Choice and Inequality

Since the early 2000s, much of Jon Hanson’s (and other Situationist Contributor’s) research, writing, teaching, and speaking has focused on the role of “choice,” “the choice myth,” and “choicism” in rationalizing injustice and inequality, particularly in the U.S.  (e.g., The Blame Frame: Justifying (Racial) Injustice in America).  That work has helped to inspire a significant amount of fascinating experimental research (and, unfortunately, one derivative book) on the topic.   Over the next couple of months, we will highlight some of that intriguing new research on The Situationist. 

Here is an abstract and excerpts from a fascinating article (forthcoming, Psychological Science – pdf of draft here) co-authored by Situationist friend Krishna Savani (Columbia) and Aneeta Rattan (Stanford).  Their article examines how “a choice mindset increases the acceptance and maintenance of wealth inequality.”

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Abstract: Wealth inequality has significant psychological, physiological, societal, and economic costs. We investigate how seemingly innocuous, culturally pervasive ideas can help maintain and further wealth inequality. Specifically, we test whether the concept of choice, which is deeply valued in American society, leads people to act in ways that maintain and perpetuate wealth inequality. Choice, we argue, activates the belief that life outcomes stem from personal agency, not from societal factors, leading people to justify wealth inequality. Six experiments show that when choice is highlighted, people are less disturbed by facts about the existing wealth inequality in the U.S., more likely to underestimate the role of societal factors in individuals’ successes, less likely to support the redistribution of educational resources, and less likely to tax the rich even to resolve a government budget deficit crisis. The findings indicate that the culturally valued concept of choice contributes to the maintenance of wealth inequality.

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Wealth inequality has substantial negative consequences for societies, including reduced well-being (Napier & Jost, 2008), fewer public goods (Frank, 2011; Kluegel & Smith, 1986), and even lower economic growth (Alesina & Rodrik, 1994). Despite these well-known negative consequences, high levels of wealth inequality persist in many nations. For example, the U.S. has the greatest degree of wealth inequality among all the industrialized countries in terms of the Gini Coefficient (93rd out of 134 countries; CIA Factbook, 2010). Moreover, wealth inequality in the U.S. substantially worsened in the first decade of the 21st century, with median household income in 2010 equal to that in 1997 (U.S. Census Bureau, 2011), although per-capita GDP increased by 33% over the same period (Bureau of Economic Analysis, 2011), indicating that all of the gain in wealth was concentrated at the top end of the wealth distribution.

A large majority of Americans disapprove of a high degree of wealth inequality (Norton & Ariely, 2011), for example, when the top 1% of people on the wealth distribution possess 35% of the nation’s wealth, as was the case in the U.S. in 2007 (Wolff, 2010). Instead, people prefer a more equal distribution of wealth that includes a strong middle class, such as when the middle 60% of people own approximately 60% of the nation’s wealth, rather than only the 15% that they owned in the U.S. in 2007. If people are unhappy with wealth inequality, then policies that reduce this inequality should be widely supported, particularly in times of increasing wealth inequality. However, Americans often oppose specific policies that would remedy wealth inequality (Bartels, 2005). For example, taxation and redistribution—taxing the rich and using the proceeds to provide public goods, public insurance, and a minimum standard of living for the poor—is probably the most effective means for reducing wealth inequality from an economic perspective (Frank, 2011; Korpi & Palme, 1998). However, most Americans, including working class and middle class citizens, have supported tax cuts even for the very rich and oppose government spending on social services that would mitigate inequality (Bartels, 2005; Fong, 2001). What factors explain thisinconsistency between a general preference for greater wealth equality and opposition to specific policies that would produce it? We investigate whether people’s attitudes toward wealth inequality and support for policies that reduce wealth inequality are influenced by the concept of choice.

Choice is a core concept in U.S. American culture . . . .

Recent research suggests that the concept of choice decreases support for societally beneficial policies (e.g., a tax on highly polluting cars) but increases support for policies furthering individual rights (e.g., legalizing drugs; Savani, Stephens, & Markus, 2011). Historical analyses also suggest that Americans often use the concept of choice to justify inequality, arguing that the poor are poor because they made bad choices (Hanson & Hanson, 2006; see also Stephens & Levine, 2011). Building upon this work, we theorized that the assumption that people make free choices, when combined with the fact that some people turned out rich and others poor, leads people to believe that inequality in life outcomes is justified and reasonable. Therefore, when people think in terms of choice, we hypothesized that they would be less disturbed by wealth inequality and less supportive of policies aimed at reducing this inequality. . . .

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You can download a pdf of the draft here.

Related Situationst posts:

• Barry Schwartz on the Choices that Matter
• Sheena Iyengar on the Art of Choosing
• Just Choose It!
• Renata Saleci on “The Paradox of Choice”
• Sheena Iyengar on the Situation of Choice,
• The Blame Frame – Abstract,
• Sheena Iyengar’s Situation and the Situation of Choosing,
• Sheena Iyengar on ‘The Multiple Choice Problem,’
• Can’t Get No Satisfaction!: The Law Student’s Job Hunt – Part II,
• Dan Gilbert on the Situation of Our Decisions,
• Poverty and Delinquency,
• Nicole Stephens on “Choice, Social Class, and Agency”
• ‘Situation’ Trumps ‘Disposition’- Part II
• The Inherited Situation of Racial Inequality
• The Cause of Rioting? That’s Easy: Rioters!
• Examining Why Estimated “Costs” of Racial Inequality Vary by Race,
  
• The Situational Consequences of Poverty on Brains,
• The Situation of Blaming Rihanna,
• Inequality and the Unequal Situation of Mental and Physical Health,
• Rich Brains, Poor Brains?,
• Psychology of Inequality
  
• A System-Justification Primer,
• Rationalize or Rebel?
• A Discussion about (In)Equality
• The Situational Effects of (In)Equality,
• Barbara Ehrenreich on the Sources of and Problems with Dispositionism,
• The Motivated Situation of Inequality and Discrimination,
• The Unequal Situation of Seperation
• Examining Why Estimated “Costs” of Racial Inequality Vary by Race,
  
• The Situational Consequences of Poverty on Brains,
• The Interior Situational Reaction to Inequality, and
• The Interior Situation of Intergenerational Poverty.

You can review hundreds of Situationist posts related to the topic of “choice myth” here or to the topic of inequality here.

The Situation of the Inequality Getting Inequalitier

From PBSNewsHour:

Financial gains over the last decade in the United States have been mostly made at the “tippy-top” of the economic food chain as more people fall out of the middle class. The top 20 percent of Americans now holds 84 percent of U.S. wealth, as Paul Solman found out as part of a Making Sen$e series on economic inequality.

Psychology of Inequality

Elaine McCardle wrote a terrific review of last month’s Fifth Annual PLMS Conference.  Her article is the spotlight piece on the Harvard Law School website and includes several excellent videos, photos, and links.  Here’s the story.

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While equality is a fundamental principle of American law and the bedrock of the national psyche, inequality has actually increased in the past four decades in the distribution of wealth, power, opportunity, even health. Yet the topic of inequality has received relatively little attention from legal theorists, and, for the most part, it is ignored in the basic law school curriculum.

A conference last month at HLS, “The Psychology of Inequality,” presented by the Project on Law & Mind Sciences (PLMS), stepped into that vacuum, bringing together scholars, law students, and others to examine inequality from the standpoint of the latest research in social science, health science, and mind science, and to reflect on the implications of their findings for law. The HLS Student Association for Law and Mind Sciences (SALMS), together with a group of roughly 20 students, were instrumental in organizing the conference.

“Inequality matters in ways that are not commonly understood, including in how people see and make sense of the world,” saysJon Hanson, the Alfred Smart Professor of Law and Director of PLMS. “Indeed, the way people respond to instances of inequality – either by equalizing, or by rationalizing – appears to be a very significant factor in how they view markets, regulation, and many important policy and social issues. So when we engage in policy debates, mustering all our best arguments and evidence in favor of a given policy conclusion we shouldn’t be perplexed when our opponent doesn’t budge,” says Hanson. “Such recalcitrance on both sides of a discussion often reflects, not the inadequacy, but the irrelevance, of the reasons being exchanged. Behind it all may be a conflict between largely subconscious urges: some people would rather rationalize inequality while others lean toward equalizing.”

Hanson was one of more than a dozen scholars who spoke at the Feb. 26 conference, the fifth annual conference by PLMS, founded by Hanson six years ago to promote interdisciplinary exchange and collaboration between the mind sciences and the l

egal community. PMLS supports research, writing and conferences in order to dislodge the prevailing “dispositionist” approach of law – which holds that human beings, for the most part, make rational choices based on logical preferences – in favor of a “situationist approach.” Situationsim recognizes that social sciences and mind sciences, including social psychology, social cognition, and cognitive neuroscience, have repeatedly demonstrated that human behavior is influenced by countless factors ignored by the dispositionist approach, which collectively are known as “situation.”

Jaime Napier, an assistant professor of psychology at Yale University, presented her research on the ways in which high-status and low-status groups differ in their rationalizations of inequality. High-status people tend to place blame on individuals for their lot in life, while low-status people tend to see theirs as the natural order of things. Eric Knowles, an assistant professor of psychology and social behavior at the University of California, Irvine, discussed his theory of “malleable ideologies,” through which different groups with a same core ideology – say, “life is sacred” – can come to different outcomes on issues such as abortion or the death penalty. Adam Benforado ’05, a former student of Hanson’s and an assistant professor at the Earl Mach School of Law at Drexel University, presented on the mind-body connection in decision-making, including how seemingly innocuous environmental influences such as room temperature might have significant influence on decisions made by juries and judges. Ichiro Kawachi, a Professor of Social Epidemiology and Chair of the Social/Behavioral Sciences Department at the Harvard School of Public Health, discussed research showing that people of lower social status lead shorter, sicker lives, while other speakers discussed ways that social disparities influence health, how even young children favor high-status individuals, and the drive among humans to view the world as essentially fair.

In addition to national experts in the areas of health, psychology, and mind sciences, a number of HLS faculty contributed to the discussion from their areas of expertise in a panel discussion (see video below), including John Palfrey ’01, the Henry N. Ess III

Professor of Law and Vice Dean for Library and Information Resources, an expert on the internet; Lucie White ’81, the Louis A. Horvitz Professor of Law, who specializes in poverty law and international economic and social rights; Robert C. Bordone ’97, the Thaddeus R. Beal Clinical Professor of Law and Director of the Harvard Negotiation & Mediation Clinical Program; Stella Burch Elias, a Climenko Fellow and Lecturer on Law and Andrew Woods ’07, a Climenko Fellow and Ph.D. candidate in politics at Cambridge University.

In that discussion, Hanson shared some provocative ideas. The good news, he said, is that humans have an egalitarian impulse, so that inequality causes them discomfort; some resolve the conflict by redistributing so that there is more equality, while others rationalize with reasons that explain the inequality. The bad news, Hanson added, is that it’s not terribly hard to move someone away from the equalizing impulse.

“When you experience fear and threat – personal threat, group threat, system threat – you become a hardcore dispositionist,” said Hanson, snapping his fingers, “just like that!”

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More here. Related Situationist posts:

• John Palfrey’s PLMS Conference Reflections
• SALMS Liveblogs PLMS Conference
• Harvard Law Record on Tomorrow’s PLMS Conference
• Fifth PLMS Conference Agenda

The Political Situation of the Economic Inequality

In Winner-Take-All Politics: How Washington Made the Rich Richer – And Turned Its Back on the Middle Class, Jacob S. Hacker of Yale and Paul Pierson of Berkeley argue that America’s money-addicted and change-resistant political system is at the heart of the enormous and rapidly growing income inequality that they say is undermining America’s economic and political stability.

A Discussion about (In)Equality

The following (51 minute) video contains a worthwhile discussion from Agenda about how much inequality is too much.

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Participants Include:

Richard Wilkinson is co-author of The Spirit Level and Professor Emeritus at the University of Nottingham Medical School and honorary professor at University College London. He has played a formative role in international research and his work has been published in 10 languages. He studied economic history at the London School of Economics before training in epidemiology.

William Watson is the Chair of the Economic Department at McGill University.

Lane Kenworthy is a sociologist at the University of Arizona where he studies the causes and consequences of poverty, inequality, mobility, employment, economic growth, and social policy in the United States and other affluent countries.

Bob Rae is the Liberal foreign affairs critic, MP for Toronto Centre, and a former premier of Ontario. Visit bobrae.ca.

Sylvia Bashevkin is principal of University College, and a professor in the Department of Political Science, at the University of Toronto. She is the author of Toeing the Lines: Women and Party Politics in English Canada.

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For a sample of related Stiuationist posts, see “The Situational Effects of (In)Equality,” “The Situational Consequences of Poverty on Brains,” “Inequality and the Unequal Situation of Mental and Physical Health,” “The Interior Situation of Intergenerational Poverty,” “Rich Brains, Poor Brains?,” “Jeffrey Sachs on the Situation of Global Poverty,” “The Situation of Financial Risk-Taking,” “The Situation of Standardized Test Scores,” “The Toll of Discrimination on Black Women,” “The Physical Pains of Discrimination,” “The Depressing Effects of Racial Discrimination,” and “The Cognitive Costs of Interracial Interactions.”

The Situational Effects of (In)Equality

Here is an intriguing (40-minute) interview with Richard Wilkinson co-author of the book The Spirit Level: Why Greater Equality Makes Societies Stronger and co-founder of The Equality Trust.

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For a sample of related Stiuationist posts, see “The Situational Consequences of Poverty on Brains,” For a sample of related Situationist posts, see “Inequality and the Unequal Situation of Mental and Physical Health,” “The Interior Situation of Intergenerational Poverty,” “Rich Brains, Poor Brains?,” “Jeffrey Sachs on the Situation of Global Poverty,” “The Situation of Financial Risk-Taking,” “The Situation of Standardized Test Scores,” “The Toll of Discrimination on Black Women,” “The Physical Pains of Discrimination,” “The Depressing Effects of Racial Discrimination,” and “The Cognitive Costs of Interracial Interactions.”

The Interior Situational Reaction to Inequality

From EurekAlert:

The human brain is a big believer in equality—and a team of scientists from the California Institute of Technology (Caltech) and Trinity College in Dublin, Ireland, has become the first to gather the images to prove it.

Specifically, the team found that the reward centers in the human brain respond more strongly when a poor person receives a financial reward than when a rich person does. The surprising thing? This activity pattern holds true even if the brain being looked at is in the rich person’s head, rather than the poor person’s.

These conclusions, and the functional magnetic resonance imaging (fMRI) studies that led to them, are described in the February 25 issue of the journal Nature.

“This is the latest picture in our gallery of human nature,” says Colin Camerer, the Robert Kirby Professor of Behavioral Economics at Caltech and one of the paper’s coauthors. “It’s an exciting area of research; we now have so many tools with which to study how the brain is reacting.”

It’s long been known that we humans don’t like inequality, especially when it comes to money. Tell two people working the same job that their salaries are different, and there’s going to be trouble, notes John O’Doherty, professor of psychology at Caltech, Thomas N. Mitchell Professor of Cognitive Neuroscience at the Trinity College Institute of Neuroscience, and the principal investigator on the Nature paper.

But what was unknown was just how hardwired that dislike really is. “In this study, we’re starting to get an idea of where this inequality aversion comes from,” he says. “It’s not just the application of a social rule or convention; there’s really something about the basic processing of rewards in the brain that reflects these considerations.”

The brain processes “rewards”—things like food, money, and even pleasant music, which create positive responses in the body—in areas such as the ventromedial prefrontal cortex (VMPFC) and ventral striatum.

In a series of experiments, former Caltech postdoctoral scholar Elizabeth Tricomi (now an assistant professor of psychology at Rutgers University)—along with O’Doherty, Camerer, and Antonio Rangel, associate professor of economics at Caltech—watched how the VMPFC and ventral striatum reacted in 40 volunteers who were presented with a series of potential money-transfer scenarios while lying in an fMRI machine.

For instance, a participant might be told that he could be given $50 while another person could be given $20; in a second scenario, the student might have a potential gain of only $5 and the other person, $50. The fMRI images allowed the researchers to see how each volunteer’s brain responded to each proposed money allocation.

But there was a twist. Before the imaging began, each participant in a pair was randomly assigned to one of two conditions: One participant was given what the researchers called “a large monetary endowment” ($50) at the beginning of the experiment; the other participant started from scratch, with no money in his or her pocket.

As it turned out, the way the volunteers—or, to be more precise, the reward centers in the volunteers’ brains—reacted to the various scenarios depended strongly upon whether they started the experiment with a financial advantage over their peers.

“People who started out poor had a stronger brain reaction to things that gave them money, and essentially no reaction to money going to another person,” Camerer says. “By itself, that wasn’t too surprising.”

What was surprising was the other side of the coin. “In the experiment, people who started out rich had a stronger reaction to other people getting money than to themselves getting money,” Camerer explains. “In other words, their brains liked it when others got money more than they liked it when they themselves got money.”

“We now know that these areas are not just self-interested,” adds O’Doherty. “They don’t exclusively respond to the rewards that one gets as an individual, but also respond to the prospect of other individuals obtaining a reward.”

What was especially interesting about the finding, he says, is that the brain responds “very differently to rewards obtained by others under conditions of disadvantageous inequality versus advantageous inequality. It shows that the basic reward structures in the human brain are sensitive to even subtle differences in social context.”

This, O’Doherty notes, is somewhat contrary to the prevailing views about human nature. “As a psychologist and cognitive neuroscientist who works on reward and motivation, I very much view the brain as a device designed to maximize one’s own self interest,” says O’Doherty. “The fact that these basic brain structures appear to be so readily modulated in response to rewards obtained by others highlights the idea that even the basic reward structures in the human brain are not purely self-oriented.”

Camerer, too, found the results thought provoking. “We economists have a widespread view that most people are basically self-interested, and won’t try to help other people,” he says. “But if that were true, you wouldn’t see these sort of reactions to other people getting money.”

Still, he says, it’s likely that the reactions of the “rich” participants were at least partly motivated by self-interest—or a reduction of their own discomfort. “We think that, for the people who start out rich, seeing another person get money reduces their guilt over having more than the others.”

Having watched the brain react to inequality, O’Doherty says, the next step is to “try to understand how these changes in valuation actually translate into changes in behavior. For example, the person who finds out they’re being paid less than someone else for doing the same job might end up working less hard and being less motivated as a consequence. It will be interesting to try to understand the brain mechanisms that underlie such changes.”

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For a sample of related Situationist posts, see “Robin Hood Motives,” “Martha Fineman on the Situation of Gender and Equality,” “The Blame Frame – Abstract,” “The Motivated Situation of Inequality and Discrimination,” and “The Situation of Inequality – Guns, Germs, and Steel.”

Law and Economics Primer

Situationist Contributor Jon Hanson, Kathleen Hanson, and Melissa Hart, have recently posted their outstanding introduction to law and economics (to be published in Dennis Patterson’s forthcoming volume, “Compantion to Philosophy of Law and Legal Theory) on SSRN.  The chapter includes a brief discussion of the emergence of economic behavioralism and situationism, and it is now available to download for free here.  Here’s the abstract.

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This chapter provides an introduction to the history, uses, methods, strengths, and limits of law and economics. It begins by examining the role of positive and normative approaches to law and economics. To examine the positivist thesis – that the law does in fact tend toward efficiency – the chapter discussed and analyzes the famous Hand Formula developed by Judge Learned Hand in United States v. Carroll Towing. As one of the only traditional cases in which a judge arguably made efficiency his explicit goal, the case presents an excellent opportunity to assess whether, even an efficiency-oriented judge will or can identify the efficient result. The chapter reviews the possible liability rules that might have been applied in Carroll Towing, and uses that review to introduce many of the core concepts and methods of law and economics, including game theory. Ultimately, the chapter concludes that, although the Hand Formula may have led to one of the possible efficient results, there is little reason to be confident, and some reason to doubt, that Judge Hand reached the most efficient outcome. The difficulties inherent in selecting the efficient rule through litigation present a significant challenge to the positivist case for legal economics.

The second part of the chapter considers both the normative support for efficiency and the range of challenges to, and refinements of, the normative position that have developed in recent years. The chapter highlights some of the trade-offs inherent in the law and economics approach and concludes that law and economics has, like any legal theory, both costs and benefits.

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Again, you can download the paper for free here.  For a sample of related Situationist posts, see “Tushnet on Teles and The Situation of Ideas – Abstract,” “Deep Capture – Part X,” “Behavioral Economics and Policy,” and “Emotional Reactions to Law & Economics – Abstract.”

John Jost on System Justification Theory

Vodpod videos no longer available.

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To read a selection of related Situationist posts, see “John Jost’s “System Justification and the Law” – Video,” “Independence Day: Celebrating Courage to Challenge the Situation,” “Thanksgiving as “System Justification”?” and “Patriots Lose: Justice Restored!”  To review the full collection of Situationist posts related to system justification, click here.

The Distributional Situation of Obesity

William Underhill had a nice summary of recent research on one of the situational causes of obesity: inequality.  Here are some excerpts.

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What makes Americans so fat? Don’t blame the doughnuts. That extra heft could be symptomatic of a malaise prevalent in all the world’s least equal societies. According to “The Spirit Level,” a new book by British academics Richard Wilkinson and Kate Pickett, a slew of social woes—from drug abuse to obesity and mental illness—can be tied directly to the width of a nation’s income gap.

The evidence for the link is compelling. Obesity is six times more common in America, where the wealth gap is among the highest in the developed world, than in Japan at the opposite end of the inequality scale. And teenage birthrates in Britain are at least five times higher than in the more egalitarian Netherlands.

The explanation lies in a highly evolved reaction to low status, which shows itself in misery, violence or poor self-esteem. Weight, in particular, has long been a marker of socio-economic clout, and there’s an unusually close match between obesity in women and their society’s wealth gap. But it’s not only the poor who suffer in unequal societies; higher incidences of mental illness, for example, affect all classes.

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The entire (brief) article is here. For a few related Situationist posts, see “The Situation of Body Image,”“Prejudice Against the Obese and Some of its Situational Sources,” and “Fitting in and Sizing up.”

A Neural Perspective on “Efficiency versus Equity” – Abstract

Ming Hsu, Cédric Anen, and Steven R. Quartz, recently published a report titled “The Right and the Good: Distributive Justice and Neural Encoding of Equity and Efficiency” (in 320 Science 1092 – 1095 (2008)).  Here’s the abstract.

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Distributive justice concerns how individuals and societies distribute benefits and burdens in a just or moral manner. We combined distribution choices with functional magnetic resonance imaging to investigate the central problem of distributive justice: the trade-off between equity and efficiency. We found that the putamen responds to efficiency, whereas the insula encodes inequity, and the caudate/septal subgenual region encodes a unified measure of efficiency and inequity (utility). Notably, individual differences in inequity aversion correlate with activity in inequity and utility regions. Against utilitarianism, our results support the deontological intuition that a sense of fairness is fundamental to distributive justice but, as suggested by moral sentimentalists, is rooted in emotional processing. More generally, emotional responses related to norm violations may underlie individual differences in equity considerations and adherence to ethical rules.

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For a brief, helpful summary of the report on BPS Research Digest, click here.