Is Equality an Illusion?

“People exhibit a desire for unequality – not too equal, but not too unequal.”

The idea of equality shapes our thinking, as the article below points out. How does or how should this affect government policy? Please read on and let us know your opinion.

Anyone looking for evidence that people have a natural aversion to inequality will find numerous laboratory studies that seemingly confirm their view. Studies have found “a universal desire for more equal pay”, “egalitarian motives in humans”, “egalitarianism in young children”, and that “equality trumps reciprocity”. A Google Scholar search for “inequality aversion” yields over 10,000 papers that bear on this topic.

Here is an article on what Thomas More thought would be Utopia. It is an interesting read.

However, what happens when you actually give mammals their Utopia?

When subjects in laboratory studies are asked to divide resources among unrelated individuals, they tend to divide them equally. If a previous situation has led to a pre-existing inequality, people will divide future resources unequally in order to correct or minimise the inequality between others. This bias is so powerful that subjects sometimes prefer equal outcomes in which everyone gets less overall to unequal outcomes where everyone gets more overall.

Furthermore, people appear to view the equal distribution of resources as a moral good; they express anger toward those who benefit from unequal distributions. This outrage is sufficiently strong that subjects will pay to punish unequal distributors. One study examining this across 15 diverse cultures found that members of all populations demonstrated some willingness to administer costly third-party punishment for unequal division of resources – although the magnitude of this punishment varied substantially across populations.

Studies of children between the ages of three and eight years find a similar equality bias. Three-year-olds divide resources equally among third parties, while six-year-olds show an even stronger commitment to equal distribution, insisting on throwing out extra resources rather than allowing them to be unequally distributed between two absent third parties.

In one study, six- to eight-year-olds were tasked with distributing erasers to two boys who had cleaned up their room. When there was an odd number of erasers, children insisted the experimenter should throw the extra eraser in the trash rather than establish an unequal division. They responded this way even if the recipients would never know that one of them received less, suggesting that children weren’t worried about the recipients’ feelings, but were opposed to creating the inequality even if none of the recipients knew about it.

Even more tellingly, children are just as likely to reject unequal distributions when they reflect generosity (the distributor gave up all her candies to the receiver) as when they reflect selfishness (the distributor kept all the candies for herself). This suggests that the rejections are specifically an aversion to inequality, rather than punishing selfishness.

‘A desire for unequality’

Given these findings, one might expect that when people are asked to distribute resources across a real-world group of people, they would choose an equal distribution of resources across all segments of society. But they do not.

A recent study by Norton and Ariely received well-deserved media attention as it showed that people both underestimate the amount of inequality in our society, and prefer a more egalitarian society to the one they think they live in.

The authors describe their studies as examining “disagreements about the optimal level of wealth inequality”, and report the finding of “a surprising level of consensus: all demographic groups – even those not usually associated with wealth redistribution, such as Republicans and the wealthy – desired a more equal distribution of wealth than the status quo”. An article by Ariely was titled: “Americans want to live in a much more equal country (they just don’t realize it)”.

These summaries are accurate: participants in these studies did prefer more equality than the current situation. But the results also suggest that they were not particularly worried about large inequalities. Instead, these subjects claimed that, in the perfect society, individuals in the top 20% should have more than three times as much money as individuals in the bottom 20%.

When they were given a forced choice between equal and unequal distributions of wealth, and told to assume that they would be randomly assigned to be anyone from the richest to the poorest person (that is, a “veil of ignorance”), over half of the subjects explicitly rejected the option of an equal distribution of wealth, preferring inequality. Thus, the data suggest that when it comes to real-world distributions of wealth, people have a preference for a certain amount of inequality.

This preference for inequality materialises in 16 other countries, across people on both the left and right of the political spectrum, and in teenagers. As Norton puts it: “People exhibit a desire for unequality – not too equal, but not too unequal.”

In fact, these data may actually underestimate people’s preferences for unequal distributions. One follow-up study contrasted Norton and Ariely’s question about the percentage of wealth that should correspond to each quintile of the American population with a question about what the average wealth should be in each quintile. The former question resulted in an ideal ratio of poorest to wealthiest of about 1:4 – but for the latter, the ratio jumped to 1:50. And when the connection between the two questions was explained to participants, a majority chose the higher inequality ratio as reflecting their actual beliefs for both measures.

A preference for fairness

How can this preference for inequality in the real world be reconciled with the strong preference for equality found in laboratory studies? We suggest this discrepancy arises because the laboratory findings do not, in fact, provide evidence that an aversion to inequality is driving the preference for equal distribution. Instead, these findings are all consistent with both a preference for equality and a preference for fairness – because the studies are designed so that the equal outcome is also the fair one.

This is because the recipients are indistinguishable with regard to considerations such as need and merit. Hence, whether subjects are sensitive to fairness or to equality, they will be inclined to distribute the goods equally. This idea is supported by numerous studies in which fairness is carefully distinguished from equality. These studies find that people choose fairness over equality.

Consider a situation with two individuals, identical in all relevant regards, where one gets $10 and the other nothing. This is plainly unequal, but is it fair? It can be, if the allocation was random. And adults consider it fair to use impartial procedures such as coin flips and lotteries when distributing many different kinds of resources.

Children have similar views. In the erasers-for-room-cleaning studies described above, if children are given a fair “spinner” to randomly choose who gets the extra eraser, they are happy to create inequality. One person getting two erasers and another getting one (or 10 and zero, for that matter) can be entirely fair and acceptable, although it is clearly not equal.

It follows, then, that if one believes that (a) people in the real world exhibit variation in effort, ability, moral deservingness and so on, and (b) a fair system takes these considerations into account, then a preference for fairness will dictate that one should prefer unequal outcomes in actual societies.

Tom Tyler uses a related argument to explain why there is not a stronger degree of public outrage in the face of economic inequality. He argues that Americans regard the American market system to be a fair procedure for wealth allocation, and, accordingly, believe strongly in the possibility of social mobility. On this view, then, people’s discontent about the current social situation will be better predicted by their beliefs about the unfairness of wealth allocation than by their beliefs about inequality.

Theories of relativity

People may have other motivations for preferring an unequal distribution of wealth in their society. One such consideration has little to do with an abstract desire for fairness, and instead reflects a desire to have more than others. Interestingly, these desires are not always for increasing one’s absolute amount, but are often for increasing one’s standing relative to others.

For example, studies of income and happiness have revealed that, once a basic level of wealth is achieved, relative wealth is more important for overall happiness. Similarly, a vast body of research in social psychology finds that people engage in constant comparison of themselves with others. Knowing that one’s income is much higher (or lower) than that of a neighbour has a substantial impact on happiness. As Gore Vidal put it: “Every time a friend succeeds, I die a little.”

This motivation for “relative advantage” can motivate a desire for unequal distributions. Indeed, to achieve the warm glow associated with relative advantage, people are even willing to pay a cost themselves to reduce others’ incomes.

Even young children show this relative advantage-seeking behaviour. Five-year-olds often reject equal payouts of two prize tokens for themselves and two prize tokens for another child, and choose instead only one token for themselves, if that means that the other child will get none. The inequality associated with relative advantage is so appealing that it overrides both a desire for fairness and a desire for absolute gain.

A further motivation for inequality may come from the idea that inequality is necessary to motivate industriousness and allow for social mobility. For example, Norton argues that people prefer inequality because they see it as a motivating force that leads people to work harder and better, knowing that doing so can improve their station in life, and that of their children.

This belief entails a sort of “meritocratic mobility” – and such mobility is indeed a necessary condition for an unequal society to be a fair one. After all, a society lacking mobility is a society in which those born into poverty remain in poverty, regardless of their hard work and ingenuity.

Not surprisingly, then, a belief in meritocratic mobility is associated with more tolerance for inequality, as reflected in less discomfort with existing wealth inequality, less support for the redistribution of educational resources, and less willingness to support raising taxes on the rich.

From this perspective, cultural differences in expectations about mobility may account for differences in tolerance of inequality across cultures. For example, Americans might have an unreasonable tolerance for inequality in part because they tend to overestimate the extent of mobility in the United States – which is, in fact, lower than in places like Canada and most of Europe.

One reason for this lack of mobility is that the income distribution in the United States – the distance between the poorest and richest citizens – is much greater than in rival countries. Moving from the 10th percentile to the 90th percentile in Denmark requires a US$45,000 increase in income, but making the same jump in the United States would require an increase of US$93,000.

And the situation is not improving. While 92% of American children born in 1940 would go on to earn more than their parents, only 50% of children born in 1980 have done so.

Consequences of an unequal society

While concerns about fairness may motivate a preference for inequality, there are various countervailing psychological forces that may lead people to endorse equality. One of these is a worry about the consequences of an unequal society. That is, even if people have no problem with inequality itself, it might have negative consequences that people are motivated to avoid.

For one thing, as inequality increases, self-reported happiness diminishes, especially among the bottom 40% of income earners. One reason for this is that “relative disadvantage” has a larger negative impact on well-being than relative advantage has a positive impact. When people know where they stand in the overall income distribution, those on the lower end of the scale report less job satisfaction, while those on the higher end of the scale do not report any greater satisfaction.

This has negative effects for productivity too: workers who know they are on the low side of the distribution decrease their effort, but knowing that one is on the high end does not lead to an increase in effort.

However, it is not clear whether the corrosive effects of inequality on happiness are due to inequality per se, or due to the perception of unfair inequality. That is, it is an open question whether people who get less than others would suffer decreases in happiness and productivity if they believed they were in a fair system: one in which increased efforts on their part could lead to social mobility.

In the current economic environment in the United States and other wealthy nations, concerns about fairness happen to lead to a preference for reducing the current level of inequality. However, in various other societies across the world and across history (for example, when faced with the communist ideals of the former USSR), concerns about fairness lead to anger about too much equality. To understand these opposite drives, one needs to focus not on whether the system results in a relatively equal or unequal distribution of wealth, but whether it is viewed as fair.

What’s really bothering people?

As with most psychological claims of this sort, our proposal has, at best, indirect implications for public policy. Even if the average individual desires a somewhat unequal society, one might argue that people are mistaken in what they want. Perhaps people would actually be better off in a perfectly equal society – they just don’t know it.

We do see two implications of this work, however.

First, it’s clear that many people are misinformed about how well their society matches their ideals. They are wrong about how much inequality there is, believing the current situation to be much more equal than it actually is. Furthermore, Americans have exaggerated views about the extent of social mobility in the United States, and thus the extent to which the current American market system is a fair procedure for wealth allocation.

We have argued that views about fairness will be most predictive of discontent with economic inequality. Thus, public education on the actual current rate of mobility will help to ensure that people’s moral assessment of the world that they live in is grounded in the relevant facts.

Second, contemporary political discourse often blurs together various concerns that should be thought of as distinct. Worries about inequality are conflated with worries about poverty, an erosion of basic rights, and – as we have focused on here – unfairness.

If it’s true that inequality in itself isn’t really what is bothering people, then we might be better off by more carefully pulling apart these concerns, and shifting the focus to the problems that matter to us more.

The recognition that fairness and equality are different cannot merely be a footnote on empirical studies, and cannot be a rarely invoked piece of trivia in political conversations that wrestle with unfairness but frame the conversation in terms of equality.

Progress in the lab and in the real world will be facilitated by centring the discussion on exactly what people do care about – fairness – and not on what people do not care about – equality.

This is an edited version of the paper Why people prefer unequal societies, first published in Nature Human Behaviour on 7 April 2017. Dr Starmans is a postdoctoral associate in psychology, Dr Sheskin is a postdoctoral associate in cognitive science, and Dr Bloom is the Brooks and Suzanne Ragen Professor of Psychology, all at Yale University.