Most of us have heard and read about the existing unequal pay, and the need for an egalitarian economic system. Yet, even today, according to the Global Wealth Report of 2019, 10% of the world’s richest people own 82% of all wealth.
In a paper published in April 2017 in the journal of Nature Human Behaviour called ‘Why people prefer unequal societies’, a team of researchers from Yale University concluded that humans, including young children, prefer to live in a world in which inequality exists. One may question these findings as after all, it sounds counter-intuitive. However, the study indicates that if individuals find themselves in a position where everyone is equal, many become bitter because those who work hard don’t feel amply rewarded while the undeserving are over-rewarded.
People also view equal distribution as a moral good. In a laboratory study, children were asked to divide an odd number of erasers between two people who had worked equally hard to clean up a classroom. Despite knowing that the other person would not have any knowledge of receiving a smaller reward, the children decided to throw the extra eraser into the trash to ensure equal distribution. The children believed that since both had worked equally hard, it was fitting that they should receive an equal reward.
A study, conducted by Norton and Ariely in 2011, concluded that not only do people underestimate the level of inequality in society, but also want to live in a more ‘equal’ one. It is surprising to note that while people preferred equality, the study highlighted the fact that they were not very worried about extremely large inequality gaps. Yet, when subjects were forced to choose between an equal or an unequal society, and told to assume that they could be placed anywhere randomly, from the poorest to the richest, more than half the people preferred inequality as they innately equated hard work with wealth. This is called the ‘Veil of Ignorance,’ a term coined by John Rawles, to describe a situation where one is unaware of the eventual outcome of a given situation. Similar results were produced by people belonging to various groups and cultures – including Americans, Canadians, and Australians. Norton justifies these by stating “People exhibit a desire for inequality – not too equal, but not too unequal.”
An important question that arises from this is where exactly do the discrepancies come from resulting in the contradicting results of the laboratory study as well as the aforementioned study by Norton and Ariely. The answer lies in the fact that most laboratory studies do not take into account that aversion to inequality leads to the subjects wanting equal distribution. The laboratory studies are designed in such a way that a fair outcome is also an equal outcome, making the two indistinguishable. When asked to choose between fairness and equality, numerous studies provide evidence that people choose fairness over equality. People prefer fair inequality over unfair equality. They favour fair distributions over equal distributions. For example, subjects of studies consider it fair to distribute resources and rewards in an unequal manner by using impartial procedures such as flipping a coin or taking part in a lottery.
What are the consequences of living in an unequal society? Even though the will to prefer inequality comes from the concerns on fairness, it nevertheless leads people to endorse equality, forcing one to think of the consequences of an unequal society. As the inequality gap widens, the bottom 40% of earners have reported diminishing happiness. A reduction in the well-being of people has a much larger negative impact – it reduces their productivity as now they know where they lie in the inequality chain. They have knowledge of the fact that working harder would not reduce their status.
However, what is not clear is whether these corrosive consequences are caused by the ‘perception of unfair inequality’ within the minds of people or by the presence of inequality itself. This means that the daunting task researchers should strive to answer is whether people would experience a reduced lack of happiness if they believed that they lived in a fair system. At the same time, it is imperative to recognise fairness and equality while also emphasising on the differences between them more frequently in political conversations and academic studies. Simultaneously, we need to realise that the two are vital in assisting us to understand and find an explanation to human behaviour in various scenarios.
Rohner, (2019). The Global Wealth Report 2019. [online] Switzerland: Rohner, p.2. Available at: https://www.credit-suisse.com/about-us/en/reports-research/global-wealth-report.html [Accessed 12 July 2020]
theguardian.com, (2017). The science of inequality: why people prefer unequal societies. [online] Available at: https://www.theguardian.com/inequality/2017/may/04/science-inequality-why-people-prefer-unequal-societies [Accessed 12 July 2020]