> Our research does not reject the notion that individual behavior and decision-making may directly relate to upward economic mobility. Instead, we narrowly conclude that biased decision-making does not alone explain a significant proportion of population-level economic inequality
Interesting. It's not cognitive biases of some innate sort.
It seems important to me that society should apply boosts to people who can demonstrate ability through some trainable measure that is advantaged by intelligence until they hit some threshold.
> It seems important to me that society should apply boosts to people who can demonstrate ability through some trainable measure that is advantaged by intelligence until they hit some threshold.
In theory, this is what merit-based college scholarships are for. In practice, arguably not so much.
Because real boosts in this society are not puny scholarships. Its graduating with a good job already lined up, no debt, and and a heap of cash. This is basically how a lot of my wealthy friends I met in college ended up. Parents would even give them like 100k cash or even more as a graduation present. They’d also throw down on their down payments for new car or housing. Meanwhile their peers who are also getting a scrap of paper that graduation day are perhaps in debt by that amount.
Piketty loves to make fun of this sort of research because the hypothesis they’re disproving has been disproven a hundred times in very simple, empirical ways. But we have to pretend we’re diligently narrowing down the culprit at the heart of wealth inequality, knocking off potential causes one by one.
Must be maddening working on a paper like this. Wealth equality is a necessary feature of our economic system yet very serious people pretend like labor can somehow pull themselves up by their bootstraps.
> Wealth equality is a necessary feature of our economic system yet very serious people pretend like labor can somehow pull themselves up by their bootstraps.
How is wealth equality a necessary feature of capitalism when there has never been wealth equality in the history of human existence?
Also, labor has pulled them themselves up by their bootstraps many times. It is possible, just simply not likely or common.
It doesn’t help that financial education is nonexistent in this country, and the laws around investment advice make it so schools can’t really teach it. I took a budget class in college in effort to get more financially savvy, but they basically said they can’t really legally give advice for things like tax or investment or retirement planning, only really gave basic budget rules of thumbs that full time college students can’t really follow anyhow for lack of income.
The rich kids on the other hand, just ask mom or dad what to do and they are well informed by their own family financial planner.
I have similar extended family. They are very entitled and lazy. When they are given things, they don’t take care of them and they basically go to shit. They aren’t mean spirited but somehow lack all drive to take care of themselves. Without our social safety net, they’d either live off of family or simply die.
This is true on both sides of my family. Somehow my parents both are hard workers and have thrived, relatively speaking.
If individual effort doesn't produce commensurate rewards people learn to minimize effort instead of maximize reward, though individual variation will exist.
Isolated laziness is an individual foible, but wide-spread laziness is a market failure.
The title is very misleading. What they actually show is that a certain set of cognative biases (_not_ the same as "bad choices") that are pretty much universal can't explain differences in outcome because...well, they're pretty much universal.
Also, I suspect that lack of the ability to photosynthesis, multiply twelve digit numbers in your head, or see gamma rays with your eyebrows will turn out to not explain a significant proportion of population-level economic inequality.
Reminder: If you have an economy with opportunity, you will have inequality. It’s a feature not a bug. Even if everyone in the world got free entry to Harvard (no jokes please) then there are some people who wouldn’t remember to set their alarm, or listen to the lectures, or apply the knowledge, or who just wouldn’t be interested.
You're missing the point, which is that kids who "chose" the right parents get vastly more opportunities than those with less luck at birth, and the lucky ones don't have to work as hard or have as much talent as the unlucky.
Do you think the world would be better off if this effect were eliminated, ie that people could not preferentially help their own children? Or are you simply pointing out that life is not fair?
> Do you think the world would be better off if this effect were eliminated
I don't know. I do think the world would be better off if we eliminated homelessness, hunger, student loan debt, medical debt, and political campaign financing. These are some of the worst consequences of economic inequality in society.
> Or are you simply pointing out that life is not fair?
Well, I personally don't think that so-called "meritocracy" is fair or ideal. I was born with some advantages over the majority of people, and my academic talents started to show at a relatively young age (with no "hard work" — it was easy work!), but I don't think I "deserved" to be born that way, nor do I think that I "deserve" more money than other people as a result of my advantages.
I understand capitalistic supply and demand, and that may be a decent economic system. It's not an inherently ethical system, however.
why does everything have to be a dual. in life practically nothing is. I can both be biased towards my children's success, and still understand that as a society we're all much better off giving some opportunity to the generally downtrodden.
in most european countries, university is mostly free. and they offer financial support for those who need it (because you still have to pay for food and rent if you can't live with your parents), which effectively does eliminate the ability for parents to help their children get into a good university.
i'm not sure where this idea arises, that parents doing things for their children is the root of all social evil. it's a bit ridiculous on its face, since it's a prime way to improve the lot of the next generation
Nobody was talking about "social evil". But it's plainly the root of much economic inequality, which is the topic.
Separate questions:
(1) Should we accept some level of economic inequality in society?
(2) Are the wealthy more "deserving" of their wealth than the non-wealthy?
It's perfectly consistent to answer (1) Yes and (2) No to those questions.
Capitalism is an economic system, not an ethical system. The "invisible hand of the market" is not God handing out rewards and punishment, though some people seem to believe that.
For sure. And I'd add that the acceptance of inequality as a reward does not imply anything about inherited inequality.
Even if we grant the proposition that a good way for society-wide progress is to harness the desire of some to have superior positions by forcing them to work hard at creating value for others, it doesn't really follow that inheritance is a good idea. Indeed, you could argue that it's just the opposite, if we really want a nation of hard workers, we have to make sure the youth can't get away with being lazy just because of some historic success that they didn't have any part in.
You’re assuming economic inequality will always exist, and using that to at least imply that the answer to “What should we as a society do about economic inequality?” is “Nothing.”
There’s a whole lot that a society can do to address the negative aspects of wealth inequality. Almost all of it means that the wealthiest people will have to make some sacrifices—in proportion to their wealth, *incredibly small* sacrifices—and will have to accept that just being poor shouldn’t be a death sentence, that everyone should have food, and water, and housing, and education, and medical care, and transportation, to a reasonable baseline level, simply for existing.
Our species is prosperous enough that no member need ever experience homelessness, nor hunger, nor untreated injury nor disease, nor unwilling ignorance, nor an inability to pull up stakes and move. The only reason the status quo persists is that it is to a small number of wealthy and powerful peoples’ benefit, not because it’s the best possible arrangement for society.
Did you notice what I didn’t suggest? I didn’t suggest that the rich should lose their wealth or position. In fact, they don’t even necessarily have to pay more in taxes than the middle class. They just need to pay around the same *proportionately* as the middle class.
Parents doing things for their children *to give them unearned advantage* is in fact *a* root cause of social evil.
It’s saying “Because this person is a Jones, they deserve a spot at Yale even though others are more academically deserving, and we will pay you for that privilege.”
This is also why grade inflation happens at these institutions: “You can’t fail him, he’s a Jones!”
No, that's false. The presence of opportunity does not necessitate unequal spoils. The final outcome of inequality is total monopoly, which is the death of opportunity for all but the monopoly.
Opportunity is not meritocracy. I have no issue with guaranteed basic life support for everyone, with additional privileges for those who contribute more through some combination of talent and effort.
But this only works if there is true equality of opportunity with completely open universal access to education, health, basic tech and tools, high quality unbiased news, and social opportunities.
The real cause of inequality is privileged parents trying to tilt the scales for their kids and their social class.
You may say "That's only natural" - but so was cannibalism until we worked out that it's a really stupid idea and does a lot more harm than good.
The real costs of unearned "elite" family privilege are almost unimaginable. We're so used to how things are that we can't even see how much this arrangement has blocked progress in every discipline.
Not only does it pollute politics, democracy, and the media, hoard resources uselessly, and cause untold human suffering, it also guarantees that most of the talent in each generation is suppressed and wasted.
> The real cause of inequality is privileged parents trying to tilt the scales for their kids and their social class.
I really don’t think this is true in a meaningful way. Despite your appeal to cannibalism (of all things), it certainly is natural for people to want to help their family and friends. Without that instinct, we have neither.
Whatever the solution to inequality, it will need to take into account that people like helping people they like. This is why social programs like free healthcare and education are so important - we need to neutralise the benefit of “tilting the scales”, rather than asking people to change perfectly reasonable behaviour.
There’s a gulf of difference between “helping family and friends” and, say, allowing legacy admissions at the universities that feed the majority of the highest status jobs in our society, or even allowing public schools to falter (much less *be intentionally sabotaged*) because some people can afford a private education for their children.
I completely agree with you. I am absolutely not arguing against policies intended to level the playing field - quite the opposite, I think that everyone should be allowed the opportunity to thrive regardless of age, identity, class, health, or anything else.
My point is that the desire to “tilt the scales for their kids and their social class” seems innate, and any mechanism that we create to improve equality needs to take this into account at a fundamental level, or it will either be rejected or compromised.
> If you have an economy with opportunity, you will have inequality.
It doesn't work the other way, though. As with any complex dynamic system, the relationship between opportunity and inequality is neither unidirectional nor linear. Consider that there are two well known systems where opportunity is very low. The one you obviously had in mind is perfect enforced equality, often associated with communism[1]. The other is most commonly referred to as feudalism[2]. In other words, both very low and very high levels of inequality result in near-zero opportunity. The interesting range is in the middle - another hallmark of complex systems BTW. When most people refer to wealth inequality they mean a level beyond which opportunity is driven back down, and argument should proceed on that basis. Presenting this as "zero inequality with zero opportunity vs. non-zero amounts of both" is both counterfactual and non-constructive, to say the least.
[1] No actual communist system at significant scale ever had equality as a feature. More often, the medium of exchange shifted from hard currency to some form of reputation, standing, etc. but the inequality most definitely still existed.
[2] Apparently historians consider "feudal" to be a hopelessly ambiguous term. In this context "manorial" might be more accurate but nobody would recognize it.
The application of the term 'science' to the social 'sciences' was a terrible mistake. How does the author justify this statement:
> "A global study ... finds that economic inequality on a social level cannot be explained by bad choices among the poor nor by good decisions among the rich."
...when their article quotes the first author as saying:
"Our research does not reject the notion that individual behavior and decision-making may directly relate to upward economic mobility... *we narrowly conclude that biased decision-making does not alone explain a significant proportion of population-level economic inequality.*" ??
How do they bring themselves to make the statement:
> "Poor decisions were the same across all income groups, including for people who have overcome poverty."
... when the study didn't look at any real-world decisions whatsoever, but merely at performance on a battery of academic tests, (whose relationship with real-world decision-making we're expected to take on faith)?
That's a great way of putting it. I'm ashamed that I only recently realized it during a discussion about science and religion with my friends. I defined science along the lines of "best-effort iteration on making a hypothesis, collecting data, and evaluating the hypothesis". And that's without considering the human factor, whether it's confirmation bias, thirst for fame, or some other weakness. That's not to say that science is worthless; on the contrary, it embodies our capability to rationalize our universe. It's unfortunate that so many people think that understanding science means listening to the mainstream consensus of scientists, without critically evaluating their own values, assumptions, and the limitations or outright flaws of the studies. Nuance shouldn't be overlooked and mistaken conclusions should be addressed.
Many people do not have a background strong enough to analyze papers. Most. Even many of us, depending on the topic, not either.
People are more driven by belief than anything else. I try not to as much as possible, but I humbly believe I am at least able to detect one thing: when things do not match each other and there are cracks and contradictions.
However, many people do not care to get informed beyond a basic article without any research (not even a paper) and will still fiercely support their positions. That is why I think people have more of belief and emotion than rationality when it is about highly politicized topics.
Could it be that these folks have a different value system than you? To them money is made to be spent not horded. You can always declare bankruptcy if you run out of it. Isn't it allowed every 7 years.
Why is your way better? You probably value the thought of having money more vs actually spending it. Time passes by for both parties.
Because they complain about all the consequences of their actions without changing them? They complain about their tiny apartment, about their out of date phones and computers, about how much their animals cost in time and money, about how they have to take suboptimal medications because they can't afford the correct ones? Then when an emergency happens they have to beg money off their friends. "Having a different value system" is almost always code for shitty behavior and poor impulse control.
They're basically saying that social inequality is not the sum total of rich people having made good decisions and poor people having made poor decisions. As an individual, it is possible to make savvy decisions that raise your circumstances; however, as a society-level phenomenon, it's incorrect to say that poor people are only poor because they screwed up. As an extreme hypothetical, consider a system where
1) Your annual income is determined by making one specific, arbitrary decision
2) It is possible to be observant enough to make the decision intelligently, but most are not able to perceive the clue clearly and must guess; this is reflected in an outcome distribution that skews towards a preponderance of incorrect answers
3) Making the decision correctly nets you $1 mil; incorrectly, $1,000
4) There are no other opportunities to make money
The inequality present in this system is largely a function of the magnitude of the spoils/demerits for being correct/incorrect, not the distribution of correct/incorrect answers.
>They're basically saying that social inequality is not the sum total of rich people having made good decisions and poor people having made poor decisions. As an individual, it is possible to make savvy decisions that raise your circumstances; however, as a society-level phenomenon, it's incorrect to say that poor people are only poor because they screwed up.
Does anyone honestly think this? Is this a strawman? I don't think you need a study to make you conclude that individual choices don't explain 100% of differences in income/wealth. Someone born in a worse school district is obviously going to be at a disadvantage compared to someone in a better school district, all else being equal. The same exists for luck or other random factors (eg. meeting the right people).
This is probably very different from person to person. Most of the poor people I know personally are hard-working, intelligent people, and are not poor because they screwed some important thing up. It's just circumstances/family obligations, and not any personal failing.
I'm also aware of a couple of people who appeared to have a reasonable shot at a stable life with some level of wealth, but they seemed determined to squander it, maybe due to mental/emotional trouble and addiction.
I'd like to see society change so that we afford more respect, stability, and comfort to the least fortunate among us, but where this fits into a discussion about personal choices is a contentious issue.
> This is probably very different from person to person
Yes, well, of course. The point of statistical analysis is to account for this variation at the level of the population. If anecdotes were sufficiently explanatory, we wouldn’t need to do the math.
Yes, many people think that, and I’d argue many more maybe don’t but use it as convenient kayfabe to blame the poor for their lot / undermine attempts to address inequality.
If you want numbers, just look to the numbers of people who attend prosperity gospel churches. That’s just one very specific example of attributing individuals’ circumstances to their specific decisions (in this case, the individual’s piety)
You may or may not have been paying attention to the recent SCOTUS decision on Affirmative Action, wherein the notion you are questioning the prominence of is ubiquitous amongst the discourse pro-revocation
> Does anyone honestly think this? Is this a strawman?
My aunt does. She is a conservative lobbyist. She believes that giving a penny to charity is bad because every single poor person is lazy and made bad choices.
Science in the context of politically charged topics generally disgusts me. The outcome, that is. In theory it could help things, but it never does. The authors’ personal beliefs interfere every time. From the conception of their idea, to the research, to the decision to publish the results. By the time we read it, it’s no different than a biased news article. Only the intellectual level at which the biases/beliefs are presented differs.
This particular paper is no different. Sure, people are born into different economic conditions. This is obvious. Beyond that, there’s nothing useful to see in the research.
I don't think you need to look far to find bad papers, but for good ones doing "real science", I would maybe look for psych stuff that's next door to economics? Kahneman comes to mind
As someone else said, Kahneman is OK. He certainly has some brain-tickling research. I’ve read some papers by him about how people use poor logic in decision-making that were truly fascinating.
There are countless bad papers. If you lean left, I could show you papers that declare no racial bias in police use of lethal force. If you lean right, I could show you papers that declare no correlation between conservative policy and economic growth.
The thing that's really interesting to me is how "science" has arguably turned into what it was originally against. Originally, science outright rejected the ideas of specialization and credentialism. And it was founded on opposition to the "scientific consensus" that was enforced by groups like the Catholic Church (though, contrary to popular misconception, it wasn't hostile to religion and in fact scientists like Newton also were interested in trying to reconcile the Bible with the discoveries of science).
So much of what passes for "science" today consists of outright logical fallacies like the appeal to authority and the appeal to consensus. And the peer review process is often flawed with self interested reviewers using the process to demand citations to their own work or block papers they disagree with.
On any politically sensitive topic, I don't trust any "peer reviewed research" unless I can plausibly answer yes to the following question: "If this paper found the opposite result, would it be published?" Often, the answer is that a paper finding the opposite result would be career ending for the author. Which means there is no disinterested search for truth on that topic and papers on it are just dogma masquerading as science.
So you two reached a consensus …but your credentials (experience) don’t matter so who cares what you think? No divine mandate exists that puts upon me obligation to you specifically.
…
It’s possible old philosophy is miserly to the point of silliness.
I upvoted the first 2 para's of this reply. Now, as to this old saw:
>there is no disinterested search for truth
In studying the history of science, I've seen that: what the word 'scientist' means has changed a great deal in the past two centuries (since the more generalist 'natural philosophers'). Also that: for most of that time it has never been a disinterested search (let alone 'for truth' ... a word as undefinable as 'god'). Prime example: The existence of rocks falling from the sky was rejected by the faithful simply because Newton said space is -empty-. (There are hundreds more salient examples.)
The rise of specializations is like the rise of Guilds; inevitable for multiple practical reasons. (Recently I tried to read a paper on Paleoneurobiology. Nope, not going there.)
“does not alone explain” means the same thing as “cannot be explained by.” I think your confusion stems from “is influenced by” being a much weaker statement than “can be explained by.” Being in prison for example isn’t ”explained by” people breaking the law as that would require nobody to be falsely imprisoned or be set free on a technicality etc.
The second statement follows from the first. If you can’t completely determine someones wealth from past decisions alone, then you can’t group the poor or wealthy by the history of their past decisions.
This is not correct. If we want to explain why the sidewalk is wet, and 99% of the time it is because of sprinklers and 1% of the time it is because of rain, then "The sprinklers do not alone explain the wetness", but "The wetness cannot be explained by the sprinklers" is a foolish thing to say.
“Wetness of all sidewalks globally can be explained by sprinklers.” <- obviously false.
“Wetness of sidewalks can never be explained by sprinklers.” <- also obviously false
The first applies to all sidewalks as a group, the second applies to subsets of the overall group so it’s false if any subset can be explained by sprinklers. Both quotes are using my first example due to being inclusive and including: “on a social level” and “population-level”
It's strange that you're painting this as a "social 'sciences'" problem, when all the problems you listed are with the phys.org article itself. The social scientists in question are properly qualifying their statements, it's just that the media is taking those statements and running with them.
> ... when the study didn't look at any real-world decisions whatsoever, but merely at performance on a battery of academic tests, (whose relationship with real-world decision-making we're expected to take on faith)?
These aren't even decent forms of those academic tests, either. When I read it yesterday, I was very unimpressed: https://www.reddit.com/r/Economics/comments/14nuucw/economic... Every single variable here, whether their self-reported current income as relatively young respondents (who haven't had much career/lifetime to build up large SES differences) or the very brief questions about individual cognitive biases which are then discretized to throw away even more information, is poorly measured, and there's not much of a sample to begin with. So, they predictably find that none of their measurements are correlated with each other (the biases don't even correlate with each other), and report the amazing discovery that "economic inequality cannot be explained by individual choices". They fail to reject the null (perhaps because their data is so bad?) and conclude they have proven the null.
From my reference frame I have no reason but faith to accept your relationship with the real world is sound.
For example, your objection ignores that “performance on a battery of academic tests” is also reasonably described as “real-world decisions”.
Your definitions for “any real-world decisions” is non-existent; it’s not on us to assume for you.
A test is a real world behavior in my opinion. So I’m left feeling your entire comment is “a primate exercising writing skills but failing at establishing any useful logic”.
> Economic inequality cannot be explained by individual bad choices
A more appropriate hypothesis would be that economic inequality cannot be explained by individual bad choices *alone*.
Plenty of examples of poor decision making can lead to catastrophic permanent poverty. Drug/alcohol abuse, having children without the right finances, skipping school etc. are just some of the decisions that can directly explain economic inequality.
Having to spend $100k on drug rehab is objectively more financially harmful to someone than not having to. It's probably more accurate to say it's not financially ruinous.
Those are anecdotal exceptions. The average drug/alcohol abuser ends up badly, and the average college dropout earns much less than an average college graduate; the gap is over $1 million in lifetime earnings [1].
But the point is that different people can make the same bad decisions and end up with vastly different economic outcomes.
I personally made some absolutely terrible decisions when I was younger that could have put me in jail or in the grave, but I managed to avoid both of those outcomes. ;-)
But the rich are the exceptions. The discussion is about economic inequality: "economic inequality on a social level cannot be explained by bad choices among the poor nor by good decisions among the rich." People try to argue that the rich got to be rich because they make good decisions. I'm pointing out that the ultra-rich — and yes, the ultra-rich are the exception, the most economically unequal — make the same so-called "bad" decisions as average people or poor people.
There's a ridiculous double standard where we blame poor people for making bad decisions but give rich people a break for making the same damn decisions.
When you say rich, you refer to billionaires or millionaires, which may be the exception. But I’m reality even if you compare the top 10% excluding billionaires with the rest, decision making is a very big part of what gets you there. That may not be the only predictor, which was my original comment, but arguing decision making does not affect income inequality is pretty ridiculous.
Why is it ridiculous? An alternative explanation is opportunity plus randomness.
You already admitted that there's a large element of randomness to life: "Plenty of people survive accidents when not wearing seatbelts." And by the way, is there any evidence that the seatbelt wearing rate varies across economic classes?
People of economic means have a lot more opportunities than other people. And that's certainly no guarantee of success, but a certain % of opportunities will randomly work out, whether they involved "good" or "bad" decisions. This means it's much easier to succeed if you grow up with economic advantages, even if the level of talent is evenly distributed among all economic classes.
Let me put it this way: the reason to go to Harvard or Stanford isn't the "education". Calculus for example is the same anywhere. The actual classes at a state university are comparable to the classes at an "elite" university. The reason people desperately want to go to the elite universities is to meet the elite. It's about social networking. You get more opportunities if you know the right people. That should be obvious.
I meant people are free to have kids and everyone should get to experience the joy/pain of having children. But having children is expensive. If you have 5 kids vs 1, there will be a difference in your economic status unless you’re already coming from wealth. Same holds true about whether you have a kid at 16 vs when you have in 30s. You can make any decision you want, but some are just objectively bad and have an impact on your economic status.
Even if people can make the "right choice" in a controlled setting with no stakes involved, that doesn't mean they can or want to make choices in the same manner when things are important, or it's their own life, or there are strong emotions, etc...
How difficult is it to understand that the ability of making the right choices depends on how you are raised. Where you grew up etc.
People who say success is a choice are conpletely wrong.
Why Nations Fail is a great book that everyone has to read. Says that economic inequality is because of political institutions.
Specifically, "inclusive" institutions where everyone can become part of the economic system. Anyone can be a government supplier under the same terms, everyone can start their own business under the same terms, everyone can get financing under the same terms, and everyone get the same protection to their own private property.
There's a nice Economic effect called "Hume-Cantillon Effect":
> Furthermore, he posited that the original recipients of new money enjoy higher standards of living at the expense of later recipients. The concept of relative inflation, or a disproportionate rise in prices among different goods in an economy, is now known as the Cantillon Effect.
> ... the rate of interest was determined by the supply and demand on the loanable funds market—an insight usually attributed to Scottish philosopher David Hume.
If we accept that it is possible to raise two similar children from birth with a view to creating vastly different outcomes, regardless of what those children think or will, then we must also accept that the great diversities of the natural world make that dynamic a reality.
It's no different than taking two dogs of the same breed, and raising one as a farm working dog, and the other as a family pet. The outcomes will seem different, but that's not because one or the other specimen is inherently special or superior.
Inherent, individual qualities do exist, sure, and do play a part in the nuance - but ultimately, as individuals, existence has a lot more effect upon us than we do upon it. How could it possibly be otherwise??
My lived experience is simply that most people don't actually care about finances _that_ much.
If you went to the gym you would find that 90%+ of people are not trying to deadlift 510kg for a world record and accept that as fact.
But somehow when it comes to money it's assumed that everyone's #1 priority above all else is to stack cash, and it's just not, and that cannot be characterised as a "bad decision".
Hot take:
1. Income Inequality is directly related to financial education. If you taught people how to save in schools and make good choices things would be very different.
2. The Fed Reserve has made it impossible for a generation of people to save for the past 2.5 decades. Creating the largest wealth disparity in human history.
123 comments
[ 2.9 ms ] story [ 171 ms ] threadInteresting. It's not cognitive biases of some innate sort.
It seems important to me that society should apply boosts to people who can demonstrate ability through some trainable measure that is advantaged by intelligence until they hit some threshold.
Huh, wonder what we could call it?
In theory, this is what merit-based college scholarships are for. In practice, arguably not so much.
Must be maddening working on a paper like this. Wealth equality is a necessary feature of our economic system yet very serious people pretend like labor can somehow pull themselves up by their bootstraps.
Or do you mean the political implications of these papers?
How is wealth equality a necessary feature of capitalism when there has never been wealth equality in the history of human existence?
Also, labor has pulled them themselves up by their bootstraps many times. It is possible, just simply not likely or common.
Exhibit A: Andrew Carnegie:
https://en.wikipedia.org/wiki/Andrew_Carnegie
Exhibit B: J.K. Rowling:
https://en.wikipedia.org/wiki/J._K._Rowling
The poor people I personally know (relatives) are definitely there by bad choices.
Perhaps there are too many contexts to apply a simple answer to explain all?
The rich kids on the other hand, just ask mom or dad what to do and they are well informed by their own family financial planner.
This is true on both sides of my family. Somehow my parents both are hard workers and have thrived, relatively speaking.
Isolated laziness is an individual foible, but wide-spread laziness is a market failure.
I think deep down we all know the truth. Obesity is a capitalist invention to sell more gyms.
It's not a joke, because some students do get "free" entry to Harvard, due to their parents paying for it.
I don't know. I do think the world would be better off if we eliminated homelessness, hunger, student loan debt, medical debt, and political campaign financing. These are some of the worst consequences of economic inequality in society.
> Or are you simply pointing out that life is not fair?
Well, I personally don't think that so-called "meritocracy" is fair or ideal. I was born with some advantages over the majority of people, and my academic talents started to show at a relatively young age (with no "hard work" — it was easy work!), but I don't think I "deserved" to be born that way, nor do I think that I "deserve" more money than other people as a result of my advantages.
I understand capitalistic supply and demand, and that may be a decent economic system. It's not an inherently ethical system, however.
Separate questions:
(1) Should we accept some level of economic inequality in society?
(2) Are the wealthy more "deserving" of their wealth than the non-wealthy?
It's perfectly consistent to answer (1) Yes and (2) No to those questions.
Capitalism is an economic system, not an ethical system. The "invisible hand of the market" is not God handing out rewards and punishment, though some people seem to believe that.
Even if we grant the proposition that a good way for society-wide progress is to harness the desire of some to have superior positions by forcing them to work hard at creating value for others, it doesn't really follow that inheritance is a good idea. Indeed, you could argue that it's just the opposite, if we really want a nation of hard workers, we have to make sure the youth can't get away with being lazy just because of some historic success that they didn't have any part in.
There’s a whole lot that a society can do to address the negative aspects of wealth inequality. Almost all of it means that the wealthiest people will have to make some sacrifices—in proportion to their wealth, *incredibly small* sacrifices—and will have to accept that just being poor shouldn’t be a death sentence, that everyone should have food, and water, and housing, and education, and medical care, and transportation, to a reasonable baseline level, simply for existing.
Our species is prosperous enough that no member need ever experience homelessness, nor hunger, nor untreated injury nor disease, nor unwilling ignorance, nor an inability to pull up stakes and move. The only reason the status quo persists is that it is to a small number of wealthy and powerful peoples’ benefit, not because it’s the best possible arrangement for society.
Did you notice what I didn’t suggest? I didn’t suggest that the rich should lose their wealth or position. In fact, they don’t even necessarily have to pay more in taxes than the middle class. They just need to pay around the same *proportionately* as the middle class.
The top 20% of earners pay more taxes than the other 80% of earners combined.
This is due primarily to the total amount of their earnings rather than their tax rates.
It’s saying “Because this person is a Jones, they deserve a spot at Yale even though others are more academically deserving, and we will pay you for that privilege.”
This is also why grade inflation happens at these institutions: “You can’t fail him, he’s a Jones!”
But this only works if there is true equality of opportunity with completely open universal access to education, health, basic tech and tools, high quality unbiased news, and social opportunities.
The real cause of inequality is privileged parents trying to tilt the scales for their kids and their social class.
You may say "That's only natural" - but so was cannibalism until we worked out that it's a really stupid idea and does a lot more harm than good.
The real costs of unearned "elite" family privilege are almost unimaginable. We're so used to how things are that we can't even see how much this arrangement has blocked progress in every discipline.
Not only does it pollute politics, democracy, and the media, hoard resources uselessly, and cause untold human suffering, it also guarantees that most of the talent in each generation is suppressed and wasted.
I really don’t think this is true in a meaningful way. Despite your appeal to cannibalism (of all things), it certainly is natural for people to want to help their family and friends. Without that instinct, we have neither.
Whatever the solution to inequality, it will need to take into account that people like helping people they like. This is why social programs like free healthcare and education are so important - we need to neutralise the benefit of “tilting the scales”, rather than asking people to change perfectly reasonable behaviour.
My point is that the desire to “tilt the scales for their kids and their social class” seems innate, and any mechanism that we create to improve equality needs to take this into account at a fundamental level, or it will either be rejected or compromised.
It doesn't work the other way, though. As with any complex dynamic system, the relationship between opportunity and inequality is neither unidirectional nor linear. Consider that there are two well known systems where opportunity is very low. The one you obviously had in mind is perfect enforced equality, often associated with communism[1]. The other is most commonly referred to as feudalism[2]. In other words, both very low and very high levels of inequality result in near-zero opportunity. The interesting range is in the middle - another hallmark of complex systems BTW. When most people refer to wealth inequality they mean a level beyond which opportunity is driven back down, and argument should proceed on that basis. Presenting this as "zero inequality with zero opportunity vs. non-zero amounts of both" is both counterfactual and non-constructive, to say the least.
[1] No actual communist system at significant scale ever had equality as a feature. More often, the medium of exchange shifted from hard currency to some form of reputation, standing, etc. but the inequality most definitely still existed.
[2] Apparently historians consider "feudal" to be a hopelessly ambiguous term. In this context "manorial" might be more accurate but nobody would recognize it.
This is really tautological if you define opportunity as advantage over others.
> "A global study ... finds that economic inequality on a social level cannot be explained by bad choices among the poor nor by good decisions among the rich."
...when their article quotes the first author as saying:
"Our research does not reject the notion that individual behavior and decision-making may directly relate to upward economic mobility... *we narrowly conclude that biased decision-making does not alone explain a significant proportion of population-level economic inequality.*" ??
How do they bring themselves to make the statement:
> "Poor decisions were the same across all income groups, including for people who have overcome poverty."
... when the study didn't look at any real-world decisions whatsoever, but merely at performance on a battery of academic tests, (whose relationship with real-world decision-making we're expected to take on faith)?
Every time I hear this I respond
“Science says nothing. Only scientist.”
What I find amusing is that people arguing for something want to metabolize sweeping generalizations.
If social science teaches you anything, it’s that sweeping generalizations are a poor framework for understanding anything.
That's a great way of putting it. I'm ashamed that I only recently realized it during a discussion about science and religion with my friends. I defined science along the lines of "best-effort iteration on making a hypothesis, collecting data, and evaluating the hypothesis". And that's without considering the human factor, whether it's confirmation bias, thirst for fame, or some other weakness. That's not to say that science is worthless; on the contrary, it embodies our capability to rationalize our universe. It's unfortunate that so many people think that understanding science means listening to the mainstream consensus of scientists, without critically evaluating their own values, assumptions, and the limitations or outright flaws of the studies. Nuance shouldn't be overlooked and mistaken conclusions should be addressed.
People are more driven by belief than anything else. I try not to as much as possible, but I humbly believe I am at least able to detect one thing: when things do not match each other and there are cracks and contradictions.
However, many people do not care to get informed beyond a basic article without any research (not even a paper) and will still fiercely support their positions. That is why I think people have more of belief and emotion than rationality when it is about highly politicized topics.
Here are some sweeping generalizations that seem to be helpful:
Why is your way better? You probably value the thought of having money more vs actually spending it. Time passes by for both parties.
Because they complain about all the consequences of their actions without changing them? They complain about their tiny apartment, about their out of date phones and computers, about how much their animals cost in time and money, about how they have to take suboptimal medications because they can't afford the correct ones? Then when an emergency happens they have to beg money off their friends. "Having a different value system" is almost always code for shitty behavior and poor impulse control.
1) Your annual income is determined by making one specific, arbitrary decision
2) It is possible to be observant enough to make the decision intelligently, but most are not able to perceive the clue clearly and must guess; this is reflected in an outcome distribution that skews towards a preponderance of incorrect answers
3) Making the decision correctly nets you $1 mil; incorrectly, $1,000
4) There are no other opportunities to make money
The inequality present in this system is largely a function of the magnitude of the spoils/demerits for being correct/incorrect, not the distribution of correct/incorrect answers.
Does anyone honestly think this? Is this a strawman? I don't think you need a study to make you conclude that individual choices don't explain 100% of differences in income/wealth. Someone born in a worse school district is obviously going to be at a disadvantage compared to someone in a better school district, all else being equal. The same exists for luck or other random factors (eg. meeting the right people).
If a poor person would make good decisions and not be lazy, they wouldn’t be poor.
I'm also aware of a couple of people who appeared to have a reasonable shot at a stable life with some level of wealth, but they seemed determined to squander it, maybe due to mental/emotional trouble and addiction.
I'd like to see society change so that we afford more respect, stability, and comfort to the least fortunate among us, but where this fits into a discussion about personal choices is a contentious issue.
Yes, well, of course. The point of statistical analysis is to account for this variation at the level of the population. If anecdotes were sufficiently explanatory, we wouldn’t need to do the math.
If you want numbers, just look to the numbers of people who attend prosperity gospel churches. That’s just one very specific example of attributing individuals’ circumstances to their specific decisions (in this case, the individual’s piety)
My aunt does. She is a conservative lobbyist. She believes that giving a penny to charity is bad because every single poor person is lazy and made bad choices.
This particular paper is no different. Sure, people are born into different economic conditions. This is obvious. Beyond that, there’s nothing useful to see in the research.
There are countless bad papers. If you lean left, I could show you papers that declare no racial bias in police use of lethal force. If you lean right, I could show you papers that declare no correlation between conservative policy and economic growth.
So much of what passes for "science" today consists of outright logical fallacies like the appeal to authority and the appeal to consensus. And the peer review process is often flawed with self interested reviewers using the process to demand citations to their own work or block papers they disagree with.
On any politically sensitive topic, I don't trust any "peer reviewed research" unless I can plausibly answer yes to the following question: "If this paper found the opposite result, would it be published?" Often, the answer is that a paper finding the opposite result would be career ending for the author. Which means there is no disinterested search for truth on that topic and papers on it are just dogma masquerading as science.
…
It’s possible old philosophy is miserly to the point of silliness.
>there is no disinterested search for truth
In studying the history of science, I've seen that: what the word 'scientist' means has changed a great deal in the past two centuries (since the more generalist 'natural philosophers'). Also that: for most of that time it has never been a disinterested search (let alone 'for truth' ... a word as undefinable as 'god'). Prime example: The existence of rocks falling from the sky was rejected by the faithful simply because Newton said space is -empty-. (There are hundreds more salient examples.)
The rise of specializations is like the rise of Guilds; inevitable for multiple practical reasons. (Recently I tried to read a paper on Paleoneurobiology. Nope, not going there.)
The second statement follows from the first. If you can’t completely determine someones wealth from past decisions alone, then you can’t group the poor or wealthy by the history of their past decisions.
“Wetness of all sidewalks globally can be explained by sprinklers.” <- obviously false.
“Wetness of sidewalks can never be explained by sprinklers.” <- also obviously false
The first applies to all sidewalks as a group, the second applies to subsets of the overall group so it’s false if any subset can be explained by sprinklers. Both quotes are using my first example due to being inclusive and including: “on a social level” and “population-level”
These aren't even decent forms of those academic tests, either. When I read it yesterday, I was very unimpressed: https://www.reddit.com/r/Economics/comments/14nuucw/economic... Every single variable here, whether their self-reported current income as relatively young respondents (who haven't had much career/lifetime to build up large SES differences) or the very brief questions about individual cognitive biases which are then discretized to throw away even more information, is poorly measured, and there's not much of a sample to begin with. So, they predictably find that none of their measurements are correlated with each other (the biases don't even correlate with each other), and report the amazing discovery that "economic inequality cannot be explained by individual choices". They fail to reject the null (perhaps because their data is so bad?) and conclude they have proven the null.
For example, your objection ignores that “performance on a battery of academic tests” is also reasonably described as “real-world decisions”.
Your definitions for “any real-world decisions” is non-existent; it’s not on us to assume for you.
A test is a real world behavior in my opinion. So I’m left feeling your entire comment is “a primate exercising writing skills but failing at establishing any useful logic”.
A more appropriate hypothesis would be that economic inequality cannot be explained by individual bad choices *alone*.
Plenty of examples of poor decision making can lead to catastrophic permanent poverty. Drug/alcohol abuse, having children without the right finances, skipping school etc. are just some of the decisions that can directly explain economic inequality.
Tons of rich and famous people are or were notorious drug/alcohol abusers.
> skipping school
College dropouts: Bill Gates, Steve Jobs, Mark Zuckerberg, Larry Ellison...
Having to spend $100k on drug rehab is objectively more financially harmful to someone than not having to. It's probably more accurate to say it's not financially ruinous.
What's $100K to someone like (randomly chosen) Eric Clapton? That's like 10 minutes of work for him. ;-)
1- https://www.aplu.org/our-work/4-policy-and-advocacy/publicuv...
I personally made some absolutely terrible decisions when I was younger that could have put me in jail or in the grave, but I managed to avoid both of those outcomes. ;-)
Plenty of people survive accidents when not wearing seatbelts. That does not prove that not wearing seatbelts is okay.
There's a ridiculous double standard where we blame poor people for making bad decisions but give rich people a break for making the same damn decisions.
You already admitted that there's a large element of randomness to life: "Plenty of people survive accidents when not wearing seatbelts." And by the way, is there any evidence that the seatbelt wearing rate varies across economic classes?
People of economic means have a lot more opportunities than other people. And that's certainly no guarantee of success, but a certain % of opportunities will randomly work out, whether they involved "good" or "bad" decisions. This means it's much easier to succeed if you grow up with economic advantages, even if the level of talent is evenly distributed among all economic classes.
Let me put it this way: the reason to go to Harvard or Stanford isn't the "education". Calculus for example is the same anywhere. The actual classes at a state university are comparable to the classes at an "elite" university. The reason people desperately want to go to the elite universities is to meet the elite. It's about social networking. You get more opportunities if you know the right people. That should be obvious.
So how does the study address that?
- Arthur Schopenhauer
Specifically, "inclusive" institutions where everyone can become part of the economic system. Anyone can be a government supplier under the same terms, everyone can start their own business under the same terms, everyone can get financing under the same terms, and everyone get the same protection to their own private property.
There's a nice Economic effect called "Hume-Cantillon Effect":
> Furthermore, he posited that the original recipients of new money enjoy higher standards of living at the expense of later recipients. The concept of relative inflation, or a disproportionate rise in prices among different goods in an economy, is now known as the Cantillon Effect. > ... the rate of interest was determined by the supply and demand on the loanable funds market—an insight usually attributed to Scottish philosopher David Hume.
https://en.m.wikipedia.org/wiki/Richard_Cantillon#Monetary_t...
It's no different than taking two dogs of the same breed, and raising one as a farm working dog, and the other as a family pet. The outcomes will seem different, but that's not because one or the other specimen is inherently special or superior.
Inherent, individual qualities do exist, sure, and do play a part in the nuance - but ultimately, as individuals, existence has a lot more effect upon us than we do upon it. How could it possibly be otherwise??
If you went to the gym you would find that 90%+ of people are not trying to deadlift 510kg for a world record and accept that as fact.
But somehow when it comes to money it's assumed that everyone's #1 priority above all else is to stack cash, and it's just not, and that cannot be characterised as a "bad decision".