairness principle, expect it from others, but do not demonstrate it in their own behaviour. They recognize fairness from infancy, but still have to be told to share until around six or seven years old, when it starts to become routine. In many ways, however, younger children are being more honest than older children and grown-ups. Adults typically consider themselves to be fair, but most of us are hypocrites when the potential rewards are high and we think our unfair choices will be undetected. In one study, adults were presented with two tasks: one that had potential reward and one that did not. The majority (between 70 and 80 per cent) assigned the lucrative job to themselves when their decision was anonymous.20 The same is true for avoiding pain or punishment. Even when adults are instructed that the fairest way to allocate jobs is to flip a coin, only about half elect to do so, with the remainder showing the same self-bias to choose the best job or to avoid tasks with associated electric shocks. What’s more remarkable is that 90 per cent of individuals who agreed to flip a coin still chose the best job anyway. They want to appear to be fair but cheat when they think they will be undetected.