A Strange Money Attitude


There is a strange money attitude that many people have--many more than you might expect. It is the desire that one's neighbors make less money. Well, to be generous we could say that the desire is to make more money than one's neighbors, but that would be quite the truth, at least according to the research done.

You see, it may seem strange, and like many people we might deny this feeling, but most people would rather be richer than the people around them than have more money themselves. This requires a short explanation that start with a question: Which situation would you rather have for yourself, an income of $50,000 per year while everyone around you made $25,000, or $100,000 annual income with everyone around you making $250,000? For the sake of these hypothetical examples we assume that the prices of products and services are the same in both scenarios.

Here is the amazing truth: When researchers in the field of behavioral economics ask this question, most people prefer the first option over the second. In case you didn't get that, most humans would prefer being poorer as long as their neighbors were even poorer than them. What are we to make of this?

To myself--and I assume to any objective observer--this is entirely irrational. The science, however, suggests that it is very human. There is even an explanation of the phenomenon from the field of evolutionary economics. There is a certain logic to humans desiring to have more relative power over others (which is in part what money buys), even if that means less actual wealth, since in our ancient history this provided more chances for survival.

What is fascinating about this is that--in my speculative judgment--most people who feel this way would not change their peculiar money attitude even after understanding the evolutionary/biological/psychological basis of it. Our rational mind so rarely is able to overrule out instincts, even when the former are on a very conscious level.

Most people will read this and think it is relatively unimportant--especially compared with continuing the pursuit of more apparent power relative to their neighbors and peers. I happen to think it's very good evidence of the dangers inherent in a race that has only evolved far enough to see the evolutionary forces that mislead us, but without the conscious power to turn to a better path.

There is another psychological inclination at work here that is just as dark. We call it envy, and although few people will acknowledge it in themselves, it is very common. Envy is not the same as jealousy, which is mostly just a feeling of wanting what others have. Envy is wanting those who have more than us to have less, or to actually suffer. I think this is the real basis for the rationalizations of those who want to hurt the rich through confiscatory plans that have never been shown to raise the poor to a higher standard of living.

It is one thing to acknowledge that the rich should pay more in taxes, since they do gain far more from the system that protects their rights. But it quite another to punish success and so punish all in an economy--including the poor. It is as if we are saying that we would rather have more equality as at a much lower level than have the poor much richer but with the rich even richer yet. This seems like insanity to me. If the poor could be wealthy by way of a system that allows the rich to be 100 times wealthier, what possible argument could there be against this other than one based on a strange money attitude that comes straight from envy and deeply non-rational evolutionary forces?

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