This is Your Brain on Income Inequality

Human beings don’t like income inequality, but until now scientists haven’t really known how deep that dislike goes. It turns out the aversion is brain-deep: A team of researchers, using functional MRI technology, has found that the “the reward centers in the human brain respond more strongly when a poor person receives a financial reward than when a rich person does.” Furthermore, even rich people’s brains seem to crave equality. “In the experiment, people who started out rich had a stronger reaction to other people getting money than to themselves getting money,” said Colin Camerer, one of the study‘s coauthors. “In other words, their brains liked it when others got money more than they liked it when they themselves got money.” [%comments]


Nosybear

How do we square this idea with politics, where the thought of income equality is comparable in its distastefulness to using the Flag to clean toilets?

Dan

All this proves is that a brain "liking" something is a poor predictor of that person's behavior.

Arvin Bautista

How does this square with rich conservatives' idea of letting rich people donate money on their own instead of taxing them? Would rich people like it equally if the money poor people was receiving money that came from them, but they didn't have control of it?

Brett

@Nosybear

I think you're mistaken about what's distasteful. It's not income equality, but how that equality is achieved.

Notice the researcher says "people who started out rich had a stronger reaction to other people getting money than to themselves getting money". I think you're assuming the same results would occur if the statement went something like "people who started out rich had a stronger reaction when their own money was taken from them and given to other people."

To keep this in the realm of economics - all people respond to incentives... are we going to give people an incentive to not work or an incentive to work.

To keep this from being taken in the wrong light - I'm all for helping people who are on hard time, I just prefer to do it willingly through charity as opposed to being forced to do so through taxes/entitlements.

hmmm...

How are they sure the brain reaction is pleasure or "like" ? What if the rich people just hate to see someone else get money more than they enjoy getting it themselves?

Politically incorrect, just wondering as no mention is made of how to resolve what the reaction means...

Chris Doyle

A ruling class cannot voluntarily give up its own predominance; for this predominance appears to it the sole foundation of the world order. It must defend this predominance; and this it can do only so long as it has hope and self-confidence. But actual conditions cannot give self-confidence to the capitalist class; therefore it creates for itself a hope that has no support in reality. If this class were ever to see clearly the principles of social science, it would lose all faith in its own possibilities; it would see itself as an aging despot with millions of persecuted victims marching in upon him from all directions and shouting his crimes into his ears. Fearfully he shuts himself in, closes his eyes to the reality and orders his hirelings to invent fables to dispel the awful truth. And this is exactly the way of the bourgeoisie. In order not to see the truth, it has appointed professors to soothe its troubled spirit with fables. Pretty fables they are, which glorify its overlordship, which dazzle its eyes with visions of an eternal life and scatter its doubts and dreams as so many nightmares. Concentration of capital? Capital is all the time being democratised through the increasing distribution of stocks and bonds. Growth of the proletariat? The proletariat is at the same time growing more orderly, more tractable. Decay of the middle class?

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Paul '52

So how come if we question someone's inheritance that's "class warfare" but it's our patriotic duty to criticize the size of police pensions?

Don

@Brett:

Income equality has never and will never be achieved by charity, so essentially you're saying "Let them eat cake."

I'm sure Sarah Palin and the Taliban would agree with you, but personally I've had enough of that kind of con game.

Jeff

Humans beings also like fighting wars, taking drugs and worshiping magical beings in the sky.

Luke

@Bret

You say "all people respond to incentives... are we going to give people an incentive to not work or an incentive to work."
I dont disagree that redistribution has implications for incentives however surely we should strike a balance between the blunting of incentives provided by an income tax and the welfare gains seen to society as a result of the government allocated spending of the funds?

Furthermore, income inequality is strongly correlated with several social ills such as crime rates, drug abuse, poor health outcome ect as discussed in the spirit level". So surely, as with any externality a Pigovian tax is in order.

Finally, dont you think allowing the rich to redistribute is a pretty tenuous way of doing so (and doesn't your argument rely on the distribution of resources via the market being somehow fair, that is presuming your taking a libertarian stance?) Its hardly reliable therefore making long standing remittance programs difficult and i very much doubt that the figures donated would be comparable to the amount raised by taxes for the same purpose.

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Brett

@Don

Income equality has never and will never be achieved by taxation and redistribution of wealth. If you think that politicians are truly working towards an ever-equal society, you're crazy. In no time in history has there ever been a perfectly equal society, there will always be the rich and the poor, it's human nature.

What I believe we should strive for is not a perfectly equal society (as nice as that would be) but an ever raising floor that the poor can stand on. This has been achieved over the past 200+ years through conservative principles and freedom, not taxation and 'enslavement' of citizens. (By the way, don't assume I consider Bush/GOP as conservative - I mean REAL conservative principles).

The poor in America are better off than the poor in any other country. Let's continue that tradition, create an example to the world, and eventually our poor will not worry about where to find food or shelter, but instead will claim unfairness because they can't afford the latest sports car. I look forward to a day like that, where we still have poor vs. rich (incentives are important), but the poor have everything they truly "need".

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jimmyc

That sounds like a parenting effect. Would the same rich people's brains still like it, if the money given to the poor was their own?

Matt

Income equality isn't going to be achieved by government welfare programs either, Don. Charity helps people get back on their feet whereas many people, not all mind you, use welfare to keep from trying to better themselves.

Personally I don't see it ever being equal, no matter how you try to even the playing field there will always be those who are go getters and those who want to sit back and be spoon fed.

Allan

It squares because government action was not mentioned. Everybody wants everybody to succeed and for everybody to succeed the government has to stay out of the way.

Daniel

I've been wondering about how one might apply neurological and behavioral research exploding in economics right now to poverty and income inequality. I've seen some, but very little until this paper.
The next step is to see if the neurological response to inequality has a behavioral counterpart; i.e. if people act less rationally under perceived inequality.

Alex

Did anyone think their preference wouldn't appear in the brain? Maybe they should have scanned the invisible preference elf instead. In other news, your brain also knows if you like chocolate, action movies, and attractive people.

Luke

@ Brett

I hate to reply before you've gotten back to me but i must protest at your last post!

I'm afraid your conclusions are a little cursory, for starters income equality HAS been archived through taxation and redistribution, look at the Scandinavian states, although some country's i.e. japan achieve equality through cultural norms it is feasible to do so ( and with the same benefits e.g better health outcome ect as country's culturally equal) via government fiscal policy.

And brett, dont use straw man "In no time in history has there ever been a perfectly equal society" , don wasn't talking about perfect equality.

You also laspe into use of the natural argument "there will always be the rich and the poor, it's human nature." is doesnt equal ought and its not as though we cant do something about it. Thats like saying we shouldn't tackle disease as it will always be with us.

You talk about an ever raising floor ( Ill go with this assumption although stratified income growth data suggests otherwise and yes that within the US) However data shows that once per capita income in a country exceeds $20,000 per head increases in income fail to correlate with increased reported happiness levels i.e. fine give them a better floor to stand on materially but there not better off,to paraphrase Aristotle money is merely useful for some thing else.

You say that the poor in america are better off than the poor in any other country however i'd argue that they are indeed WORSE off than the poor in almost any other developed country, this is because they have to cope with the burden of inequality, inferiority isn't a great feeling and given the inequality of us society there are MANY countries in which the poor are materially more comfortable.

One final point, you say that you will relish the day when the poor have everything they need and seem to imply that they cannot be at odds with the rich if such a situation occurs but far from it, inequality is a huge problem, sure its nice to have everything you "need" as you put it but is it ok to have a class which is materially provided for and yet unhappy, one which feels second best? Inequality bites, an analysis of absolute wealth doesn't get to the heart of the matter once you start looking at an affluent society.

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Cory

The problem is that this assumes that it is NOT a zero-sum game. In effect, you're introducing "new" money. If the "new" money is between the rich and poor, of course you'd prefer poor.

On the other hand, wealth redistribution policies pursued in the name of income inequality IS ia zero-sum game. You take from one and give to the other.

And even in that situation, it still differs from politics or wide-spread action. If you have one poor person receiving at the expense of others, people like it. I suspect that's why juries give to the plaintiff at the expense of deep pockets. They want to see that one person succeed.

By contrast, if you set up the rules of the game to take from all rich people and give to all poor people - or an overall system-wide rule - then it has a much different reaction. That's why people react negatively to wealth redistriubtion in politics. In the case of the juries mentioned above, the general public hates what they see as an institutional decision of rewarding some people at the expense of the deep pockets for no other reason than that those pockets are deep.

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OldBob

Let's see. John and Cindy McCain own seven homes and bank accounts worth multi-millions. Cindy didn't make her money be getting up at 5:00 am to deliver Bud to the saloons around Phoenix. She inherited what the IRS calls "unearned income." John worked for his income, but made it almost completely in the public sector, toward which he has a revulsion. "Make the government stay out of the way."

Does the American public resent their millions? Do the McCains feel uncomfortable about their enormous wealth? Or do they just feel they were born in the socio-economic class that was "born to rule?"

David L

Very interesting and clever study. The second part (rich people's response) could have implications for evaluating the marginal value of money.