Tag Archives: public service

Global Political Economy, Human Rights, Inequality, Politics in Canada, US Politics, World Politics

The Psychology of Wealth and the Social Contract

Credit: Flickr User Philip Taylor
Credit: Flickr User Philip Taylor

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.

Credit: Flickr User Brent Granby
Credit: Flickr User Brent Granby

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.

Politics in Canada

Public Service: A Paradigm Shift in the Heart of Government

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It is easy to complain about public employees: are they not a privileged, elite, sheltered group?  It seems that public employees and the cost of public payrolls are, yet again, in the sights of critics from the right.  In particular, attacking the ‘burden’ on taxpayers of ‘excessive’ pensions, benefits, and salaries is an easy and simple way to short-circuit a serious political discussion.  In Canada, such attacks do not tend to have the racist overtones they have in the US, where a growing segment of public employees come from black, Latino or other racial and ethnic minority groups.  Nevertheless, such attacks can be scathing. 

One thing about these criticisms is that they essentially miss the point.  The purpose of government is not the same as that of business, nor would taxpayers truly want their government to be run like a private for-profit enterprise.  Imagine peoples’ reaction if the prices of government services truly followed the laws of supply and demand: the price of healthcare, prescriptions, surgeries, education, road and infrastructure construction, and a whole host of other high-demand items and services would be so high that it would quickly render many private businesses uneconomic.  Imagine if every individual had to pay directly for their own education, health care, road use, sewers, personal protection, water, etc.? 

IfQYvThe whole idea of having government deliver these services is the general recognition that these common goods are most efficiently (and cheaply!) delivered at collective cost, and by extension, that their operation and administration should be overseen by publicly-appointed administrators who are accountable for the expenses that are taxpayer-funded.  You only need to spend a short amount of time in a country with a broken or absent public service to realize the importance of it. 

While there is room for debating the extent and scope of public administration, there should also be acknowledgement within the debate that public service is not only legitimate and necessary, but beneficial.  In the interests of shifting the discussion and possibly even changing the paradigm for public service, here are some ideas for thinking differently about public service:

Outcomes matter more than efficiency

When patients get better, when special needs adults are able to live independently, and when kids master a new skill, real social goods have been accomplished that save taxpayers money in the long run.  Such a calculation simply cannot be reduced to a yardstick that trades off today’s revenues and expenditures.  When these outcomes are compromised by budget cuts, not only do individuals pay a price, but the social costs are borne by everyone in society.

Incentives erode the soul of motivation

Talk of ‘rewarding excellence’ and ‘reducing the redundant’ does NOT improve performance.  Competition is not the point of public service.  Trying to incentivize outcomes increases stress and makes people resistant to change.  Companies are discovering this on their own in recent years, but they are also discovering that a decent level of compensation is a prerequisite to a motivated, creative, and productive employee in any enterprise.

Bureaucracy means fairness

This may be a hard sell, but next time you’re waiting in line for a drivers’ license or filling out a passport application, consider the effort and expense required to ensure that all of those who use public services are treated consistently and fairly.   Then consider what happens when those services are cut or reduced.    How much is fairness worth to you?

Cutting services is self-defeating

In the open market, fraud and deceit flourish because businesses lack the ability to police themselves and are highly motivated to abuse their power and superior knowledge. The cost to legitimate businesses in restoring confidence when violations occur is significant. A large part of what government provides is trust and confidence when the market fails, which allows businesses to be profitable.  If business is less profitable, economic activity slows and tax revenue falls.  Beyond the purely instrumental argument that austerity directly reduces economic growth, austerity is self-defeating because it increases the hidden costs of doing business in hard times. 93442034

Public servants create wealth, and create the conditions that enable private businesses to create wealth.  Of course governments should be accountable for costs, especially since the disciplining competition of the market is less sharp and the high demand for public goods and services can tend to push prices up.  However, the solution is not to heighten competition but to recognize and account for the benefits that public service provides, and not just to focus on its costs.  A truly balanced account would show that taxpayers are investing their resources very efficiently indeed.