Monday, November 24, 2014

Wealth is especially bad for the wealthy.

Michael Lewis reviews Darrell West's new book "Billionaires: Reflections on the Upper Crust" in The New Republic. The review starts with a marvellous story about breakfast at a tennis camp for children of the East Coast elite:
Jack Kenney’s assault on teenaged American inequality began at breakfast the first morning...On each table were small boxes of cereal, enough for each kid to have one box, but not enough that everyone could have the brand of cereal he wanted. There were Fruit Loops and Cheerios, but also more than a few boxes of the deadly dark bran stuff consumed willingly only by old people suffering from constipation...By the third morning, it was clear that, in the race to the Fruit Loops, some kids had a natural advantage...Some kids would always get the Fruit Loops, and others would always get the laxative. Life was now officially unfair.
After that third breakfast, Kenney called an assembly, saying...“You all live in important places surrounded by important people...When I’m in the big city, I never understand the faces of the people, especially the people who want to be successful. They look so worried! So unsatisfied!...In the city you see people grasping, grasping, grasping. Taking, taking, taking. And it must be so hard! To be always grasping-grasping, and taking-taking. But no matter how much they have, they never have enough. They’re still worried. About what they don’t have. They’re always empty.”
“You have a choice. You don’t realize it, but you have a choice. You can be a giver or you can be a taker. You can get filled up or empty. You make that choice every day. You make that choice at breakfast when you rush to grab the cereal you want so others can’t have what they want.” And then he moved on to why no one should ever hit a two-handed backhand—while every kid on the hill squirmed and reddened and glanced at each other, wondering if everyone else realized what an asshole he’d been.
On the fourth morning, no one ate the Fruit Loops. Kids were thrusting the colorful boxes at each other and leaping on the constipation cereal like war heroes jumping on hand grenades. In a stroke, the texture of life in this tennis camp had changed, from a chapter out of Lord of the Flies to the feeling between the lines of Walden.
Lewis follows with a discussion of the increase in wealth inequality, and whether rich people are significantly determining political outcomes. The evidence is not clear.
If these billionaires are seeking, as a class, to minimize the sums they return to society, they are not doing a very good job of it. But of course they aren’t seeking anything, as a class: it’s not even clear they can agree on what their collective interests are. The second richest American billionaire, Warren Buffett, has been quite vocal about his desire for higher tax rates on the rich. The single biggest donor to political campaigns just now is Tom Steyer, a Democrat with a passion for climate change. And for every rich person who sets off on a jag to carve California into seven states, or to defeat Barack Obama, there are many more who have no interest in politics at all except perhaps, in a general way, to prevent them from touching their lives. Rich people, in my experience, don’t want to change the world. The world as it is suits them nicely.
Lewis cites Dacher Keltner's work, which has been the subject of several mindblog posts (see here and here).
What is clear about rich people and their how it changes them...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 time...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 jar—and ignore the big sign on the jar that said the candy was for the children who passed through the department.
Other studies show that a person, as he grows richer, becomes more likely to violate the rules of the road, to cheat, shoplift, and give less to charity.
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...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...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,spending it on others increases happiness.
(By the way, I dug up the Muscatell paper, which does fMRI studies to show that individuals lower in social status are more likely to engage neural circuitry involved in thinking about others' thought and feelings.)
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 changed—or 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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