Posts Tagged ‘psychology’

 George Grosz, "Bürgerliche Welt/ World of the Bourgeoisie" (1922)


George Grosz, “Bürgerliche Welt/ World of the Bourgeoisie” (1922)

Back in 2011, I suggested we move from focusing on the pathologies of the poor to those of the rich. And that’s exactly what psychologists seem now to be doing. We’ve seen studies of “social class as culture,” “sharing the marbles,” and much more.*

The latest is Rael J. Dawtry, Robbie M. Sutton, and Chris G. Sibley on “social sampling”—that is, the idea that wealthier people may be less supportive of redistribution than poorer people because they infer society is wealthier than it actually is because they are surrounded by other wealthy people. And that’s exactly what the authors found:

wealthier (relative to poorer) Americans reported moving in wealthier social circles and extrapolated from them when estimating wealth levels across America as a whole. . . In turn, these estimates were associated with the perceived fairness of wealth distribution in America and with opposition to redistribution, a finding that is consistent with theory on normative-justice judgments.

These results suggest that the rich and poor do not simply have different views about how wealth should be distributed across society; rather, they subjectively experience living in societies that have subtle—but important—differences. Thus, in the relatively affluent America inhabited by wealthier Americans, there is less need to distribute wealth more equally.

Dawtry, Sutton, and Sibley are certainly on to something: we often arrive at social judgments based on anecdotal evidence—things we have either heard or seen—and many of our anecdotes are produced or disseminated within our particular social circles. Those circles are our “sample.”

But that’s not enough. Because we also have other knowledges of the world around us—knowledges that come from the news, novels, music, religious sermons, political speeches, and so on. We’re not just limited to what is said and repeated within our narrow social circles.

So, sure, wealthy people might think the rest of society looks like the worlds in which they live and work. But they also know, through other means, that it isn’t really like that. There are many more people earning far lower incomes than they might come across on a daily basis. Grotesque inequalities exist and they’re getting more and more extreme.

If the rich don’t know about those inequalities, given the other knowledges that are widely available, then they are engaged in practices of willful ignorance.

And that’s another pathology we need to take into account.

 

*Readers will note I find myself always turning to George Grosz to illustrate my discussions of these studies. There must be some other artists I can use. Any suggestions?

rise-economists

Justin Wolfers has assembled some serious information. But, in my view, he has offered a less-than-serious explanation of that information.

The information is pretty straightforward: references to economists in the New York Times have grown over time and far outnumber mentions of members of other academic disciplines, including historians, psychologists, sociologists, anthropologists, and demographers. (The same is true, as it turns out, of the number of mentions in the Congressional Record.)

I have no reason to dispute the numbers. And they make sense to me—from my own reading of the Times over many decades and the fact that, “if you are running a government agency, a think tank, a media outlet or a major corporation, and don’t have your own pet economist on the payroll, you’re the exception” (to which I would only add, major university).

Wolfers’s explanation is, however, much less serious:

This economist is drawn to conclude that if our relative success is not due to supply, then it must be demand, which means that our popularity reflects the discerning tastes of our audience in the marketplace of ideas.

What I think we need to grapple with is the economizing tendency of bourgeois society. What I mean by that is the idea that, within contemporary society, all major individual and social questions are increasingly subject to an economic logic. Should I stay in school? What kind of job should I look for? How do we organize our households? Can we eliminate poverty? Should we lower the retirement age and expand Social Security benefits? And so on and so forth.

Given the way our society is currently organized, the answers to those questions are generally viewed through an economic lens and couched in an economic language. It’s a lens and language (borrowed mostly from mainstream economics) of incentives, tradeoffs, scarcity, costs and benefits, equilibrium, and so on. It’s a discourse according to which a system based on individual decisions, private property, and markets is considered sacrosanct. And it’s a project that seeks to economize—to subject to an economic calculation—all major individual and social issues.

If that’s true, is it any wonder that economists find themselves at the top of the heap?

 

It’s clear we are in the midst of an acute period of inequality: not only of grotesque levels of economic inequality (which are now well documented) but also of a wide-ranging discussion of the conditions and consequences of that extreme inequality (which appears to be taking off).

There are, of course, the deniers, like my dear friend Deirdre McCloskey. What inequality, is her mantra. The only thing that matters is economic growth, such that the amount of stuff people have today is much more than they’ve had throughout much of human history. OK, but that doesn’t tell us much about how that growth took place (it’s the surplus, Deirdre) or what it’s consequences are (on the majority who actually produce the surplus versus the tiny minority who appropriate it).

And then there are those who are actually thinking seriously about inequality, some of whose work is published in the latest issue of Science (a lot of which, unfortunately, is behind a paywall). Leave aside the silly article on econophysics (really, the existing distribution of income is a kind of “natural inequality,” which is what you would get from entropy?), the article that focuses on the psychological pathologies of the poor (what about those of the rich?), and the fact that all the economics is narrowly confined to mainstream theories (which have done more to deflect attention from, as against the wide range of heterodox theories that have actually focused on, inequality over the course of the past three decades). Just the fact that a special issue of such a prestigious journal is devoted to the problem of inequality tells us something about how it has risen to the top of our agenda.

And it offers lots here to think about: the types of inequality that can be found in the archeological record (Heather Pringle), the absence of fundamental inequalities in hunter-gatherer societies (Elizabeth Pennisi), the devastating effects of inequality on health (Emily Underwood), growing inequality in developing countries (Mara Hvistendahl and Martin Ravallion), the intergenerational transmission of inequality via unequal maternal circumstances and health at birth (Anna Aizer and Janet Currie), and finally a dire warning about what will happen if current inequalities continue to grow (Angus Deaton):

The distribution of wealth is more unequal than the distribution of income, and very high incomes will eventually pupate into very large fortunes, ultimately leading to a hereditary dystopia of idle rich.

The pair of articles by economists—one by Thomas Piketty and Emmanuel Saez, the other by David Autor—tells us a great deal about how the issue of inequality is being framed within mainstream economics (since, as I wrote above, all the various types of nonmainstream economics are simply ignored in the issue). For Piketty and Saez, it’s all about the inequality (both income and wealth) that separates the top 1 percent (and, within that, the top .1 percent and .01 percent) from everyone else, while Autor’s piece focuses on the inequality of earnings within the bottom 99 percent. The debate comes down to seeing inequality as a result of high CEO incomes and returns on accumulated wealth (especially when the rate of return on wealth is greater than the overall growth rate, leading to more concentration of wealth) versus the inequality that derives from earnings based on different levels and kinds of skill (presuming that earnings are equal to marginal productivities). In other words, it’s a (mostly) classical approach—which focuses on scarce wealth concentrated in the hands of the already richversus a (thoroughly) neoclassical approach—according to which scarce skills attract higher earnings. The solution from the classical perspective is a global tax on wealth; from the neoclassical viewpoint, all we need is an increase in education and skills for those at the bottom.

Here’s what I find interesting about the debate, not only between the economists but throughout the entire special issue: it’s all about economic inequality—what it is (absolute or relative), how it can be measured (within and across nations, and over time), what its causes and consequences are (including not only the health of individuals but also of society as a whole), and so on—but there’s not a single mention of class.

Not literally. The word class doesn’t appear in any of the articles or reviews. But class is the specter that, in my view, haunts this entire debate. We saw it back in the First Great Depression. And now we’re seeing it rear its ugly head once again, in the midst of the Second Great Depression. We didn’t solve it then. Perhaps, now, we’re ready to tackle it.

And, if we don’t, we’ll be faced with even more inequality all the time.

Update

American-Spectator-cover

As if on cue, the latest issue of the American Spectator focuses on what they consider to be the “new class warfare”—using as a threat the universal symbol of “off with their heads.”

For which Gavin Mueller offers the only appropriate response:

Remember this: no matter how many country clubbers flip through Piketty’s book, at bottom, the rich hate usThey disdain usThey mock us. And they fear us, even though the current balance of forces favors them overwhelmingly and sometimes “common ruin of the contending classes” seems like an optimistic outcome.

Yet I have to fall back on some advice I got as a kid: If the American Spectator wants to cry about class warfare, we should give them something to cry about.

becker-books

Gary Becker’s recent death has provoked widespread praise (for example, from Peter Lewin through Justin Wolfers to Amita Etzioni) for his role in initially creating and then extending “economics imperialism.”

The basic idea (as presented on Wikipedia, by Edward P. Lazear [pdf], and in this interview with Becker himself) is that economics imperialism refers to an “economic analysis of seemingly non-economic aspects of life,” such as crime, law, the family, racial discrimination, tastes, religion, and war.*

Actually, that’s wrong. Economics imperialism is not the economic analysis of supposedly noneconomic behaviors and institutions; it’s the extension of neoclassical economics to those domains. Economics imperialism is, in this sense, the highest stage of neoclassical economics.

There are lots of different ways of making sense of the economic dimensions of our individual and social lives. What Becker and his followers set out to do was to analyze various aspects of individual decisionmaking and social institutions through the lens of neoclassical theory. This has meant reducing those decisions and institutions to individual, rational, self-interested calculations of costs and benefits, under conditions of scarcity, such as to arrive at efficient, equilibrium solutions.

The imperialist extension of neoclassical theory to supposedly noneconomic phenomena was predicated on the formation of a neoclassical monopoly within the discipline of economics. Once that monopoly over teaching, research, publications, and funding was achieved within the traditional domain of the discipline in the postwar period, it became possible to branch out and colonize the rest of the space of social theory. (I should note that the monopoly of neoclassical theory within the discipline was never complete, and has been contested throughout the postwar period.) That’s what economics imperialism was all about: to attempt to create a theoretical monopoly across the social sciences by exporting the methods of neoclassical economics to other domains. This is what made it different from the previous period, when it was the conclusions of neoclassical economics that were exported to other disciplines; now, it was the method that was being exported.

The result, of course, was not to unify social theory across the disciplines but to create new divisions within the disciplines. It’s no longer a battle between, say, economists and sociologists but, instead, between neoclassical economists and sociologists, on one hand, and non-neoclassical economists and sociologists, on the other. Much the same is true in political science, anthropology, psychology, and so on. And it’s not just a battle over the use of some of the key concepts and tools closely identified with neoclassical economics (such as mathematical modeling, rational choice, equilibrium, and so on) but over the actual entry points of social analysis. Because, in the end, that’s what Becker’s neoclassical analysis privileges: the reduction of the social space to the decisions and actions of individual subjects.

The real challenge to economics imperialism—inside and outside the discipline of economics—is, as Louis Althusser put it, the idea of a process without a subject.

 

*What I didn’t remember, or perhaps never knew, is that Becker understood his work to be a critique of and an alternative to Marxism (or at least what he took to be Marxism). It’s right there at the beginning of his Nobel lecture [pdf] and the interview with Religion and Liberty:

R&L: You are sometimes called an “economic imperialist.” What is meant by this?

Becker: That refers to my belief that economic analysis can be applied to many problems in social life, not just those conventionally called “economic.” The theme of my Nobel lecture, based on my life’s work, is that the horizons of economics need to be expanded. Economists can talk not only about the demand for cars, but also about matters such as the family, discrimination, and religion, and about prejudice, guilt, and love. Yet these areas have traditionally received little attention in economics. In that sense, it’s true: I am an economic imperialist. I believe good techniques have a wide application. Adam Smith and many others believed that as well.

On the other hand, my economic imperialism doesn’t have anything to do with crude materialism or the view that material status is the sum total of a person’s value. That view has much more in common with Marxist analysis.

pyramid

I have worked for over three decades in a theoretical tradition, born at the University of Massachusetts Amherst and associated with the journal Rethinking Marxism, defined by a revitalization of Marxian class analysis (in relation to the appropriation and distribution of surplus labor) and a critique of essentialism (in both methodology, such as economic determinism and humanism, and epistemology, including rationalism and empiricism). What this means is that we tend to see class processes as neither essentialist determinants of economic and social outcomes nor the phenomenal form of some essential cause but, rather, as the overdetermined cause and effect of history and the myriad—economic, political, and cultural—dimensions of society.

But we have never really looked at the class determinants of essentialist views of the world. As it turns out, Dacher Keltner (whose research I have discussed before, here and here) has (with coauthor Michael W. Kraus) done just that. And the results are fascinating.

What psychologists Keltner and Kraus (behind a paywall) find is that social class is correlated with both essentialist conceptions of class and beliefs in a just world—and that the belief in a just world, in turn, reinforces essentialist conceptions of class. In other words, they found that upper-class individuals (as measured by subjective ranking rather than so-called objective criteria, such as income) were more likely to endorse the idea, first, that social class is an inherent, stable, and biologically determined social category and, second, that society is fair and just relative to their lower-class counterparts. Those on the other end tended to view the world through a different, social constructivist lens, that is, the view that “social class is based on changeable, external social forces.”

In addition, Keltner and Kraus report that class-based differences in social perception affect beliefs about social justice: lower-class individuals tend both to support less punishment and, when they endorse it, punishment based on restoration as against retribution more than their upper-class counterparts.

And their conclusion?

The current results provide some initial evidence suggesting that essentialist beliefs are associated with justifying and legitimizing an individual’s own position in society and raise the possibility that these beliefs will also increase justification of unfairness in the distribution of economic and social resources: That essentialist beliefs endorsed by upper-class individuals were associated with failing, rather than rehabilitating, academic cheaters suggests that one way in which individuals can maintain current societal structure is through the use of essentialist beliefs. Future research is necessary to determine what other legitimizing behaviors high-status individuals may engage in to constrain upward mobility in society (e.g., opposition to affirmative action programs) and whether essentialist conceptions of social categories explain this behavior.

As well, endorsing social constructivist beliefs—beliefs that social class is based on changeable, external social forces—led to the favoring of social policies related to academic policy and judicial procedure that focus on rehabilitating individuals. Perhaps social constructivist views, endorsed by lower-class rank individuals, may increase optimism among these individuals with regard to overcoming current financial hardship, future career opportunities, or even the economic advancement of future generations.

Clearly, different conceptions of the determinants of social class have important implications for economic and social policy, including approaches to criminal justice. And, as economic and social inequalities widen and we remain mired in the Second Great Depression, we need to move beyond the tendency to neglect or overlook the role of class and essentialism in determining (and, of course, being determined by) the policies that got us into this mess in the first place.

We’ve suspected it all along but now we know: the rich really are different from the rest of us.

People driving expensive cars were more likely than other motorists to cut off drivers and pedestrians at a four-way-stop intersection in the San Francisco Bay Area, UC Berkeley researchers observed. Those findings led to a series of experiments that revealed that people of higher socioeconomic status were also more likely to cheat to win a prize, take candy from children and say they would pocket extra change handed to them in error rather than give it back.

Because rich people have more financial resources, they’re less dependent on social bonds for survival, the Berkeley researchers reported Monday in Proceedings of the National Academy of Sciences. As a result, their self-interest reigns and they have fewer qualms about breaking the rules.

Even more: they’re not rich because they’re different. Their wealth makes them different.

But before those in the so-called 99% start feeling ethically superior, consider this: Piff and his colleagues also discovered that anyone’s ethical standards could be prone to slip if they suddenly won the lottery and joined the top 1%.

“There is a strong notion that when people don’t have much, they’re really looking out for themselves and they might act unethically,” said Scott Wiltermuth, who researches social status at USC’s Marshall School of Business and wasn’t involved in the study. “But actually, it’s the upper-class people that are less likely to see that people around them need help — and therefore act unethically.”

Of course, even more interesting than the findings about how the rich are different from the rest of us are the fact that (a) people set out to investigate the difference and (b) the mainstream media are reporting the results.

How do we get the rich to share the proverbial marbles?

Jonathan Haidt suggests, based on recent research within developmental psychology, that we focus less on distributive fairness and more on procedural fairness:

which is about whether honest, open and impartial procedures were used to decide who got what. If there’s a problem with the ultra-rich, it’s not that they have too much wealth, it’s that they bought laws that made it easy for them to gain and keep so much more wealth in recent decades.

The problem is, even if the procedures are open and transparent, it’s still the case that the rules of capitalism are such that those who produce the surplus marbles play no role in deciding how many there will be or what will be done with them.

Another way of sharing the marbles is to build on the finding concerning collaboration:

But here’s the most amazing condition — a slight variation that reveals a deep truth. Things start off just as in the first condition: you and your partner see two ropes hanging out of the machine. But as you start tugging it becomes clear that they are two separate ropes. You pull yours, and one marble rolls out into your cup. Your partner pulls the other rope, and is rewarded with three marbles. What happens next?

For the most part, it’s pullers-keepers. Even though you and your partner each did the same work (rope pulling) at more or less the same time, you both know that you didn’t really collaborate to produce the wealth. Only about 30% of the time did the kids work out an equal split. In other words, the “share-the-spoils” button is not pressed by the mere existence of inequality. It is pressed when two or more people collaborated to produce a gain. Once the button is pressed in both brains, both parties willingly and effortlessly share.

It’s precisely that idea of collaboration—or, if you prefer, of the social—that leads in a different direction, not of either distributive or procedural fairness within the existing rules but instead of the idea that the surplus marbles are produced socially and therefore should be disposed of socially. In other words, it’s the community that both creates and relies on the surplus marbles. Therefore, it’s the community that should have the ultimate say in what should be done with them.

Sure, let’s have more open and transparent rules but let’s make sure the rules themselves embody the idea of collaboration in disposition of the surplus marbles in the very structure of economic and social institutions.

The rich ARE different

Posted: 10 August 2011 in Uncategorized
Tags: , ,

We’ve known all along that the rich live differently from the rest of us. Now, we know they look at life differently.

According to Dacher Keltner, coauthor with Michael W. Kraus and Paul K. Piff of “Social Class as Culture: The Convergence of Resources and Rank in the Social Realm,”

People who come from a lower-class background have to depend more on other people. “If you don’t have resources and education, you really adapt to the environment, which is more threatening, by turning to other people,” Keltner says. “People who grow up in lower-class neighborhoods, as I did, will say,’ There’s always someone there who will take you somewhere, or watch your kid. You’ve just got to lean on people.’”

Wealthier people don’t have to rely on each other as much. This causes differences that show up in psychological studies. People from lower-class backgrounds are better at reading other people’s emotions. They’re more likely to act altruistically. “They give more and help more. If someone’s in need, they’ll respond,” Keltner says. When poor people see someone else suffering, they have a physiological response that is missing in people with more resources. “What I think is really interesting about that is, it kind of shows there’s all this strength to the lower class identity: greater empathy, more altruism, and finer attunement to other people,” he says. Of course, there are also costs to being lower-class. Health studies have found that lower-class people have more anxiety and depression and are less physically healthy.

Upper-class people are different, Keltner says. “What wealth and education and prestige and a higher station in life gives you is the freedom to focus on the self.” In psychology experiments, wealthier people don’t read other people’s emotions as well. They hoard resources and are less generous than they could be.

Are the rich more selfish or just willfully clueless?

Whatever the answer, the past few years have demonstrated they’re different. The tiny minority at the top have taken more than their share and transferred the costs onto the rest of us. The politicians, meanwhile, have been all too willing to take the handouts from those in charge and to keep things more or less as they’ve been for the past three decades. This means those at the bottom have to rely on themselves and one another to get by. Whatever social contract that once existed has been shredded, with the rich going in one direction and the majority left to their own devices.

 

What’s with all the new books on and media attention to happiness? And what are we learning about our happiness from this new research?

My sense is (but I stand to be corrected by readers), the focus on happiness, at least in economics, stems from the Easterlin Paradox: the idea presented in a 1974 paper by Richard Easterlin [pdf] according to which, although within a given country people with higher incomes are more likely to report being happy, the average reported level of happiness does not vary much with national income per person, at least above a level of national income that meets basic needs. Apparently, Easterlin has recently updated his study, coming up with results that confirm the paradox.

That’s a real problem for neoclassical economists, who presume that national income is a measure of well-being and that individuals make decisions based on given utility functions guided by the idea that more is better. (Two of my colleagues, Amitava Dutt and Ben Radcliff, have edited a volume in which they discuss the implications of the “new happiness” research for mainstream approaches to economics and politics.) It’s also a problem for capitalism, since an important part of its justification is that an “immense accumulation of commodities” makes us happier.

In today’s Chronicle of Higher Education, John Quiggin [ht: ja] reviews two recent books on economic approaches to happiness. His conclusion:

the question of how to live a good life. . .remains something of a luxury in a world where a billion or more people still live in the most extreme poverty despite endless labor. For the moment, the question of justice in global distribution remains at least as urgent as that of optimal production and consumption among the affluent.

Derek Bok’s new book, The Politics of Happiness, was recently reviewed by Glenn C. Altschuler:

Bok demonstrates that a preoccupation with economic growth — and a doubling and redoubling of the gross domestic product during the last 60 years — has not made Americans any happier. Although average levels of happiness increase as one moves up the income scale, the impact of greater wealth on happiness, even among winners of the lottery, is mitigated by rising aspirations and adaptation to a higher standard of living. In 1975, at a time of stagflation, 74 percent of Americans indicated that their family income was sufficient to satisfy their most important needs. In 1999, at a moment of great prosperity, only 61 percent had the same claim.

Finally, Deborah Kotz [ht: sf] discusses new psychological research on the “dark side of happiness’’:

feeling happy all the time can destroy relationships and careers, while avidly pursuing happiness is bound to lead to disappointment.

While some of us may envy those manic folks at the extreme end of the cheerful spectrum, they often have the same level of dysfunction as a person who’s too sad, some recent studies suggest. They may completely tune out sad events around them like, say, their spouse being laid off or a parent dying.

Far more common than extreme happiness, though, is the overwhelming need to seek out happiness, evidenced by the current No.1 advice book on The New York Times paperback bestseller list called “The Happiness Project.’’ The author, Gretchen Rubin, spent a year thinking about what makes her happy by making lists, keeping a journal, and engaging in activities centered around increasing her state of well-being.

While the approach makes sense in theory, the latest studies have shown that trying to increase happiness can actually be counterproductive. “People often fall short of their goals and that can make them feel unhappy,’’ says Iris Mauss, a psychologist and researcher at the University of Denver.

So, are we happy yet? Not if it depends on higher national income, trying to feel happy all the time, or worrying about increasing our happiness. At best, they don’t increase our happiness; and they may even make us less happy.

What we can say is that the new happiness research represents a challenge to neoclassical economics and to capitalism. It just might be that getting rid of both of them will make us happier.