By Will Lasky
ECSN BRICSAM Program Officer
For Richer…or Poorer? The Capture of Growth and Politics in Emerging Economies, presents some staggering data plus case studies charting the exponential increase of elite wealth in BRICSAM countries. According to the report:
“If the top is dissected into even-smaller fractions, and each of these fractions is divided into an upper and lower half, the ‘poorer’ half of the respective groups always has a significantly smaller share compared to the richer one. This is concerning, as it means that a focus on the richest 10% or even 5% as the top share falls short of capturing the truly extraordinary differences hidden in the highest end, and further scrutiny as to what is happening at the peak of the distribution will be necessary. This phenomenon of fractal division means that, for instance, the South African top 0.1% – just over 50,000 people — held 4.8% of total income in 2010; the richer 25000 of this small group, however, appropriated close to 70% of this amount.”
I am struck by this idea of fractal patterned increase, like the concentric rings of a snail’s shell. There is a grotesque harmony to the way we hoard.
For Richer or Poorer highlights the optimism of neoliberalism, calling into question the faith that free market principles on a global scale will latch onto the boostraps of all members of society equally. The belief in free markets is often context blind. Do proponents of the neoliberal model view the developing world through a cultural lens that filters out inequality? What are the psychological factors that come into play?
One interesting study conducted by Columbia and Stanford Researchers Krishna Savani and Aneeta Rattan (K. Savana, A. Rattan. A Choice Mind-Set Increases the Acceptance and Maintenance of Wealth Inequality. Psychological Science, 2012), links the idea of choice itself to outlooks reinforcing inequality. Not the belief in choice, but the very idea of choice and how it interfaces with human discernment, Savani and Rattan say may play a role in perpetuating inequality.
The researchers conducted six tests on US citizens demonstrating how the mere act of perceiving choice influences perceptions of inequality. For example, in the first experiment, one group is asked to recall events of the past day. The choice group is asked to list the choices they made. When confronted with statistics pertaining to inequality, the group primed by choice is less troubled than the non-choice group. In another experiment participants watch a video of an actor performing daily activities. The control group is asked to press a button whenever the actor performs an activity; the other group is asked to respond when a choice is made. Even after controlling for political orientation, gender, race, the choice group is less concerned by inequality data. The implication is that being primed by choice making makes us forget that climbing out of poverty is not as simple as making a decision to do so.
Does a cultural preoccupation with abundance of choice play a role in maintaining inequality? According to Savani and Rattan, the answer might be yes. Although they acknowledge that there are different cultural contexts to explore, along with variations in consumer choice plus a host of other factors.
Would such a study hold up in countries where extreme poverty is more visable and the capture of political decision making by the very wealthy more of a boldfaced reality? In terms of advocacy, another question might be how to effectively communicate across cultures separated by history, wealth, experience and other subtle intervening factors like perceptions of upward mobility and choice.