Social science is telling us that morality and generosity decline among the most well-off. Ever since I heard about this study at UC Berkeley I’ve been curious to imagine how these findings might apply to political systems. It seems that material wealth, or even the feeling of wealth, has a greater impact on one’s attitudes towards others than previously believed; possibly even a greater impact than previous political ideology, upbringing, or education! Studies have shown for some time already that generosity is more marked among those who have fewer resources compared to those with more, but now it seems we’re starting to get results that reveal even more about the nature of these differences. There are intriguing hints at the sources of these really surprising findings.
Nick Powdthavee, an author of a study of the effect of lottery winnings, found that greater wins tend to make people more right-wing and inegalitarian. He declared:
“We are not sure exactly what goes on inside people’s brains but it seems that having money causes people to favour conservative right-wing ideas. Humans are creatures of flexible ethics.”
Also in this study, the authors speculate about the effect on democracy, arguing that self-interest trumps morality in decision making.
This last point is where I depart a bit in interpreting the meaning of these studies. Moving to the right may mean supporting an effort to protect one’s own ‘hoard’, but it is only ‘self-interested’ on an individual level, not necessarily on a social level. Democracy is to some degree about keeping these tendencies in check and allowing a public good to emerge from the apparent conflict of interest created between the rich and the poor. The paradox, of course, is that the wealthy MUST be on board the project of contributing to the social good at the very point when they are the least motivated to do so (due to their wealth, apparently). As the wealthy opt out of the social contract that makes things better for everyone, they undermine themselves by eroding the means by which the social fabric is maintained.
The paradox, of course, is that the wealthy MUST be on board the project of contributing to the social good at the very point when they are the least motivated to do so…
I assume, of course, that the wealthy are still in some way part of that social fabric. Wealth seems to offer a way out of social obligations and norms [for example, by letting people think they can drive faster with a more expensive car, even if they end up paying a ticket]. But why do people choose to opt out, even if it becomes more expensive, and actually less rational, for them to do so? Why send your kids to private school, pay your taxes to another country, or get your healthcare from a boutique provider, when comparable services can be obtained much more cheaply by paying your fair share to the common pool? It’s not exactly self-interested in the rational, economic sense, to do this.
I’m wondering if the answer has to do with the psychological need to control the environment, something that money provides unequivocally in a capitalist society. What one loses in material cost [private school is more expensive than public, paying a ticket is more expensive than driving according to the rules, for example] is made up for in control over the process. If it is about control rather than about wealth, it has implications not only for what the rich do individually, but how they act toward the political system as a group. For if the tendency to protect one’s own extends to the effort to control the society as a whole, it means the wealthy will make social laws and rules for everyone else that reflect their particular interests.
Fostering empathy in the minds of the wealthy may not be the way to go, as this article in the Atlantic suggests. A considerable amount of energy is spent in encouraging charity among the wealthy, which has had little impact on the mindset. Indeed, what is interesting is that most Americans have experienced poverty in their lives, if only temporarily, at one time or another. This means a significant number of wealthy individuals, and yes, even members of Congress or Parliament, have also experienced poverty. If the above studies are correct, it seems unlikely that this experience can trump the psychological effects of wealth, and the tendency to be less egalitarian or generous, that goes with wealth. It doesn’t seem likely that human nature will change.
Bridging the psychology of the individual with the need for a public good means bolstering institutions that supercede and limit the tendencies of the wealthy to opt out and to control the process. Unfortunately, many democratic institutions have been put in place to do exactly the opposite: to control and limit the worst excesses of the general public [see the Canadian Senate].
Public education, public health care, parental leave, elder care, social services, and even sewers and parks have often been thought of as contingent on ‘affordability’ (Yes I’m looking at you, BC Liberals!) In fact, by highlighting the idea of the public good, these institutions remind us of the vulnerability of the social contract to the psychology of wealth. Now that we know more about the effects of wealth on our thinking (and by that I mean everybody’s thinking) social planners should be better equipped to make the case for the defence of that social contract. That defence should strongly state the need for everyone, but especially the wealthy, to be included in the social project from which we all benefit.
Sometimes the language that we use as political scientists is regrettable in its implications. For example, the definition of ‘differentiated citizenship’ according to a leading introductory text to Canadian politics reads as follows: “The granting of special group-based legal or constitutional rights to national minorities and ethnic groups” (Mintz, Tossutti and Dunn 89). While accurate, the use of the term ‘special’ has many unintended implications. Who is ‘special’ and who is entitled to ‘different’ treatment by government?
For one thing, to say that a group or individual receives ‘special’ treatment is to imply that every other group is not special. Or, to put it another way, it is to imply that a group is singled out from the otherwise equal treatment that they might be entitled to receive by virtue of being equal members of the community. It assumes that the community at large includes other groups which may be equally entitled to special treatment were it not for the unique qualities which set the ‘special’ group apart. Equality before the law is both an operational concept and an aspirational standard.Using the term ‘special’ to describe a group singled out for differentiated treatment suggests that everyone else is already treated equally under the law, that equal legal treatment is in fact a reality, and not also an aspiration yet to be achieved. Under the assumption of equality, special treatment is, by definition, discriminatory. Discriminatory treatment technically only means the same as ‘special’ treatment, except for the fact that it implies a harmful result for the group being singled out. When the result of special treatment is discrimination, it is rightfully condemned. Discrimination on the basis of race, gender or ethnicity, for example, is condemned in a democracy not primarily because it constitutes special or differential treatment, but rather because of the negative effects of the judgments that tend to be made, most often based on involuntary or ascribed characteristics. The response to ‘special treatment’ is to question the basis for unequal treatment rather than to condemn all forms of harmful discrimination. Why the knee-jerk reaction to ‘special treatment’? After all, governments identify groups for a variety of special programs and services all the time. Groups are defined by age, income levels, geography, occupation, health status, and marital status. Many of these categories are based on involuntary characteristics, or at least, characteristics that are extremely difficult to change. Northerners or people who live in rural areas are entitled to unique job training or assistance for moving expenses. Fishers in the Maritimes are treated distinctly from other occupations with respect to qualification for EI benefits, young people are targeted for special job training and employment programs, and government services like healthcare are often offered in languages other than the two official languages.
In truth, as discussed in the last two blog posts, equal treatment is as elusive as the abstraction of ‘equality’ itself. One is tempted sometimes to ‘test’ equality by imagining a ‘reverse onus’. In other words, we might try to test the extent of equality by asking ourselves how a given situation might be if the positions were reversed. If a black woman and a white woman are ranked equally on a college entrance application, then ‘all else being equal’, the chances of success should be equally distributed (50/50). If this is indeed true, then the white woman and black woman are being equally treated. In reality, we can more effectively test the presumption of equality by looking at outcomes. If an equal chance of success really does exist, then the number of black successful women should be roughly proportional to the number of black women in the population as a whole, and the same with the number of white women. Success is clearly not distributed proportionally among these racial groups. Because the outcomes do not support the idea that such equal treatment exists, it is unfair to apply the ‘reverse racism’ test. Treatment that might be appropriate for one group would not be appropriate for the privileged group. The two situations are not comparable. Discrimination can still be shown to exist, as the story of Yolanda Spivey reveals. Spivey, a black woman, reportedly modified her online job profile to appear ‘white’, changing her name and racial identification, but keeping all of her other information the same, including qualifications,
experience, and work history. She received many more employment enquiries as a white woman than as a black woman. The experiences of black and white people are not comparable, and so these groups should not be considered as if they were treated equally. Of course, more study and data is needed to determine the extent, nature, and form of discrimination in society. Nevertheless, differential treatment, and even differentiated citizenship, is justifiable in order to move toward equality of opportunity for all. Until equality can be demonstrated in outcomes, it should be seen as an aspirational goal, and not assumed to be already in place.
When analyzing any phenomena, it helps to have a good idea what we want to achieve. In political science as in life, equality has great significance. Analysts tend to think quite differently from the general public, however, about what constitutes equality and how we should use the term. Let’s consider a thought experiment to sort out the difference between ‘equality of opportunity’ and ‘equality of condition’.
If we imagine that equality of opportunity and equality of condition are kinds of ideal types at opposite poles, with a spectrum of variations in between, then the picture might look something like this: under ‘equality of condition’ everyone would experience the same life outcomes: equal incomes, equal standards of living, and equal levels of education, health care, and work. How would things differ? Likely inequality would creep in through limited means: for example, some may work longer hours, have more or less education, spend more or less time skiing, etc.
What is wrong with this picture? The most common criticisms of this ‘absolute equality’ are:
It reduces the incentive to succeed, and 2. It distorts the value of things, leading to scarcities and gluts in supply.
But these are practical criticisms, not questions of justice. Would absolute equality actually be ‘just’? Assuming for the moment that such a system could be workable (and I’m not saying it is) then an argument could be made that it actually creates injustice by failing to differentiate among people with ascribed or inherent differences who deserve differential outcomes. Those who work harder or are more creative or who are disabled or ill should be treated differently. Some may deserve preferential access to resources either as a result of their extra effort, their accomplishment or contributions, or by virtue of need. Tellingly, the right more often argues for differential outcomes based on effort and accomplishment, while ‘need’ tends to take second place. It is sometimes said that such a system would be communistic. However, under Marx’s vision of communism, the ideal form of equality actually allowed for differential rewards focusing on need rather than accomplishment or contribution. Contrary to popular belief, Marx did not advocate absolute equality of condition. Indeed, nobody has, in all seriousness, ever really proposed that large-scale industrial societies impose absolute equality of condition. This is because serious thinkers would quickly realize that equality of condition, even in its ideal form, would inevitably raise both practical and fairness questions since there would still need to be some argument for different treatment of some people. Nobody is average.
Now, what about equality of opportunity? That sounds like something we can all get behind: everybody can try or fail equally well, and those with the greatest accomplishments and talents will rise to the top. This is kind of what Paul Summerville argues when he says:
Equality of opportunity is a virtue when it is twinned with unequal outcomes. It is meaningless without it. What is the point of equality opportunity if success is discouraged by custom, law, or taxation?
But, to respond to this, how can we be sure that everyone actually has an equal opportunity to try, and to win? Inequality all by itself is not evidence of equality of opportunity. What if the winners try to ‘kick the ladder out’ from behind them, blocking the upward advance of others? What if they use their newfound positions to favour their heirs and families and friends rather than allow their loved ones to fail? Perhaps when we see that some are able to climb up to the top from the very bottom of the social ladder without artificial assistance from the state, then we can say that equality of opportunity exists. But how many of these examples are sufficient to prove it? One? One in ten? One in a thousand? The fact is there is no natural or inevitable level of inequality that can tell us when everyone truly has an equal chance. We can point to clues: perhaps when the top 1% is as diverse and representative of the entire society, or when every member of the top group can claim to have climbed out of the gutter, but that seems as unlikely as the ideally equal society discussed above. The question of fairness rises again: even in a society in which opportunities are purely equally distributed, there will be unfairness due to the same factors mentioned above: What about those disadvantaged by illness or age or poor upbringing? What about highly talented or accomplished individuals who don’t manage to make it through no fault of their own? why value some talents more than others?
Again, the argument to treat some people differently in order for equality of opportunity to be realized is present. But, the same question arises: what should be the basis for differential treatment? Here, the differences between the two poles start to disappear: the essential argument is not about equality at all, but about the basis and rationale for differences. Both sides work toward an ideal world that is impractical and unfair, yet both sides argue for ‘differential’ treatment on the basis of different individual characteristics. The right argues that differential treatment should be based on talents or contributions, while the left focuses on compensating for special needs and other (class) disadvantages.
The world we actually live in is of course far more complicated. Equality before the law, which is the dominant discourse of equality in Canada and other Western liberal democracies, is actually a fall-back position avoiding both of the options described above. It doesn’t guarantee equality of opportunity and it doesn’t mitigate inequalities of condition. At most, it provides a measure of our progress toward some compromise on fairness and practicality. It’s not irrelevant, far from it! The legal guarantees of the Voting Rights Act or protections for gay marriage or for equality between religious beliefs do matter, but not for the reasons we think. They matter less because they create equal opportunities, and more because they clarify the legitimate grounds for treating people differently. The fact that people are all, in some way, treated differently by society still needs to be acknowledged by all participants in the equality debate.
The next two blog posts will address the sources of present-day inequality in globalization, and the basis for differential treatment and its centrality to equality.
For those attending the Munk Debate livestream on May 30th:
David Miller responded:
Imagine the following: China secretly buys up gold futures in the hopes of stockpiling a war fund to fight inflation caused by US ‘quantitative easing’. If the US goes too far in trying to fund its stimulus by debasing the dollar, China triggers a crisis by buying up gold. The ultimate statement of lack of confidence in the US dollar (which is the key currency for all international trade and capital reserves) leads to a catastrophic run on the dollar and a collapse of globalization as each country tries to ‘beggar’ its neighbour with cascading tit for tat devaluations. In his book Currency Wars: The Making of the Next Global Crisis, Jim Rickards presents several scenarios by which the world could come to the brink of collapse as a result of governments’ efforts to manipulate their currencies, thereby stimulating their economies at the expense of their trading partners. Indeed, it is not hard to imagine how the monetary underpinnings of globalization could easily come crashing down given the wobbliness of the top currency, the high level of US debt, and the lackluster response of the US consumer, traditionally the world’s growth engine, in recovering from the 2007 recession. Indeed, one could argue that even a much less complicated scenario might lead to crisis: what if China simply decided to use it’s so-called ‘nuclear option’ and stop buying US treasuries, triggering a cascading dive of confidence in the world’s reserve currency? What if politics really did take over economics?
The alarmism over a coming hyperinflationary crisis appears to be growing, and it’s not without some foundation. Fiscal stimulus appears to have met its match in the global system of monetary exchange, where politics and economics do not just interact, but essentially meld. However, at least some of the alarmism should be taken with a grain of salt. The calls for curbing the US fiscal deficit (quite apart from the debt) are at least in part motivated by an ideological discomfort with government’s influence on the market as well as a moral panic over Americans’ dependency and perceived complacency. This view tends to see the world as a dangerous, zero-sum place where countries await any and every opportunity to force an advantage over their competitors. However, economic competition is not exactly the same as political rivalry, and should not be equated. While it is not impossible for countries to mutually try to obliterate each other (see the Great Depression) it is not likely given the availability of much more palatable options.
It is important to remember that unlike real wars, currency wars that result in hyperinflation are not really deliberate—they result from governments’ fumbling and lack of effort to cooperate or lead rather than from single-minded plans to dominate the world. They are tragedies (or tragicomedies) rather than evils. They are not so much caused by politics as by a lack of politics. Because of the uncertain results of currency manipulation, it is a very blunt and unpredictable instrument of policy indeed. As with nuclear deterrence, mutual deterrence is more likely than not to push countries to cooperate and to head off crises before they get out of hand. Indeed, this is exactly what has been happening for the last (almost) 42 years. The players may change, but the game will remain: keep the poker face on and ensure the world continues to have a world reserve currency with some usefulness to everybody. The alternative is just too awful to contemplate.
In quantum physics, there is the idea that a single particle can have an effect on a different particle many light years away. Einstein called this ‘spooky action at a distance’. In today’s globalized world, economic activity shows similar ‘spooky’ characteristics, indeed, it is virtually a truism to say that what happens in one industry or segment of an economy will inevitably affect others at great distances. What is often overlooked in ideological debates between the right and the left, however, is the entanglement of the free market economy with the activities of government. They are separate, just like particles separated by great distances, but they are so closely entangled. Action in one sphere will unavoidably affect the other.
Take, for example, the encroaching effects of the ‘fiscal cliff’. An increase in taxes coupled with spending cuts, could potentially cause a drop of as much as 1% of GDP growth in the US. The resulting reduction in economic activity would then impact government revenues, cutting into revenues just as measures to reduce the deficit kick in. This makes these measures, therefore, essentially self-defeating. Even a more measured response to deficit reduction that allows for some spending increase could potentially trigger inflation, since it will unavoidably give the impression that the government will just keep printing money to pay its debt. Inflation could also reduce economic activity and jeopardize growth, although it seems unlikely in the short term, by undermining investor confidence and leading to capital flight. The result, as with the fiscal cliff, is the same: a hit to government revenues and a self-defeating policy.
The first step to breaking the cycle is to recognize that the favoured solutions of both the right and the left are both inappropriate in the present context. Reducing taxes to stimulate the economy without accompanying measures to induce spending and investment just doesn’t work, there is no evidence of it ever having worked, and it does severe damage to the government’s ability to raise revenue. At the same time, government spending does not have the growth-inducing impact as in the past because the implied willingness to spend and borrow undermines investor confidence.
The solution lies in the awareness that government is both an economic actor and an economic hedge. Contrary to the arguments on the right, government cannot just ‘get out of the way’ and let the market grow. For one thing, it might grow somewhere else. For another thing, markets need government to backstop their activities and stop them from imploding on themselves. The sooner that people stop thinking of governments as part of the problem, and realize that free markets require governments to make decisions for the common good, the better off both the economy and the government will be. Governments and markets are not the same thing, their purposes are different and their instruments are different, but they are irrevocably enmeshed together.
In his book The Age of Austerity: How Scarcity will Remake American Politics Thomas Byrne Edsall argues that shrinking public and private resources will make politics leaner, meaner and less civil. It’s not just that right and left disagree on how to distribute resources, it is a fundamental rift in the understanding of the purpose of the state itself. It’s also not just a fight over ideas: it is a battle for survival. The supporters of the right, to paraphrase Edsall, are ageing, embattled, middle to upper class whites living in decimated and depopulated suburbs who are increasingly bitter about the direction of the redistributive state. In the past, the right’s call to arms was a kind of negative freedom (‘Don’t Tread on Me’) which fought to preserve the individual’s ability to choose their own forms of happiness unimpeded by state regulations. The premise of this, we know now, was the expectation that everyone could gain from a growing pie. No more. Programs for which supporters of the right are the primary recipients (including Medicare and social security) are considered sacrosanct. Programs from which others benefit (read black, immigrants, poor or public sector workers) like Medicaid, the Patient Protection and Affordable Care Act, or income supports, are untenable ‘entitlements’. On the left, there is a counter-move to protect the public sphere from erosion while simultaneously trying to remain coherent in the face of a fiscal crisis and an unrelenting personal attack on Obama during an election year. The left is increasingly turning to middle class minorities, immigrant and young voters who are far less steady in their support and are on the whole less well-established and more vulnerable both economically and politically.
These kinds of politics reveal rifts that have historically deep-seated roots but which linger below the surface until austerity and crisis reveal them. What rifts lie below the surface of Canadian society that have been eroding the social consensus gradually and unrelentingly? Could Canada go down a similar route? Recent battles paint a picture of the possibilities. With vitriolic flourishes the Harper government and environmentalists are fighting an increasingly pitched battle over oil resources. The push for a pipeline to expand foreign markets for oil, whether through a Northern route or Keystone, has as its root a long-standing fear that overproduction of oil will drive the price down and shrink profits. This is a real fear, since the flattening of oil prices will make the billions of dollars already invested uneconomic, and capital will flee. On the one hand, it seems more like an embarrassment of riches than a problem of austerity: oil consumption is maintaining a steady stiff pace overseas and is set to grow, along with its negative climate impacts. On the other hand, it has all of the set piece features of a zero-sum fight over a shrinking resource. As anti-fossil fuel efforts grow, and as more bitumen-type oil production facilities are being developed in Latin America and more unconventional oil is prospected in the Arctic and other areas, the chances of oil revenues becoming restricted in the future is higher and higher. If this happens, look for politics here to follow a similar path to those in the US, with the centre of the storm being the role of the state as a (re)distributor of resources. With potentially shrinking state revenues due to tax reductions and few other signs of growth outside the resource sector, the temptation to retrench at the expense of the poor, immigrants, the disabled and other marginalized groups may well be irresistible. On the other hand, another fight between regions in true Canadian fashion may be brewing. I want to end on a positive note here. Everything I’ve learned in teaching young people about politics in the last 15 years has taught me that if anything, youth are more accepting, welcoming, compromising and diverse than ever. I can only hope that these qualities will enable the cultivation of a middle ground in the future in Canada that seems increasingly elusive in the divisive and paralyzing politics down south in the US. If we are to believe Edsall, however, austerity could bring out the worst in all of us.