Dan Ariely along with Mike Norton, found that Americans ridiculously underestimate the amount of inequality in their country. In reality, American society is staggeringly unequal: the top 20% hold 84% of the wealth, while the bottom 40% have just 0.3%. But according to Mr Ariely, Americans, whether liberal or conservative, rich or poor, prefer a wealth distribution that is more egalitarian than Sweden’s
Mr Ariely’s data may seem to hold out hope for the egalitarian cause. Once you enlighten Americans with the facts about inequality in their society, the argument goes, they will be outraged and demand redistributive policies that reduce the wealth and income gaps. But Mr Ariely's approach is deeply flawed: he misinterprets his survey results and misunderstands the political philosophy of John Rawls, the theorist who inspired his inquiry.
Americans don’t understand the extent of disparity in the US, and that they (we) desire a more equitable society. It is also interesting to note that the differences between people who make more money and less money, republicans and democrats, men and women — were relatively small in magnitude, and that in general people who fall into these different categories seem to agree about the ideal wealth distribution under the veil of ignorance.
You don’t need to be a socialist to worry about the divide between rich and poor in America. Many Americans across the political spectrum claim to be deeply troubled by economic inequality, and many say they support changes that would yield a more equal distribution of income and wealth.
People might be troubled by what they see as unjust causes of economic inequality, a perfectly reasonable concern given how much your income and wealth are determined by accidents of birth, including how much money your parents had, your sex, and the color of your skin. We are troubled as well by potential consequences of economic inequality. We may think it corrodes democracy, or increases crime, or diminishes overall happiness. Most of all, people worry about poverty—not that some have less, but rather “that those with less have too little.”
This analysis helps us explain why such huge power differentials exist in the world right now, where it’s far harder for the weak to team up to dominate the strong. As Boehm tells it, in a small society, a wannabe dictator can be ignored or ridiculed by everyone else, and if he doesn’t get the message, he can be beaten up, expelled from the group, or killed. But this is a harder trick to pull in a society of millions where interactions are no longer face-to-face and where the powerful have guns and gulags.
ehavioral economists Michael Norton and Dan Ariely recently showed sample distributions of wealth to Americans, in which the people in the bottom fifth have X percentage of the wealth, those in the next fifth have Y percentage of the wealth, and so on. They found that Americans are very wrong about just how unequal their country is—they think that the bottom 40 percent has 9 percent of the wealth and the top 20 percent has 59 percent, while the actual proportions are 0.3 percent and 84 percent.
They also find that when asked about what distribution would be ideal, Americans, regardless of political party, want a far more equal society than they actually live in or believe that they live in. In an article published in The Atlantic, Ariely writes, “the vast majority of Americans prefer a distribution of wealth more equal than what exists in Sweden, which is often placed rhetorically at the extreme far left in terms of political ideology—embraced by liberals as an ideal society and disparaged by conservatives as an overreaching socialist nanny state.”
Watch the following video to learn about social inequality: Ariely, D. (2015, March). How equal do...