The self vindication of privilige

The Monkey Cage, via Mark Thoma

Does Inequality Make People More Conservative?

Yes, according to some new research (pdf) from Nathan Kelly and Peter Enns. They rely on a a yearly measure of “policy mood” from 1952-2006. This is an omnibus summary of the public’s ideological leaning, liberal to conservative. (See the graph and corresponding Excel file at Jim Stimson’s homepage.) They also draw on a specific measure of the public’s support for welfare. The question is whether and how both measures respond to inequality.

Their first main finding: increases in inequality are associated with a conservative shift in mood and increasing opposition to welfare. (For more on why this would be true, see this paper (pdf) by Roland Benabou.)

Their second main finding: increases in inequality are associated with a conservative shift among both the wealthy and the poor.

One natural objection: perhaps some citizens, and especially poorer citizens, just do not realize that inequality has increased. But the third main finding contradicts this: over time, the poor are actually more likely to perceive increased inequality than do the wealthy.

Kelly and Enns offer some further speculation on why, in particular, the rich and poor respond in parallel to rising inequality:

Despite the fact that parallelism is not driven by lack of information about income inequality, we think it is possible that the way information about distributional outcomes is framed is important. This idea is rooted in Gilens’s …argument is that during good economic times news stories focus on individualism (enhancing opposition to welfare) and during bad economic times stories emphasize people being down on their luck (enhancing support for welfare).Given that rising inequality since the 1970s has been driven in large part by gains at the top of the income distribution, media frames over this period may have increasingly emphasized stories of individualism, thus generating a negative link between rising inequality and public opinion liberalism. The decline in inequality prior to the 1970s, by contrast, was driven primarily by increasing incomes at the bottom of the income distribution and may have generated stories emphasizing government’s role in education and job creation. This could explain why declining inequality up to the 1970s pushed public opinion in a liberal direction.”

See the paper for some further discussion and appropriate caveats.

I haven’t been able to look at the paper yet, but unlike Thoma the observed result doesn’t puzzle me, though it dismays me. It’s what I bemoaned here. The receipt of rents1 becomes its own vindication, above and beyond the ability to use those rents to directly buy influence. The greater the rents, the more self evident their justification becomes in the eyes of society. Why this is so I have no idea, especially since all those behavioural economics experiments (like the ultimatum game) keep throwing up pro-egalitarian results.

Still, I guess it’s reassuring on some level to know the myths that hustify inequality on this scale are not entirely fed to us by a cynical ruling class, we are more than capable of creating the myths ourselves.

1 and yes, inequality on the scale we see in a given society is rent. I’m yet to see any reasonable attempt to show that incomes tens and hundreds of times larger than others are associated with higher productivity of the same magnitude – most attempts seem to accept that great income is evidence in itself of greater productivity. Self vindication of rents.

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About Richard Tsukamasa Green

Richard Tsukamasa Green is an economist. Public employment means he can't post on policy much anymore. Also found at @RHTGreen on twitter.
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13 years ago

[…] Green’s reaction here. This entry was posted in Economy, Politics and tagged inequality, Politics. Bookmark the […]

Paul Frijters
Paul Frijters
13 years ago

I agree with a lot of this, though I would frame it differently and think the media mainly feeds the public the stories it wants to hear, meaning the puzzle is not about the pool of available stories that change with the business cycle, but more the demand for them. I would frame the puzzle around the degree to which many amongst the poor manage to identify with the wealthy as if they truly believe they are going to join them soon, and then act like their protectors at the ballot box. The scale on which this happens is most curious and, as you say, it seems to happen without any indoctrination conspiracy.

13 years ago

Why this is so I have no idea, especially since all those behavioural economics experiments (like the ultimatum game) keep throwing up pro-egalitarian results.”

The problem with the interpretation of many of the psychology ones I have looked at, which is a fair number, is that psychologists have the exceptionally bad habit of giving very qualitative explanations to many effects (often due to small sample size limitations but sometimes legitimately when they are just trying to falsify a theory) and they also often ignore individual differences (they’re too hard to think about and you need sample sizes far bigger than typically collected).

So what you often get is an experiment where people don’t have to be nice to someone for some reason or another, and then you look at what people do and find that the average person displays some nice behavior. If you are lucky, someone might report the percentage that actually are or the distribution. This almost always gives you a significant effect (null-effects are quite difficult to publish, because people will claim you ran a crappy experiment, not because the effect you investigated has only tiny power), which is then interpreted as pro-egalitarian.

Another problem is that some experiments are set up so that they are comparing egalitarian behavior with doing nothing. This means the only conclusion you can actually come to is to support pro-egalitarian behavior, which you will always get if only some proportion of your group even slightly deviated from the baseline. You could run these experiments in reverse (I’ll call them pro-greed) where the baseline was some asset that was perfectly distributed in a population to start with, and then look at whether people display non-egalitarian behavior, and you would find exactly the same thing in reverse but come to the conclusion people display non-egalitarian behavior (and you’d be right).

Until people start running experiments that allow both greed and pro-egalitarian behavior, and also look at the individual data much better, I wouldn’t accept the pro-egalitarian claims, since they’re largely claims saying that pro-egalitarian behavior will occur in some circumstances (big deal) and not claims about the extent that it occurs in general.

Matt C
13 years ago

Fascinating post, Richard.