Most Americans would rather keep wealth to themselves than help others

https://www.independent.co.uk/news/world/americas/americans-wealth-keep-help-others-robin-hood-reflexes-economic-inequality-study-a8263771.html

by pmoriarty • 8 years ago

15 21 8 years ago

independent.co.uk

tunesmith2• 8 years ago

Have there been any studies that purport to show what level of financial "inequality" is healthy? I mean, the phrase:

    "Between 1989 and 2016, the amount of wealth held by the richest one per cent of Americans rose from just under 30 per cent to nearly 49 per cent"

sounds like that's definitely in the wrong direction, but assuming something other than purely flat (the top 1% gets 1% the wealth), is there an actual distribution to shoot for other than "flatter than now"?

maxxxxx• 8 years ago

The first step would be stop the trend towards more inequality. This seems like a no-brainer to me.

IAmEveryone• 8 years ago

Inequality has one obvious and intuitive effect: the decreasing marginal utility of money causes a decrease in total wellbeing with ncreasing inequality. In easier terms: a wealthy CEO gets less use out of the $1000 they spend on a bottle of champagne than a poor person would get from spending the same money on food for the family. This is basically a truism as long as people do any meaningful prioritization (which they obviously do).

There is a countering effect where inequality is a needed byproduct to incentivize people to, for example, start businesses. This is also obviously true in general.

The question is where these two curves intersect, I. e. whee the benefits are no longer enough to compensate the loss from unequal distribution.

It seems likely that the US is long past this point at least in gerade to the compensation of lawyers, top executives, or stock traders. After all, these professions also exist in more equal societies and there’s no reason to believe people cut out to be high-charging CEOs in those countries choose to become couch potatoes and leave the $15,000,000 job to lesser individuals because they require $150,000,000 to even bother.

On the startup side it’s a little more murky. But keep in mind that almost all startup founders come from the financial security of an upper-middle class family, and even in the US, the success of a Silicon Valley is rather unique. It may be easier attributed to network effects, excellent universities, the status of the English language, or the availability of capital.

Wikipedia has this summery with some empirical evidence:

Effects of inequality researchers have found include higher rates of health and social problems, and lower rates of social goods,[112] a lower level of economic utility in society from resources devoted on high-end consumption,[113] and even a lower level of economic growth when human capital is neglected for high-end consumption.[114] For the top 21 industrialised countries, counting each person equally, life expectancy is lower in more unequal countries (r = -.907).[115] A similar relationship exists among US states (r = -.620).[116]

2013 Economics Nobel prize winner Robert J. Shiller said that rising inequality in the United States and elsewhere is the most important problem.[117]

Increasing inequality harms economic growth.[118]

The economic stratification of society into "elites" and "masses" played a central role in the collapse of other advanced civilizations such as the Roman, Han and Gupta empires.[119]

https://en.wikipedia.org/wiki/Economic_inequality#Effects

pmoriarty3• 8 years ago

"It seems likely that the US is long past this point at least in gerade to the compensation of lawyers, top executives, or stock traders"

Most lawyers actually don't make that much money compared to CEOs (median income of $118k vs $748k).[1][2]

[1] https://money.usnews.com/careers/best-jobs/lawyer/salary

[2] https://www1.salary.com/Chief-Executive-Officer-Salary.html

tunesmith2• 8 years ago

Googling around, all I find so far is that this is generally measured by the Gini coefficient, where 0 is everyone is equal, and 1 is the top dog gets everything. The US is around a 0.38, Denmark is 0.25.

I'd rather visualize it as a line going from left to right, that curves upward as it goes to the right. A Gini-0 would be horizontal, a Gini-1 would basically be a hockey stick. So the US is generally going to be steeper on the right side than Denmark, but in reality each region's line is going to have a bunch of wiggles.

So I wonder if there's an ideal "line". Either scored by some metric, like at what point does some measure of mobility or entrepreneurship increase or decrease... or some measure of system stability.

For instance, I've seen a few references that the value of money is roughly logarithmic as it increases. If every wealth holder were taxed logarithmically (so that the tax bill "hurts" everyone equally), and the proceeds were then distributed to everyone equally, would that push the line to some sort of stable shape, no matter how unequal the system starts?

If so, you could consider that a line of capitalism, with anything on either side being disproportionate in some way. The line should still curve since talent/skill/etc will always have an impact.

thesumofall• 8 years ago

Of course, giving away an Amazon gift card isn't the same as fighting societal inequality. But the researchers believe these findings provide insight into government policy on a country-wide level. They pointed out that in Germany, where participants were more willing to equalise the gift card, the government has used taxes and transfers to reduce the poverty rate by 20 percentage points. In the US, where participants were less likely to equalise the gift card amounts, the poverty rate has been reduced by only 8 points.

That’s a pretty wild jump. There are probably dozens of other factors that might explain the outcome (e.g., different parenting styles, different degree to which people “obey” the true intent of researchers, ...). And I’m even sympathetic to the cause here

mey• 8 years ago

Most American's have no savings and are living paycheck to paycheck. For example https://www.forbes.com/sites/maggiemcgrath/2016/01/06/63-of-...

aethertap• 8 years ago

Here's another part that I think contributes to the "... inequality persists in part because individuals are not averse enough to inequality,” based on my own perception of the situation in my part of the country.

I think people are generally less willing to share what they have when they feel insecure about their future. There is a LOT of uncertainty in front of most people at this time, and in that case the reflex is to squirrel away as much as possible for a rainy day. When you feel secure in your future, it's easy to be generous, and it takes less stuff to fee like you have a surplus. When you're worried about what the future holds, taking care of yourself and your loved ones takes precedence.

I'd look at this as an interesting data point that probably gives some kind of estimate of the combined effects of different levels of uncertainty about the future and the social views of income inequality in different places, but I don't think it's nearly as clear-cut as it seems to be in the article.

pithymaxim• 8 years ago

The headline is misleading. 22 percent of Germans chose to fully equalize the endowments (or "help others") compared to 17 percent of Americans. This seems striking for how similar the proportions are, not how selfish the Americans are.

DrScump• 8 years ago

A key takeaway from the study:

"They also found that participants who were most willing to take money from a “wealthier” cardholder were less likely to give their own funds to a “poorer” one."

blhack• 8 years ago

Hmmmm, seems like the independent can't really make up its mind on this one: https://www.independent.co.uk/news/world/americas/america-ne...

America has been named as the world’s most generous nation in the world, where its citizens give the most to charity, according to a new report.

IMHO independent.co.uk is in the same tier as huffington post, buzzfeed, daily mail etc. clickbait farms. This story is no different.

America is consistently rated as the most charitable country in the world. Just because people don't support whatever specific form of wealth redistribution this study was looking at, it doesn't mean that suddenly we're all greedy jerks.

faitswulff• 8 years ago

The headlines aren't necessarily mutually exclusive.

pmoriarty3• 8 years ago

America is first in absolute dollar amounts given, but not percentage-wise.

Also, when people and institutions give to charity, there is sometimes a political or even financial incentive to do so. For instance, some charities (like the Peace Corps) have been accused of spying for their governments, and others like the Bill and Melinda Gates Foundation have been accused of being used to funnel money to large corporations. In both cases, the underlying motivation for donations could be more about helping the people giving the money than about helping others in need. Without such motives, it's possible that not nearly as much money would be given.

In the experiment the article is about, however, such political and financial incentives didn't exist. It was purely about giving money to others without any conceivable benefit to oneself. Thus, it could be a better gauge of an actual urge to help others motive without any recompense than charitable giving in the real world is.

boomboomsubban• 8 years ago

They are covering two different pieces of news, which show different results. And their headline even included "study suggests," to try and not sensationalize the article. Do you want them to only report on the items that support their position?

Though, if you look at the "most charitable" report, I can't find where they found the countries ranked by GDP. Additionally, the report does show that the USA has the second most total people donating, but only ~43% of the population donating. So both could be true.

Johnny555• 8 years ago

If there was any certainty in the future of Medicare and Social Security, I could be a lot more generous in my giving, but as it is now, I need to save enough retirement money to cover uncertain medical insurance costs as well as be prepared for lower (or no) Social Security payments than projected.

jaclaz2• 8 years ago

At first sight the scoop seems to me that the British (or at least the Independent journalist) cannot count up to three:

The researchers tested participants’ feelings about inequality by giving them two Amazon gift cards in two different amounts: $25, $50, or $75.

The actual paper (maybe) clears the matter:

http://cess.nyu.edu/wp-content/uploads/2018/02/Bechtel.pdf

The two gift cards could take on three values, each corresponding to a different type of inequality. In the "own poorer" condition the values were $25 (own) and $75 (other). In the "own richer" condition the value of the gift cards was reversed ($75, $25). In the "equality" condition the gift cards were worth $50 each.

pmoriarty3• 8 years ago

The wording is ambiguous. It could be read either way.

The way you're reading it, there are three different amounts: three potential amount for each of two cards.

But it's perfectly correct to read it as there being only two different amounts: one final, chosen amount for each of two cards.

jaclaz2• 8 years ago

But it's perfectly correct to read it as there being only two different amounts: one final, chosen amount for each of two cards.

Well reading only the Independent article it was not so straightforward.

There are two cards and three values, as written in the original paper, it is only funny (to me) in Italian we have a saying, that goes more or less like:

You did like the one that said that the four evangelists were three: Lucas and Matthew.

briankelly• 8 years ago

Another equally valid title would be "Americans are less entitled to the wealth of others," and a better title would've pointed out "compared to Germans." This is article is just click-baity and the central point isn't that interesting without more countries of comparison in my opinion.

dash2• 8 years ago

Most bears would rather shit in the woods.

antisthenes• 8 years ago

Studies about generosity with inconsequential amounts of money will yield inconsequential results.

Obviously people won't behave the same if their hard-earned money was on the line or if the sums were potentially life-altering.

Most Americans would rather keep wealth to themselves than help others

Related Stories