Are the rich greedy?

The rich, conventional wisdom has it, are greedy, unscrupulous and selfish. The left happily play into the stereotype, justifying wealth distribution not only with the need of the poor but the undeserved nature of the wealth of the rich.

Lately, academia has gotten in on the game. Paul Piff, a professor at UC Irvine, is amongst several academics who have spent much energy trying to determine the effects of wealth on behaviour. In a well known experiment an obviously rigged game of monopoly blatantly favours one player. Put in a position of wealth, the participant becomes ruder, greedier (for the provided pretzels) and suffers from an inflated sense of accomplishment – seemingly blind to the rigged nature of the game. Piff and several co-authors published a much-hyped paper where other experiments arrive at similar conclusions: as wealth increases, compassion and empathy decreases and sense of entitlement and self-interest increases. The rich are seemingly more selfish – at least in controlled lab experiments.

The paper has received a fair bit of criticism. Lab work (and one dubious out-of-the-lab experiment) may not reflect real world behaviour. But other lab studies have reached similar results. Can the cliche about the greedy rich be confirmed in a comprehensive study outside the lab?

Leaving the university campus, 3 professors ‘misdelivered’ transparent envelopes, visibly containing money (EUR 5 or EUR 20), to rich and poor Dutch households and observed whether the wrong recipients re-posted the letters. The results were surprising: the ‘rich’ households returned 75% of the cash against only 25% from the ‘poor’ households. Hang on, you may say, EUR 20 is a meaningless amount to a rich household but represents real value to a ‘poor’ household. The incentive to keep the money is different. The academics tried to control for this: envelopes were also misdelivered containing a cheque for the money, obviously worthless to the wrong recipient but of equal value to the intended recipient. Returning the envelope, the idea was, represents pure ‘altruism’. Again, the ‘rich’ returned far more of these non-cash envelopes. The greediness of the rich seemed to have been turned on its head. Controlling for ‘polluting’ factors such as age, education etc. turned out to have no effect. Altruism, it seemed, was explained by wealth only.  So, are the rich suddenly supposed to be less greedy? The answer turned out to be complex: digging deeper, the academics found that the disposition to return envelopes amongst the poor households decreased the farther from pay day they got. It seemed financial stress, rather than lack of altruism, could explain the low return rate. An attempt to statistically determine the ‘altruistic propensity’ found that to be the same for the ‘rich’ and the ‘poor’ group. Rich and poor displayed similar altruism. Difference in behaviour, it seemed, was determined by incentives: ‘Wealth affects individual incentives, which in turn affect pro-social behaviour’, the study concluded.

While economically satisfactory, politically the conclusion that incentives, rather than socio-economic status, determines behaviour, ruffles some feathers. The left unsurprisingly finds the idea that the rich may not be less generous than the poor difficult to embrace. It plays poorly with their divisive narrative of ‘them against us’ and the premise that the rich are undeserving and musts have cheated their way to the top and can therefore be plucked of their riches with moral impunity.

To others with a more open mind, it may after all not be that surprising. History is full of examples of large-scale generosity from the richest in society, from Andrew Carnegie to Bill Gates. Compassion, empathy and altruism are traits of basic humanity, and not reserved for the deserving poor.

In conclusion, we may owe it to ourselves to consider if selfishness is necessarily bad. Ayn Rand, in her philosophy of objectivism, promoted the selfish pursuit of man’s own happiness as a virtue. In her view, living your life for someone else is morally repugnant. In addition, selfishness and self-reliance are close cousins. The belief that the wellbeing of someone is primarily the responsibility of the individual encourages thrift, work ethic and self-respect. Collectivism absolves the individual form that responsibility, with adverse effects on moral, enterprise and ultimately, fulfilment. Maybe the rich are rich because they are selfish. Maybe the poor owe it to themselves to be a bit more selfish. It may be that greed, for lack of a better word, really is good.

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