Well-being isn’t just about our relationship with things, it’s also about our relationships with each other. Poverty hurts, not just because it can leave you feeling hungry, cold and sick, but because it can also leave you feeling ignored, excluded and ashamed. In The Theory of Moral Sentiments Adam Smith argued that all of us want others to pay attention to us and treat us with respect. And "it is chiefly from this regard to the sentiments of mankind, that we pursue riches and avoid poverty."
Recent research confirms Smith’s intuitions — social pain is every bit as aversive as physical pain. And Smith’s thoughts about the way people use material goods to achieve social goals are even more compelling in the light of Gary Becker’s theory of household production. Becker argues that all human beings have stable preferences that relate to fundamental aspects of life such as "health, prestige, sensual pleasure, benevolence, or envy" rather than to specific goods and services. If Becker is right, material goods are often only a means to social ends.
There is ample evidence that the trappings of wealth are effective as social tools. According to psychologist Helga Dittmar:
…wealthy people are seen as intelligent, responsible, hard-working, successful, skilful, physically attractive and resourceful. In contrast, poor people are viewed as lazy, unmotivated, lacking in abilities and skills, irresponsible, unattractive and lacking proper money management (p 162).
So if Smith is right then what should we do about involuntary poverty? Is it enough to provide state subsidised goods such as housing and healthcare and to dole out money for necessities?
Adam Smith — Poverty as social exclusion
According to Adam Smith, human beings are by nature social creatures. In The Theory of Moral Sentiments, he wrote:
Nature, when she formed man for society, endowed him with an original desire to please, and an original aversion to offend his brethren. She taught him to feel pleasure in their favourable, and pain in their unfavourable regard.
The reason poverty causes pain is not just because it can leave people feeling hungry, cold and sick, but because it is associated with unfavourable regard. As he explains:
The poor man … is ashamed of his poverty. He feels that it either places him out of the sight of mankind, or, that if they take any notice of him, they have, however, scarce any fellow–feeling with the misery and distress which he suffers. He is mortified upon both accounts; for though to be overlooked, and to be disapproved of, are things entirely different, yet as obscurity covers us from the daylight of honour and approbation, to feel that we are taken no notice of, necessarily damps the most agreeable hope, and disappoints the most ardent desire, of human nature. The poor man goes out and comes in unheeded, and when in the midst of a crowd is in the same obscurity as if shut up in his own hovel.
For Smith, a person’s possessions function as signals of underlying personal characteristics — characteristics that others regard either favourably or unfavourably. In the Wealth of Nations he wrote:
A linen shirt, for example, is, strictly speaking, not a necessary of life. The Greeks and Romans lived, I suppose, very comfortably, though they had no linen. But in the present times, through the greater part of Europe, a creditable day-labourer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty, which, it is presumed, nobody can well fall into without extreme bad conduct.
As Mark Thoma notes, Adam Smith thought poverty was about much more than physical deprivation. The labourer’s linen shirt has value because it can be used to influence other people’s opinions. The labourer is using the shirt as a raw material in a production process — a process that affects other people’s mental states, changes their behaviour and, ultimately, improves the psychological well being of the wearer.
The ‘good’ that is being consumed here is not the shirt — it is the observer’s opinion. While it’s true that the observer’s opinion only affects the labourer’s well being via behavioural signaling, this is true of many consumer goods. For example, neuroimaging research suggests that wine really does taste better when it carries a high price tag (at least for some consumers). In both cases, the consumer cares about the quality of the good, even if they can’t directly observe it.
Smith argued that human beings are hard-wired to care about each other’s opinions. As he put it, nature taught people to feel pleasure in the favourable regard of others, and pain in their unfavourable regard. And according to cognitive scientists, there is a good reason for this. According Naomi Eisenberger, "mammals require close contact with a caregiver in order to acquire the appropriate nourishment and protection to survive." As a result, it would have been highly adaptive for our ancestors to feel pain when their relationships with caregivers were threatened.
As Eisenberger notes, neuroscientist Jaak Panksepp "hypothesized that the social attachment system, the system that keeps us near close others, may have piggybacked onto the physical pain system to promote survival in mammalian species."
Most people have experiences in which socially mediated pain is so great that they are not only in agony but are overwhelmed or incapacitated. In this article, we argue that referring to these responses to social exclusion, rejection, or loss as pain is more than just a metaphor. Because inclusion in social groups has been a key to survival for social animals deep into the past, we propose that threats to one’s social connections are processed at a basic level as a severe threat to one’s safety. In fact, we argue that such threats are partly mediated by the same system that processes physical pain because the pain system was already in place when social animals evolved adaptations for responding to social exclusion.
The theory attracted media attention in 2003 when Eisenberger and her colleagues reported the results of a neuroimaging study. The researchers found that that feelings of social exclusion were associated with activity in a brain region which is also involved in pain processing.
According to researchers, our experience of pain has two separate components — pain sensation and pain affect. As MacDonald and Leary write, "Pain sensation provides information about ongoing tissue damage" while "Pain affect consists of the feelings of unpleasantness that are associated with pain sensation, as well as emotions associated with the future implications of those sensations". According to the social pain hypothesis, loss, rejection and social exclusion can trigger the same feelings of unpleasantness and emotional responses as physical pain.
Gary Becker and household production
Adam Smith’s labourer valued his linen shirt, not just because it protected him from the sun and wind, but because it protected him from the unfavourable judgments of those he depended on. Smith argued that all human beings want others to notice and approve of them. More recently, economist Gary Becker and Robert Michael suggested that all human beings might have the same basic preferences. It seems likely that some of these preferences relate to social approval:
In the standard theory [of choice] all consumers behave similarly in the sense that they all maximize the same thing — utility or satisfaction. It is only a further extension then to argue that they all derive that utility from the same "basic pleasures". From this point of view, the Latin expression de gustibus non est disputandum suggests not so much that it is impossible to resolve disputes arising from differences in tastes but rather than in fact no such disputes arise!
Extending Becker’s theory, cognitive sociologist Siegwart Lindenberg and his colleagues argue that "people produce their own well-being by trying to optimize achievement of universal goals, within the set of resources and constraints they face." In a 1999 paper the researchers argue that subjective well-being depends on the achievement of both physical and social goals. Social goals include status, approval and affection.
If this theory is right, then it makes sense to think that much of our material consumption serves social rather than physical ends. If it were possible to use material goods such as cars and clothes to influence other people’s opinions, then it would makes sense for people to do so.
The social utility of wealth
According to Smith, the rich get far more attention and respect than the poor — even when they’ve done nothing to merit it. "In equal degrees of merit", he wrote, "there is scarce any man who does not respect more the rich and the great, than the poor and the humble." Material consumption acts a signal of underlying characteristics — characteristics that are able to provoke deference, approval and affection.
In her book The social psychology of material possessions Helga Dittmar argues that observers use patterns of consumption rather than isolated items “to locate others in terms of class, status and social position, and that these categorical evaluations give rise to impressions of the owner’s personal qualities and attributes” (161). There is growing body of evidence for this claim.
For example, in a study of American adolescents Dianne Skafte found that subjects readily inferred character traits from information about wealth or poverty. She showed the young people a photograph of a person of around the same age as themselves and included a brief biographical sketch. The biographies were identical except that one group were told the person in the photograph was from a rich family while others were told that it was of someone who was from a poor or neutral family. Subjects were then asked to rate the person in the photograph on various traits.
Skafte’s subjects judged the people labeled as wealthy to be more intelligent, more likely to get good grades in school, more likely to succeed in the future, and to be healthier and happier than those labeled poor or neutral. While the poor people were judged to be harder working and more generous they were seen as lacking the talent and ability needed for success.
Dittmar performed a similar experiment with English school students aged 16 to 18 which she reported in her 1992 paper ‘Perceived material wealth and first impressions‘. Subjects were shown films of a man or women coming home from work, making a cup of tea, watching TV, listening to the stereo, and packing their sports equipment into their car. In one condition the person was shown in a well-off middle class context with props such as up-market appliances, a Ford Grenada car and a well decorated living room. In the other condition the person was shown using cheaper appliances, more basic furnishings and a VW. After viewing the film subjects were asked to rate how well various descriptions of personal qualities applied to the person they had seen.
Dittmar found that the wealthy person was seen as more intelligent, successful, educated, and in control of their life than the less well-off person. However the less well-off individual was seen as warmer, friendlier and more self-expressive. Another finding of Dittmar’s study was that these patterns of perception did not differ between students from a working class comprehensive school and those from prestigious public schools.
In a study of American undergraduates Cozzarelli, Wilkinson and Tagler asked subjects to rate how applicable various trait descriptions were to poor and middle class people. The poor were more likely than the middle class to be described as lazy, stupid, dirty, uneducated, unmotivated, criminal and less likely to be described as proud, intelligent, family oriented, responsible, and hardworking.
Signals of wealth have also been shown to have an effect on the perceiver’s behavior. For example, psychologists Anthony Doob and Alan Gross performed an experiment in the field where a car stopped at a traffic light failed to move through the intersection when the light turned green. Using two conditions, one with a cheap low status car and the other with a well cared for high status car the experimenters watched and waited to see how long it would take before the trapped drivers would honk their horns. On average, drivers stuck behind the low status car waited less time before honking and honked more often than those trapped behind the high status car (two subjects in the low status condition were excluded from the analysis because they drove their cars into the back of the bumper of the low status car instead of honking).
In a 1971 study of effect of status on honesty, psychologist Leonard Bickman had a confederate leave a dime in a prominent position in a public phone booth. Then, two minutes after a subject entered the phone booth the confederate tapped on the booth and told the subject that they may have left a dime in the phone booth asking if they had found it. In one condition the confederate was dressed in high status clothes while in another they were dressed in low status clothing. In the high status condition 77 per cent of the subjects returned the dime while in the low status condition only 38 per cent did.
In both these studies the experimenters went one step further. As well as running the experiment in the field they also asked another group of subjects using a questionnaire how they believed that they would respond to the situation. In both studies the answers to this question were different to the observed behaviour. Subjects told the experimenters that they would not treat people differently just because of the car they drove or the way they were dressed. It seems as if it difficult for most of us to admit that we rely so heavily on superficial features in making judgments and deciding how to act.
What if Adam Smith was right?
For Adam Smith poverty meant having visibly less than others. But it’s not obvious that Smith’s problem of poverty could be solved simply by handing out food, housing and health care to those at the bottom of the income distribution. Smith argued that people have social as well as physical needs. In our society, working-age adults meet many of these needs through paid employment. Work is not just a source of income, it can also be a source of status, belonging and approval from others.
This view of well-being helps explain why income redistribution on its own will never be enough to guarantee that the needs of the least advantaged are met. When income support payments are linked to tests of employability (as with disability payments) or job search effort (as with unemployment payments), eligibility for the payments is itself a signal (whether we like it or not).
If we’re committed to constantly improving well-being of the least advantaged, what policies should we support?